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Need to Know: New York State's Fiscal Crisis (8/01/08)

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Peter Iglinski:Thanks for joining us. I'm Peter Iglinski. New York's Budget Director says the State is officially in a recession. That assessment follows the Governor's statewide address Tuesday telling New Yorkers the deficit has grown more than one billion dollars to $6.5 billion. The next day the Governor projected the deficit could balloon to $26 billion in three years. He's calling on the State Legislature to go back into session later this month to work out some solutions. How manageable is the crisis? What can we expect in terms of a response? To get some answers, I now welcome State Senator Joe Robach and Assemblyman Joe Morelle. Thanks for being with us today. Both: Good to be here, Peter. Iglinski: How bad are things, Senator Robach? Robach: You know, we're learning about this as we go along, but I think we should let the public know and this really just is accurate, our budget, unlike the Federal government, has to be balanced. We can't print money, which I believe is a good thing and makes us more fiscally responsible. So first, I want to let people know, this goes on all the time. We are adjusting budgets, we are looking at them, this is what we do. A big portion of what we do is the resources to run programs from education, health care, economic development, roads, bridges, it's what we do. And I applaud the Governor for being upfront, and in many years, we don't let the public know where we are at financially making it a little bit more transparent, open. Now we have to look at those numbers find out if they are accurate and then I think we have to work in a very bi-partisan way to address this. We all have some ideas of what we can do to do this. You know, we always hope that it's on the lower side not on the higher side of the deficit.Or as they say all the time, it's always much easier to make a budget when you have a surplus rather than a deficit. So it'll be challenging, but it's what we've done. We've done it in the past; we'll do it now. The question now, I believe is, how big is the scope? Iglinski: Assemblyman, did the Governor do the right thing? He certainly got our attention Tuesday. Did he do the right thing interrupting basically some programming and going right to New Yorkers? Morelle: Oh, I think it is not only an effective tool that he used going and using the media to be able to convey the challenges but it's a pretty courageous one, in the middle of the year, to say, look, we have serious challenges. I think Joe is right. We're always adjusting budgets so that's something because we could never know what the future will bring. The concern I have is not so much the State's fiscal problems which we'll resolve by either cutting costs or trading efficiencies and looking at other means to balance the budget, but the underlying economic challenges that the State face is in my mind, the greatest long term threat. We rely significantly on the financial sector in this State. We're the financial capital of the world. Obviously what's going on in the markets globally has enormous impact on us. The housing crisis is having an impact on us. So, from my perspective, what we really need to keep our eye on, is what the long term economic challenges are that face the State, and how does that affect our region. And obviously, as a state, when you get to the fiscal issues how we balance our budgets, we've relied on an awful lot of revenues out of New York City. For the most part, metropolitan New York, they have enjoyed a boom, primarily again in the financial markets for the last ten to fifteen years and it's tended to mask some of the economic challenges that we have. But, I think that's the real challenge that we face. All speak at once. Robach: I'm sorry. If I could just interject, because I think this is important in this dialogue, I really think, you know, what Senator Morelle said, is right. We should be applauding the Governor at this point in the game. I think, had this occurred a year ago, the likelihood would have been to try to sweep it under the rug and not let the public know. I'm hoping that as we go through this, which might be challenging we'll even have some scenarios laid out that we can come back to Rochester, have forums, have dialogue...this should be a decision.... and we should include as many people as we can and is possible without the Governor starting the way he did. That would have virtually been impossible. So challenging, but I think we're doing it the right way, and I give the Governor kudos for starting the ball off in the right direction. Iglinski: What's on the table? What's not on the table? Assemblyman? Morelle: Well, my guess is everything is on the table to some extent. Part of that challenge that we would have as legislators is that we're not administrators. We're not in the executive branch, so I'm not sure what's been spent so far. So that'll be important. Obviously the budget we passed on April 1st indicates what we believe the priorities are. I think the things that we will be less likely to do are school aid cuts, and cuts to programs for frail elderly, disabled, I mean the most vulnerable population in the State. I mean, those are the things that would happen last. Everything else we'll look at. And some things we may be able to adjust the budget by delaying payments or spreading out a program over time. So slowing it down, that may be one way of addressing it. We may look at, as the Governor indicated, a downsized workforce; that may be something we look at. I think everything is on the table, but I think Joe and I and our colleagues would be very reluctant to do anything that damages our investment in the future which is education or do anything that damages programs that are really essential for, as I said, disabled and frail elderly people. Iglinski: