Editor's Note:
Oh yes, that liberal Hawkins has a solution - but we won't tell you about it.

Buffalo News
by Tom Precious
October 14, 2010

ALBANY -- It's all the buzz, and everyone on the campaign trail wants to do it: control New York's spiraling taxes.

"We have to eliminate the deficit in this state, and we have to do it without raising taxes. Why? Because the working families of New York can't afford to pay any more taxes -- period," Democratic gubernatorial candidate Andrew M. Cuomo said recently.

"New Yorkers are taxed too much, and we demand relief," said his Republican rival, Carl P. Paladino.

Even one of the race's most liberal candidates, Howie Hawkins, running on the Green Party line, has gotten into the act, calling for a reduction in property taxes for potentially millions of property owners.

But given the soaring deficits the state again faces, how do the candidates plan to deliver this relief from rising state taxes and local property taxes?

The routes vary greatly.

There are ideas to cap property taxes, reduce corporate franchise tax payments and give breaks to manufacturers or people in job-creating industries. There are ideas to slow tax growth and actually cut into the muscle of Albany's tax-levying ways.

But uncertain in all these plans from Cuomo and Paladino, the two major party candidates, is something far more basic: How do they persuade the State Legislature, especially the more left-leaning Assembly, to go along with these ideas, some of which have kicked around the Capitol for years without success?

The Assembly, whose majority is poised to become even more New York City-dominated after the Nov. 2 elections, has been unwilling to go along with a far less ambitious property tax plan proposed by lame-duck Gov. David A. Paterson than the ideas advanced by Cuomo or Paladino. And next year brings another big state deficit, making it questionable whether New Yorkers will see a noticeable effect on their taxes.

Assembly Speaker Sheldon Silver, D-Manhattan, this week dismissed any notion of returning to session this year to deal with property taxes -- only days after Paterson released a report saying the average property owner's bill today would be 22 percent lower if a cap had been in place over the last 15 years.

A recent poll found state taxes and property taxes being cited by a third of voters as the top issues facing the state. In a bow to those concerns, Cuomo and Paladino have floated very different plans, though both contain holes and exceptions.

Cuomo, for instance, has offered a plan to freeze what he calls the Big Three: income taxes on individuals and corporations, and the state sales tax. But it is uncertain whether he would stick to that freeze beyond 2011.

While those taxes account for the large majority of state levies, Cuomo's proposal does not cover many of the "nuisance" tax increases for which Albany has become infamous.

In most years -- and 2010 is no exception -- the state raises user fees, such as those for hunting or motor vehicle use, while often slapping assessments or taxes on hospitals, energy companies, banks or any assortment of industries that trickle down as higher costs for consumers.

Such increases enacted this spring -- on everything from cigarette purchases in hotels booked on the Internet, state park user fees and higher sales taxes on clothing purchases -- are all part of $1 billion or more in "revenue actions" in the 2010-11 budget that runs through March 31.

On the state tax front, Cuomo also has proposed a "Jobs Now" credit -- a two-year program worth $300 million to employers who hired out-of-work New York residents.

But it is his property tax plan that Cuomo has been promoting most heavily, as he did in a visit to Monroe County on Wednesday. "Taxes are out of control. They are suffocating families. We are chasing businesses from the State of New York. Property taxes are one of the most oppressive taxes in the State of New York," Cuomo said in Irondequoit.

That plan would cap the annual growth in property taxes by all levels of local government, including schools, at the inflation rate or 2 percent, whichever is lower. (For the last two years, a 4 percent cap pushed by Paterson has not made it through the Assembly.)

The cap could be overridden if approved by both a "local governing board" and at least 60 percent of local voters.

There are many potential loopholes in a cap program. Could, for instance, contractual teacher salary increases not be included in a cap, which would therefore water down its significance for property owners?

Cuomo has said only that there would be "limited exceptions," such as a big legal settlement or "extraordinary" capital expenses. Josh Vlasto, a campaign spokesman, said Cuomo supports no other exceptions beyond the shortlistcq he already has identified, which also includes letting a locality break the cap if the money is used to consolidate services in a community as a way to save money.

Paladino says Cuomo's plan comes up short. "New Yorkers want their taxes cut, not capped" is his mantra.

Paladino acknowledges that some of his proposals, such as how he would fund some of his tax cuts, are still in need of fleshing out. For instance, he has called for a 20 percent cut in state spending in the 2011-12 budget, which he says would make it possible to cut state taxes by 10 percent.

The major target is Medicaid, the health insurance program for disabled and low-income people, including the elderly. He says a $10 billion cut in state and county Medicaid spending would help cut state and county taxes by up to one-third. He also believes that consolidating school district functions, such as administrative offices, into countywide units, would save money and produce better bargaining power with unions over salaries and benefits.

Paladino envisions an initial cap on property taxes, followed by cuts from present levels. But Wednesday, his campaign did not, as expected, release details on how it would work.

To reach downstate suburban voters, Paladino has dangled a $1.5 billion cut in a payroll tax imposed in counties near New York City. He only says that it will be funded by rooting out "waste, fraud and abuse" at the transportation authority that is the beneficiary of the payroll tax revenues. He also would make that entity, the Metropolitan Transportation Authority, a state agency, which the Cuomo campaign derided as "bizarre" because it would have all New Yorkers paying for a downstate transit system.

There are some similarities between Cuomo and Paladino on taxes. Both say they support an end to three-year hike in personal income taxes on higher-income New Yorkers enacted in 2009. The only difference: Paladino says he would sunset the tax a year early, in 2011.

Neither candidate has specifically said how he would make up for the lost tax revenues, which the Paterson administration says amounted to $3.6 billion last year and is projected at $5.8 billion this year.

Paladino insists his overall plan would actually put more money into the pockets of New Yorkers, and he proposes that a supermajoritycq of the Legislature be needed to approve future tax increases.

"In my mind, capping is gutless," Paladino told a group of business executives in Manhattan last week.

Kenneth Adams, president of the Business Council of New York State, which has endorsed Cuomo, is pleased to hear both camps talking about tax cuts.

"Our position is the state has to live within its means, which means bring spending in line with existing revenues," he said. Adams said that beyond addressing property taxes -- which he said cost New Yorkers $46 billion a year, 40 percent of which is paid for by businesses -- next year's budget needs to avoid "backdoor" tax hikes.

But one labor-backed group says both men's tax plans would result in deep cuts to vital programs for low-income residents and students in public schools.

Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, said Cuomo and Paladino should raise taxes on the wealthy to make make the tax structure more fair to low- to moderate-income families.