As any NBA fan knows, one shot can win a championship. Likewise, too many of these shots over a period of years can destroy the economy of a state and sink it into a deficit spiral from which it can never recover. Today, New York is poised on the edge of a fiscal cliff because the leadership of its state government has neglected our statutory budget process in favor of quick fixes.
If nothing is done to change its course, the state Legislature is poised to implement the largest one-shot revenue raiser, in real dollars, in the history of the Empire State to pay for its 2010-2011 spending plan. One-shot schemes such as the one being considered by both majorities in the Assembly and Senate add to our structural deficit – that is, the deficit which arises when government spending outstrips expected tax revenue.
Meanwhile, Assembly Speaker Sheldon Silver and Senate Conference Leader John Sampson want billions more in deficit borrowing to balance – or should I say “structurally imbalance” – the budget. And thanks to Governor Paterson’s habit of funding state operations through emergency extender spending bills over the last 11 weeks, they have built an argument, albeit a bad one, for kicking the can down the road, once again deferring the tough but appropriate decisions that would actually create a balanced budget. Unfortunately, the longer they wait, the more current and future taxpayers suffer.
In budget-negotiation parlance, this is “delay to get your own way” at its most perverse. But this year the stakes, and the deficit, are bigger. Deficit-financing for current expenses with the use of a huge one-shot revenue raiser to create a final budget after two-and-a-half months of delay is certain to explode any hope of tackling New York’s structural deficit in a comprehensive, responsible manner.
Prior to the mandated April 1 deadline, the Legislature projected a $136 billion budget with a $9.2 billion current-year deficit. After 11 weekly extenders, they have transformed the difficult challenge of cutting to balance the budget to an almost impossible one. Average New Yorkers will likely now have to weather a year’s worth of reckless tax hikes and drastic cuts in just nine months.
Confronted with an estimated 30 percent of state budget revenues left to pass, majority leaders in the Assembly and Senate are signaling that they intend to borrow their way to a completed budget, deficits be damned. Like the boy who killed his parents and then asked for leniency because of his orphaned status, they are poised to suggest with limited funds and a remaining $8 billion deficit that we must now borrow billions of dollars to finish the state’s spending plan. That’s chutzpah.
Governor Paterson has called the legislative majorities’ bluff and raised the stakes by demanding a June 28 balanced budget without any borrowing. If now is not the time for this Legislature to break its addiction to taxing, spending, and deficit borrowing then when is it? I fear the answer is never. The expected one-shot revenue raiser the Senate and Assembly Majorities intend to use to defer New York’s stark fiscal realities to another day may finally pass this budget, but it is certain to be an air ball for the Empire State’s long-suffering taxpayers.