http://money.cnn.com/2010/01/19/news/economy/New_York_budget_deficit/index.htm
The article focuses on the fiscal budget cuts and increased taxes to be made by New York governor, David Paterson. This includes cutting budgets for education, state agencies, and closing four prisons. The amount of money spent on health services and juvenile justice programs will also be reduced as well as cutting up to $79 million from the Environmental Protection Fund. Along with legalizing ultimate fighting in order to bring tax revenue, taxes and fees will be raised by $1 billion. The ultimate fighting will bring a supposed $2.1 million in tax revenue to New York. Cigarettes will be $1 more than usual, as well as one more penny per ounce for sugary drinks. Paterson refers to the cuts as “painful but necessary” in order to cut down the amount of spending by the state and veer away from more state deficit.
New York is at a disadvantage when compared with other states, due to its early start of the fiscal year (April) and New York has the fourth largest deficit in the county. Other states in debt will struggle in 2011 due to less federal stimulus money.
It seems as though Paterson is making the correct budget cuts in order to cope with lack of federal stimulus money as well as the major state deficit. Some reader’s commented on the article, explaining that New York could have been more careful with the budget money when the economy was stable in order to have money to balance the budget. Although this might be true, Paterson is trying to deal with a $7.4 billion gap – and these budget cuts and taxes might be the right answer.
New York has struggled with a $20 billion deficit last April and another mid-year gap of $3.2 billion, and is looking to try to close their deficit gap, which is currently the 4th largest nationwide.
ReplyDeleteAs Nick Johnson, director of the center's state fiscal project, stated, "For most states, 2011 is shaping up to be the worst budget year ever."
New York's cutting of school aid, as well as the government reduction of state aid to state and city university system, along with the reduction of the Tuition ASsistance Program awards by $75 per student, will cause a lot of debate due to the school cuts & the increase in the state subsidy for the highway and bridge trust fund by $7 billion.
Although the cigarette tax and the tax on soda is tough for the consumers of the products, it will raise $218 million (by the cigarette tax) and $465 million (soda tax). Many people will be affected by the new budget cuts and new tax change but it may help in answering the fourth largest state deficit.