CONTACT: Lise Bang-Jensen

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A comprehensive strategy for addressing New York State’s fiscal crisis, including a 30-point plan to save the state up to $30 billion over three years, was released today by the Empire Center for New York State Policy.

 

“Blueprint for a Better Budget: A Plan of Action for New York State” says the governor and state lawmakers should couple state budget cuts with mandate relief and other reforms, which will help local governments cope with lower state aid and reduce their costs. Under one of the report’s key proposals, the Legislature would formally declare a financial emergency and freeze all public-sector wages and salaries for a three-year period.

 

The 76-page report was written by E.J. McMahon, director of the Empire Center, and Josh Barro, a senior fellow at the Manhattan Institute for Policy Research.

 

“Like a runaway train, New York’s budget is in danger of derailing,” McMahon said. “It needs to be brought under control—before it’s too late.”

 

Savings options identified in “Blueprint” include $8.5 billion over the next three years from reducing and capping projected growth in state school aid.The report emphasizes that the aid cut should be “hard-wired” to other changes including the wage freeze and a cap on school property tax levies.Additional three-year savings include:

·$7.8 billion in Medicaid and healthcare spending, including programmatic reforms and higher fraud recovery targets;

·$3.8 billion in state workforce costs from freezing salaries, instituting a 40-hour state workweek and requiring employees to cover a larger share of their benefit costs;

·$1.2 billion from giving the State University of New York and City University of New York greater flexibility to set their own tuitions and manage their own affairs;

·$976 million from capping growth in School Tax Relief (STAR) benefits;

·$708 million from freezing and capping “non-personal” services;

·$661 million in welfare reforms; and

·$451 from cutting the Legislature’s budget and eliminating unspent member items.

 

The report says the state could realize additional long-term savings by privatizing assets including ski areas, golf courses, housing developments, Off-Track Betting corporations and the State Insurance Fund; encouraging public-private partnerships (PPPs); and repealing laws that raise capital construction costs. The report concludes by identifying tax policy goals, including the scheduled expiration of personal income tax increase and the “indexing” of the state income tax to allow tax brackets to expand with inflation.It also estimates the state could raise $1.1 billion over three years by imposing state taxes on sales to non-Indians on Indian reservations and repealing unwarranted personal and corporate tax breaks.

 

The Albany-based Empire Center is a project of the Manhattan Institute, one of the nation’s leading non-profit, nonpartisan think tanks. A copy of the report can be downloaded here.

 

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