Inside the News

Albany may be following California's example

Is New York becoming California?

If there is a poster child of a state hit hardest by the recession, it is California. For a year, the state government has hit its work force, taxpayers and every range of social program to ring savings out of its stumbling budget.

For his part, Gov. David A. Paterson has been warning that unless real cuts were made to the budget here, New York would feel the pain California has gone through.  With word that New York's deficit has now climbed another $2.2 billion in just the course of one month to $16.2 billion, the Empire State has a better-than-average chance of going the way of California.

What could be the effect?

For starters, big spending cuts are expected, as are big tax hikes. But if the Democrats who now control the governor's office and the Legislature in New York make the wrong decisions in the days ahead as they lead up to adoption of a 2009 budget, the consequences could be long lasting.

Will they turn to "creative" borrowings to fund things today that won't be paid back for a generation? Will they implement one too many solutions derided as gimmicks that, when combined with the sour revenue numbers, lead Wall Street agencies to lower the state's credit rating -- further driving up borrowing costs for years go come? Will real reforms be instituted -- such as combining government functions to reduce duplication?

Frustrated rank-and-file lawmakers privately fear Paterson and legislative leaders are on the verge of missing real opportunities to take advantage of the fiscal crisis to end some of the much-criticized ways Albany spends and taxes.

"It's the worst I've ever seen it here," one lawmaker said Tuesday. But, will it be even worse after the budget is adopted?

-- Tom Precious

A challenging first year for Gov. Paterson

    To hear David Paterson tell it, his first year in office has been pretty darn good: He identified the state's fiscal problems early on, brought legislators into the fold and kept the budget balanced in terrible times through a series of steps.

   So why does everything seem to be crashing down around him? Why are his fellow Democrats openly stewing about his administration and how come so many are talking of Paterson in the past tense when it comes to his re-election effort next year?

   For starters, his critics say, is a healthy dose of indecision. They talk of his penchant for trying to make too many people happy. He will, for instance, talk tough on the budget and need for cuts and pain. But then, when confronted by a real live New Yorker -- a voter -- he backs away or waffles.

   It's been a rollicking year, indeed. His supporters say the year was not fair to him: he took over in a crisis -- the resignation of the disgraced Eliot Spitzer -- and had to deal with going from a job making no decisions, as lieutenant governor, to suddenly being the chief executive of a government with more than 200,000 workers and more than $120 billion in its budget.

   Moreover, they say the governor has not had a chance, because of the fiscal crisis, to actually implement a real policy direction; instead, his time has been spent moving from one fiscal crisis to the next.

   Detractors say he flips and flops, though. At first, he defended his former top aide, Charles O'Byrne, for being a tax evader. Then, he helped him out the door. Recently, he welcomed him back as a campaign adviser and, Democrats say, off-budget adviser to help him through his troubles at the Capitol.

   But before each new poll showing him slipping in the eyes of New Yorkers, another thorny problem emerges that does nothing for his image. He talked of belt-tightening, yet there were stories about expensive rug purchases at the governor's mansion and pricey taxpayer-funded hotel rooms for Paterson to attend President Obama's inauguration. (He recently said his campaign would fund the trip instead).

   And, of course, there was the debacle over his selection process to pick a replacement for Hillary Clinton in the U.S. Senate, which ended with anonymous personal attacks from someone close to Paterson on Caroline Kennedy, once the front-runner, after she dropped out. This week, Paterson called the whole process "a circus" and said he should not have dragged out his selection.

   Now comes word again of another example of what Paterson says in public may not really be reality. Consider the "hard" hiring freeze Paterson put into effect last summer. In appearances around the state, he talks of the freeze as an example of his fiscal discipline and the public is led to believe few, if any, state jobs are being filled during these tough times.

   Yet, since October, more than 8,000 people have been added to the state work force. (A look by the Buffalo News last fall examining hiring since the freeze kicked in last July found 31,000 people added to the state's job ranks).

   Such a term -- "hard" -- sounds like they really mean business, and if you read the budget bulletins sent to state agencies, the rhetoric is tough and pointed: every hire must go through the ringer and be justified in any number of ways.

   But, since this is Albany, there are loopholes galore. For starters, huge areas of state government are not even covered by the freeze: the state university system, Legislature and court system for starters. About 70 percent of the hiring since October has been in those kinds of agencies.

   Then there are, of course, exceptions for jobs involving public safety and health, like state troopers and prison guards and nurses at psychiatric centers and snowplow operators. Finally, there are the positions deemed crucial for the running of state agencies, a catch-all provision that can be anything from public relations people to ski school instructors to a tree pruner at the transportation department.

   In the end, the explanations sound plausible. But it seems as though, considering that nearly 40,000 people have joined state agencies since a hiring freeze was announced, perhaps a different term might be used.

