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   From: start@killing-socialists.org   
      
   In article    
   governor.swill@gmail.com wrote:   
   >   
   > Socialists are the Democrat fed termites of every decent society.   
   >   
      
   By Robert Megna and Laura Schultz   
   New York State has reached an inflection point. The COVID-19   
   public health crisis and associated economic fallout has   
   illuminated structural challenges in the state. At the same   
   time, the state’s governor and the mayor of New York City have   
   been in their leadership roles for, collectively, less than a   
   year. These new leaders will oversee the rebuilding and   
   reimagining of public infrastructure and economic systems in the   
   state with the goal of preserving the long term fiscal health of   
   the State.   
      
   To get a better sense of the challenges the state and its   
   leadership face, we revisited how New York City and the State   
   addressed the Fiscal Crisis of 1975. In late September 2021, we   
   invited leaders who navigated the crisis to discuss the   
   immediate response to the crisis, the longer-term impacts of the   
   decisions made at the time, and the characteristics effective   
   leaders demonstrate when managing a crisis.   
      
   Moderators:   
      
   Marc Shaw, chair of the Advisory Board and senior advisor at the   
   CUNY Institute for State and Local Governance   
   Carol Kellerman, former president of the Citizens Budget   
   Commission   
   Panelists (roles listed below were those at the time of the   
   fiscal crisis):   
      
   Peter Goldmark, New York State budget director   
   Dall Forsythe, budget expert on the Emergency Financial Control   
   Board   
   Richard Ravitch, chairman of the New York State Urban   
   Development Corporation   
   The 1975 Fiscal Crisis   
      
   Starting in 1961, New York City was running annual current   
   account deficits; the City’s revenues could not fund their   
   current expenditures and debt payments. By 1974, in the midst of   
   the second recession of the decade, the annual deficit had reach   
   $487 million. The City maintained spending and services by   
   borrowing to cover these operating expenditures. In 1974, New   
   York City borrowed $2.2 billion to offset deficits and finance   
   other capital projects. In the same year, the City’s outstanding   
   debt has reached $13.5 billion.   
      
   In 1975, the banks reviewed the City’s revenue projections and   
   decided they would no longer underwrite the notes and bonds of   
   New York City. The City could no longer borrow money to operate   
   and by April of 1975, New York City ran out of money. City   
   leaders turned to the federal government and the State looking   
   for the funds required to avoid bankruptcy. Eventually, Governor   
   Hugh Carey agreed to advance the City funds from the State in   
   exchange for the City turning financial oversight to the State.   
   The outcome was the creation of the Municipal Assistance   
   Corporation (MAC). The MAC was authorized to sell bonds to meet   
   the City’s borrowing needs.   
      
   Good Governance Lessons Learned: Transparency and Fiscal   
   Planning Practices   
      
   One of the key contributors to New York City’s fiscal crisis was   
   inadequate oversight of the City’s finances. In addition to the   
   creation of the MAC, the New York State Legislature enacted the   
   Financial Emergency Act (the Act) in the fall of 1975. The Act   
   implemented several measures to prevent future fiscal problems.   
   The City was required to budget in accordance with generally   
   accepted accounting principles. As part of the annual budgeting   
   process the City was required to submit a budget and a four-year   
   financial plan. The plans include forecasts of revenues and   
   expenditures and regular comparisons between actual and   
   forecasted values. As Dall Forsythe noted, “these good practices   
   help alleviate the financial risks that cities face. Such   
   planning practices are critical for dealing with economic   
   realities such as the ups and downs of the business cycle and   
   their impact on economically sensitive revenues. The City has a   
   lot of economically sensitive revenues—now much more than it did   
   before the fiscal crisis.”   
      
   I think the most significant thing that the MAC statute   
   contained was the provision that the City had to budget in   
   accordance with Generally Accepted Accounting Principles (GAAP   
   Accounting).   
      
   — Richard Ravitch   
   The plans are submitted annually to the New York State Financial   
      
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