Taxes Galore
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| Mon, 03-30-2009 - 2:54pm |
Blue states tend to be leaders in taxation. New York seems to be trying to be the bluest state of all.
This made me wonder, is it better to have the currency collapse or to be taxed to the poorhouse?
Our government at all levels seems unable to control spending.
http://wcbstv.com/local/ny.state.budget.2.971103.html
Taxes Galore: NY's Staggering New Budget Unveiled
Proposed $131.8B Tax-And-Spend Plan Has Critics Howling
New Yorkers, both rich and not so rich, will soon be digging deeper into their pockets to close the huge state budget gap. The new spending plan expected to be adopted this week is jam-packed with higher taxes and fees.
The hits for New Yorkers just keep on coming. After being socked with a whopping subway and bus fare hike, New York families making at least $300,000 are now being walloped with a 7.85 percent tax rate and those over $500,000, an 8.97 percent rate. But it's not only the rich who are being soaked by the budget unveiled by Governor David Paterson and legislative leaders.
"We made the tough choices necessary to address that challenge through shared sacrifice and responsible budgeting," Gov. David Paterson said in a written statement issued with legislative leaders. "The agreement we are announcing today closes the largest deficit in state history, stabilizes our finances and institutes critical reforms that will help eliminate waste and inefficiency in our government."
There are lots of new taxes and fees that will be annoying to everyone, an equal-opportunity spreading of the pain. Among those are vehicle registration fees, a cigar tax, a beer and wine tax, a utility assessment, an auto insurance surcharge, driver's license fees, a rental car tax and a registration fee for tobacco sellers.
"These numbers are absolutely staggering, and the height of irresponsibility on the part of the Democrat leadership in this state," said Senate Minority Leader Dean Skelos (R-L.I.). "The public should be outraged."
Even bottled water drinkers aren't immune to the fees. They'll be paying a nickel more per bottle because the drink has now been added to the 5 cent bottle deposit law.
"You know it's a really difficult situation. There are no clear solutions. It just seems to tax too much," said Upper West Side resident Jamie Kalfus.
"We have produced a budget that provides a solid foundation to move forward and address challenges ahead," Paterson said. "We have accomplished this with a budget that holds government accountable to the people of New York, and protects those who cannot protect themselves."
The details of the new budget include:
--Essentially flat state school aid. Aid to public schools would increase about $1.1 billion, according to Assembly Speaker Sheldon Silver, and eliminate the $700 million cut Paterson had proposed in December. But that results in almost no increase for schools that have gotten bumps of billions of dollars from lawmakers pressured by school districts back home. School aid will total more than $21 billion, one of the highest per capita levels in the nation. But school advocates expected $1.5 billion more this year, even after Paterson's cut was restored, under a promise by the state following a court decision it lost for not providing a sound basic education for years.
"There are going to be layoffs of teachers and other educators," said Billy Easton, executive director of the Alliance for Quality Education, a union-allied advocate for public schools. "There are going to be cutbacks of programs and kids in districts that are already underfunded, the problem is going to continue ... and that's a travesty of justice."
The last time school districts received far less state aid than expected local property taxes were subsequently increased by an average of 10 percent.
--About $3 billion of taxes and fees, from motor vehicle registration charges to public college tuition and other costs that would affect everyday life for most residents.
--No more tax rebate checks to residents, although the STAR exemption program and NYC STAR credit will continue to provide $3.3 billion in property tax relief.
--A bigger bottle bill. A nickel deposit would be required of bottled water, to go along with carbonated drinks. The state will get about $115 million of the unclaimed deposits, with bottlers keeping the rest under a last-minute deal worked out with lobbyists for the Coca-Cola Co.
--Taxing little cigars often called cigarillos at the same 46 percent rate applied to cigarettes, instead of the 37 percent rate now.
Meanwhile, Paterson had proposed more than $1 billion in cuts from health care in his mid-December budget to the Legislature. He sought to force more funding to be moved from traditional and expensive hospital care to more efficient community-based and preventive programs. The Legislature restored about 69 percent of funding to hospitals, 73 percent to pharmacies, 60 percent to home care programs and 43 percent to nursing homes.
The Legislature also restored:
--$340 million of critical funding to New York City, Silver said.
--Funding for teacher training centers and adult literacy and bilingual education programs.
--$125 million more to the State University of New York, for a total of $2.5 billion in funding; and $86 million more to the City University of New York, for a new total of $1.4 billion.
--$49 million in cuts to community colleges.
--Almost $50 million to the Tuition Assistance Program, which provides financial aid to college students.
The Legislature also created a $50 billion program to provide low-interest loans to residents attending college and rejected a proposal for a gas tax.

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Yeah, everything here is going up.
mombitsy wrote - "It is too bad that New York Republicans don't understand the need to raise revenue to pay the state's bills."
The choice states face is to cut spending or to increase taxes. Sadly most states choose to increase taxes. Many Republicans understand the need to cut spending, many Democrats don't seem to see any alternative but to increase taxes. Most states and our federal government are currently insolvent. :(
Aside from entitlements for the poor, another very large expense states confront are entitlements to the middle class. These would be former civil servants who get very expensive pensions with benefits.
