There is no question that Governor Paterson and members of the Legislature are confronting very difficult decisions in trying to put together a budget that doesn’t further burden New Yorkers. But the pain of these decisions is largely self-inflicted and that is the problem.
For years, and across party lines, leaders have done their best to mask the growing structural imbalance by increasing taxes or borrowing to cover their bills – basically muddling through from one budget to the next. The result? A cash-strapped state with a shrinking private sector and a public sector that does not want to share in the pain.
So what do you do when you can’t throw money (i.e. tax and spend) at the problem anymore?
Property taxes are 60% higher than the national average, last year’s budget added $8 billion in new taxes and fees and New Yorkers pay the third highest in the nation in electricity prices. In 2009, state and local governments in New York raised taxes on electricity by more than 15%, during the worst economic crisis of our generation. In addition to this, a new proposal by the Governor looks to cut business tax credits by 50% for the next three years. These are the very credits that enable businesses to hire new employees, expand their operations and stay comeptitive in New York. Businesses and taxpayers have shouldered more than their share of pain.
On the flip side, Unshackle Upstate found that salaries for state and local government employees are 10% higher than the private sector and that New York leads the nation in per-capita contributions for public-employee retirement. Benefits for public employees are 68% higher than those received by private-sector employees.
Public employee unions have said no to wage-freezes, payroll lags and now threaten to sue over furloughs, forcing the state to spend money it doesn’t have on lawsuits.
I was asked recently, what is the state to do when every cut gets opposed by a special interest group? My answer is to review the $12 billion in recommended state savings by Unshackle Upstate. These are pragmatic, realistic cuts that can be made to close the current budget gap. These are also measures that will have long-term impacts on structurally reforming state government.
Let’s hope that the inactivity on the budget is due to the realization that Albany cannot spend its way out of this fiscal crisis. Unshackle Upstate has maintained that a good, late budget is better than an abysmal on-time budget.
Across the state, members of the Unshackle Army have responded loudly and clearly that it is time for a new way of governing – and we will accept nothing less.