New York State’s Executive Budget

February 8, 2010

Every year the Governor publishes the Executive Budget, the starting point for further negotiations with the State Legislature that results in a finalized state budget.  Rarely – if ever – does the Legislature reduce the size of the budget.  I am positive that this year will not be any different.

The Comptroller’s office is required to review the budget and provide opinion (but not authority).  Comptroller DiNapoli’s analysis reveals that the budget is unrealistic, relies on questionable assumptions, balances this year’s budget by moving even more debt (mainly, your state tax refunds) into next year’s budget, and over the next four years has a projected structural imbalance of $61 billion.  And that’s just the first page.

• The Executive’s anticipated growth in revenue from the Personal Income Tax and other sources is based on an economic recovery, the timing of which remains uncertain.
• The lingering recession adds to fiscal stress by increasing the demand for programs and services such as Medicaid.
• Several revenue producing measures (sugared beverage tax, wine sales in grocery stores, Video Lottery Terminal and Quick Draw expansions) have similarly been proposed in the past, but not enacted.
• Numerous programmatic cuts have been proposed previously, but either were not enacted or were not fully realized. School aid, higher education and health care reductions are notable examples.
• Tax audit recoveries, new Medicaid audit recoveries and abandoned property transfers are budgeted aggressively at $1.1 billion.

Debt Service is the largest-growing budget category. It is growing even faster than both Medicaid and Education.

The growth in spending outpaces the growth in revenue, 7.7% to 2.9% – indicating that little if anything is being done to reduce the state’s structural imbalance.

On the upside, the state does plan to trim its workforce from 196,375 to 196,701 – a reduction of 674 positions (I’m being sarcastic).  And under current law, our long-term debt cap cannot exceed 4% of our residents’ combined income.  This won’t cause problems until the 2012-2013 time frame when our collective income is expected to fall and we exceed the cap.

The 34-page report is a pretty easy read.  Recommended if you have an hour to spare in your busy day and prefer something like this over hitting yourself with a hammer.

The Executive’s anticipated growth in revenue from the Personal Income Tax
and other sources is based on an economic recovery, the timing of which
remains uncertain.
• The lingering recession adds to fiscal stress by increasing the demand for
programs and services such as Medicaid.1
• Several revenue producing measures (sugared beverage tax, wine sales in
grocery stores, Video Lottery Terminal and Quick Draw expansions) have
similarly been proposed in the past, but not enacted.
• Numerous programmatic cuts have been proposed previously, but either were
not enacted or were not fully realized. School aid, higher education and health
care reductions are notable examples.
• Tax audit recoveries, new Medicaid audit recoveries and abandoned property
transfers are budgeted aggressively at $1.1 billion.

How Many Employees Does it Take?

December 13, 2009

While Buffalo Pundit chastises the Buffalo Economic Renaissance Corporation for lack of strategic foresight in its lending practices, I found today’s article on the BERC disappointing for a wholly different reason:

-It takes 25 employees to administer about a loan a month.

Six-sigma lean it ain’t.

Open Letter to NY Assemblyman Quinn

November 21, 2009

Dear Assemblyman Quinn,

I want to thank you for your 18 November response to my recent email regarding my opposition to balancing the 2010 budget with additional fees and taxes. While you explained to me your stance on the original budget as well as the upcoming mid-year adjustments, you did not seem to appreciate the frustration and anger that many of my colleagues and I have with you and your fellow legislators. Perhaps I did not elucidate this well in my email; perhaps you merely replied with a form letter. One thing, however, is clear:

You do not understand what we are angry about.

We are angry at you – the collective you – because you cannot get beyond the side of the aisle on which you find yourself. It doesn’t matter to which party you belong: Your actions are those of children in a schoolyard, taking sides but never reaching across to resolve the differences.

Your letter contained many promises and calls to action. Nothing in it, however, spoke of the need to reach across that aisle to address New York’s problems in a bipartisan manner; nothing spoke of doing the Peoples Business. Instead you emphasized your frustrations with the Democrats, and the us versus them mentality that pervades the legislature.

Your letter was full of bellyaches and personal accomplishments, but no mention the word bipartisan. Not a single sentence spoke of collegiality or a sense of urgency. You are quite eloquent at placing blame on the Democratic Party, not so articulate at offering an olive branch. You don’t seem to get it: We are angry at you because you are all to blame.

You – the collective you – need to get beyond your rhetoric in a hurry, for the sake of this state and for your jobs. I for one remain unconvinced that you and your fellow legislators deserve another term. Without seeing real bipartisan action in the near future I intend to join the rapidly-growing ranks of those determined to help vote you out of office. You demonstrate by your words and collective (in)action that we no longer have anything to lose by throwing the bums out.

One final point: What happens behind those closed doors in Albany may be deemed progress by the few of you privy to the inner sanctums. But the perception out here is one of shady deals, power grabs and chaos; the perception is that it’s all about you, not your constituents. You have scarce time left to change that perception.

