Lies, Damned Lies, and Campaign Promises

Pataki Spins Houdini Math

To return to the state budget, let us examine how the charade was carried out. In his first two terms, Pataki used the economy's boom years to build up reserves and serve his political career goals. Because of the boom and the resultant surge of tax revenues, he was able to lower tax rates yet increase spending to please a wide range of voter blocs. He balanced the budget each year, a requirement under the state constitution, using lots of gimmicks and fancy juggling and one-time, non-recurring funds. With all this good fortune and prestidigitation, he was also able to lay aside as much as $4.1 billion in reserve, "rainy day" funds.

But by the time the state's last fiscal year began, on April 1, 2002, the stock-market bubble had burst, the recession was on, and September 11, 2001, had sent New York City into shock. The rainy-day reserves were already down to $2.6 billion, and by Election Day, tax revenues were shrinking so fast that the nest egg was gone and a budget chasm was widening. With Pataki hiding the extremity of the situation from ordinary voters and taking no steps to curtail his lavish state spending, the mess was on its way to becoming the worst fiscal crisis in New York history, even more severe than the one in the mid 1970s. There was a governor in Albany then, Hugh Carey, who—whatever his flaws—did not hide or run from a problem.

Knowledgeable political operatives and scholars around the state were astounded by Pataki's strategy of denial. Two months before the November election, for example, Gerald Benjamin, a highly regarded author and political science professor at SUNY-New Paltz, and a Republican, told reporters: "There's going to be an extraordinary crisis. Nobody disagrees who pays attention and is not vested in one of these campaigns. It's going to be a very big deal. The localities are going to turn to the state, and the state is going to be in extremis. . . . This deficit should be the biggest issue in the election, but nobody wants to touch it. There is no credible plan for this."

illustration: Ryan Sanchez

Pataki's only plan was his vow that there would be no new taxes. "This is not going to happen," he said. "Absolutely not." This pledge was grossly misleading, because his proposed budget for fiscal 2003-2004 calls for $1.3 billion in new "assessment" hikes, which are taxes. It also includes $6 billion in one-shot revenues, a gimmick he had excoriated in earlier governors' budgets and said he would never use.

He has kept insisting that he easily handled a $5 billion gap when he first took office in 1995, so this one would not be any more daunting. This one, however, was strikingly different. Pataki had spent money like a tipsy sailor, handing out election-year goodies all over the state. He's been doing this for the last five years, as if the stock-market mania was never going to fizzle. Well, it fizzled and crashed in 2001 and remained in the tank through election-year 2002. It would have been hard for Pataki to miss the carnage.

After the election, Pataki's pretend-game collapsed quite suddenly, for the true budget numbers erupted into public view like a dam breaking. Now it was clear to everyone that the gap for the fiscal year that ended March 31 would be around $2 billion and the one for the year that began April 1 (fiscal 2003- 2004) would be at least $10 billion. Yet the governor has stuck with his "taxes are job-killers" platform and, with the crisis worsening, is still shouting it loudly every day now, with the vigorous help of his favorite newspaper, Rupert Murdoch's New York Post, always in the "right" column.

It's a bully campaign against the two legislative leaders, Bruno in the Republican-controlled senate and Sheldon Silver, speaker of the Democratic assembly. The goal is to build public pressure to get them to bend to Pataki's demands for shrinking the budget by making deep cuts in vital aid to localities—which would affect everything from public safety to schools to health care to garbage pickup to road repair. He says that if the legislative leaders pass any large increases in "broad-based" taxes, he will veto them. The leaders would then either have to override his vetoes—and thus accept any voter backlash from the new levies—or go along with some negotiated compromise.

Meanwhile, in Washington, President Bush not only wants no new federal taxes but demands big reductions in the present ones as well. Which raises an obvious question: Has Pataki—who has long thirsted for a senior post in the Bush administration, with some backers even talking about the vice presidency—been playing all these budget power games primarily to curry favor with conservative Republicans and the missionary good-versus-evil president? It's hard to know, but whatever his motives, the creature the governor has hatched walks and talks and froths like insanity.

Did Pataki really believe that he could get away with standing before the television cameras after September 11, looking caring and patriotic with a giant flag behind him, while at the same time lying baldly to the voters about a gut issue as serious as this one—and not face a justifiably enraged citizenry when they found him out? For if the president is cutting taxes and Pataki succeeds on his no-new-taxes tear, then local governments will have to come up with the money by raising their own taxes astronomically—property and school taxes among others.

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