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First take on state budget

I won't pretend that what I'm about to say is the byproduct of any exhaustive study to the state budget released Tuesday. But based on what I've read in assorted press accounts, including the fine work done my colleague Tom Precious, some things jump out:

The state employs 239,830 and has added 7,979 jobs since Paterson and his former boss, Eliot Spitzer, took office. In the face of the worst deficit in state history, Paterson proposes 521 layoffs. Come on, guv, get serious. Mario Cuomo wrote some 18,000 jobs out of the budget the last time the state had a major deficit problem.

The proposed $700,000 million cut in school aid has predictably sent the education establishment into spasms. Keep in mind that education aid this year went up a record $1.8 billion, and the guv is proposing taking back less than half of that next year. Which means districts would have more state aid in 2009 than they did in 2007. Further keep in mind that per-pupil spending in New York State is the highest in the nation. (Student performance is not). Already, superintendents are talking about cutting student field trips and the like, knowing it pushes a button with parents. Personnel costs, however, consume the lion's share of school budgets, so I have another idea: get real about those expenses. End pension abuses and negotiate labor contracts to cut out the goodies that are common in many school districts but rare in the private sector: allowing teachers and administrators to cash out up to 200 days of unused sick time; providing lifetime health insurance; and offering cash incentives to retire as early as 55, ten years before most of us can. Let's also keep in mind that teacher pay continues to grow faster than the rate of inflation in many, if not all districts. Teachers typically get two bites at the apple, an annual across-the-board pay increase, plus "step increases" every one to three years for additional years of experience. School spending needs to reflect the state's new fiscal realities.

Change to the Empire Zone program is long overdue. The News and Syracuse Post Standard exposed the problems more than five years ago and several reports from the state comptroller further confirmed the program's waste and ineffectiveness. It took a budget crisis for the governor to act; better late than never, I guess. Most other states offer incentive packages, so I'm not sure New York can unilaterally disarm, at least not without consequences. (Not that they all shouldn't knock off the nonsense. The only ones benefiting are the corporations playing one state off against another). The trick will be recasting the program in a way that promotes real economic growth that targets incentives. Dropping tax breaks for retail, as the governor has proposed, is a good idea, as retail rarely generates new spending. Rather, it just redirects it.

Finally, the governor's proposal does not make enough changes in structural spending to solve the state's fiscal woes. There are too many one-shots and skimming of money from state authorities, starting with the New York Power Authority and the profits it generates at the Niagara Power Project in Lewiston. That sets us up for more deficit drama next year, unless Wall Street rebounds with a vengeance. I'll give Paterson some credit for moving in the right direction, but solving the problem requires him and the Legislature to go a lot further. The politicians should start with their own operations: the governor's office has added more jobs, as a percentage of employment, than any division of state government the past couple of years, and the legislature spends more on itself than almost any state legislature in the nation.


State government
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