Angry New Yorker

Semi-Daily Rants from New York City's Angry Man

"As I know more of mankind I expect less of them, and am ready now to call a man a good man, upon easier terms than I was formerly." - Dr. Samuel Johnson, Boswell, Life of Johnson, Sept. 1783

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Tuesday, March 08, 2005
 
Partying like it's 1999... spending like it's ....

A solid look at the fiscal situation New York State finds itself in -- due to the near malfeasance of our spineless elected officials.

“EXCELSIOR” OR BUST?
FISCALWATCH MEMO March 7, 2005

Governor George E. Pataki says the last four years have been “the worst … since the Great Depression”[1] for New York’s finances.

You wouldn’t know it from looking at the state budget, though. Since the end of the 2001 fiscal year[2], state funds[3] spending has risen 18 percent. That’s a growth rate of one and a half times inflation – despite the fiscal fallout from a national recession, a nasty Wall Street bear market and the destruction of the World Trade Center.

In fact, as explained below, New York State has exerted somewhat less fiscal discipline in the 2001-05 boom-and-bust cycle than during a comparable period in the early 1990s.

Recent state spending trends underscore the high stakes in Albany’s fiscal 2006 budget negotiations. Despite the widespread media focus on “cuts,” especially in health care, Pataki’s proposal calls for net state funds spending growth of 5.5 percent – twice the rate of inflation. If the Legislature is allowed to make significant additions and restorations to the Governor’s budget, New York will be hobbled by state budget shortfalls for years to come.

Déjà vu all over again

Notwithstanding the governor’s frequent allusions to the 1930s, the state’s latest economic and fiscal travails aren’t completely unprecedented. Indeed, there are striking similarities between the early 2000s and the early 1990s. During both periods:

  • New York experienced an economic recession more severe than the national average.
  • Medicaid costs skyrocketed.
  • New York’s budget gaps were closed in large part with tax hikes, increased borrowing and fiscal gimmicks.
  • The Legislature set new records for tardiness in adopting a state budget.

No two economic cycles are exactly alike, of course. For example, the state lost more private sector jobs during the early 1990s, while the revenue losses were much greater after the 2001 recession.

Read the entire article here.



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