Opinion: The Big Ugly

By Michael Fragin

Issue of April 3, 2009 / 9 Nissan 5769

In state government jargon, the final deal between the powers that be in Albany, the one that sets the state budget is called “the big ugly.”

The budget deal for 2009-2010 is just about the ugliest that seasoned Albany watchers can remember. And brace yourselves, because Long Islanders are going to be hit particularly hard.

Let’s start with a few hard facts. The state will increase spending by $10 billion at a time when revenues are falling by using $7 billion in stimulus spending and imposing more than $7 billion in tax increases. Spending will gallop ahead by 8.7 percent, way ahead of inflation. In addition, at least 3,558 “member items” –– New York’s version of so-called pork-barrel earmarks –– are scattered throughout the four budget appropriation bills. Albany seems intent on ignoring calls for fiscal prudence while asking taxpayers to dig deeper to subsidize their largesse.

The new budget will hike taxes on the wealthiest New Yorkers, and if you live in Nassau County you will probably qualify for that threshold. Worse, the budget calls for elimination of the STAR rebate program that cushioned the property tax hit, but does nothing to provide for meaningful property tax relief. Additionally, our school districts will get less from the state this year and our struggling yeshivas will only be getting two thirds of the meager aid that they received in past years. Nassau County is one of the highest taxed counties in the country and that burden is about to get much, much worse.

The Albany interest groups, mainly the labor unions that mounted a successful campaign to raise income taxes in New York, did so with the theme that the wealthy also need to sacrifice in a time of economic distress. However, there is very little sacrifice coming from labor these days. Contracts are not being renegotiated; fabulously generous pension and retirement health benefits are not being curtailed. Many state workers in New York can retire after 20 years, some after 25, and almost all after 30. These workers receive lifetime retiree health benefits for themselves and their families, often without any contributions or co-payments. GM and the other automakers could not survive under these structural fiscal imbalances. It will not be long before our state will have to reckon with the costs of fiscal irresponsibility.

Perhaps the worst feature of the budget deal was that, despite Governor Paterson’s stated commitment to opening up government, the entire deal was negotiated in secret. That’s right; the three men in a room who control everything locked the door behind them. Not even the leaders of the Republican minority in each house were invited. Not a single hearing was held. There was no opportunity for the public to have any input. Imagine: there was no discussion publicly on how to spend more than $130 billion until the deal was done.

It was hoped that once the Democrats gained control of all the levers of power in the state that the dysfunction for which Albany has become legendary would soon disappear. Instead, our profligate big ugly budget shows dysfunctions while highlighting the political weakness of Governor Paterson. For months, Paterson tried in vain to preach the necessity of fiscal restraint to a legislature that appears to have no interest. At the same time he opposed hiking the state income tax as unwise in a recession. Even though technically the Governor is the most powerful actor in this drama, with the big ugly he lost on both issues.

In politics, a crisis is a terrible thing to waste. Our political leadership led not by the Governor but by Speaker Sheldon Silver (now the longest serving Assembly Speaker at 15 years) has squandered an opportunity for reforming and lowering the enormous cost of government in New York State, where our combined tax burden comes in a close second to neighboring New Jersey.

As things in Albany continue to get uglier, we, the hardworking taxpayers of New York, will be left to pay the tab.

Michael Fragin serves as a Trustee of the Village of Lawrence as well as the Long Island Power Authority. The views expressed here are his own.