2010-11 State Budget Will Be Late; Framework Passed By Assembly Majority Contains $342 Million In New Taxes, $2 Billion In New Borrowing,
Legislative column from Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua)
March 26, 2010
Today is Friday, March 26, and as this weekly legislative column is written, budget “extenders” – legislation that provides short-term funding to keep state government operating – are being drafted and will be passed this afternoon by the Assembly Majority. The Senate Majority is expected to do likewise. The fact that budget extenders are being prepared, the 2010-11 State Budget is due just seven days from now, and today marks the last day of session until April 7, all add up to two inescapable conclusions. First, the 2010-11 State Budget is going to be late; just how late nobody knows. Second, state government remains broken and in need of fundamental reform more than ever. THE LONG AND WINDING ROAD TO A LATE STATE BUDGET Paraphrasing the Beatles, the road to a late 2010-11 State Budget was long and winding. It did not begin this week or even this year. In fact, it began when the 2009-10 State Budget was passed last year. Our entire Assembly Minority Conference opposed that budget, which contained $8.5 billion in job-killing taxes and fees along with a 10 percent hike in government spending, because we knew it would only worsen New York’s already precarious financial situation. Now, almost a year later, our Assembly Minority Conference and I are again sounding the alarm about the contours of a spending plan that will drive state finances off a cliff. To put all this in proper context, it is important to remember that the bad economy did not start yesterday. The fiscal crisis was already in full swing when last year’s budget was passed by the Majorities in both houses of the state Legislature and signed into law by Governor Paterson. The bad economic times continued throughout 2009, evidenced by a steady rise in unemployment and an astonishing decline in state revenues. This is why, during the summer and fall, I called for public, Legislative Leaders’ meetings to try getting a running start at the 2010-11 State Budget. Those calls went unanswered. On October 13, I offered several specific recommendations that would have provided over $3 billion in budgetary savings. The recommendations went unheeded. Meanwhile, in November, the Governor brought Members back into a Special Session that was supposed to enact a “DRP” (Deficit Reduction Plan) but instead devolved into a complete waste of time and, more importantly, a waste of taxpayers’ money. All of the aforementioned was the lead up to this year’s budget process. Not exactly a great start. MAJORITY GREEN LIGHTS $342 MILLION IN NEW TAXES AND $2 BILLION MORE IN BORROWING With a realization setting in that there were still miles to go before the 2010-11 State Budget could be enacted, on Wednesday, the Assembly Majority drafted, voted for and passed a resolution that established a framework for the budget. Their resolution included $342 million in new taxes, raised the Gross Receipts Tax (GRT) on hospitals and contained $2 billion in new, voter unapproved borrowing without a comprehensive job creation plan to grow New York’s private sector. Clearly, if ever there was a “worst of all worlds” scenario, the Majorities’ framework was it. OUR CONFERENCE SAYS NOT ANOTHER DIME IN NEW TAXES Much as we did in leading the opposition to last year’s budget, our Conference and I stood against the Majority’s resolution. On behalf of New York’s overtaxed, overburdened taxpayers, we said “enough” to Albany’s fiscal irresponsibility enabled by higher taxes, more government spending and backdoor borrowing that amounts to generational theft. We put those words into action by voting against the framework of another fiscally irresponsible spending plan. In 2009, we cautioned that the budget would leave state finances in terrible shape while doing nothing to spur job creation. What has happened since then? New York’s budget deficit ballooned to $9.05 billion and state unemployment hit a 26-year high. The Majority’s budget resolution perpetuated this vicious cycle, which is why our Conference voted unanimously against it. THE WAY FORWARD: REDUCE THE SIZE AND COST OF STATE GOVERNMENT Our vote in opposition to the resolution was not about the blame game – it was about the future of New York and an inescapable reality that taxpayers cannot afford another dime in new taxes or more borrowing on a credit card whose bill will be paid by our children. Someone needed to stand up for taxpayers and say enough to the budget framework’s new taxes and billions in new borrowing. This is exactly what our Conference did. We said enough to Albany’s broken status quo and “yes” to a stronger financial future for all New Yorkers. If things continue, the 2010-11 State Budget could end up in the pantheon of late spending plans but it will not be alone: during one hall of shame-worthy stretch, New York’s budget was late for 20 consecutive years. When you factor in the likelihood that this year’s final budget will include tax hikes, billions in borrowing and zero plans for private sector jobs, the only silver lining is that even more voters – regardless of where they live or which political party they belong to – will call for fundamental change in state government. The way forward begins with a realization that before any borrowing or additional tax increases are even considered, we have first exhausted all cost- savings measures and actually shrunk the size and burden of state government to protect taxpayers. That is what our Assembly Minority Conference believes because, like you, we have had enough of Albany’s broken status quo. 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 firstname.lastname@example.org. You also can follow me on Facebook and Twitter for the latest news and informational updates regarding state government and our Assembly Minority Conference.