It is, from a preliminary look, the strangest of the seven budgets Gov. Andrew M. Cuomo has proposed, beginning with the way he proposed it: twice behind closed doors then, almost as an afterthought, in an unveiling for the public – the people who will be paying the freight.
But that’s only the beginning of the strangeness, as Cuomo proposes significant increases in spending even as the state contends with a projected deficit of $3.5 billion, opened by the scheduled expiration of a surtax on the state’s millionaires, declining revenues and higher-than-expected spending.
The $162.2 billion budget would increase spending by 3.8 percent, though less – 1.9 percent – when considering the portion of the budget funded mostly by state taxes and fees. The question that lawmakers will need to answer is how much additional spending is warranted when the state faces a budget deficit whose sources include declining revenues? And are those expenditures worth the increases in fees that Cuomo is proposing?
It begins with Cuomo’s proposal to increase funding to education by $1 billion. That’s a lot of money, but if past is prologue – and with education funding, it always is – it’s only an opening bid. Lawmakers will push it higher. It continues with his already disclosed plan to provide free college tuition to some New Yorkers and to borrow money to fund infrastructure projects, perhaps undertaken in conjunction with the federal government.
As slaves to the teachers unions, legislators of both parties are committed and enthusiastic spenders on education, so the final costs are all but guaranteed to be notably higher. It doesn’t seem to matter to them that New Yorkers already pay more per student than residents of any other state.
So the question: What is the need and how will taxpayers benefit? Will there be a metric to measure educational improvement – graduation rates, test scores, attendance by teachers and students? Will there be a renewed commitment to a fair program of teacher evaluations, designed not to dismiss those who fall short but to help them improve? What do New Yorkers get for a giant increase in education costs at a time when revenues are lagging?
Other aspects of the budget proposal include:
• Retaining an already-scheduled program of lowering income tax rates for New Yorkers with annual incomes between $40,000 and $300,000.
• Allowing ride-hailing services such as Uber and Lyft to operate upstate.
• Expanding high-speed tolls to upstate portions of the Thruway, though on an unknown schedule.
All are worthy programs. Of more concern is a proposal to allow movie theaters to sell beer and wine to adults at films rated PG-13 or higher. It could be fine if adequately controlled, but it would take only one obnoxious drunk to instigate trouble.
Cuomo plans to close the deficit and fund his new spending proposals by retaining the surcharge on millionaires and increasing an array of fees. The surcharge was enacted in 2009, during the budget crisis brought on by the Great Recession. It was tweaked and extended in 2012. Now, Cuomo wants to renew it again, offering fresh evidence for the theory that taxes, once enacted, don’t go away.
But it’s not just millionaires who will pay. While income taxes on the middle class will continue a slow decline, Cuomo is proposing new or increased fees on auto titles, prepaid cellular devices, cigars, some business real estate transfers, online purchases and e-cigarettes. Revenues from motor vehicle fees, alone, are projected to grow by $50 million – a startling increase of 28 percent.
Among the initiatives left out of the plan is a state takeover of the costs of indigent defense, now paid by counties at a cost of $400 million per year. Cuomo recently vetoed legislation on this issue, promising to introduce his own plan this year. How he will do that outside of the budget structure is, at this point, a mystery.
To a great extent, the budget represents a continuation of Cuomo’s second-term shift to the left, making peace with the teachers unions as he contemplates a third term in 2018 and perhaps a bid for the presidency in 2020.
The question for legislators and their constituents is separate from Cuomo’s political ambitions, though. What they need to calculate is how much additional spending New Yorkers should be asked to underwrite when the books are already out of balance.