   -- Tom Precious

AIG: Millions and millions of reasons to be mad

    WASHINGTON -- OK, it's time for a quiz.

   Which of the following sets of numbers makes you angrier:

   A) $165 million in bonuses, paid out of taxpayer money, and given to employees of AIG, the insurance conglomerate whose exotic "credit default swaps" made it the biggest recipient of federal financial bailout money.

   B) The $47.73 million AIG spent lobbying Congress between 2004 and 2008.

   C) The $9 million in contributions that AIG and its employees gave to federal politicians and parties in the last 20 years, which includes $200,560 to former President George W. Bush, $107,332 to current President Obama, and $111,875 to New York's own Sen. Charles E. Schumer.

   D) All of the above -- in combination.

   -- Jerry Zremski

Should Buffalo rely on overtime or hire more firefighters

Rochester hires 20 more firefighters than it needs so the department is adequately staffed even when people take vacations, get sick, or use personal days. Rochester discourages overtime.

Pittsburgh, on the other hand, relies on overtime to fully staff its fire department. The city feels it's cheaper to rely on overtime than to hire more firefighters.

Pittsburgh spends about $10 million annually on firefighter overtime. So does the city of Buffalo, although Buffalo is hoping to hire more firefighters by the end of the year, and reduce its overtime bill.

Which makes more sense: Relying on overtime? Or hiring more firefighters?

Tell us what you think.

-- Susan Schulman  

Read the full story.

State may be even more generous toward its workers

  Every year, groups looking to control the costs of government target benefits given to public-sector workers as among the chief culprits of getaway spending. Pension sweeteners, additional union bargaining powers and lifetime health benefits are just some of the perks critics say help drive costs and, in turn, higher taxes, especially property taxes that pay for local governments.

   And every year, legislators at the state Capitol respond in kind, introducing dozens of bills to provide even greater benefits for public employees.

   Among such bills pending are three to give free time off to public employees across the state for such things as colon cancer screening and blood donations. A third bill, by Sen. Antoine Thompson of Buffalo, would give two days off every year to any state worker — that's more than 330,000 people — to "participate" in their child's education.

   Lawmakers say the benefits are needed, in the case of, say, the colon cancer screening, to encourage more testing to catch the disease before it becomes fatal. They point to laws passed a couple years ago giving free time off for breast and prostate cancer screenings as sound health policies — though none of the lawmakers could say how many state workers have taken advantage of those benefits.

   It's all fine and well to promote good health, critics say, but why are the public-sector workers afforded more benefits than those in the private sector? Why shouldn't responsible adults in government just use their sick or vacation time, as someone in the private sector would have to, in order to get these screenings?

   And, just as important, is anyone in Albany paying attention to the headlines? The recession is pushing private companies to bankruptcies, nearly 600,000 people lost their jobs last month and corporate workers are being told to work with frozen salaries and  higher health care costs.

   "It's just another sign of how out of touch the folks in Albany are," said Erie County Executive Chris Collins, who believes county workers have more than enough time off in a year to do things like get cancer screenings or give blood. "They need a reality check."

Collins thinks the message being sent by, for instance, the blood donation benefit is a particularly bad sign.

   "I am frankly sick and tired of government thinking they need to be responsible for people's lives. That's what this is suggesting. Unless I give you time off you won't give blood? Well, everyone who gives blood now should be outraged."

   — Tom Precious

The stimulus is ready -- now, will it work?

   WASHINGTON -- So, finally, it's a deal.

   You, the American taxpayer, will invest $790 billion in undoing what Wall Street and the nation's bankers have done. You will invest $790 billion in government spending and tax cuts aimed at stimulating an economy that's as lifeless as a rock.

   Congressional negotiators agreed to the deal on Wednesday. The legislation will inject cash into strapped state and local budgets, cut taxes for most Americans and dramatically increase construction nationwide.

   The deal is aimed at saving or creating 3.5 million jobs.

   Will it work?

   -- Jerry Zremski

 

Robbing the Power Authority to solve a crisis

   What to do with some cash found under the cushions?

   If you are the New York Power Authority, you give it to the state to help erase its deficit.

   But if you are a ratepayer, you might be wondering why the Power Authority didn't return some of those reserves back to you in the form of lower electricity rates. Or maybe use some of it to lower power costs for manufacturers trying to compete against firms located in places where electricity is far cheaper.

   So went things in Albany this week with the approval by Gov. David A. Paterson and the Legislature of a $476 million transfer of funds -- known as a sweep -- from the Power Authority to the state's general fund between now and March 2010.

