First glimpses of the Cuomo program

by E.J. McMahon |  | NY Torch

The broad outlines of Andrew Cuomo’s gubernatorial campaign platform are beginning to dribble out as the formal announcement of the attorney general’s candidacy approaches.  By the time the state Democratic Party Convention opens next Tuesday, the leaks may have turned into torrent.

Meanwhile, what little we know about Cuomo’s proposals tends to raise more question than it answers. For example:

Property Taxes — Cuomo will propose a 2 percent cap on property taxes, according to this report in Newsday.   But will his cap apply to the total tax levy, and not just a portion thereof?  Will it feature costly carve-outs for fast-rising expenses such as pension costs?   Or will Cuomo, in fact, define “cap” in the same way as the New York State United Teachers — i.e., a state-subsidized “circuit-breaker” that really is just an income transfer?

Public-Sector Employees — “Cuomo Would Freeze State Worker Salaries,” reports today’s Wall Street Journal. In fact, this is only slightly less predictable than “Cuomo Would Take Oath of Office on Jan. 1.”  All state employee union contracts expire next March 31 (or June 30, in the case of state university professors).  No further wage increase can be granted unless the next governor agrees to it in the next round of contract negotiations.  Given the size of the state’s structural deficit, and the unions’ refusal to make any meaningful concessions to Gov. David Paterson, it would be news if any current gubernatorial candidate was not planning to sock the unions with a series of zeroes.

State workers just pocketed another 4 percent hike in their base pay, effective April 1, on top of 9.3 percent base hikes (not including longevity “steps”) in the previous three years under contracts negotiated by Governors Spitzer and Paterson.  In the midst of a severe fiscal crisis, and in a dis-inflationary environment, a freeze in wages must be the opening default position for any governor.

Then-Gov. Mario Cuomo essentially froze pay for two years during the fiscal crisis of the early 1990s.  The first round of contract deals negotiated by Gov. George Pataki, who faced his own budget shortfall upon taking office in 1995, froze pay for one year and granted only a small bonus in the second year. The real question is not whether the next governor will freeze wages–he has no choice–but whether he will (a) seek structural changes in work rules and benefits, such as a 40-hour workweek and higher employee contributions to health insurance, and (b) whether he will ask the Legislature to impose a freeze on all public-sector salaries, for every level of government, which is legally possible.

State Spending Cap — Cuomo also will “introduce a spending cap, to be permanently inked into state law, mandating that the state cannot increase spending beyond the rate of inflation,” according to a campaign memo cited in the Journal report.

But talking about a cap on spending increases is sort of beside the point in the midst of a fiscal crisis that demands real, immediate and recurring budget reductions. Only a constitutional cap would have real teeth — but the current amendment process is such that a constitutional cap would not take effect any early than fiscal 2014-15, at the end of the next governor’s term.  In the meantime, a Governor Cuomo — like a Governor Lazio, Levy or Paladino — would essentially function as a human spending cap.  That’s because he will be equipped with a constitutional line item veto that, given the limited outlook for change in the state Senate’s composition, is highly unlikely to be overridden.  In the absence of a constitutional cap, a governor must use the veto to set and enforce clear spending limits for the Legislature.



- E.J. McMahon is the Research Director at the Empire Center for Public Policy.