State Budget

Where Will Cuomo Cut?

From the Morning Memo:

Gov. Andrew Cuomo will propose his fifth state budget today, and sources say he plans to once keep spending under a 2 percent increase from last year.

The self-imposed spending cap has been a hallmark of every Cuomo budget proposal since 2011, his first year in office.

And the 2 percent cap has stuck: State lawmakers have agreed to work within the framework of Cuomo’s initial spending figure while also enacting four budgets on time.

Aside from controlling costs, the cap is a useful political tool when Cuomo touts the cap on local property tax increases, even if it is an apples and oranges comparison: If the state can stay within the bounds of a 2 percent increase in spending, then local governments and school districts should be able to do the same when it comes to the amount they collect in taxes.

But in a real way, controlling spending is linked to property taxes: Cuomo wants to use the planned surplus to help pay for a $1.66 billion property-tax relief plan that is his administration’s version of the circuit-breaker program, which ties relief to a household’s income.

Cuomo’s cap on spending this budget year will have to withstand a rather large test, according to the Citizens Budget Commission, given that he’ll have to find $1.8 billion in savings this year in order to balance the budget. The need for savings grows to a projected $2.6 billion next year and then $4 billion ahead of the 2017-18 fiscal year

Namely, spending on major cost-drivers for the state – education aid and Medicaid – are growing alongside pensions and debt costs.

“Although school aid is statutorily capped at the annual growth rate of personal income, the projected increase for next fiscal year is a much larger 7.5 percent,” the budget watchdog wrote.

Even as Cuomo talks of using a planned surplus based on these 2 percent caps, such goals are currently premature, the CBC found.

“Despite reported surpluses, under current projections, New York’s real baseline financial plan includes budget gaps expected to exceed $4 billion in two years,” the group wrote. “Savings in every area should be under consideration before new commitments are made.”

Add Valesky To ‘Syracuse Billion’ Push

Sen. David Valesky of Oneida is joining the push for a “Syracuse Billion.”

The Independent Democratic Conference member on Monday said in a statement he backed the plan as proposed by Syracuse Mayor Stephanie Miner to have the state commit to a massive infrastructure investment in the central New York city.

“Mayor Miner’s proposal contains exactly the components we need to propel Syracuse and Central New York into economic growth in the 21st Century,” Valesky said in a statement. “This plan’s singular focus is on infrastructure—investing in the physical needs and human capital to create a playing field where the entire community can grow. The Syracuse Billion proposal is a comprehensive plan that has my wholehearted support.”

Though the proposal has echos of the “Buffalo Billion” — a program that targeted private-sector job growth through specific state investment — this program Miner backs is aimed at upgrading Syracuse’s roads, bridges and sewer systems which are increasingly costly to maintain on the local level.

Republican Sen. John DeFrancisco, the chairman of the Senate Finance Committee, last week announced he also backed Miner’s proposal.

Miner will be a guest on Capital Tonight this evening.

Skelos: Property Tax Package ‘A Critical Component’

Senate Republican Leader Dean Skelos called the property-tax rebate program designed to nudge local governments on cutting costs a “critical component” of the agreed-to spending plan.

In an interview, Skelos said the multi-year rebate program was designed to shore up relief programs like STAR that were taken away.

“This is slowly trying to get back that type of property tax relief for those paying property taxes outside of the city of New York,” he said.

The tax plan would require local governments to budget within the state’s cap on local property tax levy increases and then in a second year find ways to share services. Property taxpayers would then receive the difference in the tax increase in the first year.

The property tax “freeze” was proposed by Gov. Andrew Cuomo in his January budget proposal.

The measure was altered to allow for shared service programs currently in place to be considered.

“It is tough for the local districts, but many of them already are looking at efficiencies, shared services, some areas are sharing superintendents,” Skelos said.

“So I think there are some positive steps going, but we want to look for them to continue to look for efficencies in their school district, their municipality.”

Skelos even adopted some language that Cuomo has used to spur local governments on cutting costs, noting the state has budgeted within a self-imposed 2 percent limit on spending increases.

“If we can do it, certainly our local government can do it,” he said.

Statewide Pre-K Pegged At $340M

State officials are closing in on an agreement that would fund statewide pre-kindergarten programs at $340 million in the coming 2014-15 budget.

Under the agreement, $300 million would be set aside for New York City, with $40 million for the rest of the state.

The deal comes after New York City Mayor Bill de Blasio had campaigned on a plan that would provide universal pre-K in the city with a tax on those who earn $500,000 and more a year to pay for it.

