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New York State's economy is growing slowly, but it will grind to a halt if the State Legislature approves Gov. Pataki's proposed budget, the head of the state AFL-CIO said Friday.

About 250,000 jobs will be lost in the public and private sectors due to deep cuts in state funding for health care, education, construction projects and aid to municipalities, according to Edward J. Cleary, president of the state AFL-CIO, which represents 2.5 million unionized workers.

He said the health care and construction industries will be hit hard by reduced state spending.

In addition, all companies will be affected by property taxes and other levies, which are likely to rise as the state's personal income tax is reduced and Albany shifts more responsibilities to local governments, Cleary told reporters and editors of The Buffalo News.

"Businesses will leave the state, and small businesses which voted for him (Pataki) are going to scream when they see their property tax bills," he said.

"We have to live with taxes. Gov. Pataki is just shifting the responsibility to local governments, and we will have bigger budget problems in the end," he added.

The state AFL-CIO opposes further personal income tax cuts because it believes they will grow New York's structural deficit from the current $2 billion to $5 billion.

Furthermore, the proposed income tax savings of $106 for each taxpayer will be more than offset by $2,000 per person in additional local levies, college tuition and user fees, said Denis M. Hughes, Cleary's executive assistant.

Pataki's budget calls for $37 million less in aid to localities, but only gives these communities a $12 million break on mandates. So, cities, towns, villages and counties will be forced to raise $25 million in additional revenues to meet the responsibilities that Albany has dumped on them, Hughes said.

"The biggest tax burden isn't the state income tax, it's property and federal income taxes," he added.

The union leaders also complained about the media blitz launched by Change-NY, a conservative lobbying group. They predicted that Change-NY's campaign to raise an additional $1 million from the business community for more budget-related ads will fail once executives see the "misinformation being put out."

The state AFL-CIO has spent $116,000 to date on advertising, primarily in newspapers.

"The governor is following the reckless advice of Change-NY, a group of millionaires who are prepared to create chaos in New York State to get their way and reduce taxes on the rich and the big corporations, in other words, on themselves," Cleary said.

"They will not succeed. A fair budget is more important than an April 1st budget. If for the first time in living memory we have a New York governor who wants -- in the interests of a clique of millionaires -- to wage war on working people, the elderly, the poor and the disabled, he will learn soon enough that New Yorkers know how to fight for their rights and organized labor is prepared to lead that fight," Cleary said.

The Business Council of New York State and the National Federation of Independent Business, a small-business lobbying group, both have embraced Pataki's budget. They predict his spending plan will jump-start the economy.

Daniel Walsh, the council's president, predicts that the budget will create 375,000 private-sector jobs by the year 2000. Companies will begin to hire people again because of their renewed confidence in the state's ability to control government expenditures, he said.

"Over a million enterprises in New York State pay taxes on their profits through the personal income tax of the owners," said Mark P. Alesse, the NFIB's state director.

"These businesses will grow and create jobs with a lower, flatter income tax rate. The passage of this budget will mark the beginning of New York's economic resurgence, which will be led by small business," he said.

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