Presidential candidates often run on platforms that have little chance of being implemented and this year is no exception.  But let's assume that the winner will be able to push through his entire package.  Which one is best for New York?  The answer is neither.

The tax and budgetary policies being proposed by both candidates will have a negative impact on New York State's ability to pay for and deliver public services at the state and local levels.  The bottom line is that there will be less money coming back to the states without any lessening of the burden -- including unfunded mandates.

The immediate outlook is that the state will also have less money to give to localities and thus villages, towns, cities and counties will be faced with two choices -- cut services or raise taxes.  Since many of New York's taxing jurisdictions are at or near their tax ceilings, the future New Yorkers face is a decline in local services. That means less police and fire protection, poorer servicing of roads and bridges, longer lines and less responsiveness to inquiries and applications, etc.

Even the potential loss of earmarks -- Mr. McCain's bete noire -- will have a negative impact on localities.  Those little league fields, senior center programs and other projects funded by earmarks will now either have to be paid for at the local level or they will not get funded. 

But they're both promising tax cuts.  Isn't that good?  Yes, but.  Both are promising huge tax cuts at a time when the federal government will be running its largest deficits of all time.  That may be sound policy in a recession.  Certainly raising taxes in a recession goes against one of the basic lessons of the Great Depression.  But deficits have to be paid eventually...and if a federal tax cut results in increases in your local taxes plus increases in the cost of living (inflation) then the benefit is more mirage than substance.

Both candidates are also promising to cut some current federal spending to make way for their new expenditures for education, health care and energy.  Of course, there's saying you'll cut spending and then there's doing it, but again lets' assume that they will make cuts.  Ask yourself who will be hurt? Say they cut research grants.  That impacts on institutions of higher learning.  Say they cut environmental cleanup.  That impacts local economies and quality of life.  Say they cut federal highway funds or aid to AMTRAK.  That increases the cost of transportation.   Or maybe they'll try to get the same productivity from federal agencies out of a smaller work force.  That's an concept I endorse, except there's no track record for doing that.  More likely is a decline in the quality of the services. 

New York will have to manage with the hand the new president deals us.  No matter who wins we'll face a new imperative for the reduction of the cost of government at all levels.  The Commission on Local Government Efficiency and Competitiveness came up with 73 recommendations that have the potential to not only reduce the cost of government, but also increase the value of the money we are spending by reducing duplication and other inefficiencies.  It is imperative that the Governor and State Legislature give serious consideration to those recommendations as soon as possible. 

Even if the country wasn't in the early stages of what will probably go down in history as the most serious financial crisis since the great depression, New York State needs an independent budget office.  The financial crisis only makes the formation of such an agency that much more crucial.

Yes, creating a new agency will cost taxpayers money.  However, the savings that result from the resulting publication of impartial data will far outweigh the cost.  Take for example the situation that occurred earlier this year when Albany came close to passing legislation that would have cost taxpayers $500 million dollars in added pension costs because the Legislature was relying on the sponsors' word that the bill was "fiscally neutral".

Under an Independent Budget Office that I would create, every piece of legislation that comes up for a vote in the Legislature that has the potential to cost the taxpayers $1 would be subject to mandatory review by the IBO.  

Isn't that what the legislators and their staffs are supposed to do, you might ask?  Yes, of course, but those staffers -- as smart and skilled as they are -- are not impartial.   That's a problem.  And, because they are not, both parties in both houses of the Legislature need their own staffers to advise them on the accuracy of the numbers.

What the taxpayers need is impartial data with which to hold our legislators' collective feet to the fire of fiscal responsibility – something they do not have today.  Trying to make sense out of a governor's budget bill when it is presented each January is ten times harder than doing the Sunday New York Times Crossword puzzle.  You might be able to figure out a few clues, but it takes an army of experts to understand the total picture.  Hopefully, a state IBO would reduce the need for the Leglslature to have so many staffers devoted to reviewing the budget and various legislation which would also help the state finance the IBO.

A NYS Independent Budget Office would also be required to evaluate the governor's budget, issue periodic reports on the state of the state and help legislators craft fiscally responsible legislation. That's not a criticism of the state's division of the budget.  The people who work in that agency do a terrific job. However, they work for the governor. Thus, how their work is used is partisan -- i.e., designed to benefit the governor's poiitical party.

I'd like to hear from the "good government" community, academics who follow NYS government and the state's news media about this concept.  Do you believe that New York's financial situation would be improved if we had an Independent Budget Office analyzing the data for the legislature and the general public?

The after-affects of the sub-prime mortgage crisis continue to roil the financial markets bringing down once mighty companies to bankruptcy and fire-sale prices.  From both political camps we hear that greed is the source of the problem and that once the electorate gets to change the resident of 1600 Pennsylvania Avenue, he will reform Wall Street along with Washington.

Excuse me while I laugh out loud.  It’s not going to happen because neither Obama nor McCain have the first, second or third clue as to what went wrong much less how to fix things.

