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New York State Tax Revenues Slump 36%, Is New York The Next California?
Zero Hedge ^ | 10/5/09

Posted on 10/05/2009 11:14:55 AM PDT by FromLori

New York State is quickly becoming the next California, as tax revenues drop 36% from 2008 levels, and a dejected governor expressing his frustration with policy measures that continue to not bear fruit. As a reminder the state most reliant on the financial sector, is struggling with a $2.1 billion budget deficit that is still looming despite tax increases, federal aid and spending cuts.

New York State’s income tax revenue has dropped 36 percent from the same period in 2008, Governor David Paterson said, “frustrating” his attempt to close a projected $2.1 billion budget deficit.

“We added personal income tax, which we thought would make the falloff 10 percent to 15 percent,” Paterson, a Democrat, said on CNBC today, referring to $5.2 billion in new or increased taxes. “This is what is so frustrating. It’s still 36 percent, meaning our revenues fell more in 2009 than they did in 2008.”

The budget will still be $2.1 billion in deficit because spending plans exceed revenue projections, the state Division of Budget said July 30. The report predicted deficits of $4.62 billion in 2011, $13.3 billion in 2012 and $18.2 billion in 2013. The Governor, who has recently had a major falling out with President Obama, may be in even more hot water as hopes for major tax windfalls from corporate taxes vanish due to generous NOLs established during last year's financial collapse:

“We are Ground Zero for the economic recession,” said Paterson. “What we’re recognizing now is what everybody recognizes in their own portfolio: you can’t overinvest in one area because, if it fails, you’ll have a debacle.”

New York is depleting its options for balancing the budget, Paterson said.

“What we want to do is bring the legislature back as soon as possible and make the tough decisions,” Paterson said. Alas expenses tend to be much "stickier" than revenues, meaning that even much more drastic cost cutting will likely still leave the state at the mercy of Federal handouts. And if California's IOU experiment is any indication, Paterson may want to promptly get on the President's good side before he is forced to ask for much needed assistance.

Also, another issue that is not receiving much airtime is the continued dire straits that New York's MTA finds itself in. From the most recent status update: "the program has a funding gap of $9.9 billion despite a large increase in State aid and a 56 percent increase in anticipated federal funding, which may not materialize. In the absence of additional aid, the MTA plans to fill the gap with debt, but debt service would then rise rapidly and increase pressure in the future to raise fares and tolls." Yet another aspect of the state economy that is intimately linked with well-bid debt markets, which in turn track the equity market tick for tick, explaining once again how much the administration has staked on a stock market that, miraculously, is not allowed to leg lower by any material amount. However, as long as analyst actions, such as today's by Goldman in which it effectively upgraded itself, continue to drive markets, the plan to keep equities at untenable and fundamentally unjustified levels, will be viable to keep the economy running. Even if it is based on smoke and mirrors.


TOPICS: Business/Economy; Front Page News; News/Current Events; US: New York
KEYWORDS: bhoeconomy; california; democrats; economicdisaster; economy; failedstates; laffercurve; newyork; taxcheatparty; taxes
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1 posted on 10/05/2009 11:14:55 AM PDT by FromLori
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To: FromLori
"Hello, Galt's Gulch, can I help you?"

"Yes, we have plenty of room. C'mon down!"

2 posted on 10/05/2009 11:17:26 AM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: FromLori

There is only one solution. Raise taxes again! Yea, that ought to do it!


3 posted on 10/05/2009 11:17:26 AM PDT by Blood of Tyrants (The Second Amendment. Don't MAKE me use it.)
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To: FromLori

THE FEW

THE PISSED

THE TAXPAYERS!


4 posted on 10/05/2009 11:18:52 AM PDT by Huskrrrr
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To: FromLori

Perhaps Gov. Paterson should be trying to invite Rush back. :)


5 posted on 10/05/2009 11:18:58 AM PDT by pnh102 (Regarding liberalism, always attribute to malice what you think can be explained by stupidity. - Me)
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To: FromLori
Let's charge a 100% on bankers'/brokers' bonuses.
6 posted on 10/05/2009 11:20:15 AM PDT by KarlInOhio (Rio: Gold / Madrid: Silver / Tokyo: Bronze / Obama: Lead weight.)
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To: FromLori
TAX ALL OF THOSE MARXIST/SOCIALIST/LIBERALS TO DEATH I SAY!!

