Nearly a year and a half after Republicans in Washington imposed a $10,000 limit on state and local tax deductions, New York and other affected states appear to be weathering the change far better than Gov. Andrew Cuomo and his allies predicted.

In February, just weeks after the annual fanfare of the State of the State address, Cuomo began raising alarms that state revenues were lagging $2.3 billion below expectations. That was in addition to a previous $500 million downward revision as personal income tax receipts fell off a cliff relative to projections.

New York's updated financial plan, released in early May, continues to show healthy growth in income tax receipts over the next few years. The most tangible impact of the SALT cap thus far appears to be in shifting when people pay their state and local taxes.

For example, New York City's personal income tax collections dropped by an estimated $1.2 billion in December and January over the same time period the year prior — leaving a shortfall of some $433 million despite attempts to anticipate the shift. But April payments were $561 million more than anticipated and so revenues should be $50 million more overall than the de Blasio administration's most recent estimates, according to an analysis of the city's executive budget the state comptroller's office released Friday.

This volatility highlights the need to further increase the amount of money set aside in rainy day funds, according to the Citizens Budget Commission's David Friedfel.

"For New York, it really made a real difference when that money came in," he said, adding that there's likely to be at least another year of adjustments before financial projections properly calibrate the measure's impact.

State spending has actually gone up by 4.9% in this year’s budget — not 2% as Gov. Cuomo has claimed, when “off-the-books” spending is included, according to an analysis by the Citizens Budget Commission.

The nonpartisan organization, which evaluates state and New York City fiscal matters, claims that State Operating Funds (SOF) spending is higher when adjusting for a series of accounting maneuvers that is shifting $4.7 billion out of the budget. This includes some $1.84 billion in taxes to support the Metropolitan Transportation Authority. Also, continuing with past practice, the state is prepaying debt service payments a year ahead of time. However, this year, it accounts for $1.5 billion – the largest amount during Cuomo’s administration, according to the blog.

In addition, the state has made changes to the STAR program to change it into a tax credit program. Residential property owners will continue to receive the same or greater benefits, but the reclassification results in spending appearing in $1.24 billion lower.

All together, these and a few other adjustments results in total spending increasing by $4.7 billion for this year, according to the Empire Center.

Gov. Andrew Cuomo loves to brag about his fiscal conservatism, routinely brandishing Power Point slides that show he has kept the growth of state spending at 2% or less for what’s now nine straight years. Problem is, that’s only by his accounting — and independent numbers paint a much more troubling picture.

The gov is focused, fairly enough, on state-funded spending, not cash that flows from Washington to fund federal programs. In that light, he says, he again kept the rise in outlays to 2% for the new budget year.

But the Citizens Budget Commission (among others) says otherwise. Its latest report adjusts for various fiscal gimmicks, and finds that fiscal year 2020 state spending actually jumps 4.9%.

And that follows actual growth rates of 2.8% in FY 2018 and 2.5% in FY 2017, after six years that (by the CBC’s count) did average 2% growth.

In other words, Cuomo has failed to meet his own mark for three straight years now, and the problem’s getting much worse.

As expected, a glorious Memorial Day weekend weekend weather did result in people flocking to city beaches. However, not all trips to the Rockaways went well, as beach goers opting to take the ferry waited over an hour for boats.

The NYC Ferry route to Rockaway Peninsula, which begins at Wall Street with a stop at Sunset Park, is the most popular line, and it had wait times of 60-90 minutes on Sunday, NYC Economic Development spokeswoman Stephanie Baez told WNYC. (The NYC EDC operates NYC Ferry.) Baez said, "Due to the warm holiday weekend, we’re experiencing very high ridership and increased wait times."

NYC Ferry, a pet project of Mayor Bill de Blasio, has been under criticism for being heavily subsidized by taxpayers. A report from the Citizens Budget Commission found "that [the] per-rider subsidy worked out to $10.73 in fiscal year 2018... and is expected to balloon to more than $24 per trip on a planned Coney Island route announced earlier this year — or 2,257 percent more than what's allocated to the average subway or bus rider." NYC Ferry also does not have ridership data.

Cuomo and the state Legislature used a whole bag of accounting tricks to make it appear the latest state budget honored his perennial pledge to limit Albany's operational spending increases to 2%, according to an analysis by the nonprofit Citizens Budget Committee. The group asserted that state spending will really increase by 4.9% this fiscal year.

The most subterranean subterfuge of all involved the levies that feed the MTA, including the Commuter Transportation Mobility Tax, which collects cash from employers in the New York City metro area to fund the transit network.

Following a pattern set in last year's budget, the governor and the legislative leaders simply moved the disposition of this money—almost $1.7 billion—off the official budget ledgers.

"These shifts and reclassifications undermine transparency and make year-to-year comparisons challenging," the organization warned on its blog.

The nonprofit found the administration used similar tactics to conceal the true dollar figure expended on the state's costly Medicaid program, and moved a number of expenditures from the tax-funded operations budget to the bond-backed capital budget. The state also pre-paid a number of its debt obligations out of last year's funds, even though this did not produce any interest savings.

The conversion of the School Tax Relief program from a funded exemption to a refundable credit also made the budget artificially appear $1.24 billion smaller.

Last week, the New York Times published another blockbuster investigative series by reporter Brian Rosenthal, this time on the misleading and predatory practices which led to inflated prices of New York City yellow taxi medallions over the last decade.

