(Editor's note: This letter was originally sent to New York State Governor David Paterson. It is being printed below at the author's request.)
During these unprecedented crisis budget times, I wanted to offer some budget and financial actions for you to consider. I have been restructuring businesses for some 25 years and wanted to offer some ideas and perspectives to government that work in the private sector.
We need major focus on budget cuts (not deferrals) and not the focus on a laundry list of tax increases. Taxes and fees are already too high in New York and are detrimental to NYS's recovery and future. Taxpayers are tapped out and losing jobs at rates unheard of in modern times.
We can no longer afford the size and scope of the NYS's government and its services.
During this 100-year crisis, you have a one-time opportunity to fundamentally restructure what government does. Change the current business as usual philosophy: Think Big! Be Bold!
Some thoughts and ideas for consideration and action:
I count 110 NYS agencies, many of which seem devoted to the same area but having some minor difference to their center of attention. There should be a major reduction in the number of agencies by consolidation or elimination - reduce them by half. I am sure each agency has its own administrative staff, legal counsel, contractors, accountants, budget administrators and facilities, etc. This nonproductive duplication of expense should be eliminated.
Government spending on construction of new facilities should be eliminated immediately, even if started. Facilities should be rented from the private sector for the next 10 years or until this crisis is over and prosperity returns.
Consider a monetary cap on any lawsuits against NYS and any of its agencies. Taxes and taxpaying residents should not support outlandish court judgments from questionable lawsuits. A cap would make lawyers think twice about pursuing the ridiculous, costly to the State, litigation.
All bank indebtedness should be renegotiated to lower interest charges and non-interest fees.
Government employees of all kinds have high salaries and bloated benefits compared to the private sector, especially considering the job security government offers. By government employees I mean: police, teachers, administrators, judges, legislators and all contracted services such as lawyers and consultants, etc. Specifically, all who are paid by taxpayer funding.
Consider promoting and adopting legislation for a universal salary reduction of possibly 10 percent for management and all who are earning $100,000 and above and 7 percent to 8 percent for all others. All government paid positions and workers means all - no exceptions. I favor aggressive expense cuts and salary reduction over layoffs. However, if there are no other options, mass layoffs must occur.
Consider changing the policies regarding premium overtime pay. Reduce overtime pay from a premium of 50 percent to 25 percent and holiday pay from 100 percent to 50 percent. There is nothing sacrosanct about 50 percent or double pay for holidays.
The current guideline being used in the private sector for healthcare insurance cost sharing is approximately 30 percent of monthly premiums. There is no reason for government workers or legislators to receive free medical benefits when predominantly all other citizens partially pay for their benefit coverage. Partially paying for benefits gives those recipients an incentive to keep healthcare medical and dental costs low and effectively introduces grass roots expense control.
Change the minimum retirement age to 67 with mandatory retirement at 75. It's amazing how one can play golf and tennis into our 80s but cannot physically work beyond 62. A mandatory retirement age for all allows more positions for others and, at an appropriate time, the older employees need to leave.
Consider a cap on legal and other professional hourly and weekly charges. No legal or consulting firm should receive more than $250 per hour or $8,000 per week. There are enough competent lawyers and professionals who will work for this rate level.
No one should be employed or paid any type of remuneration by NYS as an employee, advisor or contracts once they have retired. The current double dipping discovered and being prosecuted by the fine work of Andrew Cuomo is morally wrong and reeks of special personal political accommodations.
Non-profit, tax-exempt organizations have run amok and have extended their charters into normally taxable activities. Religious, healthcare organizations and others have established taxable businesses and ancillary activities not related to charity and use their sanctioned nonprofit umbrella to shield normally taxable activities and entities. I know that this has been off limits and highly controversial in the past, but this financial crisis mandates that a new look be given to the nonprofit umbrella and those who are taking blatant advantage of the system at the expense of resident taxpayers. Federal tax guidelines need not apply to New York's tax laws.
Governor Paterson, I am writing this letter and addressing this financial and budget crisis because our government and its service providers have lost sight of what is reasonable and absolutely necessary services for the residents they serve. Government has lost respect for the taxpayer and its citizens toiling to provide for the daily needs of living and family.
Admittedly, action on the above will need major legislation. This legislation must be created considering the impending crisis in the budget and the highly uncertain future of the economy and projected revenue. It will need to authorize authority to override contracts, signed agreements and historical policy, all negotiated and put in place during prosperous times and during vastly different circumstances.
I believe that you want to do the right thing and that you have the leadership abilities to institute major change with the concurrence and participation of the legislature. You certainly have a mandate because of the current crisis.
Hopefully, these comments will encourage outside-the-box innovation. I look forward to you taking the necessary bold actions to balance our budget, lower taxes and renew NYS's commitment to the respect of its taxpaying residents.
Richard P. Bankosky