Budget Crisis Task Force reveals its findings
Former Lieutenant Governor Richard Ravitch is continuing his crusade to build public awareness of the enormous fiscal challenges states and local governments will confront. Our Erin Billups was there as Ravitch’s Budget Crisis Task Force unveiled its review of the impending crisis.
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WASHINGTON, D.C. -- For decades, former Lieutenant Governor Richard Ravitch has been ringing the alarm bell, worried about the looming financial problems New York and other states face.
"There is an appalling lack of understanding about the question of the sustainability of the path that states are on," Ravitch said.
That path is the rapid growth of Medicaid and retirement expenses that are quickly outpacing the revenue in states across the country. This, just as the federal government is looking to cut more in support for states and in turn local governments.
In response, Ravitch last year formed the State Budget Crisis Task Force with former Federal Reserve Chairman Paul Volcker, who says Ravitch's time as lieutenant governor only magnified the need for action.
Volcker said, "It was very difficult to get people interested in the problem, to do something about it. I think being lieutenant governor of New York state must be one of the most frustrating jobs in the world. It's a great title with no responsibility whatsoever."
Tuesday, the task force released a report that looks at the conditions of a handful of states, including New York.
"We see an increasing use of gimmickry of borrowing, by states and local governments to cover deficits," Ravitch said.
So what's the solution? The task force doesn't give one. They're asking the public to get engaged.
"What I hope happens is the banks and the politicians and the unions will sit down and figure out who's going to contribute what to solve the problem. It's not for a wise man to decide," said Ravitch.
The Task Force does offer some recommendations, like multiyear budgeting, rainy day funds and honesty and transparency with the public. And when it comes to the recent spending cuts and tax increases in New York, Ravitch says at least in his home state, a shift in awareness is taking place.