Empire State gubernatorial race heating up

Paul Liben Contributor
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With the 2010 elections little more than six months away, one thing is clear. After Election Day, New York will have a new governor.

With incumbent David Paterson’s popularity ratings sinking far below electable levels, he decided earlier this year to forgo re-election. For many New Yorkers, Paterson was the accidental governor, Eliot Spitzer’s running mate who inherited the job following Spitzer’s resignation due to a sex scandal.

Since assuming office, Paterson has faced out-of-control deficits, courtesy of a steep recession and his fellow Democrats running what is arguably the most dysfunctional state legislature east of Sacramento. Even his modest attempts to instill fiscal discipline have been rebuffed by Albany’s big-government barons.

As Steve Malanga of the Manhattan Institute has written, states like New York are plagued by coalitions of “tax eaters”—public employee unions, government-funded social service providers, and community activists feeding at the public trough while donating dollars and people to incumbents. This largely explains why, for nearly a generation, spending rose faster in the states than in Washington.

Even when Washington restrained its spending following the Gingrich Revolution of 1994, eventually balancing its budget in the late 1990s, profligate spending continued in the states, including red states with red governors.

One of the exceptions was—surprisingly—bluer-than-blue New York. In November 1994, George Pataki won an upset victory over liberal icon and incumbent Gov. Mario Cuomo and proceeded with a frontal assault on business as usual. The tax eating organizations panicked, blitzing the airwaves with hysterical ads warning of Armageddon-like outcomes if Pataki’s spending curbs and tax reduction became law. But when the dust had settled, the new governor had prevailed. Income taxes were slashed 25 percent and spending hikes halted in their tracks. Three years into his term, Gov. Pataki was still holding Albany in a virtual spending-freeze mode.

Thanks to the booming state economy unleashed in part by the tax cuts, rising tax revenues began filling Albany’s coffers, and the temptation to spend this bonanza proved overwhelming. As the resolve for further fiscal discipline began to falter among Republicans, New York state spending began to show signs of accelerating again. By 2003, the Legislature had passed an income tax hike to pay for its excesses. Pataki promptly vetoed it, but then was overridden by a stampede of fellow Republicans joining the Democrats in that action.

So the empire—Albany’s establishment—had struck back in the Empire State. Overall, spending grew approximately 4.9 percent a year during Pataki’s12-year tenure. Yet spending rose higher for the 50 states as a whole. And today, with proposed spending increases approaching 10 percent annually under Paterson, many New Yorkers rightly view the Pataki era as the last time New York prospered and Albany fell under adult supervision and governance.

With Paterson not running, the Democrats’ likely gubernatorial nominee is Andrew Cuomo, Mario’s son and currently attorney general. Until recently, the Republicans’ expected choice, former Rep. Rick Lazio, was virtually unchallenged. In a bizarre twist typifying New York’s zany political world, the state Republican chairman, Ed Cox, apparently helped encourage a Democrat, Suffolk County Executive Steve Levy, to switch parties and enter the race.

Unlike Levy, however, Lazio is backed by New York’s Conservative Party, which Republicans need to win statewide races.

While Cuomo evokes memories of his father’s free-spending gubernatorial days, Lazio was part of the budget-balancing GOP Congress of the late 1990s. He is a smart, able, personable candidate with a strong record to run on. Besides the Levy challenge, however, Lazio faces an electorate that is overwhelmingly Democrat. That makes him the natural underdog. If he is the nominee, the big question is whether the national revolt against record spending will reach New York. If so, Lazio can shine. By running well in New York’s suburbs and winning upstate, he can overcome Cuomo’s New York City advantage and win in November.

If he wins, and if his GOP colleagues retake Congress, it will seem like 1995 again. The difference is that today’s fiscal picture is far grimmer, as budget deficits threaten New York with bankruptcy. If the past is prologue, look for Lazio to insist on spending restraints rather than tax hikes. What then will the Legislature do? If it says no, will Lazio go over its head to the people, and if so, will he succeed? Time will tell.

Paul Liben has worked in New York City and Washington, DC as a speechwriter for the past 15 years.   He served as a speechwriter for New York Governor George Pataki and then as director of speechwriting for U.S. Homeland Security Secretary Michael Chertoff.   A published writer, he has written op-eds for more than 100 publications, including the Wall Street Journal, Los Angeles Times, Washington Times, Baltimore Sun, Philadelphia Inquirer and Houston Chronicle.