New York State Budget Talks Stall Over Revenue Projections

| Wall Street Journal

New York state budget negotiations broke down over the weekend as Democratic Gov. Andrew Cuomo and Democrats in the state legislature continued to disagree over revenue projections for the coming fiscal year.

Talks between the two sides, which have until April 1 to agree on a budget, began on Thursday but stalled on Saturday.

Under state law, the impasse means Comptroller Thomas DiNapoli will issue a revenue forecast on or before March 5. Legislators consistently push for higher numbers than the governor, but the current situation represents the first time in Mr. Cuomo’s three-term gubernatorial tenure that he and the Legislature have been unable to reach consensus.

“It means they are getting off to a testy start, but it doesn’t mean they are doomed and they are not going to be able to do a budget,” said E.J. McMahon, research director at the Empire Center for Public Policy, a fiscally conservative think tank.

The disagreement marks another point of tension between Mr. Cuomo and the legislature, which for the first time in his tenure is fully controlled by his fellow Democrats. Mr. Cuomo has been trading barbs with Senate Democrats over the collapse of a deal to develop a headquarters campus for Inc. in Queens.

Initially, Democrats in the Assembly and Senate projected about $900 million more in revenues for the coming fiscal year than the Cuomo administration.

Mike Murphy, a spokesman for Senate Democrats, said Sunday that over the course of negotiations that difference was reduced to a few hundred million dollars and that legislators felt confident an agreement could soon be reached.

But Cuomo administration officials stopped talking Saturday morning.

Cuomo administration budget director Robert Mujica said in a statement Saturday: ”The governor has said getting the budget done on time is important, but it is more important to get the budget right.”

In a joint statement, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie called the breakdown unfortunate. They said they remain committed to delivering an on-time budget.

Mr. Mujica called on the comptroller to release his own revenue forecast. “While the budget discussion always has differing political priorities and opinions, facts are still facts and numbers are still numbers; and the numbers must govern a legitimate budget,” he said.

A spokesman for the comptroller said Sunday, “In the absence of a revenue consensus between the executive and the legislature, the comptroller will fulfill his responsibility under the law and provide a forecast.”

Administration officials are urging caution because of what they see as the increased potential for an economic slowdown as well as potential revenue shortfalls they say are caused by federal tax changes instituted by the Trump administration.

Cuomo administration officials recently cut income-tax-revenue projections by $3.8 billion for the next fiscal year and the remainder of the current fiscal year. They blamed the Trump administration’s new $10,000 limit on state and local tax deductions as a key factor for the revision.

© 2019 Wall Street Journal