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Inaction on state deficit amplifies previous failures
November 10, 2009

Today, the New York State Legislature entered into special session (and then recessed after a Veterans Day tribute) to deal with the state's budget deficit now reported to be $4.1 billion. Yesterday, Governor Paterson passionately urged a joint session of the Senate and Assembly to take action on his deficit reduction proposal, released last month.

The Partnership and the rest of the Unshackle Upstate coalition continue to believe that, while the specifics of the governor's proposal should be improved, his approach to dealing with the growing budget - addressing it with a reduction in state spending and not with more new and increased taxes, fees and assessments - is absolutely right on! In a letter to the WNY state delegation last week, we urged our representatives to follow his lead.

Much of the reported reaction from the state legislature - particularly from the Democrat Senate Majority - has been negative toward the governor's proposal. Moreover, many Albany special interest groups are asserting that state revenues will catch up with state spending, and a Wall Street rebound in the coming months will "right the ship" - a forecast which no objective person, from economic expert to average citizen, believes has any validity. So, this budget deficit, which is projected for the next five years to grow to $30 billion or more if Albany continues to spend unchecked, must be addressed now!

The Partnership and Unshackle Upstate continue to propose a package of $9 billion of short- and long-term spending reductions. These cuts hit the rising costs of Medicaid, education and state personnel - and do so in a smart way. They are not heavy-handed, do not rely on one-shot revenue enhancers or on shifting of funds, as the governor's proposal does - instead, they entail tangible reforms of state programs whose costs are spiraling out of control. If you haven't done so already, I urge you to send a message to the state legislature TODAY in support of these budget cuts - so far, over 48,000 such messages have been sent by the Upstate employer community.

Also in the mix for the special session is a push by organized labor toward passage of so-called IDA "reform" legislation. As a refresher, unions, for the past several years, have been pushing the inclusion of wage mandates and apprenticeship programs on any projects in New York that receive IDA incentives. Research has shown, however, that while IDA incentives can help an employer save 10-15% of its cost on development, the wage mandates, etc. increase the cost by 28%, making the incentives useless, and actually a disincentive to new business investments, which are so precious in Upstate. Special interests' focus is on the Upstate Senate Democrats, so I encourage you to remind them of the importance of the unencumbered IDA incentives to economic development in the Buffalo Niagara region: Call Senator Bill Stachowski - 826.3344; and Senator Antoine Thompson - 854.8705.

This is another important week in Albany for New York State taxpayers. So far, the state legislature has been unable and unwilling to make tough decisions to curb the spiraling cost of state government. There is no more time for wavering - and this week's actions will surely be remembered on Election Day, 2010.

Andrew J. Rudnick