Cuomo recalculates budget gap as $1B

ALBANY - Remember that $10-billion budget gap that Gov. Andrew M. Cuomo has been warning about for months? Monday he said it might be much, much smaller - possibly as little as $1 billion.

On the eve of delivering his 2011-12 budget, the governor and aides fanned out to make an all-out public-relations push - in an op-ed article, radio interviews and impromptu news conferences - to make their case.

Cuomo said the $10-billion figure is largely based on what's necessary to continue programs and current services levels.

But he said Monday that the deficit should be based on actual year-to-year spending changes. The approach would allow Cuomo, for instance, to freeze school spending and say he's not reducing aid. However, unions and activists would interpret a freeze as a cut that would trigger layoffs and program cuts because the additional spending is required to keep pace with the current level of services.

It's a line of reasoning Cuomo predecessors in the Executive Mansion have often championed, with varying degrees of success. Yet Cuomo aides touted it as a whole new way of looking at the budget.

Cuomo sent an op-ed article to numerous New York newspapers. In it, the governor notes that Medicaid and school spending each are projected to grow 13 percent based on maintaining the current levels of services and programs. Put aside projected growth, Cuomo wrote, and the deficit is much smaller.

"For example, if one assumed these programs would increase at the rate of inflation (instead of 13 percent), the $10 billion deficit is really a $1 billion deficit," the governor said in his op-ed piece.

Even state budget director Robert Megna is now changing his math. In the fall, Megna - working for then-Gov. David A. Paterson - said the projected deficit was $9 billion to $10 billion. Monday, when he was asked on a radio talk show whether the deficit is $2 billion or less, Megna said: "About that."

But Assembly Speaker Sheldon Silver (D-Manhattan) sounded skeptical.

"I think what[Cuomo] looked at was his proposed budget and that in the end result he's going to end up spending more money than was spent last year - even though he has said there will be a cut," Silver told reporters.

In fact, following a briefing at the Executive Mansion, Senate Majority Leader Dean Skelos (R-Rockville Centre) said the governor will be proposing slightly higher overall spending compared to last year, although school aid will be reduced.

Cuomo's political strategy is meant to pre-empt special-interest groups and unions from crying too loudly about how much pain the budget will actually inflict, said Lawrence Levy, a political commentator and dean of Hofstra University's National Center on Suburban Studies.

"But he might confuse things," Levy said. "For months, he's been saying the deficit is enormous: $10 billion, going up to $14 billion. Now, he's saying the real deficit isn't as high - so the unions and service recipients shouldn't complain as much."

Cuomo's new math

For months, Gov. Andrew M. Cuomo has pegged this year's state budget deficit at about $10 billion. Monday, the day before he unveiled his 2011-12 budget, Cuomo said the deficit actually is far less. How did he get there?

The $10 billion deficit figure is largely based on projected spending increases for specific programs - particularly Medicaid and school aid - that are based on last year's budget, according to Cuomo. These and other programs contain formulas and estimates that essentially set the spending levels necessary to maintain the prior year's levels of services.

Now, Cuomo says the deficit should be based solely on actual year-to-year spending changes. So, by Cuomo's reasoning, if he were to freeze school spending at last year's level, technically there'd be no addition to the deficit. Unions and other school-aid advocates likely would see it very differently: if it cost $3 billion more this year to provide the same level of services as in 2010-2011, then they'd consider themselves to be facing a $3 billion deficit in funding.