The late Daniel Patrick Moynihan once wrote that he pursued a seemingly eclectic mix of liberal and conservative ideas because he knew that “it is culture, not politics, that determines the success of a society.” Yet he also believed that “politics can change a culture and save it from itself.”
The daunting challenges facing New York’s new governor, Andrew Cuomo, are centered in the area where politics and culture intersect. The state needs brilliant political leadership to change a culture of government that delivers the nation’s most generous spending with too little heed to costs or results.
The Empire State’s budgetary culture is reflected in outlays on education, Medicaid and other programs that are far higher than those in most states, both in absolute terms and relative to residents’ needs for public services.
A 2006 study by scholars at the Urban-Brookings Tax Policy Center and the Federal Reserve Bank of Boston found that New York’s “expenditure need” — reflecting population, citizens living in poverty, school-age children and other measures — was almost precisely the same as the national average. By contrast, New York’s “expenditure effort” was 39 percent higher than the average — far above that even in such states as Massachusetts, New Jersey and California.
To pay for that spending, New Yorkers bear the highest tax burden in the country. Yet the state still repeatedly fails to balance its budget. And, like most other states, New York does little to measure whether its outlays produce high-quality services.
We like to blame powerful interest groups for pushing the Legislature to drive spending ever higher. For example, the hospital workers’ union and Greater New York Hospital Association have repeatedly used multimillion-dollar, political-campaign-style attack advertisements to scare elected leaders away from changes in Medicaid.
But it’s also true that many New Yorkers like high spending. The state’s political culture is ideologically more liberal than most; we gave Barack Obama 63 percent of the vote in 2008, compared to 53 percent nationwide. Despite complaints about property taxes, voters approve overwhelming majorities of school budgets each year.
Since Al Smith created the strong governorship, every New York chief executive has faced the challenge of balancing spending and revenues. But Albany’s modern budgetary culture came later — born under Nelson Rockefeller in the 1960s and maturing as public-employee unions built their power, the Legislature enhanced its institutional ability to negotiate with the executive and baby-boomer attitudes emphasized services over affordability. The result today: Virtually every year’s budget process starts with a gap requiring significant spending reductions and/or revenue increases.
Not so long ago, the breadth and cost of modern public programs would have been almost beyond imagining. Who’d have thought we’d take it for granted to send $100,000-a-year bills for nursing-home care to the government? That the typical school district’s annual spending would reach $19,000 per pupil? Or that retired public employees would receive pensions commonly worth over $1 million?
Such expenditures are now accepted — no, assumed — parts of the budget culture in New York. The task for the new governor, as his inaugural address showed he understands quite well, is to change the culture.
It’s a far greater challenge than merely balancing a budget. Left unchanged, this culture will make it impossible for Gov. Cuomo to balance even one budget, let alone eliminate years of built-up structural imbalances. Failure to do so would mean not only substantial tax increases but also more debt left for our children. (We’ve already sent them the bill for billions of dollars in state spending that provided benefits to this generation, not the next.)
But, in this, Moynihan was right: The political process can change a culture — and save it from itself. Our state already has an example to follow.
In the early 1970s, a long-established pattern of irresponsible budgets had pushed New York City into what appeared to be a permanent chasm between spending and ongoing revenues. The political culture barred any corrective action — and the civic culture told voters to look the other way. By 1975, bankruptcy loomed.
But a new governor, Hugh Carey, used a combination of official powers and personal vision to solve the city’s immediate budget problems and impose strict controls to ensure that the days of never-ending crises wouldn’t return.
The specifics of Carey’s achievements are well-known. Less appreciated is the extent to which the reforms that he forced into place drove a permanent change in the city’s governmental culture.
Now when budget gaps emerge, interested parties — the City Council, public-employee unions, budget monitors and others — expect that the mayor will impose budget discipline of the sort that a John Lindsay or Abe Beame would not or could not in the 1970s. Public services overall have improved. The city, not so long ago regarded by Albany as a black hole of fiscal irresponsibility, now has a budgetary culture that the state would do well to emulate.
Politics, well practiced, produced this gift for the city. Now a new governor may be about to change the culture in Albany.
Robert B. Ward is the deputy director of SUNY-Albany’s Nelson A. Rockefeller Institute of Government.