Thursday, April 30, 2009

More Red Ink? Pass the Wine Bottle

Just when we thought that the state's finances were somewhat in order, we get the following bad news: "New York state faces massive budget gaps totaling almost $25 billion over the next three years despite a record high new state budget that increased taxes by some $8 billion, Gov. Paterson's budget experts revealed yesterday."

And the NY Times avers: " The state will face a perilous financial situation when federal stimulus money and temporary state tax increases on the wealthy expire two years from now, according to the financial plan released by the governor’s office on Tuesday." So, will this mean that we get some fiscal discipline from our state leaders?

Not if the spinning from the governor is considered. As the Post points out: "This year's budget represented a first step in the difficult process of putting New York back on sound fiscal footing," Paterson said. He and his budget experts contended the budget had increased state operating-funds spending by 0.7 percent, the smallest increase in 14 years. Independent budget experts, however, have noted that state operating funds represent a relatively small portion of the overall budget, which was up more than 30 times the inflation rate."

Bold leadership is going to be needed; especially if the governor is going to try to find some way out of his own mired down position. And the bad fiscal news is right around the corner-as the Times indicates: "Some fiscal pressures are already making themselves felt. Payments submitted with individual tax returns this month were 30 percent lower than those of last April, according to Laura L. Anglin, the governor’s budget director. Payments submitted with requests for an extension were down 50 percent. While some drop-off has already been built into the current budget, more bad news could come on June 15, when individuals must make quarterly tax payments and corporate tax bills come due."

Which should mean that the legislature will have to return-probably in September-in order to find some way to re-balance an out of whack state budget. Which says to us that it will be necessary to seriously revisit the wine in supermarkets question. That $140 million will be looking irresistible pretty soon now.