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.
We know several people that are or have moved from CA. They just can’t make it there.
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.
Why don’t they try something new? Like increase the fees for license renewal and car registrations?
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.
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?"'
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.
That is not my idea of trying something new mine would be like quit spending and quit taxing people to death.
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.
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.
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.
I bet they miss Rush now.
Tex revenue drops unexpectedly...
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)
I don’t understand, we keep raising the tax rates and revenues keep falling...
Yep, the bigger trainwreck is gaining speed. Hope all are prepared for extended survival. It ain’t going to be pretty.
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.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.