Budget Debate Takes Center Stage

- Governor Spitzer unveiled his new budget on Wednesday, and we're off to the races on the annual sprint to the March 31 deadline. Albany is on a two-year streak of actually having met the deadline after years of being late. The governor is proposing to increase spending by 5%, to $124.3 billion, while closing a $4.4 billion deficit; all "without raising taxes." Right. That's the usual politispeak for "closing loopholes" and "adding or raising fees." So ask a New Yorker if taxes haven't been raised when he/she is paying an auto insurance fee of $20, up from $5; real estate transfer taxes of up to $400 instead of $75 (if there's anyone buying real estate out there these days); taxes on cans of one's favorite malt liquor, or $3.50 per gram on a purchase of marijuana. (No, I'm not smoking it, but maybe Spitzer is.)

Add in a reduction of property tax rebates, cuts in health care and in aid to NYC, and you get the picture. Republicans, led by Senator Bruno, levied their expected criticism, noting that the taxes fees, totaling, in his estimation, $1.7 billion, “would increase taxes on virtually every New Yorker. It increases taxes on people who buy homes, own homes, drive cars or pay health insurance, or own a small business.” [Albany Times Union] Bruno also feels that the budget does not adequately benefit upstate interests, and criticized the reduction of property tax rebates. More on the Senator's, and other reaction, here.

And the budget anticipates $250 million in fees collected from the operator of the racino at Belmont. The problem with that, of course, is that Speaker Silver adamantly opposes slots there. That issue is one of the sticking points of the franchise standoff; and Spitzer's inclusion of that in his budget could well be the beginning of the process whereby the franchise issues becomes interwoven into the general budget debate.

If that's to be the case, NYRA will of course require a new temporary extension well past the new February 13 deadline. The first two deadlines were granted without much apparent debate by Steven Newman, Spitzer's hand-picked successor to Carole Stone, the former chairperson of the Oversight Board. But now, as reported by Tom Precious on Bloodhorse.com, the Board, dominated by Republicans, has voted to rescind the broad powers it had previously granted to Stone, and presently, at least up until now, enjoyed by Newman. That means that any further extensions would have to be approved by the entire board. "The purpose is to shut [Newman] down," said one government source.

My first thought is to wonder if Spitzer has the power to dissolve the Oversight Board altogether and replace it with supporters. But also, what really are the Republicans trying to accomplish other than to directly rebuff the governor? I don't see where it would be to Bruno's advantage at this point for the board to deny the next extension, shut down racing, and throw the whole matter into the vagaries of the court system, thus risking the land being awarded to NYRA. Do you?