The State Budget
March 29th, 2006

The New York Times looks at the state budget deal and decides the states surplus may be more a bane than a blessing. The Republicans want to use it to help the rich and the Democrats want to spend it on schools and tax cut for the poor – a better tactic but not good enough, in the Times view. Both sides, the editorial continues, are utterly uninterested in paying down debt to increase long-term solvency. The paper then calls on our leaders in Albany to show a little backbone, writing, It’s ridiculous that the legislators, who are almost all from districts gerrymandered into impregnability, and a governor whose presidential hopes are still a mirage can be doing so much damage with an eye toward pleasing the voters.

Writing in Newsday, Lawrence Levy also bemoans the states propensity to cut taxes and spend: It’s clear that billions of dollars in new spending and tax cuts already agreed upon will turn this year’s big surplus into bigger deficits in the future. This could all cave in one the next governor who would have no choice but to govern a slash-and-burn artist.”

By on March 29, 2006, 8:33 am
In category: Albany,Gotham City,Public Finance | 3 Comments »

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3 Responses to “The State Budget”

  1. Larry Littlefield Says:
    March 29th, 2006 at 10:04 am

    With this new STAR program the city’s share of state school aid will still be lower than its share of state income tax payments, leaving the city’s children even more worse off than they would be if state school aid did not exist.

    As for the borrowing to build schools, the state could simply stop paying the debt service next year, bankrupting the city.

  2. Daniel Millstone Says:
    March 29th, 2006 at 12:35 pm

    The school funding part of this deal is not good. Although, to my $$ uneducated mind, the financing is murky,it seems clear that in the out-years the capital part of this program does not actually come from the state. The expense budget portion increase to NYC is $400 million next year. This does not resolve the CFE action for NYC schools and leaves underfunded districts accross NYS in the lurch.

    At same time, the Senate-inspired tax cuts will leave big budget holes in the out-years. Does Senator Bruno expect to lose his majority and want to leave a mess for future governors and legislators?

  3. Larry Littlefield Says:
    March 30th, 2006 at 8:16 am

    (The expense budget portion increase to NYC is $400 million next year. This does not resolve the CFE action for NYC schools and leaves underfunded districts accross NYS in the lurch.)

    Schools elsewhere in the state, almost everywhere elsewhere, are overfunded. If you include the latest STAR enhancement, NYC’s share of state education funding goes down. NYC taxpayers will be paying for that excess spending while having little to show for it for NYC kids.

    As for the capital aid, NYC has to borrow it, but the state doesn’t have to pay it back. That’s a future promise. In every deal in which powerful interests have gotten cash today, but less powerful interests have gotten a promise for tomorrow, the state was too broke to deliver when tomorrow came.

    NY State legislators get to claim victory and keep their seats. NYC residents get screwed. We’d have been better off with Pataki’s budget, bad as it was. As it is, he could just veto the city’s capital fund and permit the rest.

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