Gov. Hochul must force fiscal restraint

Massive federal aid to New York has thankfully given elected leaders in Albany an array of budget options that they would not otherwise have had. But as the annual state budget haggle gets going, even elected officials of the highest intent could be dangerously tempted into fiscal abandon, potentially with disastrous consequences down the road.

When Gov. Kathy Hochul unveiled her sweeping post-pandemic $216.3 billion budget plan, with major new spending initiatives, she wisely put forward — and has reiterated — an important proviso: Building up a reserve fund. Her plan would scale up these reserves to $15.4 billion by 2025, or an estimated 15% of state operating funds.

Holding the line on this modest reserve would be just a first step toward enforcing proper fiscal savvy. It would still allow desirable, but not unsustainable improvements proposed by Hochul and the State Legislature, including phasing in more than $4 billion overall to beef up wages and bonuses for health care workers and build out needed health infrastructure. Other billions of dollars would enhance the child care system as a step toward making its benefits available to all New Yorkers.

As the story usually plays out, however, lawmakers in the Democratic majority are looking to pad and increase the governor’s ambitious expenditures. The Assembly under Speaker Carl Heastie proposes to expand the overall budget size by an estimated $9.5 billion above Hochul’s plan. The Senate under Majority Leader Andrea Stewart-Cousins would also support a spending increase, though perhaps not as large.

There might be more impactful ways to achieve some of the shared goals. Let’s make sure, as the administration says, that federal funds are used to augment and not replace state allocations for roads and bridges in disrepair. Rental assistance programs in the wake of the pandemic emergency should be reassessed to determine what’s truly necessary to continue. And starting the structural reform of having the state pick up school costs would do far more for the property tax relief that Long Islanders need than the shiny gimmick of modest rebates timed to arrive near Election Day.

Overall, Hochul’s ability to protect state resources from the pressures of legislative and lobbying clout in an election year faces its first big test. Making the compromises needed for a budget deal by April 1 is one thing, but giving up the reserve would not only send the wrong message but abandon a key fiscal safety feature. Repeatedly in public forums, Budget Director Robert Mujica has cited the times in the past that the state found itself unprepared with insufficient reserves, forcing sharp cutbacks.

In January, Hochul said this about the 15% reserve: “That’s what the experts recommend, and it’s what we’re going to do...for the future health of our state.”

Now comes time to prove she meant it.