Originally published in Issue 4 - Mar 10, 1997
This week, the State legislature at long last renewed the 12.5 percent personal income tax (PIT) surcharge, ending the standoff on the use of surcharge revenues which has thwarted resolution. The PIT surcharge is projected to generate $925 million during the 1997-1998 renewal period.
A new legislative agreement hammered out in Albany resolves debate by committing the City to maintaining spending levels in criminal justice and school construction. A City general fund criminal justice account will receive $275 million in surcharge revenue during the current and succeeding fiscal years. The City is required to maintain 38,310 police force officers, with a surcharge rate reduction penalty should the force fall more than two percent below this target. The Mayor’s Preliminary Budget for 1998, however, called for a uniformed headcount reduction significantly below this level. Accordingly, the Mayor will be forced to address this issue in his upcoming Executive Budget.
The City also pledged to provide $1.5 billion for school construction and repairs over the next two years; $650 million in surcharge revenues will be diverted from the City’s general fund to school construction if the City does not meet its commitment.