Friday, August 22, 2008

Taking the tax cap to the top

From the 25 August 2008 Greater Niagara Newspapers

By Bob Confer

Although party politics looked like the ultimate cause of the controversial property tax cap never making it in the Democrat-led Assembly while it did in the Republican-led Senate, it is, at its core, a bipartisan issue. Republican John Faso introduced the concept during the 2006 gubernatorial debates and within a year’s time Democratic Governor Eliot Spitzer warmed up to the idea and created a Democrat-led task force whose findings tickled the fancy of Democratic David Paterson and Republicans in the Senate and Assembly. With a fan base as two-sided as that it’s obvious that even though it failed last week, the tax cap bill will see lengthy debate in the future. It might pass one day, maybe even next year if the Dems gain control of the Senate and can then take full credit for its institution.

If this does happen, which a majority of the beleaguered property owners in New York are hoping for, the concept needs a lot of help because it only answers one half of the equation. It might address spending at the local level but does absolutely nothing to address the spending habits of State Government. This is in itself brazenly hypocritical because the elected officials who want to hold the lower levels of government accountable choose not to live by the same rigid standards. If anything, it’s Albany that needs a tax cap because our state spends at rates the growth of which far exceed those of our schools and municipalities.

As mentioned in last week’s column, I saw my property taxes rise by a total of 17% over a three year period. It takes the state about two years to achieve such an increase in spending. When you look at what happened to the state budget over the past 3 fiscal years (the last two under liberal governors and the other ruled by a GOP head) this year’s is 5.5% higher than last year’s which was 7.3% higher than the previous which was 7.9% higher than the one before that. That amounts to a three-year rise in spending in excess of 22%. It’s no wonder that the state budget nearly doubled in the last thirteen years, going from $61.9 billion to $121 billion.

In comparison, federal spending, which is always believed to be more malignant than state spending, grew by “only” 6.7% in the last 3 years. Now, when gluttonous Uncle Sam is evidently more fiscally prudent than New York, there’s obviously something wrong. Hence Governor Paterson employing last week’s emergency session at the State Capitol which, by the way, wound up being more of a dog and pony show than anything of substance. It was a means by which to lull the taxpayers into believing that the political class was looking out for them. Only a pittance was carved from the budget and most of the wasteful social welfare and corporate welfare programs were left completely untouched. The legislators patted themselves on the back for carving out .08% of the bloated budget. Eight-tenths of one percent! They’ve been making it sound like their efforts were as awesome and dangerous as Man walking on the moon.

And that sort of fiscal lunacy is exactly why Albany needs a cap. Without any reins these wild horses have run roughshod over the Empire State. They need to be reined in. They need to know that their spending is - just like that of the local spending they decry - out of control and that it, too, needs a cap. But, a cap on taxation is difficult to implement at the State level because they flood us with so many often-hidden income taxes, sales taxes, user fees, license fees, and more. That’s why at the higher levels of government a “spending cap” is the way to go. If the expansion of the State budget was limited to the same standards that might be applied to locals’ taxes (the lesser of 4% or 120% the rate of inflation) we’d be so much better off. Applying that mathematical concept, the $62 billion budget of 13 years ago would have grown to $90 billion this year, a third less than what it truly is.

A simple spending cap is really that effective. And, it’s obviously necessary, too. New York State’s public sector doesn’t understand the value of a dollar, so they need to be guided by the hand because, unfortunately, the cap they’re using now – the dunce cap – just isn’t helping New Yorkers.

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