But the tax increase ran into opposition in Albany – both from Gov. Andrew Cuomo and Senate Republicans.

Cuomo had proposed spending $1.5 billion over five years, with $100 million starting in the first year, to fund pre-K.

Meanwhile, the Senate’s one-house budget resolution proposed spending $540 million, which was the number de Blasio had proposed ($340 million for pre-K and the rest for after school programs). Unlike the Assembly however, the Senate rejected de Blasio’s ask for the power to tax rich New York City residents, and instead proposed to pay for pre-K and after school programs by cutting $1 billion worth of corporate tax cuts sought by Cuomo.

DREAM Act (By Another Name) Lives?

Cardinal Timothy Dolan released a carefully worded statement this afternoon that seemed to suggest some form of the DREAM Act is very much alive as legislative leaders and the governor continue to try to hammer out a budget deal.

“We have been advocating for the Education Investment Tax Credit as a critically needed measure to help provide scholarships for families to pay tuition for children attending private and parochial schools,” Dolan said.

“At this time in Albany, there is discussion of expanding this education tax credit concept to include scholarship funding for college students in need, including those students who might not otherwise qualify for other assistance opportunities. We support this expanded concept and urge its passage.”

“Students who might not otherwise qualify for other assistance opportunities” sounds a lot to me like students who aren’t able to access state-funded programs to help pay for higher education due to their immigration status. (In other words, they’re undocumented). But Dolan, who is a DREAM Act supporter, specifically avoided any mention of the controversial legislation in his statement.

I called the state Catholic Conference spokesman Dennis Poust, who told me that during the course of negoitations “it has become clear that the framework of discussions includes some elements” of the DREAM Act. If what the four men in a room are considering is a straight expansion of the education tax credit the church has been pushing, then it would definitely apply to undocumented students, Poust said, because the bill in its current form makes no mention of immigration status.

Poust said the cardinal and the governor have been “keeping the lines of communication open,” and Dolan put out this statement because “it was felt that it would be helpful” as negotiations continue.

It had been suggested that the up to $300 million annual education tax credit could be “traded” (in budgetspeak) for the DREAM Act, which is opposed by the Senate Republicans and failed by two votes on the Senate floor last week. Assembly Speaker Sheldon Silver said the governor had put that idea on the table, but Silver didn’t think it was “viable.”

The teachers unions have opposed the tax credit, even though supporters – like Dolan – say it will help public as well as private (and parochial) schools.

Pushing for Parks

And item No. 3:

Advocates for the state parks were among those disappointed by the one-house budget resolution passed in the wee hours of the morning by the state Senate last week.

Deep in the Senate’s plan was the elimination of $92.5 million worth of New York Works capital funding that had been allocated for the third year in a row to pay for much needed park repairs and improvements.

The money was apparently scrubbed from the executive budget because the governor had failed to line out in advance exactly where it would be spent.

There has been a $1 billion backlog on work at the state’s parks and historic sites, which saw their busiest year on record with more than 60 million visits in 2013.

And that was despite the fact that some of the most popular parks were forced to close for repairs following Superstorm Sandy.

The Senate approved the previous two years worth of funding, which went to pay for everything from high-profile projects like the overhaul of Niagara falls State Park (the oldest state park in the US, by the way) to more mundane – but necessary – efforts like upgrading the electrical systems at Taughannock Falls in the Finger Lakes.

“By slashing $92.5 million from the New York State Park’s capital budget, the Senate is jeopardizing the future of New York’s state park system,” said Erik Kulleseid, executive director of the Open Space Institute’s Alliance for New York State Parks.

“With more than a billion dollars in documented repairs, upgrades and improvements needed at our state parks, we are deeply disappointed that the Senate put these funds at risk,” Kulleseid continued.

“We applaud Governor Cuomo and the state Assembly for standing up for state parks and urge the Senate to restore this critical funding.”

Assembly Dems To Include Med-Mar In Budget Bill

The one-house budget bill submitted by the Assembly Democrats next week will include a revised version of the Compassionate Care Act, which would legalize marijuana for medical use.

Assemblyman Dick Gottfried, a Manhattan Democrat who has long championed med-mar, confirmed that this is the first time in Albany history that the provision has been included in a budget bill by his conference.

“Unless something dramatic changes, yes, that is the plan,” Gottfried told me during a telephone interview this afternoon. “It’s my bill with some changes that we’ve worked up over the last couple of weeks that would have eventually gone into my bill except we’re putting them into the one-house instead…By putting it in our budget bill, we jump start a three-way discussion.”

