A modest proposal for fixing New York’s budget

New York state faces the proverbial perfect storm: Tax revenues from Wall Street have imploded; income taxes statewide are down; sales tax receipts have plummeted.

The next shoe to drop will be property tax revenues, as new assessments reveal the dramatic decline in home values.

Despite the woeful trends, this is the wrong time for state and local governments to lay off workers:

In a recession, declining employment means a downward economic spiral, especially in small North Country towns where government jobs are often the only jobs.

At a time when government should be priming the economic pump, job cuts create the opposite effect.

So what’s the solution? Here are the four important steps needed now:

-State and local government workers earning more than $35,000 a year should take a mandatory 7% pay cut effective immediately.

-All state and local government workers should begin paying for a larger part of their insurance.
The amount of this contribution should be tied to the average amount paid by private-sector workers in New York for their health coverage.

-The retirement age for workers eligible for a public pension in New York should be reset to 65. Taxpayers can no longer foot the bill for thousands of middle-aged retirees.

-School districts with fewer than 1,000 students must consolidate administrations or lose state funding. This doesn’t mean closing schools necessarily; but it does mean sharing administrative staff and services.

Changes this sweeping would require the support of New York’s public employee unions.

The trade-off for these sacrifices should be a firm commitment from Governor David Paterson that for the next two years a) no state workers will be furloughed, b) no state facilities will be closed and c) support for local governments will be maintained.

This guarantee would give communities and workers a sense of security in uncertain times.

Sure, everyone’s wallets will be a little thinner, but we would avoid catastrophic changes: the closure of a state prison, say, or mass lay-offs at the local school, or spiking property taxes.

Without painful but manageable cuts on this scale, we will likely find ourselves on the road to chaos that California is now traveling.