Here’s the good, the bad and the ugly in the budget.
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 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.
© 2020 Crain’s New York Business