WHAT FISCAL CRISIS?

BY ASSEMBLYMEMBER RORY LANCMAN

Wednesday, August 13, 2008 8:42 PM EDT

Let us get something straight: New York State is not facing a fiscal crisis.

A fiscal crisis is what New York City faced in the ‘70s. No one would buy the city’s bonds. The city couldn’t make payroll. Bankruptcy was an option (for a time, it appeared the only viable option).

On the other hand, New York State in 2008 faces an estimated $600 million shortfall in a $121.6 billion budget; a less than one-half percent shortfall Governor David Paterson has already correctly addressed through such prudent and modest cost-saving measures as a hiring freeze and a 7.7 percent reduction in agency spending.

Those shortfalls are expected to grow in the next few fiscal years, increasing the already anticipated $5 billion 2009 shortfall to $6.4 billion, the $7.7 billion 2010 shortfall to $9.3 billion, and the $8.8 billion 2011 shortfall to $10.5 billion.

A serious financial challenge, to be sure, but no crisis. Indeed, Assembly Democrats have been warning of this serious challenge for some time. In our formal response to the Spitzer-Paterson administration’s proposed 2008-2009 budget in February, we forecasted $667 million less in expected revenue than the Governor, “reflecting a less optimistic view of overall conditions in both the state and national economies. The lower revenues are expected primarily as a result of smaller personal and corporate income tax collections.”

But why is it so important that we acknowledge that there is no crisis, but merely a serious challenge? Because crises produce bad policies, while serious challenges produce serious, thoughtful responses.

Witness the rush to judgment of our state’s editorialists and political commentators, crying out for cuts, cuts and more cuts to education, healthcare and our workforce; and no new taxes, even for those earning over a million dollars a year.

Have the fiscal and social consequences been thought out of our consigning another generation of New York city schools kids to an inadequate education after we finally got them their fair share of state education money; of denying access to health care for the working poor or elderly; of ignoring the gross inequities in our tax policies that leave middle class families paying a far higher share of their resources in state taxes than our wealthiest citizens?

The late summer, one-day special legislative session three weeks before primary day called by the governor is a perfect recipe for the bad policies bred of overstated crises, and should give those who care about good government serious pause for concern. New York has a detailed and elaborate budget-making process, essentially running from January through March, culminating in an approved budget by April 1 (a target date the state has more or less hit with consistency the last few years after two decades of absurdly late budgets).

The process is filled with good government stuff we should be loathe to throw overboard for a one-day special session at the first whiff of stormy seas: budget hearings covering every subject area and state agency; detailed budget analyses and economic forecasts provided by each legislative chamber’s majority and minority parties; public budget conference committee meetings and reports; and a state comptroller with the power and pulpit to arbitrate revenue disputes.

Perhaps most importantly, the budget process is filled with context - the context of an overall budget that strives to meet the many varied and competing interests and needs of New York’s extraordinarily diverse population - urban and rural; upstate and downstate; young and old.

So let’s all take a deep breath, take stock of what is undoubtedly the serious financial situation we have known of for some time, and act resolutely but deliberately to keep our financial house in order in a manner consistent with our values and our long-term goals as the family of New York.

Rory Lancman is the Assemblyman representing the Twenty-Fifth District, Queens