Jan. 28 (Bloomberg) -- New York Senate Majority Leader Dean Skelos said he would block local officials’ requests to raise sales taxes to balance their budgets.
“We’re not doing any increases in the sales tax,” Skelos, a Republican, said after a Manhattan speech to the Association for a Better New York, an organization of business executives, political leaders and non-profit groups. “Taxes have to be brought under control in New York state, and that’s my priority as majority leader.”
Local sales taxes must be approved by the state. Nassau County Executive Edward Mangano, a Republican elected in 2009 on an anti-tax platform, proposed a 0.25 percentage-point increase in the sales tax to lawmakers last year to help plug a $133 million deficit he said he had inherited in his $2.6 billion budget, according to reports in Newsday and Jim Carver, president of the county’s Police Benevolent Association.
A state oversight board seized control of the county’s finances Jan. 26, saying local officials failed to present a balanced budget.
A 0.25 percentage-point increase would have brought the total sales levy in the county to 8.875 percent, shared with the state and the Metropolitan Transportation Authority. Brian Nevin, a spokesman for Mangano, said in an interview that the county executive never proposed such as tax increase.
New York, the third most-populous U.S. state, faces a deficit of at least $10 billion in its estimated $135 billion budget. Its new Democratic governor, Andrew Cuomo, who is set to propose his first spending plan next week, has promised to balance it with cuts rather than tax increases.
Less for Education
Skelos, 62, has promised to work with Cuomo to achieve those aims. He became Senate leader when the Republicans took control of the upper chamber of the Legislature in the Nov. 2 election. Today he proposed reducing a projected $5.7 billion increase in the state’s Medicaid costs, an almost 50 percent jump that would bring the total to $17.6 billion.
“We’re probably going to spend less on education, and there are other programs throughout the state that can be controlled to reach that $10 billion,” Skelos said.
Senate Republicans may advocate a sixth pension tier for future state workers that would provide reduced payments in combination with a defined-contribution retirement plan akin to a 401(k), in which employees invest part of their pay with tax advantages.
Skelos, of Rockville Centre in Nassau County, said the state oversight board may have acted too hastily when it took control of Nassau’s financial operations.
County officials “indicated that there is a balanced budget,” he said. “They should be given an opportunity to operate that way.” The panel’s action, Skelos said, “presents an opportunity to work together with country officials -- but without tax increases.”
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