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Page 58

New York

George Pataki, Republican

Legislature: Divided

Took Office: 1/95

Grade: B

New York's economy has a heartbeat again--thanks in no

small part to the pro-growth fiscal agenda of George Pataki.

To the surprise of many, after ousting Mario Cuomo from of-

fice in November 1994, Pataki not only delivered on his

promised $3 billion 25 percent income tax cut on schedule,

he slashed other taxes as well, including the workers com-

pensation tax and the state sales tax on clothing. New

York's Empire Foundation for Policy Research recently noted

that even with these tax cuts, the state's resurgent economy

has generated "more income tax revenue under Gov. Pataki

than it ever did under former Gov. Mario Cuomo."  His latest

budget contained the steepest reductions in business taxes

in the country.  Alas, New York remains one of the highest

tax states in the nation, but its commanding lead over the

rest of the pack has been narrowed considerably.  Pataki has

been most impressive in his tightfisted approach to expendi-

tures in a state notorious for its free-spending tradition.

In 1995 he inherited a general fund budget of $42.7 billion.

Two years later the budget was $41.5 billion, 2.5 percent

lower.  But lately Pataki has shown signs of fiscal schizo-

phrenia.  In 1996 he backed a pork-packed $1.75 billion "en-

vironmental" bond initiative--in a state that already has

the highest debt burden and one of the five worst credit

ratings in the country.  His FY99 budget called for a gar-

gantuan 8.9 percent spending hike.  Fears Tom Carroll,

president of tax watchdog group Change NY, "The enormous

progress made in 1995 and 1996 is beginning to unravel."

Overall, Pataki's record has been quite positive, but the

recent profligate fiscal trends are worrisome to say the

least.

Score

Grade

Rank

Overall Fiscal Policy Score

70

B

3

Spending Score

77

B

4

Revenue and Tax Rate Score

67

B

3

Amount

-1.4%

Average Annual Change in Real Per Capita Direct General Spending through 1996

-3.8%

Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996

-1.5%

Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999

-2.1%

Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98

-1.7%

Average Annual Change in Real Per Capita Tax Revenue through 1997

-4.1%

Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997

-3.6%

Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999

0.5%

Average Annual Change in Real Per Capita General Fund Revenue 1996-98

-1.3%

Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999

-1.025

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

-0.5

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

15.9

1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)

0.0

Change in Sales Tax Rate, proposed and/or enacted (% points)

0.0

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)