Pataki’s Pattern
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Not much has changed in Albany since Governor Pataki took office in 1994 as a fiscal conservative out to challenge a complacent political culture to cut taxes and reduce the size of government. The budget has been passed late for 19 consecutive years, spending has consistently outpaced inflation, and the legislative agenda, such as it is, has progressed at a glacial pace. But the governor has changed dramatically over the past nine years. Far from reforming Albany’s politics, he has become an active and even eager participant in them. Judging from the budget Mr. Pataki has just proposed, expect a disappointing three years between now and 2006, when he next stands for re-election.
Once again, Mr. Pataki has chosen to feed the budget lines that perennially threaten to bankrupt the state, rather than cutting them down to size. Consider Medicaid. Mr. Pataki called for re-establishing the gross receipts tax on hospitals and home-care services and increasing a similar tax on nursing homes that had been scheduled to be sliced in half this April. These measures would raise hundreds of millions of dollars, helping the governor close what he estimates to be a $5.1 billion gap in the coming fiscal year. (There is no independent budget office, so much of the state’s negotiation process consists of negotiating, instead of calculating, how much money the state has to spend.) But the measures would do nothing to slow the growth of the state’s Medicaid program, which consumes $42 billion in state, local, and federal funds and which by itself is larger than the total spending of 43 states.
We’ve already weighed in with our objections to the governor’s plan to finance education spending, which runs neck and neck with Medicaid for the distinction of being the state’s largest expense line. His plan is to, in effect, tax the innumerate by introducing Video Lottery Terminals, a highly addictive electronic variation on the slot machine. All revenue derived from gambling is required by the state’s constitution to go into education. But given that the constitution also bans slot machines — which VLTs quite obviously are — we’re skeptical that this will occur. These debit-card-taking no-armed bandits are expected to be the state’s single largest new revenue stream in the coming fiscal year.
Pension payments, another of the state’s major expenses and the most difficult to predict, are also carelessly treated in Mr. Pataki’s proposal, which all in all suggests a man who has given up on presenting even a façade of reform. At present, the state’s pension plans protect public employees from the vagaries of the markets while adding another expense that taxpayers must contribute to during downturns. There’s little to be done about this considering that it’s unconstitutional in New York state to reduce these benefits. But rather than propose a new tier of pension plans for new employees that would reduce the cost of pensions as we move forward, the governor proposed stretching out the payments we already owe by changing various actuarial assumptions to push state contributions into future fiscal years.
The comptroller, Allen Hevesi, has warned that these changes are likely unconstitutional. The state lost a similar law suit a few years back and was compelled to strain the budget to make up the missed payments with interest. Mr. Pataki’s budget assumes several hundred million in savings from this fiscal fudging. His idea of reform seems to be leaving an IOU in the cookie pot.
The governor has also abandoned last year’s rhetoric on taxes, when he bitterly opposed various increases, which were approved only when the Legislature overturned his vetoes. But just one year later, instead of calling to eliminate these taxes, he is now content to let them phase out on the legislative schedule. As the Manhattan Institute’s E.J. McMahon has pointed out, if the governor had curtailed spending, he could have proposed phasing out the income tax and property tax surcharges instead of letting them run their course, which means they may well be extended even past their present expiration dates.
Mr. Pataki has tried to present himself as a fiscal conservative by reducing spending in the state’s general fund. But this is not savings, merely creative bookkeeping, as money from this year’s new VLT revenues and health care taxes, last year’s cigarette excise, and various other extractions from the taxpayers’ wallet go not into the general fund but are spent through various dedicated back channels. The sum of Mr. Pataki’s proposals is yet another budget that all but ensures that next year’s budget will be more of the same, ad inifnitum.
Mark, finally, that the governor’s proposals are merely the starting point for negotiations with the legislature — a process likely to culminate in an even less responsible budget for the coming fiscal year. Expect another three years of lurching from crisis to crisis until the voters have the chance to again try to find someone with the same ideas that motivated Mr. Pataki a decade ago and — one can hope — a willingness to fight for real change.