Tuesday, March 31, 2009

Hello, He Must Be Going

The concluded budget process has turned David Paterson into Captain Spaulding, whose famous phrase was, "Hello, I must be going." As the NY Post's Jacob Gershman observes: "Paterson confirmed the fear that he's the nation's weakest governor, sealing his fate as a lame duck. It'll be up to New York's next chief executive to rescue the state from bankruptcy."

At the same time, as we have also pointed out elsewhere, this budget fiasco-with an additional $8 billion in new spending while NY business craters-opens the door wide for a challenge to Democratic hegemony: "No one will remember that he got an on-time budget or the minor victories buried in the bonanza of outlays (such as a long-overdue adjustment to hospital Medicaid reimbursements). The big story is that Paterson let lawmakers bury their heads in the sand and produce a budget that fiscal analysts are calling a "recession-proof porkfest." "We're going to run against Paterson," says a Republican source. "People will blame the governor, his party and those who do his bidding."

But it's the entire party-not to mention the state's fiscal good health-that will be threatened: "The long-term shakeout has the potential to elevate a moderate Democrat to the front of next year's governor's-race pack, stir a leadership rebellion in the Legislature and give Republicans a new lease on life."

So while it is clear, as the NY Times points out, that Shelly Silver basically slapped the other two leaders silly, it might also be true that the victory he achieved was a Pyrrhic one: "At the same time, the state’s main financial engine, Wall Street, is undergoing a profound transformation and unlikely to soon produce the tax revenues of its heyday. Some wonder if an Albany led mainly by Mr. Silver will be willing to confront that reality."

Clearly, however, Paterson was out of his depth-bending and breaking on all of the faux fiscal discipline he had articulated in the run up to the budget process, As the Times underscored in another news analysis: "But as outside analysts began poring over hundreds of pages of the budget, they said they saw little evidence of stern spending discipline, even in the face of a major recession. In closing a budget deficit that in the end surpassed $17 billion, lawmakers relied on billions of dollars in new taxes and fees, some of which may not even raise as much revenue as hoped if the economy continues to worsen. And like every Albany budget, whether in good years or bad, this one includes $170 million worth of what critics call pork-barrel spending for lawmakers’ pet projects."

So while we have complained about the poor decision making in our own little world of food and drink, it is the entire state that has been ill served by the leadership in Albany. All that's left is the voter blow back-and the WFP's short term triumph may well be short lived, as tax payers begin to realize how privileged and wealthy they really are when their payment due notices come in.