Which did happen in the early 90's: mid-year school aid cuts. Morelle: That's right. Robach: Everybody knows that very difficult to manage is not the direction we want to go in. I would almost say it this way. We don't know exactly, we have some idea how big it is. But you know, some times too, I say this: From challenge can come a little opportunity. Now. I and Senator Maziarz have been going around... You know, I think I'll abolish some of these overhead and administrative things especially in some of these authorities. Not the people that do the work, but like, to me, folding the Thruway Authority into the Department of Transportation? Great way to save money. Liquor Authority. Let's make that part of Economic Development. Instead of spending all this money and resources on saying you're guilty until you're proven innocent, How about we give you a license unless you are a convicted felon. If you have two violations, you lose your license. I think there's a lot of things we've tried to do well, but the bureaucracies have gotten big. We may be able to save a big chunk of money in that way and avoid some of the things that are more vital services or things that New Yorkers have come to like and I'd say need. Morelle: The thing that I would add is that the challenge for us, again, is if we can't create a stable fiscal picture for the State, people will not invest private capital, people won't create jobs in New York State, so the barriers particularly which is most acute in Upstate New York, are going to be the State has to get it's fiscal house in order or else people won't invest and we've obviously had significant challenges in barriers already in the way of people who would want to invest and create jobs. This will add to it. So we have to deal with this. Iglinski:Can we expect structural changes versus gimmicks? Morelle: Yeah, I don't think we can get through this long term with gimmicks. I think what Joe is saying, what I would say, is that we have to look at the structure of government. We have to look at a lot of the programs which are well-intended, well-meaning and probably in some cases, effective, but not the greatest priorities. We're going to have to realize that we have limits to our expectations in what we can do as government and we're going to have to peel back some of those expectations. When we're able to get to a point again where the economy is growing in New York where those revenues growth in terms of personal income tax, corporate income tax, the sales taxes are as a result of growth in terms of the economy, and not just simply increase in prices then that's when we'll start to really get some traction on a return to prosperity. Iglinski: This is an election year. Your chamber, especially, is under a lot of scruitiny, a very small margin. Do lawmakers this year have the political will to make the tough decisions? Robach: I think, always doing your job, engaging the public, letting them know what you're doing letting them know you're trying to listen to them, implement and work with them, I think isn't only what we're supposed to do; I've always lived by that's the best politics: do a good job, be sincere, that's the best campaign platform. I don't know, it's worked for us; it's worked for me. I don't think it will be any different. So, being responsive to the public, being responsive to your job, and taking it seriously can be helpful. I think the public understands, too, a little bit, where we're at, what's going on. We hear it from them whether it's them dealing with escalating gas prices, food prices, adjustable rate mortgages, they know, what you hear more and more is, we want government to be a little bit more responsive to some of the things we do. I think every attempt will be made to meet that goal, in a way, and I would say this not more so Democrat or Republican, I believe a little more parochially, with policies and programs that affect Rochester and Upstate New York. sure I'm going to try to protect those. That doesn't mean we don't have the will, I think that's what I'm supposed to do, and we'll do that. We'll get through this. You know, post September 11th, we had a struggle, we got through it. We'll do this. Iglinski: You know the reports, the Bryant reports, dysfunctional State government this year we got two of the big three leaders in New York State have changed: new majority leader in your chamber, a new governor. So what can we expect? Seems like the dynamics have changed so much, people aren't sure what we can expect in Albany. Morelle: Well, you know, one of the interesting things is, if you really want change, then there's going to be new faces, there's going to be new approaches. and, I think, again I agree with Joe that I think the Governor set the tone for this. This is a pretty extraordinary thing to say in the middle of a fiscal year, to start alerting people early on, to call the Legislature back into special session I mean those are things where I think he is trying to be forthright, I think he's trying to have a frank discussion, and obviously, I think, to our public, to our constituents, to the broader residents of the State, We obviously look around and see the economy, nationally, is in real trouble; we see the sub prime lending crisis, how that's affected not only housing prices but everything; we see the impact of gasoline prices. So, I think the public understands, look there are difficult times. I think the Governor has made a real adjustment and frankly, this is good. This adds transparency. I think those of us particularly in Upstate, who seem to be under a little bit more of a microscope I think, than some of our Downstate colleagues are used to this. But that's good. We want to be able to make decisions, where, while people may disagree with us, about the decisions, ultimately, they'll know, at least, the choices that we had in front of us They'll know the decisions we made; they'll know why we believed, we prioritized