March 30, 2007

We thought Wednesday  would be a good day to write about the State budget, since we had heard that agreement  between the governor and the legislative leaders was about to be reached.  We wrote an article, linked the text to relevant articles, and were  ready to send it out at 7 p.m.  It then occurred to us that there had been developments during the day which we could better report on Thursday.    We updated Thursday afternoon and were ready to e-mail you a two-day report.  But again, we concluded that ongoing events would preclude a full review of what was taking place in Albany. Today is Friday and we are ready to rock with three days of traditional negotiations, fueled by pizza and coffee.
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You will find facts and opinions on the budget and the negotiating process.  They will appear in dated paragraphs, so you can watch how the story unfolded during the week.  You can read them in chronological order, starting with Wednesday, or you can cut to the chase and go right to Friday.  Remember that we are still two days from the April 1 deadline, and the details remain undisclosed and fluid..
 
Our conclusion: The legislature added about a billion dollars to the governor's budget, we don’t yet know precisely how much.  They always do that, just as the City Council does.  The add-ons  justify their labors, and help them get re-elected.  The problem is that Governor Spitzer started too high, proposing an increase between two and three times the rate of inflation.  He added billions of dollars for education, with no reasonable plan to spend the money more productively than the tens of billions that now go to schools, many of which are failing.  

WED: The New York State budget for the new fiscal year has just been agreed upon by the powers that be (who are the same as the powers that were for the last dozen years, except for Spitzer replacing Pataki).  The budget is better than it could have been but far from what it should have been.

THU: The New York State budget may or may not have been agreed to by the three men in a room.  Although agreement in principle on a compromise budget was reached Tuesday evening,
Some details remain to be settled, and as you should know, “God is in the details”.

WED: The Times reports, on B1, LAWMAKERS IN ALBANY NEAR DEAL ON BUDGET, Danny Hakim and Nicholas Confessore wrote: “In a major step toward passing a state budget by the April 1 deadline, Gov. Eliot Spitzer and state legislative leaders agreed Tuesday night to add at least $850 million to his proposed budget and appeared to have resolved the main issues that divided them.  The deal involved several key concessions by the governor to Senate Republicans…”

 WED and THU: Trapped between the desire to adopt a budget by the Constitutionally-mandated April 1 deadline, (although the budget had come in late for 18 of the last 20 years) and the unwillingness of both houses to go along with the budget the governor proposed, on January 29, the decision was made to resolve the issue by compromise, rather than each side standing firm and failing to reach a timely agreement.
 
WED: That decision by Governor Spitzer was correct.  Not going along would have dragged the budget impasse out for months, consequently precluding the legislature from dealing with other issues.    The end result would have been much the same, considering the relative strength of the parties to the perennial parties to the dispute.

THU: Governor Spitzer can only go so far in accepting increases in his budget.  The changes must be perceived as reasonable and not disproportionate. For example, if the Assembly added  $600 million, or 0.5 %.  The Senate addition is disputed: Spitzer’s staff says it is $3.4 billion, the Senate staff on dollars and the Senate tacked on another two billion to the governor’s $120.6 billion budget, then a settlement at $1.5 billion would not be a victory for the governor.  A settlement at $500 million would be.  An intermediate result would likely be seen as a reasonable compromise.
Note:  Understand that this discussion has nothing to do with the merits of the budget increases.

WED and THU: The essence of the budget is that the Governor submitted a high budget, with a 7.6% spending increase over last year, twice the rate of inflation.  The Assembly added hundreds of millions of dollars to the budget for school and hospital employees, and the Republican Senate was even more generous, adding additional hundreds of millions to the Assembly version.

WED and THU: This confused some people who believe that the Republicans, normally considered more conservative than the Democrats, would support smaller budgets.  However, the alliance between the Republicans, hospital managers and unions, and Long Island school boards, groups that seek more state funding, has transformed historic ideological stances into pragmatic political positions.

WED:  The Citizens Budget Commission is a centrist research and public policy organization which is known for its studies on city and government and its moderate attitude toward public Its expenditures (you cannot spend what you do not have, and you cannot lie about the figures). Its president is Diana Fortuna, a skilled professional and alumna of the city’s Office of Management and Budget.   CBC found modest improvements in the budget but concluded that “the spending increases for next year are simply too high.  The deal will increase state funds spending this year by about 9 percent, more than three times the projected rate of inflation.  This rate of growth is unsustainable in a state that already has the highest combined state and local tax burden in the country.”

