The Budget is Too High
But What's a Man to Do?
Hit by Unions, Hospitals,
Lacking Public Support.
By Henry J. Stern
January 23, 2008
Governor Spitzer's proposed state budget of $124.3 for fiscal 2008-09 comes in at the high end of mid-range. He did what he feels he has to do, considering his weakened standing with the legislature.
If the governor were stronger, he could initiate substantial reductions in a state budget that is both excessive and structurally imbalanced. The stock market's sharp decline makes it highly unlikely that state revenues will rise sufficiently to pay for the higher budget the governor has offered, and which the Legislature is likely to increase still further.
The 5.3 per cent increase he proposes is far higher than the rate of inflation, which is 2.9 per cent, but not as high as the 7.8 per cent increase that he proposed last year. 2007 was the time to cut the budget, when he was at the peak of his popularity and influence. Governor Pataki made substantial cuts in 1995, but later morphed into a spender under the influence of the permanent government, some of whose members can be generous.
According to the polls, Governor Spitzer's popularity is currently near the freezing point, 32 degrees. It took President Bush six years and an unwon war to reach that low point, Spitzer has done it in one year without a war. On the other hand, Mayor Bloomberg was once at that chilly level, but rose over time to the commanding position he enjoys today.
The state budget is summarized in today's Times by Danny Hakim on B2. The headline: SPITZER PLANS CUTS AND FEES TO CLOSE DEFICIT OF $4.4 BILLION.
The lede: Gov. Eliot Spitzer on Tuesday proposed an array of taxes and fees and almost $1 billion in health care cuts, and scaled back plans for new education aid and property tax relief, in an effort to close a budget deficit estimated at $4.4 billion. The governor's $124.3 billion budget plan also called for an expansion of gambling to raise $250 million by installing thousands of video slot machines at Belmont Park."
Speaker Sheldon Silver said that he was "generally pleased" with the budget, but opposed the spread of gambling." Working men and women have enough time making ends meet. Their government should not be tempting them to play with their limited resources," he said. Silver is showing greater concern over gambling addiction than the governor. And if you put computer terminals at Belmont, how far is it from putting them in every home. Think of the revenue.
It will basically be up to the Speaker and his Senate counterpart, Joseph Bruno, to tweak the budget sufficiently so that they can show their contributors that the money invested in lobbyists and legislators is well spent. If the past is any guide, the legislators will add about a billion dollars to the budget, which will end up as $125 billion, plus change of a few hundred million. This will prevent budget cuts that could actually reduce some parts of the budget itself, not just the rate of growth of the budget. It reminds one of differential calculus.
Last night Channel 13 aired a program on the corruption of former Congressman Duke Cunningham of California, who was sentenced to seven years in federal prison for taking bribes from defense contractors that added up to millions of dollars. Assuming the payments go to campaign committees and not directly into the legislator's pockets, is that state of affairs ethically sounder? We suppose it is, but not by too great a margin. The process is, however, legal, which means it can continue unabated. The legislature has been denounced by some media and academics as "dysfunctional." That allegation is generally true, but in some areas the legislature functions rather effectively. We cite Rule 14-M: "Follow the money."
Another result of a weak governor is that he cannot afford to offend too many interest groups. Last year, he took on the hospital-labor complex, which was the right thing to do. The result was millions of dollars worth of commercials denouncing him, paid for by the complex. He countered by commercials he bought with his own campaign funds, which was really putting his money where his mouth was.
The barrage by the wealthy institutions, who receive billions of dollars in state funding through Medicare and other programs, took its toll on the governor's popularity. He is unlikely to take them on this year with the intensity and power point charts the way he did in 2007. Why fight when you can borrow?
DIGRESSION: I remember a particular singing commercial from my childhood, back in the distant past. The jingle, repeated endlessly, ran:
"Never borrow money needlessly, but when you must, go to the people you can trust."
The sponsor was the Household Finance Corporation. I couldn't find them today in the Manhattan phone book, so I went right to Google. The company eventually became HFC Bank (Just as Kentucky Fried Chicken morphed into KFC). It is now a division of HSBC (formerly known as Hong Kong Shanghai Banking Corporation - guess where they came from). END DIGRESSION
Almost every civic group and financial expert believes that the state government overspends. The result is higher taxes and fees, and more borrowing, which leads to higher costs to service the every increasing state debt. A fee becomes a tax when the amount of the fee exceeds the cost of overseeing the program or occupation which paying the fee permits you to enter.
