January 22, 2013
Governor Cuomo, facing his third lean fiscal year as governor, closes a $1.3 billion dollar budget gap by holding spending flat for state agencies, which he estimates will save $434 million dollars, and putting off a cost-of-living increase for health care providers, worth $412 million dollars. He wants to raid a fund for workers compensation, with the promise of reforming the entire system, and raise a small number of fees, including higher fines for texting or using a cell phone while driving.
Cuomo says it’s a “different mentality” than the old days.
“That said every year said ‘put more money in the budget’,” Cuomo said. “More money in the budget will mean more results.”
“No”, he continued. “More money in the budget just meant more money in the budget.”
Nevertheless, the governor is increasing school aid by 4%, though he punishes the City of New York for not meeting a January 17th deadline to complete a teacher evaluation plan, and will withhold the city’s increase.
Cuomo provides $25 million for all day pre-kindergarten in the state’s poorest school districts, and will give out $20 million dollars in grants to districts who want to extend the school day or school year.
Economic development incentives include $50 million to promote technology clusters, an historic preservation tax credit, and an already announced $60m deal with the Buffalo Bills for a new stadium.
“For $60 million dollars, the Bills had better win this year,” the governor joked. “Talk about performance funding.”
Cuomo says he can’t provide extra money for financially struggling local governments, but he does offer some relief. Local governments, and schools can sign up for a pension stabilization program, that would allow them to pay less for pensions now, with ballooning payments several years into the future. The largest public workers union, the Civil Service Employees Association calls it a “bait and switch” program. Cuomo would also let localities raise sales tax rates without permission from the legislature.
The governor plans to use billions of dollars in federal aid for Superstorm Sandy to better rebuild homes, and in some cases buy back the homes. He says he’ll also improve the state’s emergency fuel and water supplies and protect the subway system and other infrastructure from future floods, in what he says will be a “massive” effort, that “requires immediate assistance on a grand scale”.
The programs also apply to victims of 2011storms Irene and Lee.
Reaction from the legislature was largely positive. Senate Republican Leader Dean Skelos finds little to disagree with.
“No tax increases,” said Skelos, who also says he’s pleased that there is no new borrowing to close the deficit.
But Senator Skelos says he wants to examine school aid distribution numbers more carefully to make sure his home district of Long Island gets its fair share.
Senate Independent Democratic Conference Leader Jeff Klein, who has a power sharing agreement with the GOP in the Senate, is pleased that the governor included the proposal to increase the state’s minimum wage from $7.25 cents an hour to $8.75 cents an hour, and that Cuomo justified the increase by saying it would be an economic development boost.
“An increase in the minimum wage creates jobs,” Klein said. “Close to five thousand jobs.”
Senators Klein points out that the increased wages will spark $600 million dollars in new spending at businesses in the workers’ communities.
Klein says he’d like to see in the budget, though, a tax credit for small businesses to hire unemployed veterans.
Assembly Ways and Means Committee Chair Denny Farrell, who has seen his share of budget fights, says for the third year in a row, the budget should come together smoothly.
“This is the third year of magic,” Farrell said, with a smile.
But Farrell says he might object to a provision that would hold future minimum wage increases to the cost of living index.
Senate Democratic Leader Andrea Stewart Cousins, is also happy with Cuomo’s plan, though she says he’d like to see more funding for the community based program to reduce gun violence, known as SNUG. She says the program reduced gun violence by 65% in her home city of Yonkers.
Most lawmakers believe the budget can be done on time, and even early this year.
The Passover and Easter holidays begin March 24th, so the spending plan needs to be in place several days before the April 1 deadline.