Council unveils Web site, hightaxesnewyork.com, to make case against the Runaway Spending Amendment

The Business Council has unveiled a new Web site, www.hightaxesnewyork.com, that is designed to help voters understand how New York's fiscal problems would be significantly worsened by a proposed Constitutional amendment fundamentally altering New York’s budget process.

"This Web site will give New York and its taxpayers a steady stream of information explaining why Proposal One would worsen New York's already huge problems with high spending and high taxes," said Business Council President Daniel B. Walsh. "New York needs budget reform, but this isn't it—as this Web site will show."

The Business Council's Board of Directors voted unanimously to oppose the amendment, Proposal One on the November 8 ballot, last spring.

Between now and Election Day, when New York's voters will accept or reject Proposal One, the Web site will be updated daily with information from a variety of sources, including news stories, op-ed commentaries, other institutions' reports and studies, and commentaries on various Web logs.

The site also includes links to: a detailed slide show outlining the case against Proposal One; a one-page document with "fast facts" on the proposal; the Public Policy Institute's recent report criticizing the proposal; ideas for alternative budget reforms that would address New York's real budget problem, excessive spending; and the ballot language on the proposed amendment.

The site is also updated frequently with new editorials from New York papers condemning the amendment. The editorials page includes comments from the Wall Street Journal, New York Times, New York Post, New York Daily News, Newsday, New York Sun, Buffalo News, Albany Times Union, Rochester Democrat and Chronicle, Utica Observer-Dispatch, Canandaigua Daily Messenger, Watertown Daily Times, and the Poughkeepsie Journal.

The Public Policy Institute's report documented some of the effects Proposal One would have. That report, entitled New York needs real budget reform, concludes that the proposed amendment would virtually guarantee late budgets every year, make big budget gaps more frequent, and lead to even higher taxes and debt.

Instead, the report suggests, New York's Constitution could be amended to include legal limits on growth in state spending and taxes, to end Albany's habit of spending more than it can afford. Such a provision, already in place in more than 20 other states, limits annual budget growth to affordable levels based on such factors as the inflation rate and population growth.

Supporters of Proposal One say it will force Albany to enact better and more timely budgets.

"In reality, the proposed amendment would do the opposite," says the Institute's report. "It would
give the Legislature much more power over state spending whenever it fails to adopt a new budget by the start of a new fiscal year. Such a powerful incentive for delay would virtually guarantee late budgets every year. And history shows the Legislature’s stronger influence would lead to higher spending and taxes –– thus making it even harder for New York to compete for the jobs we need."

“This is an important issue that New Yorkers have a responsibility to understand and inform others about,” said Walsh. "New Yorkers don’t always get the chance to have their voice heard on fiscal matters, and that’s been more and more evident in recent years. This is their chance to let lawmakers know that voters do watch, and care about, the budget process in New York and its effects on the New York economy."

Wall Street Journal editorial blasts the Runaway Spending Amendment

From UpstateBlog.net October 6, 2005:

The notorious Runaway Spending Amendment (RSA) proposal that New York's voters will consider in November has attracted virtually no support from anyone who seriously considers fiscal-policy issues and the state of New York's fiscal health.

Fiscal-policy think tanks, their in-house wonks, academic policy experts, business groups, notable good-government groups, and most or all New York State editorial pages have all roundly criticized the proposed amendment. This proposed amendment, which will be Proposal One on the ballot in November, is being called "budget reform" by its apologists, but it's not much more than a power grab by the state legislature that ensure late budgets, inflate already high spending, taxes, and debt, and make budget gaps worse and more frequent.

'Like waving packages of white powder in Needle Park.' Well, the idea is so dumb that even national media are starting to take note. A blistering editorial in today's Wall Street Journal (available cost- and registration-free here) marvels at Albany's enthusiasm for driving its taxes even higher.

As exhibits in spendthrift government go, New York state is right at the top. But believe it or not, the legislators who already impose some of the highest tax rates in the nation want to give themselves even more spending clout.

They're promoting an amendment to the New York constitution on next month's ballot that would remove important budgetary powers from the Governor and give them to the legislature. This is like waving packages of white powder in Needle Park. If voters approve the referendum, lawmakers would, among other things, be empowered to draft their own budget if they haven't acted on the Governor's by the start of the new fiscal year.

The piece notes that some of the provisions of the amendment— creation of an independent budget office, putting health-care spending on the books—would be done without an amendment. Then it notes, correctly, that any benefits from those changes would be more than nullified by the ideas "central perverse incentives." The piece quotes the work of our own director of research to make the point.

Simply by refusing to adopt a budget on time--and the amendment eliminates the current penalty for that, which is no paychecks until an overdue budget is passed--the legislature will allow itself to take control of the process.

According to a recent analysis by Robert Ward of the Public Policy Institute, "history suggests that giving the legislature more influence over the budget will lead to higher spending and taxes--thus making it even harder for New York to compete for the jobs we need."

The piece also has harsh words for the legislative leaders pushing the idea, and a strong hint that the governor should mount a charge against the idea.

. . . Republican Senate Majority Leader Joe Bruno and Democratic Assembly Speaker Shelly Silver are both pushing the power grab. The liberal New York Daily News describes them, with some restraint, as "the two leaders who have run the legislature as their personal fiefdom for the past decade, securing it the title of worst in the country." California Governor Arnold Schwarzenegger might argue that Sacramento holds that dubious distinction, and that his state has the budget deficits to prove it, but point taken.

Albany needs stronger protections against runaway spending. Proposal One would have the opposite effect. A Quinnipiac University poll released yesterday shows voters supporting the amendment by a 48%-33% margin. However, 20% are still undecided, and we hope that over the next five weeks Governor George Pataki will use his bully pulpit to help them make up their minds.

For daily updates on the case against the Runaway Spending Amendment, visit www.hightaxesnewyork.com.