January 20, 2014
The governor is expected to detail a more than $2 billion tax cut plan that includes business tax reductions and a multi-stepped plan to freeze property taxes for two years. Cuomo will also reveal how much money he wants to spend on education.
He has said he will recommend an increase in school aid by perhaps as much as five percent over last year. But, he’s promised to not raise overall spending in the state budget above two percent.
EJ McMahon, with the fiscally conservative think tank The Empire Center, says to make things even more challenging, the governor’s budget office has said the state still faces a structural $1.7 billion deficit. McMahon says he’ll be looking to see how it all adds up.
“What would he cut in order to hold spending growth to two percent?” McMahon asks.
But Governor Cuomo has said he doesn’t plan on cutting anything. He believes he can finance it all by holding the growth of spending to zero in other parts of the budget.
McMahon points out that the state workforce, under terms of its contracts, will get raises this year and next for the first time in several years. Cuomo promised in exchange that there would be no lay offs, so any savings would have to come from attrition.
McMahon says this year’s budget is financed in part by a one billion dollar raid from the state insurance fund. He says expect another one shot revenue source, to materialize. He predicts Cuomo will have difficulty hitting his spending targets “if you don’t have some sort of marvelous infusion of new funds from the outside."
McMahon says he also wants to see details of the Governor’s plan to freeze property taxes. Cuomo laid out a broad plan early in January to subsidize local governments and schools who freeze taxes, as long as they consolidate services in the second year of the plan. McMahon says some of the plan, as outlined “doesn’t make sense."
Ron Deutsch, with the progressive leaning group New Yorkers for Fiscal Fairness, also wants to know more about the governor’s tax cut plans. Deutsch says he’d like to see the governor address income equality and poverty in his budget.
He says those issues were absent from the State of the State, where Cuomo also proposed an estate tax cut that Deutsch says would benefit New York’s 200 richest families.
“The hope would be that the governor gets in line with some other national progressive leaders,” said Deutsch. “Like President Obama, Mayor deBlasio and even the Pope, who are all talking about income inequality and addressing poverty, hunger and homelessness.”
The governor may not have to take on the Pope, but he may in his budget try to resolve a potential dispute with newly elected New York City Mayor Bill deBlasio over how to fund universal access to pre kindergarten. Mayor deBlasio would like to impose an income tax surcharge on the wealthiest New Yorkers, then earmark the money for the pre-K programs.
Cuomo has said he does not want to raise taxes in 2014, a year when the governor is up for re election. Cuomo did say in his State of the State speech, though that he shares the mayor’s ultimate goal.
“It’s time for New York State to have universal full day pre K statewide,” Cuomo said on January 8.
The governor will also need to lay out exactly what would be included in his proposed $2 billion education bond act.
Meanwhile, 30 government reform groups wrote a letter to Cuomo, asking the governor to make good on his call for public campaign financing and for an independent agency to enforce regulations by putting money for those plans in the budget.
“There’s really no way to move forward on enforcement or on public funding without funding to begin those programs,” said Karen Scharff with Citizen Action. “Even if they are going to take effect in future election cycles.”
She says if public campaign financing is to be partially funded by a taxpayer check off, for instance, it would need to be part of the budget now. Then, the check off option could appear on 2015 tax forms and fund the 2016 statewide election cycle.