“People might ask: Why does this belong in the budget? The answer is: When creating a new state program that’s going to cost money to administer and create a new source of state revenue, it’s perfectly acceptable to have it in a budget bill.”

One change was to have the excise tax proposed in Gottfried’s bill (being carried in the state Senate by IDC Sen. Diane Savino) from a certain number of dollars per pound to a percentage of the dispensing price. This was necessary, Gottfried said, because the sponsors realized that “a pound of dried leaf and a pound of oil extract are very different and should not be taxed the same.”

The other, more substantive change was the addition of provisions to speed up – at least on a temporary basis – the recognition of organizations that are registered to dispense medical marijuana. The way the bill had been written, it could take a year or two before product was available to patients, Gottfried said, due to the time required to write regulations, process registration applications and grow the plants.

How quickly marijuana could get into the hands of the people who need it remains something of an unanswerable question, due to the fact that the federal government would have to sign off if New York is to procure product from states where it is already legal.

“In order for this concept to work, we would have to get the Department of Justice to acknowledge that there’s nothing wrong if the product goes from one tightly regulated state to another tightly regulated state,” Gottfried said. “Because if not, there’s really no practical way anyone can think of to make product quickly available…And I really do not want to see babies dying for a year or two while they’re waiting for New York to get its system up and running.”

There has been considerable movement on med-mar in recent weeks in the Senate, with several Republicans expressing support for the Compassionate Care Act. This is widely attributed to the strong lobbying efforts put forth by a group of Western New York parents whose children suffer from devastating seizures, either caused by epilepsy or a disorder known as Dravet’s syndrome.

At least one Republican senator – Patrick Gallivan – has said he supports a very limited bill that would legalize a high CBD, low THC oil type of medical marijuana. In Colorado, it’s known as “Charlotte’s Web,” named after Charlotte Figi, who suffers from Dravet’s syndrome and was the first patient who had success with the treatment.

Gottfried said he considers it “inhumane” to patients who would need different kinds of med-mar treatment – like smoking to offset the nausea brought on by chemo, for example – to severely limit access to just one or a few types of the plant, adding: “It’s highly unlikely you could ever develop a production process in New York just to serve a dozen patients.”

The Assembly budget bill will not include any money in the coming fiscal year for med-mar, Gottfried said, because the assumption is that there will be little – if any – initial cost in setting up a med-mar system. The cost – as yet unknown – would ramp up in the 2015-16 fiscal year, but the assumption is that it would be more than covered by the revenue generated once the system gets up and running – revenue that Gottfried said could “possibly” exceed $100 million a year.

Gov. Andrew Cuomo included a limited medical marijuana plan in his budget proposal that would be established via executive order, reviving a 1980s-era law that has been dormant for years. Gottfried and others panned this approach as cumbersome and too limited in scope. Asked if the the administration has taken any steps to implement the governor’s plan, Gottfried replied:

“If you find the name of anyone in the Health Department who’s working on this project, would you let me know? I’ve been trying very hard to find out that name, and so far I’ve gotten no response.”

The administration has indicated, through top Cuomo aide Larry Schwartz, that the governor would “support” the Compassionate Care Act if it passes both houses and ends up on his desk.

Senate GOP leader Dean Skelos appears to have softened his stance on med-mar, saying he’s now open to legalizing marijuana-based oils and possibly vaporizers, but still doesn’t like the idea of “public smoking.” Skelos also has not yet agreed to letting a bill to legalize med-mar come to the floor for a vote.

Megna: Tax Cuts For 2014-15 ‘Under Discussion’

There has been much speculation as to whether Gov. Andrew Cuomo will propose tax cuts in his 2014-15 executive budget – a pledge he reportedly made at a fundraiser on Long Island this summer at which Jon Bon Jovi entertained the crowd.

That was music to the ears of the Senate Republicans, who are all about tax cuts – especially during an election year (which 2014 just so happens to be). But it makes some Democrats, including former Assemblyman Richard Brodsky, a little nervous, since they can think of any number of things they would prefer to see state cash spent on, like education, financially ailing municipalities and health care.

State Budget Director Bob Megna came into the CapTon studio last night to discuss the first meeting of the Financial Restructuring Board for Local Governments, which he is chairing. I asked how the budget preparations are going, and he replied:

“We in the process of developing programs, working with the governor and his senior staff to develop priorities for the next budget. Our fiscal situtation, while it’s still very tough, the economy has been slowly improving.”

“I think through the governor’s prudent management we’re in a fairly good place with respect to our out-year gaps. So, you know, we’re at the beginning stages, and I think we’re probably in a better place than we’ve been in the past few years.”