The legislature capped state debt in 2000, in what was thought to be a reform. The money to build capital projects and reduce the deficit is now borrowed, not by the state itself, but, by public authorities, of which there are over 700 in New York State. It is classic politics to pass a law, and at the same time find a way to avoid its consequences. One word for such an escape route is 'loophole,' as I am sure you all know. In Washington, the key word is 'earmark,' which is a specific appropriation within a larger bill.
In New York State, the same purpose is achieved through a 'member item,' in which individual legislators in good standing with the leadership and in the dominant party in their house receive much larger sums than their less fortunate colleagues to distribute to organizations or to build capital projects in their district. Sometimes these legislators or their family members may be employed by corporations who are beneficiaries of member items. They might even be consultants, who operate out of offices at home. Their expertise, however, is often helpful to the company they are serving, particularly in that part of the project which involves securing the necessary funds from Senate or the Assembly.
Legislators are permitted to engage in this outside employment, such as partnerships in law firms or as consultants. Al Smith was credited with saying, "A law degree means you can take a bribe and call it a fee." With the advent of consultants, the law degree, now a J.D., is no longer required. This outside income supplements, and in some cases, outstrips, the salaries and lulus they receive as public officials.
That is the way our system works. Since the legislators make the laws, they can take conduct which might to the ordinary person be considered criminal, and make it perfectly legal. But even with this enormous latitude, some of them still commit crimes and are prosecuted. But not every criminal is brought to justice, far from it.
People generally do not realize that, unlike homicide and assault, bribery is a crime of consent. Neither party to a corrupt transaction has any incentive to disclose it. However, if they are being prosecuted for other matters, and believe that disclosing the bribery will result in reducing their sentence for the offenses they have committed, they may squeal, sing, or snitch, which will provide valuable information in the interest of justice...
That happens to be the way that Queens Borough President's shakedowns came to the attention of the authorities. An investigation in Chicago into parking meter payoffs led to a defendant who volunteered information about even more fraud and corrruption in New York City, centering on the Parking Violations Bureau, which employed as deputy director a crony of Manes, Geoffrey Lindenauer. The crimes they committed had gone on for years, but they were only detected as a result of the tip from Chicago. Who knows what other criminal schemes and conspiracies are operating undetected today?
The underlying problem was clearly stated by another mid-century icon, The Shadow. "Who knows what evil lurks in the hearts of men," he asked, and then answered his own question, "The Shadow knows!" Unfortunately neither Lamont Cranston nor Billy Batson nor Peter Parker nor the team of Bruce Wayne and his ward, Richard Grayson, is available. And Clark Kent, if he exists, is probably still in Smallville, if Kal-el has left the building on Krypton.
In the absence of superheroes, the hard and thankless task of fighting recurring corruption must be performed by mortals, who, as Shakespeare wrote and Hamlet said to himself, are subject to the "thousand natural shocks that flesh is heir to".
The subject of dishonest public employees is brought to mind by two articles in the Times about police corruption in the narcotics division on the midnight shift. A number of officers are reported to have taken drugs or money in exchange for not making arrests.
The latest incidents of alleged police corruption are reported today on B1 in a thoughtful story by Al Baker, whose work we know from Albany. The headline: DRUGS-FOR-INFORMATION SCANDAL SHAKES UP NEW YORK POLICE NARCOTICS FORCE. Another fine Times piece is NIGHT SHIFT HAS LONG TIES TO CORRUPTION, by William K. Rashbaum, on B2. We recommend that you link to them for background on the broader issue, as well as an account of recent arrests of police officers.
We link the two topics, legislative and police corruption, because wrongdoers use whatever is available to them to violate the public trust for personal gain. The cop has narcotics dealers to shake down or to protect. The senators and assembly members have legislation before them, which they can approve, amend or shelve. There are corporations with deep pockets before them, who will benefit or suffer as a result of their decisions.
We should treat both classes of lawbreakers similarly, except that the lawmakers have the power to make the laws. It is not necessary for them to break the law to enrich themselves, their campaign treasuries, their law firms, or their private business interests. They use the authority to set the rules of the game and legitimize their self-serving behavior.
Some people sympathize with legislators who have problems with ethical issues.
But, unless they are brutal or violent, I feel more sorry for the cops, who have more difficult and dangerous jobs than the solons. They both have good pensions, but the police jeopardize theirs by their misconduct. Tell us the last legislator who paid that price.
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