Volume 80, Number 31 | January 5 — 12, 2011
West and East Village, Chelsea, Soho, Noho, Little Italy, Chinatown and Lower East Side, Since 1933

Editorial

Mind the GAAP

The New York Uprising reform pledge signed by a majority of members of both houses of the Legislature had three points: independent, nonpartisan redistricting; ethics reform; and, finally, the implementation of a GAAP budget process.

Former Mayor Ed Koch is the leading force behind Uprising, which counts good-government groups among its members.

The first two points are pretty self-explanatory. Basically, unless there is an independent, nonpartisan redistricting commission, incumbents will keep drawing their own district lines every 10 years, helping reassure their perpetual re-election; viable challengers won’t have a hope of a level playing field and will be put off from even running. However, no one is guaranteed election for life.

Ethics reform is also sorely needed, because it’s essential that we know where our politicians’ income comes from. If our elected officials are doing business with people who have business before the state, we must know this.

The Uprising pledge’s third point, though, a GAAP budget, is perhaps less well understand by most voters. Yet, it’s just as vitally important, if not more so, as the pledge’s other two points — particularly with the state’s staggering deficit now at more than $9 billion, and expected to mushroom to $15 billion in the coming fiscal year, unless it can somehow be reined in. GAAP can help do that.

GAAP stands for “generally accepted accounting principles,” and these regulations are something Albany desperately needs.

Although Assembly Speaker Sheldon Silver has told us twice since Koch started his reform initiative in March 2010, that New York State already does have a GAAP budget, Koch emphatically disagreed.

“It’s not in the law,” Hizzoner told us Monday. “And the budget they adopt is not GAAP-balanced.” In short, Koch continued, without these accepted principles, money can be shifted around between different agencies, pension plans and so forth during the budget process.

New York City, for one, does have a GAAP budget under law. It’s high time that the state followed suit.

Earlier this year when then-Lieutenant Governor Richard Ravitch presented his “Ravitch Plan” — budget measures he hoped the state Legislature would adopt — GAAP budgeting was among its cornerstones.

The New York Times at that time noted GAAP would help “curb the runaway spending that has helped plunge New York into fiscal crisis,” and “would represent a drastic change to how Albany has operated for decades.”

With Governor Andrew Cuomo in office and pledged to reform, it behooves our legislators, including Silver, to help him truly bring about a GAAP balanced budget. Just saying we have a GAAP budget obviously isn’t the same as having one. With a $15 billion deficit looming, the need for GAAP is great.

In his State of the State address on Wednesday, Cuomo made it clear that reining in the budget and out-of-control spending will be a priority. He gave kudos to Koch, 86, who was sitting up near the front of the audience, for leading his Uprising reform crusade, and for taking it on the road around the state.

Cuomo didn’t specifically mention GAAP when he was talking about fixing the state’s dysfunctional budget process. But we hope it’s part of his game plan, because it’s another piece of the puzzle for getting Albany and the state to function properly. As Cuomo said, we need to make our state government something that New Yorkers can be proud of once again — and bringing Albany’s wheeler-dealer, unaccountable budget process under proper regulation is a big part of that.

 

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