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Video Transcript of Economic Message

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Years ago, when my grandfather was still with us, and he wanted to have a significant conversation, he would look at me and say, “Andrew, we have to talk.” And then I knew it was serious.


Well, my friends, we have to talk. The economy has taken another turn for the worse. It’s unfortunate. In the beginning of this year our State was off to a great start. We balanced the budget, we did it on time, we cut spending, we operated in a bi-partisan manner and we restored integrity, performance, and even pride in New York State Government. Working with the State Senate and the Assembly, we got it done. We hung the New York is Open for Business sign.


Now, the national economy has grown worse. The State’s deficit for next year has grown to $3.5 billion. Over the past few weeks, we expected Washington to take action that could help the nation, and therefore help New York. However, once again, we have been disappointed. Not only did Washington fail to act in a constructive way, but the federal government’s gridlock has actually roiled the markets and made the situation worse.


Needless to say we need to act to improve our economic situation and we need to act now. The economy is not going to get better on its own and Washington is not coming to our rescue. But that’s ok. This is New York and we will address the situation ourselves.


I am approaching this problem in a much different way than in the past. I am not just treating the symptom but attacking the illness. I am not just trying to balance a budget but I am trying to grow our economy. I am not just plugging a budget hole but I am trying to create jobs. How do we get the economy running? How do we restore confidence in our markets and our government? How do we avoid the plague of gridlock and get the government to act? That’s our challenge.


I am talking to the legislative leaders in the Senate and the Assembly, Senate Majority Leader Skelos and Assembly Speaker Silver, to forge a bi-partisan solution that we can actually enact and pass now. I believe we can avoid partisan politics and avoid gridlock by creating a plan that is based on fundamental fairness rather than political ideology. There is no time to waste because New Yorkers are suffering now. Our focus, a plan that helps create private sector jobs and follows the reform principles that we have implemented to turn this State around.


We have a three-pronged approach:


First, it’s all about jobs, jobs, jobs – creating private sector jobs. There are critical projects that we need to undertake that are long over-due. I’m talking about bridges that are falling down, roads that are dangerous, improvements that have been long delayed. This is the work we must do to keep ourselves safe and make our state competitive. For this, I want to form the New York Works initiative. It’s a program that will access capital from the private sector, pension funds and State sources. This will allow us to better coordinate and manage these projects and it will create thousands of jobs. Projects like a new Tappan Zee Bridge, that people have been talking about for 20 years, and has gone nowhere. While in the meantime, we spend $50 million per year just to keep it standing. Or the Peace Bridge in Buffalo, which has a new plaza that needs to be built after years of delay or the Port Authority and MTA in New York City, which have backlogs that go back for years of capital projects. Projects that have languished due to lack of capital, or even worse, lack of initiative. It’s time for New York to get back to work.


Second, we must continue our course of fiscal responsibility and control government spending. We have spent too much for too long and we’ve gotten too little in return. As you know, I controlled government costs last session and I will again this year. Our 2% cap is truly fiscal discipline. We must also continue to demand actual performance by government. It’s not how much you spend, it’s what you achieve. Only government believes the more you spend, the better. It’s results that matter. We’re also changing the Albany culture to remember who the government serves: to put you first. Education funding is to benefit students, not school personnel. Health care funding is to benefit patients, not hospitals. Government is to benefit citizens, not special interests. We need to respect the taxpayer and spend less money. We need to honor the citizen and get better results.


Third, when it comes to taxes we must design our tax code with two goals in mind: First how do we create private sector jobs? And second, what is fair?


I am proposing a new plan called the Fair Tax Plan, a tax reform to make the code more equitable and to stimulate the economy. I propose a tax cut aimed at the middle class New Yorkers that I believe will help stimulate the economy by putting much needed money back in the hands of millions of people across this state. From President Reagan to President Obama, all agree that tax cuts can incentivize the private sector economy. We know that money in the hands of the middle class means money back in the economy. Under this plan, middle class families will pay the lowest tax rate since before I was born and that was a long, long time ago. It will be the lowest tax rate in 58 years. Furthermore, for New Yorkers making under 2 million dollars we will be reducing taxes to the lowest level in 3 years by allowing our current tax surcharge to expire. I believe this will boost our State’s economy and increase consumer confidence in New York. Besides a tax cut to incentivize our economy, I believe in targeted tax credits to hire and train inner city youth and that this is a great investment. We have an unemployment crisis within an unemployment crisis. Young inner city males have unemployment rates approaching 40%. It destroys communities and it starts a lifetime of issues. I want to offer businesses a job credit for long-term employment for these New Yorkers. Most of all, the tax code must be fair.


