Skip to main content

Hawley says Lt. Gov's fiscal reform plan is 'a start but needs work'

By Billie Owens

This is a statement by Assemblyman Steve Hawley concerning a proposed fiscal reform plan by New York's Lt. Governor:

“Last night, Lt. Governor Ravitch clarified his five-year fiscal reform plan to my colleagues and I in the Assembly Minority Conference. While I agreed with him on the need to cut out social ‘yum yums’, or giveaways in the state budget, I am specifically concerned with his proposal to increase state borrowing by $2 billion a year for the next three years.

"We are not going to solve the state’s fiscal crisis by increasing our borrowing and coming up with budgetary gimmicks. In order to truly close out the budget deficit and steer New York out of this fiscal crisis, we need to make real spending cuts. I look forward to working with the Lt. Governor and my legislative colleagues in the coming weeks as the budget deadline approaches."

C. M. Barons

According to Moody's- the ranking judge of public credit standing, New York State's rating has been down-graded due to weak revenue collections causing large gaps, a highly cyclical state economy, reflecting dependence on New York City-based financial services industry; volatile state finances due to above-average dependence on income taxes and lack of spending restraint; a polarized and very difficult state political process; above-average state tax-supported debt burden. New York's rating is AA3. Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the Aaa securities. A Moody rating may have digits following the letters, for example "A2" or "Aa3". According to Fidelity, the digits in the Moody ratings are in fact sub-levels within each grade, with "1" being the highest and "3" the lowest: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, etc.

If the state follows through with the Lt. Governor's recommendation to slavage the budget through borrowing; the outstanding debt responsibility as translated , per person, will be approximately $3400. Borrowing is not the solution. Cutting expenses is the solution. This will merely prolong the status quo and postpone the recovery.

The ratings determine not only opportunities to borrow, but the interest that will be charged.

Mar 12, 2010, 12:54am Permalink
Dave Olsen

First, a bald Eagle, then this, what's next????? I feel like Ben Stein "I'm just giddy with excitement"
(the bald eagle picture is way cool)

Mar 12, 2010, 6:06pm Permalink
C. M. Barons

Hawley indicated that he accepted (at least in part) the Lt. Governor's position on budget management dependent on borrowing. I do not support borrowing; it is no answer to the state's fiscal problems. It only condones business as usual by way of postponing when payment is due. So- NO, I do not support Hawley or the Lt. Governor's positions.

Mar 12, 2010, 6:36pm Permalink
Dave Olsen

That's OK, I wasn't really that excited. I don't get that Hawley is supporting borrowing in any way. He said he supports cutting out social yum-yums, whatever that is, but didn't like the part about borrowing. I'm not necessarily being his defender, just my impression from Billie's article. C'mon, you can concede a little to him can't ya? By the way, I agree with you, borrowing is a bad idea especially with the higher interest rates we'd have based on the Moody's info you posted.

Mar 12, 2010, 7:34pm Permalink
C. M. Barons

I don't dislike Hawley as a person. I even buy insurance from the guy. That doesn't mean I have to agree with his politics. It's odd, though. Despite being a Constitutional Liberal, I'm a fiscal conservative. One would think I'd have more in common with a Republican Assemblyman. Go figure!

Mar 12, 2010, 8:21pm Permalink
C. M. Barons

As I understand it, Lt. Gov. Richard Ravitch's whole concept revolves around borrowing over three years. It would be hard to find anything agreeable in it without embracing the borrowing portion.

Mar 12, 2010, 8:25pm Permalink
Dave Meyer

Everyone remember, this is the same guy that showed up a year or so ago with a big cardboard check (perfect for the photo op by the way) for the Lion's Club for Christmas lights.
I love the Christmas lights and the Lions club obviously does fantastic work, but Hawley has NO BUSINESS giving away state money as if it's his own.
Now we're supposed to believe that he's a fiscal conservative?

Mar 13, 2010, 7:38am Permalink
Dave Olsen

Here's a little more info on the State's already high debt load.

Ravitch is going for the quick and easy route. It may have worked for NYC in the 70's for him when they had an almost guaranteed tax income stream, but not now. Why can't we just freeze spending at last years or 2008's level and actually work on cleaning it up for 2011, when we have a new Governor and (my keyboard to God's eyes) new legislators, who know that the only reason they are there is because the last bunch couldn't or wouldn't clean this up. I'm sure I'll get jumped on for being simplistic, but a guy can dream.

Another question for anyone What happens if the state goes bankrupt? Maybe a forced re-organization wouldn't be so bad.

Mar 13, 2010, 10:05am Permalink

Authentically Local