By several key measures, state government in New York is back on track. Spending is being reined in. Sensible union contracts were negotiated without rancor. Recent legislation will allow New York, for the first time in years, to choose sites for new power plants. All of this should make the state more attractive to businesses and the high-earning individuals who run them.
That's precisely why the state should let its income-tax surcharge on those earning more than $200,000 a year (or married couples earning more than $300,000 a year) expire at year's end. Given the high cost of living on Long Island and in other parts of New York, these sums are much less grand than they appear, and these earners are subject to some of the nation's highest property taxes as well. New York City even imposes an income tax of its own.
Just as important, New York has finally begun to send a message of consistency and competence to those who might want to put their money to work in our state -- and create jobs in doing so. Gov. Andrew M. Cuomo's message from the beginning has been that New York spends too much, and that higher taxes aren't the answer. He's right.
Of course, extending the surcharge is tempting. New York faces another budget deficit in the coming fiscal year, this one for $2.4 billion. Occupy Wall Street protesters have drawn attention to the yawning gulf between the richest Americans and everyone else. And Assembly Speaker Sheldon Silver (D-Manhattan) has argued that extending the surcharge solely on those earning more than $1 million would close the anticipated budget gap -- and then some. New Yorkers favor Silver's plan. In a recent Siena College poll, nearly three-quarters of registered voters favored higher taxes on those earning more than $1 million a year.
But that doesn't make it a good idea. Cuomo is right to oppose an extension, even for the highest earners. Senate Majority Leader Dean Skelos (R-Rockville Centre) is right to stand with him. And Deputy Majority Leader Thomas Libous (R-Binghamton) is wrong to hint that if he can't get support for hydrofracking, a controversial means of natural gas extraction he hopes can revive his region's economy, he might drop his opposition to the surcharge extension. Hydrofracking should be decided on the merits alone, and pursued only if scientists and regulators find that it can be done in New York without poisoning groundwater. It's much too grave a matter for cavalier horse-trading.
So is retaining the state's highest-earning entrepreneurs and professionals. Extending the income-tax surcharge would only encourage them to decamp for lower-tax locales, while letting it expire will return New York's top rate to 6.85 percent, comparable to that of Connecticut. Such taxpayers can as easily live in Greenwich as Great Neck. So why on Earth should the state pay them to move? hN