Apr

16

Lecturehop: Crisis in State Budgets

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Good budgeting practices start at home: an Italian shopping list.

Bwog hops a lot—it’s how we get our exercise! This week, we kept up with our New Year’s Resolution and lecturehopped our way over to the Italian Academy to the 14th Annual David N. Dinkins Leadership and Public Policy Form: Crisis in State Budgets. Bwog Budget Bureau Chief (seriously, someone has to regulate our snack expenses!) Zach Kagan reports.

Last Sunday, President Obama announced his new budget plan, which cuts $4 trillion in spending over the next 12 years. But while the nation reels from the president’s announcement, another debt crisis threatens the solvency of state governments. Only four states are entirely debt free, and many of the other face debt that is over 30% of their yearly spending. New York lies somewhere in the middle with a $14 billion deficit, around 15% of yearly spending. While Governor Cuomo is proposing sizable budget cuts and layoffs, the topic of New York’s budget crisis was a timely one for the David N. Dinkins Leadership and Public Policy Forum on Monday. Each year, former New York City Mayor-turned-Columbia professor David Dinkins organizes a forum to discuss pertinent issues with prominent policymakers and academics. This year’s headliners included Kristen Gillibrand, junior Senator from New York, and former Governor David Paterson.

The ornate Italian Academy lecture hall bubbled with conversation as professors, politicians, reporters, and campaign supporters rubbed elbows while they waited for the forum to begin. It was Dean of SIPA Professor John Coatsworth who introduced the topic at hand, opening with a historical account of budget balancing. He praised FDR’s Depression Era deficit spending, but noted that decreases in state and local government spending stifled the new New Deal until WWII provided the final boost necessary for recovery. Coatsworth then confidently claimed that President Obama’s stimulus package had saved the United States from a second Great Depression—an insight that was appreciated by the predominantly liberal panel, many of whom would go on to praise the stimulus in their own speeches. It was sort of concerning that no hard evidence was provided to support this claim. Since the panels were made up of mostly Democrats, it felt as if the speakers were toeing the party line on the president’s economic policy, rather than voicing their honest opinions.

Senator Kirsten Gillibrand

The keynote speaker was junior Senator from New York Kirsten Gillibrand who moved from the House to the Senate after Hillary Clinton became Secretary of State. She was inspired by Clinton’s 1995 speech at the Fourth UN World Conference on Women, and entered public life a few years thereafter. In 2006, she earned the nickname “dragon slayer,” by winning her House seat in a district with a 2:1 Republican to Democrat ratio. She stressed the importance of women’s health programs and reproductive rights, and warned that even in an economic crisis these issues have a real impact on quality of life for both sexes. Gillibrand spoke perhaps too informally, and her speech came off as unprepared and unfocused. Twice in her speech she mentioned she was looking forward to answering questions from Columbia students but was quickly whisked out of the building when her speech had ended. The whole sequence of events made it look like Gillibrand’s keynote was planned at the spur of the moment with little relation to the topic at hand.

Governor David Paterson

The panel discussion, “Balancing City and State Interests” was moderated by SIPA Professor Esther Fuchs,  and included former Governor Patterson, financial analyst Dall Forsythe, former MTA COO March Shaw, and former NYC Comptroller and Mayoral candidate William Thompson, Jr. Fuchs first directed the conversation to Patterson, who presented himself in an easygoing manner despite his failure to receive his own party’s support in the 2010 Gubernatorial election. Patterson, perhaps feeling patronized for being praised by the same people who harshly criticized him while he served as governor, was eager to show his expertise. “In the eight years from 1998 to 2006, the Dow Jones, S&P 500–those indexes quadrupled,” said Paterson, “and the state was in debt for five of those eight years.”

Professor Fuchs then posed a question: given that most of New York’s economic growth happens in NYC, could we turn the rest of the state into a park and focus on development in the city? Thompson was quick to remind Fuchs that in the ‘70s large parts of NYC were abandoned and unprofitable, but have since undergone large economic expansion; however, his response quickly evolved into a plug for his upcoming run for mayor. Patterson quoted his SNL doppelganger’s unfavorable opinion of Buffalo, but eventually concluded that it makes sense to support the state’s main driver of growth.

Despite the big names and the lively discussion at this year’s forum, no technical plans were discussed. The consensus was that cuts must eventually be made, likely across the board, but it was not clear when this will actually happen. The gravity of the crisis necessitates immediate action, but to do so would counter the effects of the stimulus that so many of the panelists praised. This essential contradiction was never really addressed and neither was the possibility of future tax increases. While enlightening in some aspects, the forum did little to influence the future of New York economic policy. Ultimately that will be left up to the politicians now in Albany, which means that we should expect more cuts and more squabbling.

List of fancy foods via Wikimedia Commons

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5 Comments

  1. Das Racist  

    Like a young Dave Dinkins, like a young Abe Lincoln...

  2. Anonymous

    The need for revenue increase seems to be taboo these days. So, big surprise was New York Times editorial forcefully advocating for tax increase.
    http://www.nytimes.com/2011/04/13/opinion/13wed1.html?_r=1&partner=rssnyt&emc=rss

  3. Anonymous

    Great that Kirsten Gillibrand spoke in support of woman's reproductive rights. Current Congress's attempts to de-fund Planned Parenthood will negatively affect health of many poor women.

  4. Anonymous  

    Lecturehop's been pretty awesomely informative. :] Keep up the good work.

  5. Anonymous

    Good catch, everybody talks budget cuts, there is no courage to propose increase in tax revenue. Laffer curve again....

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