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In an interesting compare
and contrast scenario, democratic governors from the two largest states have
vastly differing ideas regarding what to do about huge budget gaps. New York
Governor Andrew Cuomo seeks spending cuts on schools and Medicaid, while
California Governor Jerry Brown wants to ram through tax hikes.
The LA Times reports Brown cites unrest
in Egypt to make his case for budget vote
Citing the pro-democracy
unrest in Egypt and Tunisia, Gov. Jerry Brown called it
“unconscionable” that GOP legislators are vowing to block his
attempt to ask voters to extend tax hikes to balance the budget.
“When democratic ideals and calls for the right to vote are stirring
the imagination of young people in Egypt and Tunisia and other parts of the
world, we in California can’t say now is the time to block a vote of
the people,” Brown said in his first State of the State address in
nearly 30 years.
He said the budget has tough choices but that the people “have a right
to vote” on the package. He challenged both parties to take the
difficult votes necessary to balance the budget.
Jerry Brown Is Disingenuous
The moment a vote is put to the people, the teachers' unions, the police and
fire unions, the prison unions, the transit unions, and in fact every union
in the state will bombard taxpayers with promises of Armageddon if tax hikes
are not approved.
Money for those ads will come from taxpayers of course.
Hopefully Republican tell Brown to go to hell, and if not, then hopefully
taxpayers tell the unions to go to hell.
California does not have a revenue problem, it has a spending problem. The way
you fix a spending problem is to cut spending. Until the governor is willing
to do that Republican should hold their ground.
Cuomo’s Budget Cuts Spending on Schools and Medicaid
The New York Times reports Cuomo’s
Budget Cuts Spending on Schools and Medicaid.
Declaring New York State
“functionally bankrupt,” Gov. Andrew M. Cuomo proposed a $132.9
billion budget on Tuesday that would reduce year-to-year spending for the
first time in more than a decade, sharply cut back projected spending on
education and health care, and cut the budget for state agencies by more than
half a billion dollars in the next fiscal year.
In a novel and potentially risky move, Mr. Cuomo’s budget defers
specific Medicaid cuts to the work of a task force he appointed last month
and which includes lawmakers and representatives of labor and health care
interests. The task force’s recommendations are due in one month —
time that may buy Mr. Cuomo protection from the withering attack
advertisements that those same interests typically unleash on governors
seeking Medicaid cuts.
Presenting his budget to lawmakers and other officials at a state theater in
Albany, Mr. Cuomo sounded stern, even angry, about the way past governors and
lawmakers have built inexorable spending growth into future budgets, even as
he urged the Legislature to join him in reigning in government expenditures.
He decried current budgeting practices as a “special interest
protection program” that led to too much spending with too little
accountability for performance, and called for a return to what he described
as “reality-based” budgeting.
“It’s not about the industry of government,” Mr. Cuomo
said. “It’s not about the bureaucracy of programs. Government is
there to serve people.”
like Mr. Paterson, Mr. Cuomo is proposing to eliminate the annual cash
subsidy that New York City receives through a state program, setting up a
battle with Mayor Michael R. Bloomberg.
Offering a further glimpse of how he will seek to negotiate with the
Legislature and outmaneuver unions and other special interests that dominate
the budget process in Albany, Mr. Cuomo will seek agreement with lawmakers to
reduce spending on adult and juvenile prisons.
But his proposal would defer decisions on which of the state’s dozens
of adult prison facilities to close to a task force of lawmakers and state
prison officials. Should the task force fail to agree on prison closings,
under Mr. Cuomo’s proposal, the commissioner of the corrections
department would be empowered to make the decisions unilaterally.
Similarly, the budget proposal would empower the executive branch to
unilaterally make any Medicaid cuts that Mr. Cuomo’s task force is
unable to agree on its own.
Mr. Cuomo is seeking to reduce the budget for state operations, among the
larger pots of spending, by 10 percent, one of the steepest proportional
reductions to any area of the budget. About $100 million in savings would be
sought through agency mergers, but the bulk of the amount, $450 million, is
intended to come through what Mr. Cuomo’s budget proposal terms a
“Labor Management Partnership.”
Mr. Cuomo’s budget also offers a more expansive glimpse of his plans to
redesign New York’s sprawling state bureaucracy, with plans to merge 11
existing agencies or authorities into just four entities. Mr. Cuomo will seek
to consolidate the department of corrections, one of New York’s largest
agencies, with the state division of parole, and to move several agencies
that handle programs for domestic violence and crime victims into the state
division of criminal justice services.
Mr. Cuomo also proposes to reduce projected spending on the State University
of New York, the City University of New York and their community colleges by
about 10 percent, which would save more than $200 million. The budget saves
another $135 million by eliminating subsidies for SUNY’s teaching
hospitals at Brooklyn, Stony Brook and Syracuse.
Band-Aid
Approach
I applaud all of those moves, but most are nothing but Band-Aids. Cuomo needs
to get at the root of the problem. To do that he needs to end collective
bargaining of public unions, make New York a right to work state, kill
prevailing wage laws, and make sure all new state employees do not get
defined benefit plans, and go to merit pay for teachers.
Those moves would not only help the state, but would ease the pain of cuts on
New York City. Moreover, if he did all that, I bet Republicans would agree to
some tax hikes. The same applies to California Governor Brown.
Governor Cuomo is better than expected (but still off the mark). Meanwhile,
Governor Moonbeam remains in outer space in regards to addressing
California's problems.
Mish
GlobalEconomicAnalysis.blogspot.com
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