Tax and Rend

Apropos of our earlier discussion of Carl Kruger, Bertha Lewis and the WFP, comes the following discussion on the severity of the state's fiscal crisis from Spin Cycle: "Gov. David A. Paterson is warning that next year's budget will be "grim," with retrenchment virtually everywhere, from schools and hospitals to building projects and social welfare agencies.The cuts will probably be deeper because of last week's failure by Paterson and lawmakers to close a $2-billion hole in the 2008-09 spending plan. That red ink now must be rolled into the projected $12.5-billion deficit for 2009-10, precipitating reductions in spending rather than slowing its growth."

What this means is that the size and scope of government will need to be addressed-and Long Island tax payers and homeowners are in Newsdays' focus: "Long Island has a lot at stake in the 2009-10 budget. Area public schools received $2.6 billion in aid this year and a future reduction would probably spark a hike in school property taxes. The region's hospitals rely on billions of dollars in Medicaid reimbursement, nearly $2.9 billion in 2005. And Long Island Rail Road customers are facing possible fare hikes and service cuts as the cash-strapped Metropolitan Transportation Authority struggles with little hope of help from the Capitol."

Centrist Democrats like Carl Kruger-as well as those Republican "terrorists"-are going to be vital players in the upcoming grim budget battle: "This is going to be an extraordinarily difficult budget that is actually unprecedented in the lifetimes of most of us," said Assemb. Robert Sweeney (D-Lindenhurst). "The governor probably will call for cuts across the board. I don't know if he will propose any new revenues, but I think it's inevitable."

In this context, the role of the WFP will become central; and Governor Paterson's effort to act in a prudent and pragmatic fashion-much like PE Obama is doing-could be challenged: "Raising taxes right now would diminish the number of people who live in this state," Paterson said. Fiscal experts were divided over whether Democrat Paterson would succeed in shelving the
millionaires' tax, given strong support for it among the Assembly's Democratic majority. But even if Albany were to soak the rich a bit more, the experts said, only about $2 billion would be produced, far short of closing the two-year, $15-billion deficit."

Let's face it, the extreme left wing of the Democratic party has no interest in reining in government; yet the current crisis offers up a perfect storm moment for reform:

"The billions and billions from Wall Street that the state relied on in the past simply aren't there anymore," said Robert Ward of SUNY's Nelson A. Rockefeller Institute of Government. "Washington is likely to help New York ... but it's certainly not going to bail us out
entirely."Some lawmakers and economists were hopeful that budget director Laura Anglin would advise Paterson to use the huge budget deficit as an excuse to reinvent government. Some suggested merging agencies and authorities with overlapping responsibilities such as the Transportation Department and Thruway Authority."If you just craft a budget from the point of view of cutbacks without looking at the opportunity for reform, you may not be in the strongest position to leverage support for what's going to be some very tough medicine," said state Comptroller Thomas DiNapoli."

One thing is certain; this is a time, not for vitriol and rancor, but for bipartisanship and cooperation-something that the outrageous Bertha Lewis charges threaten: "State Sen. Craig Johnson (D-Port Washington) agreed, adding that adoption of a lean budget wouldn't be effortless just because Democrats will control both houses of the legislature and the governor's office come January. "You are going to have a better working relationship between the three parties," he said, "but there are going to be challenges."