Gov. Andrew Cuomo releases his state budget proposal Tuesday afternoon, and many will be watching to see what it contains and how the numbers will work.
The governor is expected to detail a more than $2 billion tax cut plan that includes business tax reductions and a multi-stepped plan to freeze property taxes for two years. Cuomo will also reveal how much money he wants to spend on education. He’s said he’ll recommend an increase in school aid by perhaps as much as five percent over last year, but he’s also promised to not raise overall spending in the state budget above two percent.
E.J. McMahon, with the fiscally conservative think tank The Empire Center, says to make things even more challenging, the governor’s budget office has said the state still faces a structural $1.7 billion deficit. McMahon says he’ll be looking to see how it all adds up.
“What would he cut in order to hold spending growth to two percent?” McMahon asked.
Cuomo has said he doesn’t plan on cutting anything. He believes he can finance it all by holding spending growth to zero percent in other parts of the budget. McMahon points out that the state workforce, under terms of its contracts, will get raises this year and next for the first time in several years. Cuomo promised in exchange that there would be no layoffs, so any savings would have to come from attrition.
McMahon says this year’s budget is financed in part by a $1 billion raid from the state insurance fund. He says to expect another one-shot revenue source to materialize and predicts Cuomo will have difficulty hitting his spending targets unless there is some sort of marvelous infusion of new funds from the outside.
McMahon says he wants to see details of the governor’s plan to freeze property taxes, too. Cuomo laid out a broad plan early in January to subsidize local governments and schools who freeze taxes, as long as they consolidate services in the second year of the plan. McMahon says some of the plan as outlined doesn’t make sense.
Ron Deutsch, with the progressive leaning group New Yorkers for Fiscal Fairness, also wants to know more about the governor’s tax cut plans. Deutsch says he’d like to see the governor address income equality and poverty in his budget. He says those points were absent from the State of the State, where Cuomo proposed an estate tax cut that Deutsch says would benefit New York’s 200 richest families.
“The hope would be that the governor gets in line with some other national progressive leaders,” said Deutsch. “Like President Obama, Mayor de Blasio and even the pope, who are all talking about income inequality and addressing poverty, hunger and homelessness.”
The governor may not have to take on the pope, but he may try to resolve a potential dispute with newly elected New York City Mayor Bill de Blasio over how to fund universal access to pre-kindergarten. Mayor de Blasio would like to impose an income tax surcharge on the wealthiest New Yorkers, then earmark the money for the pre-K programs. Cuomo has said he does not want to raise taxes in 2014, a year when he is up for reelection, but did say in his State of the State speech that he shares the mayor’s ultimate goal.
“It’s time for New York state to have universal full day pre-K statewide,” Cuomo said on January 8.
The governor will also need to lay out exactly what would be included in his proposed $2 billion education bond act.
Meanwhile, 30 government reform groups wrote a letter to Cuomo asking him to make good on his call for public campaign financing, and for an independent agency to enforce regulations by putting money for those plans in the budget.
“There’s really no way to move forward on enforcement or on public funding without funding to begin those programs,” said Karen Scharff with Citizen Action. “Even if they are going to take effect in future election cycles.”
She says if public campaign financing is to be partially funded by a taxpayer check off, for instance, it would need to be part of the budget now. Then, the check-off option could appear on 2015 tax forms and fund the 2016 statewide election cycle.