Greg David

In normal times a government budget is a detailed list of what money will be coming in and how it will be spent, and the idea is to end the year right on plan. But the state budget adopted by Gov. Andrew Cuomo and the Legislature last week is just moving forward “on a wing and a prayer.”

Here’s the good, the bad and the ugly in the budget.

The good:

Given this is an election year, the adoption of a spending plan of $177 billion as the governor proposed in January is good.

The Legislature usually adds billions in additional spending, especially for education. This time, state spending on education has actually been reduced by $1 billion. But local school districts are being promised the same amount as last year, with the gap filled by crisis education aid from Washington.

The Legislature agreed to implement crucial reforms for the state’s Medicaid program, although some of them will be delayed because the New York congressional delegation barred them while the state is tapping as much as $6 billion in additional Medicaid aid.

The Legislature conceded that the budget may need to be reduced as the economic impact of the coronavirus shutdown becomes clearer. If revenues fall below expectations, the state budget director can inform the Legislature how he will cut spending.

The Legislature has 10 days to adopt a different plan.

The bad:

The governor agreed to adopt a state operating budget (excluding federal aid) that is about $10 billion more than the state is expected to have.

This is the wing and a prayer part.

The hope is that the economy will bounce back or that Washington will come up with more money. The first is looking unlikely, but more aid from the federal government is likely.

The really ugly:

The Legislature granted the governor the ability to borrow up to $12 billion. No one disputes the needs for short-term borrowing because the extension of the income tax deadline to July 15 from April 15 means the state will see billions in income tax payments delayed by three months.

But the bill also allows the governor to convert the short-term loans into long-term debt without any approval from the Legislature, and maybe without much public debate.

Even worse is the governor’s lack of transparency. He may be winning praise for his daily factual presentations on the impact of the pandemic in the state, but he is obscuring, if not hiding, the state’s fiscal condition. It gives him a free hand, but he shouldn’t have such discretion.

“We are at the early stages of what shapes up as the biggest state and city fiscal crisis since the Great Depression,” said E.J. McMahon of the Empire Center. “Borrowing and short-term cuts aside, the budget doesn’t chart any clear path out of it.”

© 2020 Crain’s New York Business

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