From the Times Union:
The Spitzer administration now forecasts $384 million less in revenue than projected three weeks ago, but the state can still afford a bailout of the New York Racing Association, state officials said Sunday.
[The DOB is]coping with the reduced personal income, corporate franchise and capital gains revenues now forecast by adding $50 million more to the amount the state wants to get by assessing higher fees on health insurance companies. That is on top of the $140 million Spitzer’s already scheduled and increased revenues from the “covered lives assessment,” which bring the total tax to more than $1 billion levied on health insurance policies.
Although Budget Director Laura Anglin says the industry can afford the costs because insurers have ample reserves from years of profits,
Representatives of insurance companies say the assessment is passed on to those paying premiums for private health insurance, such as employers and individuals. That could result in increasing the number of uninsured in the state by making policies cost too much, industry officials warn, at a time Spitzer is trying to reduce the number of people without coverage.
Anglin said insurers also will be expected to come up with another $25 million to help the state pay for diabetes and obesity prevention programs. Those costs could also be passed on.
[Anglin] also said the state is forced to cut the rates paid to the health care industry by 35 percent, compared with the 25 percent cut Spitzer proposed in January, to save another $18 million.
Bad times mean we pay higher health insurance premiums and hospitals and nursing homes get clobbered another 10%? I thought this was the year Democrats had all pledged to do something positive about the health care system. Did our Governor get the memo?
There’s got to be a better way. Hmmmm…. there’s always restoring fiscal fairness. As the Fiscal Policy Instutute has pointed out about New York’s income tax rates:
Among the changes that have been made [to the state personal income tax] since 1972 has been a move to something that is much closer to a flat tax. This has been done by eliminating brackets from both the bottom and the top of the old structure.
For example, the lowest rate in the old structure was 2%. But the 2% and 3% brackets have been eliminated, so the lowest rate is now 4%.
At the other end of the spectrum, even more brackets have been eliminated. The 15%, 14%, 13%, 12%, 11%, 10% 9%, 8%, and 7% brackets are all gone.
New York now has a 5-bracket/5-rate system, with both the 5 rates and the 5 brackets in very tight ranges.
All five of New York’s current rates are between 4% (the current lowest rate) and 6.85% (the current highest rate).
You read that right. Flat tax. As in crazy ol’ Steve Forbes, too mad to be a serious presidential candidate back when. But here we are. And FPI has a nice graphic to show just how much “here we are” has cost us:
taxlossny.jpg [click to view]
Fairness suggests readjusting income tax brackets first, so that those who’ve benefitted far and away the most, are the first to pitch in to help New York. And don’t worry about rich folk fleeing to New Jersey to avoid paying New York income taxes. New Jersey’s top rate is 2.2% higher.