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THE GOVERNOR'S TAX CUTS

Gov. Pataki has the right idea on growing the economy through tax cuts, but his timing may be off. Upstate New York needs this help now, not down the road when some other governor might have to figure out how to pay for it.

Pataki has called for $325 million in business tax deductions in categories designed to keep businesses and jobs in this state. Like his proposed $600 million in personal income tax cuts, though, the cuts are "back-loaded." That means they won't take full effect until 2003.

While the cuts are welcome, it's especially clear in the lagging upstate economy that more needs to be done -- and more quickly. Simply put, taxes here aren't yet low enough. Not on businesses, not on residents.

A recent report by the American Legislative Exchange Council, a bipartisan organization of some 3,000 state legislators, ranks New York first in both per-capita taxation and in state and local taxes as a percentage of income. We also lead the total tax category, with residents shelling out 40 percent of their incomes for taxes.

The governor has a good record on reducing our onerous tax burden. Some of the tax cuts, including the STAR program, phase in over time and are just nearing their peaks in taxpayer savings.

But he has had to back-load his most recent tax-relief proposals because the state will have its hands full paying for already-enacted tax cuts that will grow to $6.9 billion by 2002.

That's sobering for both the governor and legislators, especially local Senate Republicans who loudly trumpet their support of both the previous Pataki cuts and Senate Majority Leader Joseph L. Bruno's $795 million tax-cut proposal. They, like most other legislators, tend to be a bit more taciturn about how to pay for the cuts.

Pataki wants to use this year's surplus to help pay for the already-enacted tax cuts. Good idea. But he and legislators must not only propose new tax cuts, they must find ways to cut state spending to pay for them -- without touching projects and programs designed to stimulate the economy.

So far, Pataki is avoiding that task by putting the tax cuts in the future. Although he sends a strong -- and needed -- signal that New York is serious about reining in its tax burdens, business and tax-watchdog groups alike express a valid concern that the cuts will be postponed if Wall Street takes a downturn.

It will take political courage and special discipline to cut spending rather than postpone promised tax cuts, should the need for that choice arise. But New York must be true to its word. The Legislature, and especially Bruno and Assembly Speaker Sheldon Silver, have a heavy responsibility to make that commitment now.

The number of jobs here increased by just a tenth of a percent last year, far behind the state and national averages. Things have improved, but we still shoulder the highest tax burden in the nation. We worry about missing the crest of the economy, and drowning in the next trough.

By moving to lower taxes for businesses and residents, Pataki is throwing us a lifeline. We just prefer that it be a little stronger, and get here a whole lot sooner.

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