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04/06/2007: "What's More Important -- Process or Substance?"

I received an email the other day from Governor Spitzer touting the results of his negotiations with the state legislature, evidence of which were editorials in the New York Times and New York Daily News. Governor: Those editorials were in the minority. More typical were those in the Rochester Democrat & Chronicle (“Reform was MIA” Tuesday, April 3) and the Syracuse Post-Standard “Politics as Usual” also April 3).

The fact is that this year’s budget disappointed a lot of people for two reasons – the amount of spending and the process. The promised reform of the process was absent and the governor had to give in on a number of fronts in order to get the budget done on time.

What role the time pressure played in forcing the governor’s hand only he and his top advisors know for certain. However, it is very likely that this factor was significant. They had very little time to put the new budget in place and didn’t want to risk the political fallout that could have resulted if the budget came in late.

That fact gives rise to hope that next year’s budget will be closer to what the citizens of New York both want and deserve.

Many commentators focused on the process. No, it was not as open as we were led to believe it would be. However, I’m not certain negotiations can ever occur in public. Deals are necessary to put together a budget and deals can only be made when you are able to exclude certain parties.

I would argue that the substance of any budget is more important than the process by which it is created. In his email the governor claims that the results are what he promised.

If that’s the case, then I suggest he and his people look again. The state budgets in the past couple of years have been doable for one main reason – Wall Street. With the national economy on solid footing and the stock market on the rise, New York has been able to operate with a short-term mentality. However, many believe there are serious underlying problems that will crop up as major obstacles to political peace when the national economy softens. And, if New York continues to lag the rest of the country, that day of reckoning may be right around the corner.

Hopefully the governor will spend the remainder of 2007 on the road meeting with the public on street corners and in their homes. If he listens to enough people, he’ll find out how fragile New York’s political economy truly is. He’ll learn that the majority of bright young people are not staying in New York AND that many of their parents do not plan to stick around either.

Why should baby-boomers with money in the bank at retirement age continue to live in a state with high property taxes, high state income taxes and a high cost of living?

While the focus this year was on Medicaid and aid to education – and I have little doubt the pressure to keep spending more in those areas will continue unabated, those are only be the tip of the iceberg. Underneath are the future costs of public sector pensions and a deteriorating infrastructure that may require billions of dollars to address future needs for electric power production and transmission, for safe bridges and highways, for public safety and for higher education, where capital investment is critical to be able to compete in the increasingly world-wide knowledge market.

While solutions may be hard to come by, the governor will need to win the people over to his side in order to get the “tax and spend” Senate Republicans and the “tax and spend” Assembly Democrats to go along with any significant reforms. Unless he starts that campaign very soon, the combination of a soft national economy coupled with the legacy of past state budgets may limit his options…and that could result in Mr. Spitzer’s ending up as a one-term governor.