Latest Fiscal Watch Memos

Spitzer's Big Spending Plan
FISCALWATCH MEMO February 2, 2007

Governor Spitzer's first Executive Budget would raise state spending by up to three times the projected rate of inflation in the fiscal year that begins April 1.

The "$6 Billion Tax Cut" That Gov. Spitzer Isn't (Quite) Proposing
FISCALWATCH MEMO January 8, 2007

News coverage of Gov. Eliot Spitzer's first State of the State message invariably highlighted his proposal for what has been widely billed as a $6 billion property tax reduction. . .

Surpluses... but not for taxpayers, unless Bloomberg acts
FISCALWATCH MEMO July 27, 2006

New York City's current budget is an object lesson in why too much money is just as serious a problem as too little. New York ended the last fiscal year with $3.8 billion more than it expected to spend. . . but while taxpayers historically have borne tax-rate hikes to fund the city's predictable cyclical deficits, they will not see tax cuts due to the current record surplus, unless Mayor Bloomberg takes advantage of this temporary boom time. . .

Pension Watch '06: The Sweetening Continues
FISCALWATCH MEMO July 13, 2006

Seemingly oblivious to the already high and rising cost of taxpayer-funded public pensions in New York, state lawmakers this year passed at least 36 measures that would expand pension benefits for groups of public workers.

New Budget Spends at Rockefeller-Era Pace
FISCALWATCH MEMO May 17, 2006

New York's newly enacted budget calls for the biggest state spending increase in 33 years ­ without even including legislative additions blocked on constitutional grounds by Governor George Pataki.

More STAR in New York's Future?
FISCALWATCH MEMO March 23, 2006

With school property taxes continuing to rise across New York State, Albany's leading Republicans are pushing for a major expansion of the STAR (School Tax Relief) program in the next state budget. But more STAR spending will do nothing to reduce New York's oppressive state and local tax burden. Instead, it will promote faster growth in school spending and property tax levies unless it is tied to a firm cap on school district budgets or taxes.

Final Pataki Budget: Spend Now, Cut Taxes Later
FISCALWATCH MEMO January 17, 2006

Governor George Pataki's final Executive Budget would increase state spending at well over twice the inflation rate while initiating a new round of significant state tax cuts that would not become fully effective until two years after he leaves office.

Gotham's spending continues to outpace inflation, economy—and sure deficits loom
FISCALWATCH MEMO July 25, 2005

New York's newly adopted city budget for fiscal 2006 calls for a 7.5 percent spending increase, well above the rate of inflation or growth in the city's economy. Under the four municipal budgets adopted since Michael Bloomberg became mayor in 2002, city spending has risen at more than twice the inflation rate. Relative to New Yorkers' personal income, city operating expenditures in the year ahead will be significantly higher than the average during Rudolph Giuliani's tenure in the mayor's office.

Legislators Still Aim to Sweeten Public Pensions
FISCALWATCH MEMO July 15, 2005

Despite skyrocketing public pension costs, New York State legislators have introduced literally hundreds of measures that would further increase taxpayer-funded retirement benefits for government workers—including dozens that passed in both houses this year.

The Biggest Public Pension Investment Policy Shift You've Probably Never Heard Of
FISCALWATCH MEMO June 13, 2005

The State Legislature appears close to passing a significant change in the law governing how the comptroller invests New York’s $120 billion Common Retirement Fund for state and local employees. But the bill has potentially far-reaching implications that deserve more careful consideration—and a public hearing.

"Excelsior" or Bust?
FISCALWATCH MEMO March 7, 2005

New York State spending has increased faster during the four fiscal years since the latest economic downturn began in 2001 than during a comparable recession and recovery period in the early 1990s.

Spending Still Rising In State Budget
FISCALWATCH MEMO January 18, 2005

State funds spending would rise at twice the inflation rate under Governor Pataki's proposed 2005-06 Executive Budget. And despite much-ballyhooed "cuts," state-funded Medicaid costs next year would increase nearly 13 percent.

City Spending Accelerates
FISCALWATCH MEMO July 20, 2004

City-funded spending would increase almost 10 percent under New York's newly adopted budget for fiscal 2005. The budget's financing structure, which relies heavily on prior-year surplus and one-shot revenues, sets the stage for a looming shortfall in fiscal 2006.

The Legislature’s Spurious Budget Reform
FISCALWATCH MEMO June 2, 2004

A “budget reform” measure partially approved by the New York State Senate and Assembly is little more than a constitutional power grab by the Legislature and a prescription for higher spending.

The Cloud Behind the Silver Lining
FISCALWATCH MEMO May 5, 2004

The projected "out-year" gap in Mayor Bloomberg's proposed 2005 budget is the largest on record, leaving New York's finances extremely vulnerable to external shocks in the year ahead. City spending is now growing at an unsustainable pace; as a result, barring another boom on the late 1990s scale, Bloomberg could feel increasingly pressed to reduce spending as he approaches the next mayoral election.

