March 30, 2006

The Senate and Assembly are reported to have agreed on the state budget, which is required to be adopted by April 1.  For 19 of the past 20 years (except 2005), the budget was not adopted until late in the year, but that goes into the category of unenforced laws.  The governor is likely to veto the pumped-up 2006 budget, and the legislature may then negotiate or override.

Today’s arrangement provides increased spending, reduced taxes, and more borrowing, further increasing the record state debt by using Enronian off-budget entities.  Republican concern over retaining their Senate majority has resulted in a more expensive election-year package.  The mayor considers the new budget a triumph because it contains the school construction funds he sought so intensely from Speaker Silver and Majority Leader Bruno.  It is a political victory for him, and by extension, for the city because he will receive money he may not have to pay back.  But the state’s weak financial condition and its continued addiction to balancing budgets by borrowing billions do not augur well for economic recovery, business retention, or fiscal responsibility.

We admire prudence in public expenditures, but when it comes to action, both congressional and Albany Republicans support new spending programs in areas they fancy.  This indulgence of massive deficit spending is attributable to the combined pressure of constituents and lobbyists.  The opposition, the misers, the perennially beleaguered cost-cutters, usually lose out, except where municipal insolvency appears imminent.

Our irresponsible indulgence is the fault of no one individual.  The outgoing governor has lost considerable influence; his days are numbered.  Today is Day 276 of the countdown to his successor’s inauguration.  The mayor, invigorated by re-election, prioritizes school construction.  The Senate majority leader understandably seeks to preserve his majority.  The education lobby vigorously defends incumbents of either party.  The Assembly speaker is secure, but he is no foe of increased expenditures.

Skeptics unconvinced that construction dollars necessarily morph into high reading and math scores are bewildered.  Will these billions be cost-effective? Will contractors and unions be the primary beneficiaries of new construction? With school populations relatively constant, why is the edifice complex so insistent? 

The fiscal plan provides for the borrowing of $2.6 billion by the State Dormitory Authority through the issuance of bonds.  New York City would receive $1.8 billion of this largesse, which would build 21 new schools. 

The city will also gain permission to borrow $9.4 billion from the NYC Transitional Finance Authority, a state agency created in 1997 to help the city fund its capital plan.  The state undertakes to help service the bonds if the city requires assistance. The result is extensive borrowing, increased public debt, and rising interest costs.

With singular insight, a Times editorial captures the issue in a sentence:

“It’s ridiculous that the legislators, who are almost all from districts gerrymandered into impregnability, and a governor whose presidential hopes are still a mirage can be doing so much damage with an eye toward pleasing the voters.”

Sadly, the legislature responds to demands from the education lobby, and intimations of retaliation against those who refuse to submit.  Threats aren¹t all bad; fear also stimulates good deeds.  We appreciate the energy of the mayor’s initiative. 

We are just not certain that throwing bricks and mortar at schools will solve learning problems.  The mayor’s apparent victory over lame-duck Pataki and endangered Bruno will provide more money for our schools, but it will not satisfy the educrats and their allies, for whom any failure to learn is the result of inadequate public funding.

The legislature may intend to respond to the CFE lawsuit by demonstrating generosity, but one doesn¹t throw money at plaintiffs before settlement negotiations begin.  We think the state undermines its own position by offering borrowing as a cure-all for spending decrees.

It was sad to read yesterday of the closing of 11 parochial schools in NYC, which are generally regarded as educationally successful institutions.  The state cannot and should not subsidize religious education, but we wonder what educational benefits will accrue from spending billions on new schools while small existing schools close for lack of resources.

Many non-Catholic parents send their children to Catholic schools, paying tuition, because they believe their children will learn more.  It is unfortunate that the legislature, in thrall to the United Federation of Teachers and its upstate appendages, resists charter schools, vouchers for parents, or other efforts to modify their educational monopoly, while demanding greater public expenditures without demonstrating superior results.

This is not meant to disparage public education, which I enjoyed for 14 years.  But the education network is New York’s version of the military-industrial complex, which President Eisenhower warned about before leaving office in 1961.  Union and management, often at odds, agree on one issue: More spending.


#288 3.30.06 793wds