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NY Gov. Cuomo's Budget Expected To Be Grim

Governor Andrew Cuomo
Office of Gov. Andrew Cuomo

New York Governor Andrew Cuomo is set to deliver his budget Tuesday, and the news is not expected to be good. The state faces a more than $4.4 billion budget gap, as well as funding cuts and policy changes from Washington that could cost New York and some of its taxpayers billions of dollars.

The governor set the tone in his State of the State speech earlier this month saying “2018 may be the toughest year New York has faced in modern history”.

“We have unprecedented challenges ahead on every level,” Cuomo said.

The Democrat, in his speech, said President Trump and the Republican-led Congress in Washington are responsible for many of the state’s challenges, including $2 billion in cuts to hospitals and health insurance programs for the working poor. He called the cuts “an arrow aimed at New York’s economic heart”.

While he warned of the dark times ahead, the governor did not name any spending cuts that might have to be made, and even said he wants to increase some education programs. Those details will come in the budget address on Tuesday afternoon.

Senate Republican Majority Leader John Flanagan says the governor’s proposals, in light of the large deficit, don’t add up.

“There’s a lot of ambitious things in there and I certainly respect that,” Flanagan said after the January 3rd speech. “But I don’t know how the heck anyone can conceive of paying for everything that was laid out.”

Assembly Speaker Carl Heastie, a Democrat, says given the state’s financial picture, he doesn’t expect big increases in spending this year.   

“There may have to be, let’s say, some limiting expectations somewhat,” Heastie said. “But I don’t believe that we have to do any cutting." 

The largest parts of the state budget are health care and education.  In recent years, the state has increased spending on school aid. This year, spending went up by more than a billion dollars.

The state’s teachers’ union, New York State United Teachers, has been a strong advocate for increased state aid to schools. NYSUT President Andy Pallotta, speaking after the State of the State speech, says he’s confident that the governor will find a way to at least avoid cuts to schools.

“The governor seemed hopeful," Pallotta said. "He seemed like he had some plans. So that's what we're looking forward to - the legislature standing up for the schools and also the governor." 

If cuts are not made, another way to raise revenue is by increasing taxes.

Cuomo is expected to overhaul the state’s tax structure in his budget, as a way to mitigate changes in the federal tax overhaul that could harm some New York taxpayers.

The governor hinted that might include raising some taxes. He says he is reexamining the carried interest loophole, which largely benefits hedge fund managers.

“We’re also addressing the Wall Street giveaway called the carried interest loophole,” Cuomo said. “Which is another device to give away revenue to people who don’t need it.”

Speaker Heastie says he’s not averse to increasing taxes on some wealthier New Yorkers, as part of tax restructuring.

“For those people who are going to benefit from this federal tax bill, they should be able to help out and contribute more,” Heastie said.

Flanagan says his Republican conference wants to cut taxes further in 2018, and speed up the timetable for some phased-in tax cuts for middle class New Yorkers.

“We actually want to accelerate the tax cuts,” Flanagan said.

But they have not spelled out exactly how they would pay for that.

Cuomo and lawmakers have about two and a half months to get everything to add up before the spending plan is due April 1.  

Karen DeWitt is Capitol Bureau chief for New York State Public Radio, a network of public radio stations in New York state. She has covered state government and politics for the network since 1990.
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