Monday, April 26, 2010

Still No Annual Budget In Sight in New York

New York's legislators and Governor Paterson continue passing weekly appropriations since the state has failed to pass an on time budget yet again. The state budget was due April 1, and there is no sign that Albany is any closer to finalizing a state budget than it was at any point until now.

These continuing budgets provide a stopgap financing for state operations, but this is a process that must come to an end.

The entire state budgeting process in New York is abysmal and needs complete and total reform. While some observers have suggested that changing the state budget due date to July 1 would solve the problem, excessive state spending is a root cause.

If the legislature and governor do not come to a budget agreement on time, the state should be mandated to accept a spending package that is 10% less than the spending for the prior year. This would pressure the legislature and governor to come to an agreement much sooner, because of what would be perceived as drastic cuts in spending but which are entirely reasonable and sensible particularly in a recessionary environment and a state where spending remains out of control.

The New York Times runs an editorial wondering what the state legislators are doing these days with the state falling into the abyss and fiscal ruin is just around the corner. The answer not surprisingly is that they aren't doing anything of import. And whatever proposals being proffered by the Democrats include still more tax and spend (including yet another property tax rebate program that requires more state spending to give some homeowners a minor break from the insufferable taxes. The Times doesn't spare the Republicans in the editorial, but that's because the Times wants to see still more cigarette taxes imposed, despite the fact that revenues are all too likely to fall short of projections. Further, the Times complains that the state GOP isn't going for a borrowing plan that would help get the state out of the fiscal mess, but that too ignores that the reason that the state is in dire fiscal shape is that the state has been borrowing and spending outside its means for years on end and it must stop. That's how to fix the state budget, even if it means cutting spending significantly in the interim and going forward.

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