NY State Government: Growing Beyond Its Means
FISCALWATCH MEMO March 22, 2004

New York State spending has outpaced inflation even as tax receipts plummeted since 2001. The state budget is on track to continue growing at twice the inflation rate over next several years—resulting in large projected future budget gaps, and raising the specter of expanded tax hikes."

CSEA Contract Will Cost Taxpayers Plenty
FISCALWATCH MEMO March 10, 2004

A tentative contract agreement between Governor George Pataki and New York’s largest union of state government workers would permanently add billions of dollars to New York State and New York City budgets, if it is ratified by union membership and ends up setting a pattern for the state’s other collective bargaining units.

The High Cost of Educational “Adequacy”
FISCALWATCH MEMO February 18, 2004

New York State needs to spend $7 billion more to finance a “sound, basic education” for all pupils, according to the group that successfully sued to overturn the state’s education finance system. What kind of tax hike would it take to pay for such a draconian solution? This memo explores the range of possible answers to that question.

Proposed Spending Hike One Of Pataki’s Biggest
FISCALWATCH MEMO January 22, 2004

The 2004-05 Executive Budget features one of the largest state funds spending increases George Pataki has proposed in nine years as Governor of New York.

City Budget Rises Another $1.4 Billion
FISCALWATCH MEMO July 16, 2003

City-funded spending will rise at nearly twice the rate of inflation in New York's newly adopted budget for fiscal 2004, pointing the way towards recurring budget gaps in the future, according to a Manhattan Institute analysis.

New York’s Ugly Stealth Tax Hikes
FISCALWATCH MEMO June 9, 2003

Many New Yorkers who may consider themselves middle class will be paying higher effective marginal rates than billionaires under the "temporary" state and city income tax hikes recently approved by the State Legislature.

New City Tax Hikes Raise Likely Job Loss Toll
FISCALWATCH MEMO May 27, 2003

New York City's latest personal income and sales tax increases will result in the loss of an additional 18,250 private sector jobs in the city, and will raise $70 million less than expected, according to the Manhattan Institute's NYC-STAMP tax model.

Tax Hike Gouges NYC Metro Region
FISCALWATCH MEMO May 13, 2003

Households in the New York City metropolitan area will account for nearly 90 percent of the added state income taxes that New York State residents will pay to help finance spending increases in the 2003-04 state budget, assuming the Legislature overrides Governor Pataki's expected veto.

Proposed Tax Hikes in Historical Perspective
FISCALWATCH MEMO May 6, 2003

By any standard of comparison, the tax increases proposed by the New York State Legislature would easily exceed all the new taxes enacted during Governor Mario Cuomo's last term in office.

How To Save Another $1 Billion
FISCALWATCH MEMO March 26, 2003

Instead of imposing higher taxes on an struggling economy, New York State legislators should be looking for more ways to save money in the $59 billion state funds budget Governor Pataki has proposed. Here's a by-no-means exhaustive list of eight cost-cutting steps that would add up to over $1 billion next year.

Bigger Gap, Smaller Cuts?
FISCALWATCH MEMO January 29, 2003

Governor Pataki's 2003-04 budget proposal calls for smaller spending cuts than the budgets he proposed during his first two years in office—even though the current budget gap is more than twice as large.

Bush Plan Would Boost NY
FISCALWATCH MEMO January 7, 2003

New York’s economy stands to reap enormous benefits from President Bush's proposed tax stimulus plan.

What’s The Real Financial State of the Transit Authority?
FISCALWATCH MEMO December 30, 2002

Just how big is the New York City Transit Authority's deficit? The answer to that question appears to be (a) not nearly as big as the NYCTA would have had everyone believe going into the TWU talks, but also (b) not nearly as big as it will be once the Authority gets through paying for the wage and benefit increases in the new transit workers contract—unless a fare increase is approved soon.

Transit Pact Has Big-Buck Implications for State and City
FISCALWATCH MEMO December 17, 2002

If the new transit workers deal is used as the “pattern” in the next round of collective bargaining with New York's public employee unions, the result would be $725 million in added labor costs for the state and $1.2 billion a year in added costs for the city, not including any offsetting productivity concessions.

Property Tax Hike Will Cost 62,000 Jobs
FISCALWATCH MEMO November 25, 2002

New York City’s impending property tax hike will lead to the loss of another 62,000 private sector jobs, re-accelerating a downward economic spiral that dates back to the end of 2000, according to a forecast by the Manhattan Institute's econometric model.

Will More Ever Be Enough? New York City’s Skyrocketing School Spending
FISCALWATCH MEMO August 2, 2002

New York City's new schools chancellor, Joel Klein, kicked off his introductory news conference with the observation that ‘resources are scarce.’ True enough—although you wouldn't know it from looking at the Board of Education's budget for 2002-03. Even after the latest round of budget cuts ordered by Mayor Bloomberg, spending will keep pace with inflation. And adjusting for cost-of-living changes, per-pupil expenditures are up 57 percent since 1983.

