Ravitch Rambles On About State's Fiscal Ticking Time Bomb

New York State is in the very best of hands when the best that the state has to offer is the lieutenant governor who proposes a plan that will take years to implement, let alone fix the state's structural deficits.



Governor Paterson has been an abject failure, and Ravitch's plan is based on letting the governor and other elected officials who helped create this fiscal mess nominate a bunch of people for a panel who will then try to fix the problem. How exactly is that a solution when these people created the mess in the first place by spending far more money than the state could ever hope to take in as revenue.

Paterson's communications director has resigned and is the fifth such top official to quit over Paterson's array of scandals and yet Paterson is disappointed over the fact he isn't running for reelection? He's the only one.

Speaker Sheldon Silver is introducing legislation to prevent the state from delaying the issuance of refund checks to tide the state over while it lacks the funds to cover its general operating expenses. No word on cutting state spending to alleviate the crushing deficits and tax burdens that are only set to grow as the state refuses to recognize that it can no longer afford to do business as it has always assumed it could.

At the same time, the city and the MTA are also looking for major bailouts for their own fiscal mess. The MTA recognizes that they've lost tens of millions of dollars from farebeaters and that they have no way to ever recoup the loss.

The New York Political Roundup

Jay Z and Floyd Flake have dropped out of the AEG bid for a casino at Aqueduct race track. The odds that this particular plan will go forward are getting longer with each passing day. It's not without a sense of irony that the state budget was counting on that plan being approved to help balance the budget.

That there's no deal means that the state isn't getting a much needed infusion of funds.

Meanwhile, Governor David Paterson continues to deal with the swirling accusations of wrongdoing and that he may have used a state aircraft for personal campaigning rather than for state purposes. Paterson might not face charges in tampering with the domestic abuse case because the Attorney General's office hasn't found sufficient evidence to proceed. Sherr-una Booker has apparently told investigators she didn't think that Paterson threatened her. So it was just a coincidence that after the call that she failed to appear in court for the domestic abuse case against Paterson's top aide? Still, the appearance of the phone contact with the alleged victim smacks of being tampering. The lies and obfuscation over that contact also fall in to the realm of obstruction of justice.

The NY Times reports that his father, Basil Paterson, is besides himself with the way things have gone down. His father helped select David to be Eliot Spitzer's running mate, and while he was Spitzer's fourth choice, it was a fateful decision that put him in charge when Spitzer succumbed to a scandal of his own and resigned in disgrace. There are also reports that Spitzer might be eying a political comeback.

In another Spitzer-era scandal, David Loglisci entered a guilty plea on securities fraud and allocuted to helping steer pension money to political contributors to then State Comptroller Alan Hevesi and to companies that paid kickbacks to Hank Morris, his political consultant. Can you say culture of corruption? I know you can - but so did Loglisci in saying that Morris had to sign off on deals before senior officials within the Comptroller's office would do so.

Meanwhile, a Buffalo-area Tea Party activist, Carl Paladino, is threatening to run on the GOP line and bypass the state GOP convention, claiming that the state GOP has already settled on Rick Lazio. The state GOP says in response that they welcome challenges and calls for fiscal responsibility but to run through the party channels - to make his case to the county chairs. Paladino is a real estate developer, but he's a political unknown.

Meanwhile, Steve Levy, a Democrat is courting GOP support for a possible run in the general election (as a way to sidestep what is likely an inevitable Cuomo nomination on the Democrat line).

I think Paladino is putting the screws to the state GOP precisely because Levy is contemplating a run on the GOP line to avoid a Democratic party primary - that Levy would be a true RINO-style candidate.

That said, none of the candidates in the ring thus far ignite the passions, and the only one who has statewide experience is the one guy who isn't in the ring - Cuomo.

At the same time, the most important issue facing state politicians is the budget, and Lt. Governor Richard Ravitch announced a plan to help bring the state into fiscal balance, but it involves serious borrowing and accounting tricks that are just as likely to blow up in everyone's face as the current situation. Instead of curbing spending that remains out of control, we're looking at ways to sustain the state budget at its current rate. 

