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A decisive year

New York stands at a precipice. As bad as the state’s finances have been in recent years, they soon could become much worse.

Comptroller Thomas DiNapoli has warned that the state faces a 2009-10 deficit of at least $4 billion and a three-year budget gap of more than $27.5 billion.

"The state has to stop treating New Yorkers like ATMs," he said when releasing those numbers.

Gov. David Paterson, who has echoed this theme, said in his State of the State address Wednesday that New York has "spent recklessly and without any long-term strategy."

A new report by the Empire Center for New York State Policy, released this week, sheds additional light on New York’s profligacy. It shows that annual state spending from all revenue sources excluding federal aid has jumped nearly 70 percent-or some $35 billion-over the past decade. If the state had merely budgeted at the per-capita average nationwide in 2008, it would have spent $32 billion less.

"New York has been outspending and out-taxing most of the country for many years-and has also experienced a mass exodus of taxpayers and slower than average economic growth," the report states. "After living beyond its means for many years, the Empire State faces a day of reckoning."

The report proposes more than two dozen specific steps to save roughly $30 billion over three years.

The biggest savings by far would fall in just a few areas-in particular, reforming and restructuring Medicaid and reducing and capping school aid. Combined, they would cut spending over the next three years by nearly $15 billion.

And a three-year wage freeze for all state and local public-sector workers-including school employees-would save more than $5 billion over that period.

Any effort to achieve significant cost savings will meet stiff resistance from those who benefit greatly from the status quo. But unless spending is reined in, New York’s future looks bleak.

In 2010, the governor’s office and all state legislative seats are up for grabs, making this a decisive year. It is time for voters to demand action and accountability-and mean it.

1/8/10 (c) 2010 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.

A decisive year

New York stands at a precipice. As bad as the state’s finances have been in recent years, they soon could become much worse.

Comptroller Thomas DiNapoli has warned that the state faces a 2009-10 deficit of at least $4 billion and a three-year budget gap of more than $27.5 billion.

"The state has to stop treating New Yorkers like ATMs," he said when releasing those numbers.

Gov. David Paterson, who has echoed this theme, said in his State of the State address Wednesday that New York has "spent recklessly and without any long-term strategy."

A new report by the Empire Center for New York State Policy, released this week, sheds additional light on New York’s profligacy. It shows that annual state spending from all revenue sources excluding federal aid has jumped nearly 70 percent-or some $35 billion-over the past decade. If the state had merely budgeted at the per-capita average nationwide in 2008, it would have spent $32 billion less.

"New York has been outspending and out-taxing most of the country for many years-and has also experienced a mass exodus of taxpayers and slower than average economic growth," the report states. "After living beyond its means for many years, the Empire State faces a day of reckoning."

The report proposes more than two dozen specific steps to save roughly $30 billion over three years.

The biggest savings by far would fall in just a few areas-in particular, reforming and restructuring Medicaid and reducing and capping school aid. Combined, they would cut spending over the next three years by nearly $15 billion.

And a three-year wage freeze for all state and local public-sector workers-including school employees-would save more than $5 billion over that period.

Any effort to achieve significant cost savings will meet stiff resistance from those who benefit greatly from the status quo. But unless spending is reined in, New York’s future looks bleak.

In 2010, the governor’s office and all state legislative seats are up for grabs, making this a decisive year. It is time for voters to demand action and accountability–and mean it.

1/8/10 (c) 2010 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.

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