RAISE YOUR HANDS: Who thinks the state should cut spending and reduce the tax burden on ordinary New Yorkers? Okay, now how many of you want to pay higher property taxes? … Anybody?
That always seems the choice left to taxpayers in lean years, and this one certainly qualifies as lean. Governor David Paterson issued his executive budget last week, and while it doesn’t cut overall spending, it does keep the increase below 1%, with significant reductions.
The fiscal crisis for the state has gone from bad to worse, much as it has for most states. The governor predicts a $7.4 billion deficit in a state where the constitution requires government to balance its books annually. In the past, governors and the legislature simply winked at the constitution and pulled fast ones, like selling themselves a highway or a prison and recording the transaction as revenue. But this year the state has little left to sell, and in the aftermath of the toxic shell game played by Wall Street banks, lawmakers may find it more difficult to hoodwink voters.
Who gets whacked in Mr. Paterson’s budget? Schools will take the biggest hit, mainly because that’s where the money goes. The governor has proposed chopping aid to public school districts by $1.1 billion, or 5%.
He also proposes cuts of similar size to hospitals and other health-care facilities, and to the rest of state government grouped under the heading of Agency Spending. Cuts of this scale sound admirable, but they also promise bad news for Columbia County.
Money still available from the federal economic stimulus package would help cushion the bite of the proposed school cuts, but only slightly. The governor has also suggested that school districts can use their reserve funds. But districts already apply some of their reserve cash to holding the line on taxes each year, assuming they have enough in the bank to do that.
As the six districts in this county trim their budgets for the next school year, board members and administrators will undoubtedly face angry parents demanding reinstatement of smaller class sizes, extracurricular activities, sports or non-required academic programs that get axed so that the schools can sustain their basic educational mission. District employees who have contracts that expire this year will face tougher negotiations not only because of the cuts but because nobody can predict when the economy will show real signs of recovery. Labor pacts, which typically run for two or three years, will reflect that uncertainty. Jobs will be lost too.
Governor Paterson proposes new taxes to offset some of the budgetary pain for hospitals and other healthcare facilities. Cigarettes will cost a dollar a pack more and–here we go again–sugary soft drinks will have a few cents tacked on to the price of each can or bottle in an effort to dissuade people from consuming these beverages. The taxes might dissuade some people from smoking or drinking things that make them unhealthy, but even with the taxes, hospitals would face a cut statewide of $244 million in aid.
Columbia Memorial Hospital in Hudson is the county’s largest employer. If state cuts are so drastic that the hospital has to lay off employees, that would generate unwelcome economic ripples throughout the region. And even if the hospital can avoid job losses, like any large institution it will have to look for ways to pass along the cost of the reductions without affecting the quality of care it provides.
Negotiations over the state budget have entered their ritual political dance phase. The state Senate and Assembly will craft their own versions of a spending plan, and the majority in each house will proclaim its plan is fairer and more generous than what the governor proposed. Finally, sometimes long after the deadline set by the constitution, the governor and the majority leaders will work out a compromise that everybody praises as a great deal for the taxpayer. Or maybe not.
Governor Paterson’s executive budget has much room for improvement, but keep in mind that he is the only person in budget negotiations who represents the whole state. And with his poll numbers hovering in the “unelectable” range, he has adopted a strategy rarely used by politicians: the truth.
New York does not have enough money to avoid painful cuts; lawmakers have exhausted most of their fiscal gimmicks. Regardless of what politicians say, no budget will liberate taxpayers from the yoke of state government, nor will it lower taxes in the short run. But the executive budget makes hard choices we can no longer avoid. Nobody likes this plan. The best you can say about is that it’s fair.