NYAPRS Note: Amid speculation that Cuomo may use $4b in legal settlement surplus to invest in state reforms in 2016, news emerged yesterday that the Governor has told state agencies to keep their projections at current levels. Though some of the funding is slated, the excess might be used to pay down current debt or find other ways to improve the state’s credit rating. Interestingly, money projected to encourage local governments to consolidate may impact county mental health dollars, but that is speculative prior to any more details of how the surplus could be spent.
Cuomo Tells Agency Heads to Hold Spending Amid Surplus
Bloomberg Internet Publication; 10/1/2014
New York Governor Andrew Cuomo directed agencies to hold spending at current levels next year even as a record budget surplus looms, according to a letter sent to department heads by Budget Director Robert Megna.
Agency spending plans are due Oct. 21, before Cuomo’s January budget proposal for fiscal 2016, which begins April 1. The state is poised for a more than $4 billion surplus next year, the result of legal settlements with Wall Street banks and limited growth in spending.
“We are holding spending growth below 2 percent for the fourth consecutive year, continuing a record of fiscal discipline that has reversed decades where state spending increased at a higher rate than inflation and personal income growth,” Megna wrote in the letter.
Cuomo, a 56-year-old Democrat running for re-election in November, has cut more than $12 billion in deficits in his first term by keeping agency budgets flat and using the threat of firings to get unions to agree to wage freezes. The effort, along with four consecutive on-time budgets — the first time that’s happened in 37 years — led to credit upgrades from all three major rating companies.
Last month, Cuomo said he wants to use $1 billion of the surplus for economic development in upstate New York and an additional $500 million to encourage local governments to consolidate. The remainder won’t be used for recurring expenses, Megna said in the letter.
Instead, it will be spent on “ways that will improve the state’s financial standing,” Megna wrote.
http://www.bloomberg.com/news/2014-10-01/cuomo-tells-agency-heads-to-hold-spending-amid-surplus.html