New York State is facing a serious budget shortfall. This was forecast in July, before the yo-yoing of the stock market, the crash of Goldman Sachs, the problems of insurance giant AIG, and the so-called “bailout” (read government nationalization) of our country’s biggest financial institutions. Back in July, our newly minted governor, David Paterson, warned of a coming budget shortfall. I wrote about the impending budget crisis on July 29: My Easy Fix for the New York State Budget Shortfall. The New York State legislature, in typical fashion, has done nothing since July but fiddle while Rome has burned.

Fast forward to a meeting between the governor and the leadership of the New York State Senate and Assembly just a few days ago. Nothing got done but a lot of squabbling. According to the Press & Sun-Bulletin, this is the scope of the issue:

Paterson deserves credit for outlining the problem — a $1.5 billion gap in the current budget, expected to reach $2 billion by the end of the budget year (March), $15 billion next year, and possibly $47 billion in four years if the state continues to do nothing — and for proposing a $2 billion reduction in this year’s budget. (State of denial, Nov. 19)

Call me Johnny one-note, but let me point out yet again, as I have been for nearly a year, the obvious $47 billion elephant in the room no one is talking about–Medicaid. (Also see my post from Dec 12, 2007: The High Cost of Doing Business in New York and Medicaid.) New York pays more for Medicaid, both as a percentage of its population and in real dollars, than any other state in the Union. We pay $2,316 per capita. Thats $2,316 for every man, woman and child in the state, to give away free health care as a welfare benefit. It’s obscene. New York sucks money out of my pockets to give away to people who won’t pay for their own health care–giving them arguably a better level of care than many working people can afford on their own. This must stop. It’s not compassion–it’s an unhealthy codependency.

My solution to the New York budget crisis? As I’ve pointed out in the past, I propose New York cap Medicaid spending to $1,000 per capita–which is still more than California which is $939 per capita, and Texas at $771 per capita, both states with bigger populations than New York. Capping Medicaid would have the instant effect of reducing the state budget by $23 billion, which will instantly SOLVE the budget crisis. No further cutting of precious school budgets, no further cutting of precious government bureaucrat staffers. No counting paperclips. Just cut Medicaid. It will have the associated benefits of restoring some semblance of fairness to our budget and reducing the incentive for people to move to our state and not work.

Governor Paterson, it’s easy! Cut Medicaid.

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