“The amendment before us is a trick and a treat,” the attorney general said in a Halloween-Day address before the Citizens Budget Commission in New York City. “It’s a trick on the voting public, and it’s a treat for the Legislature.”
The amendment is on the ballot at a time when New York’s economy is “in a serious, serious state of distress,” Spitzer said. Much of Upstate in particular is “almost in a state of depression,” he added.
Nationwide, population flow is “accelerating away from New York State at a rate that has not only diminished our political strength but is also leaving us without those individuals whom we have to depend upon to grow the economy,” he said. In much of the state, “we have population growth that has collapsed. We have wages that are flat. We have a tax base that is declining."
"In some Upstate cities, to the extent there is any job growth, 50 percent of it is public sector," he added. "A ratio of one-to-one, public and private sector in terms of job growth, is simply unsustainable. There simply won't be a tax base to support those public-sector jobs.”
Given these economic trends, the state must improve its fiscal performance, Spitzer said. He identified three broad, budget-related failures in Albany: “We spend too much, we use debt to pay for it, and we’re not buying the right stuff.”
State spending since 2001 has grown at twice the rate of inflation, the attorney general said.
"When you compound spending at twice the CPI over a period of years, suddenly you've busted your budget, and that's what we have done," he said. "Tax revenues will not go up proportionately.."
State debt has grown by more than $10 billion in recent years, with most of that going to operating expenses rather than long-term capital investments that most fiscal experts consider an appropriate use for debt, he said.
Yet, the attorney general said, “as bad as Albany is, this amendment would make it worse.”
By giving the Legislature more power when the budget is not enacted on time, Proposal One would encourage late budgets every year, he said.
The contingency budget created by the amendment would “let us do essentially what we did in prior years” rather than address new challenges, he said.
Among those challenges is New York’s costly Medicaid program, he said. Without mentioning specific reforms, Spitzer said, “Medicaid is the 800-pound gorilla of the budgetary discussion. We simply must face up to that.”
The attorney general called for “real”debt reform, saying the legislation Governor Pataki and the Legislature enacted in 2000 to restrict borrowing has failed to stop dramatic increases in debt.
Other budget-related reforms should include requirements that the enacted budget be balanced and that more dollars be set aside in reserve funds, he said.
Beyond budget issues, the attorney general called for reform of the state’s public authorities, changes in judicial selection, and “campaign finance reform.”