A tale of two budgets

When things get tough, what kind of budget decisions do governors make? That depends on the governor, his or her governing philosophy and what those philosophies have done for their respective states.

In New York state, Gov. David Patterson wants the taxpayers to do the heavy lifting. His proposed $121 Billion budget for the coming year would increase state spending by 1.1 percent ($1.3 Billion) and impose 88 new taxes and fees. That’s a tax increase for every key on a piano.

Patterson wants to raise $4 billion in revenues with the plethora of new taxes and fees. He intends to tax clothes and shoe purchases under $110, downloads of music, movies or games from the web, movie admission, tickets to sporting events, taxi rides, hiring limousines, watching cable television, listening to XM or Sirius on the radio, smoking cigars, drinking beer and wine, and we’re just getting started.

Purchasers of luxury goods such as expensive cars, boats, jewelry and furs will be hit. Those who enjoy drinking non-diet sodas will have to ante up an extra 18 percent on top of the price of the drink. The governor also targets drivers by increasing the fees for driver’s licenses and automobile registrations. In addition, he wants to re-issue license plates to rake in another $25 from vehicle owners. Only New Yorkers who are bald, never cut their hair or do it themselves will escape Patterson’s new taxes on haircuts and hair stylists.

The governor also wants to increase tuition at SUNY by 14 percent and at CUNY by 15 percent. Hospitals, clinics and nursing homes will be hit with increased assessments and reduced funding. And he proposes to raise the ceiling on how much state tax can be charged on gasoline. New York state currently has a limit of 8 cents per gallon.

Recreating in the Empire State will become more costly, with additional fees for camping, cabin rentals, golf and marina use. And we’re not even up to Middle C on the piano keyboard…

Most of the money raised by Patterson’s new taxes will go to social programs.

Meanwhile, in Alaska, Gov. Sarah Palin has proposed capital and operating budgets that would cut state spending by 7%. No new taxes and no increases in the old ones are in the Palin budget. Not that are many taxes to raise. Alaska has no state income tax and no personal property tax. Historically, most state revenues have been generated in the 49th state by taxing oil and natural gas production.

But with oil and gas prices falling through the floor, how can the governor hold her budget to just a 1% increase over that of the previous fiscal year? The answer is savings. By law, Alaska’s budget is required to be balanced, and the state has enjoyed budget surpluses in past years. Sarah Palin has wisely been depositing the money into savings accounts which were not affected by the recent financial meltdown. To the contrary, the funds have been modestly — but safely — drawing interest.

Palin critics will be quick to point out that comparing the budgets of New York and Alaska is like equating apples and oranges. That’s not the point. The point is that the two proposed budgets represent two completely different philosophies of governance. When things get tough in New York, the first thing that comes to the mind of its liberal democrat governor is how to soak his citizens and businesses for more revenues with new taxes. In Alaska, the first thought Gov. Palin had in the wake of declining revenues was how to cut spending by her government.

Not fair, the critics will also say. Palin had savings to fall back on, while Patterson did not. Well, that’s the point of fiscal responsibility, isn’t it?

– JP