THU:     In an interview with Jacob Gershman of the Sun, Ms. Fortuna was critical of the budget process.  “At this point, all the information is just terrible.  We won’t know for days what the numbers really are.  We are back to the situation where people were arguing over how much there was to spend and turning their attention to the question of how to spend it.”   Later in his article, Gershman asked whether “the governor’s desire to wrap up negotiations this week came at the cost of transparency and clarity in the budgeting process.

THU: The Times, in two articles this morning, enlightens us on the maneuvering in
Albany. On B1, “STEAMROLLER” IN ALBANY LEARNS HOW TO CONCEDE, BY Michael Cooper and Danny Hakim.  On B3, IN DARK ON BARGAINING, AND EXPERIENCED IN THE FRUSTRATIONS OF BUDGET consists of interviews with legislators who know as little as you are I do as to what is going on.

The Post takes the gloves off (not that they ever wore them) in two stories and an editorial.  At the top of p2, HOSPS BIG WINNERS IN STATE BUDGET WAR, by Kenneth Lovett and Fredric U. Dicker, beneath that article appears GOV. STEAMROLLED INTO A BIG SOFTEE”, a  column by Dicker, whose lede reads:
Gov. Steamroller has become Mister Softee this week as plunging poll numbers, Republican recalcitrance and the approaching April 1 budget deadline forced Eliot Spitzer to change himself into George Pataki.”  The column is tastefully illustrated with a headshot of the governor wearing on his head a cup of what appears to be vanilla frozen custard, and a red and white Mister Softee bowtie below his jutting jaw.  The editorial on p34,     NOTHING’S CHANGED, begins

“Well, that didn’t take long.
Eighty-seven days, to be exact.
The governor who swept into office on a pledge to “change everything” about Albany – has managed to change … virtually nothing…
“Gov. Steamroller got squashed.
“The plan is a spending riot.”
“There is no real tax relief for anyone.
“Schools will be bathed in cash, getting an extra $7 billion over four years – even as New York already  spends far more per student than almost every other state,
“Future-year budgets get thrown out of whack: the Citizens Budget Commission says that, at this rate, Albany will be $4.5 billion short of cash in just 18 months.”
A contrary view is expressed in today’s Daily News editorial: GOV DELIVERS FOR THE KIDS.  Here are the two lede paragraphs and the closer:

“Gov. Spitzer’s handshake budget deal with the Legislature marks a historic shift in state priorities – putting the brakes on out-of-control Medicaid spending while investing heavily in the public schools that deserve help.”

“If lawmakers stick to the bargain as outlined, New York City schoolchildren will reap a bonanza of state aid – enough to reduce class sizes, hire better teachers, buy spiffy new computers and textbooks and make and make the many other improvements Mayor Bloomberg has planned…”

“Bruno got nowhere near the extra $3 billion he sought, but he got enough to make this budget uncomfortably plump.  In fact, Spitzer had to trim his property tax relief proposal to accommodate lawmakers’ demands for spending – a fact of which Bruno should be ashamed.”

Newsday supported the governor in its editorial: THUMBS UP FOR BUDGET: Spitzer Won Key Reforms, but NY Must Pay a Price for Higher State Spending.  The lede:

“At least it’s a start – a reasonable start.
“True, the tentative state budget deal is more than the state can afford.  It was cobbled together behind closer doors, so it’s hard to tell just how much it will add to future deficits.  And most of the new money added to Gov. Eliot Spitzer’s initial plan was a sop – to the state’s wealthiest and most powerful special interests.
“But New Yorkers should hold their nose (sic) with one hand and give the deal a thumbs-up with the other…”

FRI: A BUDGET DEAL IS ANNOUINCED, MINUS DETAILS
Negotiations Were Inscrutable, Even for Albany. Times, B5, by Cooper and Hakim, "Gov. Eliot Spitzer and legislative leaders agreed behind closed doors to double the number of charter schools in the state to 200 and create a fund of more than a half-billion dollars for stem cell research, officials said late Thursday night.

