Governor David Paterson announced this week he is going after both of the Big Untouchable Issues in Albany: School funding and Medicaid. He’s also broaching the idea of renegotiating public employee union contracts. This is not a man who’s afraid of a fight.
That the governor is wading into the state’s thorniest budget territory should indicate just how dire New York’s finances are. Projecting a budget gap of $47 billion over the next three and a half years, along with 50 percent more jobs lost in the financial sector than after 9/11, Governor Paterson understands that only by making serious cuts in the state’s two major expenditures will New York dodge even bigger crises.
The governor recognizes that the collapse of the financial services industry is hurting income taxes and will get worse as layoffs intensify and reduced or nonexistent bonuses lead to further shortfalls in revenue. Already retail sales are declining as households cut back spending.
The State Legislature is coming back to Albany for a special session on Nov. 18, and its leaders must recognize the need to make cuts now, as the governor has proposed, over what are sure to be loud complaints from the powerful teachers’ and hospitals workers’ unions. New York has increased spending on education in recent years; now unfortunately is the time to cut spending on all but the essentials, which may mean cutting back on non-classroom activities such as teacher training, sabbaticals and extracurriculars. Cuts in health care spending will be equally painful, requiring cuts to hospitals and health care providers, which need to learn how to achieve productivity gains and not pass on their costs to the state. New York also needs to close and consolidate hospitals, as the Berger Commission proposed two years ago.
Already the push-back has begun. Some are suggesting that Governor Paterson wait and see what the Obama administration brings to the table in January. That’s magical thinking; the time for concrete action is now.
David Paterson is well suited to this necessary and unpleasant task. He is not only a Democrat, but an avowedly liberal Democrat who now finds himself having to cut programs he would have supported as a state senator. So he has the credibility to make these drastic cuts without seeming heartless. He deserves the support of the Legislature. His approach so far has been deft and conciliatory—a “we’re all in this together” tone.
“I don’t need a protest for it to bother me; I used to fight for some of these causes,” the governor said this week. “I’ll feel pain in my stomach, but my conscience will be clear.” Indeed, that the governor is willing to personally weather relentless attacks, and a likely drop in popularity, for the sake of the state’s fiscal health is a mark of bold and inspired leadership.