Stupid Budget Tricks (Coming to Your State Soon)

But if history is a guide, governors and legislators across the country will seek to avoid the difficult choices that are required. Instead, they will likely pass the costs of the services that we enjoy today on to our children and grandchildren, through creatively deceptive budgeting.

This is a time-honored practice. In 1991, the State of New York sold Attica prison to none other than itself. The buyer was a state agency that financed the $200 million purchase price by issuing bonds. The agency then leased the prison back to the state, with the lease payments being equal to the debt service on the bonds.

In substance, of course, the transaction was nothing more than a borrowing arrangement — the equivalent of borrowing $200 million from the buyers of the bonds. Nevertheless, the state booked the entire sale price as revenue for the year. The previous year, the state sold the Cross Westchester Expressway to the New York Thruway Authority — in other words, to itself.

New York is not the only state fond of this sort of budgetary dissembling. Gov. Arnold Schwarzenegger of California wants to reduce his state’s deficit by borrowing money from the future. His plan is to issue $15 billion in bonds that are backed by future lottery revenues. More than a third of that money would be used to ease California’s current-year deficit.

Borrowing from the future to pay for the present is, unfortunately, becoming routine. In 2006, Indiana leased a toll road to a foreign consortium from Australia and Spain. The state received $3.8 billion upfront by surrendering the next 75 years of toll revenues. .

No private business can do that thanks to Sarbanes-Oxley. If our politicians had to abide by its requirements, they would all be carted off to prison. We're imposing huge costs upon our children because we don't want to sacrifice for them either by cutting back on popular programs or paying the bill for them.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

Our state controller (California) said yesterday that our budget situation isn’t as bad as made out to be. We will still be solvent all the way through October.

Yee-haw! That’s like a whole 3 months away, nothing to worry about here, I guess that whole $15 billion deficit wasn’t that big of a deal - I mean when you have an entire eternity-like 3 month period not to worry about it.

My guess is California will fill the gap with a combo of accounting tricks, more borrowing and increased taxes. Mark my words though - government will not shrink.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

Mario Cuomo was good at introducing bonds to apply band-aid fixes to the State budget. At one point, he even wanted to sell the Governor's Mansion to a not-for-profit group. How he thought he could do that without the approval of the people of New York State was beyond me. Fortunately it never happened. In 1990, during his last term as Governor, New York State was under another one of his austerity budgets. He introduced a $2 Billion Environmental Bond which was soundly defeated by the public at that fall's elections.

Cuomo was pi$$ed about it, and immediately started coming up with other options of wiping out the debt he had helped create. Besides raising fees on just about everything, and laying off many Civil Service employees, another option he chose was to lag (hold back) one week's pay of State workers. We would work 5 days without pay. The 5 days pay would be given to us upon our retirement or exit from State service. Of course you wouldn't get it if you dropped dead in the meantime. The main issue against this plan was that our salaries had already been lagged two weeks when we started our jobs. We had had to work a month before we even saw our first paycheck, and then it was only for 2 weeks.

Despite protests from the 3 unions, he did it anyway. PERB (Public Employee Relations Board) found he had overstepped his bounds and he was forced to pay us back that money. I doubt we got any interest on it for the time the State had it. Cuomo's popularity went down hill steadily after that, and of course he was beaten by Pataki in '94. I can see the same crap being tried again with Patterson. I'm just glad I'm retired now and the a-holes can't touch me. Well, hopefully they won't screw around with our pensions.

Here's a great way to save the USofA a lot of money!

A president's pension currently is $191,300 per year. Assuming the next president lives to age 80, Sen. McCain would receive ZERO pension as he would reach 80 at the end of two terms as president. Sen. Obama would be retired for 26 years after two terms and would receive $4,973,800 in pension.

Therefore it would certainly make economic sense to elect McCain in November.

At the rate government unfunded entitlement and public employee (hack) pensions are growing, they won't wait for the grandchildren. They will start going after our private pension annuities and increase the death taxes.

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