Let’s cut spending once and for all

I trust you haven’t forgotten the famous slogan Gov. Hugh Carey used during New York’s fiscal crisis in the 1970s: “The days of wine and roses are over.”

Unfortunately, the fiscal situation in our state remains perilous, and rather than make cuts, our leaders are proposing even more borrowing to get us out of this crisis. Lt. Gov. Richard Ravitch suggested that New York borrow $2 billion a year in new money each year for the next three years for short-term funding for operations.

These funds will only make it easier for the state to continue its reckless spending without having to take on the entrenched special-interest groups.

At the risk of sounding like a broken record, it’s time for our political leaders to recognize the biggest financial crisis our state has faced since the Great Depression. State income tax rates are at their highest levels since the early 1980s. What we need is spending cuts. Six billion dollars in additional borrowing for operations and further debt is not the answer.

Our politicians would have us believe that spending cuts and collecting unpaid taxes are difficult concepts, but really, it’s quite simple. First, in the short term, the state must be more proactive and enforce the collection of sales taxes on cigarettes sold on Native American reservations. New York has the highest cigarette taxes in the nation, and yet we allow over $1 billion in tax revenue to escape because our politicians are afraid of the economic power that Native American tribes could use in a political campaign. New York can’t continue to be the state of tax evaders.

Second, New York should refinance the tobacco settlement bonds at lower interest rates, similar to what New York City did in refinancing its MAC bonds in 1975. This example of financial management kept New York City afloat in a time of crisis. Given the low long-term interest rates, a similar plan for the state is preferable to the Ravitch plan.