My op-ed in today’s New York Post gives Governor Paterson credit for his continuing “straight talk” on budget issues.   As for the gritty details, on the other hand:

Unfortunately, for all the doomsday headlines and special-interest caterwauling that will greet his latest emergency budget-reduction plan, the governor’s proposals don’t go nearly far enough or fast enough in some areas.

In seeking to reopen labor contracts with state employee unions, Paterson has reached out and touched one of the capital’s hottest third rails. Too bad he’s doing it so gingerly – asking the unions to consider a pay freeze, a modest reform in health insurance for future retirees and a gimmicky paycheck “lag” that will yield only one-time savings.

The governor needs to do a better job of framing the workforce issue as a choice between the contractual status quo and massive layoffs. Avoiding disruptive cutbacks will require significant reform of work rules (for example, a shift from a 37.5-hour to a 40-hour week); greater flexibility for agencies in hiring, firing and promotion, and larger employee contributions to retiree-health benefits than the governor has been willing to suggest up to this point.

In asking school districts to cope with less than they anticipated – on average, a 5 percent, rather 9 percent, aid hike – Paterson still isn’t offering the kind of mandate relief districts are justified in demanding.

His proposed Medicaid savings would be achieved mainly through blunt cuts in reimbursement rates and – worse – counterproductive cost-shifting to the private sector. He’s generally not attacking the structural factors behind the high cost of Medicaid or of health care in general in New York.

All these issues (and more) must be tackled much more effectively in the governor’s 2009-10 budget, due for presentation in mid-December.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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