To say that greed is the problem is to criticize the coach whose team wins by a large margin.  “You ran up the score,” the critic complains.  Tell that to Bill Belichick, coach of the New England Patriots professional football team and he’ll tell you that his team played by the rules of the game.  To do otherwise would have been to betray their owner, their fans and their obligations to each other as professionals.

Thus far not one of the people who ran Bear Stearns, Lehman Brothers, AIG or Merrill Lynch has been accused of violating criminal or civil law.  They played by the rules of the game and if they had not, they would have been replaced by someone who was willing to do so. 

Greed comes in to play when people like the former president of the New York Stock Exchange get their compensation committees (which in that instance included Carl McCall, the former Comptroller of New York State) to pay them way beyond the value the bring to their company. However, those instances notwithstanding, greed is not what got the financial giants into trouble.

The Candidates Don’t Have a Club

It is interesting to hear Sarah Palin, being interviewed this week by Sean Hannity, talking like a New Deal Democrat.  More regulation is needed, she said. But then remembering that she’s a Republican, she said “But don’t expect Washington to solve every problem.”  That’s where the rub comes in.  How does one decide where to draw the line between allowing the markets to regulate the participants and having Washington change the rules in the middle of the game? 

We’re in new territory here.  We’re seeing events occur on a scale that we haven’t seen in our live-times. So, let’s put it in some perspective. 

In the past we’ve seen too many times when a crisis has led to rule changes that had not been thought through carefully.  Two examples:

1. Sarbanes-Oxley  – the additional requirements placed on public companies after Enron went too far in reporting requirements that did little to change behavior.  What was needed was giving shareholders more power over management.  Shareholders if given knowledge and power will do a lot better job of regulating companies than Washington.
2. The reaction to 9/11 which brought about a number of ill-conceived policies, some of which have added greatly to the cost of the Federal Government while doing little to protect public safety. 

The danger is that in order to prove that he is a man of action the next president will hand down a set of reforms without adequate study and consideration. Such an approach will only further public cynicism when it invariably fails to curb greed or prevent people from making bad decisions involving lots of other peoples’ money.

Perhaps one blessing to come out of this crisis is the fact that it’s forcing the Bush Administration to act now rather than wait for the next president.  Being relatively free of the pressures to win an election Bush’s appointees are likely to do the right thing.  Only time will tell.

It's been more than a month since we launched the NEW Empire Page and I thought I'd use this space to give those of you who read this column an overview. 

(By the way if you are a subscriber and haven't received a rash of newsletters lately with news about the changes, let us know and we'll get you on the newsletter list.)

The Empire Page was founded in 1999 by Chris Chichester. I became involved a year later when he put the site up for sale and it was purchased by PoliticalNewsToday.com, LLC of which my company – Empire Information Services – was a minority owner.  Last winter I became the majority partner of the LLC and thus have added the publisher’s label on top of the editor’s tag that I carried for the past 8 years.

My immediate goal after taking over the site was to overhaul the underlying programming in order to make the site more valuable to its subscribers and advertisers and also to be able to advance my belief that an open debate informed by people who have expertise and experience results in better public policy than when decisions are made behind closed doors.

Hence, the NEW Empire Page has a separate page where you can monitor press releases as they are issued instead of waiting to read them the next day.

Hence, the NEW Empire Page arranges news items into 10 categories so that you can get to the news that matters to you faster.

Hence, the NEW Empire Page has an events calendar, more exclusive columns and a poll question of the week, but we’re not stopping there.

Starting next week, we’re converting the Guest Editorial section into a new kind of information sharing page which we’re calling Improving New York.   What will you find in that section?  You’ll find guest editorials and book reviews – content we had on the old Empire Page, but it will also feature interviews conducted by yours truly of people who I believe have important ideas, outlooks and information to share. 

It is my hope that the combination of these changes will help move needed solutions to New York’s many pressing problems into the decision-making  process.  The Empire Page has played that role sporadically in the past when the occasional guest editorial has called a problem to light or prevented a mistake from being made.  I believe the new Empire Page can play an even greater role in that regard.  It can with your help become a place that decision-makers – including elected officials and people who work for us in federal, state and local government – cannot ignore.

It goes without saying that the NEW Empire Page (and that’s the last time I’m going to capitalize ‘new’) offers multiple opportunities for participation without regard to one’s political affiliation, status or any other of those characteristics that excluded people in the past.  There’s an  opportunity to comment on columns and other  pieces; you can submit a guest editorial or a book review (both of which are subject to editorial oversight); you can suggest someone as a potential interviewee and you can share the information you find valuable on the site with others.

Feedback is welcome.  You can contact me by email at editor@empirepage.com.

Here are three proposals that should be adopted ASAP in order to put New York’s fiscal house in order.

