Two days before Gov. David Paterson”™s Jan. 6 State of the State address, E.J. McMahon, director of the Empire Center for New York City Policy, and Josh Barro, a fellow at the Manhattan Institute, took apart state and local expenditures, outlining the think tanks”™ recommendations on how New York”™s budget system can be repaired. Part 2 of the study, summarized here, deals with spending and government organization. (Part 1, last week, covered health and education.)
? Intergovernmental spending:
The blueprint suggests capping state aid to municipalities. Five categorical stream aids were merged into one in 2006 and linked to a requirement that municipalities adopt long-term financial plans. The goal? Reducing costs and property taxes. In just three years, state aid to municipalities has ballooned from $850 million to nearly $1.1 billion.
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Even with current proposed reduction in such spending by $32 million in December 2009, a $100 million annual reduction over the next several years would still leave the program about 10 percent above its original levels. “The distribution formula should be revised to limit the impact of the aid reduction on the most ”˜distressed”™ municipalities,” say McMahon and Barro.
They recommend a reduction in judiciary staffing and a restructuring of the judiciary”™s budget. Targeted as one of the fastest growing areas of New York”™s budget over the last 10 years, the judiciary has added more than 2,400 full-time positions in the past decade, a 16 percent increase, despite former Chief Judge Judith Kaye”™s special commission report urging modernization of the court system, estimated to yield savings of $59 million a year. “This would require an amendment by the Legislature,” according to the report.
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An adjustment to prison spending: New York spent $36,835 in 2001 per inmate as opposed to $22,650 nationally, ranking fifth in the nation or 63 percent above average. Today, the state employs 52 correction staff per 100 inmates, compared to 46 per 100 a decade ago.
“It”™s time to implement former Gov. Spitzer”™s proposal to establish a prison closing commission patterned after the Berger Commission,” say blueprint authors. “The state could realize significant added savings by more aggressively pursuing alternatives to incarceration for nonviolent offenders and probation violators, as the state of Texas has recently done with some success.”
They suggest rolling back court staffing to 1999-2000 levels through attrition to save $65 million in 2010-11, with savings growing to nearly $196 million by 2012-12, not counting further savings from a proposed pay freeze.
? Changes in the way the Legislature does business:
The blueprint jumped into New York’s legislative process and called for adjustments in excessive spending ”“ $989,892 per member in 2008 compared with the national average of $379,450. New York”™s 212-member state Legislature and its 3,550 full-time employees were among the largest legislative bodies in the nation. The state Legislature, says the report, is “rife with duplication, including separate TV studios and photography operations for both houses. Cutting this in half would save $110 million a year compared to projected amounts.”
Permanent elimination of member items: “Should taxpayers across the state fund dozens of grants to Little Leagues and other sports groups, the kind of thing once paid for through voluntary bake sales, raffles and 50-50 drawings?” asks the blueprint. “Though often laudable, why are taxpayers throughout the state footing the bill?”
- Agency mergers and consolidations:
- Among the recommendations in these arenas, the blueprint says two-into-one should work for:
- Division of Human Rights and the Attorney General”™s Office;
- Council on the Arts and the Department of Education;
- Consumer Protection Board and the Attorney General”™s Office;
- Office of Real Property Services and the Department of Taxation and Finance;
- Office for Prevention of Domestic Violence and Children and Family Services;
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Other cost-cutting savings the state could utilize:
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? Reduction of spending on capital projects, with economic development dominated by education, prisons and mental health facilities;
? Streamline purchasing, overlooked for the most part by the Legislature;
? Elimination of subsidies:
The elimination of certain subsidies like those to public radio and to Amtrak”™s Adirondack Montrealer. “Private bus companies and airlines serve the same corridor and receive no state subsidy. This should be repealed,” say McMahon and Barro.
? State work force savings:
“New York has yet to demand sacrifices from its unionized state employees. State workers received an average 3 percent increase in 2009 and continue to receive longevity increases,” say blueprint authors. “The governor and Legislature should invoke their powers to declare a financial emergency until the budget is permanently and sustainably balanced, for an annual savings of $328 million in 2010-11 and growing to $882 million by 2012-13.”
The study recommends a return to the 40-hour work week. Currently, state workers are required to work 37 ½ hours per week.
Also suggested: that early retirees be required to pay a higher share of health care costs for a savings of $207 million in the upcoming fiscal year and rising to $232 million by 2012-13; and require state retirees to pay Medicare Part B premiums, billed at $96.40 a month, a savings to taxpayers of $134 million a year; modify state employee contributions for family health care plans, (an action that would trigger collective bargaining and would not see significant savings in the upcoming budgetary process.)
“After September 11 and the financial meltdown, our economic landscape has been permanently altered,” write McMahon and Barro. “Notwithstanding the profitability of Wall Street”™s surviving big banks, the old financial sector model is not coming back to bail out Albany and federal stimulus funding has only postponed the inevitable. It”™s time for New York to stop living beyond its means, and find solutions to reduce the size and cost of both state and government local government to a level New Yorkers can afford. That demands fundamental and permanent changes in the way New York does business.”
