Cosentino: More budget woes on horizon

By Guy Cosentino

Tuesday, September 23, 2008 11:58 PM EDT

The last 50 days have not been easy for the government of New York. Worried about a declining economy, Gov. David Paterson called the Legislature back to Albany in August to request some $600 million in cuts, on top of the $630 million that he already put in place soon after the start of the state's fiscal year on April 1. The Legislature came up with nearly $2 billion in alleged (since many still have to be implemented well into next year's budget) cuts.
Then came the memo on Sept. 5 from Paterson to the state's departments to come up with “zero growth budgets” this coming year. That was followed a little more than 10 days later with the meltdown on Wall Street and Paterson indicating not only that the state could expect $1 billion less in tax revenues over the next six months, but a loss of upward of 30,000 jobs as the fallout of the massive financial crisis. The picture doesn't look as if it is going to get any better in the coming months.

The governor's call for zero growth budgets, due to the Division of the Budget Oct. 3 will require departments to stay within the budget numbers they are currently in, next year. Such news is a mixed bag financially when it comes to impact.

First and foremost, these departments make up $50 billion of the state's overall $120 billion budget - more than 40 percent of it. Yet, even with these cuts, many of these departments have seen their budgets grow in the last several years, by more than three times the rate of inflation. So, while they may not see any growth, don't expect them to be as slim and trim as they were prior to the largess of the later Pataki/Spitzer years.

Also off the table, so far, are giant chunks of the state's expenditures, including aid to schools, Medicaid and, the politically sensitive School Tax Relief program, commonly known as STAR, though Paterson has suggested they will be looked at. As the largest budget line items, they also have the largest political constituencies, from beneficiaries and property taxpayers to doctors and hospitals.

By the way, note that what Paterson is asking for are “zero growth” budgets, not “zero based budgeting,” which would seriously require the state's executive departments to defend all they spend money on. That is a more fiscally prudent, if possibly more politically suicidal step for New York to take when trying to deal with the financial paralysis that is clearly here.

Next: A call back when?

Cosentino is a former mayor of Auburn and can be contacted at cozguytho@aol.com

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