Budget Impact on NYS
The National Priorities Project
In the Bush Administrations budget for fiscal year 2005, Mr. Bush proposes to cut grants to state and local governments, increase military spending, and make the tax cuts of the last few years permanent. The proposed budget would cut numerous programs: health agencies, pollution control, conservation, mass transit and many others that affect the well-being of our communities. It would also cut almost $28 billion in grants to state and local governments, further aggravating recent state and local crises.
New York State could lose an estimated $2.2 billion if this budget passes Congress, including:
¨ Housing assistance: $328,943,255
¨ Title I education assistance: $101,458,264
¨ Community development: $10,210,175
¨ Clean Water Fund: $57,564,391
The Cost of Permanent Tax Cuts to New York
Recent tax cuts primarily account for the rapid turnaround from record surpluses to record deficits. This year alone, the deficit is expected to reach $521 billion. If the budget were to be balanced this year, the average taxpayer in New York would have to pay an additional $1,894 to cover this gap. Mr. Bush proposes making his tax cuts permanent, which will cost at least $2 trillion over the next decade. The vast majority of the tax cuts will benefit the wealthy. More taxpayer dollars will go towards paying interest on the debt, while forcing even deeper cuts in national priorities such as education and health care. Heavy government borrowing will cause interest rates to increase, impacting families with flexible rate or new mortgages. Even a one-percentage point increase on a modest size mortgage could cost an additional $725 or more a year.
More Security or Just More Military?
The Bush administrations budget proposal would increase military spending up to $421 billion, a 5% hike after inflation. The budget does not include spending on Iraq or Afghanistan, so military spending in fiscal Year 2005 is likely to be $50 billion more. While Mr. Bush justifies the additional spending as a matter of national security, the increases have little to do with fighting terrorism. Instead the military budget is stockpiled with high-priced, unrelated initiatives like ballistic missile defense and Cold War weaponry like submarines and more nuclear weapons.
Are these Federal Policies Working in New York?
In New York, 580,520 workers remain unemployed. Many others have left the labor force, discouraged after a long search for work. Nationally, the proportion of people who participate in the job market has fallen to a low not seen since the recession of the early 1990s. Since 2000, most states have experienced a growing job gap the difference between actual jobs available and the number of jobs needed to keep up with the growth in the working age population. New York is 359,417 jobs short of the mark. In addition, personal bankruptcies are at an all time high as families struggle to pay the bills. In New York, 18,452 people have declared bankruptcy, up 27% since 2000.
More on sources and methodology is available at <www.nationalpriorities.org> or from the government itself at <www.whitehouse.gov/omb>. Comparable information for each of the other 50 states is also available from the National Priorities Project.