Friday, May 07, 2010

They Can't Work It Out

Three Men In a Room

Nowhere to Be Seen,

Budget 37 Days Late

By Henry J. Stern
May 7, 2010

Today, Friday, May 7, is the 37th day the State of New York has been without a budget. The state's fiscal year begins April 2, and a tenth of it has now passed, with the state relying on emergency extensions to avoid a shutdown.

There is still no sign that a resolution of the budget impasse between the governor, the senate and the assembly is imminent, so it is difficult to predict how long it will be before a budget is agreed upon.

The delay causes particular hardship to municipalities and local school boards, which normally adopt their own budgets in May or June and are dependent on state aid, which in many cases is a return of the taxes paid to the state by people in those localities.

This year, because of the Great Recession (lower revenues and steadily increasing labor, and health and pension costs) the budget gap is higher than ever. The state gap is now between nine and ten billion dollars, and New York State's finances are comparable to those of Greece, or California. The State Senate has shown itself more amenable to budget reductions than the Assembly, which is more responsive to public employee unions. However, neither house is anywhere near a balanced budget, and it is likely that there will be a resort to backdoor borrowing, illegal and irresponsible as that may be.

The fact is that there is a structural gap in both city and state budgets. In this case, structural means chronic. In good economic times, government may come close to breaking even. But the general tendency in periods of prosperity is to increase expenditures, which make government particularly vulnerable when times turn bad. There is always more pressure on government to spend than to save, and politicians, constantly eager to please constituencies, support programs that the state cannot afford to fund.

The press will cover the budget machinations as deadlines approach and are passed without action. This year the trichotomy--a lame-duck governor and two houses with their own agendas--is unlikely to lead to harmonious resolution of differences. It may be, however, that when they tire of controversy and decide they would look better by reaching agreement, they will come to terms with each other.

Remarkably, as we are writing this, a bulletin has appeared on the computer monitor that the Marist Poll has found that New Yorkers are unhappy about the late budget. 47% of poll respondents said that the lateness of the budget worried them "a great deal." An additional 25% said it mattered "a good amount." When 72% of the public is concerned about the lateness of the budget, it could become a potent issue in the upcoming campaign.

The poll contains bad news for the Governor: only 31% of respondents claimed to be happy with his leadership on budgetary issues. Admittedly, this would be significantly worse news if he were still a candidate for office. He was wise to retire.

Link to the full results of the Marist poll here.

Other articles on the budget appear today on the illustrious illustrated blog, True News.

DIGRESSION: Marist is a college in Poughkeepsie, a city on the Hudson River about 80 miles north of New York, and county seat of Dutchess. Marist is one of four colleges in the region that poll on public issues, the others being Siena College in Loudonville, a suburb north of Albany, Quinniapac College, located in Hamden, CT, which is just north of New Haven, and Canisius College in Buffalo. Quinniapac is named for a local Indian tribe which was part of the Algonquin family.

The other three are Catholic colleges, named respectively for Mary, the mother of Christ; St. Bernardino Siena, an Italian monk from the town of Siena, which itself was named for Senius, the son of Remus, who was the twin brother of Romulus (who killed Remus, much as Cain slew Abel); and St. Peter Canisius, a 16th century Jesuit.

The polling done by these colleges is non-sectarian and well regarded as a public service.

On Tuesday, May 4, Mayor Koch visited Albany and spoke with legislative leaders in both houses on behalf of redistricting reform through the selection of a nonpartisan commission to redistrict the state. Koch heads New York Uprising, a citizens group formed this year to fight gerrymandering, secure a balanced budget and tighten ethics rules in Albany. The organization intends to ask candidates for the legislature to sign pledges to support these reforms, and to publicize the names of both signers and nonsigners.

Enjoy the weekend.

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