With any luck, the coronavirus will be a fading memory by summer. But by then, massive (if temporary) damage will already have been done to the state and regional economies. The Empire State and its local governments, including Gotham, will have to confront a fiscal crisis as intense as the current public-health emergency.

It isn’t hard to conjure a worst-case scenario. The personal-income tax, Albany’s largest single revenue source, leans heavily on high-rolling ­investors who have lost fortunes in three wildly chaotic weeks on Wall Street. The emptying of public places will blow a huge hole in sales-tax receipts, leading to enormous shortfalls for New York City and county governments across the state.

The question now isn’t whether previous state and local budget assumptions have been demolished — only by how much and for how long.

Yet while immersed in his new role as epidemiologist-in-chief, Cuomo had sidestepped questions about the pandemic’s impact on the state budget for the fiscal year starting April 1.

At a Saturday night press briefing, the governor finally opened up on the subject — only to sound as if nothing had changed since he rolled out his FY 2021 Executive Budget back in January.

Although New York City and the counties are watching their spring sales tax forecasts vaporize, Cuomo continued to push his budget proposal to make localities pick up a share of higher Medicaid costs.

Asked about a congressional coronavirus relief package that could send up to $7 billion in added federal Medicaid funds to New York, the governor groused it wasn’t enough — and attacked Sen. Charles Schumer for inserting a provision designed to shield localities from paying more.

Cuomo sounded willing to go along with a legislative plan to ­accelerate final budget votes into this week — but only under his own politics-as-usual conditions. He made it clear he still wants to use the budget process to get his way on non-fiscal matters ranging from tweaking the new bail-“reform” law to legalizing recreational marijuana use.

But a rushed budget, cluttered with costly side-deals on extraneous issues, could also easily give cover to a bad budget creating bigger problems for the future — especially if it wrongly assumes a rapid V-shaped recovery from the inevitable recession.

As it happens, this week marks the 12th anniversary of two memorable New York events that provide an object lesson in how quickly an unforeseen economic downturn can accelerate into a historic crash.

On March 17, 2008, headlines included the demise of Bear Stearns — whose collapse under a pile of mortgage-backed securities prefigured what would soon erupt into a full-scale global financial crisis.

That same day, Lt. Gov. David ­Paterson took the oath of office as governor of New York, succeeding the disgraced Eliot Spitzer.

Within two weeks, Paterson had unwisely agreed to a new budget deal that boosted spending 5 percent, premised on overly optimistic revenue projections. The new governor also quickly agreed to ­labor contracts matching a generous pattern that Spitzer already had set with a few bargaining units.

By early summer, the state faced a ballooning budget deficit. To his credit, Paterson scrambled to get a jump on the problem, but the Legislature wouldn’t cooperate — not even after the Lehman Brothers failure triggered Wall Street’s meltdown that fall.

In the spring of 2009, with the Great Recession in full bloom, lawmakers enacted a budget balanced with even larger tax hikes than the governor had proposed — including a supposedly temporary, three-year “millionaire tax” that has never been allowed to fully sunset.

Unlike the inexperienced Paterson in 2008-09, Cuomo has had 10 years in office. He kept a lid on spending growth for most of that period — until, that is, he allowed Medicaid to snowball into a multibillion deficit before the coronavirus emerged.

Say this for David Paterson: Once he saw a crisis brewing, he at least tried to get ahead of it. ­Cuomo should imitate his predecessor’s proactive approach, shoving non-budget issues to a back burner and keeping a tight leash on legislators now — because it will be much harder to rein them in later.

© 2020 New York Post

About the Author

E.J. McMahon

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

Read more by E.J. McMahon

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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.