01/07/2005
Governor recommends tax cuts, reduced Medicaid spending in State of State
Saying tax cuts have helped New York’s economy in the past and can help again,
Governor George Pataki has proposed a series of tax cuts, including the
accelerated phase-out of tax hikes imposed by the state Legislature in 2003.
In his annual State of the State address the Governor said another key tax-cut
proposal, the so-called single-sales factor reform, would be part of a new
initiative designed to help struggling Upstate communities. And he proposed
reducing the state’s highest-in-the-nation Medicaid spending.
Business Council President Daniel B. Walsh said, "We are heartened to see the
Governor's energetic commitment to putting New York back on the path to
prosperity. Tax cuts and spending restraint spurred job growth earlier in his
administration, and they can give New Yorkers the same benefits again."
Many of the Governor's tax-cut proposals are part of a proposed initiative
called Operation SPUR. SPUR stands for the Strategic Partnership for Upstate
Revitalization.
The tax cut proposals include: enacting the single-sales factor tax reform which
would base corporate taxes for manufacturers on just one factor, in-state sales;
creating new job tax credits in new agribusiness zones; creating tax credits for
high-tech businesses; expanding the state’s earned income tax credit to included
lower-income single fathers; expanding the state’s STAR property-tax relief
program; and simplifying the tax code. The Governor asked former Reagan
administration economic adviser Lawrence Kudlow to review existing code and
recommend reforms; easing the worsening burden of property taxes in the state.
The Governor also said he would proposal Medicaid reforms that will cut costs
and also protect county property taxpayers.
The Governor announced during his speech that IBM—along with other global
companies such as Sony, Toshiba and Samsung—will invest $1.9 billion to build a
“next generation” computer chip plant in the Hudson Valley. IBM and other
companies will also invest $450 million to expand the Sematech research center
in Albany, while ASML, a leading manufacturer of equipment for computer chips,
will invest $325 million to create a research center at the University at
Albany.
The Governor also said he would propose a new statewide school aid formula along
with new accountability measures for schools. He noted that in the last 10
years, New York has increased overall school funding by 55 percent.
The speech also: included proposals to eliminate or consolidate hundreds of
commissions, task forces, boards and authorities; urged lawmakers to negotiate a
budget reform bill that "opens up the process, empowers individual legislators
and ensures balanced and on-time budgets," and recommended a ban on backdoor
borrowing.
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