ALBANY — The $212 billion state budget adopted this month contains record spending and represents a missed opportunity to reduce borrowing and improve longer term finances, state Comptroller Thomas DiNapoli says in a new analysis.
The annual report, released Thursday, credited the budget for providing aid to New Yorkers hit hard by the COVID-19 pandemic.
But the report also warns the record spending in the budget passed by the state Legislature and signed by Gov. Andrew M. Cuomo may not be sustainable.
The state spending plan continued to defer up to $3.5 billion in Medicaid payments to health care facilities, and failed to add to New York's $2.5 billion in "rainy day" reserves.
"And, for the second year, state leaders circumvented the state’s debt cap for debt to be issued in the coming year—with new state issuance likely to exceed the limits, rendering the cap meaningless," DiNapoli said.
The report noted that, "despite a strong cash position, short-term borrowing was also reauthorized."
Cuomo budget spokesman Freeman Klopott called the state spending an investment that will spur enough growth to allow the economy and state revenues to rebound.
"The Enacted Budget makes critical investments in schools and infrastructure and deploys resources to struggling businesses as we recover from the pandemic to re-imagine and rebuild New York," Klopott said in a statement.
Klopott said half "the spending growth is for one-time investments targeted at protecting the vulnerable and getting the state’s economy back on track, and the other half supports education and health care."
Over the next three years, Klopott said, the 2021-22 budget "assumes an expected decline in federal resources offset by gradual state revenue growth to bring the state to a smooth fiscal landing and we welcome the Comptroller’s recommendations on reducing spending."
Congress and the administration of President Joe Biden provided New York $12.6 billion in emergency aid in the most recently $1.9 trillion American Rescue Plan.
Also, state tax revenues have bounced back faster than expected from the economic shutdown forced by the pandemic, Di Napoli said.
"While the enacted budget makes important investments in education, health care and other important areas, it’s critical to maintain a long-term view and ensure the state’s spending does not grow to unsustainable levels," DiNapoli said.