"In what many Albany watchers regarded as a vintage performance in a Capitol (that's the building) long known for secrecy, the governor held a news conference to reveal that he would not reveal the details of the private budget agreement he worked out during marathon negotiations with the legislative leaders.  But he did say that he was now confident of passing a budget before the state's April 1 deadline."

FRI: . SPITZER WINS A VICTORY ON CHARTERS, 100 New Schools to Be Allowed Under Budget Deal in Albany, Sun news story by Jacob Gershman.  p1, Lede: “In a victory for Governor Spitzer, lawmakers are poised to approve an expansion in the number of charter schools in the state...”

SPITZER'S HOLE IN THE POCKET, Sun column by Kent Gardner and Erika Rosenberg, p9.  Lede:  " It is easier to be frugal when you're broke.  This principle applies just as well to government as it does to your teenager.
"While the state budget is still on a glide path to disaster, this year we have some extra change jingling in our pockets and the temptation to spend it proved irresistible to the three politicians who make these decisions...".
.  What follows is a thoughtful discussion of New York State's fiscal problems, which the authors believe the budget now being approved does nothing to resolve.  The column is well worth printing out and reading when you have the time..  The writers are president and senior research associate at the Center for Governmental Research,  based in Rochester.
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THE EDUCATION OF ELIOT SPITZER, Sun editorial, p8  "Governor Spitzer is certainly getting an education in Albany.  Even the newspapers that endorsed him to lead the state are calling the self-proclaimed steamroller things like Governor Softee.  The New York Post, which endorsed him in florid terms, ran a picture of him as an ice cream cone.  It reckons that his budget plan is a "spending riot" with "no real tax relief for anyone" and schools "bathed in cash and future-year budgets out of whack."  It says that he's failed on schools and hospitals and most importantly, failed to "fix Albany's broken culture."  Its own hopes -- come day 88 -- the  Post says are "fading."
"Our own reaction to Mr. Spitzer's predicament is a bit different...."
In the rest of the editorial, which you can link to above, the Sun cuts the governor something of a break, but the editorial concludes: "We have little doubt that the governor would make new friends, ones he wouldn't have to double cross to get the things he says he wants."   We should only hope the governor will read and listen to the Sun's advice.
 
FRI   Post editorial, p32, ELIOT, OVERWHELMED.  (The Post resumes its assault on the governor it supported in November.  Although we feel their argument is overstated, the editorial is a forceful and articulate essay.  You can link to the full text, which is written in the traditional Post style. The editorial begins:

"Who'd have thunk it?  Eliot Spitzer is making George Pataki look like Gary Cooper.
"Doubt it?
"Just compare what each accomplished in their first few months in office -- most especially their first budgets.
"Sure, Pataki later morphed into spinelessness.  But he started with a backbone.
"The present governor?
"All talk.
"No walk..."
 
As far as the secrecy goes, that is in fact the only way to negotiate seriously, in private.  Some idealists believe that staging t arguments about money in a Roman forum will produce better outcomes.  In fact, such a spectacle would never result in agreement. When interests conflict, neither side can sell out (or gracefully retreat) in public, and in consequence the proceedings would end in paralysis.  You could forget April 1 as a deadline; that is when the budget season would be about to begin.  The reformers are right in most cases, gerrymandering, financial integrity, equal staffing, full disclosure, restricting outside employment, etc.,  There are, however, a few things best not done in public,  that is why rooms have doors. Serious financial negotiations, like settlement conferences in lawsuits, are intrinsically private.

IOHO (In our humble opinion); We cite Rule 30-T: “The truth lies somewhere in between.”   The result was the best deal the governor could get under the circumstances, and it was better than the interminable fight that would have ensued if the April 1 deadline had been missed.   He did not sell out any more than was necessary to make the deal, and he got some good things in return, like more charter schools. The problem was that he started too high, but what do young idealists know about playing poker.  In fact, Senator Bruno retreated from his bargaining position far more than the governor did, but the senator's position was deliberately more outlandish when he entered the bizarre bazaar.

Let's do it better next year.

 
#362  3.30.07   2472wds