New York State to Increase Spending Despite Facing Massive Budget Shortfall

By Sara Burrows | December 19, 2008 | 6:51pm EST

New York Gov. David Paterson (AP Photo)

( – In just 10 years, New York state has increased its spending by 13 percent per person, in real terms. Inflation-adjusted, per-capita spending was $1,119 per person in 1998-99 – and was $1,222 per person in 2008-09.
Spending has tripled over the last 50 years in New York – meaning the $369 that the state spent per person in 1959 was 230 percent higher in fiscal year 2009.
Under Gov. David Paterson’s proposed 2010 budget, New York state’s general-fund spending would remain flat compared to 2009 levels -- at $55.4 billion.
(Spending for the state’s operating fund, which is separate, would actually increase one-half of 1 percent, and all funds spending would increase 1.1 percent.)

Today, New York faces a 2009 mid-year budget gap of $1.7 billion and a massive $13.7 billion gap in fiscal year 2010. 

Rather than reduce spending, which has increased faster than the rate of inflation for decades, the governor has proposed 137 new or increased taxes to deal with the state’s deficit.

Paterson wants $4 billion in new taxes and $9.5 billion in cuts in his 2010 Executive Budget proposal, which he presented to the public earlier this week. 

New taxes include an “obesity tax” on non-diet sodas and an “iPod tax” on downloads of songs, movies and TV shows. 

His proposed tax increases include taxes on gasoline, car rentals, beer and wine, cigars and cable/satellite TV service. 

Sixteen fee increases would make driving a car much more expensive. Licensing fees for barbers, cosmetologists, manicurists, bail enforcement agents, home inspectors and other modest income jobs, would also be raised.
Education, hospitals and prisons are among the programs facing cuts in the coming fiscal year.
Although spending on these particular programs would be reduced, spending in general would not be reduced.
Paterson’s proposal predicts the budget deficit will reach $51 billion by 2012 if nothing is done. Under his four-year plan, the 2012 deficit could be reduced to $5.8 billion, according to New York’s Division of the Budget.

Paterson, by the way, became governor after then-Gov. Eliot Spitzer resigned amidst scandal in March.

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