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The Empire

Minority legislative caucus: NY has a revenue problem, not a spending problem

The calls for austerity and sacrifice have been woven into politicians' speeches on budgets for the past five years. The Black, Puerto Rican, Hispanic & Asian Legislative Caucus, in its "People's Budget" released today, pushes back on some of the arguments--and actions--made by those in favor of a cutting-and-gutting, budget-crisis approach.

The Caucuses' analysis notes that "New York’s move to austerity budgeting in its 2010-11 budget
and even more so in 2011-12 budget appears to be having a negative impact on New York’s
relative performance in terms of private sector employment."

They point to the state slipping from 4th overall in national job growth to 25th in the last year.

Additionally, the analysis argues that the state doesn't have a spending problem as much as a revenue problem. Over the past 20 years, the report says, the state has given large tax cuts, while at the same time taken on "important new spending commitments" in the form of property tax exemptions, Medicaid programs and cost growth, and new court-ordered school spending.

"By adding these important new commitments to the state budget without adding revenue to pay for them, the state was on course to face large projected budget gaps unless the revenue produced by the existing tax system were to grow fast enough to cover both the ordinary growth in the cost of existing programs and the cost of these new commitments," the report says. "Not only did revenues not grow fast enough to accomplish that feat but the meltdown of the finance sector and the subsequent Great Recession resulted in actual year to year reductions in state revenues."

While the budget analysis doesn't go so far as to suggest a different approach to closing the current budget gap of $1.1 billion, it does focus in on education as the area of greatest concern. In particular, the Campaign for Fiscal Equity, which won a court case against the state for underfunding minority school districts in 2006, has been hurt by recent budget cuts, the report found.

"[I]n 2012 there is an opportunity for restoring some of these classroom cuts. The Executive Budget will restore $805 million in school aid; however, this amount of money does not begin to put our schools back on track to restore the quality programs that our students lost in the past two years," it says, calling for the Governor to fund the state's obligation before any general funding formula gets enacted.
The People's Budget