Here’s a suggestion: Reach across the aisle with this letter. Let your Democratic colleagues know that as many voters are gunning for their jobs as yours. Then offer that olive branch.

Best Regards.

Extreme Makeover – The Aftermath

November 18, 2009

Mayor Brown would be smart to distance himself from taking any credit for the success that Extreme Makeover brought to Buffalo’s Massachusetts Avenue neighborhood.  Instead, he should cite this as an example of what can be accomplished when everyone works together for the betterment of a neighborhood.  He’d be way ahead if he uses his political clout to help sponsor and organize Extreme Makeover, Part II – XYZ Neighborhood.  I think any area around Jefferson and Best would do just nicely.

Someone asked about the tax liability that Delores Powell will have on her new home.  Rest assured that the producers of Extreme Makeover don’t leave that open-ended.  Essentially, they got the city to agree never to raise the assessed value of Delores’ property so long as she owns it.  What Extreme Makeover did was lease the house for two weeks from Delores, so that they could renovate it under leaseholder improvement provisions.  There is even a federal provision nicknamed the Extreme Makover Loophole that Congress passes every year, just so these guys on ABC can do what they do.

I’m not sure how New York State sees this but I wouldn’t be surprised it sends Ms. Powell some kind of tax bill for imputed income.  It is New York State, after all.

It’s a wonder that this Extreme Makeover segment even happened.  When the producer first went to City Hall with the schedule, some of the first words out of the Municipal Housing Authority were “It’s not gonna happen by those dates” to which the producer said “We’ve done 168 homes throughout the country so far; do you really want to be known as the first city that couldn’t accommodate the schedule?”  The permits were put into place shortly thereafter. 

This is yet another example of the territorial nature of our local government.  I’m happy that clearer heads prevailed and if Mayor Brown had something to do with this, then good for him.  Rather than embrace Extreme Makeover and its potential for great intentions and even greater PR, some clown in City Hall decides to throw his weight around.  The issue of little duchys permeates across Western New York govenment and grows by example, starting with our political leadership.  How do we ever change something so ingrained as this?

Buffalo needs more Extreme Makeovers.  What a great way to bring out the best and show the rest of the world why we so rightly deserve the title “City of Good Neighbors”.

Bill Stachowski Meets His Constituents, Part Deux

August 23, 2009

Part 2:  Why 62 Senators Stood Pat for 2 Months NOT Doing the People’s Business.

Bill Stachowski

Senator Bill Stachowski spent an hour and a half with about 25 members of the Buffalo Niagara Partnership last Thursday.  His introductory remarks focused on why he voted for the 2010 state budget.  In summary:

  • The governor’s office gave them little to work with;
  • Legislative rules prevented them from making wholesale changes;
  • The state senate was forced to re-insert necessary expenditures that the governor’s office removed;
  • The other side refused to deal with this mess last year.
  • Voting YES was the lesser of two evils;

I’m glad he was able to deflect blame away from the Democrats; otherwise he would have had to implicitly blame my Democratic-leaning friends who voted for him.  Luckily, there were plenty of other entities with which he could spread fault for this fiscal mess.  This was a practice session:  I’m sure that next year during the election season he’ll find even more scapegoats and not-for-the-people public officials to impune.

But I was interested in learning more about the recent two-month-long senate stalemate, so during the Q&A I asked this question:

“There were 62 senators who – to a person – decided that allegiance to the Party was more important than the people’s business.  Why, to a person, is the Party so much more important than your own constituency?”

Stachowski got clearly irritated and trampled on the last word of my question to blurt out

“You’ve got it all wrong”

At which point some guy to my right shouted out “That’s bulls**t, that’s exactly what it was”.

Stachowski and the guy, and the guy next to him went back and forth for what seemed to be an uncomfortably long time but was probably just a few seconds.  I didn’t really mean to cause a ruckus, I just wanted an answer to a question that’s been on my mind since June.

“Our side offered 15 different resolutions to solve the impass.  The other side rejected all of them.”

He proceeded to explain the compromises that the Democrats offered the other side about power sharing, each party submitting bills on alternate days and some other measures to break the impasse.  He was clearly irritated but not belligerent.  I think it was because I distracted him from the roll he was on with the budget, with all that smugness because he could throw out jargon and policy-ese and bill-ese that only those in the know, like him, could comprehend.  The 31-31 impasse was clearly not something he wanted to talk about and he did so in a more curmudgeonly manner than on budget questions.

He never did answer my question though.  It is clear that neither he nor anyone else in the senate thought that crossing party lines was a solution.  I learned a lesson here, that someday, if I really want to wield power, I should join a political party so they can tell me exactly how I should wield it.  Yesiree, I’ll take my marching orders from the Party!

