New York’s Ballooning Deficit And Debt Add Up To “Generational Theft”
During his speech to the New York Conference of Mayors in Saratoga Springs last week, Governor David Paterson made the dire announcement that state tax revenues have declined by 35 percent, which could necessitate his calling the entire Legislature back into a Special Session later this summer to address the shortfall.
As troubling as it was, the Governor’s announcement hardly came as a surprise to me. In fact, our Assembly Minority Conference and I predicted this exact scenario as we led the fight against the 2009-10 State Budget. My colleagues and I voted against that reckless spending plan because it raised taxes and fees by $8.2 billion, failed to rein in our state’s growing deficit and debt, and increased government spending by an unsustainable rate of 10 percent, making New York’s economic “misery index” even more miserable.
The 2009-10 State Budget only put off New York’s economic day of reckoning that will soon arrive – the Governor’s acknowledgement of just how bad the situation is underscores that point. Even though our state clearly cannot afford to borrow and spend like there’s no tomorrow, certain politicians and special interests in Albany think only about today because hard-working taxpayers like you keep picking up their tab.
Set against a backdrop of our state having the highest combined state and local tax burden in America, the nation’s second-worst business tax climate and the loss of 212,200 private sector jobs since August 2008, Albany’s continued addiction to deficit and debt goes beyond typical government mismanagement, or irresponsible fiscal policy. It is nothing short of “generational theft” that robs our children and grandchildren of the future they deserve by saddling them with a financial mess not of their making.
Having entered public service after a successful career in the private sector, I know the importance of telling it straight when it comes to the financial bottom line, whether it was for a company I started, or the taxpayers I serve. I want to offer some straight talk – and hard facts – on New York State’s ballooning budget deficit and debt that both political parties helped create.
NEW YORK STATE’S BUDGET DEFICIT: The 2010-11 State Budget deficit is projected at $2.2 billion. I say “projected” because, given the dramatic erosion in state revenue, that gap is expected to widen even further. State Budget deficits from 2010-11 through 2012-13 are estimated to swell to a staggering $24.6 billion, a figure larger than some state budgets;
NEW YORK STATE’S DEBT: Our state is in debt to the tune of $54.5 billion for 2009-10, a 41.3 percent increase since 1999. The average New York family’s share – your share – of that debt is $11,000. Service on the State debt is $5.9 billion for 2009-10, which amounts to 4.5 percent of the $131.8 billion State Budget. State debt service has risen by 49.1 percent since 1999, an average annual rate of growth of 4.1 percent, which even outpaced inflation!
Taken together, New York’s budget deficit and debt represent a multi-billion dollar one-two punch that will not only “KO” our economy, but our quality of life. Getting deficit and debt spending under control means returning to fiscal sanity, which is something our Conference has long championed. Specifically, we have advanced bi-partisan legislation that would:
BAN “BACKDOOR BORROWING” – Backdoor borrowing is borrowing that occurs without voter approval. Our legislation would prohibit this activity and require that 10 percent of any budget surplus be used to decrease the state’s debt (Assembly Bill A.4133);
REQUIRE “TRUTH IN BORROWING” – Our Conference supports having any ballot proposition that authorizes state debt include information on both the principal and the interest incurred by state taxpayers (Assembly Bill A.8450); and
FISCAL IMPACT FOR LEGISLATION – Require all bills to include the costs of mandated expenditures so lawmakers understand the financial consequences of these bills and how they negatively impact local communities and taxpayers (Assembly Bill A.8449).
These are just some of the many initiatives our Conference has put forth to get New York back on solid financial ground. For the sake of future generations, we must get serious about addressing our State’s mounting deficit and debt. The men and women of our Conference are prepared to do exactly that and hope the Governor calls us back into Special Session to tackle this challenge and other unfinished business left over from the recently concluded Assembly Session.
As always, constituents wishing to discuss this topic, or any other state-related matter, should contact my district office at (315) 781-2030, or e-mail me at email@example.com.