Blair Horner: Albany Moves Toward A Budget Deal
Despite the growing controversies swirling around Governor Cuomo, the mounting calls for his resignation, and the beginning steps toward possible impeachment, the state budget discussions moved forward last week.
The governor’s proposed budget released in January has been superseded by Congressional action. The most recent federal stimulus, known as the American Rescue Plan, will result in an enormous windfall to New York. According to U.S. Senate Majority Leader Chuck Schumer, the state will receive as much as $100 billion in benefits, including nearly $24 billion in fiscal relief funds for the state, localities, and the MTA. Of that, $12.6 billion in direct relief will go to the state government while another $6 billion will be sent to New York City alone.
In addition to the federal stimulus monies, New York State’s revenues have been coming in higher than expected. When the governor and the legislative leaders agreed to available revenues for the upcoming fiscal year, they estimated that there will be $2.5 billion more than the governor estimated in January.
Last week, both houses approved their budget resolutions which, while non-binding, set the budget priorities for each house as they begin negotiations with the governor.
The state Senate and the Assembly offered similar one-house budget resolutions, with each house’s budget plan exceeding $200 billion in spending – considerably more than the governor’s January plan.
The legislative budgets included billions in new taxes, far more than the $1.5 billion in temporary tax hikes that the governor had proposed in January. The legislative proposals include higher income taxes for the wealthy and corporations by $7 billion, although some differences exist between the two plans.
Both chambers have also proposed far more funding for education. Both rejected the governor’s plan to allow tuition hikes at the State and City university systems. Both increased the maximum tuition assistance award from $5,165 to $6,165 – that $1,000 increase is the biggest in memory.
The Assembly also approved additional 20 percent across-the board increases in the state’s higher education programs that help students in need. Both houses rejected the governor’s plan to zero-out state support for private colleges and restored that aid in its entirety.
The legislative budgets maintained or enhanced funding for environmental programs, water infrastructure, health care, and stopped the governor's $145 million "raid" of MTA funds. Yet, both houses pulled back from measures that the governor opposed, most notably the effort to get the state to keep “sales tax” revenues from Wall Street trading activities (the Stock Transfer Tax). The federal bailout made the leaders’ financial decisions a lot easier to make.
Last week, both houses began conference committees to negotiate their differences while simultaneously conducting closed door budget negotiations between the houses and the governor. As is the case with most things in Albany, the real action takes place out of sight.
Given the tense atmosphere at the Capitol – the result of the allegations against the governor, both his personal actions as well as his Administration’s mishandling of reports of nursing home pandemic deaths – it will be a challenge for lawmakers and the governor to hammer out a budget agreement in a week and a half to be in time for the April 1st start of the new fiscal year.
It is an agreement, though, that all want to have. Under New York’s budget system, the governor is in the driver’s seat when it comes to shaping the state’s finances. The governor has the power to veto line-item spending additions to his budget appropriations as well as any revenue bill passed by the Legislature, subject to an override by two-thirds of the members in each house.
What is different now is that Democrats control supermajorities in both the Assembly and Senate. Assuming that there is a rift between the governor and the legislative leaders, the leaders have the power to force their own vision of the budget.
How the budget plays out only time will tell. Obviously, the fact that the Assembly is taking the first steps towards impeaching the governor, the Senate Majority Leader has called on him to resign, and a large – and growing – number of rank-and-file lawmakers have also urged the governor to pack his bags, makes the budget negotiating dynamics uniquely difficult.
But that’s their jobs. The state’s finances have been dramatically strengthened by the Congressional stimulus and as a result, the budget deal should be easier. Let’s hope that the governor’s controversies don’t result in a budget meltdown. After a year of pandemic shut downs, dislocation and tragedies, New Yorkers are hurting and they need the help, now.
Blair Horner is executive director of the New York Public Interest Research Group.
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