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By Jerry Kremer
Lt. Governor Richard Ravitch, looking to inject some sanity into the legislative process has crafted a series of proposals to straighten out the state's ugly budget mess. Ravitch has succeeded in the past as Chair of the Metropolitan Transportation Authority where he did an admirable job cleaning up the MTA ugliness.
Among the current Ravitch proposals are the creation of a five year financial plan, adopting a budget according to GAAP principles, creation of an Independent Financial Review Board and giving the governor the power to enact spending reductions if a budget is not in balance.
If the legislature does all of those things he then recommends that the legislature be able to borrow up to $2 billion over three years to get out of the mess. That's a sensible solution to a serious problem because it imposes discipline on all of the members of the legislature for a long period of time.
There are rumors that the legislature is seriously considering borrowing the $2 billion but not agreeing to the rest of the package. That's a recipe for disaster and it should be avoided at all costs. Back in the 1970's the City of New York was caught using bond funds for day-to-day operating costs. Once their practices saw the light of day it took an act of Congress to stop the chicanery.
New York State has to get out of its current crises with some tough measures, but if its elected officials don't swallow the bitter pill of financial restraint, then there will be disasters yet to come.
Note: Jerry Kremer is the Former Chairman of the NYS Assembly Ways & Means Committee and President of Empire Government Strategies
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New York State should not issue more debt UNTIL it demonstrates that it can reduce its expenditures.
ReplyDeleteOne of the key reforms that is necessary to bring New York State into solvency is to change the law making state union pensions "untouchable" and a higher priority to secured debt obligations of the state.
Furthermore, New York State needs to consolidate its layers of jurisdictions, starting with abolishing villages and towns...and consolidate school districts into county districts with school vouchers and parental choice.
Reducing the size of state Government and making the K-12 education system more efficient and effective is crucial to solving New York's economic crisis.
"A crisis is a terrible thing to waste."