Budget Adopted April 7, 2021

 WORDS OF WISDOM OR DESPAIR

DELIVERED ON APRIL 4, 2021

       ”So as of right now we have the resources necessary so that there would be no cuts in the Governor’s Budget so you wouldn’t require any significant level of tax increases to pay for the restorations,” Mujica told reporters on a conference call.  Mr. Mujica is NYS Director of the Budget.  “So now the conversation is to go to what additions to the budget do we have and then how do you finance those additions.”

He means the economy has recovered enough to maintain a revenue stream sufficient to operate government without tax increases and the cushion of federal aid for this and perhaps out years.

Unfortunately for many citizens of the state those additions have ballooned [10% increase] the budget to $212billion funded by much higher taxes and an infusion of money from Washington, the latter representing “a one-shot” or non-repeating source of funds and the tax increases probably permanent, provided their depressing effect on the economy does not result in revenue short-falls. [Think Laffer Curve].  The legislature is not aware of or does care if high taxation produces a flight of high-income earners who generate almost 90% of personal income revenue to the state.  The state’s budgets are perpetually out of balance because of year to year projections drive increases in spending at a greater rate than tax revenue growth derived from economic activity that varies depending on financial markets.

Legislators are on break and will return on April 14 and work 2-3 days per week until the middle of June.

[Reminder: view any bill followed by clicking Tracking NYS Legislation.  The bill, its progress and comments are easily available.]