In one of those rare times in life when it is ok to do so, let me say: “Told you so.” What is it that I am referring to? Check out the link below and read for yourself.
In what is an annual event, the various finance gurus from the state’s Division of Budget, the Senate, Assembly, and Comptroller’s office get together and forecast the state’s financial picture. Little surprise here – the information is not good. All agree that the state is facing at least a $9B deficit for next year. Some say it’s higher.
So what are the root causes? You can boil it down to a few areas:
- Revenues, while up, are lower than forecasted. Why? Income tax collections are down. If you recall, in the 2009 state budget a Personal Income Tax (PIT) increase was passed. Called the “Millionaires’ Tax,” we were led to believe that people wouldn’t leave because their taxes went up. Really? Guess at least some of them did.
- Federal stimulus money will go away. That means that roughly $5B worth of state spending that was moved over to the stimulus program (even though we were told it wasn’t and that the state actually cut spending) will now be coming back. That includes about $4B for Medicaid and $1B for education.
- Speaking of Medicaid, the projections are now that nearly 1 out of every 4 New York residents will receive some form of assistance in 2011-12. All told, the Medicaid rolls have grown by 700,000 during the past three years. While I understand that the recession has been longer than anticipated and people need help, this isn’t the solution.
In a statement yesterday, Comptroller DiNapoli said “It is time to take off the rose-colored glasses and face the grim economic reality. We cannot allow this year’s problem to fester. Doing so will only make these problems that much harder to deal with.”
Unshackle Upstate couldn’t agree more. it is time for the re-elected and newly elected members of the Senate and Assembly to heed the comptroller’s recommendation. We simply have to stop this practice of kicking the can down the road, of waiting until tomorrow to find answers to our problems. The only solution for our economic woes is to lower spending, reduce taxes and fees, and stimulate private sector jobs. Anything less is just unacceptable.