This week in Albany was budget week. On Tuesday, Gov. Cuomo unveiled his $132 billion 2012-2013 budget. This budget is being called the Executive Budget and Reform Plan, an Executive budget with a reform twist.
Before starting the budget explanation, the governor made it clear that there would be no one-shots, no gimmicks, no fees, no borrowing and, most importantly, no new taxes to fill the $2 billion gap in the state budget.
The governor’s intention is to close this year’s budget gap by stemming the growth of state agencies, keeping their spending levels flat and by cajoling the Office of the Comptroller, the Office of the Attorney General and the judiciary to keep their agency funding flat. He also intends to keep local aid growth to 2.6% growth TANF (Temporary Assistance for Needy Families) growth to 5%. State operations will be maintained at 1.9% growth, and all funds will be reduced .2% from last year’s budget. Together this will close the budget gap of $2 billion. The state legislature and the Governor had already agreed to a 4% increase in both education and healthcare and that will be reflected in this year’s budget.
The governor then talked about economic development reiterating the $25 billion that will be included in the NY Works Fund. This is an economic initiated that will give priority to programs which will spur development and produce jobs. He also intends to fully fund the MTA and, importantly for the League, will include the healthcare exchanges in the budget language which means the legislature will have no choice but to approve these exchanges with adjustments only to the details. These healthcare exchanges are part of the federal Affordable Care Act which will draw down $100 million in federal dollars.
Mandate Relief
Governor Cuomo explained that NYS unfortunately does not have a printing press in the basement of the Capitol, unlike the federal government. Therefore, it just does not have the $8 billion to pick up the counties’ share of Medicaid. However, the governor did say that the growth of Medicaid to the counties will be capped this year at 3%, next year it will be capped at 2%, and the following year at 1%. After that the counties’ growth of Medicaid will be held harmless.
Pension Reform
The Governor intends to create a controversial new Tier VI. He will again put this in budget language which will present the legislature with no options but passage. At great length, he talked about the fact that the yet “unborn,” meaning the future state workforce, should not be guaranteed the right to a NYS pension. This new Tier will be 50% cheaper to state and local counties. However, he did make a good argument for the ability of new employees, who do not stay in state service long enough to be vested, to have portability of their pension.
Education Reform
As part of his budget the governor is demanding that the legislature agree to his long held belief that there must be improved teacher’s evaluations. This is an issue the governor has championed before as part of NYS ability to comply with the federal Race to the Top initiative. NYS stands to receive $800 million federal dollars if it complies with this new teacher evaluation requirement.
According to Bob Magna, the Budget Director, this is the most clear and straight forward budget document in his 25 years of doing state budgets. It became clear from the Governor’s address that he, like former Governor David Patterson, intends to use the immense power that the Governor has over the legislature to accomplish his legislative initiatives. The general consensus here in Albany is that this budget will come in early and that this will be a relatively less contentious legislative session. Of course, for those of us that care about redistricting and campaign finance reform, we can only hope that these issues will be as easily resolved as the NYS budget.
Next week may bring submission of legislative redistricting lines and a federal judge’s decision on the congressional primary date. Stay tuned…
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