Crisis—What Crisis? Spending Up $800 Million in New Fiscal Year
FISCALWATCH MEMO July 10, 2002

For all the hue and cry about the ‘cuts’ needed to close New York City’s $4.9 billion budget gap, a funny thing happened on the way to the 2003 fiscal year: the first adopted budget of the Bloomberg era does not reduce overall city spending. The nearly $800 million increase in the "city funds" portion of the budget is the key to understanding why New York City continues to face massive potential deficits for as far as the eye can see.

Doing More With Less: Money-Saving Priorities For City Contract Talks
FISCALWATCH MEMO April 22, 2002

Mayor Bloomberg could realize more than $1.2 billion a year in city budget savings if he can get municipal employee unions to agree to proposed labor givebacks and productivity reforms including a health insurance co-pay, a longer work day for teachers, more scheduling flexibility for cops and firefighters, and less vacation and leave time for newly hired workers. But it all starts with ‘the zero option’—a pay freeze after current contracts expire in fiscal year 2003.

Union Contract Talks Are Key To City’s Fiscal Future
FISCALWATCH MEMO April 22, 2002

The collective bargaining table will be the most important field of action for Mayor Bloomberg over the next 18 months. Bloomberg's tenuously balanced Executive Budget assumes little change in the size of the city workforce in the year ahead and no net wage increase for city workers in the three years after current contracts expire. If this assumption proves overly optimistic, next year's budget will be knocked out of balance, and huge projected budget gaps in subsequent years will grow by another $1 billion or more. Clearly the mayor cannot bring city finances back under control unless he wins significant concessions from municipal unions—and reduces the employee headcount in the process.

Proposed Tax Hike Would Destroy Jobs
FISCALWATCH MEMO April 4, 2002

A majority of City Council members has called on the council leadership to back a city income tax surcharge of up to 55 percent on high-income New Yorkers. This $1.23 billion tax increase would have a devastating impact on the city's economy, leading to the loss of another 48,000 jobs, according to the Manhattan Institute’s tax policy analysis model. It would boost the combined state and city income tax rate to a maximum of 12.5 percent—nearly double the next-highest rate in any neighboring state.

NYC Cigarette Tax Hike Endangers Pataki Health Funding
FISCALWATCH MEMO May 17, 2002

Mayor Bloomberg's proposal to raise the city’s cigarette tax to $1.50 from 8 cents per pack is expected to cut taxable consumption in half, as many more smokers quit, cut back, or turn to alternative sources out of state or on the Internet. This would undermine the financing for Governor Pataki’s health care programs, which depend partly on revenue from the state’s cigarette tax.

Bloomberg Budget Goes Easy on Headcount
FISCALWATCH MEMO February 20, 2002

Mayor Bloomberg's preliminary budget was surprisingly easy on city employees, even though personal service costs comprise more than half of the total budget. His proposed workforce reduction of 5,000 to 7,000 positions out of a total workforce of 306,000—20% higher than was previously reported—is many fewer than the number Mayor Giuliani proposed to cut in 1993 when he faced a similar budget gap. Time will tell, perhaps sooner rather than later, whether Bloomberg's conciliatory tone will control the cost of city employees better than did Giuliani's more outwardly confrontational approach.

Sizing up the State Payroll
FISCALWATCH MEMO January 30, 2002

New York State's executive branch workforce will shrink back to its lowest level in nearly 20 years under Governor Pataki's 2002-03 budget proposal. A review of hiring trends since 1983 shows Pataki, who eliminated 20,000 positions during his first two years in office, has not allowed significant growth in the employee headcounts of agencies he most directly controls. The net workforce reduction since 1995 is saving taxpayers $676 million a year.

Ever Upwards: Real Spending Growth Under Pataki and Cuomo
FISCALWATCH MEMO January 22, 2002

As another budget cycle begins, Governor Pataki is once again citing his record of spending restraint. Adjusted for inflation, however, the rate of state spending growth actually has been higher in Governor Pataki's first two terms than it was in Mario Cuomo's last two terms.

The Tax Whose Time Has Gone
FISCALWATCH MEMO January 19 2002

New York City’s post-9/11 fiscal problems are prompting fresh calls in some quarters for reinstating the city’s commuter tax, which could generate as much as $500 million, to help close a projected budget gap of at least $3.6 billion. But the usual arguments for the tax just don’t stand up to scrutiny.

Threatened Tax Surcharge Hike Would Cost City 10,700 Jobs
FISCALWATCH MEMO January 17, 2001

Effective Jan. 1, New York City's personal income tax surcharge rose back to a full 14 percent, wiping out a tax cut that had become effective for city residents in 2001. If the tax increase is allowed to stand, New York’s battered economy will lose another 10,700 badly needed private sector jobs, according to the Manhattan Institute’s tax policy simulation model.

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