BALCONY new logo large

The BALCONY Bulletin

Finding  Common Ground Between New York Business and Labor
  
 
November 12, 2008

GOVERNOR PATERSON DELIVERS $5.2B, TWO-YEAR DEFICIT REDUCTION PLAN

Legislature to Debate Plan:
BALCONY Urges
'Share the Burden'
 
Governor David Paterson 
 
The following is a news release from Governor Paterson:
 
"Governor David A. Paterson on November 12th  announced a comprehensive, two-year $5.2 billion deficit reduction plan that will entirely eliminate the State's $1.5 billion current-year shortfall, protect against further declines in revenue in a volatile economic climate, and make a substantial down payment on next year's deficit.

Governor Paterson's proposed reductions are spread across virtually every area of State spending, including education, health care, human services, the State workforce, and others. These actions would produce $2 billion of savings in 2008-09 and $3.2 billion in 2009-10.

"The deficit reduction plan I have put forward today represents a series of difficult choices across virtually every area of State spending," said Governor Paterson. "The only way we are going to overcome this unprecedented crisis is through shared sacrifice. I look forward to engaging in a productive dialogue with the Legislature about the actions we must take at next week's special session to address our State's record budget deficits."

Governor Paterson's plan would close the State's $1.5 billion current-year shortfall, while also providing a $548 million cushion against additional declines in revenue during 2008-09. These proposed actions would also reduce the State's 2009-10 deficit from $12.5 billion to $8.8 billion and four-year budget deficit by from $47.0 billion to $35.9 billion.

After implementing Governor Paterson's deficit reduction plan, 2008-09 All Funds spending would still total $119.2 billion, an increase of $3.1 billion or 2.7 percent over the previous year. State Operating Funds spending would total $77.0 billion, an increase of $1.9 billion or 2.5 percent. Inflation is currently projected to be 4.2 percent for 2008-09."
 
Click here to read Governor Paterson's entire release.  
Statement by Alan Lubin and Bruce Ventimiglia, Co-Chairmen, BALCONY

"The Wall Street Meltdown was not created by working men and women and they must not be forced to bear the brunt of  New York State's budget crisis.
 
Destruction of the public workforce, schools, state services and health care would leave our state with a terrible economy, hasten our decline and dramatically impact the ability of small businesses to survive. 
 
The state must be more realistic in its solutions to repair the budget shortfalls.  Just as the federal government has moved quickly to support the financial sector with almost a trillion dollars, so too must Washington provide the assistance necessary for New York State and other states." 
 

State Budget Crisis Debate
On November 18th, Governor David A. Paterson will convene a special emergency session of the New York State Legislature to address a mid-year budgetary shortfall of $1.5 billion.  This session will be the second in the current budget year held to address the state revenue losses that could mushroom as high as $47 billion over the next four years, according to Paterson. Next year's shortfall is expected to exceed $10 billion. 
 
To combat this deficit, on November 10th Governor Paterson raised the possibility of billions of dollars of cuts in Medicaid and school aid. Moreover, he threatened to urge state labor unions to reopen the current contracts for public employees.
 
This loss is directly tied to the Wall Street meltdown that has led to the biggest bankruptcy filing in American history (Lehman Brothers), the collapse of Fannie Mae and Freddie Mac, federal government intervention in private banking institutions and in insurance giant AIG, a concomitant credit squeeze, and a precipitous decline in the valuation of the stock market.  Wall Street payments account for 20% of the state's income tax collections, and that revenue could be down by as much as 40%.  Governor Paterson has also testified before Congress, requesting federal aid to help alleviate this situation, which has national origins but which affects the State of New York disproportionally hard.  
 
"There will be hard and painful cuts. There is no segment of this budget that will not be cut," Governor Paterson warned in a speech on October 28th. Governor Paterson predicted that the state consequences of this crisis would include the loss of 160,000 jobs (45,000 in financial services alone), an unemployment rate that could well top 6.5 percent, and a decline in personal income and wages which would reverse the trend to higher income and wages that had obtained in 2007.  This is confirmed by New York City Comptroller William C. Thompson Jr., who issued a report on October 15 predicting a loss in New York City of 165,000 jobs over the next two years. Of course, when income and wages decline, so too does consumer spending, so the effects of the financial thin ice spread into most other sectors of the economy.
 
According to State Comptroller Thomas DiNapoli, the volatility on Wall Street has had an effect on the New York State pension fund, which stood at $154 billion back in March, but has suffered a twenty percent reduction ($30 billion) since that time. This may lead to additional pressure on municipalities to increase their contributions to this fund in the future.
 
Since BALCONY is comprised of small businesses, trade associations, non-profits, and labor unions, we are vitally concerned that both our response and the State's to the fiscal crisis be responsible, creative, and well thought out.  Most of the public pronouncements by the Governor have tended to signal that he believes we can "cut our way out of this deficit."  While State budget cuts will be part of the solution, it will take a surgeon's scalpel and not an axe to make cuts that do not affect the businesses of, or services to, those who are most in need of help.
  
BALCONY does not possess a "magic bullet" solution to this impending crisis.  Indeed, there is widespread and vigorous debate among BALCONY members as to the proper strategy to follow, and this debate is precisely the reason BALCONY was formed to address.  It is the duty of BALCONY and other public policy organizations to provide the forums and a dash of "common ground" civility to push this ongoing conversation forward.
 
One BALCONY member, the New York City Building Congress, has issued a report predicting much uncertainty among new construction projects.  This report stated, "Overall construction spending in 2008 is forecast to reach a record $33.8 billion, a 16 % increase from 2007 when spending reached $29.1 billion. Spending is currently forecast to reach $33.4 billion in 2009 before easing to $26.2 billion in 2010."
  
