As other states contemplate cutting spending growth in light of slowing revenue growth, New York State recently passed a $122 billion budget for 2008–2009. Coming nearly 5 percent higher than last fiscal year’s spending plan, the budget relies on $1.5 billion in higher taxes and fees, including a near‐doubling of the state’s cigarette tax rate. The increased taxes will fund, among other programs, a record‐breaking $1.75 billion increase in school aid. But it’s doubtful the state will even raise that money because higher taxes will just generate an even larger black market in cigarettes.
Despite this stunning increase in spending, the state is still using creative techniques to balance the last budget. According to a recent Times Union article, the Paterson administration “swept” $100 million from various special accounts to supplement general revenues. But the funds in the dedicated accounts are raised through user fees and slated for specific programs, not for the general spending whims of policymakers;
For instance, more than $1 million was swept from the Animal Population Control account, which is fueled from $3 surcharges on dog licenses, $25 Love Your Pet license plates and other funds from pet lovers. It is supposed to go to spaying programs.
Beyond the fact that Albany should not be in the spaying business to begin with, there appears to be dishonesty in budgeting if Albany creates new programs, overcharges “fees” to accumulate surpluses in various dedicated accounts and then “sweeps” the funds into the black‐hole that is the general fund budget. It comes as no surprise several of these user fees were increased in the 2008–2009 budget. With spending on an unsustainable upward path, much more sweeping is yet to come.