Barrett: If Murdoch and Zuckerman are Whining, is the State Budget Really So Bad?

News flash! The state budget that's been so trashed in the tabloids does loads of good things you've heard next to nothing about.

Whenever the rich are taxed, the only media contest in town is who will howl louder -- Rupert or Mort. Both are such class enemies of their own readers that, in a budget season like this, the editorial rants of the Post and News swamp their news pages and all we get are daily diatribes ginned up by tax hikes but camouflaged as pleas for fiscal probity.

Can anyone really defend a personal income tax in what's supposed to be one of America's most progressive states where everyone earning more than $40,000 a year is in the same bracket? Is there something wrong with changing that so that families earning more than $300,000 pay at a higher rate, and someone earning more than $500,000 pays at a still higher rate? And if changing those brackets delivers $4 billion in additional revenue to the state -- avoiding, for example, the layoffs of teachers and the slashing of student assistance programs for college students -- shouldn't the newspapers that those teachers and students buy be cheering?

If the new budget eliminates the STAR property rebate checks that go indiscriminately to owners of Hampton mansions and multi-million dollar Manhattan condos, delivering another $1.5 billion in saved revenue to the state, isn't it a social good that we used those funds to finance the first increase in the state welfare grant in 19 years? Shouldn't we celebrate a budget that reforms Rockefeller's cruelest legacy, closes prisons and funds drug treatment for nonviolent users, instead of sacrificing them without judicial discretion, as we have for counterproductive decades, to cells that prop up the upstate economy? Did anyone in the media notice that the budget restored a $100 million hit on the state's 700,000 elderly, blind and disabled poor who were counting on a minimal, cost-of-living, boost in their SSI checks?    
We're supposed to be outraged that the $131 billion budget is $10 billion more than last year's. But at least $7 billion of that is pure federal stimulus that, as Republican governors have established, has to be spent or returned. One Post screed suggested that the stimulus was supposed to be spent to avoid state tax hikes. Seems to me the president talked endlessly about the stimulus being used to avoid massive state and local layoffs which would only have deepened the downturn. This state budget is an extension of the Obama calculation that government spending is the way to yank us out of the spiral, so why would policies saluted in Washington be condemned in New York?  

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Indeed, just like in Washington, every Republican in the Albany legislature is voting against the state budget. But instead of depicting them as obstructionists without an answer, as the media has at a national level, New York's Republicans, who were as profligate as Bush when they controlled the senate, are suddenly being saluted as beacons of budgetary balance. In reality, New York's GOP naysayers, like everywhere else in America, are nothing more than stick men for the rich.

Even the remaining $3 billion in additional expenditures is what is called "all-funds" spending, which means it includes some federal funding that's not stimulus, some bonded capital projects, and the tiniest bit, less than 1 percent (not the 10 percent in the headlines) of actual state operating expense. The critics are largely right when they charge that the primary cuts in this budget are merely reductions in the projected growth of state expenditures, not actual cuts in real spending. While in other business cycles, these claimed "cuts" may be hogwash, holding state-funded expenditures virtually flat in a crisis like this, when Medicaid and many other demands on services are soaring, is tough. If the critics are demanding shared pain, they will certainly see some.

There is no chance that the tax bracket restructuring, welfare hike, STAR slash, prison closings, and Rockefeller drug law reforms would have happened if the Republicans had retained control of the senate. As much as Malcolm Smith and the Senate Democrats have stumbled, their majority made these genuine achievements possible (though it was Smith and Paterson who apparently pushed to "sunset" or suspend the tax changes after three years, while Assembly Speaker Sheldon Silver wanted to continue them for five years). The governor championed the welfare and drug treatment advances, but he inexplicably had to be dragged, kicking and screaming, to the tax reforms by Silver, the assembly conference and the Working Families Party.

For once, the speaker could not allow the marginals (Democratic assembly members in swing districts) to set policy for his chamber and, in fact, many of the marginals, as Tom Precious pointed out in the Buffalo News, took a walk or voted against several of the budget bills. Silver has built his majority to an astronomical 109 to 41 and he may lose some seats with this package. He's also defending the indefensible -- $170 million in unaccountable member items and a disastrously insular budget process. But it was he -- even at the risk of making himself the number one tabloid target -- who bulled through so many of these positives in a time when we are so plagued with negatives.

The fairest critique of the budget is long term. Wall Street will never come back to what it was and state leaders have yet to face our very different budgetary future. Brooklyn assemblyman Jim Brennan believes the legislature deserves credit for closing the majority of an astounding $17 billion deficit by strong state actions independent of the stimulus, but says "we have many tough decisions yet to make."

If state leaders haven't begun to adjust to this fundamental shift, neither has Mayor Bloomberg, who is nonetheless praised by the same tabloids that condemn state Democrats. The fact is that no one has a plan to make New York's finances viable beyond the stimulus, and maybe it's too early to expect one.                        


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