Spitzer's Unveils Agenda; N.Y. Gov. Proposes Multiple Changes
BYLINE: Ted Phillips
New York Gov. Eliot Spitzer yesterday in his first state of the state speech laid out an ambitious slate of proposed changes that would affect the budget process, how borrowing authorities operate, and could include a bond issue to fund stem-cell research, while also calling for spending restraint.
"The budget I will submit on Jan. 31 will not raise taxes," said Spitzer, who must close a $2.4 billion budget gap. "Instead, it will significantly reduce our rate of spending growth, which has increased at three times the rate of inflation over the last four years. We must end this culture of spending money we do not have."
To make the budget process more timely, Spitzer said legislators should accelerate consensus revenue forecasting that could allow a third party to set expense numbers when the executive and Legislature can't agree, reduce the 30-day amendment period, and have conference committees meet earlier than they do now. He also called for a requirement for the enacted budget to be balanced, rather than just the executive budget as is now required, and for cost analyses to be required when legislators make changes to the budget.
The governor also offered an olive branch to the Legislature, saying he was willing to talk about the balance of power in the budget, presumably referring to the court ruling between Assembly Speaker Sheldon Silver and former Gov. George Pataki that allowed the governor to put legislation into the budget document.
Spitzer additionally called for reducing the state's more than 700 authorities, which according to the state comptroller's office, account for 93% of the state's borrowing, and compelling the authorities to operate with greater transparency.
"Originally created to be lean, anti-bureaucratic machines, they have become patronage dumping grounds, adding yet another costly bureaucracy, entrenched in the status quo and insulated from accountability," Spitzer said. "We will promptly review each of the authorities and develop a plan to consolidate and eliminate those authorities that have outlived their usefulness. And we will staff our authorities with experts picked for what they know, not whom they know."
Spitzer called for an infusion of capital to create a fund for stem-cell research that would lead to direct commercial applications. In the prepared speech, he said he would take the measure to the voters, which according to Dall Forsythe, a professor at the New York University Wagner Graduate School of Public Service who served as state budget director from 1988 to 1991, implies he would seek approval for a general obligation bond issue. Spitzer dropped that language in the speech he delivered.
As part of a plan for a leaner government, Spitzer said some of the state's 4,200 taxing jurisdictions should be consolidated and will form a commission on local government efficiency to look into it, leaving open the question of what would happen to debt in districts that are reconfigured. The governor repeated his desire to have the Empire State Development Corp. split between an upstate co-chair in Buffalo and a downstate chair in New York City.
Spitzer said the new budget will have a new school aid formula that would dramatically increase education spending at the neediest schools and repeated his call for a $6 billion property tax cut targeted to the middle class, which several observers believe refers to the School Tax Relief program, or STAR .
He outlined a number of initiatives to save money to the state's health care system. This includes closing hospitals, reducing nursing home facilities in favor of home- or community-based care, fighting Medicaid fraud, and using the state's bargaining power with pharmaceutical companies to cut medicine costs.
"It's very ambitious," Forsythe said. "Typically the way budgets change is incrementally, it's on the margin, and to make sweeping changes that reduce spending in some areas to pay for spending in other areas is always controversial. But if 70% of the voters said 'you're our guy' then you've got standing to try to do things like that."
Forsythe said the state's strong economy should give Spitzer some leeway to accomplish his goals.
Despite stating some specific goals, the speech was often thematic and many details won't be available until the budget comes out.
"From a credit perspective, what we're interested in is the budget and authorities reform," said Robert Kurtter, senior vice president for state ratings at Moody's Investor Services. "I think we're all interested in seeing the details behind the budget reform. New York's budget process is extremely cumbersome and hasn't resulted in an on time budget in 20 years. If [the reforms are] successful it should make a real difference in the timeliness and openness, and budgetary balance."
"The state of the state is a goal-setting exercise, and obviously we'll know a lot more when the budget comes out, but he was certainly articulating the right goals," said Diana Fortuna, president of the Citizen's Budget Commission.
"[Former Governor] Mario Cuomo used to like to say the state of the state is poetry and the budget is prose," said Forsythe "You have to wait for the prose before you can do serious analysis."