More news items from around the state, including that Doug Hoffman who ran a failed campaign in NY-23, is actually moving into the district, can be found here. I guess we'll expect to see another run for that office in November.

UPDATE:
It's official. The Aqueduct casino bid by AEG was tossed out because it couldn't pass regulatory muster. That means that the $300 million that the state was hoping to get to help balance their books isn't coming either.

The state will have to relet the contract and will likely attempt an expedited contract process to see which casino group will win.

The AEG bid was marred by all manner of problem and multiple investigations opened into how it won the bid. Gov. Paterson had recused himself from that process.

New York Political Scandals Coming To A Head

It's getting pretty tough to keep track of all the political scandals in New York these days.

There are the multitude of scandals - all involving top Democrats. There is the huge scandal involving Governor Paterson, his former top staffer David Johnson and state troopers which threatens to take down the governor. 911 calls from Johnson's apparent assault have been released, but the key issue is what did Governor Paterson say and do in his phone call to the alleged victim, Sherr-una Booker.

Paterson feels jilted that Assembly Speaker Shelly Silver isn't continuing to back Paterson. Well, no one in their right mind wants to do business with Paterson and his political capital is pretty much gone. Silver is the most powerful man in Albany at the moment, and the one least tainted by scandal. That's bad news for state taxpayers since the state budget is due April 1 and there's little chance that a fiscally prudent budget plan will be negotiated by the leadership in Albany. It also means that Silver is in the driver's seat and Silver has never seen a spending plan that couldn't be improved - by more spending. Silver says that he wants to deal with Lt. Gov. Richard Ravitch on budget issues - almost expecting Paterson to resign or be impeached in the near future, but Paterson is holding on and is freezing Ravitch out of the process for now (lieutenant governors have no real power under state law).

The Paterson scandal is keeping Attorney General Andrew Cuomo busy, and it appears that the investigation into Paterson's wrongdoing is keeping Cuomo's own potential plans to run for governor under wraps until after Cuomo finishes his investigations into both Paterson and Pedro Espada Jr (another Democrat involved in unethical conduct).

There's the ongoing scandal involving Gregory Meeks and Malcolm Smith and the "charity" they ran that never seemed to be able to actually follow the money and hundreds of thousands of dollars never went where it was supposed to.

Then, there's the ongoing mess with US Congressman Charles Rangel, who continues to hold on to the Chairmanship of the House Ways and Means Committee even though Rangel should have been tossed out for violating House rules and that doesn't even begin to scratch the surface with his tax troubles with the IRS and multiple state and local tax authorities. The New York Times again reiterated its call for Rangel to be removed from the chairmanship.

In what must be the most hilarious juxtaposition of corruption and cronyism, Rangel, Malcolm Smith, Charles Barron, and several other key African-American Democrats including Al Sharpton tried to rally support for David Paterson. It was a who's who of people who should be tossed from office and those who should never be allowed near elected office again. Sadly, H. Carl McCall was among those at that confab and he dirtied his own reputation with his presence.

UPDATE:
Paterson spoke at a conference this morning and said that he wont resign and that he's not going to delegate budget authority to Ravitch. He says that he's going to govern for the next 306 days. Right - this from a guy who apparently likes the trappings of being governor than actually governing.

Calls For NYS Gov. Paterson's Resignation Mount

New York Governor David Paterson's political career is swirling around the drain as calls for his resignation from fellow Democrats mount, even as he announced that he would not seek reelection yesterday.

Right after Paterson announced he was dropping out of the governor's race -- amid disturbing accusations that the governor and state troopers contacted an alleged domestic-violence victim who said she had been assaulted by one of the governor's aides -- a chorus of disappointed Dems began bleating for him to leave office ASAP.

"He's a guy who is considered road kill and will have no influence with the Legislature," said former Mayor Ed Koch, who just weeks ago had been staunchly defending Paterson.