Only Kentucky seems to have taken this middle class entitlement on.
See - http://www.pionline.com/apps/pbcs.dll/article?AID=/20080627/DAILY/614556085
Kentucky Gov. Steve Beshear today signed pension reform legislation, concluding a five-day special session of the General Assembly, according to the governor’s website. The $17 billion Kentucky Retirement Systems and the $15.5 billion Kentucky Teachers’ Retirement System, both of Frankfort, have an estimated $26 billion in total unfunded liabilities. The reforms, among other stipulations, would require new state employees to have higher combined years of service and age to retire, and would prohibit retired workers who are rehired in state government from collecting a second pension.
The bill passed the state Senate on a 35-1 vote this morning; it had cleared the House by a 98-0 vote Wednesday.
“We have taken a giant step toward placing our pension systems on a sound financial basis by reducing out-of-control costs and setting target dates for the state to fully fund its share of the pension system,” Mr. Beshear said in the release.
Edited 3/30/2009 4:43 pm ET by postreply
"These would be former civil servants who get very expensive pensions with benefits."
Very true! While private companies' benefits are costing more &/or getting less bang for the buck. OT Retirees are a huge burden on the US auto industry too.
They polled the voters in my state & the majority said that they'd rather pay somewhat higher taxes & keep our infrastructure in place.
The poll question shaped the answer.
It isn't necessarily a situation where it's infrastructure or taxes.
How about this poll:
Should we continue to give lavish benefits and retirement to civil service workers, or significantly increase your tax?
I wonder if most would support a tax increase.
Push polling is very annoying. :(
I'm certain the civil service workers appreciate all the money taxpayers spend on them.
Here is an interesting story -
http://www.tmcnet.com/usubmit/2009/03/29/4092138.htm
Hazardous-Duty Workers Inflate Base Pay With Overtime Before Retiring
David Lozada spent 20 years doing the hard work of a prison guard, but perhaps never worked harder than in the few years leading up to his retirement last July at age 46.
Lozada racked up extraordinary amounts of overtime as his pension neared, routinely doubling his hours, and topping $100,000 in pay for each of his last five years, according to state payroll records.
The reward: A pension of nearly $60,000 a year for the rest of his life -- an amount significantly higher than his base salary as a guard, and more than his total income in all but those final years on the job.
Dozens of other employees who retired last year pursued a similar tack, collecting massive amounts of overtime for a few years in exchange for a lifelong boost in pension payments often worth tens of thousands of dollars a year. For the most aggressive, those long hours can translate to an extra $1 million over the course of retirement.
Every bit of it is legal. But with governments straining to pay bills and private-sector workers watching their pensions disappear and their retirement accounts dwindle, civil service pensions have come under fire as overly generous -- especially for those who spike their final years with overtime.
"Giving people an opportunity to jack up their workload for a few years and treating it as income used to calculate their pension is grossly unfair to the taxpayers," said Lewis M. Andrews, senior policy analyst of the Yankee Institute for Public Policy, a conservative think tank in Hartford.
The most lucrative state pensions are held by state police, prison guards and others with hazardous-duty jobs, who can retire after 20 years and immediately begin receiving a pension equal to half their pay. But those same pension rules also give employees the ability to run up overtime and retire in their 40s with what amounts to full-time income.
Trooper Todd Lynch, a former commander of the state police canine unit, earned about $20,000 a year in extra pay early in the decade. But by 2007, his last full year on the job, that figure had quadrupled, helping to boost his pension to $73,000 a year-- about $20,000 more than he would be collecting if his overtime earnings had not risen.
Lynch said his overtime increased when he switched to the canine unit about three years before he retired.
The unit trains dogs both for the state police and for a number of municipal departments, a workload that created a lot of overtime.
"Those hours are when I'm away from my family," Lynch said. "It's not like I'm working from home. I'm leaving the house at 6:30 in the morning, and every night coming back at 11, 11:30." Lynch said he also handled the "vast majority" of assistance calls for the unit.
"Most people don't realize: My phone is ringing at 1 o'clock in the morning. If you've got a missing kid, I can't just get the phone call, send a dog and go to bed. They're calling me for statuses. And then you're getting a callback -- 'Hey, we didn't find 'em, ramp up the next one.' And then I gotta get up and go do that." A day after retiring at 41 years old, Lynch joined the New London Police Department, where he now runs that department's canine unit.State pensions are generally based on the average of an employee's three highest-earning years, which provides a strong incentive for workers to maximize their income for a few years before retirement. With overtime readily available to police and prison workers, those employees saw the biggest boosts in pay as they prepared to leave state service.
Across all agencies, the roughly 1,100 workers who retired in 2008 sawa 14 percent increase in pay from 2003 to 2007. But among state police retirees, average pay jumped at twice that rate, and at six prisons, wages for those retiring increased at least 50 percent faster than the state average.
And overtime saw the biggest increases. Among state police officers, for example, base wages grew 23 percent in those years, while overtime leapt about 60 percent. Overall, pay for retiring troopers averaged $115,000 in 2007.
