Over the holidays two Governors from two large blue states made important pronouncements about their states’ fiscal condition and the health care bill passed by the Senate on Christmas Eve.
Governor Arnold Schwarzenegger faces a $21 billion dollar gap in an $85 billion dollar general fund budget, according to the Wall Street Journal. In response, he sent a letter to Speaker Nancy Pelosi saying that his state could ill afford the spending mandates of the health care plan passed by the Senate. Both California Senators, Diane Feinstein and Barbara Boxer, voted for the bill.
On December 31, Governor David Patterson announced that New York would end the year in the red for the first time in the state's history. According to the New York Times, New York could be facing a $9 billion dollar deficit come March, the end of the state's fiscal year. Patterson complained that the Senate health bill would cost New York's taxpayers an extra billion and could mean a 15% reduction in payments to hospitals, nursing homes and other health care providers. Both New York Senators, Kirsten Gillibrand and Chuck Schumer, voted for the bill.
The mandates will be an acute problem for New York's property tax payers, who lack the protections Prop 13 affords those who own property in California. Albany legislators have a bad habit of tossing unfunded mandates to Counties, towns and cities, forcing local officials to pay the bills by hiking property taxes.
New York and California share something else in common. People are voting with their feet. California is projected to lose a Congressional seat next year for the first time in its 150 years history. New York is also projected to lose a seat. Its Congressional delegation, now at 29, will likely shrink to 28, down from 45 during the second world war. The inevitable tax hikes required to pay for the unfunded mandates in Obama care will only accelerate the exodus.
That ideology trumped the common sense of the four Democratic Senators who voted to tighten the tax noose on their own constituents is undeniable. Why else would four Democratic Senators, three of whom are on the ballot in 2010, and who represent badly cash-strapped states hemorrhaging middle and upper income taxpayers, saddle their constituents with billions in new unfunded mandates over the objection of their own Governors? To those who are or may be considering a run against Mr. Schumer or Ms. Boxer or Ms. Gillibrand, take note.
And a footnote about the New York Times. On the last day of 2009, the paper of record ran an editorial entitled "Failed State," which lambasted the churlish behavior of New York's legislature, (by all accounts the nation's "most dysfunctional" legislative body,) for its failure to cut spending the face of record budget deficits. Fair enough. The editorial might have had more credibility had it included a couple lines of invective for New York's two Senators.