Koch said his change of heart came after "it was clear . . . that he has surrounded himself with unworthy people who are, in addition to everything else, the beaters of women."

Echoing the sentiments of other party leaders, Koch said, "No question the state would be better off if [Lieutenant Governor] Dick Ravitch were governor."

Another Paterson ally to turn on the beleaguered gov was city Comptroller John Liu.

"New York should move forward under Governor Ravitch," Liu said.

Mind you that all this is occurring with the backdrop of a state in a dire financial mess and a rudderless leadership - including a State Senate that has managed to just barely get its own house in order following the expulsion of Hiram Monserrate.

The governor is supposed to focus his energy on getting a budget deal done by April 1, but with this political scandal, his remaining political capital is being wasted on just trying to get through the next few weeks without worrying about being impeached.

Everyone in Albany and beyond knows that this isn't going to end well for Paterson, except Paterson. What would be in the best interests of the state at this point? Well, that would mean Richard Ravitch assuming the governorship, but it would also mean that New York would see three governors in three years (two unelected).

Paterson Drops Reelection Bid

Well, based on the mushroom cloud TNT of a scandal brewing in the Second Floor over Governor Paterson's inappropriate call to the accuser in a criminal case involving his adviser David Johnson and the actions by State Police Superintendent Harry Corbitt, it comes as little surprise that David Paterson has decided not to run for reelection.

It remains to be seen whether he can manage to stick around in office until the end of his term given the way his actions may have crossed the line into criminality. Fred Dicker seems to think that Paterson bought himself another month in office:

No such sense of imminent resignation greeted Troopergate I when it took place 2½ years ago, after it was revealed by another pack of aggressive Cuomo investigators that Gov. Eliot Spitzer used the State Police in an effort to destroy a political foe.

The offenses then were considered serious, potentially criminal, but not quite impeachable. This time it's different.

The allegations against Paterson, top aide David Johnson and State Police Superintendent Harry Corbitt are so shocking that it's considered likely that Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Democratic leader John Sampson (D-Brooklyn) would move to impeach the seriously unpopular governor if they're true.

Without Cuomo's probe, Paterson would have to step forward and answer questions about what he did, what he knew and the seeming contradictions in earlier comments.

Resignation would surely be at hand.

With the probe, Paterson can hide -- as he did on the John Gambling radio show yesterday -- behind the claim that he'd "better not discuss" the specifics of the charges for fear of interfering with Cuomo's investigation, which is expected to last about a month.

Another key difference between Troopergate I and Troopergate II is that Paterson, perhaps in a state of shock, signed a formal legal "referral" giving Cuomo full subpoena, prosecutorial and even grand-jury power.

Mind you that Cuomo is considered the presumptive front runner for the governorship, so this investigation is not without a sense of irony. Paterson is done, and this is all taking place with the backdrop that the state's financial situation is hanging on by a thread - multibillion dollar deficits and a state that has repeatedly failed to have the state budget in place on time for years on end.

This circus atmosphere has to end, and Paterson looks like he's the one that may make it happen - with his exit via resignation or impeachment. And that would mean that Richard Ravitch would become the third New York governor in as many years - and the second straight unelected official to do so (Ravitch was appointed by Paterson and a flurry of lawsuits culminated with a court decision ruling that Paterson had the power to do so).

Ravitch would probably be a good choice to finish out the term, given his experience in managing organizations in crisis, including the MTA. He seems to have broad support among Democrats. With the way that Paterson's friends are fleeing him, that may be the best move.

A New Paterson Scandal Bubbling Up From the Depths?

The blogosphere is abuzz that there may be a scandal set to erupt surrounding the escapades of embattled New York Governor David Paterson. Gothamist, HuffPo and others are busy saying that there's something there, and that the New York Times is sitting on the story until they're ready to release it, which could have come as early as yesterday and may go sometime this weekend or Monday. The rumor - and I stress that it's rumor - is that it involves wife-swapping and drugs at the Governor's mansion.

