The current enfeebled state of the economy may not be as obvious to us in the North Country because of several insulating factors, but everyone in New York state is likely to feel the pain as next year's budget begins to be assembled.
The North Country is usually slow to be subject to general economic trends. Our economy is bolstered by a large helping of service industries, including 11 prisons, four colleges -- three state-run -- and a state authority. Schools are the largest employers in many of our communities.
In addition, we are close to Canada and are buffered from some of the economic disasters in the United States by an annual $1 billion infusion of Canadian influence.
Our highs may not be as high as in counterparts throughout America, but our lows aren't as low, either.
Still, next year's state budget is bound to be as challenging as any in memory, and we in the North Country are inescapably in for the same bad news as everybody else.
State revenues are bound to be significantly lower than in other years. About 20 percent of New York state's tax revenue derives from Wall Street in the form of taxes on bonuses, income, capital gains and real-estate sales. Both personal and business income taxes are going to be down, as investments continue to decline in value.
Financial giants, including Merrill Lynch, Bank of America, Citigroup, Lehman Brothers and Morgan Stanley, are in turmoil. Some experts predict notable collapses of one or more of these economic stalwarts. The companies are laying people off, and earnings are plunging.
The borrowing crisis is inhibiting the large real-estate transactions that are so vital to the state's revenue. Even in the North Country, we've seen the negative effects of evaporated lending with the inability of Laurentian Aerospace to break ground at PARC.
In most previous years, revenues surprisingly came in higher than expected. That is almost certain not to happen this year.
Meanwhile, the high cost of petroleum is forcing the state to consider significantly increasing home-energy assistance. That and other factors are provoking a call for a cap on local real-property taxes.
In other words, while revenues are going to be dramatically off, the cries for new aid are going to be loud.
Two of the three people fashioning next year's budget were never involved in the process before: Gov. David Paterson and Senate Majority Leader Dean Skelos.
History tells us it makes little difference who the participants in the budget process are -- the work is always ponderous and usually tardy, forcing difficult decisions on revenue projection and borrowing on local entities, particularly school districts.
Unless the economy makes a miraculous and unexpected recovery quickly, next year is going to one of unprecedented angst for New Yorkers.
Best of luck to Messrs, Paterson and Skelos.
Opinion
July 29, 2008
EDITORIAL: Bad news will hit home
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Cheers and Jeers: Feb. 6, 2012
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Cheers and Jeers: Feb. 6, 2012
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In My Opinion: E'town water, sewer essential
