Tax and Spend: The New York Way

It appears that Gov. David Paterson and legislative Democrats have come to an understanding. They're going to increase the state sales tax to 4.5% (which pushes the overall tax rate in certain municipalities close to 10%). They're also going to increase the personal income tax on those making more than $500,000.

Yet, they're going to sunset those provisions for just before elections in November 2010 or 2011.

Fred Dicker reports:

Also under intense discussion yesterday as lawmakers rushed to complete a budget by April 1 is a proposal to raise the state's 4 percent sales tax to 4.5 percent the total of which would jump to close to 10 percent in parts of the state with the addition of local sales taxes.

The sales-tax hike, too, would sunset at the end of next year or in early 2011, legislative Democrats said.

While Paterson has repeatedly claimed he was against a "millionaires' tax" on the very wealthy and hasn't backed a sales-tax hike, the sources said he was privately backing both.

The current top tax rate is 6.85 percent for all incomes over $25,000 a year. Sources could not say yesterday what the rate would rise to for incomes over $500,000.

"Paterson has told everyone he really wants the taxes, but he wants it to appear to the public that he's against them," a senior legislative official said.

"Then, next year, when he's running, he'll say we can afford to phase them out so he can claim that he's a tax cutter."

Billions in other tax hikes proposed by Paterson in December, including huge increases in levies on insurance policies and health services, have been left in the budget for the fiscal year beginning April 1.

The budget, which is meant to close a multibillion-dollar deficit made less severe by billions of dollars in last-minute federal stimulus aid, is also expected to cut several major state programs, including Medicaid, deeper than many have expected.

Paterson's handling of state affairs has gone anything but smoothly, and it's apparently not much of a difference than during his tenure in the State Senate. He avoids conflict and pretty much gives in to what his caucus demanded:

A bombshell secret report sizing up David Paterson's leadership when he was Senate minority leader found his office mired in chaos, lacking clear lines of communication and hobbled by dysfunction and indecisiveness.

The 2005 report, based on interviews with key aides, is a devastating early look at the bumbling management style that would come to define Paterson's first year as governor.

"Leader Paterson has a restaurant maitre d' style of management - whatever the members want," Jonathan Rosen, then a top staffer for Senate Democrats, told a Paterson aide who was tapped to interview staffers and compile their opinions.

"Paterson is afraid of the conference; leads by consensus," the report says Rosen believed at the time. "This is a huge liability."

That's not the definition of leadership.

I've been more than willing to give Paterson the benefit of doubt since I considered Paterson to be a decent man personally, but he's clearly not up to the task of leading New York State with a monstrous budget deficit, a reluctance to take on the special interests and unions that hold the state hostage to thwart cutting costs that will improve the state's long term fiscal stability, and views tax and spend as a way of life.