Just how much there is actually there? Paterson's infidelities wouldn't actually surprise anyone given that he copped to being unfaithful the day after he took office. He even had campaign funds used to pay for the hotel rooms used in his affair. But wife-swapping at the Governor's mansion? Not so much. Not that I want to picture such things either.

What is more likely is that it's going to focus on Paterson's  banning state troopers from the mansion and how that can be viewed as scandalous or an abuse of discretion.

Yet, we've got rumors of continued infidelity even without the latest rumors. I posted the reports of his apparent rendezvous at a New Jersey steakhouse (Palm River Terrace in Edgewater, which is a great steakhouse for the food btw). Paterson denies any wrong-doing. There are rumors that he was caught in a closet with another woman, yet for all the rumor, there is nothing there.

This is a non-story, and not even the National Enquirer is jumping on this story. For now.

Paterson is wounded politically, and is facing a potential challenger in the form of juggernaut Andrew Cuomo, the state attorney general who has raised funds like there's no tomorrow and would probably crush Paterson in the primary. The only reason that the New York Times would be a delay in running the story is that it would be literally buried behind the news surrounding the massive snowstorm hitting the Mid-Atlantic (and which has pretty much missed New York City except for Southern Brooklyn and Staten Island).

And just in case that these rumors do pan out? Meet Lieutenant Governor Richard Ravitch. He was the former head of the MTA and has experience running major agencies and has political ties to pretty much everyone in the Democratic party. More important is the fact that he was central to bailing New York out of the fiscal disaster of the 1970s. That's a skill that's sorely lacking among many of the state and local officials.

NY Lt. Gov. Clashing With Gov. Paterson Over Budget Cuts

Governor David Paterson can't win, even when he gets the Court of Appeals to rule on his behalf. The court recently ruled that he had the right to appoint a Lieutenant Governor under state law. It's not a ruling I can agree with, but they are paid to make the decision, so Paterson's choice of Richard Ravitch is the legitimate and legal Lieutenant Governor.

The problem now is that Ravitch is slamming Paterson for not doing more to slash the state budget, which is already hemorrhaging $3 billion in the fiscal year 2009-2010 budget.

Ravitch, allied with state Budget Director Robert Megna, wants the governor to lay out specific plans for slashing the projected $3 billion deficit, but Paterson is resisting for fear that the sure-to-be-unpopular cuts would drive down his in-the-basement popularity even further, administration insiders said.
Richard Ravitch
Richard Ravitch

The insiders described Ravitch, whose controversial appointment by Paterson was challenged by lawmakers before being sanctioned in a 4-3 vote by the Court of Appeals last month, as increasingly frustrated over his inability to get the governor to focus on the state's worsening fiscal situation.

"Ravitch wants more time to get to the governor, to talk to him about what should be done, and he's not been able to get it. He's being blocked," said an administration source.

"The governor is avoiding Ravitch, doing a lot of other things, like going to California to hang out with the governor there," the source continued, referring to Paterson's trip late last week for an event with Gov. Arnold Schwarzenegger and for what is believed to have been at least one political fund-raiser.

Paterson's refusal to take a tough stand on slashing the budget is being blamed on his secretary and chief of staff, Lawrence Schwartz, a longtime political operative and former top aide to Westchester County Executive Andrew Spano.

A source close to Paterson described Schwartz's decision-making style as, "politics first, government second."

Paterson has been over his head as governor and his political choices have been awful, and he's made all kinds of enemies in a very short time, antagonizing Democrat party leaders from President Obama on down. He's now ignoring the key reason that New York is in dire fiscal shape - a state budget that the state cannot afford. State spending rose at a time when revenues fell sharply, and the state isn't likely to see Wall Street recover its record profits (and hence tax receipts) anytime soon. That means we're talking a structural deficit that will not be solved unless receipts and expenditures are brought into line with each other.