Agencies Fear Cuts

Gov. George Pataki’s anticipated return to his conservative roots could be bad news for the Jewish social services network as it awaits details of the budget plan he will release at the end of the month.
Pataki offered few details in his State of the State address last week on how he envisions closing a $10 million budget gap next year, except to say that he would oppose tax increases and fight for tax reductions while "spending less money than we did last year."
Leaders of the Jewish social service network fear that with little increase in revenues, and without massive layoffs or other cuts in infrastructure, the governor almost certainly will have to impose massive cuts in discretionary programs that aid the elderly, homeless, families in crisis and others at a time when caseloads are increasing.
Ron Soloway, managing director for governmental relations at UJA-Federation, last week called on elected officials to "find the right balance between increasing revenues, reducing expenses and trimming services."
During his first term, Pataki imposed major cuts on social programs funded by state grants, most of which were later restored by the Legislature.
"For three budgets in a row, Shelly came to the rescue," said one organization insider, referring to Assembly Speaker Sheldon Silver.
In subsequent years, Pataki leaned to the center or left and protected social services, allowing state spending to increase dramatically: a luxury he can no longer afford.
If, as widely believed, he is fixated on elected or appointed national office, Pataki needs to realign himself with the Republican Party by returning to fiscal conservatism. That leaves him walking a tightrope, since he also risks alienating his party from New York voters (at a time when it is making inroads here) if the pain is too severe.
Government watchdogs believe it may be impossible to balance the budget without raising revenues.
"It would be very difficult to solve the whole problem by cutting spending, unless they resort to a lot of financing gimmicks," said Diana Fortuna of the Citizens’ Budget Commission. "As a whole, the state has been slow to respond to this crisis. They passed last year’s budget by depleting most of the reserves."
Democrats believe Pataki downplayed the state’s fiscal woes during what is likely to be his last campaign for governor and will dispense some harsh medicine now that he’s been re-elected.
"Clearly the fact that he has a history over eight years [but] has not said anything about how he will meet the challenges that he did not acknowledge until after the election makes for some grave concerns," said Charles Carrier, a spokesman for Silver, who left this week on a legislative mission to Israel.
"There is talk about sacrifices, but one is concerned about where those sacrifices might have to occur, and the speaker has been very clear that he doesn’t want to see the budget balanced on the backs of children, college students, the elderly and disabled."
A spokesman for Pataki, Joe Conway, said it was "too soon to speculate on any specifics" in the budget plan. But he noted that Pataki told the Legislature in his speech last week that he would be looking for savings in all areas of the state budget, except public security.
Pataki’s liaison to the Jewish community, Herbert Berman, said the governor would do his utmost to balance the budget with minimal impact on the needy.
"The daunting budget deficit notwithstanding, every effort will be made to maintain the delivery of social services to the poor and seniors by the governor," said Berman.
Directors of Jewish social service programs, however, are said to be concerned that on both the state and city level, not enough will be done to eliminate waste, fraud and inefficiency, or increase revenues through higher fines, fees or taxes before cutting programs for the needy.
"Millions could be saved if they are willing to take some political heat," said one leader.
Asked if Jewish agencies would support a tax increase in order to continue those programs, that same leader noted that expected federal tax cuts would likely offset any increase in state tariffs. The official also noted, however, that higher taxes might take a toll on charitable donations.
Jewish agency leaders note that the aftermath of 9-11, and the recession that began before the terrorist attacks, had created a tremendous need for services.
"We anticipate that there will be cuts, and we will work with the city and state to do our share," said William Rapfogel of the Metropolitan Council on Jewish Poverty. "But at the same time when the most frail among us are increasing, this is not a time for elected officials to be cavalier about cutting services."
Aside from reasons of compassion, Rapfogel said cuts to social services are often bad fiscal policy because they ultimately pose a greater strain on municipalities. For example, programs to safeguard the health of seniors protect public hospitals from the cost of their care, while substance abuse prevention and treatment programs ease the burden on hospitals and law enforcement.
Some Jewish officials said they were less worried about Pataki’s budget axe because of political realities.
"He’s worked hard to win a base in the middle and to give it up at this point makes no sense," one leader said. "He is not going to govern like he did in his first term."