N.Y. budget crisis: Time for tough choices
With economic indicators suggesting that the recession is behind us, we must think about what we’re doing to position ourselves, our businesses, our communities to take advantage of the inevitable upturn.
That won’t be easy in New York state. Our elected officials may talk about reforming costly programs, economic development and job creation. But there is nothing in New York’s long history of high taxes, excessive spending, out-of-control social programs and oppressive regulations to suggest this state can look forward to resurgence.
The American Legislative Exchange Council, a conservative think-tank, recently studied the personal income, domestic migration and non-farm employment growth of all 50 states. New York ranked 43rd out of 50, with an economic outlook ranked 50th. The reasons: high personal, corporate and property taxes, too many public employees and an unfriendly business climate.
Judging from this year’s state budget, I wonder if our elected officials are aware of the state New York is in.
With an enormous and continually growing budget gap, choices must be made. While Albany insists significant cuts were made — hard to see in a budget where spending increased almost 9 percent — elected officials opted to enhance revenues with $8 billion in new taxes and fees and use one-shot federal stimulus money to fill gaps.
On Thursday, Gov. Paterson suggested cuts to close what could be a $4 billion gap in the current budget. While Unshackle Upstate applauds him for proposing tough cuts, we are concerned that upstate could suffer an impact disproportionally greater than New York City and its surrounding areas.
In fact, Unshackle Upstate long ago suggested cuts to our governor and legislators that we believe are more strategic and better share the sacrifice.
Topping our list: a 3 percent overall reduction in state spending, saving about $2 billion a year, and a delayed state payroll and furloughing to offset the $1.54 billion in raises state workers received in April, a time when many businesses were freezing or cutting wages and workers to balance their budgets.
We’ve identified $6 billion in cuts for long-term savings, $600 million from tightening Medicaid eligibility for long-term care, $2.2 billion from holding spending on public schools flat in next year’s budget, $2.2 billion from reinstating Medicaid fraud measures cut earlier, and $200 million from eliminating member items.
We also want the state to roll back the assessments on utilities and health insurers and provide long-term tax relief by implementing a less-rich Tier 5 retirement system for future state employees and adopting a property tax cap.
We need to tell our legislators to focus on making New York more business friendly and reducing the outrageous tax burden on families. Then, when the recovery comes, we’ll be ready to capitalize on it.
Parker is president and CEO of the Rochester Business Alliance and a founding member of Unshackle Upstate.
