M.T.A. Budget Woes Go From Bad To Worse

The Senate Democrats are finally starting a conversation bill to address the M.T.A.'s massive budget deficit. They might want to add today's news from the transit authority to that talk, as things are even worse than what they seemed to be only a few weeks ago when the doomsday budget was voted on. We aren't just talking a little worse, this is on the scale of hundreds of millions of dollars.

From The NY Times:

Plummeting revenues from ridership, tolls and taxes mean that even after it raises fares by up to 30 percent and slashes service, the Metropolitan Transportation Authority faces a $621 million deficit this year, officials reported on Monday, as they presented a revised budget forecast. According to the new forecast, next year’s deficit will be more than $1 billion.

The authority’s financial outlook has become worse as the regional economy sinks deeper into an economic slump.

The authority has been hoping that the Legislature in Albany would pass a rescue package to help it balance the books this year and next year and provide long-term funding for its crucial capital program, which pays for the purchase of new buses and train cars and critical maintenance and modernization of the transit system.

The economy is putting the hurt on the M.T.A. in so many ways. Less riders and less real estate taxes, coupled with years of being debt-riddled by the legislature is making the situation extremely painful. As long as the state senate remains gridlocked by a few obnoxious and egotistical Conservadems within their ranks, the problems that confront straphangers will continue to mount. What the city needs is a comprehensive plan that funds the M.T.A.'s projects (with good oversight), keeps service going and trims the massive amount of debt that has been lying around. Without a solid plan, New Yorkers will be met with another fare increase, whether it be to $3.00 or more by the same time next year.

How Albany Pulled The Revised FY 2009 Budget

There are only a few months left in the fiscal year of 2009 and only a couple before Albany must come up with a budget for FY 2010. Yesterday, they took care of the shortfalls of this year, without addressing the concerns for the next. With our state government as dysfunctional as it is, how did they manage to keep the machine humming til October?

From The NY Times:

The agreement employs a grab bag of more than dozen spending cuts, tax increases, and accounting devices, along with the government equivalent of piggy-bank raids, like $306 million taken from the accounts of the New York Power Authority, a public utility that is theoretically independent from the executive branch. But a much larger deficit still looms in next year’s budget.

In the agreement reached on Tuesday, tuition will rise for students at the State University of New York, adding $62 million to state coffers; $50 million dollars will be cut from the state’s Environmental Protection Fund; Mr. Paterson will squeeze $135 million more out of the state agencies he leads by scrutinizing contracts and capital spending; the state will also delay by several months a tax rebate to New York City, taking advantage of the different city and state fiscal years.

The plan was basically like putting a band-aid on a gaping wound. It works for a few months, but does not address the concerns of next year at all. As the Times points out, reform groups are unhappy, the Governor is certainly displeased and it all has to be reexamined by April. What they really need is a plan that works, but until then it will be all about squabbling, such as that highlighted between Skelos and Smith at the end of the article.

Balancing New York's Budgets, With Or Without The Governor

While Governor Paterson is busy spewing rightwing BS, the State Legislature is getting ready to deal with the budget gap for the current fiscal year. The bad news for this year isn't even close to budget deficit this year so there isn't as much radical change needed, but that does not mean Paterson will not protest what the Legislature is up to this week.

From PressConnects:

Democratic lawmakers in the Assembly and Senate majorities indicated such cuts are unlikely and they will look instead to a variety of one-shot budget measures, such as money saved through hiring freezes or sweeping unspent money from state agencies.

Lawmakers said major cuts are unlikely because the state is in line for billions of dollars from the federal stimulus package. They could vote on closing the current year's budget gap as soon as today.

Gov. David Paterson has warned lawmakers to not rely on the federal aid to bail out the state from its current or an estimated $13.7 billion gap in the 2009-10 fiscal year, which starts April 1.

As much as the Governor wants to slash and burn programs throughout the budget, the Assembly and Senate refuse to do so, at least for right now. What they need to do is this, and listen to the experts, not David Paterson.

The Governor is clearly and quickly losing a lot of political capital and sadly, it is all his doing. He tried to take on too many different interests all at once without any sacrifice from the upper echelons of society and as a result, everyone else got together to pile on and attack his proposed budget cuts. Coupled with a lack of discipline and coherent strategy to stay on message, his relevancy in this process is fading fast.

Promising Signs For Shared Sacrifice In Albany

Despite the Governor's persistent denials of going the route of increased taxes on the wealthy, the chances of it happening are continuing to increase. No one knows for sure how much of a grip that the interests of the wealthy have on Paterson, but the Assembly and the Senate have other ideas. Hopefully, the talk of raising taxes on the most fortunate among us will be more than just words.