Everywhere I go I hear the same thing – New Yorkers know we are in difficult times but they want us to be fair in how we handle it. Our tax code today is just not fair. Right now, our State’s top income rate becomes effective at $20,000 of income. That means a person paid $20,000 pays income taxes at the same rate as a person making $20 million. That means the factory owner pays the same rate of taxes as the factory worker: it’s just not fair. I am proposing a fair tax system for New York based on a simple truth, the more you make, the higher the rate you pay. That’s what’s right and that’s what’s fair and that’s what New York deserves.
At the same time, we need revenue. As a matter of simple math, there is not an intelligent or productive way to close the current gap without generating revenue. The gap is just too large and it goes on for too long. While I am against higher taxes and I believe our long-term economic future for this state is enhanced by in fact lowering taxes to make us more competitive, the deal with this emergency, short-term we do need additional revenue. If I were to close the entire gap by budget cuts it would decimate essential services doing real harm to the State’s economy and strangling local governments all across this state. For those earners above 2 million, we will be reducing taxes below the levels of the last three years but not totally eliminating the surcharge. Over half of those households now live outside the State. The additional revenue generated will make a significant difference to our state by helping to close the deficit. I think this is fair, I think it will benefit all New Yorkers in the long term. To ensure fairness we are also proposing more income brackets – so there is equity in the code. These changes will make our tax code better, and fairer. There is still more to do. Understanding that this is a short term solution, I would make these changes now for a 3 year period of time – and simultaneously appoint a bipartisan commission to review the entire code.


I believe these three steps represent a comprehensive, balanced and non-partisan approach, a bold plan to rebuild New York and create good jobs now. This plan controls government spending, increases government performance, and then enacts a fair tax plan that gives the middle class a much-needed tax cut to incentivize the economy.


Most of all, this is a plan that the Legislature can and should pass. In times of crisis, it is important that government acts and now government must act in New York. It is even more important that we act given the federal government’s inability to act. I will reach out to both sides of the political aisle because I said to you when you elected me, we are not first Democrats or Republicans, we are first New Yorkers and we must act that way. We all must be willing to cooperate and compromise to get something done. Senate Leader Dean Skelos and Assembly Speaker Silver have shown last Session that they can show great leadership and rise to the occasion. Last legislative session they transcended their conference politics for the public good. They made government work and they made our State a better state. We need to do it again. And it will not be easy. Get ready, these are difficult and contentious times, people are unhappy. You will hear opposing political rants from both extremes. The “starve the beast” supporters will say we should just cut government spending to close the deficit. For them government can do no good, government is the problem, and the less it does, the better. The truth is that reckless cuts now could really hurt our schools, our health care system, our infrastructure, and that is in no one’s interest. That would damage the state economy. We can’t be blind to the unanticipated $3.5 billion deficit we face and we can’t be blind to an international economic crisis. You will hear that I should refuse to compromise and that the legislators should refuse to compromise. That position may be fine for zealots but not for elected officials, especially not at this critical time. The other extreme is the “tax and spend” school that says we should just raise more taxes and pump more money into government programs. But we can tax people right out of this state if we are not careful and we need more results, not just more money for programs.


Gridlock stopped the government in Washington. We can’t let that happen here.


My plan is balanced, my plan is fair and my plan is achievable.


New York is not alone in dealing with this economic problem. It is a national crisis. Many governments have tried to handle it and have failed. But I believe in New York and I believe New York will find our way through it and I believe we will be the better for it!


We are New Yorkers. Give us lemons and we will make lemonade. We just have to stick together because that is the source of our strength as New Yorkers.


We are not Upstate and Downstate, we are not rich and poor, we are not black and white, we are not gay and straight. We are New Yorkers. We are one state with one future. We always have been and we always will be. E pluribus unum – out of many one – that’s New York.


In the meantime, enjoy this holiday season. Enjoy your family. Honor your tradition. Remember your neighbors and remember the less fortunate, especially during these difficult times.


Thank you for listening and thank you for the honor of allowing me to serve you. I work to deserve your trust every day.


Thank you and God bless you.