• Lower the state speed limit to 55,
• Increase the tolls on the NYS Thruway, and
• Increase the number of local police on highway duty

Why lower the speed limit to 55?  The answer goes along with proposal number three – put more local police on highway patrol duty.  When the speed limit is lowered, more people will be found guilty of speeding and as a result, more money will flow to local government’s coffers.   That will help Albany, which is short on cash at the moment.

Why increase the tolls on the NYS Thruway?  If you increase the tolls, more people will take local roads instead of driving on the Thruway, which in turn will lead to more arrests for speeding and more money for local government.

And if there are any police officers left over, they can start ticketing more people for j-walking as well.  Those people will start making u-turns instead of parking their cars and j-walking to their destination, which will result in bigger fines. 

On a serious note, kudos to The Times Union The toll of tolls Sunday, August 17, 2008) for reporting that traffic on the Thruway is declining at the very moment that the Thruway Authority is raising rates.  The logical next step is for the Governor and the Legislature to set up a commission to determine the total impact of removing tolls from the Thruway and merging its management into the State Transportation Dept.  My guess is that a combination of removing tolls and the toll plazas would improve overall transportation in New York, lower costs for  the public to travel, for business to transport goods and reduce the cost to the taxpayers for supporting the entire toll-collecting infrastructure.

Governor Paterson deserves a great deal of credit for taking the bull by the horns – something I'm not confident that his predecessor would have done in the same situation. 

New York is facing a financial crisis on a scale much greater than the typical short-term tax revenue shortfall and Gov. Paterson has to be commended for recognizing that it won't be solved by a 'business as usual' approach. 

The real question is whether the legislative leaders and the state's public employee unions are willing to face reality or whether they want to continue to live in soap opera land? 

Reducing the size of state government does not mean essential services need to be sacrificed. However, instead of resisting change, the state's public employee unions need to step up to the plate to help the governor and legislature separate what's essential from what is no longer necessary and what can be done better yes, by the private sector. 

Here are some measures that should be addressed now – in the summer of 2008 – not in the fall or next year:

But above all the Legislature needs to put in place an independent budget office that is tasked with providing cost analysis for every piece of legislation that has a price tag on it.  We have to put an end to the tradition of letting favored interest groups write their own meal tickets in Albany.

Are people sufficiently appalled at the revelation that the New York State Legislature has been letting the inmates run the asylum?  I am referring to the fact that the Legislature has in the past taken the word of NYC public employee unions on the financial impact of policies that affect their members.  Their latest scheme was presented as if there would be no financial impact on the taxpayers by letting certain members retire a few years earlier with fat pensions.  When Mayor Bloomberg’s office took a closer look at the numbers the truth came out -- this scheme would have cost taxpayers in the neighborhood of $500 million.

But what’s $500 million among friends – especially if someone else is footing the bill?

So here's a question: Who foots the bill when the state legislature lets public employee unions or any other special interest walk out of the state store with their arms full of your tax dollars?

For one, it’s the citizens of upstate cities and towns who can’t afford adequate police and fire protection because their tax base has been eroded by the loss of the middle class and because such a large portion of their local budgets are tied up paying for Medicaid and the pensions of their own public employees.

It’s also those children who attend school in buildings that are decaying and who lack modern equipment because there’s no local tax base left and not enough state dollars to go around.

It’s also those families who are dependent on jobs that have been moved south or overseas because business owners can’t afford to remain in New York.

While some call these business owners greedy for wanting to stay in business, the truth of the matter is that it’s the NYS Legislature, not greed, that continues to drive businesses and the middle class out of New York.

Do we need better leaders or a better system? 

There is a difference between good leaders and good systems.  The former are transitory. The latter make for good results even under bad leaders.

Every four years we elect as governor someone who promises to solve the state's problems and make life better.  But how many times we have seen these men on white horses make one or two token changes and then spend the next four years running for higher office -- usually president -- while their aides massage their outsized egos?

Remember when George Pataki came into office promising to reduce the bloated state bureaucracy?  What did he do?  He shut down exactly ONE state agency – the Office of Energy, which probably should have stayed in business, and then went around the state to ribbon cuttings and other events pretending that he had done wonders for New York. In truth, he had just bribed someone else to stay in New York by giving them a huge tax break and other incentives in return for a large investment and numerous jobs that rarely followed.

When it comes to government, "good" systems (or structures, if you prefer) count more than “good” people.

For example, the public employee pension robberies could not have taken place if New York had an independent budget office that was charged with analyzing and reporting on the fiscal impact of every piece of legislation that comes with an invoice attached to it. 

If the federal government and New York City have such bodies – which they do, why is it that the state of New York does not?  Is it because that would make it too hard for legislative leaders to mortgage the future of New York with their give-aways?

Do yourself a favor:  Ask those running in your Assembly and Senate district this fall whether they will support the installation of an independent budget office in Albany as the first thing they do in 2009?  If not, do not vote for that person…unless of course you don’t care if the community you live in starts to resemble a third world nation because that my friends is where we are heading.