Looming Financial Crisis in New York and WHY IT MATTERS!!

Yellow states will have budget gaps

Like many states, New York is currently facing a financial crisis. As usual, the budget this year failed to adjust to inflation and was, of course, exponentially larger than many other state budgets at about $81 billion (larger than even those of many countries). According to the NYTImes, state comptroller Thomas DiNapoli has issued a statement stating that due to falling business revenues, the initial projection of tax dollars coming from that sector is $453 million less than what they had originally thought. The Center on Budget Policy and Priorities estimates that New York’s budget gap will be $4.9 billion overall, the second largest budget gap of all the states (California’s being the highest at $22.2 billion and Vermont’s the lowest at $59 million). The Center also reports that 29 of the 50 states will have to deal with budget gaps, amounting in an overall gap of almost $50 million.

Paterson now has to make the tough choice. Should he call the legislature back (session ended in June) to slash spending or should he let the budget go on as planned, resulting in compounded a state financial crisis. If he does call back the legislature, it is unlikely that he will be able to get the cuts that are needed in order to close the gap. Legislators in New York right now are facing tough re-elections unlike in years past (it is something like a 95 percent incumbency rate). Even long established members of the Legislature, like Assemblyman Joe Lentol (D-Brooklyn), Chairman of the Codes Committee, are having to run in primary elections in their districts. This would make it extremely difficult for them to tell their consitituency that they are cutting back on programs that they had fought so hard to get into the budget.

In my limited experience in state politics, it was my observation that everyone sees their budget item as essential to the life of their program. Not all of this “pork spending” is bad either; there are programs for school children, breast cancer victims, dairy farmers facing rising fuel costs etc. Obviously, some of these items need to be cut in order for the state to stay financially afloat, but the legislators and the governor will have a difficult time deciding which programs will get the axe.

In my opinion, it shouldn’t be subsidies for farmers or businesses. These items give back through revenue taxes and if farmers can lower their prices because of food subsidies, that is good for everyone. Farmers in New York generally aren’t huge corporate farms; some operate small food stands and are family-owned (Here is my outcry to BUY LOCAL, saves on fuel costs and supports your neighbors). The larger farms provide feed for livestock.

However, I am not so naive to think that there won’t be outcry if the budget is cut. People like their pork, even when they decry against other’s pork spending. Interest groups are perfectly willing to cut out their competition, even if their program isn’t objectively as important. It isn’t just the fault of the legislators if negotiations are difficult; people within their districts are often unwilling to see past their own lines to see what would be good for the whole state.

Much like the US and the rest of the world, New York is highly factionalized. Long Island, New York City, Westchester, Albany, Syracuse, Rochester, Buffalo, Plattsburgh, etc., all have completely different interests and think the others are getting a better deal. Education is usually at the center of this debate. Poor urban districts often fail to see that rural districs are failing just as bad as they are. Then of course is the outcry Long Island residents have against their ludicrously high property taxes (although sometimes in my more paranoid moments, I think this is a plot to kick out the Middle Class because only the rich can afford to live there). Drug-rehab programs, cancer support groups, highway funding, farm subsidies, art programs, etc., are all highly debated as to whether or not the state should spend money to keep them going and because the state is largely a Democratic state, spending goes hog-wild because the Republicans lack in influence to curb extraneous spending (even Pataki as a Republican wasn’t all that effective at it).

While I generally hate bipartisanship when it leads to immature namecalling that distracts from real issues, here in New York, I think it is needed more because New York continuously fails to curtail its spending. Paterson has a tough fight ahead of him, and probably some villification, but in order to do what is necessary, he’s going to have to whip the adolescent mentality into shape: STOP SPENDING!!