NEW YORK DESERVES IT!

7 posted on 10/05/2009 11:20:31 AM PDT by unixfox (The 13th Amendment Abolished Slavery, The 16th Amendment Reinstated It !)
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To: FromLori

Actually, they should just tax ALL public workers 100% and then just keep recycling the money!


8 posted on 10/05/2009 11:21:12 AM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: FromLori

More encouraging signs of economic recovery. We need healthcare now. sarc


9 posted on 10/05/2009 11:21:14 AM PDT by Neoliberalnot ((Freedom's Precious Metals: Gold, Silver and Lead))
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To: FromLori

When will thse morons learn that government cannot continue to grow at the expense of the private sector?


10 posted on 10/05/2009 11:21:47 AM PDT by avacado
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To: FromLori

“mmm”, “mmm”, “mmm”


11 posted on 10/05/2009 11:22:11 AM PDT by AU72
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To: FromLori

NY State, with its Downstate control, big unions and a few special interests, are taxing citizens and businesses out of the State. Wall Street therefore accounts for an ever larger percentage of NY State revenue. As goes Wall St, so goes the State Budget.

Unless you somehow need to be in NY State to serve NY City, it makes NO SENSE to have a business in NY State.


12 posted on 10/05/2009 11:22:44 AM PDT by PGR88
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To: FromLori

Actually, all those people who have lost their jobs and their savings probably find it even more “frustrating” than Governor Patterson.


13 posted on 10/05/2009 11:23:24 AM PDT by Cicero (Marcus Tullius)
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To: pnh102

Across the board, 10 percent staff reduction, ten percent pay cut for the remaining workers - no exceptions.
Budget in balance?
No. Repeat as above.


14 posted on 10/05/2009 11:23:40 AM PDT by Old North State
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To: FromLori

All these blue states are collapsing yet the libs are demanding more of this to fix it.


15 posted on 10/05/2009 11:23:54 AM PDT by Tzimisce (No thanks. We have enough government already. - The Tick)
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To: April Lexington
To all he is obviously blind to his spending and taxing ways
16 posted on 10/05/2009 11:24:34 AM PDT by FromLori (FromLori)
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To: Cicero

Budget cuts NOW! WTF do these cretins still have “pensions,” especially at 85% of last salary?


17 posted on 10/05/2009 11:24:44 AM PDT by Clemenza (Remember our Korean War Veterans)
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To: FromLori
“What we want to do is bring the legislature back as soon as possible and make the tough decisions,”

Like CUTTING SPENDING???? Nah - raise some more taxes!

18 posted on 10/05/2009 11:24:47 AM PDT by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: unixfox

Yep. They reap what they sow. You want a socialist utopia based on the backs of wage earners and business owners? Then, don’t be surprised if they leave for fairer pastures. Its time to realize that the demented thinking of the Democratic party and Eastern European dreams of social utopia are the wrong path. They turn productive economies into train wrecks...


19 posted on 10/05/2009 11:24:50 AM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: FromLori

It’s the inevitable end result of chronic liberal leech leadeship. Eventually any government cannot stand when it is being eroded, rotted, it’s pillars eaten away by the lies, crookery, ans hollowing bribery of the Leftists.


20 posted on 10/05/2009 11:25:25 AM PDT by DGHoodini (Iran Azadi!)
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To: FromLori

21 posted on 10/05/2009 11:25:28 AM PDT by Bobalu (I AM JIM THOMPSON)
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To: Tzimisce
It is high time the “Red” states get the hell out of the Union before the socialist bill gets spread out nation-wide. Think inflation as a tax to bail these Leftie losers out...
22 posted on 10/05/2009 11:26:34 AM PDT by April Lexington (Study the constitution so you know what they are taking away!)
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To: FromLori

We know several people that are or have moved from CA. They just can’t make it there.


23 posted on 10/05/2009 11:26:58 AM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: Bobalu
lol bo wants him gone threw him under the bus
24 posted on 10/05/2009 11:28:17 AM PDT by FromLori (FromLori)
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To: freekitty

I do not know who would want to live there now anyway with all the illegal aliens sucking off the system and their gangs and water problems, fires, quakes.


25 posted on 10/05/2009 11:29:47 AM PDT by FromLori (FromLori)
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To: FromLori

Why don’t they try something new? Like increase the fees for license renewal and car registrations?