“…The governor has been pretty clear about his priorities. One: That we continue to get timely budgets, you know, budgets passed on time. Two: That we keep spending within 2 percent on a state operating funds basis. And so, with those two parameters in place, that’s how we do our budget planning. And the Legislature is well aware of what those priorities are. So, we think we’re well positioned again to get a budget on time and one that will be fiscally responsible.”

As for tax cuts, Megna ruled them neither out nor in, though it sounded fairly likely that they will be included in the governor’s budget proposal.

“I think the governor has made it clear publicly that whenever he has the ability in a fiscally prudent way to reduce taxes he’s going to do that,” Megna told me. “So, as we put the budget together and determine that there are extra resources for tax cutting, I’m sure that will be under discussion.”

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Ceretto Wants Better Representation On NYPA Board

Just hours after the Comptroller’s office shed new light on the financial practices of the New York Power Authority, a Western New York Assemblyman is calling for new representation on NYPA’s Board of Trustees.

“We need that voice, especially when the Comptroller comes out and talks about this outlandish spending for NYPA and I don’t have anybody I can go to here locally and say this wrong,” said Assemblyman John Ceretto.

The Lewistown Republican represents the 145th Assembly district.  It’s an area that includes the Robert Moses Hydroelectric Power Station in Niagara Falls. 

“Yet we don’t have representation, right here in Niagara.  I’ve gone to the Governor and asked him for that person,” Ceretto said.

The Chairman of the NYPA Board of Trustees lives in nearby East Amherst.  But, because Niagara County is home to the fourth largest hydroelectric power plant in the in the US, Ceretto has collected thousands of signatures on a petition seeking direct representation.

“It’s my job to represent this area and to make sure that we get our fair share, and that any money taken out of NYPA stays right here in this district,” said Ceretto.

Ceretto’s concerns over how NYPA manages its finances are shared by the state’s financial watchdog.  In a 16-page report issued Thursday, the Comptroller’s office said NYPA raised costs on its customers, used a corporate plane, and is paying 35 percent of its staff more than $100,000.

“Those are costs that could be considered a hidden tax on people who pay utility bills across New York to support the state budget with dollars that are flowing through the New York Power Authority,” said Deputy State Comptroller Bob Ward.

The comptroller’s office also found NYPA, which takes in $2.8 billion in annual revenue, has given the state more than a billion dollars over the past decade to make up budget shortfalls.

“Some of those resources were not or certainly may not have been used for functions that were appropriate to the Power Authorities mission.  So we’re trying to raise some questions here and we look forward to the response from the authority,” Ward said. 

NYPA released a statement Thursday, defending its wage scale and its eight-seat prop plane, calling it valuable. It also said low power rates have been unaffected by financial contributions to New York State. 

Ceretto said he’s repeatedly voted against budgetary line items accepting money from the authority.

“I don’t believe that we should balance our budget with the Power Authority money.  The purpose of the Power Authority was to create low cost power and create jobs,” said Ceretto.

With the Governor’s recent interest in Western New York, and a new spotlight on NYPA, Ceretto is calling for action.

“I would like to send another letter to the comptroller and ask him to do a more in depth study.  Because we have to figure out why,” Ceretto added.

Cuomo Mails On Budget

First came the TV ads praising the 2013-14 state budget, paid for by the state Democratic Committee (since the Committee to Save NY appears to be sitting this session out entirely).


Next came Gov. Andrew Cuomo’s statewide victory lap, in which he and members of his administration fanned out across the state to tout the fact that this was the third on-time budget in as many years – a first for at least three decades.


Next up: Mailers, paid for by Cuomo’s own campaign committee.

A reader helpfully forwarded these photos of the glossy, six-page, full-color booklet sent by the governor in an attempt to sell both the new spending plan itself and the idea that three on-time budgets in a row indicate New York is “on the move and rising once again.

(The front and back of the booklet are pictured here. If anyone has a pdf they want to share, that would be great).

In this booklet, Cuomo insists the budget is good for both middle-class families and the state’s business community, even though most in the latter category are none too pleased with the budget.

The budget has increasingly come under fire from critics in Washington and Albany who question the so-called “gimmicks” the governor and Legislature relied on to close the $1 billion budget deficit.

Also, Cuomo’s claim that a trio of on-time budgets means the bad old days of Albany are behind us now is a little hard to swallow, given last week’s back-to-back corruption scandals that dominated the news and stepped on the governor’s big statewide budget tour.