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Wednesday, November 12, 2008

Slash and Burn Slash

- Governor Paterson announced his ideas as to where to cut the budget, and it ain't pretty. Mid-year school cuts, Medicaid, five day furloughs for state workers, wage freezes, SUNY tuition hikes, it's not good. The Times Union's Capital Confidential blog has all the gory details.

The only item related to racing that I saw was a proposed 50% reduction, beginning in the 2009-10 fiscal year, in "VLT Impact Aid" for municipalities (other than, for some reason, Yonkers) which have racinos. That of course is not going down well in Saratoga, where former mayor Valerie Keehn fought hard for the aid, which totaled $3.7 million for 2007. The Saratogian estimates that the cut could mean that the city will lose 5 to 7 percent of its expected revenue for 2009. And though the city doesn't have Joe Bruno around to fight for it anymore, it doesn't intend to take this without a fight.

"As of right now, we’re going to keep it in the budget, and fight to keep this money because we have to cover the expenses of overseeing this property," [Commissioner of Finance Kenneth] Ivins said. "They pulled out the state police, so we have to maintain protection. We have to maintain roads, sewer, water and other infrastructure. A number of local expenses go into that facility, plus it drains our sales tax revenue that would ordinarily go to our local businesses, but go there instead.

"We feel that we deserve these funds," he said. [Saratogian]
Another potentially related point is that many Democrats, and their allies, are in favor of a so-called millionaire's tax; a 1% surtax on those making over $1 million a year. Paterson, quite un-Democratically, is staunchly opposed, on the grounds that it would drive wealthy individuals and some businesses out of the state. Assembly Speaker Sheldon Silver is a big proponent of the idea; and though he's taken the issue off the table for the coming lame duck session next week, he's made it clear that it will be an option for next year, when the Democrats take control of the Senate. Senator Malcolm Smith, the Perhaps-Majority-Leader-To-Be, also opposes the idea....what kind of Democrats are these guys anyway? However, should Smith come around - because, after all, he will of course go along with the sentiments of his caucus - then that would set up the potential for the sort of horse trading scenario that this reader discusses here. A racino at Belmont, which we suspect Paterson supports, could be amongst the chips that Silver could play to help get the governor to come around on the tax.

8 Comments:

Anonymous said...

Wow, pretty grim. I worry about NY racing. Did NY state already pay the $120 million or so to bail the NYRA out of bankruptcy and the $30 million to kept it afloat until VLT's are running? I hope so, because if you are faced with closing a community hospital or taking away medical benefits or keeping horse gambling going, which one do you think Albany will cut first?

Anonymous said...

The hospital, racing generates revenue.

Anonymous said...

"Racing generates revenue" for whom? In NY, it costs the state money to keep racing going.

Anonymous said...

Silly comment, but I feel obligated to respond.

Albany gets at least 7% of every dollar wagered on track, as well as sales and payroll taxes.

Once economic impact study placed the overall economic impact of racing to NY State at over one BILLION dollars per annum.

So please, all this talk about NYRA's "bailout" needs to stop.

It is absurd, Albany recieved land valued far in excess of the debt relief provided.

If only our federal goverment could fashion such a deal with their bailout plans.

jk said...

Racing makes a ton of money for NY State. The problem is the State has bled NYRA and OTB dry. When the State tried to bleed even more, they found out there is nothing left to take.

Think of it as a business with a 100% tax rate. The business is profitable but the government takes all of the profit in taxes.

This is why Bloomberg punted NYC OTB to the State.

The latest bleed was increasing the takeout by 1%.

Anonymous said...

Most think that NY State already had a superior title to the real estate than was held by the NYRA. All the State did is settle litigation with the NYRA over its specious claim by providing debt forgiveness, cash for the racing operator's creditors and an $$$$ infusion to keep things going. Based on this, i'd want the NYRA negotiating for me in Washington, D.C, not representatives of NY State!

Anonymous said...

Let's face it, there is no better top management team than Wal-Mart's, so that is who I would appoint to manage the bailout bonanza, or NY racing, or NY State gov't for that matter. McDonald's top management team would be a close 2nd. And then send em to Detroit to get those losers back in the black. How about health care? How about sub-contracting government to Wal-Mart? Yes, I'm serious. /S/greenmtnpunter

Anonymous said...

GMP, dontcha know Wal Mart is evil??

They are non union.

As for title issues, believe me, IF the State had a superior claim, they would not have caved.