Stachowski is betting that by next November we voters will have forgotten about this rotten budget and the senate impasse.  Brian Sampson of Unshackle Upstate is betting that our state politicians’ collective behavior will not be forgotten.  Unshackle plans to be highly visible during the 2010 elections reminding the voting public how political spinelessness and Party allegiance above all else got us to where we are today.  Stachowski on the other hand has $4 million in legislative pork to spend on his constituency in order to buy their votes and make them forget.  Ah, pork:  a most potent amnesiac.

Back to the budget.  Brian pointed out that with 38 million people, California’s state budget topped off at $91 billion.  New York – with half that population – has a $132 billion budget.  Here’s what the burden per person looks like:

NY-Calif per capita burden, 2010

Brian also spoke of the state pension hole that will force dramatic tax increases in 5 years as state employees retire en masse (and move to Florida where the New York State legislature has much less authority).  Stachowski brushed it off as an accounting trick, that in reality the hole doesn’t exist.  This article begs to differ.  I beg to differ too.  In fact, I begged to differ with almost everything Stachowski said.  It would have been refreshing to have him even hint that New York State is out of control both fiscally and politically, but it didn’t happen.

Sampson was impressive in his ability to keep a straight face while Stachowski spoke.  When it came to credibility there was no contest.  When it came to having to feign respect, there was also no contest.  Both speakers get one point each.

I have to compliment Senator Stachowski for his willingness to sit in front of us and provide justification for political decision-making that clearly no one in the room believed was justifiable and then repeat that process time after time in front of various audiences.  It takes a real belief in the system and a really thick skin to do this, or else abject stupidity.  I’m not sure which camp he belongs to.

Next Up:  The Partnership, and the Paladino – Rudnick Love Affair

Bill Stachowski Meets His Constituents

August 22, 2009

Part 1:  Encounter with Bill Stachowski:  Lessons in Finger Pointing Assigning Responsibility

Bill Stachowski

The Buffalo Niagara Partnership offers member access to its Movers and Shakers events, usually held monthly.  This month’s M&S was a meeting with state senator Bill Stachowski (D, deflection) and Unshackle Upstate Executive Director Brian Sampson.  Whether you like or dislike the Partnership the M&S event is usually informative and sometimes entertaining.  Last Thursday’s event was both.

Brian spoke first and set the stage with a critique of this year’s state budget, the inability of the state legislature to hold the line on expenses and the impact that new taxes and fees will have on personal incomes and businesses.

Senator Stachowski then aggressively took the defensive, following up with an explanation of the budget.  He spoke rapid fire – spoke might not be the correct word here; for at times I thought he had marbles in his mouth or suffered a stroke or horrible malady, his speech being so mumbly as to be intelligible – about the limited options the state senate had available to cut expenses because of what they (meaning the governor’s office) delivered.  He clearly laid blame for the current budget fiasco at the feet of the previous majority‘s refusal to deal with it in last year’s budget.  In burbled tones he spoke of FMATs and “ATAT’s”.  [I really have no idea what he said but it sure sounded like “A-T-A-T”; throughout his narrative he tossed around jargon without explanation, expecting his audience to know it cold, I guess.  I am in awe of his mastery of speed mumbling.]

Stachowski also speaks while viewing people’s midsections, like he’s trying to look at you out of the top of his glasses but not quite succeeding.  I think he was trying to make eye contact but maybe his neck or something wouldn’t let him raise his head enough to actually do so.

The good senator did make a point that the state budget’s actual increase was only 1% even though, um, when using what I learned in 4th grade it’s 10% or $12.1 billion.  “The [federal] stimulus money allowed us to fund programs that otherwise would have been cut”, he explained.  Now, even though that means next year’s budget will suffer a monster shortfall when stimulus funds are no longer available to cover those programs, that’s apparently a 2010 problem and something that he swept aside maybe for the sake of brevity during this meeting, or maybe because he didn’t want to face up to it, what with an election cycle starting soon.

Stachowski also pretty much glossed over the 88 new taxes and fees that were enacted to close the budget deficit.  Actually, he didn’t speak about those at all except in the collective:   “It was hard to vote for this budget,” he said.

But I got the feeling from the matter-of-fact bluntness by which he deflected blame elsewhere that voting YES was probably the easier choice since it was clear that the governor and the other side were to blame for this mess.  I should note that Senator Stachowski seems to have trouble saying the wordRepublican”.  I’m not sure why.

Next Up:  Why 62 senators stood pat for 2 months not doing the people’s business.

How to Fund a Waterfront Project

August 19, 2009

East River Esplanade

Read this article; it’s about the $148 million that New York City and the state will spend to renovate two piers along the East River.  It creates 400 new jobs in Gotham.

That’s about $370 thousand per job created.  All it takes is David Paterson, Sheldon Silver and the mayor of a great city to pull it off.

Well, we have all three, right?  This means that Buffalo will be next, right?  We need some state-funded jobs like that.