Rosenberg warns of continuing budget problems

by Sarah R. Buchholz, Chronicle staff

lthough the state's budget situation may have bottomed out, legislators are worried about the possibility of another bad year, State Sen. Stan Rosenberg (D-Amherst) told the Faculty Senate Nov. 29.

     "We're all deeply concerned about whether there's a second year of difficulty ahead," Rosenberg said. "[But] I can say that we were better prepared for this fiscal budget problem than the last.

     "The situation in which we find ourselves at this time is not an unfamiliar one. It happens about every eight to 10 years. We are in a recession. The direct result of that recession is a drop in state revenues.

     "We were better prepared for this fiscal problem than the last. Last time there were virtually no reserves. This time we had $1.8 billion in the rainy day fund and another $579 million in a separate reserve from the '01 surplus. And that gave us $2.3 billion to fall back on, which means that there's enough money so that if this continues another year, or even another two years, that there will still be stabilization dollars available to buffer the cuts.

     "We would otherwise have to make even deeper cuts. So we made sure that we didn't spend it all this year, in case we need it for next year and the following year."

     Rosenberg said that he is encouraged that economists are now arguing about whether the economy has hit bottom or hasn't quite hit bottom, rather than predicting up to five years of hard times, as they were a few months ago.

     He told the senate that one reason the University has been cut more than most other educational institutions is the size of its lines in the budget.

     "When you're looking [to cut] $650 million, you don't do it in $175,000 severance package chunks," he said. "You do it in millions, in tens of millions, in hundreds of millions."

     Rosenberg said some legislators operate under the assumption that large institutions are able to absorb a higher percentage cut than smaller institutions and that many legislators "are never persuaded that the higher ed. system operates as efficiently as it could."

     He also said he believed the Library acquisitions cut from $14 million to $5 million was so large because acquisitions has its own line in the budget.

    "When you create a target, people shoot at it," he said.

     When asked about funding for the union contracts, Rosenberg replied, "The fact that they did not spend all of the money in the '01 surplus reserve gives us hope that that would be the source to fund collective bargaining agreements that had been previously approved by the governor and the unions but not yet approved by the legislature."

     Continuing on the topic of state employee compensation, he added, "The governor's attempt to increase the health insurance premiums was defeated by the Legislature and so it's still 85 [percent paid by the state] - 15 [percent paid by employees]."

     Rosenberg also said that early retirement programs are expensive, rather than being cost-savers.