A 21st Century Rip Van Winkle, awakening after a two-year catnap, might assume based on this morning’s newspaper headlines that David Paterson had been elected governor in 2010. But after rubbing his eyes and donning his reading glasses, old Rip would discover that the governor now getting ready to execute an 180-degree turn on taxes — just as Paterson did in 2009 — is none other than Attorney General Andrew Cuomo.
I do my best to explain what’s going on in today’s New York Post. The Assembly and Senate both reportedly are preparing to convene by mid week, for purposes of voting on … something or other. The governor Sunday issued what he called a “job creating economic plan” that would include casino gambling (which would require voter approval of a constitutional amendment in 2013), “regional strategies” for economic development (nothing new), an infrastructure financing plan that would tap pension funds (first reported a couple of weeks ago), and government jobs for unemployed teens. No mention of a permitting process for natural gas exploration, which would generate far more jobs and economic activity upstate than all of the other options put together (although the folks in Albany’s Academy Park would not approve).
New York is at the top of the debt list in the latest U.S. Census data on state and local government finances.
As of 2009, New York’s state and local long-term indebtedness came to $15,202 per-capita, more than any state and 74 percent above the national average. In 2008, New York’s per-capita state and local debt load was $13,804 and ranked third, trailing only Alaska and Massachusetts.
Comparatively speaking, state and local debt in New York wasn’t much lighter when measured as a share of income, coming to $326 per $1,000 — 45 percent above average and narrowly trailing only Alaska. In the debt per $1,000 category, the Empire State’s #3 ranking was unchanged.
Tables based on the newly released 2009 Census data on state and local government finances have been updated at the Empire Center’s Data Bank.
Nicole Gelinas has a must-read op-ed in the New York Post today on the sinking fortunes of New York City’s financial sector. Her message:
Thanks to Washington’s support for big banks, New York City has been a cocoon of prosperity compared to the rest of the nation over the last three years.
But banks can’t stay on the dole forever — and the city’s done nothing in the 37 months since Lehman Bros. collapsed to prepare for a leaner Wall Street.
New York State’s 2010-11 2011-12 fiscal year appears to be off to a good start. Tax collections for the first quarter of the year were nearly $800 million above Governor Andrew Cuomo’s initial budget projections, according to the June cash report posted today by state Comptroller Thomas DiNapoli.
On the other side of the ledger, disbursements for April through June appear to have been about $1 billion below projections. Significantly, this includes lower-than-forecast spending of $260 million on Medicaid, an area over which the governor now (temporarily) enjoys unprecedented administrative control. The spending figure needs to be taken with a grain of salt, however. DiNapoli said spending was below projections “primarily because of the timing of local assistance payments.” County executives around the state already have been complaining that Cuomo’s Division of the Budget (DOB) has been slowing down aid payments to an extraordinary degree.
In the publishing business, the annotation “TK” is used in manuscripts to indicate some important piece of information is “to come.” Gov. Andrew Cuomo’s 2011-12 Executive Budget is a book draft with an impressive cover and a promising theme: “Transformation.” The premise is compelling: “We spend too much, we get too little, and it makes us economically uncompetitive.” Yet in many chapters, the plot turns are still TK.
Governor Paterson has dropped a proposal to impose New York State’s personal income tax on the interest income of non-resident hedge fund managers from his latest preferred list of revenue-raisers to help pay for the 2010-11 budget appropriations the Legislature finished enacting two weeks ago.
The governor’s move is only symbolic, however. A package of tax and fee hikes including the hedge fund tax was passed by the state Assembly on July 1 and is the only live revenue bill pending in the state Senate. Moreover, the Assembly and Senate have refused to accept delivery of the program bill he sent up to them today.
Most news coverage of yesterday’s budget vote reflected the approach of today’s New York Times headline: “Albany Lawmakers Pass Big Cuts in Health Care.” In fact, net of those cuts, the state-funded share of Medicaid spending will increase this year year by more than 8 percent, based on data in the governor’s original 2010-11 Executive Budget documents.
Interested in finding an authoritative, plain-language summary of the health care actions in yesterday’s budget extender bill? You’re out of luck: neither Paterson’s office nor the Legislature has posted so much as a news release on their websites. As New York’s state budget deficit gets larger, hard budget data from official sources is becoming even more scarce than usual.
Think of it: including yesterday’s $50 billion Medicaid appropriation, the Legislature has now adopted roughly 40 percent of the entire state budget for 2010-11, without producing a scrap of supporting documentation to explain the financial plan impact. Amazing, even by Albany standards.
Governor David Paterson began his tenure in the spring of 2008 on a promising note by embracing a broad, no-exceptions cap on school property taxes, almost exactly as proposed by the Suozzi Commission on Real Property Tax Relief. But when the Senate actually passed his bill a few months later, he backed off and dropped the issue.
Last year, Paterson quietly reintroduced the cap — but added a massive exception that would destroy its effectiveness. A few months later, he switched gears and began advocating a property tax circuit breaker–i.e., no limit on property tax levies, but subsidized tax credits for some homeowners. The circuit breaker would begin flowing if the state budget ended a year in surplus under a separately proposed statutory spending cap. This byzantine proposal has attracted no interest in the Legislature.
Today, the governor backed even further away from the property tax cap recommended by the Suozzi Commission. His latest tax cap proposal would extend to all local governments, but adds a further carve-out that makes the exercise virtually pointless.
Lt. Gov. Richard Ravitch still hasn’t publicly released his long-term plan to restore structural balance to New York’s state budget, including a rumored proposal to bond out a portion of the state’s budget shortfall. But the details emerging so far from officials with some knowledge of the plan make this sound like a dubious proposition, to say the least.
State Comptroller Thomas DiNapoli today issued a “Strategy for Fiscal Reform” that focuses on the budget process, but his most significant and potentially valuable recommendation deals with debt.