January 23, 2004
Unexpected Cash
Taxes are gushing in but Albany's still in the red so legislators better spend responsibly.
Gov. George Pataki's 2004-05 budget proposal is built on cautiously optimistic estimates of tax revenues, reflecting a surge from stock market transactions and executive bonuses. That's why, even in the jobless recovery that is plaguing other states, tax dollars are rolling in faster here than anyone imagined.
We have Wall Street; they don't.
But Pataki has built several big holes - totaling well over $1 billion -into the budget by including other revenues that aren't certain to materialize and savings that shouldn't be permitted. The State Legislature, which received his budget Tuesday, will have to close them. If Pataki decides once again this year not to negotiate in good faith, lawmakers will again have to go their own way.
Having the unexpected cash could make their job easier, but it also could become a temptation to lard up an election-year budget with unnecessary spending, instead of focusing on a few key priorities. Lawmakers also must reject politically painless palliatives, such as excessive borrowing, raids on reserves and rosy revenue estimates. Albany remains billions in the red and can't afford a fiscal pig-fest.
Legislators have their work cut out for them. For instance, over the objections of State Comptroller Alan Hevesi, Pataki projected a $440-million cut in pension costs. Since Hevesi is sole trustee of the pension system, ignoring his opinion is perilous. The state constitution bans the use of pension funds to provide fiscal relief for state or local governments.
Pataki budgeted for $240 million in revenues this year from an expansion of video lottery terminals. Even if one agrees that using gambling funds for improving impoverished schools - and we don't - counting on that much could be a risky bet. The state approved an expansion two years ago and hasn't yet seen a dime of extra revenue. And even if the new VLT sites open as expected, the plan faces anything-but-frivolous legal challenges.
If the legislature wants to restore $850 million in school aid and health and tuition subsidy programs for the poor, as we would like it to do, it must find off-setting savings - or be willing to raise broad-based taxes. It's a tough job, but legislators have got to do it - if they expect voters to let them keep their jobs.
Copyright © 2004, Newsday, Inc.
Letter to Editor in Response
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Editor
Newsday
Address
City, State, Zip
January 29, 2004
Dear Editor:
As was pointed out in your editorial "Unexpected Cash" (January 23, 2004), Governor Pataki's budget relies, in part, on revenues that may not become a reality. In his search for sources of income to close the budget deficit, the governor has rejected a proposal that could bring in an estimated $179 million to state coffers annually.
The proposal would expand the scope of the state's 20-year old Beverage Container Deposit Law or "bottle bill" to include non-carbonated beverages such as fruit drinks, bottled water, teas and sports drinks, and take the $179 in unredeemed nickel deposits. Currently, the beer and soda distributors keep the nickels from the containers that aren't returned for the 5-cent refund.
The "unredeemed" nickel deposits are nothing more than a windfall profit for the beverage industry and should be reclaimed as public monies as they are in Massachusetts, Maine and Michigan. Assemblyman Tom DiNapoli has introduced a bill that would extend the 5-cent refundable deposit to non-carbonated beverages and put the unredeemed nickels to work for New York
Will our representatives in Albany, like the governor, buckle under pressure from the politically powerful beverage industry lobby, or will they vote for the public good? Let's hope they will seize the opportunity to divert $179 million a year in unredeemed deposits from beer and soda distributors to the people of New York State, to whom that money rightfully belongs. These monies should be used to fund environmental programs, not to line the pockets of beverage distributors.
Sincerely,
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