From The NY Times:

The Assembly, where Democrats have an overwhelming majority, has long supported increasing taxes on the wealthy, and Sheldon Silver, the Assembly speaker, reiterated this month that there continued to be strong backing for the measure among his colleagues.

Gov. David A. Paterson, a Democrat, did not propose any income tax increases in his budget proposal, but acknowledged in last month that “taxing the wealthy is probably going to be part of the solution if the deficit gets any worse, and all indications are that it probably will.”

That could leave the matter in the hands of the Senate, where Democrats won a narrow majority in November. Senator Eric T. Schneiderman, a Manhattan Democrat, said that he planned to introduce a bill in the coming weeks that would increase taxes on the rich, and that he expected his colleagues to have an active debate about the issue.

“There are a lot of us who feel that for the last 30 years we’ve been shifting the tax burden from the wealthy to middle-class families,” Mr. Schneiderman said on Tuesday. “Our conference is operating through consultation and discussion, and I expect we’ll be talking about restoring some additional tax brackets for upper-income New Yorkers as well as a lot of other options.”

A long time ago (meaning the 1940s) the richest people were taxed up to 94% of their earnings and yet continued to prosper just fine. They were not competing for a title in Forbes Magazine, but family wealth has always been shielded very well, even with the Estate tax in place. Of course there was that WWII going on and everyone really did give all of what they had to keep the country fighting and to keep it together.

We may not be in the middle of a World War at the moment, but the crisis we face is still daunting. It requires us to come together and adding a few percent to the tax rates at the top isn't going to hurt as much as the rich scream about the thought of it. Besides, we aren't talking about 94% taxation rates either.

Non Profits Fight Back Against Paterson's Budget Axe

When the New York legislature comes into session next week, Governor Paterson is ready to cut, cut, cut without any tax increases. In fact, the most money being chopped is from where it hurts the middle class and the working poor the most, specifically from education and health care programs. Education is what gives our children a chance and health care is what helps to keep us healthy without having to go completely broke or extremely in debt to get it. Well our city and state's best advocates have gotten together and are telling the Governor there is a better way.

From The PolitickerNY:

ALBANY—A coalition of social service groups attacked David Paterson's latest round of proposed budget cuts, and offered their own three-point plan for closing the enormous deficit.

The coalition—which claims to represent 200 nonprofit and faith-based service-providing groups around the state—said just reducing spending will "devastate" New York's future.

The group's plan first calls for instituting the so-called "millionaire's tax," which would raise taxes on the highest income earner (it's also the object of much spirited debate). Second, they would lobby hard for federal assistance, which Paterson has already done, though it's far from a sure thing. Third, they are asking Paterson to dip into the Tax Stabilization Reserve Fund—a pot of just over $1 billion that is set aside for unplanned expenditures. (Paterson said previously that opening the fund would be "a drop in the bucket" and that the root of the problem lay in excessive spending.)

"For too long, we've allowed the wealthiest New Yorkers to not pay their fair share," said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, pointing to Paterson's rejection of broad tax increases to generate more revenue.

A drop in the bucket is what Wall Street thinks of a billion dollars, but to the very least amongst us, saving programs that keep kids out of trouble and the disabled is akin to a flood of money. Especially in bad times, people hardly have enough to keep their families together and we need to take care of them first, not those that are worried about selling their pied-a-terre or docking rights at the yacht club. Not only should they be subjected to a millionaire's tax, but it should be the goal of the Democratic majority to pass a more progressive income tax so that everyone pays their fair share in good times and bad.

If Ballooning Debt Were A Good Thing, Bush Would Be A Great President

Of course rising national deficits and skyrocketing national/personal debt is a terrible thing for all of us, and is one of the many reasons that George Bush is a horrific President. He had claimed recently that his plans of reducing taxes on the rich and giving less to the poor was working. Too bad for him, the facts get in the way of that ridiculous assertion.

From RawStory:

President George W. Bush is leaving taxpayers with more than just a spate of scandals, tax cuts and warrantless wiretapping. He's also leaving the American people with a massive $438 billion deficit next year -- some 8 percent worse than this year, at $407 billion.

The $438 billion deficit next year does not include any accounting for Fannie Mae of Freddie Mac, the mortgage giants the US just took into receivership, and whose loans US taxpayers are now responsible for.[...]

President Bill Clinton left office with a federal budget surplus of $127 billion in 2001. That surplus was $200 billion in 2000.

What a difference eight years makes. I can't even imagine how much worse it would look if McCain got to take over for another four or (gasp!) eight. As the article notes, no matter who is President next year, there is no way that they can get around the massive deficits and piling debt that George Bush has given the United States during his term. The difference between McCain and Obama is that the former will keep piling on and the latter will work to reduce it.