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"Spinning the Budget"
They did it again. State lawmakers passed a budget on time for the second year in a row. After two decades of late budgets – some months late – it’s a remarkable turn of events. But before reformers pop open the Champagne, just remember, this is what is supposed to happen. Budgets are supposed to be in place at the beginning of the fiscal year. When you go to work, you’re expected to be there on time. No one would tolerate two decades of lateness. So while on time budgets are improvements over late ones, they are not really reforms. Unfortunately, the budget saga is not over. State legislators dramatically changed the Governor’s proposed budget. Those changes are subject to the Governor’s veto pen and so until the Governor acts, the final budget will not be in place. Hopefully, the Governor will not strike important improvements in the state budget. The legislature, for example, rejected the Governor’s proposal to raise public college tuition despite the fact that the state may well have a $4 billion surplus this year. The legislature also rejected the Governor’s proposal to slash financial aid for college students and instead hiked aid by 10 percent for needy students. They also added hundreds of more full-time faculty at the State and City Universities, while boosting state general support. For advocates, the legislature’s higher education budget was the best in a two decades. The legislature also took a first step toward addressing the court order mandating more spending for elementary and secondary schools. While the legislature earmarked over $1 billion in new spending for schools, that was still less than recommended by the courts. But the legislative budget allowed for an increase in state-supported borrowing of over $11 billion for the rebuilding of crumbling schools. The legislature also approved billions of dollars in tax cuts. According to the legislature, local property taxpayers could receive a reduction of between $300 and $800 and families with school-aged children could receive a tax credit of up to $330. So why is the Governor threatening vetoes? The Governor is arguing that while the legislative budget may be balanced this year, the additional spending will drive large deficits next year and the year after. The Governor has argued that the legislative budget spends nearly $5 billion more than his budget did – a claim that is rejected by legislative leaders. Further confusing the issue, the Senate Majority Leader and the Speaker have two different estimates on how much their budget spends. The duel over the numbers is at the heart of the Governor’s opposition to the legislature’s budget proposal. The Governor has argued that the legislature’s budget “spends too much and reforms too little.” But how is the public supposed to know if the Governor is right? The Governor made similar claims about last year’s budget, and the state ended up with a $4 billion surplus. And the Governor has a history of using the state’s financial data for his own political benefit. In the 2002 election, the Governor dismissed concerns raised about a looming budget deficit. He was wrong. However this year’s budget finally plays out, one thing is sure, the state needs an Independent Budget Office like the one in Washington DC to offer unbiased financial analysis. It may not end the budgetary games, but at least we’ll know who’s numbers are more likely to be right. That’s all for now. I’ll be keeping an eye on the Capitol and will talk to you again next week. |
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