Another BALCONY member, New Yorkers for Fiscal Fairness, has suggested a strategy to deal with the mid-year shortfall of $1.2 billion.  They propose that instead of slashing services immediately, New York State should borrow $1 billion from the Tax Stabilization Reserve Fund at the end of the 2008-2009 State fiscal year in March, and apply that to whatever gap then exists between disbursements and incoming revenue.  New Yorkers for Fiscal Fairness has created the Better Choice Budget Campaign, a coalition of over one hundred non-profits and labor- and faith-based organizations, to promote this step and a host of others that could serve as guidelines for Governor Paterson and the New York State Legislature.  Further details of this proposal are available at  www.abetterchoiceforny.org.
 
BALCONY does not back any one proposal exclusively, and asks all its members and interested New Yorkers to carefully consider all proposals - to ask themselves what the implications of any proposal will be on certain issues including:  Medicaid, various state property tax relief plans including the "circuit breaker," and any other services that New York State provides for its citizens.  If this crisis degenerates into political character assassination and partisan bickering, the ultimate losers will be the citizens of New York.  Everybody agrees that sacrifices will be required of all, and the only way New Yorkers will accept belt-tightening voluntarily is if they perceive that these sacrifices are distributed in an equitable and caring fashion.
 
We look for the input of BALCONY members on which measures you think are most viable. Each action has a consequence: massive layoffs by the State will harm surely local economies, while early retirement incentives may provide savings and minimize economic downturn. State cuts to our public schools will almost assuredly lead to higher local property taxes, simply shifting the burden to localities. Stimulus packages from Washington to the states and localities could be structured in a way to relieve the state of burgeoning Medicaid expenses and perhaps even include a public works component to rebuild our infrastructure using - and developing - green technologies here in New York as part of the rebuilding.
 
We look forward to hearing your thoughts and ideas on this issue. A series of forums or a meeting of our membership this winter is under consideration. Please know that we respect and urge feedback of all BALCONY members to help provide our Governor and Legislature with solutions. Business and Labor will work together and find solutions to common concerns is our mission. Let's take a fresh look at how we can work together to achieve this goal. 
 

 
 
Wall Street 
Save the Date!
 
Thursday, December 11th @ 8:30 am 
 
Wall Street Meltdown:
Implications for New York Economy
 
Featured Speakers:
 
NY State Comptroller
Thomas DiNapoli
 
NYS Thomas DiNapoli
 
 and 
 
NY City Comptroller
 William C. Thompson Jr.
 
 BALCONY William Thompson
 
 
 
 
 
BALCONY Members Comment on Special Legislative Session
"This is the time for the Governor and Legislature to come together to make better choices for our fiscal future. While we have been offering responsible solutions to the shortfall for several years now -solutions like tax cuts for 95% of working families and a more progressive tax rate for those most fortunate among us, allowing the State to make bulk purchases of prescription drugs and green energy initiatives that will save money, that will not be enough. We will seek creative solutions that will lead to better ways of providing services to those in need. And we will need help from Washington. We're all in this together."
- Alan Lubin, Executive V.P., New York  State United Teachers -NYSUT
 
"There are ways to reduce costs without adversely affecting services.  Last year, the state spent $3.1 billion on consultants. If state employees were hired to do this work, the state could save between $500 and $750 million annually."- Ken Brynien, President, Public Employees 
Federation
PEF 
  
"Gov. David Paterson's suggestion to the New York Times that state labor contracts be reopened is
counterproductive and disappointing. The Governor knows or should know that reopening contracts is
not acceptable to CSEA.
 
"Any serious business person knows that a contract is a contract.
 
"CSEA has already offered a range of recommendations to the Governor on ways to save taxpayers' money in the short and long term. These are far better choices for the governor to pursue than to play politics through the media."
Danny Donohue, President, Civil Service Employees Association- CSEA 
 
"We accept that the governor has stated that there are no sacred cows when the budget is reviewed for future reductions. History has shown us that the management confidential employees have repeatedly been called upon to sacrifice above and beyond all other state employees.  MC employees should be treated no less well than any other employees."
- Joe Sano, Executive Director, Organization of Management and Confidential Employees - OMCE 

 
On November 12th, the Better Choice Budget Campaign and the One New York: Fighting for Fairness joined together to call on the Governor and legislative leaders to abandon a budget policy that calls on working families and vulnerable New Yorkers to bear the burden of the state's fiscal crisis.
 
The groups called on Paterson to use the Tax Stabilization Reserve Fund (a "Rainy Day Fund" that currently has $1.039 billion) to bridge the mid-year budget gap, to wait for a state fiscal relief package from Washington before making massive cuts in services, and to ask the wealthiest New Yorkers to take part in the "shared sacrifice as we did in 2003.
 
For more information, go to www.abetterchoiceforny.org.
 

WELCOME, New BALCONY Members! 
 
Austism United
 
 
 G5 Capital
 
 
 
  
Jerry Weiss 
 
 
 
BALCONY , the Business and Labor Coalition of New York, represents more than 1,000 New York businesses, labor unions, and trade associations. BALCONY seeks common ground in the public policy debate in New York to spur economic development through the adoption of business/union friendly, socially responsible common sense laws that maintain and improve the quality of life for working New Yorkers.

Call, Write, or Email BALCONY:

BALCONY: 
633 Third Avenue, 16th Floor 
New York, NY 10017
212-219-7777
Contact: Lou Gordon - BALCONY Director
loug@balconynewyork.com
tlwebb



Forward Email

This email was forwarded to loug@balconynewyork.com, by Marsha Gordon.
Privacy Policy.

Email Marketing by
Constant Contact