Just Another DDP (Deficit Deferral Plan)

Legislative column from Assemblyman James N. Tedisco (R,I,C-Schenectady/Saratoga)
December 10, 2009
Vernon Law pitched for the Pittsburgh Pirates in the ‘50s and ‘60s. After a bad day on the mound he was asked what happened and he responded with this quote, “Experience is a hard teacher because she gives the test first, the lesson afterward.”

The New York State legislature’s recent foray into several extraordinary sessions to fix the states 2009 budget deficit illustrates that our government not only continues to fail the tests related to fiscal responsibility, but stubbornly refuses to learn the lesson taught by experience. Unfortunately, for taxpayers, it has been one bad experience after another.

What came out of this month-long debacle designed to deal with the state’s budget crisis turned out not to be a DRP (Deficit Reduction Plan) but rather a DDP (Deficit Deferral Plan). The true purpose of the agreement appears to have been to give breathing room between legislators and the appropriate, albeit tough, decisions that must be made to correct a budget that is drowning in deficit. The need for a DRP developed last April when some legislators and the Governor failed the responsible budgeting test by deferring cuts and difficult fiscal decisions.

As a result, the final budget spawned $11 billion in new spending and $8 billion in new taxes. The DRP passed this week demonstrates they have failed again. During the debate on the Assembly Floor, I warned my colleagues they had not learned the lesson that government cannot tax, spend, borrow, gimmick or one-shot its way to fiscal solvency.

Our government has taken a pass on making tough decisions and resorted to the bad old habit of filling revenue holes with “dirt” generated by digging even larger ones; thus, expanding deficits into future budgets and delaying the inevitable pain of major cuts. Instead of substantial reductions and cuts, this DRP uses one-shot revenues to close the present deficit. These are revenues that are speculative at best. Of the $2.7 billion agreed upon, $1.37 billion comes from these non-recurring revenues. That portends a huge revenue hole for 2010.

The $391 million taken from stimulus education funding is an example of this type of revenue. When it comes to federal dollars, we are robbing Peter to pay Paul as those monies were designated to be used by the state next year. The DRP also counts on money we may never receive. For example, the plan relies on $250 million from a tax amnesty program. The state also is counting on a $200 million Aqueduct video lottery contract payment for which a contract has yet to be awarded and hasn’t been for over eight years. A good deal of the remaining monies (with the exception of $45 million in refinanced debt) comes from raiding the coffers of agencies that have a surplus. By way of example, the DRP takes $200 million from the Battery Park Authority. None of these revenue sources will be available next year.

A message has to be sent to our state government to STOP DIGGING!