Cut the budget, rescue New York
BY DAVID A. PATERSON
Thursday, August 14th 2008, 4:00 AM
DelMundo for News
Gov. Paterson says the coming days are crucial for the state.
New York is running out of time to address its budget crisis, but in the coming days we have a real opportunity to fundamentally change the way our state government responds to financial challenges.
Like many other states, New York is in danger of seeing its credit downgraded by rating agencies, and its deficit balloon to nearly $7 billion or more – a point where we will have no option other than massive layoffs and reductions in services like those now being imposed in states like California. But these problems will be manageable if, rather than delaying our response, we take action now.
All too often, government fails to deal with this kind of challenge. It’s always easier to wait and to hope that revenues will increase in the short term, or that we can solve our problems by adding new taxes or borrowing additional funds. That’s exactly what happened in many past fiscal crises, and today we are saddled with debt that depletes the hard-earned tax dollars the people of the state entrust to government.
There is no denying the urgency of our economic woes. In June of last year, 16 of the largest banks that provide the state tax revenue sent $173 million to Albany. In June of this year, that same group sent $5 million. That’s a decline of 97% – a shocking statistic.
I understand the debate and criticisms over my proposal to make cuts now instead of waiting. Having heard the argument, I ask my friends in labor, and other elected officials, to come forward with their solutions to a budget deficit that has increased by $1.4 billion in 90 days.
But I also invite those who are critical of my call to action to disengage from the politics of the past. Suggesting that we seek new revenues by imposing new taxes or quick one-shot gimmicks, or finding ways to collect revenues that are likely to be tied up in years of litigation, is not a solution to the urgent challenge we face.
On Tuesday the Legislature has an opportunity to partner with me and to cover our operating deficit for this year and also significantly reduce our deficit moving forward. To accomplish this, we will have to summon the courage to do more with less and to reduce our investment in many worthwhile programs, initiatives and benefits we could afford in better times. It’s not easy, but it’s the right thing to do. To do less would be irresponsible.
The $600 million in cuts we’re seeking is a measured, critical response to a precipitous shortfall in revenues. While meaningful and serious, these cuts should be kept in perspective: They are a small part of the state’s more than $120 billion budget, but they are a solid down payment on next year’s budget gap. Even after these reductions, spending is still projected to grow by more than 10% in 2009-10, or more than double the rate of inflation. Clearly, we still have a long way to go to control our spending.
These cuts will help ensure that, just like in any family’s budget, our expenses will not exceed our income. It is never easy to cut, but here we have an opportunity to prevent much greater harm to people who depend on the state for health care, education, public safety and other essential services.
For too long, New York has spent too much money, always banking on the hope that tomorrow more and more revenue will come to the state to cover our bills. Now tomorrow has come, and there isn’t enough money.
By acting now to cut our losses we will protect essential services and the jobs of hardworking employees across the state. If we don’t act now, our problems will get much worse and we will be making an unconscionable gamble on our state’s future.
I am confident that my partners in the Legislature will do the right thing when they convene next week.
Paterson is the governor of New York State.