26 posted on 10/05/2009 11:29:50 AM PDT by Scotswife
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To: FromLori

I am happy to have contributed to at least a couple thousand dollars of state income tax fleeing the state in the past year. Even if it was to PA.


27 posted on 10/05/2009 11:30:07 AM PDT by Dan Nunn (Some of us are wise, some of us are otherwise. -The Great One)
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To: FromLori
This one always stands out.

Bloomberg's Tax Lesson[1% are paying 50% of the taxes][New York]

'"One percent of the households that file in this city pay something like 50% of the taxes," explained the Mayor. "In the city, that's something like 40,000 people. If a handful left, any raise would make it revenue neutral. The question is what's fair. If 1% are paying 50% of the taxes, you want to make it even more?"'

28 posted on 10/05/2009 11:30:26 AM PDT by BGHater ("real price of every thing ... is the toil and trouble of acquiring it")
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To: FromLori
New York State Tax Revenues Slump 36%, Is New York The Next California?

These two states should be the richest, but because they have been run by the libs for so long, they are the ones crying for money.

Here's some free advice to both of them - try cutting spending.

29 posted on 10/05/2009 11:30:27 AM PDT by The Sons of Liberty (FUBO - When 0bama Fails, Freedom Prevails!)
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To: Scotswife

That is not my idea of trying something new mine would be like quit spending and quit taxing people to death.


30 posted on 10/05/2009 11:31:12 AM PDT by FromLori (FromLori)
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To: FromLori

sorry - should’ve added the /s tag.

No matter who is in charge of NY - repub or dem - they ALWAYS raise license and registration fees.
Just got mine in the mail.


31 posted on 10/05/2009 11:32:53 AM PDT by Scotswife
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To: FromLori

Is California the next New York?

No, New York is in a three way tie for first with Michigan, and Massachutesses. California is clearly pulling up the rear of “progressive” states trying to reach its first state bankruptcy. Remember, the race is measured in people leaving the state versus those entering. Cally is just now reaching NY status in chasing away taxpayers, give it another 40 years and see how progressive you are then.


32 posted on 10/05/2009 11:33:02 AM PDT by equalitybeforethelaw
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To: FromLori

This stuff gets to me.

During the various bubbles, the governments made out like bandits. They had more capital gains, FICA, medicare, and income tax “revenue”. That doesn’t even get into sales taxes, various carbon taxes (gas, heating, etc), and the Roth IRA conversion scams.

The one that really gauls me is property taxes at the local level.

Every level of gov’t in almost every jurisdiction expanded their spending far beyond the increases in “revenue”.

Not only that, but in states like mine (GA), we don’t have property value increase caps like FL. So we saw our home values increase dramatically (as did the little old ladies with old homes in the middle of the new big clusters) which resulted in much higher property taxes. Then, they still needed to raise millage rates during the last 10 years.

So why is it that these levels of government can double or triple their spending during the dramatic “revenue” increases, but they can’t cut back one red cent during down times? They still need to expand. They want to increase tax rates. They want to increase “services”. They want want want. But the tea partiers are the greedy ones?

Hell, in my county they tried to increase my home value by 20% this year even though there are foreclosures all around. It makes me burn with anger. All of it.


33 posted on 10/05/2009 11:33:55 AM PDT by laxcoach (Government is greedy. Taxpayers who want their own money are not greedy.)
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To: FromLori

I bet they miss Rush now.


34 posted on 10/05/2009 11:34:23 AM PDT by Little Ray (Obama is a kamikaze president aimed at the heart of this Republic.)
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To: FromLori

Tex revenue drops unexpectedly...


35 posted on 10/05/2009 11:34:41 AM PDT by ltc8k6
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To: FromLori

Simplified NY State Income Tax Form 1040-NY_SCRU:
1) Gross income for this tax year: $_______________
2) How much do you have left? $_______________
3) Add #1 to #2 and put here: $_______________
4) Multiply #3 by 1.15: $_______________
5) Subtract Democrat Donation: $_______________
6) Add 250% of GOP Donation: $_______________
7) Total Lines 4-6: $_______________
Mail Line 7 to DNC NY State Chairman or Charlie Rangel or Chuck Schumer (Keep Receipt)


36 posted on 10/05/2009 11:35:23 AM PDT by SES1066 (Cycling to conserve, Conservative to save, Saving to Retire, will Retire to Cycle.)
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To: FromLori

I don’t understand, we keep raising the tax rates and revenues keep falling...


