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STATE BUDGET'S A MUDDLE AND TAXPAYERS ARE THE LOSERS AGAIN

This year's state budget battle has been long and bitter, with partisan politics, personal power and puerile posturing the major themes of the process. In other words, New York government as usual.

The result is a muddled compromise, with both Republicans and Democrats claiming victory, again as usual. Victory for whom doesn't seem to be clear. Certainly not the people of the state.

You will hear Gov. George Pataki and other Republicans proclaim the first drop since World War II in the state's General Fund, where most state tax dollars go. True. If they claim to have cut state spending, they will be at best misleading you. In fact, it is going up by about $1 billion or so.

They will also puff out their chests at an average 25 percent cut in state taxes. Former Gov. Mario Cuomo played this game for 12 years, cutting state taxes sharply. Of course, local property taxes, fees and licenses went up at the same time, making New Yorkers the heaviest-taxed people in the nation. This year seems unlikely to be much different, with rises in transportation, education and other costs certain, and increases in property taxes highly likely in most communities.

This budget is very much a cobbled-together, patched-up compromise. Pataki started immediately after his election by proposing a set of radically Republican goals, including an even bigger tax cut benefitting mostly business and the wealthy, along with major surgery on nearly every social welfare program in sight (after all, the recipients are mostly Democrats). Assembly Speaker Sheldon Silver led the Democratic counterattack, stepping on his tongue several times but ably defending his party's traditional ideals (and constituents).

After endless conferences among the only three people who matter much in our state government -- Pataki, Silver and Senate Majority Leader Joseph Bruno -- the budget was born, very late, somewhat misshapen, but alive.

What did not emerge was any serious discussion of why we have had to go through this silly and expensive game every year for the past 15. We all know the cost -- New York has the second lowest credit rating of any state, which means we (taxpayers) pay millions more for the money the state has to borrow; local officials, school districts and agencies are left for months without any idea how much state aid they'll be getting, which often means they end up borrowing as well, and paying interest; serious policy-making is ignored in the partisan wrangling, and so forth. This year was even worse than most for all these things.

The solutions are not mysterious, either. The Temporary Commission on Constitutional Revision, of which I was a member, issued a set of sensible recommendations just a few months ago, including multi-year planning, a reasonable system for estimating revenue, and mandatory, consistent and comprehensive means of reporting on actual and proposed state and local spending.

A draft report on the state's fiscal system from the N.Y. Legislative Commission on Public Management Systems is languishing right now somewhere in the bowels of the bureaucracy because of its "sensitive" nature. The 130-page report, completed in January by researcher Timothy Britt, is considered a hot potato because it labels the state's financial and budgetary practices "poorly coordinated and conceived," so antiquated that the system is verging on breakdown. Britt suggests the state's "unorthodox" accounting procedures are so arcane they may well be ruled unconstitutional. His recommendations substantially parallel those of the Constitutional Commission.

New York's budgeting process was considered an innovation when it was adopted in 1927. It was emulated by other states and even the federal government. Like all innovations do eventually, this one has become a fossil. Unfortunately, so have most of our leaders.

TERRY ANDERSON is a former Middle East correspondent for the Associated Press.

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