The politics of budget decision-making

In Columns by Hal PetersonLeave a Comment

Last week Governor Cuomo reviewed with Senate and Assembly member’s key aspects of his Executive Budget for the fiscal year 2014-15. As reported in the press, he is optimistic that state spending should only increase by 1.3%, if federal aid for Hurricane Sandy and the federal health care monies are included; Medicaid and school funding could be increased, and business taxes might be reduced.

The ‘if’s’ rule the day. The governor is convinced he has “turned the state’s fortunes around, and encourages legislators to follow his lead….we are swinging for the fences this year.”

I love the use of this metaphor and suggest that a trip to the ball park is not recommended. Why? You would be witnessing a game, the outcome of which, according to Paul A. Volcker, former Chairman of the Federal Reserve and former Lt. Governor Richard Ravitch, has been rigged to the advantage of the “we” team players.

Did they actually use the word “rigged” in the report? No, that’s my assessment having read the entire page report, recently issued by the State Budget Crisis Task Force they co-chair, “urging state and local governments to end the longstanding practice of using gimmicks and opaque accounting methods that make budgets appear balanced even when fiscal problems are worsening.’

I’m frankly shocked by the irrefutable evidence provided in the report. You should be as well. Just about everything that should not be done has eased itself into the budget preparation process, including, but not necessarily limited to, the “routine transfer of excess revenues from other state funds and public authorities; the refinancing of outstanding bonds without creating new assets, using debt as if it were an element of revenue, delaying payments to suppliers and contractors, localities, and even school districts; and the payment of tax refunds.”

On even a more dramatic scale, monies allocated for specific use ….for example, the Environmental Protection Fund …have been swept into the Operating Fund and, conversely so, monies that are set aside for capital improvements are removed from the fund to pay for motor vehicle operational costs and even snow removal.

These aberrations shatter the myth of a balanced budget process, seriously testing the integrity of those who announce otherwise. The “sleight-of-hand” mentioned makes a mockery of substantive need, intent of law, and more appropriate, Generally Accepted Accounting Principles’. I will try to determine who sanctioned and processed the alterations cited.

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