by Rick Bell FAIA Executive Director AIA New York
Rick Bell, FAIA
On Friday, 03.26.10, New York State Lieutenant Governor Richard Ravitch addressed a well-attended breakfast meeting of the New York Building Congress (NYBC) at the Hilton on Sixth Avenue. After introductions by NYBC President Richard Anderson and Chairman Peter A. Marchetto, Ravitch started by saying that he “once thought that the politics of getting something built in NY was difficult, but now I know that it’s a piece of cake” compared with getting the state budget approved. He explained that “for many years NY has balanced its budget with one-shots — that’s to say with asset sales or bonds.” Ravitch, a former builder (at HRH) and MTA chair, continued: “We’re running out of assets to sell. This is not a sustainable course of action.” He explained that Medicaid costs are going up in double digits and revenues are down despite the recovery of Wall Street: “We’re still way off from where we were in 2007.”
Stimulus funding was described as “two years of one-shots.” Ravitch pointed out that the state surcharge on income tax expires next year. The metaphor used by the lieutenant governor was that of a looming precipice: “We’ve built the cliff higher and higher off of which we will fall when there are no more one-shots.” He warned that the growth of our revenues is significantly behind the growth of our expenditures, and that gap is growing every year. “It is a dilemma for those elected to public office who are used to optimism and growth. Reality is beginning to sink in — it ain’t gonna happen,” he said, “and therefore we have to rethink what goes into a state budget and impose discipline on the Governor and the Legislature.”
Ravitch went into detail describing the Executive Budget, which includes revenues from taxes on income, cigarettes, and the sale of wine in grocery stores. But, he noted, the state Legislature is not disposed to adding any taxes, which will mean that more cuts are needed. Therefore, Ravitch proposed several new ideas as part of a five-year financial plan, including the creation of a Financial Review Board, with the goal of getting to a real balanced budget and going to a modified gap accounting system. With verbal flair disguising hard-nosed fiscal acumen he explained the difference between budgeting on an accrual rather than a cash basis of accounting, declaring a need to avoid moving money from one year to another without any budgetary constraints.
The idea of borrowing money, one of the proposals from the Lieutenant Governor, was not without controversy. He stated, “the imagination of the financial services industry is limitless. It’s all about taking from the future to pay for today’s problems.” Ravitch recalled the days when he didn’t pay a lot of attention to Albany, explaining that “there is an opaqueness about what happens in Albany,” and that “it is hard to get the information out” despite that fact the “what the state does and doesn’t do will have a very dramatic impact on our lives…. The preservation of public infrastructure is at stake, and that education is similarly state-supported, with the state paying the lion’s share of a viable public education program.” He added, “Health is the same, with funds for public health clinics coming through the Health and Hospitals Corporation.” He also noted that this is the second year in a row that the state has had to eliminate its road and bridge program.
The speech was a literal call for “public involvement and public awareness, needed at a level that we’ve never had before.” He pleaded for more involvement in Albany, saying, “There is a human cost to cutting services, particularly in health and education.” He concluded by saying that during the next few weeks the Executive Branch of the state government will be working very intensely: “I can candidly say that the state runs out of cash on June 1st, so there must be a budget by then.”
During the subsequent question and answer period, Anderson replied that everybody “can do something on this subject, starting with talking with public officials. We cannot let this subject go un-discussed.” For more detail on Anderson’s response, see the NYBC website, http://www.buildingcongress.com/. Luckily, the AIA New York State Lobby Day takes place on Tuesday, 04.20.10, and the budgetary priorities of necessary spending for educational facilities, infrastructure, and public transit are very much on the table. Our delegation will be lead by AIANY President Tony Schirripa, FAIA, IIDA, and President-elect Margaret Castillo, AIA, LEED AP. For more information about local advocacy on State policy issues, contact AIANY Policy Director Jay Bond at email@example.com. “It’s important that, as a profession, we follow developments the state budget–and that, as architects, we let our concerns be known to the lawmakers of New York,” reminded Tony Schirripa, FAIA. “Architects don’t practice in a bubble. We work in New York.”