In the publishing business, the annotation “TK” is used in manuscripts to indicate some important piece of information is “to come.”  Gov. Andrew Cuomo’s 2011-12 Executive Budget is a book draft with an impressive cover and a promising theme: “Transformation.” The premise is compelling: “We spend too much, we get too little, and it makes us economically uncompetitive.” Yet in many chapters, the plot turns are still TK.

For example, Cuomo says the state will reduce Medicaid spending by $982 million (1.8 percent) on a year-to-year basis through reforms such as TK (to be determined by a Redesign Team including “stakeholders” from the the very industry groups and labor unions that feed on the bloated Medicaid program).  The state will help localities cope with lower aid by repealing costly mandates, including TK (on which another Redesign Team will make recommendations).  In light of declining inmate populations, he will consolidate TK prisons (a task force will recommend specific closures 30 days after the budget is due to be finalized).  Spending on the state’s workforce will be reduced as a result of an agreements by public employee unions to TK (with nearly 10,000 layoffs threatened if concessions are not forthcoming).

Cuomo kept his campaign promise to balance the budget without proposing new taxes or new borrowing–if you don’t count another $386 million in savings to be realized by “amortizing” a chunk of the state’s pension fund bill, as permitted under a law signed by Governor David Paterson last year and assumed in the long-term financial plan ever since.  (As for pension reform, that’s yet another TK.)

The governor also launched a public campaign to overhaul the financial planning process in New York State by discarding the current-law baseline model, which leads to projected spending increases that account for the lion’s share of projected budget gaps. On the eve of the budget presentation, he scored his first solid (if partial) legislative win with the Republican-controlled Senate’s passage of his proposed property tax cap, setting the stage for a confrontation with Assembly Democrats.

axe2-3529434
More like a barber, actually

While today’s New York Post depicted the governor as an ax murderer man, a barber’s smock would have been a better fit.  The budget calls for haircuts, not amputations.  Not that it will be easy.  (Ever try to cut the hair of a squirming, screaming two year old?)  Giving Cuomo the benefit of a doubt, keeping the reform details vague for as long as possible is a way to keep potential adversaries guessing while keeping options open. On the Medicaid side, in particular, Cuomo has armed himself with appropriations language that would give the governor discretion to cut the budget down to size if the “team” fails to agree on another way to get there.

In terms of gross spending, how audacious is Cuomo’s proposal compared to those introduced by the last New York governor to actually reduce spending, George Pataki?  The question is not easy to answer quickly because the proposed budget’s underlying financial plan features more accounting quirks than usual.

This in part reflects the impact of federal stimulus funding, now effectively a 12 percent supplement to general fund spending.  All but $1 billion of the $6.5 billion in stimulus will disappear in the fiscal year that starts April 1 — and the rest will vanish the year after that, accounting for 40 percent of the gap still projected for 2012-13.  The accounting changes also include an agreement by the Division of the Budget (DOB) to “reclassify” several billion dollars in federal grants as State Operating Fund expenditures, making the financial plan consistent with the state comptroller’s accounts but inconsistent with past measures.

The official numbers say Cuomo is proposing spending increases of 2.9 percent in the General Fund and 1 percent in the broader, more inclusive State Operating Funds category. This is misleading, though. Counting the vanishing stimulus as part of the budgetary base (which, after all, it has been), Cuomo is proposing what amounts to a net reduction of 2.7 percent in what would normally be considered General Fund spending, same as the official rate of decrease in the all-inclusive All Funds budget figure of $132 billion.

Making further adjustments to include all items normally financed by state revenues, the proposed State Operating Funds appears to be down about 1 percent from the current year.  By comparison, as shown below, Pataki proposed larger spending reductions in 1996-97.  In its broad outlines, Cuomo’s first budget most closely resembles the proposal unveiled by Pataki in 2003-04, the beginning of the Republican governor’s third term, when projected budget gaps were roughly the same as those heading into 2011-12.

budget-proposal-chart1-2370299
The first of the two Pataki proposals depicted above led to the adoption of State Operating Funds budget that was essentially flat, along with an All Funds spending level that was actually lower than the previous year’s.  The second ended less happily, with hundreds of legislative veto overrides, billions of new spending, and a very large temporary tax hike. Indeed, the budget enacted over Pataki’s objections in 2003 dealt a crippling blow to the governor’s credibility and opened the floodgates for years of unsustainable spending, which continued (at a slightly slower pace) right through the financial crisis and recession of the last three years.

Cuomo needs to do better, of course; even a nominally flat budget would require him to surrender on too many fronts. There appears to be relatively little “move money” for the Legislature to play with in a financial plan that already contains $800 million in one-shot revenues.

The governor’s challenge, then, is to fill in those TKs will real, structural reform.  The result could be a real page-turner–with a happy ending.

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

The Public Can Now See the Vaccine Task Force Recommendations that the Cuomo Administration Held Back

Even as Governor Cuomo touted vaccine approvals by a state-appointed panel of experts, his office was withholding the group's detailed findings from public view. The governor's six- Read More

New York’s Medicaid and Public Health Crises Get Short Shrift in the New State Budget

In spite of an ongoing pandemic and spiraling Medicaid costs, New York's health-care system received surprisingly little attention in the new state budget. On issue after issue, law Read More

Empire State’s new budget is a bridge to nowhere

Looking ahead to an uncertain post-pandemic recovery, New York’s newly enacted state budget for fiscal year 2022 raises spending by staggering amounts that—barring an unlikely rapid return to peak 2019 economic activity in New York City—can't possibly be sustained for more than a few years. The budget is a mid-2020s fiscal disaster in the making: an incomplete bridge over a deepening river of red ink. Read More

Lawmakers Mull Medicaid Proposals That Would Speed New York Toward a Fiscal Cliff

As a budget deal nears in Albany, reining in spiraling Medicaid costs seems to be the last thing on anyone's mind. Governor Cuomo is advancing only Read More

Tax hike and huge spending increase seem likely in next NY budget

New York state today began its 2022 fiscal year without an adopted budget—which, in itself, is not a big deal. The state government can continue to pay bills and employee salaries next week if either final appropriations Read More

Cuomo Pushes Budget Change Sought by Hospital Group Implicated in Pandemic Scandals

A hospital lobbying group at the heart of scandals plaguing the Cuomo administration is again getting the governor's help in pushing a late change to the state budget. Aides to Gove Read More

The Cuomo Administration Is Withholding Pandemic-Related Records Again

In an echo of the Cuomo administration's stonewalling on nursing home data, the governor's office has for a third time delayed releasing records of its vaccine review panel, this time until mid-April. Read More

Cuomo’s Schedules for the Peak of New York’s Pandemic Show Limited Contact with Outside Experts

As New York's coronavirus pandemic exploded last spring, Governor Cuomo's circle of regular contacts dwindled to a handful of close advisers, according to his recently released official schedules for March and April. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo "...the Empire Center is the think tank that spent months trying to pry Covid data out of Mr. Cuomo's government, which offered a series of unbelievable excuses for its refusal to disclose...five months after it (the Empire Center) sued, Team Cuomo finally started coughing up some of the records." -Wall Street Journal, February 19, 2021

SIGN UP TO READ ABOUT THE ISSUES IMPACTING NEW YORKERS.