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Budget battle brewing in Albany

New York Gov. Andrew Cuomo delivers his State

New York Gov. Andrew Cuomo delivers his State of the State address at the Empire State Plaza Convention Center, in Albany, N.Y. on Jan. 8, 2020. Credit: AP/Hans Pennink

When Gov. Andrew M. Cuomo took office in 2011, he found a projected deficit of $10 billion. New York's finances were crippled by a deep recession and residents were too heavily taxed to bear any additional burden.

The only answer was belt-tightening. Cuomo and state legislators did it by slashing school funding by $3 billion, curbing spending growth in Medicaid and cutting departmental budgets across state government.

It worked, for a while. The growth in Medicaid costs was contained, and counties were relieved of their share of Medicaid spending increases in part to alleviate the effects of the 2% local tax cap pushed through by Cuomo. As the health of the budget improved in following years, Cuomo increased state aid to schools, helping districts live within the tax cap, too.

But times have changed. Spending has again ballooned, and the state faces a huge deficit. Medicaid and education, huge components of New York's $178 billion budget, are Cuomo's focus as he tries to make ends meet without the tax increases preferred by special interests and other Democrats.

Growing income tax revenue has cut an expected shortfall of $6 billion to $4 billion. Fully $2 billion of that is overspending on Medicaid, and that figure does not include $2.2 billion in Medicaid costs the state will shift into next year.

When the state took over paying the counties' and  New York City's share of Medicaid spending increases, those municipalities stopped fighting to control costs, which have now swelled to $75 billion a year, three times what comparably populated Florida spends. Costs exploded in the managed care of nursing home patients, non-emergency transportation for medical needs, services like bathing patients and cleaning their homes, and a new program that allowed people caring for friends or relatives to be paid.

Cuomo says he'll rein in these costs with a team created to find savings and a rule that municipalities will have to pay for any annual spending increases above 3%. That's the right answer, but it's easier said than done, both operationally and politically.

On the school front, Cuomo says he wants to shift money from high-wealth districts that spend a tremendous amount per student to high-needs districts that don't. Recent analyses, including one done by Newsday on Island districts, show staggering spending gaps.

The way the state matches certain local spending rewards wealthier districts for laying out more, a flawed   system Cuomo's budget begins to address. It's meant to be a precursor to an honest conversation about the best way to make sure all children have equal educational opportunities. A review of how we fund schools in New York is long overdue, but must be fair and include mandate relief.

New Yorkers are highly taxed. We spend so much more than other states on Medicaid and on K-12 education that the   gap defies explanation. In a brewing budget battle that pits Cuomo's calls for smarter spending and fundamental change against politicians and special interests clamoring for huge spending increases funded with unaffordable tax increases, Cuomo's on the right side.

 — The editorial board