Monday, June 28, 2010

Albany's Legislative "Leaders" Leading Way With Scam Job On Taxpayers

Media outlets around New York are catching on to the absolute disaster of a budget that this year's "process" has created. Budget extenders have enabled the state to limp along for three months since an annual budget was to be in place April 1.

The legislature refuses to enact Governor Paterson's budget, which he's broken down into parts of the extenders that have passed to date. They've balked at some of his demands, so they've gone and put together their own budget.

This budget, however isn't so much a budget as a bunch of proposals that are wishful thinking and pixie dust. It isn't a budget and it certainly doesn't pass the sniff test of being anywhere near being fiscally responsible or prudent.

It would result in a disaster even bigger than the current $9 billion deficit. The Daily News editorializes:
Paterson presented the Legislature with a reasonable plan for resolving the crisis. But his fellow Democrats, led by Assembly Speaker Sheldon Silver and Senate Democratic Conference chief John Sampson responded by adding lots of spending while subtracting revenue.

The numbers don't balance. Not even close. Again, this is a scam - a con job born of political desperation.

Lawmakers are simply saying no to Paterson's recommended cuts to school aid, tuition assistance and homeless shelters, and adding back hundreds of millions of dollars the state can't afford.

And because the liquor store lobby squawked about Paterson's plan to let grocery stores sell wine - a no-brainer that would benefit consumers while raising much-needed cash - they just say no to that, too, digging the state's fiscal hole even deeper.

And because public sector unions loathe the concept of imposing a limit on local property tax hikes, Silver and Sampson have thrown out Paterson's tax cap.

And because the Legislature loves to extend its reach through every aspect of state government, Silver and Sampson reject Paterson's attempt to reform the finances of the state and city universities to give students a general idea as to future tuition costs.

Keep in mind that even the governor's plan was shakily balanced - counting, for instance, on more than $1 billion in Medicaid money that Congress hasn't approved.

Paterson has tried to compel the Legislature to act responsibly by stuffing long-term spending cuts and tax hikes into emergency spending bills necessary to keep the state running. In effect, he forced lawmaking to choose between taking political lumps or shutting the state down.
Paterson's proposals were actually more responsible than the Legislature's proposals, but they still didn't take into account sagging revenues and required tax hikes and elimination of sales tax exemptions. Paterson sought to hide the tax hikes among his budget. Paterson wanted to give SUNY flexibility in setting tuition (reducing the state burden on subsidizing the state schools), but the legislature refused to address that in session.

The Democrats in the Legislature aren't even going through with the tax hikes - and they're hiking spending too with money that isn't even certain of being available.

Last's year's stimulus package was primarily a way for states to avoid the day of reckoning by shoveling money to them by the boatload. States like CA, NY, and NJ (among others) were able to carry on as if they were rolling in the wine and roses. This year there is no federal bailout for them - so they're confronting massive deficits that are even larger than they ought to have been had they started curbing spending last year to deal with massive shortfalls in revenues. New Jersey seems to have figured this out and their state budget due to pass by Thursday will confront the changed fiscal landscape and begin to put in place the necessary budgetary changes to get spending under control.

New York's situation is particularly egregious because they used the federal funds to prop up a budget that increased spending by 5% last year. Now, they don't have the state revenues to cover a budget that size, don't have the federal monies, and they can't raise broad based taxes because taxpayers are in a foul mood.

With the Legislature rebuffing Paterson's latest extender and refusing to curb spending in any significant and meaningful way because the politicos don't want to offend the unions, taxpayers are going to be left holding the bag for years to come because the only other alternative is deficit spending that adds to an already abysmal fiscal picture. As the state's budget deficits soar and revenues tank, the bond ratings will drop, adding to the costs of doing business. That means that more money will need to go to paying interest on debt already accumulated and deprives existing programs of desperately needed funds (for those programs that are truly deserving of funding).

The State Senate passed a budget, and like clockwork the Governor said he would veto all the additional spending - all 6,900 member items. That'll take a couple of hours for Paterson to initial each and every item, but the Senate also said that they passed a balanced budget even though they don't know how big it is.
Senate Minority Leader Dean Skelos panned the budget bills just adopted along part lines in the Senate, especially seizing on Sen. Carl Kruger’s admission on the floor that the budget will be balanced, but he’s not sure how big it ill be.

“Obviously the Senate Democrat majority has abandoned its commitment to the voters of the state in terms of real property tax relief, the fact that they have run away from their commitment on a real property tax cap, so right now what you have is a budget where they can’t even define what they’re spending and match revenue with spending,” Skelos, R-Long Island, said.

He was asked if members of his conference might provide votes to override a gubernatorial veto. Gov. David Paterson has threatened to veto additional education funding if lawmakers do not take up a contingency plan to deal with the possibility of stalled Medicaid assistance from Washington.

“We have to see the total budget, and we have not seen whether it’s in balance, not in balance–quite honestly if you listen to Senator Kruger when he says they don’t know what they’re spending,” Skelos said. “I think this is an outrageous budget process from the beginning. I don’t believe the budget is in balance and if the issue of veto overrides does come up, that’s something I’ll discuss with the Republican conference.”

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