cuomo_250x-150x150-9690239“Spending cap?  What spending cap?”  In effect, that’s the state Assembly’s opening public bid in state budget negotiations with Gov. Andrew Cuomo for the fiscal year that starts April 1.

Starting his second year in office, Cuomo has stuck to a self-imposed cap of 2 percent on annual growth in the state operating funds budget (excluding federal grants and capital spending).  The result has been consistently lower levels of spending growth, as shown below.

screen-shot-2016-03-14-at-4-11-06-pm-1024x630-3882590

Cuomo’s proposed 2017 budget would boost spending by 1.7 percent. To be sure, the governor cuts corners to get to that figure; at the margins, his Executive Budget stayed below 2 percent not by holding down spending but by offloading it, most notably through a shift of about $500 million in (state fiscal year) costs for Medicaid and City University (CUNY) senior colleges. On the other hand, the governor’s budget includes a K-12 school aid increase with a state fiscal year impact of $700 million, or 3 percent; on a school-year basis, the increase comes to $1 billion, or 4 percent.

The Assembly’s Democratic majority, however, wants to boost the state operating funds portion of the budget by another $1.9 billion—a 3.7 percent increase, according to its summary memorandum. The Assembly’s additional spending consists mainly of higher school aid (a whopping 9 percent increase on a school year basis) and a reversal of the proposed CUNY and Medicaid shifts for New York City.

Unlike the Assembly, Senate Republicans did not issue a memorandum summarizing the net fiscal impacts of their budget resolution. The Senate’s official press release asserts that the upper chamber’s one-house plan “stays within the self-imposed two-percent spending cap”—but that’s hard to immediately confirm, based on the summary in the Senate’s one-house budget resolution. The Senate proposals include a school aid increase totaling at least $700 million on a fiscal year basis—enough, all by itself, to boost spending closer to 3 percent. (The resolution uses multiple figures, some possibly duplicative, without explaining whether they represent state fiscal year or school year totals.)

Just two months ago, the same Senate Majority was approving a plan to codify Cuomo’s state spending cap—and then some—by holding state operating spending below the three-year average inflation rate, which would come to 1.27 percent in fiscal 2017.  Nonetheless, if the Senate’s one-house plan somehow comes in under 2 percent growth, it almost certainly does not come in as low as 1.27 percent.  (Memo to Senate: if you’re going to make such a big deal of proposing a spending cap, you should at least show how you would actually abide by it, if only for illustrative purposes.)

In another move that will push total spending above the cap, both houses refused to go along with Cuomo proposal for workers’ compensation reforms that would also have required the State Insurance Fund (SIF) to reduce the state government’s workers’ compensation premium by $375 million over the next three years, including $140 million next year.

Both houses also rejected the governor’s proposal to shift the Canal Corp. to the Power Authority, which was Cuomo’s pretext for eliminating a $85 million operating subsidy of the Thruway Authority. The Senate restored the full subsidy.

As it happens, the Legislature was right to reject these proposals—but they should have acknowledged and offset the total added cost of $225 million in their budget resolution summaries.

In a move that affects capital rather than operating expenses, both houses also rejected Cuomo’s proposal to utterly waste spend $113 million a year over the next three years on income tax credits to reimburse New York drivers for half of their toll expenses exceeding $50 a year.  The Assembly retained $15 million in toll credits for farmers only, while the Senate rejected the entire idea. Since the money to fund the credit would have come from bank settlement windfall revenues, the Legislature presumably want to reprogram the money for infrastructure purposes—although that, too, was not clear from the one-house memos.

Stay tuned for more.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal

A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels. First, it marked the only serious attempt by any state t Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

DeRosa Is Still Hiding the Truth About Cuomo’s Pandemic Response

As the long-time top aide to former Governor Andrew Cuomo, Melissa DeRosa ought to have useful information to share about the state's pandemic response – especially about what went wrong and how the state could be better Read More

New York’s Medicaid Spending Is Running Billions Over Budget

New York's Medicaid program ran billions of dollars over budget during the first half of the fiscal year, adding to signs of a brewing fiscal crisis in Albany. According to the fro Read More

One Brooklyn Health’s Money Troubles Raise a Billion-Dollar Question

A brewing fiscal crisis at One Brooklyn Health, which has received more than $1 billion in turnaround funding from the state, raises the question of whether that money has been well spent. Read More

Beware of Medicaid’s Spending Swings

The state's Medicaid spending is becoming increasingly volatile from month to mo Read More

With Union Support, Lawmakers Roll Back a Nursing Home Reform Law

Nearly half of New York's nursing homes would be effectively exempted from a two-year-old minimum spending law under terms of a rollback passed by state lawmakers this week. Enacted Read More

A Breakthrough for Hospital Pricing Transparency in Albany

The murky world of hospital pricing would be exposed to more sunlight under a bill approved this week by state lawmakers. The legislation calls for the state-run employee health pla Read More