July 24, 2006

State budget summary

I think the New York Times offered the best summary I've seen yet of the state of New York's budget:

this year the biggest surprise turns out [to be] the total cost of the big final hairball of interconnected supplemental budget laws sometimes called the “clean-up’’ bills. “Clean out? might be a better term.

...the state will spend over $114.7 billion, including federal funds, in the current fiscal year. That is an increase of $10.1 billion over last year’s spending. And the increase in state funds alone is about 13 percent, a full four times the inflation rate.

Admittedly, times are good. And the state suddenly has - make that had - a $2 billion surplus. But New York’s politicians spent the surplus and then some because nobody seems to have thought that this Wall Street boomlet might be temporary. Or that the price of oil might hit three digits.

...Mr. Hevesi’s post-session report raises so many red flags, it looks like a Beijing ballet. Spending, up 30 percent, is growing faster than revenues, which are up 15 percent. This is never a good way to plan for the future because it means more borrowing: the state’s debt is up by $16.5 billion this year. Some debt, of course, is good — a chunk of this new borrowing is for necessary projects like New York City schools. But at this rate the state’s debt could increase to nearly $65 billion, or more than a third of the projected state budget, in five years. This should sound the alarm, but so far it appears that somebody in Albany left it on mute.

I'm not sure how best to sound that alarm. People seem to hear it dimly, grumbling about Albany, but there's not been nearly as much action as I'd like to see toward changing things.

Posted by simon at July 24, 2006 12:05 PM in
Note on photos

1 Comments

Mary Ann said:

Well, the Times has it almost right. But I take issue with the idea that using the surplus for operating expenses "is like using a one-time bonus to cover the first few payments for a flashy new car." It's more like using all your savings to pay your electricity bill.