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WPCNR ALBANY ROUNDS. July 29, 2008 UPDATED 11:50 PM EDT WITH TEXT OF GOVERNOR’S ADDRESS; UPDATED JULY 30, 2008 11:17 AM: Governor David Patterson and his Budget Director, Laura Anglin, presented a detailed analysis of the state’s financial situation this morning at 10:30 A.M. in a live webcast calling for the legislature in cooperation with the Governor to cut $1.2 Billion from the current budget. Ms. Anglin presented a slide show documenting the precipitous decline in state revenues, which may be viewed at http://www.budget.state.ny.usa and clicking on Budget Director’s Presentation. The charts speak volumes about the financial condition of the state (not good).
Governor David Patterson and Budget Director Laura Anglin addressing the media in Albany this morning on the Budget.
The governor said his office has identified $630 Million in savings across state agencies, to catch up with the current shortfall indicated by First Quarter Results. He enacted a hard hiring freeze, and, in addition he is asking the legislature when it returns to work in Albany at his request August 19, to produce another $600 Million in cuts off the present state budget, to begin to trim the 2009-2010 Budget. The cuts amount to $1.2 Billion off a $122 Billion Budget ($81 Billion Operating Budget)
The governor and Budget Director, in addition, said they were looking to lease-partner state assets to run them more efficiently, but declined to name what assets were in play for such partnerships.
The $1.2 Billion in spending cuts proposed by the Governor would carry forward into next year’s budget cutting some $2.5 Billion off the projected 2009-2010 shortfall of $6.2 Billion.
The Budget Director said the governor was not looking for cuts by passing along cuts to county and city governments. The session painted a bleak picture of the present economy. The governor said if the state does not act now, the opportunity to cut into the growing deficit this year would be lost. He maintained that education cuts were still in play, and nothing was “off the table.”
Wall Street Real Estate Numbers Numb
The Budget Director pointed out that Wall Street problems were accounting for the widening state deficit, citing a projected 24.4% decrease in Capital Gains, a 20.5% decline in Wall Street Bonuses, pointing out this was the first time since 2002 that Capital Gains had declined.
On the foreclosure front, she painted a bleak landscape: In the first quarter of 2008, 13,700 mortgage loans entered the foreclosure process, up 10,000 properties since the first quarter of 2007. She said at the end of the first quarter, the number loans in foreclosure had almost doubled since the first quarter of 2007, 45,100 in foreclosure (2.2%) to 25,000 (1.2%) a year ago.
Yesterday, Governor David L. Patterson called legislators back to Albany, beginning August 19, to hammer out immediate spending cuts, state workforce cuts to deal with a ballooning state revenue shortfall. The Governor promised to “curtail” the costs of heating oil so New Yorkers would not freeze this winter. He called for the legislature to pass a property tax cap to limit school district property tax increases, and indicated there would be layoffs of state workers, as well as spending cuts in the existing state budget passed just four months ago, which he signed.
“Next Year’s Budget Process Starts Now. New York families are already making the tough choices…New Yorkers are prioritizing spending every day…Now your government is going to follow your lead. We’re going to end the legislators’ vacations and bring them back to Albany and reprioritize the way we manage New York State finances.” Governor David Patterson in his state address today 45 minutes ago.
The governor said the state deficit over the next 10 years three months ago was $21.5 Billion, now three months later that is projected to be 26.2 Billion, “a staggering 22% increase in less than 90 days.” He noted that the 16 major New York banks projected a 97% decrease in taxes they owned to New York State, plunging from $173 Million last year (through June 2007) to $5 Million this year. He said the situation will get worse before it gets better.
The Governor said “It is time for New York and other governments to cut up our credit cards. The era of buy now and pay later is over. The faster we address this crisis, the faster and stronger we will emerge from it.”
The Governor said that in the next four weeks his administration would be working to address the size of the state workforce, further cuts to agency spending, and generating proposals from public and private partnerships to deal with the crisis. He said New Yorkers everywhere have been cutting back, indicated by the decrease in traffic on the New York Thruway, meaning many have cut their vacations. He said the legislature should take their cue from the citizens in learning to do more with less.
Herewith is the text of the Governor’s remarks:
My fellow New Yorkers,
Our state now faces increasingly harsh economic times. When I travel across the State I see communities suffering. Everywhere I go I meet people who are losing their jobs and their homes. I meet families forced to pay more for gasoline and for food, while their paychecks stay the same. Next winter some of these families will have to choose between heating their homes and feeding their children. The rising costs of health care mean that they can’t afford to get sick. The rising costs of education mean that parents can no longer prepare for their children to be in the work force. The damage on Wall Street is affecting all of our communities and its effects on our New York State’s finances are devastating.
When I took office, I was apprised that the New York State budget deficit for next year was $5 billion. I immediately ordered cuts to state spending, but the situation has gotten worse. Tomorrow I will submit a budget plan that places our deficit for next year at $6.4 billion – that is $1.4 billion higher than it was just a few short months ago. How could this happen? It’s simple. Costs are rising steadily, revenues are dropping dramatically.
In the beginning of May, our budget director projected our New York State deficit over the next three years at $21.5 billion – that was a record. But things have changed. That number has now erupted to $26.2 billion – a staggering 22 percent increase in less than 90 days.
In June of 2007, the 16 banks that pay the most on taxes to their profits remitted $173 million to our New York State Treasury. This June, just a month ago, they sent us $5 million – a 97 percent decrease. Our economic woes are so severe that I wanted to talk to you personally this evening about where we stand. The fact is: we confront harsh times. Let me be honest: this situation will get worse before it gets better.
But the time to act is now. We cannot waste any further opportunities. We can’t wait and hope that this problem will resolve itself. If we do, we will lose our opportunity to turn this situation around. These times call for action and today I promise you there will be action.
Today I am calling the legislature back for an emergency economic session on Tuesday, August [19th].
In the interim, my administration will confront the following issues: addressing the size of the state work force; further cuts to agency spending and generating proposals for public and private partnerships for our State assets.
When I meet with the legislature, we will work together to help New Yorkers cope with this crisis. We will continue working on a property tax cap to lighten the load for homeowners and we will find a way to curtail the rising costs of home heating next winter. I will do everything I can to make sure that New York’s families do not freeze when it gets cold. My message to the legislature is that next year’s budget process starts now.
New York’s families are already making the tough choices. Every time you fill up a tank of gas or go to the supermarket you are learning to do more with less. New Yorker’s are prioritizing spending every day. The lesser crowding of the New York State Thruway is an indication that too many of you have postponed holidays or canceled your vacations.
Now your government is going to follow your lead. We are going to end the legislators’ vacations and bring them back to Albany to reprioritize the way we manage New York State’s finances. For too long we have done less with more and paid more for less. Now government will do what families have done when their incomes have fallen – we will cut spending. Government will learn to do more with less.
But I can’t do it alone; I need all of your help. I’m asking for the State leaders in the public and private sector, in labor, those who serve in Washington, owners of business and others to join us in this great effort.
It is time for New York and other governments to cut up our credit cards. The era of buy now, pay later and later is over. The faster we address this crisis, the faster and stronger we will emerge from it. That is the path to a better and more prosperous New York.
I’d like to thank the networks for extending me this opportunity and all of you for watching and listening this evening. Good night.