37 posted on 10/05/2009 11:36:38 AM PDT by ltc8k6
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To: FromLori

Yep, the bigger trainwreck is gaining speed. Hope all are prepared for extended survival. It ain’t going to be pretty.


38 posted on 10/05/2009 11:38:57 AM PDT by Neoliberalnot ((Freedom's Precious Metals: Gold, Silver and Lead))
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To: FromLori
Economics 101: NY is clearly now at point B on the Laffer Curve:


39 posted on 10/05/2009 11:40:00 AM PDT by FormerACLUmember (When the past no longer illuminates the future, the spirit walks in darkness.)
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To: avacado

When will thse morons learn that government cannot continue to grow at the expense of the private sector?””

Taking down the economy is the goal of some including the muslim in charge of the white hut.


40 posted on 10/05/2009 11:40:19 AM PDT by Neoliberalnot ((Freedom's Precious Metals: Gold, Silver and Lead))
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To: unixfox

No, we do NOT deserve it. Thanks a bunch.


41 posted on 10/05/2009 11:41:31 AM PDT by Marysecretary (GOD IS STILL IN CONTROL!)
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To: pnh102

How many people on long Island are saying: whyshould I pay taxes just to pay pensions for the retired civil servant next door, who gets a bugger check each month than I do from my boss, after all the stuff is taken out. And his boss is thinking: Now Texas has no income tax and low commercial rents right now, right?


42 posted on 10/05/2009 11:43:31 AM PDT by RobbyS (ECCE HOMO!)
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To: FormerACLUmember
The question I have never heard addressed: Why is it a government's function to maximize tax revenues anyway?

Where is THAT in the Constitution?

43 posted on 10/05/2009 11:43:50 AM PDT by TChris (There is no freedom without the possibility of failure.)
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To: FromLori
NJ, Kalifornia, and NY need to put a stake through the heart of the Teachers Unions.

This is their attitude.

I could say the same thing about my paycheck that goes to exorbitant property taxes that pay for their salary, retirement, health care, etc.

Is all this really that hard? Put the screws to this union and kill it.

44 posted on 10/05/2009 11:45:22 AM PDT by SkyPilot
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To: Blood of Tyrants

45 posted on 10/05/2009 11:46:05 AM PDT by SkyPilot
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To: Neoliberalnot

I foresee a huge tax coming soon on moving companies.
(think Kalifornia and ammo taxes)


46 posted on 10/05/2009 11:48:49 AM PDT by WOBBLY BOB (ACORN:American Corruption for Obama Right Now)
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To: AU72
“mmm”, “mmm”, “mmm”

Can I ask a question?

What does that mean? I see all these "umm umm" or "mmm mmm" repeated posts on FR all the time now. It sounds like listening to someone chew food.

Is it some obscure SNL skit, or YouTube video? I have to admit, it is kind of annoying.

47 posted on 10/05/2009 11:49:27 AM PDT by SkyPilot
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To: FromLori
“We added personal income tax, which we thought would make the falloff 10 percent to 15 percent,” Paterson, a Democrat, said on CNBC today, referring to $5.2 billion in new or increased taxes. “This is what is so frustrating. It’s still 36 percent, meaning our revenues fell more in 2009 than they did in 2008.”

Hey Paterson. Even you and your Democrat moron leaders in NY should be able to see all you have to do is raise income taxes another 50% and everything would be great!

Geez, some people just have no idea what they're doing.

48 posted on 10/05/2009 11:50:16 AM PDT by VeniVidiVici (Hey Obama. Where is Osama Bin Laden?)
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To: pnh102
Yes I think a gigantic tax increase, one that would cover all of their shortfalls and provide for a rainy day account would be fine for New York. In the area of 50% seems fair

5

49 posted on 10/05/2009 11:54:00 AM PDT by BooBoo1000 (Some times I wake up grumpy, other times I let her sleep/)
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To: SkyPilot

There is a simple and very progressive solution to New York’s budgetary problems. Simply tax all income at the 175% level and the deficit disappears. This will also promote the “greening” of New York, a process that is well advanced in cities like Detroit.


50 posted on 10/05/2009 11:54:04 AM PDT by Vehmgericht
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