This past week, State Comptroller, Tom DiNapoli, reported in a mid-fiscal year update that tax collections are three-hundred seventy-one million dollars below the expected personal income tax collections projected by the State Budget Division.
DiNapoli predicts that if this trend continues, the four billion dollar state budget shortfall currently projected will grow.
Add to this, potential reductions in federal funding for various state programs and the state could be facing catastrophe.
Whenever we get this news, I cannot help but re-examine the wisdom of our state officials and the decisions they make when times appear to be flush.
In 2015, New York received 714 million dollars from a class action brought against the largest tobacco companies.
Earlier this year, the Rochester Democrat and Chronicle reported that New York State, in recent years, had been the recipient of over nine billion dollars in settlement money from Wall Street settlements with twenty-two different entities.
One would have thought those funds would have been held in reserve to meet whatever budget crisis that might materialize.
And if one didn’t materialize?
According to the U.S. Census Bureau, New York has a debt amounting to $ 137, 369, 089, 000 amounting to $ 6,956.00 per person.
We rank second in indebtedness only behind the State of California.
Faced with this sea of red ink, our state leaders decide to spend the settlement windfalls and kick the can of debt down the road for future legislators and generations to deal with.
As I once heard an official in Albany describe it, “it doesn’t make any difference if you drown in six inches of water or six feet of water, so you might as well go in deep.”
So, what did our state officials spend these latest windfalls on?
Well, some of the tobacco settlement money went towards a $ 700,000 sprinkler system at a public golf course in Niagara County.
Another $ 24,000,000 was used to build a new county jail and office building.
Despite the fact that the tobacco settlement would have provided 206 billion dollars over twenty-five years to the states that were part of the class action, New York, because its officials were anxious to use the money, was one of the states that issued bonds against its future payments.
This money grab means the state traded its future payments for immediate payment for pennies on the dollar.
Moreover, the bonds they issued are capital appreciation bonds which defer all interest payments for fifty years when the interest and principal come due together.
The nine states and three other entities issued 22.6 billion dollars in bonds in exchange for payment in the amount of 573.2 million dollars. When the bonds mature they will owe 67.1 billion to the bond holders.
Talk about kicking the can down the road.
The most recent ten billion dollar settlements are being used for one time state budget relief rather than capital improvements according to DiNapoli.
Funds are also being committed to Cuomo’s vaunted “buffalo Billion.”
A cynic would be tempted to ask whether the program has produced more jobs or indictments?
In western New York, the preferred developer, L.P. Ciminelli is under indictment charged with bribery, bid rigging and assorted other crimes in connection with the projects touted to boost the economy there.
Here, in central New York, COR, the preferred developer finds itself in the same situation.
Other defendants include the former founder and President of SUNY Polytech Institute in Albany which was to oversee the projects and the Governor’s closest confidante, once described as “Mario Cuomo’s third son” by the Governor.
Despite Cuomo’s claim that the “buffalo Billion” was a national success story, economically the region lags behind the nation and the rest of the state in job growth, downtown office vacancies rose last year and the poverty rate in both Buffalo and Rochester is climbing.
Locally, we have a fifteen million dollar film hub that sits empty while COR and SUNY Polytech fight over unpaid rent in court.
One of the criticisms the State Comptroller leveled was that if these windfall were going to be utilized, it could best used to fund public infrastructure projects.
Locally, we have a water system that was constructed almost one-hundred and twenty-five years ago.
Water began flowing through it in 1894.
It consists of nineteen miles of thirty inch pipe flowing from Skaneateles lake to Woodland Reservoir on the City’s west side and into five-hundred miles of water mains throughout the city.
Due to its age, the system suffers hundreds of leaks and breaks each year.
Repairing the pipes would have provided the kind of infrastructure project that would have insured long term employment for many central New York residents and stanched the loss of thousands of gallons of water each year.
Two years ago Cuomo was asked whether spending fifty million dollars at the State Fair might not be better spent on repairing Syracuse’s water system.
In response, he told us, “Fix your own pipes.”
Ten days ago, Cuomo announced that he was using one million dollars from Empire State Clean Water Fund to buy water filtration systems.
That’s the good news.
The bad news is that the filtration systems are for Puerto Rico.
Now there is a wise use of state taxpayer dollars.
And I thought he was starting to see the light.
I’m beyond frustrated for our grandkids! I told Miner & Maffei 8 years ago we needed 2.5 Billion to fix the 2.5 MILLION gallons daily leaking in those 500 miles throughout our city. That didn’t include what was in its way from Skaneateles! A few city water dept employees even suggested the leakage be bottled & sold for revenue!
We are living with idiots ~ & as you once said “you can’t fix stupid!”
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The bottom line is that the system is corrupt at whatever point one might choose to access the system. This corruption began in 1913 with the enactment of the Federal Reserve Act. I suggest you study the implications of that act and decide for yourself. The bottom line is that regardless of what anyone might wish is that the purchasing power of $1.00 in 1913 is about $0.04 in 2017. Wrap your mind around that fact. We all see those cute comparisons of what a meal or a loaf of bread cost 40 or 30 years ago but never think about what that actually means. Why is that happening. I challenge you to figure out the reason. Really do you have the courage to figure it out?