Tammany's Town: Balanced budget follies

By JAMES B. CHAPIN, UPI National Political Analyst   |   May 22, 2002 at 6:10 PM
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NEW YORK, May 17 (UPI) -- The political alliance between New York City Mayor Michael Bloomberg and New York Gov. George Pataki held firm throughout the budgeting process in Albany. Bloomberg has gone out of his way to pump the governor in his re-election year, and in return the governor has taken care of the mayor.

Bloomberg got an extra billion dollars for his own budget from the budget that just passed the state legislature. This billion dollars includes a $163 million increase in school operating aid, and a promise of another $37 million from Assembly Speaker Sheldon Silver, as well as an extra one-time $200 million to reimburse the city for school programs paid for in the past. This will get Bloomberg off the hook of having to cut the education budget at a time when polls show that most city residents want to increase it.

Of course, Bloomberg's plan to take over the city schools has been stalled by the state Assembly, a body not under Pataki's control. And Bloomberg's own budget has yet to pass the City Council, and has led to waves of demonstrations from affected interest groups. But, given the unique powers of the city mayor to establish his financial priorities, that is a footling obstacle.

The more serious problem for both men is that they have now bet their respective farms on an economic recovery to take place in the next year.

Bloomberg "balanced" this year's budget only by borrowing a billion and half dollars to pay for operating expenses. It's safe to say that he was the only mayor since the 1975 fiscal crisis that could have gotten away with this tactic.

Pataki cleaned out his own cupboard, using $3.1 billion dollars in "one-shot" revenues and adding close to a billion dollars to the state's own astronomical debt. He has less than three-quarters of a billion dollars in reserves for next year's budget.

Using these techniques, the legislature passed a budget that raised spending 6 percent to almost $90 billion, while raising state taxes and fees only 3 percent.

New York state was one of the few states in the country not to take drastic action to cut spending because of declining revenues.

Since the entire state government is up for re-election this year, no one wanted to make any cuts. They just took the money from anywhere they could get it.

They kept the financing for college scholarships by using federal welfare money, and moved more than half-a-billion dollars in dedicated monies from environment and health care purposes and the state mortgage agency to general funds.

Of course, the legislature kept $200 million in the budget to be allocated $85 million per each house and $30 million by the governor for "member items," essentially individual handouts to favored constituencies.

For almost two decades, the legislature has missed its April 1 deadline, but to be less than seven weeks late, and to pass the budget in daylight, were achievements in the legislator's eyes, if not in those of its usual critics.

Everyone thinks that huge cuts and tax increases will come next year, which is not an election year for anyone in state politics but for the New York City Council, the bottom of the pecking order in New York politics.

Just because most analysts think that next year will be a fiscal train wreck, doesn't mean that they're right. It's always possible, if not very likely, that the economy, and therefore state revenues, will bound up next year.

In any event, that's the unsurprising bet taken by the Albany politicians: it's the same bet they take every year. It was Louis XV who said "apres moi, le deluge," (after me, disaster) but it could just as well have been the slogan of Albany's budget-makers.

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