ALBANY, N.Y. -- Senate lawmakers, on Wednesday, began series of hearings geared toward reforming the state's tax code. For lawmakers in favor of cutting taxes, part of the problem is keeping the budget in balance. Senate Finance Committee Chairman John DeFrancisco recalled then-Governor George Pataki's tax cut of 1995.
"Somehow the books still balanced after the major cut in rates. You just spend less, I guess, is part of the answer," DeFrancisco said.
But budget hawks also pointed to myriad tax breaks and credits given to niche industries that cost a lot in revenue but don't generate economic growth. Singled out for criticism was the film tax credit, which has expanded and is being credited with bringing NBC's "The Tonight Show" back to New York.
"It's not a recipe for long-term economic growth. Every independent study, aside from the ones funded by the recipients of the program, have concluded that," said Joseph Henchman, Tax Foundation Vice President for Special Projects.
Similarly critiqued was the $400 million tax rebate program for families, a break approved this year that will send a check to New York families just before next year's elections.
"That's not a tax cut, that's like a mail-in rebate. It's gratuity. It's based loosely on how many children you report on your tax form, but it's not a tax savings, it's not going to be boost the economy," said E.J. McMahon, Empire Center Senior Fellow.
But the state's chief business lobby believes broad-based tax cuts and targeted credits can still be used effectively to bring and create jobs in the state.
"They're not mutually exclusive. We can make our business tax structure more competitive, simpler to comply with and lower costs on business," said Ken Pokalsky, Business Council.
And liberal groups seized on the series of hearings on tax policy initiated by Senate Republicans to note in a separate event at the Capitol that the state has approved tax breaks for the politically connected.
"What we've seen is some very bad tax policy which tends to favor big campaign contributors and the wealthiest in New York State," said Ron Deustch, New Yorkers for Fiscal Fairness.
Next year could shape up to be a showdown over taxes. Governor Andrew Cuomo has reportedly told donors he plans to push for a tax cut in next year's budget that already faces a $1.7 billion deficit.