Renaissance Budgeting:
How Fiscal Responsibility and Historic Tax Cuts Helped Bring About
the Resurgence of New York City
By Mayor Rudy Giuliani
Late last week the City Council and I agreed on a final budget that
solidifies the gains we've made over the past eight years. Our historic
crime-reduction efforts and the reforms that are bringing record numbers
of New Yorkers from welfare to work will continue. Spending for senior
citizen services has increased by over 90% since 1994, while funding
for public education is at the highest level it has ever been in our
City's history. But one of the most significant aspects of this budget
is the almost $500 million in new tax cuts that have been achieved
while government spending has been kept under control.
What we have achieved together is a fundamental change in the way
New York City government approaches taxation. In the past, chronic
fiscal irresponsibility coupled with a tax-and-spend philosophy led
to frequent tax hikes. The efforts of businesses and hard working
men and women were taken for granted. That high rate of taxation contributed
to the exodus of businesses from our City during the early 1990s,
when New York lost nearly 330,000 jobs in just three years.
New York's resistance to tax cuts began to change in my first budget
- when we proposed reducing the hotel occupancy tax, which resulted
in higher revenue from the lowered tax. The political landscape has
shifted dramatically over the last eight years, to the point that
the Council and I frequently debate which taxes to cut and by how
much, as opposed to which taxes to raise and by how much. In fact,
since 1994 we've reduced or eliminated 23 different city taxes, saving
taxpayers more than $3 billion in fiscal year 2001 alone. These tax
reductions include:
- Elimination of sales tax on clothing and footwear purchases
of less than $110.
- Reduction of the commercial rent tax; eliminating it in every
borough but Manhattan south of 96th Street.
- Reduction of the personal income tax surcharge.
- Reduction of the co-op and condo property tax.
In all, the tax burden on New York City residents and business has
been reduced 17% - to its lowest level in more than three decades.
These tax cuts have spurred the private sector to create a record
480,000 new jobs, outpacing both the state and national job growth.
And job growth is thriving in all five boroughs, while property values
have increased by 32% citywide since 1998. In fact, Queens and Staten
Island are leading all boroughs in job growth. Queens has experienced
12.5% private sector job growth since 1993. Staten Island has experienced
24.5% job growth since 1993. Brooklyn and the Bronx are at 9.4% and
7.7% respectively. And Manhattan has experienced private sector job
growth of 17.3%.
New York City's renaissance has been built upon fiscally responsible
budgets as much as reduced crime and the improved quality of life.
Together, we have turned chronic budget deficits - that reached $2.3
billion when my predecessor left office - to multi-billion dollar
surpluses. We've kept the rate of spending at or below the rate of
inflation. And we've created a budget stabilization account that will
insulate New Yorkers from any future downturns in the economy and
reduce the temptation to turn back the clock to the failed tax-and-spend
politics of the past. In this final budget we have once again demonstrated
that a City in control of its destiny is committed to fiscal responsibility
and tax policies that reward the entrepreneurial spirit that has always
made New York City the Capital of the World.
