‘Building on Success” was the theme of Gov. Cuomo’s election-year budget presentation in Albany this week. But while Cuomo boasts he’s got New York headed in the right direction, the latest economic and demographic indicators suggest we still have a long way to go. Read More
One fiscal watchdog called that surplus an illusion. "It's purely aspirational," said E.J. McMahon of the Empire Center, a conservative think tank. He said a more realistic projection shows New York with a $2 billion deficit in two years rather than a $2 billion surplus. Read More
E.J. McMahon of the fiscally conservative Empire Center said that adopting the budget wouldn’t lead to the $2 billion surplus Cuomo proposes using to offset the tax cuts, though he said it’s a fine goal. Instead, by traditional measures, it has budget gaps of $1.6 billion in 2016, $2 billion in 2017 and $3 billion in 2018. “He has basically changed the rules,” McMahon said. “ … It’s like a coach saying we’ve not only won more games, we’ve already scored 30 more points, when it’s actually his goal to score 30.” Read More
Cuomo has said that he could flip what is currently projected as a $1.7 billion deficit for the next fiscal year into a $2 billion surplus by 2016, provided he can hold state spending growth to two percent or less. That's going to be quite difficult, fiscal analysts note, as the state has already committed to spending increases for education and health programs. “Two percent growth in state operating funds yields the 'surplus' he's talking about. The question, though, is that 40 percent of that is Medicaid and school aid, and those are assumed to increase at four percent each year, and in Albany, those are seen not as caps, but floors,” said E.J. McMahon, president of the business-backed Empire Center. “So if that's off-limits to reduction, it's very difficult to see how everything else gets reduced enough to hold that two percent line.” Enter the waiver. If the state were able to count on the additional federal revenue, it could direct some of its own money elsewhere. Read More
E.J. McMahon, executive director of the fiscally-conservative Empire Center, noted that statewide bond acts are often rejected by voters and he said the education bond proposed by Cuomo seems to rely on an arbitrary number and would pay for technology that will be outdated and useless before it's even paid off. “My concern is that it was pulled out of thin air and it was used to fill space in the State of the State that was thin on education stuff,” he said Sewer and infrastructure upgrades are a significant expense faced by many municipalities, including some that still directly discharge waste into the Hudson River during storms. Beaches in communities along Lake Erie are regularly closed during summer months because of sewer discharge into the water. Old pipes, decaying electrical systems and other infrastructure problems have stalled private development in many upstate cities, McMahon said. While McMahon said he didn't support the whole environmental bond, the $2 billion directed toward infrastructure is increasingly necessary, but gets little notice during an election year. “It's the non-sexy, really important thing that seems like it won't happen while we're paying for iPads and technology for schools,” he said. Read More
In 2011, Cuomo decided to cap growth in education spending at the rate of New Yorkers' personal income growth, and he cut state aid accordingly for the 2011-12 school year by $1.3 billion. In 2012-13, personal income grew about four percent, and Cuomo and the Legislature awarded an $800 million increase, the maximum allowed under the cap. “The cap is not real. I don't think the cap is ever going to be real again,” said E.J. McMahon, president of the Empire Center, a fiscally conservative think tank. “I don't think it ever was binding. I think it was a convenient pretext in the governor's first couple of years and increasingly is going to be disregarded.” Read More
Unfortunately, Mr. Cuomo so far has been unwilling to combine the tax cap with meaningful local-mandate relief, especially public-sector collective-bargaining reforms that would give county executives, mayors and school boards more tools to live within the cap. Read More
A report issued last week by one of Gov. Andrew Cuomo's two tax commissions has rekindled debate regarding taxes in the Empire State. Former Gov. George Pataki and former state Comptroller Carl McCall headed the commission. E. J. McMahon, president of the Empire Center for Public Policy, praised the report's recommendation the state cut the top estate-tax rate and raise the taxable estate threshold to federal levels. "The Empire State would remain one of a very few jurisdictions still imposing any death tax, but it would at least take a smaller bite out of fewer estates," he said in comments published in the New York Post. Read More