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State faces spending cap in measures OK'd by Senate

State spending would face an annual cap, and super majority votes would be required for any tax or fee increases under two constitutional amendment resolutions approved Wednesday by the State Senate.

But the measures are likely to die in the Assembly.

Even if the Assembly went along, the measures -- because they change the constitution -- require another vote by the next session of the Legislature and then a statewide referendum, which could not occur until November 2013. The resolutions call for capping the level of state spending growth at 2 percent, or 120 percent of the inflation rate, whichever is lower, and require a two-thirds vote by both legislative houses for any tax or fee increase or extension.

A separate measure also approved by the Senate would give tax breaks to companies hiring unemployed people and roll back about $400 million worth of income taxes small companies and manufacturers otherwise will pay this year.

Some Democrats in the new GOP-controlled Senate said backers of the spending cap had failed to do their homework to see the damage that would be done to certain education and social services programs through cap edicts. Sen. Liz Krueger, a Manhattan Democrat, said Colorado has seen an explosion over the years in the number of new units of local governments that are able to raise spending because they are not covered by that state's spending cap. "We are already the poster child for having that problem," she said of the estimated 10,000 various units of government across the state.

But Sen. Michael Ranzenhofer, an Erie County Republican who sponsored the spending cap resolution, said that the state has run out of options.

"New York State's fiscal condition is so bad that if we do nothing, it will continue to worsen People are leaving the state in droves and something has to be done to keep them here," Ranzenhofer said.

Republicans say that a projected deficit of $10 billion or more would be largely erased had the state placed a cap on annual growth rates several years ago. Past promises for spending increases into future years have helped create the current deficit.

Senate Majority Leader Dean Skelos said if no changes are made to already existing law, the state's education spending must increase by 7.5 percent, or about $1.5 billion, in 2011. The health care portion would have to rise 67 percent, or about $5.7 billion, he said.

"That's what is driving the deficit we have right now, and what we're going to have to deal with," Skelos said of past spending promises in those two major cost areas plus programs like higher education and social welfare programs.

Assembly Democratic leaders were silent on the two resolutions passed Wednesday by the Senate.

Sisa Moyo, a spokeswoman for Assembly Speaker Sheldon Silver, said, "The Assembly recognizes that New York State faces a fiscal crisis. The speaker remains committed to working together to restore New York's fiscal stability.


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