New York State Comptroller Alan G. Hevesi presented the final lecture of the Arthur Levitt Public Affairs Center series on the U.S. budget on Wednesday, April 27. Hevesi discussed in the New York state budget and the recent budget process in the context of a "historical reform movement."
Hevesi began his lecture by discussing the intertwined relationship of state budgets and the federal budget. "The state of New York is a wealthy state," Hevesi said; when the state economy is well, we produce revenues, largely from apples and Wall Street. However, no matter how a state may be doing economically, the federal economy affects the state economy; if the federal budget is not balanced, the state budgets will, subsequently, be unbalanced, he explained.
"In the mid 1990's, there was a remarkable change" in both society and the United State economy, he explained. There was a massive technology revolution that forever changed the economic markets. This change was tied to good decision President Clinton made: he raised taxes. This, Hevesi argued, was necessary because it closed the large national deficit created during the Reagan era and restored both business and consumer confidence.
"Fast forward 10 years and the United States has gone from a five trillion dollar surplus to a five trillion dollar deficit. The problem is that this national debt translates to the states," Hevesi explained.
Currently, New York State is 49 billion dollars in debt, the second most indebted state in the nation and the second largest per capita debt. "By the end of 1986, we were in the worst debt since the Great Depression," he stated. "We may be heading in that direction [again] at the state and local level."
This large and ever-increasing debt, Hevesi said, was influenced by three factors: a huge collapse in the market; 9/11; and corruption scandals, particularly in major corporations and within the 733 public benefit agencies in New York.
Hevesi did offer an answer to quell the growing debt: "austerity." In order for New York State to come out of debt, he argued, the state needs to do exactly as Nassau County did: raise taxes and cut programs evenly. Hevesi suggested that the state freeze all budgets for a number of years in order to come out of debt. "I have hope that things will turn around," he stated. "There needs to be reform. We need people to supervise these authorities [and stop corruption]."
Prior to his election as New York State Comptroller in 2002, Hevesi served as New York City's 41st Comptroller for nine years. In addition, he spent 22 years in the State Assembly and 26 years as a faculty member at Queens College. He was also an adjunct professor at Fordham Law School and Columbia University's School of International and Public Affairs.
The Levitt Center Speaker Series brings the experiences of policy analysts, policy makers and policy administrators to campus. "The U.S. Budget: Power, Politics and Priorities" is the 2004-2005 Speaker Series theme.
-- by Emily Lemanczyk '05
