Is it possible that Albany lawmakers could resolve the state’s budget crisis without massive tax hikes, without meat-ax spending cuts and without fiscal gimmickry that would dig New York deeper into the hole?
A thought-provoking report from a fiscally conservative think tank says yes, they can – and spells out exactly how in hard dollars and cents. It should be required reading for Gov. Paterson and all 212 members of the Legislature.
Far from engaging in a right-wing anti-government diatribe, authors E.J. McMahon and Josh Barro of the Manhattan Institute’s Empire Center for Public Policy provide a long menu of creative solutions to save big bucks for taxpayers while keeping the subways running, the schools open and the streets safe.
The pols could do a lot worse than following this blueprint to the letter.
And they almost certainly will do a whole lot worse.
The biggest of McMahon and Barro’s big ideas: freezing the wages of government workers across the board. That single, dramatic step – last taken during the fiscal crisis of the mid-1970s – would save the state, local governments and school districts $1.6 billion in the first year alone.
That’s $1.6 billion worth of tax hikes that don’t have to happen. That’s $1.6 billion worth of teachers and snowplow drivers who could keep their jobs.
Public employee unions will no doubt go ballistic at the very idea of suspending their contracts. But asking their members to make do with their current salaries is hardly Draconian, given that lots of private-sector workers are living with stagnant or plunging wages – if they have jobs at all.
Labor lobbyists who oppose the freeze should be asked point-blank which alternative they prefer: Raising taxes on other working New Yorkers who are scraping by on less, or pink-slipping thousands of civil servants?
The same sound logic supports other proposals from the Empire Center, such as asking state employees to put in a 40-hour week instead of 37.5 and upping what they contribute for health coverage. Even with these givebacks, their benefit packages would make most private-sector workers drool with envy.
But public employees aren’t the only ones who would be expected to sacrifice. As McMahon and Barro see it, we’d all have to learn to live with a little less largess from Albany.
It’s about time. New York’s state government is one of the most bloated in the country, burning through 33% more tax dollars per capita than the national average – on top of heavy local outlays.
Albany spends 73% more per capita on Medicaid health coverage for the poor and disabled, 65% more on public schools and almost double the national average on mental health and the courts.
All are full of fat that could be cut without unduly harming services.
In Medicaid, for example, the state could save $860 million just by paying hospitals and nursing homes rates that are closer to national norms. It could save an additional $454 million by cracking down on well-to-do people who give away assets to their family members so they appear to be poor when they check into a nursing home.
Some of the proposals are absolute no-brainers, such as downsizing prisons to match the rapidly shrinking number of inmates. That safe streets dividend would ultimately save $300 million a year.
The Legislature could save taxpayers $110 million by cutting its own budget in half – and would still wind up spending more on itself than the national average.
It could chop an additional $120 million by eliminating the discretionary pork-barrel grants that individual members hand out in their districts. It’s obscene that pols would even think of continuing with this naked vote-buying in hard times.
Many of these ideas are far from new. In fact, the Empire Center forthrightly admits borrowing them from bipartisan commission reports and blue-ribbon studies that have been gathering dust for years.
They were shelved because – you guessed it – nobody in Albany has the guts to face down the special interests when push comes to shove.
But what happens when shove comes to shove the state off the cliff? We’re about to find out. This year’s $6 billion-plus deficit will more than double in 2011, when federal stimulus money is due to dry up.
Paterson and legislative leaders have ruled out raising taxes to close the gap – as they should, given that New Yorkers are already saddled with one of the heaviest burdens in the country.
They have no choice but to cut spending, and deeply. And now they have no excuse. The solutions are staring them right in the face.