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Albany avoids real change Lawmakers close budget gaps with tax hikes and cash grabs

State legislators acted quickly to close New York's current $1.6 billion deficit this week. That's where the praise stops.

The way the lawmakers -- or, more specifically, the Democratic leadership -- closed this gap was business as usual in Albany: dodge the tough decisions, hike taxes instead of cutting payroll, raid specific pots of revenue to bail out the general fund, ignore any need for structural reforms.

What are they thinking? How can they boost New Yorkers' already heavy tax load? How can they see their constituent business owners laying off people, and still be responsible for making doing business in New York even more difficult? How can they see their constituents losing jobs, while protecting jobs in state government? Whatever happened to doing the right thing?

Gap closed -- irresponsibly. And only until next year's projected $13 billion deficit hits, and the federal stimulus package either bails out Albany or the governor and Legislature will have to face -- with less latitude to dodge -- an inconvenient truth: New York has to do more than plug gaps, it has to change the way it does business.

It won't. And the secretive process by which this was done proves again why this Legislature has been labeled the most dysfunctional in the country. Most of the lawmakers didn't even see this bill until two hours before they voted on it, as instructed.

Here's some of what the interim bandage applied this week gets wrong:

It takes 90 percent of last month's State University of New York tuition hike and drops it into the general fund -- in effect, imposing a specific new user fee on students that goes to Albany, not to their education.

It uses a gimmick known as "sweeping" to brush supposedly unused money from state authorities into the general coffers. An example: $306 million from New York Power Authority programs that are supposed to provide power incentives for upstate economic development, and which should be monetized and used for redevelopment programs if the allotments go unclaimed.

It cuts state aid to cities and other municipalities, which helps Albany but merely shifts burdens for taxpayers.

It raises costs on health care insurers who inevitably will hike already harmfully high insurance premiums to pass that cost on to consumers -- a move likely to cause many New Yorkers to drop insurance, in turn increasing Medicaid costs.

About half of the $1.6 billion, according to Gov. David A. Paterson, involves recurring reductions and revenue hikes that will help with future deficits as well. But nearly half involves revenue "sweeps" that are one-time bandages, and not cures at all.

This will not solve New York's problems, or do anything to enhance its competitiveness with other states that have lower taxes and throw fewer obstacles in the way of business, job and population recruitment. We are not building our future, we are digging a hole to drop it in.

Paterson, to his credit, has been doing a stalwart job of defining the problem. While the Legislature has remained in denial, the governor has, for months, been trumpeting the severity of the state's fiscal crisis, preaching that New York got into this mess because it has spent too much, and proclaiming that tough decisions have to be made.

This was his first real shot at that. But when Democratic lawmakers -- or, even more specifically, the governor and the two Democratic leaders of the Assembly and Senate -- met to close this gap, no hard decisions were made. What emerged is the usual Albany hodgepodge of efforts that protect turf and lighten taxpayer wallets.

This is simply not good enough.

For the fiscal year starting April 1, the state projects a $13 billion deficit. Even with the expected billions in help from the federal stimulus package, Albany will get another shot at tough deficit-closing decisions.

It must do so by following the lead of private sector enterprises that also are trying to cope with a deep recession -- cut personnel and other expenses, keep core missions and services while trimming the bells and whistles that accumulated in better times through political expediency, eliminate outmoded or damaging practices and restructure for efficiency.

If leaders can't exert the leadership to do that, here's the future they can ponder: Fewer jobs, fewer taxpayers, less revenue to support the stuff they've "saved," less of a role for New York in the nation's progress and fewer people left, especially upstate, to care about it.

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