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The Glass is Half Full

June 28, 2010

Trying to get a handle on the moment? 

You’re not alone. It has been a bizarre 48 hours at the Capitol, and it is not done yet. 

Instant analysis in an unprecedented and fluid situation like this is very difficult, but we’ll try. 

We actually believe there is some reason for encouragement – not so much in what the lawmakers did, as what they didn’t do. 

First, they didn’t borrow. The Ravitch plan was scrapped. It would have borrowed $6 billion for operational expenses. It was the easy way out and would have been terrible for the state. Andrew Cuomo is the secret MVP here. Were it not for his intervention, the lawmakers and the executive surely would have avoided the tough choices and added to the state’s massive debt. 

Second, they didn’t increase broad-based taxes. Yes, there’s some tinkering with sales tax on clothing and charitable write-offs for the wealthy, and, yes, there’s an increase in the cigarette tax and a deferral of certain tax credits, but these aren’t catastrophes.  Shelly Silver deserves credit for this. He headed off a PIT increase that many of his members wanted and he blocked the governor’s tax proposals.   

Third, they didn’t increase spending. The final numbers aren’t in yet, but this could be the first year in a long time that New York actually spends less that it did the year before. And when it’s all said and done, life as we know it won’t end. There won’t be riots in the street. Children will still be playing in the park, and elderly ladies will still be knitting. And, the rest of us, well, we’ll all get by. John Sampson deserves credit on spending levels. Starting with the initial formulation of his conference’s budget position, Sampson was pushing for spending restraint. That’s something that the GOP, for all its time in the majority, never really embraced, especially in recent years. 

Fourth, they didn’t raid the state pension fund. This will allow Tom DiNapoli to stay in the game, although he still has to be tough on certification of the budget, which may or may not be in technical balance. 

Fifth, they didn’t close down the government. Nothing would have underscored the ineptitude of the governor and lawmakers, and the dysfunction of Albany like shuttered parks and other public facilities. Thankfully, they avoided that. 

Of course, there’s no way around the fact that the state budget was two months late. And even after the cuts, it still spends too much. In fact, if FMAP federal assistance doesn’t materialize, the state could have a $1 billion hole later this year. (Think supplement budget in November.) 

The ultimate product, though, is not terrible. In fact, in a year where no one was going to be a winner, in a year in which some really awful options were on the table, this ain’t that bad.

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