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Home » Issues » Statement on Albany's Tax Deal

Statement on Albany's Tax Deal

Statement by Barbara Bowen, PSC President

December 8. 2011

Albany has moved on taxes—after months of intense political protest—but has not moved far enough. The agreement on revamping the tax structure passed last night [12/7/11] by the New York State Assembly and Senate must be the beginning, not the end, of a public conversation on how to solve the economic crisis in this state.

The three-way agreement represents a significant shift in Albany’s approach to addressing the economy. The plan acknowledges that the way to create jobs and provide the revenue New York needs is to address income inequality and change the tax structure—not to cut public services and lay off teachers and other public employees.

The shift is critical, but the tax legislation falls short of being the comprehensive tax reform New York needs:

  • It does not produce enough revenue. The State is poised to lose approximately $4.6 billion with the end of the so-called “millionaires’ tax.” The new tax structure created by this legislation would net only $1.55 billion after deductions are made for changes to lower-income tax brackets, flood relief, funding to offset reductions in the MTA payroll tax and other programs. That is $2 billion short of the amount needed to close the projected $3.5 billion deficit in next year’s State budget. Under this plan, New York will still have a serious budget deficit next year.
  • The plan will not generate enough money to restore funding and meet the needs of higher education, health care, mass transit, and other human services in New York. CUNY and SUNY alone have been cut by almost $1 billion over the last three years. If Albany is serious about job creation, the State must reinvest in higher education. The public university systems are important sites of job creation, but they are being starved of resources. There is nothing fair about making some of the poorest families in the state pay CUNY’s 30% tuition increase when the richest families are still getting a tax break. Progressive tax reform should provide SUNY and CUNY with the money needed to invest in our state’s greatest asset: the people of New York.
  • The legislation does not eliminate the injustices in our tax structure. The PSC welcomes tax relief for middle-class New Yorkers, but we believe that the highest-income taxpayers should pay their fair share. Under this plan, that doesn’t happen. Under Albany’s plan, the biggest tax cuts will be handed over to taxpayers earning between $300,000 and $2 million per year. A middle-class taxpayer earning $50,000 will see less than $200 a year in tax cuts, while a rich taxpayer with a $1 million in annual income will get $20,000 per year in tax “relief.”

Passage of this legislation should not foreclose debate on a more ambitious plan for tax reform and job creation. If Albany’s tax deal is a first step, the Fiscal Policy Institute’s 1% Tax Plan offers a good map of where our next steps should take us. It would raise as much as $5 billion a year by raising marginal tax rates on taxpayers earning $665,000 or more per year.

To enact the 1% Tax Plan or other progressive tax reforms we need to keep the pressure on. The change in Albany’s approach to taxes occurred only because of a level of pressure not experienced in this state for many years. PSC members and CUNY students were exceptionally active in demanding fair taxation. The union’s peaceful direct action for progressive taxation last spring, which resulted in 33 arrests outside the door of the governor’s office, came early in the upsurge of activism. Occupy Wall Street—together with Occupy Albany and other movements of “the 99%”— expanded our political imagination, and the sustained work by coalitions of which the PSC is proud to be a part added momentum. Working with Strong Economy for All, 99% New York, the Working Families Party and CUNY students, we expanded our union’s influence and helped to move the campaign.

The movement for progressive tax reform is far from over; with a huge budget deficit looming we can’t allow it to be over. New Yorkers cannot withstand another $2 billion in cuts to education, health care, mass transit, and other human services. Now, thanks to months of protest, the conversation on revamping the state’s tax system to stimulate job creation has begun; PSC members and other activists from across the state cannot let the opportunity for a more ambitious reform be lost. What’s at stake for the PSC is whether our classrooms will continue to be so crowded that students sit on windowsills, whether CUNY faculty will have resources for research, whether students who have dared to dream of a better life will have a chance to succeed.

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