When I was a child, my grandparents hosted a gift orgy on Christmas Eve—the whole family gathered in Chicago and every aunt & uncle brought something for ME. My cousins and I had eyes only for the pile of gifts under the tree.
Remind you of the American Recovery and Reinvestment Act (ARRA)? The ARRA orgy begins with the reasonable assumption that the economy needs a healthy dose of Christmas cheer. Congress and the Administration joyfully decreed that we could save the world and spend money, too. Every lobby and interest group joined in the happy chorus. Presto! Christmas in February.
Yet “killing two birds with one stone” only works if you’re a very good shot. ARRA is riddled with Congressional multitasking, using the occasion of the stimulus (and its virtually unlimited spending) to implement specific social goals.
Consolidating local governments in New York is a hot topic across the state. Proponents maintain consolidation is a way to make local governments more efficient and less costly. Opponents argue that services will be cut, local representation will be lost, and savings will be minimal at best. Every week, I receive calls from local government officials across upstate asking what is involved in studying how to share or consolidate services. Almost invariably, the caller starts out by saying, “I’m not necessarily in favor of dissolving or consolidating, but I feel it is my responsibility to the taxpayers to look at every avenue to reduce our local taxes.”
This week’s conference on the state’s budget crisis—sponsored by the Empire Center on State Policy and the Center for Governmental Research Inc.—was organized around a technical question: What can be cut from New York’s budget to fix a deficit estimated (today, at least) at $12.5 billion? Yet the overriding problem is not technical but political. My colleague Erika Rosenberg, moderator of one of the sessions, asked the panelists this question: “What’s it going to take for the Legislature to make the unpopular decisions that are needed to balance the budget?”
Gov. David Paterson made the correct technical decision in calling the Legislature back for a special session on Nov. 18. Yet the brutal reality of New York politics eliminated any possibility of progress. With control of the state Senate still in question and the political risks starkly clear, the session never convened.
Back in 2002, CGR reported on the many buildings around the state bearing the names of elected officials. To illustrate our point, we included a picture of the Joseph L. Bruno Stadium at Hudson Valley Community College, built with $14 million contributed by the generosity of then Senate Majority Leader Bruno. Of course, he was being generous with OUR money.
Bruno Stadium
In hindsight, it was risky to use the Bruno example. A political friend told me what he’d have done to me had he been on Bruno’s staff. Standards of decency and editorial policy prevent me from saying more.
A lot of money flows to community projects through the goodwill of legislators. The NYS Legislature has long divvied up $200 million in “member item” cash—money from the annual budget that can be allocated by a member of the legislature with no more process than the permission of his or her political leader. In 2006, my colleague Erika Rosenberg reported that the problem extended to several billion dollars in additional money that was borrowed to fund projects sponsored by individual members. We called these funds “Capital Pork.”
The proposition that we should “Buy Local” is appealing. We may continue to buy apples from Chile and lettuce from California, but we have the common decency to feel guilty about it.
But do we need to?
American producers of beet and cane sugar have long supported a Buy Local policy. Dominated by a relatively small number of large and politically savvy producers and processors, these “buy from us” sugar interests keep prices high through official U.S. policy that includes a robust quota and tariff regime. Protectionist trade policies for American sugar acquire additional political weight from the powerful Midwest corn lobby, as cheap sugar from Brazil, Thailand and other countries also competes with corn sweeteners. Corn sweeteners—only 13 percent of total sweetener deliveries in 1970—surpassed beet and cane sugar in 1986 and now contribute 20 percent more to the sweetener market than refined sugars.
Gov. David Paterson wants state government to do more with less.
The rumblings started as early as March when the annual budget was completed. Then, last week, Budget Director Laura Anglin asked agencies to prioritize programs and match them to agency purpose, and allocate staffing accordingly. Presumably, this information will be used by the Budget Division to prepare for the Legislature’s mid-August emergency session.
Paterson’s alarm bell will have a familiar ring in state agencies Not so long ago, then-Budget Director John Cape asked agency heads to provide a one-page list of their top three strategic priorities for the 2005-06 budget. Certainly across-the-board cuts are easier for the Division of the Budget to administer, but taxpayers deserve better. Some state functions are more important than others and the cutbacks should reflect conscious priorities. Some cutbacks save more money than others. As an example, when state expenditures are partially funded by the federal government, cutting state staff can actually cost money if federal reimbursement is affected.
When it comes to economic forecasts, I tend to be a “glass-half-full” kind of guy. Yes, there is some probability that gas will rise to $20 per gallon and we’ll start riding horses again. I think it more likely that gas prices will fall back to $3 per gallon and there will again (sadly) be a market for the Hummer.
My natural optimism was dealt a blow by a new assessment of fast-growing firms from the Small Business Adminstration (SBA). The study is an adaptation of the work of David Birch of Cognetics from the 1980s and 1990s. Firms with rapid revenue growth were dubbed “gazelles” by Birch. He found that these firms were responsible for most of the nation’s employment growth.
Shouldn’t we at least talk about the notion of capping school property taxes?
A recent poll found 74% of New Yorkers think it’s a good idea. A commission appointed by our previous governor recommended it after several months of study and more than a dozen public meetings around the state.
And yet, the state Legislature is poised to adjourn for the year without seriously considering the idea. There were no legislative hearings on the commission’s report, and Gov. David Paterson couldn’t even get his bill to cap property taxes introduced in the Legislature.
Whether or not you think capping school property taxes is a good idea (full disclosure: I do), what does it say about our legislative process that an idea with such broad appeal addressing a problem that is clearly impacting on millions of New York residents isn’t taken seriously by our lawmakers?
The nation’s economy is in trouble. How bad it is and how long it will last is open to speculation. Economists’ prognostications are treated with a good bit of skepticism—and for good reason. Our track record would shame a weather forecaster in a third-tier media market. In our defense, the economy rises and falls for a combination of real and perceived reasons. And perception is often more powerful than reality. At the moment we confront a real problem of global liquidity that has been revealed in an ongoing series of disclosures, each more surprising than the last, often in obscure markets that are unexpectedly significant. Each new revelation erodes the sense that we really know what’s going on in the markets or, more to the point, what it all means or when this steady stream of bad news will end. It is this uncertainty and ignorance that feeds negative perceptions about the future, perceptions that may be right or wrong but influence behavior nonetheless.
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When I was a child, my grandparents hosted a gift orgy on Christmas Eve—the whole family gathered in Chicago and every aunt & uncle brought something for ME. My cousins and I had eyes only for the pile of gifts under the tree.
Consolidating local governments in New York is a hot topic across the state. Proponents maintain consolidation is a way to make local governments more efficient and less costly. Opponents argue that services will be cut, local representation will be lost, and savings will be minimal at best. Every week, I receive calls from local government officials across upstate asking what is involved in studying how to share or consolidate services. Almost invariably, the caller starts out by saying, “I’m not necessarily in favor of dissolving or consolidating, but I feel it is my responsibility to the taxpayers to look at every avenue to reduce our local taxes.”
Gov. David Paterson wants state government to do more with less.
Shouldn’t we at least talk about the notion of capping school property taxes?