By Henry J. Stern
October 21, 2005

A sleeper proposal, on the ballot November 8, would drastically change the way New York State adopts its annual budget, and substantially alter the balance of power between the governor and the legislature.
 
Let us be clear, the way the budget is currently put together is deeply flawed.  Twenty out of the last twenty one state budgets have been months late.  In 2005, the budget was on time for show purposes, but some issues were left unresolved.  The sums appropriated in the budget exceed the revenues received, which results in increased borrowing and ever-rising debt service costs. 

The City is required by law to balance its budget.  The Federal government prints money and now owes over seven trillion dollars, much of it held by foreign banks who could topple the system by pulling the plug.  The State should balance its budget according to generally accepted accounting principles (GAAP).  Instead New York has the highest public debt of any state in the union, with the exception of California.
 
The State in theory balances its budget, but the balance is heavily dependent on one-shots (revenues which will not be available in future years) and such schemes as securitization of the receipts from the settlement with the tobacco industry (which means borrowing against money the state is supposed to receive in the future from the industry to compensate for state funds spent on the care of smokers).
 
There is nothing new about the state's fiscal irresponsibility.  We have been writing about it for over three years.  All but the willfully ignorant know that, most of the time, the state spends more money than it receives in taxes.
 
But this year, something is new.  The State Legislature has come up with a proposal to deal with the budget problem.  Their plan: to give themselves more power to adopt a budget and drastically reduce the governor's role.  Although the governor would still be allowed to propose a budget, if it were not adopted by a certain date, the legislature would take over and pass its own budget.
 
Under the New York State Constitution, amendments must be passed by two successive legislatures and then submitted to the people for a referendum.  Without public attention, the plan was adopted by the legislature in 2004 and again in 2005.  Now it is up for a popular vote as Proposal One.
 
It would only affect Governor Pataki for one year, since he is not running for re-election.  But, on taking office in January 2007, the new governor, whether he be Eliot Spitzer, Tom Suozzi, Tom Golisano, Bill Weld or anyone else, would find himself with substantially less authority than his predecessors have enjoyed since Alfred E. Smith was governor (1923-29).
 
The power that would be stripped from the elected governor would be divided between two men.  Their names are Joseph Bruno and Sheldon Silver.  Bruno is majority leader of the state senate and Silver is speaker of the assembly.  They control their branches of the legislature.  They are elected, as all legislators are, from relatively small districts.  They are not accountable to the public in any real way.  They appoint most of their colleagues to other positions of leadership, under which their members receive additional public funds as 'lulus', payments in lieu of expenses.  The leaders therefore determine the actual salary of every member of their branch.  Would you argue with a man who can reduce your salary, and your family's pension, if you do not walk, talk or vote as he wishes?
 
You may wonder how such a proposal could be put before the public.  Well, the legislature has the authority to do just that, and it exercised it, in its own self-interest by augmenting its power in state government.  There is a large crowd that depends on legislative largesse for contracts and subsidies for their organizations, protection from regulation or deregulation, for all the reasons businesses pay millions of dollars to hire lobbyists, some of whom are former members of the legislature.  They will have new reasons to contribute to incumbents on both parties; because a legislature that obtains, fully and completely, the power of the purse, is even more worthy of receiving tribute from the supplicants who seek to benefit from its authority.
 
Articles have been and will be written on this subject.  We cite one, by Donna Arduin, in today's Post.  She was the first deputy budget director for New York State and, later, California's finance director.  She is now a practicing econometrician.  While in state government, she was regarded as a professional who was an authority on government spending.
 
Organizations divide on the question.  Citizens Union, the Citizens Budget Commission and the Association of the Bar of the City of New York oppose the proposal.  Common Cause, the League of Women Voters and NYPIRG support it; they participated in its formation.  Both the Liberal Party and the Conservative Party have come out against it, for different reasons.  Most New York State newspapers have editorialized against the proposal along with a coalition of business and taxpayer groups.  People who want the state to spend more money are more likely to support the proposal.
 
This issue is not an arcane matter of public finance.  It is a serious question of political power.  But the Constitutional amendment, written in gobbledygook, may very well pass. The Board of Elections website will give you its precise wording.  If people understood what it meant, most would probably be disinclined to support it. Many citizens will be unable to decipher the legalistic language in which the proposal is couched.  Others will skip over it, leaving special interest groups to have greater influence over the vote.
 
Let us go to the heart of the matter.  If you believe that Joe Bruno and Shelly Silver would do a more honest, more equitable and more efficient job than an elected governor and his professional staff, you should support this Constitutional amendment.  If you, from experience or insight, doubt that will be the likely result of this amendment, you should oppose it.
 
That is not to say that the budget process could not be improved, by open, public hearings, conference committees and time constraints.  There is plenty of room for genuine reform of the tortuous process.  But reform should not be used as a carrot to lure people and organizations to support the emasculation of the governor and the exaltation of the speaker and majority leader.  In no way have our Democratic assemblymembers and Republican senators shown themselves worthy of such elevation.
 
It is remarkable to us that, after years of complaint about the budget and the bargaining process by which it is adopted, we will be faced at the polls by a plan to replace three men in a room with two men in a room, cutting out the one man who is elected by all the people of the State of New York.
 
NOTE:  As always, we welcome expressions of opinion on both sides of the issue, and will publish your remarks, if they are printable, on our blog.
 
 
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