Sep 17, 2008 7:23 pm US/Eastern
Wall Street Woes Translates To Higher Taxes In NYC
Officials Concede Property Tax Increase Likely Unavoidable
Paterson Doesn't Want To Contribute To State's 'Addiction'
NEW YORK (CBS) ―
The crisis on Wall Street may be heading for your street. Taxing trouble could be on the way in the form of higher taxes for New Yorkers.
If you live in the city, you better start saving your pennies because the taxman cometh.
"I don't think you can close a $2.3 billion gap by cutting services," Mayor Michael Bloomberg said recently in response to the city's budget gap.
That gap has been made larger by the Wall Street crisis, and can only be closed with new tax revenue. And the only tax the city can raise without state approval is the property tax.
Councilman Bill DeBlasio gave voice to what many in the City Council see as inevitable.
"We cannot cut schools, we cannot cut sanitation, we cannot make the city unliveable," said DeBlasio (D-Brooklyn). "That's what we in the '70s. We can't go there, so it's going to be very hard to avoid a property tax increase."
The state faces similar problems with a budget gap also made worse by the market meltdown. Even anti-tax Gov. David Paterson has started whispering the word.
"If it gets any worse, it's something we'd have to consider," Paterson told CBS 2. "But we don't want to raise taxes because they contribute to the addiction that the state has."
Assembly Democrats tell CBS 2 that some increases in taxes and fees will probably be necessary as part of the overall plan to fill the budget gap; but Senate Republicans, in a tough battle to hold onto their slim majority, are saying no way.
"The worse thing we can do is raise taxes because that will send people out of state," said Sen. Maj. Leader Dean Skelos (R-Rockville Center).
In fact, Skelos on Wednesday called for a series of tax cuts for small businesses and manufacturers, and he's against local property tax hikes too.
"Quite frankly, local governments and school districts can't keep raising property taxes," he said.
When will the tax hikes kick in?
City residents will probably feel the pinch in next year's tax bills. The new state budget is due April 1 and tax hikes could come then.
And there's still the open question of new taxes to pay for mass transit. Those recommendations will be made in December.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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