things in the way that we did. And I think that's more honest and I think people will respect it, even if they ultimately don't agree with absolutely every choice that we make. Robach: And I would add, too, you know, Peter, you always want to get better and people are entitled to their opinion, many of them I agree with sometimes but you know, change is good, but you want to make sure it's change in the right direction. I always say "Change to what?" So over the course of the time, my relatively short time in the Senate, is six years, you know, working collaboratively, we've made a lot of positive changes. on the amount of resources we've gotten from the State, to Rochester working together. Or the City of Rochester would be in a fiscal dire crisis without the extra $52 million over three years in direct aid. We changed how we do the budget: conference committees, more open, transparent. So many things that have changed. Those are some that I think are good. Some people may think some of the changes we made might not be good. You know, we've done record amounts of aid to K-12 education. Most people seem to like it and understand that it can help offset property tax and quality program. But at the same time someone will like more accountability. That's all changed to some degree. You know that beauty's in the eyes of the beholder; this is no different. We're going to address this, if you want to call it a change, people are going to have a time to chime in and see what the result of it is. But that's really what government does on a daily basis. Iglinski: There is certainly less fighting between the Legislature and the Governor's office you know, as of last May and March,,,, Robach: That's an understatement! Iglinski: That's right. The Governor is asking for $600 million in cuts and your, the new majority leader in your chamber, Dean Skellos, is kind of balking at that saying that we can handle it through efficiencies. That's a lot of efficiency. Robach: Right.We have to be real, we have to share this with the public. I think we have to be non-partisan. But people are entitled to their opinion. A lot of people don't realize this, and even being involved in government for a long time, I have to say it over and over again our budget is $122 billion. with a B, not an M. Sometimes I forget that, bigger than most countries, so there's a lot of things in there, as my colleague Joe said. There's a lot of programming, there's a lot of different things there is a lot of government. First I think people would like to see, if there's a way to do this without doing anything that's going to be too upsetting to deliver vital services. And then there are certain things that I think we are going to agree on that we think are so important, as investments to bring money back to localities and to invest in our future, ie. education, even some capital projects that create career opportunities. Those are things I think people will have different opinions on what's most important to protect, but that will probably all be done in a very public forum. Iglinski: Speaking of capital..... oh, go ahead..... Morelle: Well, I just want to add, people should remember, a $1.2 billion cut, which is what the Governor's talking about. He suggested $600 million, he's going to take out of agencies and has essentially asked us to make $600 million in additional corrections. But that's not out of $122 billion, although Joe's right, that's our budget, we're already through about half of the fiscal year, by the time we get back to Albany, by the time we go through this, so this is really a pretty significant amount of money. I'm not sure we can do it without amending, changing or simply outright stopping some programs but I think we'll wait to hear more from the Governor because their agencies will be able to tell him and then to tell us what's already been spent, what's on the list of things that are going to be spent where projects are underway, which are not. So, you know, we don't spend, out of the $122 billion, the same amount every single day. So it's, you know, we'll have to get more detail on what money is out the door and what things we haven't already contracted for. But it's going to be significant and I think the bigger issue though, Peter, is $6 billion dollars next year which is what the Governor is talking about is about a 5% reduction overall, in what we call "all funds spending." Now that includes Federal money; that includes the money that we raise as a State through various taxes and that is significant. If you had a $60,000 household income, that means about $3,000 in expense cuts for you, which is not insignificant. Iglinski: Can I ask you.....30 seconds....maybe asking a lot but of the Upstate Revitalization Fund, a lot of rejoicing when that was approved, How secure is that? Morelle: I think it's secure; I think that the Governor understands that's investment. Again, it may be slower in coming in terms of how fast money goes out the door. And there may be ways to be able to help fiscally slowing it down, but I don't think there is any question that that money, as a whole, is going to stay in place. Robach: I would concur, absolutely. Iglinski: And Midtown Plaza, prepping the site for PaeTec. Morelle: We'll continue to fight for that; I don't believe there is any risk. Iglinski: Senator Robach, Assemblyman Morrelle, thank you for being with us today. Robach and Morelle: Thank you.Thank you Peter. Iglinski: You can go online to listen to this interview and other "Need to Know" segments. Type in and click on the link for audio podcasts.

Video Details

Duration: 15 minutes and 50 seconds
Country: United States
Language: English
Genre: None
Producer: P Iglinski
Director: K Nestle
Views: 107
Posted by: jphilipp on Sep 3, 2008

New York State lawmakers, Senator Joe Robach (R) and Assemblyman Joe Morelle (D), discuss the state's fiscal crisis.

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