Bruno: 'Not One Penny in New Taxes'

A Challenge Is Issued to Governor

By JACOB GERSHMAN, Staff Reporter of the Sun
November 29, 2007

In the first skirmish of what promises to be an unusually fierce Albany budget battle, the Republican majority leader of the state Senate, Joseph Bruno, vowed to repel any attempt by the Spitzer administration to raise taxes.

In an interview with The New York Sun, Mr. Bruno issued a warning to Governor Spitzer, saying the governor would have to find some other way to deal with a deficit that has soared beyond $4 billion.

"If he wants to get a budget done, he is going to submit a budget without any tax increases," Mr. Bruno said. "If he doesn't want to get a budget done, then he can do whatever it is he thinks is appropriate."

Added Mr. Bruno: "Not one penny in new taxes."

The Senate leader is ruling out a tax hike at a moment when pressure is building on the governor to stave off painful budget cuts by raising income taxes on wealthier New Yorkers.

Some Democratic lawmakers and labor activists close to Mr. Spitzer are urging him to lift the tax rates of residents earning at least $200,000 a year, an increase similar to the one Albany temporarily imposed four years ago, when state finances were reeling following the September 11, 2001, attacks.

Worsening revenue forecasts coupled with a growing list of spending promises have put the governor in a bind.

Mr. Spitzer has pledged not to raise taxes, but he has also pledged to increase public school aid by $7 billion during his first term and to pour billions more dollars into a property tax relief program. The Spitzer administration is also looking to avoid another costly battle with the health care industry over Medicaid spending.

The governor is expected to try to recover some of the money by raising fees, closing "tax loopholes," and tapping nonrecurring sources, such as the selling of state assets. But the money from those revenue streams is unlikely to be enough to help the governor avoid turning his back on some campaign promises.

Mr. Spitzer is scheduled to submit his 2008-09 fiscal year budget proposal to lawmakers on January 22.

Administration officials say Mr. Spitzer isn't planning to raise state income taxes, but they have been careful not to rule out the option. One administration source said the governor has rejected tax-increase proposals floated by his staff.

"The governor has been consistent in his position," a spokesman for the governor, Errol Cockfield, said. "He does not favor any new tax increases."

A month ago, the budget office revised its estimate of next year's deficit, increasing the projection to $4.3 billion from $3.6 billion. While a prediction of slower growth in financial services bonuses was a primary factor pushing up the figure, other reasons did not have to do with economic trends.

After assuming additional revenue from the enforcement of tax laws on sales of cigarettes and other products to non-Indians at Indian reservation stores, the budget office is no longer counting on the money.

It has also decided to set aside about $400 million for potential collective bargaining agreements with labor unions serving state employees.

The deficit would have been even greater if not for the fact that Medicaid expenses shrank by $385 million, mostly due to a smaller-than-expected caseload.

The 78-year-old Senate leader declined to offer any suggestions to the governor for closing the gap other than to say the Senate aims to be "responsive" and "responsible."

He did, however, blame Mr. Spitzer for helping to create the deficit. "He submitted probably one of the biggest increases in overall spending that a governor ever submitted in his first budget," Mr. Bruno said. "That was irresponsible. So he's now trying to live with what he did."

Mr. Spitzer's first executive budget called for an increase in state funds of $6 billion versus fiscal year 2006-07 spending levels, slightly more than the increase proposed in Governor Pataki's final budget. Mr. Pataki froze state fund spending in his first years in office.

The majority leader said he was opposed to saving money through nonessential workforce attrition, as was proposed by the Senate Democratic leader, Malcolm Smith.

Mr. Smith said the state could save $600 million by allowing 4,000 positions to go unfilled, the Times Union of Albany reported last week.

Mr. Bruno said the work force shrunk by tens of thousands while he was Senate leader during the Pataki administration, and said he saw no need for further cuts. "If you're going to deliver services, you need the people to deliver the services," he said.

Bruno: 'Not One Penny in New Taxes'

A Challenge Is Issued to Governor

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