Posted in: Executive Director's Corner
By Matthew Okebiyi
Oct 28, 2008 - 3:45:06 PM
Nonprofit leaders are calling for equal sacrifice in response to Governor David Paterson's proposals to cut the state's General Fund spending by $12.5 billion - or "almost 25%".
The One-New York: Fighting for Fairness coalition of 90 nonprofit organizations, service providers and unions released an open letter to the Governor and legislative leaders urging that they "resist blunt across-the-board cuts that would undermine New York's ability to serve many of its most vulnerable residents." Instead, they asked State leaders "to call on all New Yorkers - not just those that depend on government services - to sacrifice."
"Our message is simple," said Nancy Wackstein, Executive Director of United Neighborhood Houses and Chair of the Human Services Council of New York City. "We cannot cut our way out of this economic crisis. Government must deliver fair and equitable tax policies and tap revenue sources that call on all New Yorkers to contribute fairly to the solution."
"Governor Paterson's apparent resistance to even considering asking the wealthiest New Yorkers to be part of the solution to our state's problems is completely unrealistic and does not provide any of the added resources we need to stimulate a turn around in our economy," said Billy Easton, Executive Director of the Alliance for Quality Education. "The chair of Governor Paterson's own council of economic advisors, Joseph Stiglitz, has as recently as March advised that New York look to raise revenue as part of a balanced approach of shared sacrifice rather than close its budget gap through cuts alone."
Coalition leaders point to Stiglitz' nobel prize winning research demonstrating that in times of recession marginal tax increases on higher-income families are "the least damaging mechanism for closing state fiscal deficits in the sort run." Conversely, says Stiglitz, "reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy."
Members of the One New York Coalition, which is currently developing a formal series of revenue enhancement proposals, point to the State's successful implementation of these strategies during past crises. During the recession that followed September 11th and the burst of the dot.com bubble, New York temporarily increased income tax rates. The State employed a temporary top rate of 7.25 percent for single filers with incomes over $100,000 and 7.7 percent on income over $500,000. The increase expired in 2005. According to the Fiscal Policy Institute, the increases had no negative economic impact. In fact, during this time, they argue, high-wage earners saw positive income growth, economic conditions improved overall, and the State realized job creation.
Individual members of the Coalition also point to the State's $1 billion Tax Stabilization Reserve Fund as one alternative vehicle for dealing with a significant portion of this year's deficit.
Without offsetting revenue initiatives, the cuts proposed by the governor will have devastating impacts on needy New Yorkers, say advocates.
"New York simply cannot cut its way out of a multi billion dollar budget gap and continue to provide for the education, health and safety of its citizens," said Jennifer March-Joly, Executive Director of Citizens' Committee for Children of New York.
"New York has not hit bottom, but already the demand for services is increasing as families deal with job loss and the attendant loss of health insurance and the ability to pay mortgages and utility bills," said Lisa Ritchie, Public Policy Coordinator, Hunger Action Network of New York State.
"Clearly there will need to be cuts, but shared sacrifice has to mean that all New Yorkers - not just those that depend on government services - pay the price," said Mary Brosnahan, Executive Director of the Coalition for the Homeless. Citing already enacted cuts to food pantries, eviction prevention and crisis intervention services for homeless families coming at a time of increasing foreclosure, Brosnahan urged the Governor to consider not only more cuts but increased revenue.