The late U.S. Senate Minority Leader Everett Dirksen once observed about spending by Congress, "A billion here, a billion there, and pretty soon you are talking about real money."
That was the attitude in Albany last week as the Legislature adopted a record $122 billion state budget. It may have been a day late, but it was definitely not a dollar short. Spending in the adopted budget will race ahead at three times the rate of inflation. That's one of the biggest increases ever.
Despite last year's campaign rhetoric, the new spending plan hikes taxes this year by $499 million and $607 million when fully effective. Even with this dramatic increase in taxes, spending will soar $3.3 billion more than projected revenues, creating a structural deficit that will grow even larger if Wall Street's boom doesn't continue and interest rates go up.
As midnight approached and the budget bills began landing on legislators' desks, the much-heralded "Day One" budget reform requirement that a plain language fiscal plan be made available to the Legislature, before the voting began, was cheerfully ignored, in violation of the new State Finance Law passed in January. Legislators approved, sight unseen, $122 billion in taxes, spending and borrowing.
In his State of the State message on Jan. 3, Gov. Eliot L. Spitzer called for a budget reform package "based on three principles: timeliness, transparency and fiscal responsibility." This year's budget process finished late, was brokered behind closed doors and irresponsibly spends more than taxpayers can afford. As bad as the process was, the result is worse.
There is a better way.
The state ended the last fiscal year with an estimated $2.2 billion cash surplus, money that could have been used to eliminate an inherited deficit and pay down debt, generating a taxpayer savings of $205 million in annual debt service payments. Coincidentally, this is almost the exact amount that the final budget cut from larger STAR property tax rebates Spitzer originally promised.
Instead, the structural deficit will double and borrowing will continue on a costly growth path. According to executive budget projections, taxpayer supported debt will rise over the next five years by $10.7 billion, from $48.8 billion now to $59.5 billion, in 2011-12. That's a 22 percent increase that you -- and your children -- will be paying for years to come. That is, if they are still living in New York State by then.
Simply put, the new state budget spends too much, borrows too much and taxes too much. It is a missed opportunity to provide real relief for overburdened businesses and taxpayers. Unfortunately, the sound we're hearing in Western New York in response to this new budget is not applause, but the noise of moving feet, as families and businesses are shuffled out of one of the highest-taxed regions in the nation.
Jim Hayes, R-Amherst, is the ranking minority member of the Assembly Ways and Means Committee.