It is a shame that local U.S. Rep. Maurice Hinchey (D-NY) voted against the bailout bill in the House on Monday. The credit crisis is affecting voters and residents across the spectrum. Cornell specifically and New York State in general are threatened due to the crisis. All would benefit from its swift resolution. The Senate’s late-night passage of the bailout yesterday could not have come too soon, and Hinchey would do well to consider the big picture when casting his vote on the bill’s next version in the House.
Squeezed by the crisis, New York State has not had a good September. Mergers and bailouts of New York City based investment banks and financial institutions have become frequent occurrences, and unemployment is sharply on the rise. A month into the most devastating episode of this nationwide economic meltdown, New York State is really starting to feel the heat.
According to a statement released on Tuesday by State Comptroller Thomas DiNapoli, as of Sept. 29, “the tax revenue loss [due to the economic crisis] could approach $3.5 billion through March 2010.”
This financial outlook does not inspire much optimism for both short term and long term prosperity. As published by the Comptroller, business taxes are down $366 million from last year and personal income tax collections are expected to erode due to Wall Street unemployment and lower bonuses. Taken together, the financial industry crisis is having a ripple effect on the New York State budget.
As a student body we may feel defenseless against the market’s tribulations, but we can take some comfort in that the University is taking steps to secure the stability of our economic resources. In his statement sent to all Cornell University faculty and staff on Sunday, President Skorton assured the “overall soundness of our university’s financial position.” In an effort to keep the community abreast of the Administration’s operations, Skorton announced the establishment of an ad hoc group to address the economic strain.
The biggest dependents on the state economy — our three contract colleges — will be watching the group’s efforts closely. Budget cuts within the university are inevitable and we may see a reduction in programs, buildings, and other facilities. Additionally, with a dent in the state budget we are likely to see both our financial aid policies and research budgets heavily impacted in the upcoming fiscal quarters.
It is a good thing that Skorton has been following this financial situation closely but we should consider, what will this ad hoc group propose for the University’s budget? With the primary goal of “maintaining the university’s standards of excellence in teaching,” it is still unclear where the money will come from. It is likely the solution will be significant increase in tuition or more federal subsidies for higher education.
Wall Street’s collapse is debilitating Ithaca and we hope Skorton’s endeavors will sustain the University’s budget. We also hope Hinchey will reconsider his vote on the bailout. We finally hope, in the upcoming months, that New York will get back on its feet — and the nation with it.