New York State is notorious for incredibly high taxes, with local taxes being 79% higher than the national average. This astonishing figure makes New York's local taxes the highest in the nation, while New York has had the smallest population increase since 2000. What this means is that the price of living in New York is increasing and the number of people available to carry the budget's burden is too small to decrease costs. This year there is a $2 billion deficit in New York, and next year there is an estimated $12.5 billion deficit for 2009. Clearly, increasing taxes is the not the way to make up for the deficit. Cuts need to be made and priorities need to change in the budget in order to revive New York's economy.
Local government is not the problem. County taxes go toward community programs, including criminal justice services, aiding the elderly, social services, veteran services, fixing roads and bridges, and patrolling highways. Some of the county's money also goes towards welfare and providing food stamps to people in need. However, even those opposing community services would not bother to confront the local government's budget. Out of every dollar in taxes, 90 cents is controlled by the state government. That's right: the county only has control over 10% of your taxes!
If I were to decide how to make up for the state deficit next year, I would make certain cuts in the state budget. First, I would reduce spending on Medicaid from $39.0 billion to $33.0 billion, saving New York $6.0 billion. Medicaid makes up 31% of our state's budget, when the average spending of states on Medicaid is only 16.8%. Medicaid is also a federal-state program, so whatever New York decides to spend on it will be matched by at least 50% with a grant by the federal government, as long as the program meets federal standards. Medicaid is also flawed, because the requirements to be part of the program can shut-out many people who are extremely poor and need the help. Also, $5.3 billion of the state budget (4%) goes to "Health," which is very vague and slightly redundant of programs like Medicaid which help people who need health insurance. Our state's spending in other areas in the budget is so low that I hesitate to make more cuts anywhere other than "Other." "Other" covers all projects that do not fall under the regular budget expenses. "Other" contains start-up programs and ideas that may be very innovative and a good thought for New York's future, but are not necessary at this time. I think that all programs that are not completely essential to New York in 2009 should be put on hold until New York has money to spare. Therefore, the remaining $6.5 billion should be easily found in the $13.9 billion of "Other."
I wanted to take a little time to explain why I did not make certain cuts now that I have explained which cuts I would like to make. I would not like to make cuts for School Aid, Higher Education, or Other Educational Aid because New York needs more educated students to bring business and prosperity to New York. Young adults with a good educational background will be able to take or create jobs in our state that will bring in more people and money to New York. I did not want to make cuts on Transportation or Judiciary, because most of the state budget comes from residents and these programs are beneficial to residents on a community level. Debt Service and Welfare are also beneficial to residents, but are also beneficial to New York's economy. Debt Services could bring certain families back to a point where they could spend money and aid New York's economy. Welfare helps pay for the necessities of residents, which re-circulates money when the money would not have otherwise been spent by the people in need. The other programs supported by the state are very unfamiliar to me and account for only a total of 12% of the budget, so I decided to leave them as they are.
Hopefully changes will be made in our state budget that make up for the oncoming deficit, but still keeps the needs of the citizens top priority.
Sources:
2008-09 All Funds Budget, New York State Executive Budget
http://publications.budget.state.ny.us/eBudget0809/fy0809littlebook/BriefingBook.pdf
New York State Division of the Budget
http://www.budget.state.ny.us/index.html
Open Book New York
http://www.openbooknewyork.com/index.htm
Kathy Jimino, Rensselaer County Executive
Random Economics (Take two)
16 years ago
4 comments:
Interesting forward-looking logic to support growth for the future, while preserving as many citizen benefits as possible.
Cutting back on Medicare could be difficult, depending on how the cuts are made. Postponing "Other" projects until better economic conditions prevail is sound.
Senior citizens who depend on Medicare and also struggle to pay their share of school taxes, may find this proposal difficult.
Hopefully, a lot of this money can be saved through detecting and stopping Medicare fraud that is rampant and consumes needed dollars for health care.
Cutting budget expenditures is difficult. Sometimes, difficult choices need to be made. Already, the Governor has tried to spread the cuts as broadly as possible by eliminating all promotions and new hires of state employees. He has also called for each agency to cut spending. Therefore, cuts like the one proposed here will be necessary to go further than the normal effort.
A difficult decision, yet well researched and defended. No cut will be welcomed, but this one seems to be supported by the facts available.
Hopefully, the economy will recover over the next year and some of the cuts will become unnecessary. Until then, cutting redundancy and waste are the best avenues for a sound budget.
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