   The Power Authority, and many other authorities, have been favorite targets for governors looking for some quick and easy cash during times of fiscal troubles. Instead of cutting popular programs, like education or health care, it's far more appealing to just turn to the off-budget agencies known as authorities for some help.

   There are all sorts of creative ways to tap into the authorities. Recall the time Attica state prison was "sold" to an authority to get it off the general fund's books? Or the toll-free downstate highways or upstate canal system that was unloaded onto the Thruway Authority to artificially lower the red ink of the general fund?

   Or just this week, when Paterson and the Legislature decided to keep 90 percent of the money being raised by last month's state university tuition increase? Instead of the students' higher tuition going to SUNY to pay for its operations, the state will keep $62 million this semester and $122 million next year, when another tuition hike goes through, to raise revenues for the general fund.

   In the case of the Power Authority, officials say they had the extra cash and it isn't hurting anything to give some to the state during these challenging fiscal times. After all, Albany is facing a $1.6 billion deficit in its current budget and a $13 billion hole in the fiscal year beginning April 1.

   But critics say Power Authority officials should have looked around, seen how bad the economy is doing and provided their own fiscal stimulus package in the form of lower rates for consumers.

   -- Tom Precious

A heated debate about 'Buying American'

   WASHINGTON -- Congress is thinking of making "Buy American" more than just a notion -- and it's making a lot of people nervous in the process.

   Both versions of the economic stimulus bill include provisions that, to one degree or another, exclude foreign suppliers from benefiting from the wave of building that's sure to occur in wake of the bill's passage.

   But just as soon as the proposal started gaining momentum, business interests and the international community howled, and President Obama warned: "We can't send a protectionist message."

   And suddenly the Senate pulled back a bit, adding a provision making the "Buy American" clause subject to preceding trade agreements.

   In other words, it's all starting to sound like a typical congressional trade debate, with lawmakers talking tougher than they act.

   So, when lawmakers talk about "Buying American," do you think they mean it?

   -- Jerry Zremski

A harbinger of weakness to come?

   Bold,  decisive action?

   Or just delaying hard choices?

   Those were the opinions surrounding  the $1.6 billion deficit-reduction package swiftly approved at the Capitol Tuesday night -- an action designed to bring the state budget for the current fiscal year into balance before it expires on March 31.

   For Gov. David A. Paterson and Democratic leaders who control the Legislature, the plan makes painful but attainable choices. For critics, led by Republicans and fiscal watchdogs, the plan relies on spending cuts for a bare minimum of the solution. The rest? Tax hikes, tuition hikes and an array of raids on off-budget funds -- such as state authorities that have their own legally separate fiscal plans -- to transfer money into the general fund, which is home to the $1.6 billion budget.

   "I believe this plan … is a prudent and thoughtful response during these difficult times," said Assembly Speaker Sheldon Silver, a Manhattan Democrat.

Indeed, the really hard choices are yet to come.

   Maybe.

   Tuesday's budget resolution avoided many difficult decisions. Consider that, of the $1.6 billion in deficit reductions, more than $700 million came from various raids and transfers and sweeps of off-budget accounts. Cuts, however, amounted to about a quarter of the plan.

   And, legislative staffers said privately that a not-so-small portion of what was cut zeroed in on programs for which the state had already slowed funding to a crawl. That means, in fiscal talk, that not all of the programs on the chopping block were necessarily going to spend the state money anyway in the next two months of the fiscal year.

   So, when are the hard choices coming? Supposedly in the 2009 state budget plan for the fiscal year starting April 1. That's the plan that is already facing a $13 billion deficit.

   But all eyes in Albany are focused on Washington and how much the federal government will be sending New York's way in the upcoming stimulus package. The bigger the number, the less
pain in the way of spending cuts.

   But Paterson and his allies warn that even after the federal bailout, there still will be hard cuts coming that will affect many popular programs.

   But if Tuesday's deficit-reduction plan is any signal, critics of big spending worry the signs are there that maybe Paterson's heart really isn't into controlling what he has maintained has been a culture of overspending in Albany over the years.

-- Tom Precious

An ambitious -- and strangely familiar -- jobs promise

   WASHINGTON -- So, if you believe the Obama administration, the $800 billion-plus economic stimulus bill that's winding its way through Congress will save or create 228,000 jobs in New York State.

   Now there's no doubt we need them. New York lost nearly 100,000 jobs between October and December alone.

   But the Obama figure -- 228,000 jobs -- brings back some memories and raises a question.

   First of all, didn't a certain senator once promise to bring 200,000 jobs to upstate New York? And didn't that promise turn out not so well?

   And what's this business about "saving or creating" jobs? And how are we to know if the stimulus ever really worked if any job that merely continues to exist over the next few years qualifies as a "saved job"?

   -- Jerry Zremski