Pataki Budget is Relatively Moderate,
Disappointing Savers and Spenders.
By Henry J. Stern
January 19, 2005
Yesterday, Governor Pataki presented his proposed New York State budget to the Legislature.
The total budget, which includes federal as well as state spending, comes
to $105.5 billion. Of that sum, about $69 billion must be raised locally.
The increase over last year's budget is 5.4%, which is about average for
recent years. Some of the added spending is due to higher salaries for state
employees, which were agreed to in collective bargaining. Medicaid,
the largest single item in the budget, is in an upward trend.
In preparing the budget, the governor tried to pursue a moderate course between
the savers and the spenders. The budget therefore incurred substantial
disapproval from both the spenders (unions, hospitals, school officials,
local governments) and the savers (conservatives, business interests, taxpayer
groups). Nobody seemed to like it, which in government is often an
indication of merit.
What will be the effect of the recent Court of Appeals decision empowering
the governor on budget matters at the expense of the Legislature? The
decision will make this year's budget process different from last year's
protracted struggle. The full effect of the decision remains to be
seen because the parties will be negotiating with different parameters.
There is substantial doubt about what, if anything, will be done to implement
the court decision in the Campaign for Fiscal Equity's lawsuit, requiring
that billions of dollars which the state does not have be appropriated to
meet the judges' conception of what constitutes a proper education. New York
State already spends the third-highest sum
on education per pupil (out of 51 states, including the District of Columbia).
D.C. spends more than N.Y. per pupil, although the effect of these expenditures
does not appear to be reflected in quantifiable result
Will the Court of Appeals attempt to substitute its own judgment for that
of the governor and the Legislature, will it direct elected officials to
follow the orders of unelected judges, will it hold the governor and the
legislature in contempt for failure to follow orders, will it prescribe its
own scheme of taxation to pay the costs its decision mandates? None
of these solutions is palatable or consistent with a democratic or republican
system of government.
The specifics of the budgets, what it provides and what it does not, are
provided in the ample newspaper coverage of the budget. If you have
time to read just one account, we suggest Michael Cooper's analysis on page B6 of the Times. The lead story in the Times, by Al Baker and Sewell Chan,
begins on page A1, col. 6. The headline, "Transit Projects Are Put
in Doubt by Pataki Budget," is a slight understatement. The projects
were in serious doubt before the budget was issued, and there is nothing
proposed to give the MTA people much encouragement in their quest for Federal
funds for construction.
It is highly unlikely that there will be a budget by April 1, the start of
the new fiscal year, although we cannot tell know whether the record set
in 2004 for the latest state budget in history will be broken in 2005.
Much as we complain about the governor's failure to enforce modest ethical
standards, his wandering attention to public issues during the eleventh year
of his regency, and the effects of his delusional but protracted quest for
the presidency — which is said to have occurred to him when he was a young
man (the Kerry premonition) — he does deserve credit for trying to craft
a moderate and reasonable budget, disappointing powerful political elements
who are part of the pay-to-play syndrome that characterizes politics in the
Empire State.
The budget is now published, and the jackals will try to pull it apart (often
with reason), probably by adding billions of dollars to existing deficits.
As society is organized, there is no doubt that the spenders, who also spend
on wining and dining the Legislature, are more influential than the savers,
a dried-up community of worrywarts whose deus ex machina is Ebenezer
Scrooge. The spenders count on their descendants, substantial inflation,
or mass destruction to dispose of the mounting state debt.
The fact is that if one wants to save real money, some voluntary hospitals
and state institutions must close and thousands of people, including state
employees, will have to lose their jobs. This will have an immediate
negative economic effect on these individuals, their families and the towns
in which they live. Under capitalism, these effects are supposed to
be ameliorated by business streaming into the state because of the lower
taxes which will follow reduced budgets.
There is, however, a long and painful road to traverse before our wages are
comparable to Appalachia's, and the disruption which will result from this
protracted privation, paired with inevitable service reductions, is not likely
to enhance substantially the attractiveness of New York State to business
and industry. These are real issues, resistant to solution by ideologues,
or even pragmatists.
If the substantial imbalance between receipts and expenditures is not sharply
reduced, with a view toward its elimination, the state's economic situation
will drift into hopelessness. If our elected officials conclude that
we cannot live within our means, and consequently surrender, in deeds if
not in words, to the ever-rising tide of individual dependency on government,
and, in turn, of government dependency on ever-increasing debt, one need
not be Nostradamus, Cassandra or even Jor-El
to foresee the eventual economic emergency that will ensue. When elected
officials are concerned only whether the conflagration will occur on their
watch, it is unlikely that serious steps will be taken to deal with long-term
problems.
In 1975, it was the bankers who stemmed the tide leading to municipal insolvency
by refusing to roll over short-term notes. In 2005, the bankers are
cowed, fearful that the state attorney general will send them to prison for
long-term financial practices which are dishonest and unfair to the public
but have long been tolerated. With one foot in durance vile, the men
in suits are not likely to stop the merry go-round. That will make
the eventual reckoning more difficult, but, on the other hand, the later
it comes, the fewer of us will be around to face it.
Of course, a rising tide lifts all boats, inflation reduces the burden of
debt, and technology can never be underestimated. On those reeds rest
our hopes. And since the State of New York proposes to put slot
machines on every corner to raise revenue, why should it be less optimistic
than its citizens, mostly the poor and lower-middle class, who hope that
their quarters will hit the jackpot and that the resulting cornucopia will
banish poverty, famine and misery from their lives. After
all, as Albany tells us repeatedly, all it takes is a dollar and a dream.
Links:
- Times: "Mr. Pataki's State Budget," editorial, pA18; "Pataki's Budget Leaves Transit Projects in Doubt," by Al Baker and Sewell Chan, ppA1, B6; "The Governor's Three-Pronged Plan to Meet His $105 Billion Budget," News Analysis by Michael Cooper, pB6; "From Albany, Little Offered To Bloomberg," by Mike McIntire, pB6
- Sun: "Spark of the Old Pataki," editorial, p8; "Pataki's Budget Sets Up Showdown With Silver," by Brian McGuire, pp1, 3; "Governor Proposes $105b Spending Plan, Zeroes in on Cuts to Health Care," by Julia Levy, p3; "Mayor: Pataki's Offer Is 'Way Too Low'," by Dina Temple-Raston, p3;
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Henry J. Stern
starquest@nycivic.org |
New York Civic
520 Eighth Avenue
22nd Floor
New York, NY 10018 |
(212) 564-4441
(212) 564-5588 (fax)
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