This week, Governor Paterson proposed a state spending cap, calling it the "Latest in a series of initiatives to reform Albany and make government accountable to taxpayers." We're assuming the first part of this series is the mandate to analyze economic impact of any proposed legislation or policy changes - that was ignored less than a week after it was announced with the implementation of "Labor Peace."
So now a spending cap... This is an interesting concept, and one that we support in principle. I say "in principle" specifically to note that we think that a spending cap instituted after the most expensive budget in New York State history is a bad idea. Right now, there are no details associated with such a spending cap - specifically what that cap would be - so there's nothing really on which to comment. However, we know that an inflated cap painted by overspending and stimulus money is not the answer.
Here's a thought - and I can only say this because we uniquely face it here in Buffalo/Erie County... We have control boards in both Buffalo and Erie County, and through those boards the state requires that the local governments prepare and balance not only the annual budget, but a 4-year-plan. That process has actually been successful in bringing spending under control and both entities have built fund balances as a result. As it is every year, this state budget was built with a lot of short-term thinking and Band-Aid® solutions. A cap is nice, but forcing the state to look ahead would be beneficial to everyone!
In our meeting with the state's Department of Budget last week, we got a lot of "we don't know what the future holds" comments. Well, just because we don't know what the future holds doesn't mean we can't plan for it. Every household and business in the state is.