Governor Patterson’s Budget Crisis
It’s probably not fair to say that Governor David Patterson of New York has a worst budget crisis than the state of New York does, but, unfortunately he does. Governor Patterson is an honest, straight-forward speaker and thinker whose only goal is to try to do right by the citizens of New York state. However, what he seems to miss is kind of a political savvy that’s needed to make people take a hard look at some facts and try to understand just what he’s up against.
And just what is he up against? The problem New York state has is that around 20% of its yearly revenues come directly from Wall Street. When the stock market is humming along, New York is doing pretty well. But when it’s suffering, like it is now, New York takes a hit that no other states take.
The whole thing about budgeting in general is no different for states than it is for other businesses. One budgets based on perceived ‘sameness’ in revenues and expenses from previous years. Budgets are either done to try to stay even or to try to make a profit; any business budgeting for the business to take a hit across the board needs to fold up its tents and move on to something else. Healthcare is big on zero-based budgets these days, trying to stay afloat while figuring out how the punches of reduced reimbursements from Medicare and Medicaid and fewer inpatient admissions hits their bottom lines. Companies like Honda, American Express, and Xerox, just to pick a few names, budget with profit margins predicted, and even if the company happens to make a profit, if it’s not the profit that they thought they were going to get it’s a bad year, because many times they’ve projected spending that may have already taken place based on those budget estimates. A tough way to do business, but that’s how it goes most of the time.
Anyway, back to New York and Governor Patterson. This budget crisis was pretty much predicted to be coming back in 2007 while Governor Spitzer was still leading the state, if one looks back at the remarks of Budget Director Paul Francis at the CBC (Citizens Budget Commission) Conference on Reforming the NYS Budget Process in September 2007. He talked about the need to make sure the state budgeted based on possible losses coming from Wall Street.
But budgeting is a tough road to hoe in New York, mainly because each house of the state congress is led by a different party, and the guys in charge haven’t quite been accommodating to any governor. At least this year one of those guys is finally gone, but no one really expects the state to handle the budget process any better. This means that the Governor has to try to do what he can, based on the information he has, and then has to sit back and wait for everyone to beat him up over it all.
In this case, the biggest issue that Governor Patterson is dealing with is what everyone is calling the “obesity” tax, which is his proposed 18% tax on sweetened drinks, especially soda. The thought and belief is that he’s taking it out on the ‘common man’, which I suppose is the lower and middle classes, which are more apt to be drinking this stuff than the upper class; supposedly, that is, since I wouldn’t be in the position yet to really know (though I do only drink things without sugar in them except an occasional apple juice). There are other budget cuts that are trying to close a multi-billion dollar gap, including school funding and the like.
These are tough decisions, and people who are, or may be, affected by these cuts aren’t one bit happy. Yet, I haven’t seen anyone come up with another plan for trying to balance the state budget. When the state congress saw the proposal, instead of offering something back they stated that the governor hadn’t given them enough detail about the plan; that’s nothing but a dodge. Whenever the issue of taxes come up, politicians want to be seen as someone working to bring down taxes, not supporting any of them. But the truth is that if a government is going to function properly, it needs the money to do it. Anyone who believes that when President-elect Obama gets into office that he’s not going to raise taxes of some sort to try to alleviate the record deficit our country is in is being naive.
The same with New York state. There either has to be some serious budget slashing, which could mean plenty of good programs in this state go by the wayside, or he’s going to have to raise revenue in some other fashion. At least, for now, the amount of Medicaid spending hasn’t been touched, if only because it’s federally mandated that each state has to spend a certain amount in order to receive more funds from the government to keep that program going.
I have some ideas, but it’s going to take some time to break the entire thing down now and give those recommendations. That’s another blog post; lucky me. What thoughts do you have on this front?