NY Economic Chief Touts Cuomo’s Budget
By DOMENICK RAFTER
One year ago, a freshly inaugurated Gov. Andrew Cuomo - still placing the final personal touches in the Executive Mansion- had an ambitious plan. New York’s fourth governor in five years wanted to make the much-maligned state government work again- and it would start with the budget.
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| Gov. Andrew Cuomo, during a speech at Queens College last month.
Tribune Photo by Ira Cohen.
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It had become commonplace that New York’s budget would be late, sometimes comically so. In 2010, the budget, which is due on April 1, was passed in August. Cuomo decided his first budget, which would close a $10 billion deficit and have to be agreed on by the notoriously-dysfunctional state legislature, would come on time. Few believed him. But with a day left to spare, the state legislature approved a budget before the deadline for the first time in nearly three decades, and New Yorkers’ deep cynicism in the functionality of Albany was dealt a blow.
Now, Cuomo, still basking in sky-high approval ratings and coming off a successful push for marriage equality and tax reform, is looking to do it again. Kenneth Adams, President and CEO of Empire State Development, the state’s economic development agency, said this year’s budget would not be as heavy a lift as last year’s.
“This year the process was simplified because of the hard work that was done last year,” he explained.“This year the process was simplified because of the hard work that was done last year,” he explained.
Adams said the budget reform process last year included changes to the way money was spent by the state including spending increases mandated by law.
“It was budget growth on autopilot,” Adams said.
Cuomo’s budget this year is $132.5 billion dollars, slightly lower than last year, and there is a $2 billion deficit. That deficit is down by a projected $3.5 billion because of revenue brought in from the tax reform bill that the governor signed into law in December. Under the law, the tax surcharge for millionaires was kept while other taxes were dropped.
Mandated in the budget is a 4 percent increase in Medicaid spending, a 2.2 percent increase in SUNY/CUNY funding and a 2 percent overall spending increase cap. The budget also includes a 4 percent increase in school aid which will be dependent on school districts approving a teacher evaluation system by Jan. 17, 2013. Included in the budget is $15 billion for infrastructure projects including bridges, roads, sewers and the MTA. Also in the budget, $134 million for the Environmental Protection Fund- the same amount as last year, a one percent increase in funding for mental hygiene agencies, $93 million more for child care, to offset a reduction in federal money, and $4.6 billion for public safety. Beyond that, the governor’s proposal also creates a plan for the state to take over the entire cost of Medicaid growth over the next three years. Cuomo is proposing a new pension reform plan, called Tier VI, which includes an optional 401k, raising the retirement age, and requiring higher income employees to contribute more to retirement plans. The budget also includes key funding to reinstate the toll rebate program for residents of the Rockaway Peninsula and Broad Channel who use the Cross Bay Veterans Memorial Bridge.
Robert Megna, Cuomo’s budget director, said the budget language forces state agencies to better focus on what their money should be spent on and gives leeway to different ways of doing that.
“To avoid cuts in services, local aid or tax increases, the Executive Budget directs State agencies to be more efficient and focuses resources on their core programs and services,” Megna said. “The flexibility language will allow for a range of operational measures and will improve functions such as procurement, real estate, and information technology.”
Cuomo’s budget outlines two ways to close the $2 billion deficit; freezing state agency spending and lower the increased aid to local government from 3.9 percent to 2.6 percent. Both options would save the $2 billion and close the deficit with any spending cuts, new taxes or borrowing.
As for next year, the Cuomo administration is projecting a budget gap of $715 million, the smallest year-out budget gap projection in two decades. The four-year gap is project to be cut by more than half.
The budget needs to be approved by the state legislature, which is in the middle of a fight over redistricting, which would also need to be approved in the next few months.
Reaction from legislators has been minimal so far, as many get their first look at it. Assemblyman Mike Miller (D-Woodhaven) praised the budget, but noted he had reservations about the governor’s planned Tier VI pension reforms.
“Since this year’s budget deficit will be closed by a freeze in the increase of several state agencies, we will not see the dramatic cuts that we have seen in previous years. State agencies will be able to operate with business as usual,” Miller said. “This will increase the effectiveness of our government while taking away from its overbearing cost.”
Reach Reporter Domenick Rafter at drafter@queenstribune.com or (718) 357-7400 Ext. 125.