Analysis: Inside Cuomo’s budget
Spending Plan To Be Released Tuesday, Comes Amid Weak Revenues and $2B Deficit
By James M. Odato, Albany Times Union January 16, 2012
Gov. Andrew Cuomo was considering including major Medicaid relief for counties in his second executive budget, set for release on Tuesday afternoon, according to a person briefed on details.
The budget arrives amid weaker-than- projected state revenues and a $2 billion deficit for the fiscal year beginning April 1, a figure that would have been wider had the governor not secured an income tax adjustment that will increase assessments on wealthy New Yorkers. The governor is set to present a budget for the upcoming fiscal year covering at least $130 billion in state expenses. His address starts at 2 p.m.
Despite continued fiscal challenges facing the state, the governor was still looking at helping counties, whose budgeting woes are also considerable as local leaders deal with Cuomo’s requirement that tax levy growth be held to the inflation rate or 2 percent, whatever is lower. Counties complained that the tax cap was another unfunded mandate from Albany.
Cuomo was contemplating a phased-in takeover of Medicaid expenses borne by counties, which would be a huge lift off local taxpayers’ shoulders, the person familiar with the governor’s thinking said. He added that the plan was scheduled as of last week to be in the governor’s budget.
“That is not accurate,” said Cuomo spokesman Josh Vlasto on Monday. He would not discuss any components of the budget plan, but he said the belief that the governor would announce taking over the county responsibility for Medicaid costs was “wrong.” He added that the governor never thought about a “full Medicaid takeover”.
According to the person briefed, Cuomo’s staff in recent days discussed committing to assuming Medicaid costs to localities over seven years, making the program a hallmark of mandate relief.
Steve Acquario, executive director of New York Association of Counties, said he had not heard that the initiative would be in Cuomo’s budget. Such a takeover would represent a very welcome development, he said.
“This would be a jewel in the crown of his accomplishments,” Acquario said. He said the counties collectively pay $7.6 billion in Medicaid expenses and that cost drives up property taxes. He said the state could finance a takeover through savings created from Cuomo’s redesign of the Medicaid program and through other health care initiatives.
The governor is expected to discuss a health insurance exchange initiative that could save some money for a few years before the federal government stops underwriting it in 2015. Such an exchange has been criticized by Republicans as “Obamacare,” and it has been unpopular among the state Senate GOP majority. The health care exchange creates an option for small businesses and individuals to acquire medical coverage.
The governor will likely also reveal details of a proposed new pension program for new public employees, another person familiar with plans said.
A state official said the budget plan will include the merger of the division of lottery and the racing and wagering board into a new gaming organization.
Watch Gov. Andrew Cuomo’s budget presentation from The Egg in Albany at 2 p.m. Tuesday on WMHT Ch. 17 or via webcast on the Capitol Confidential blog, http://blog.timesunion.com/capitol.
Gov. Andrew Cuomo held his budget plans close to the vest this morning, but did outline that reforms to schools and state pensions would be major themes.
During a Martin Luther King Jr. Day speech near the Capitol, Cuomo said the education system has become an injustice and vowed to reform it. He kept up that message with reporters afterward.
“It’s probably the single most important mission the state government fulfills and it needs serious reform,” Cuomo said of the education system. “It has for a long time, and we’re going to try to tackle it this year.”
Cuomo won’t say whether he will tie about $800 million in new education aid to a new teacher evaluation system in the budget, which will be released tomorrow.
But he did offer, “It’s one of the issues we’re considering for the budget. And you’ll see when we do the budget tomorrow.”
He also talked about the need for pension reform, but wouldn’t say if he’ll propose a 401k-type system for new public employees.
He hinted that pension reform would be one of mandate-relief proposals in the budget.
“When you look at the numbers going forward, they are unsustainable,” Cuomo said of the pension costs. “So pension reform I believe is essential. That doesn’t mean pension reform is the only thing we need to do. We also need other aspects of mandate relief, and we’ll be speaking to that also in the budget.”
Cuomo did make one prediction: The Giants will win the Super Bowl.
“What a great game,” he said of the Giants win yesterday after the Packers. “I think they go all the way.”
As for the budget, Cuomo didn’t threaten to use his executive powers to put parts of his spending plan in budget extenders if a deal isn’t reach by the April 1 deadline-a move invented by Gov. David Paterson in 2010 and one Cuomo threatened to use last year.
“Let’s see how the budget negotiations go. I think it’s a little premature to talk about that,” Cuomo said.
The Democratic governor also wouldn’t say if he would back a higher minimum wage. The minimum wage in New York is $7.25, and Assembly Speaker Sheldon Silver and New York City Mayor Michael Bloomberg want it increased.
“I haven’t seen a proposal. As soon as I do, we’ll talk about it,” Cuomo said.
By Ken Lovett New York Daily News January 16, 2012
In addition to highlighting Gov. Cuomo’s possible plans to link school funding to a teacher evaluation system, my story and the accompanying graphic today also hit on other parts of tomorrow’s budget announcement.
Cuomo’s budget is expected to reduce overall spending for the second year in a row, hike state taxpayer supported funding by just under 2%, close a $2 billion budget deficit and–and possibly include his new plan for pension reform.
Like the teacher evaluation system he is expected to include, the pension reform plan will likely raise the ire of the public worker unions.
Sources said the plan that has been under consideration would offer for the first time a choice to new employees to accept reduced pension benefits or opt into a 401-K-like defined contribution plan. Two years after the state enacted a new less generous pension tier and a year after accepting concession-laden contracts, the unions have said they will vehemently oppose any pension changes.
Meanwhile, the governor, according to a source, will propose a total budget of about $132 billion, down a modest $200 million from the current-year spending plan. The state operations portion of the budget, which does not include federal funds, would grow by just under Cuomo’s self-imposed 2% cap.
The budget proposal will increase spending on health care and education by 4%, seek the mergers of several state agencies while cutting others by up to 2.5%, and not raise broad-based taxes and fees.
Cuomo following a Martin Luther King Jr. Day event today in Albany said he will push aggressively this year for a teacher evaluation system and pension reform, but refused to say whether they will in his budget plan, preferring to wait until tomorrow to talk about it in its totality.
He insisted he pushed hard last year to get pension reform done, but was rebuffed. Sources told me Sunday that his best leverage would be to include it in the budget.
“Remember the politics here,” Cuomo said.. “It’s hard to reform a pension system. It affects many public employees, very powerful public employee unions and politically it’s difficult to get the Legislature to do this,.”
Cuomo also wouldn’t say whether he plans to cut overall spending for the second straight year.
He did say the budget is in “much better shape” than last year.
“The good work that we did last year is actually going to pay dividend (this) year,” Cuomo said. “From just a budget point of view, where we had a true crisis last year, we had a $10 billion deficit, we had chaos. We have a much better budget situation on the numbers, we have a better working environment and i think a lot of the management changes we made last year have really redounded to our benefit.
But he hinted at major proposals as well.
“There will be jaw droppers, but not necessarily about the budget,” he said laughing.