New York State must rein in spending

When Gov. Kathy Hochul and state legislative leaders agreed on a $237 billion budget, they celebrated by touting “historic investments,” a “fairer and more prosperous New York,” and “critical funding” in areas like education, health care and affordability. 

What they didn't highlight: The state is continuing to ramp up spending in unsustainable ways. The Empire Center for Public Policy, a fiscally conservative think tank, calculates that total spending including this budget will have increased 33% over the last four years. That trend can't continue. Much of the money comes from an infusion of federal aid that is finite and rosy projections of tax revenue at a time when there is a large outward migration of the wealthy and middle class.

Rather than put the brakes on spending, state lawmakers are going in the opposite direction. One example is the ill-advised decision to roll back reforms of Tier 6, the pension level for anyone hired as of April 2012. In this year's budget, lawmakers and Hochul agreed to restore those employees' final average salary calculations to the last three years of work rather than the final five, a change that will lead to significant hikes in every affected public employee's pension — and one that will be retroactive for those who retired in the last two years. That's going to increase pension costs for every level of government, saddling taxpayers with $4 billion in new debt, according to the Empire Center.

That's not decision-making that addresses the state's affordability crisis.

Hochul deserves credit for pushing to make sure the state maintains significant reserves. And certainly, some of the spending increases will boost Long Island. That includes money for clean water infrastructure and other environmental issues.

As for schools, after initially suggesting some cuts to school funding and lifting the so-called “hold harmless” policy that promises schools they'll get at least as much as before, Hochul was able to find additional revenue and walk those changes back. The final budget gives Long Island schools more than $5 billion in school aid, an increase of $205.6 million from last year.

Hochul was right to correct course — for now — but she's also right to suggest changes ahead. This year's hike follows a stream of prior funding gains. Even as of the 2021-2022 school year, according to the Census Bureau, per-pupil spending in New York had reached $29,873, close to twice the national average of $15,633. 

Legislators agreed to have the Rockefeller Institute study school aid and the hard-to-decipher formula behind it. Everything must be on the table. Enormous changes to so-called “foundation aid,” how it's calculated, how it's funded, and who receives what must be considered. Changes to “hold harmless” should be made. School administrators and trustees are on notice now that less money can come from Albany in future years.

Our days of an open checkbook must end.