
Fellow New Yorkers:
This week, your state legislators will vote on the 2009-2010 New York State budget. In doing so, they will be asked to put the welfare of our entire State above any individual group or special interest. They are being asked to do their part in confronting a historic challenge as New York continues to face the worst fiscal crisis since the Great Depression.
For the past 378 days, my number-one priority has been to fight for a responsible solution to this fiscal crisis. Ensuring the short and long-term fiscal integrity of this state is important for all New Yorkers and the only way we could mitigate the effects of this crisis on Main Street was to produce a budget that required shared sacrifice from everyone. This budget also reflects a core value of my administration, providing accountability to the taxpayers by providing real solutions to our fiscal problems, and not gimmicks and band-aids.
While we have had to reduce spending, we have made sure that critical programs and services that help all New Yorkers get the funding they need. New York received approximately $6 billion in federal aid to help us cope with this crisis, but it represented only a fraction of our budget gap. The actions we take this week will put New York on the right path towards recovery by closing a $17.7 billion budget gap – the largest in State history. This budget will strengthen our long-term finances, protecting the state’s economy for the next generation. And we will implement significant, recurring spending reductions.
Not only is this budget fiscally responsible, it will also enact a number of long-overdue reforms to make government more accountable to New York’s taxpayers. For years, taxpayers have financed a Medicaid program that was the most expensive in the nation, but did not provide New Yorkers with the health care they need. That is unacceptable. This budget takes shifts funding to the type of primary and preventive care that will save money and save lives.
For years, we have been trying to reform the Rockefeller Drug Laws, so that we can more effectively protect communities across the state from the scourge of drugs. In this budget, we finally succeeded. For years, governors have tried to close underutilized State prisons, so that taxpayers no longer have to subsidize half-empty facilities. In this budget, we finally succeeded. For years, taxpayers have financed an ineffective Empire Zone program. In this budget, we finally stripped it of its worst abuses. These reforms will help us make this program an effective tool for creating quality jobs in our communities. For years, we have been fighting to enact a Bigger Better Bottle Bill that would help us clean up our communities. In this budget, we finally succeeded. And for the first time in since 1990, the State will increase the basic welfare grant. In this economic crisis, many New Yorkers who never thought that they would need assistance from the government are finding that they do. It is absolutely essential that we provide economic assistance where it is needed
To understand why I strongly support this budget, it is important to know how we arrived at this point. Our national economy has been in recession for more than a year, and New York is at the epicenter of a global economic crisis. When I took office, our State’s budget gap was $5 billion. Over the course of the last year, that deficit increased at a staggering rate. In the last two months alone, the deficit has increased by $4.7 billion, from $13 billion to $17.7 billion.
From the day I took office, we have faced our budget problems honestly and directly. My first act in office was to propose across-the-board spending reductions for all State agencies. In July, as the economy began to deteriorate, I instituted further spending reductions and imposed a hiring freeze and strict cash controls to manage the flow of State spending. In July, I called the Legislature back to Albany for an extraordinary emergency economic session and achieved $1 billion of mid-year reductions. All told, we enacted $3 billion in spending cuts this past year, by far the largest mid-year reductions in the history of this State.
In most economic times, these actions alone would be monumental. But during these times, it was just the tip of the iceberg.
Last fall, as the economy crashed and the budget gap continued to grow, it became clear even greater sacrifice would have to be made. To encourage discussion and to spur action, I presented my Executive Budget a month early. After three months of negotiation, amid an economy that has continued to deteriorate, we have reached a budget that reflects the tone I have set over the last year: We have addressed our long-term problems head-on by making tough decisions.
Once this budget is passed, we will enact recurring spending reductions of $6.5 billion – twice as much as in any other budget in State history. As a result, the budget gaps we will be required to close in future years have been reduced by about 80 percent, from approximately $60 billion to $11 billion.
To do this, we had to make tough, fiscally responsible choices, including reducing health care spending by $2.3 billion (the largest such reduction in State history) and eliminating the $1.5 billion STAR rebate program. And while the federal stimulus funding will allow us to restore all year-to-year cuts in School Aid, we will have to hold education spending to last year’s levels.
It was only after my colleagues in the Legislature agreed to these deep and historic spending cuts that I decided to support an increase in the personal income tax on the wealthiest New Yorkers. This is a temporary increase, which only became necessary when the deficit grew by almost $5 billion in the three months since I presented my Executive Budget.
This is a historic time for New York. As I have toured the State in these last 13 months, I have heard directly from you about the hardship everyday New Yorkers are facing. Tens of thousands of you have lost your jobs. Employers have been forced to cut back on salaries, health benefits and retirement programs. You have already been forced to make the kinds of tough decisions that our State government is making this week. This budget puts New York on the path to a better future. We are changing the way state government spends money. And I am confident that when future generations look back at this time, they will see that the actions we take this week will mark a turning point.
Sincerely,
Governor David A. Paterson