Friday, July 31, 2009

Crossing the Red Sea

If nothing productive is done soon, New Yorkers-now faced with a new $2.1 billion deficit-will soon be singing, "California Here I Come." As City Room reports: "The four-month-old state budget will face a $2.1 billion budget gap by the end of the fiscal year next March, the Paterson administration announced on Thursday, setting the stage for what will likely be a grueling special session of the Legislature in September as lawmakers debate what programs to cut."

And, as the NY Daily News editorializes, taxing the wealthy, with its been there, done that quality, is no longer an option: "Nor can the Legislature conceivably tax its way out of the hole. As Paterson said in a recent meeting with the Daily News Editorial Board: "The one thing that I feel about the personal income tax now is, now it's off the table . . . Every time you try to tell some of the groups that you're going to have to make cuts, their response was, well, you have to tax the rich. Well, you know what? We've done that. There's no further you could ever go in that process."

All this means is that real cutting is gonna need to be done: "So, the day has arrived for historic spending reductions that bring the state's revenues and costs into balance and bring both into line with the taxpayers' tapped-out ability to pay. The governor must challenge the Legislature to address New York's long-term needs rather than to craft short-term fixes bound to fail. He must think big and deliver big."

But, what about the possibility of new revenue? When the legislature returns in September, the issue of wine in grocery stores will have to be put squarely on the table since it is a $100 million or more revenue stream from fees that will not pickpocket tax payers. A no brainer? Not if your the Last Mope that's standing on Main Street-the phony coalition created by liquor stores that are expiring before our very eyes-unable and unwilling to adapt to modern economic realities.

So the Governor, who sponsored the money producing bill in the first place, must demonstrate real leadership-and insist that this revenue source be tapped; along with the budget cutting that appears to be all bu inevitable with the revenue losses concomitant with the hemorrhaging of jobs that New York has experienced: "All told, New York has lost 236,000 jobs since the official start of the recession last August, with further job losses expected through 2010. The state unemployment rate is now projected to peak at 9.1 percent in the first quarter of 2010."

And while the Albany leaders are at it, why not try to tap the uncollected Indian cigarette tax revenues that have been left on the table because of the timidity of the governor. As the NY Post editorialized last winter: "Who knew the special interests opposing Gov. Paterson's budget cuts had it so easy? All they need to do to stop the gov dead in his tracks is . . . threaten to sue. That, at least, is the message Paterson is sending with his latest punt over the scandalous flow of illicit cigarettes from New York's Indian reservations - a trade that's costing New York hundreds of millions in lost tax dollars."

So some tough choices lie ahead. But if Paterson really wants to demonstrate leadership in order to salvage any chance of retaining his seat, he must begin to, well, lead. Getting the wine issue across the finish line, and going after Indian scofflaws would be a step in the right direction.