ALBANY — Gov. Andrew M. Cuomo on Tuesday proposed tackling New York's $6.1 billion budget gap by slowing the growth of state spending on schools and Medicaid, reducing aid to communities, trimming the state workforce and authorizing a range of revenue initiatives, including legalizing and taxing recreational marijuana.
Cuomo, a Democrat in his 10th year in office, also is counting on a strong economy, banking on a $5 billion increase in tax receipts as a way to sidestep any big cuts and still balance the budget.
"The answer is to reduce the level of growth, not cuts," Cuomo said while presenting his budget ideas at the Empire State Plaza, adjacent to the State Capitol. "You say deficit and they say you are going to have to cut. No. You're going to have to reduce the rate of growth and that is exactly what we have done in this budget."
Cuomo proposed an overall budget of $178 billion for New York's 2020-21 fiscal year, which begins April 1, giving lawmakers about 70 days to negotiate. That would amount to a more than $2 billion increase (less than 2%) over the current budget.
But that's a smaller increase, Cuomo said, than if he and lawmakers do nothing to slow spending growth rates they approved in the 2019-20 budget. Without moderation, the state would be on course for a $6 billion spending increase, he said.
Importantly, Cuomo also proposed boosting aid to local school districts by $826 million, or 3%. That's actually a smaller increase than officials were projecting based on last year's spending — which was $1.1 billion. About 80% of that increase would go to high-needs districts under Cuomo's plan.
The smaller-than-expected increase and the distribution shift set up classic battle lines with legislators of all political parties, who traditionally seeks to significantly boost school aid.
The governor, for instance, downplayed a long-standing informal agreement among lawmakers to uphold a region's share of school aid — about 13% for Long Island — as an anachronism.
That brought a sharp reply from Senate Minority Leader John Flanagan (R-East Northport): “This is going to decimate Long Island schools. This is pitting regions against each other, school districts against each other.”
In addition, the governor's proposal to slow health care spending and reduce communities' aid sets up potential conflicts with a Democratic-led State Legislature that is more liberal than the governor and local governments who already say the state foists upon them too many spending mandates.
Legislators and analysts complained the governor's budget was long on rhetoric and short on details. They noted Cuomo's plan lacked specifics on how to trim Medicaid — the single biggest expense in the state budget — and how exactly his idea to reduce aid to local governments by $1.8 billion by efficiency measures, and not cuts, would work.
“As budget presentations it was pretty low key,” said Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers). “We always need details.”
She wouldn’t commit to changes, only to making sure the Legislature was part of the discussions on Cuomo’s proposals such as a "Medicaid Redesign Team."
"The biggest issue is Medicaid and this budget is 'details to follow,'" Edmund J. McMahon of the fiscally conservative Empire Center think tank said. He noted there were no specifics on a $3 billion environmental bond act the governor suggested earlier this year, as well as a reduction in New York amount pays each year to pay down long-term bonds.
That said, the governor did offer other specific proposals:
- Legalize recreational marijuana and tax it.
- Reduce the corporate tax rate for small businesses to 4% from 6.5%, and tripling the income cutoff for the tax so more farmers and sole proprietors may benefit.
- Offer, once again, more than $400 million in film tax credits and $750 million provided to regional councils for local economic projects.
- Trim the state workforce by 1,000 (less than 1%).
State legislators by and large support legalizing marijuana. Officials say marijuana sales could generate $300 million for the state in the first year.
But Cuomo and lawmakers failed to move ahead with legalization last year because of disputes about how to earmark the proceeds — the governor wants most of it to go to the general fund while legislators wanted a share targeted for communities disproportionately impacted by marijuana laws.
"There have been communities, particularly communities of color, that have been over-policed, over-incarcerated and I do think we don't just have to send an economic message but a social message," Assembly Speaker Carl Heastie (D-Bronx) said Tuesday, adding the message should be: "'We know that was wrong' and I think we have to make those communities whole."
On Medicaid, Cuomo pointed the finger at county governments. He noted state government agreed a few years ago to cover a bigger share of the costs and said that led to "blank check syndrome."
"We're signing the check and they are filling in the amount," Cuomo said.
Independent analysts have countered New York is the lone state to require counties pay for part of Medicaid. They also have pointed out Medicaid spending has grown largely due to state actions, such as getting more people to participate and raising the minimum wage, including for health care workers, to $15 an hour.
Cuomo suggested counties keep spending growth below 3% or pay the increase themselves. That way, his plan would hold "local governments harmless."
"At this point, it’s just proposals," Heastie said. "And we have to see how it affects the localities. It’s a good step that it’s not an automatic shot at the local governments, that they have to pay the increase."
With Michael Gormley
Here are highlights from Gov. Andrew M. Cuomo's proposed 2020-21 state budget. The budget calls for:
- Increasing spending by more than $2 billion over the current budget.
- Increasing tax receipts by $5 billion.
- Boosting aid to local school districts by $826 million, or 3%.
- Reducing aid to local governments by $1.8 billion.
- Legalizing recreational marijuana and taxing it.
- Trimming the state workforce by 1,000 (less than 1%).