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The State Budget Deadline Looms

Posted by NYPIRG on March 27, 2017 at 10:31 am
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Governor Cuomo and state lawmakers are now heading into the final week of the fiscal year.  New York’s fiscal year starts on April 1st and in order to have a budget in place, the governor and the legislature should have a plan in place by midnight Friday, March 31st.

During the Cuomo tenure, the state budget agreement has occurred either by April 1st or within hours of the deadline.  Getting a budget in place more or less on time has been a metric by which the governor makes his case that he has brought order to chaos in Albany.

Of course, there are other metrics – such as the number of public officials indicted and convicted of corruption that tell a different story – but the governor does get credit for pushing through state budgets that are “on time” and keep within growth estimates set by the governor.

This, however, is the governor’s first state budget being hammered out during a Republican Administration in Washington; an Administration that is making noises about cutting programs that could hurt New York State.

It appears that the state dodged its first fiscal “bullet” when the Trump Administration and the House Republican leadership could not agree on a measure to eliminate health insurance for tens of millions of Americans.  Had that plan been approved, the state could have experienced a budget hit worth hundreds of millions, if not billions, of dollars in federal aid.

The failure in Washington should make it easier for the governor and the legislature to put together a state budget.

There are a number of state issues that loom large and are still under consideration.

First, will the state extend – or increase – its tax rates on high income earners?  Despite the failure of health insurance changes in Washington, there can be no doubt that federal aid will be curtailed to some extent.  The state’s current income rate tax structure expires this year.  If it reverts to previous law, the state could lose big in its revenues.  Can it afford to do so?  Or will another extension curtail economic activity?

Second, what will the state do about college affordability?  The governor has advanced perhaps the most important change in higher education in a generation.  His Excelsior scholarship program, which would make the State University tuition-free for those with incomes up to $125,000, would help many middle income New Yorkers attend public college.  Yet, his higher education budget keeps state support stagnant for public colleges, and he cuts programs to help lower income students.  Will the governor’s initiative lead to broader access or essentially lead to cuts?

Third, will anything happen to curtail political corruption?  The former legislative leaders were convicted of corruption and joined a long and growing list of public officials facing prison time.  Currently, top associates of the governor are under indictment for allegedly using the state’s contracting process as a way to get rich and funnel campaign contributions to the governor.  The governor has proposed measures that would essentially add new oversight entities, but that are reportable to him, not independent.

Given the silence surrounding reform plans, will Albany kick the can again?

Lastly, the governor’s multibillion dollar bailout of upstate nuclear power plants has drawn the ire of lawmakers in both houses of the legislature – not only for the price tag, but for the secrecy surrounding the deal.

Will the legislature, a co-equal branch of government, use its constitutional powers to put a halt on the deal in order to ensure that there is a full public airing?

Budgets are about meeting the demands of the public.  With limited resources, and faced with unlimited demands, budgets are also the government’s primary tool to set policy priorities.

How Albany answers the budget this year will determine the quality of life for all New Yorkers, not just college students, ratepayers, and others who rely on the state for direct public help.