Steven Rief, president of the Connecticut State Police Union, said that while some troopers earn large amounts of overtime as they approach retirement, those long hours come with personal trade-offs.
"Yes, there are people that have the opportunity to make extra money, and sometimes people make quite a bit of extra money. But they also are sacrificing," Rief said. "When one of our troopers is working -- in this case, working overtime-- they're away from their families. It's not like they're not doing something. They're out there and they're away from their families." It isn't only those in uniform seeing a boost in pensions. Karolyn Pettison, a mental health assistant at Connecticut Valley Hospital, earned about $10,000 a year in extra earnings early in the decade. But as retirement neared, that grew to $35,000 in 2006, and nearly $70,000 in 2007. Without that burst of extra pay, Pettison's $60,000 annual pension would have been less than $40,000, according to state figures.
Deborah Aubin, a health worker in the prison system, added about $100,000 to her base pay in 2006 and again in 2007, boosting her average salary for pension purposes to about $160,000 a year -- nearly twice her base wages, state records show. Aubin, 58, collects a pension of about $85,000 a year.
In all, more than 75 state workers who retired last year had overtime payments in their final years that boosted their base wages -- and their pensions -- by 50 percent or more. At least 18 doubled their base wages in their final years.
"It's unconscionable. It's unethical.
It's immoral," said Jim Mihaley, a Stratford resident who has been outspoken about retirement benefits in his town, where a police captain earning $82,000 in base pay retired last year with a pension of $134,000 a year.
Stratford in 1996 renegotiated its police contract to take overtime out of pension calculations, but the change only affected newly hired officers-- not those currently retiring. Mihaley said the state should follow Stratford's lead.
"The contracts have to be renegotiated to eliminate overtime from the calculation of the defined benefit for pensions," Mihaley said.
"That's true in every municipality and at the state level, because it's bankrupting us." Some labor advocates say it is unfair to exclude overtime when calculating pensions for workers -- including police officers -- who regularly work additional hours and are accustomed to that level of pay. But even among state employees who routinely logged significant overtime, some who retired in 2008 still saw a dramatic increase in extra income in their final years.
Trooper William Bowyer, 45, who retired in 2008 after 20 years, collected more than $30,000 in overtime in 2000 and about $40,000 the next year-- accounting for about 40 percent of his income. But his overtime hours soared as he approached retirement, averaging close to $100,000 in extra pay for each of his last three years -- more than doubling his base pay, and enough to put his pension above $70,000 a year.
Not all officers in Connecticut have it so good. In 1999, the city of Hartford negotiated a contract for new police officers, with a pension provision that averages overtime across an officer's entire career. It will be 15 years before the first of the officers hired under that contract reach full retirement, but Santiago Malave, the city's director of human resources, expects to see savings.
"We're still seeing some police hired prior to 1999 who are retiring with pensions that are significantly enhanced by virtue of including the overtime," Malave said. "But we expect to see that taper off." There have been no serious legislative efforts in recent years to adopt similar changes for new state workers, although there was an attempt 20 years ago to curb overtime by state troopers.
By contract, troopers can work no more than 18 hours in any 24-hour period. In the late 1980s, state police officials tried to go further, prohibiting troopers from working any extra-duty job that fell within six hours of a regular shift. But the Connecticut Labor Board said that policy would have to be negotiated.
"We tried to limit the amount of overtime that people could work, because at some point it becomes a safety issue," said Linda Yelmini, director of labor relations at the state Office of Policy and Management.
"The labor board said we could not do that." But other states are pressing reforms. New York Gov. David Paterson has proposed reducing benefits for newly hired state and municipal workers, including limits on the use of overtime in calculating pensions and a requirement that police and firefighters work 25 years-- up from 20 -- and reach 50 years old before qualifying for a full pension.
"Right now, we are paying full retirement benefits to people in their 40s," New York City Mayor Michael Bloomberg said in support of the change. "As people are living longer, we simply can't afford to do it forever." In cash-strapped California, a pension reform group has proposed a new retirement system that caps payments, raises the age at which benefits are paid, and excludes overtime and other additions when calculating pensions. As in New York, any changes would apply only to new employees.
Rief, the state police union president, said there's a simple way to cut down on overtime hours: Hire more troopers. "We have long complained as a union about adequate staffing, which would reduce overtime, quite frankly," he said.
But Rief said hiring qualified recruits isn't easy, even with hefty pension benefits.
"This is a difficult, demanding job.
For all those people that say we're getting something over on somebody, I would say: 'Well look at the recruitment problems we have,' " Rief said. "It's very difficult to recruit people for law enforcement."
It certainly doesen't work that way for our teachers.
Not at all. I've got a friend who is a teacher. He's getting an internet doctorate which requires virtually no work. It will increase his retirement by $3,000 per year. He is also getting grants, and doing extra activities. He plans to retire with a pension almost doubled from what it would be if he didn't game the system.
Taxpayers will cover him, his wife and kids for the next 50 years. He plans to take another job while collecting retirement and benefits.
The cost for civil servant retirements is ghastly.
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