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02/01/2007: "The Governor's First Month"

Eliot Spitzer has just completed his first month in office. It may turn out to have been the most important month of his four-year term, having set the tone for the kind of leader he will be.

Starting off with a feel-good inauguration ceremony and then laying out his agenda in the State of the State, Governor Spitzer created an air of expectation as he targeted the issues that had earned him a landslide victory in November – more aid to education, reducing local government Medicaid costs, property tax relief, economic development Upstate, etc.

How all that was going to be accomplished without a tax hike was finally answered this week when the Governor submitted a $120 billion budget to the Legislature. This is perhaps the most anticipated budget in New York history and it will be subject to line-by-line scrutiny in the weeks ahead.

Early results suggest that each of the Governor’s major proposals will face opposition, a fact he tried to deflect by characterizing the enemies of reform as “the special interests”.

A major question yet to be answered is how the Governor will go about negotiating with the Legislature: will he try to steamroll them, insisting they accept the budget as he crafted it, or will he allow individual pieces to be negotiated separately and thus risk having the whole thing fall apart? Given that the Governor will inevitably be judged on whether the state has an on-time budget, the Legislature holds an April 1 trump card that may force Spitzer into giving up or modifying some of his headline items.

One program that deserves to be modified is his version of the so-called taxpayer relief or STAR program. I agree with E.J. McMahon, policy analyst with the Empire Center, who says, “Spitzer's property tax relief proposal simply builds on the shortcomings of the existing, Pataki-initiated STAR program. The new governor makes STAR even worse,” McMahon says, “with a ‘means-testing’ formula that will add to the program's administrative complexity and make plenty of homeowners unhappy, especially downstate.”

Instead of learning from Massachusetts, which has successfully brought about taxpayer relief by capping local government spending, or New Jersey, which just now agreed to a cap on school tax levies, Governor Spitzer’s proposal will allow local school boards to mortgage the future with more spending and higher school taxes that will inevitably require an even bigger state contribution down the road.

Instead of Star this should be called the Shell Program since tax payer relief at the property level is being paid for by high state income taxes and escalating fees on everything from getting a driver’s license to camping at a state campground.

Early on, the bloom went off the rose between the new governor and the state legislature over the procedure to replace Alan Hevesi as state comptroller. The confrontation between Spitzer, who backed a procedure that resulted in three names being submitted to the legislature, and Assembly Speaker Sheldon Silver, who clearly wanted a Democratic member of his house to be among those recommended by the panel, has yet to be resolved. Some people have asked whether the Governor needed this confrontation so early in his administration.

That conflict, as well as a well-reported dressing down of a legislative leader by the Governor, raise an important issue. There’s a gap that is as wide as Niagara Falls between getting elected and governing. The voters may love him, but if the Governor cannot find a way to work with the Legislature and with the constituencies whose interests are threatened by his reforms, we may be in for fierce battles and a lot less pleasing results than the public expects. Stay tuned.

Best media coverage of the governor’s budget message: The Binghamton Sun & Press-Bulletin. In addition to running several stories from Gannett’s Albany bureau, the Sun & Press-Bulletin assigned their own reporters to focus on how education and health care reforms will impact their community.

Best editorial on the budget: Poughkeepsie Journal. Unlike some editorial boards who were afraid to say anything critical about the budget, the Journal correctly pointed out that the new budget will add to New York’s already high debt load and that’s before the Legislative leaders start to push their favorite programs.

Given that Wall Street fueled tax revenues will fill the state’s coffers this spring it is a shame the governor couldn’t have crafted a budget that reduced instead of increased state debt. If the economy slows, next year’s budget battle may make 2007’s look like a lovefest.