The compelling stories of taxi drivers who thought they were buying into the American dream by purchasing taxi medallions, only to find their incomes drastically reduced by the competition of Uber and Lyft, has been a topic of public discussion for some time, but Rosenthal’s reporting provides new and detailed documentation of how lenders and brokers drove up the prices and encouraged purchases without concern as to whether the buyers had the wherewithal to repay their loans.

The situation of many taxi drivers and their families (especially those who have died by suicide) is unspeakably sad and it is understandable that elected leaders want to help them. But the rise and fall of taxi medallion prices also contains a larger message and lesson for government about the dangers and unintended consequences of relying on one-time revenues to fund government expenses.

Fiscal watchdogs warn against reliance on “one-shots” because they artificially inflate the amount of revenue available and will have to be replaced by other resources over the long term. That is why organizations like Citizens Budget Commission (CBC) urge that one-time windfalls be used to pay down debt or bolster reserves, not to start new programs or pay for employee salaries and benefits.

Memorial Day weekend brought fresh dysfunction in Mayor Bill de Blasio’s ferry system, as hundreds of riders roasted in the sun as they endured long waits and even watched boats skip their stops.

Lines for the Rockaway Beach route at Wall Street’s Pier 11 stretched for blocks Sunday, with waits above 90 minutes for furious New Yorkers clad in swimsuits and carrying beach chairs.

Even with the fare held to $2.75, that latter class of consumer is unlikely to help the system grow beyond its current 13,000 passengers a day — too small-scale to be remotely cost-effective. (Nor does it make sense to subsidize holiday boats.)

As things stand, the Citizens Budget Commission reported recently, the city is kicking in an average of $10.73 for every ferry rider, on top of the fare. All to add practically nothing to the transit system.

Last year the Economic Development Corp. official and his City Hall colleague who were in charge of a multibillion-dollar streetcar project left their roles abruptly as the plan went awry.

Meanwhile, despite a hot market for warehouses, the EDC's request for proposals to develop a large distribution center at the Brooklyn Army Terminal received not a single response. Similarly, a year and a half after the agency sought a developer to build a life-sciences campus, no deal has been inked.

Last week the EDC dropped its partner on a long-stalled $80 million garage and park project in Downtown Brooklyn, at Willoughby Square, and vowed to build just the park on its own—prompting the jilted partner to prepare a lawsuit.

The EDC, however, has missed chances to undercut criticism from the left. It has been slow to re- examine decades-old incentive programs that some watchdogs say are tailored to a bygone era when the city strained to attract private investment. One of those programs helped fuel some of the anti- Amazon movement.

Despite being one of the world's most valuable companies, Amazon was set to receive nearly $400 million in property-tax breaks through the city's Industrial and Commercial Abatement Program, according to the Citizens Budget Commission. Former EDC officials and other experts have urged the agency for years to reevaluate that program. Yet a boundary commission—a group controlled by the mayor that makes recommendations for adjusting the incentive—last met in 2015.

New York state has hit a new benchmark in education spending, reaching an average per-pupil cost of $23,091 in 2017 according to the latest census data.

That’s closing in on twice the national average, even as the number of students is falling.

Much of the growth in spending is in salaries and other personnel costs, which for unionized school employees typically entails built-in longevity raises. Rising employee health insurance rates also have been cited as a cost driver.

Other studies have illustrated the rising trend as well. According to the Citizens Budget Commission, a spending watchdog group, overall school district revenues between 2006-07 and 2016-17, increased $20 billion, which was 41 percent. That was twice the inflation rate.

To residents, a plan to replace a just-refurbished public area with a new residential tower was another example of the housing authority’s dysfunction.

The playground of a housing project in Manhattan in recent years had slid into a state of disrepair so severe that parents felt uneasy about letting their children play there.

So in 2015, the state approved a plan to steer $770,000 toward a new cushioned play surface, new barbecues and new water sprinklers for children to cool down, plus other improvements. The playground, in the Chelsea neighborhood, is scheduled to reopen early this summer.

Except that the New York City Housing Authority is now planning to raze the playground and build a new residential tower in its place as part of the city’s contentious proposal to replace some public housing buildings with mixed-income private developments to raise money for urgently needed repairs.

Sean Campion, a senior research associate at the Citizens Budget Commission, a watchdog group, said the about-face spoke to the “state’s historical lack of coordination with Nycha over how the state’s resources should be invested in Nycha’s greatest needs.”

The funding for the playground stems from a $100 million public housing package that Gov. Andrew M. Cuomo approved in 2015, but was wary of handing over directly to Nycha because of its reputation of mismanagement.

t’s a shameless bid to roll back the 2011 pension-reform law — yet it’s only a slightly more outrageous version of Albany business as usual.

Assemblyman Peter Abbate and state Sen. Andrew Gounardes, two Brooklyn Democrats who chair the key committees dealing with government employees, are pushing a bill that would cost taxpayers $149 million for a retroactive giveaway to workers hired after 2011 and cost state and local governments $20 million a year going forward.

The Abbate-Gounardes bill is veto bait for Gov. Andrew Cuomo, who’s got a solid record of nixing this nonsense. This isn’t even the first time Abbate has tried it, and he won’t stop: One year, maybe it’ll slip through.

And it’s only the biggest “pension sweetener” moving through the Legislature this year. The watchdogs at the Citizens Budget Commission are eyeing more than 100 such bills, each handing some unearned benefit to a group of public employees.

“It’s disingenuous to talk about pension reform and then go back and change it when the economy looks good,” says the CBC’s David Friedfel. Especially when the economy always dips again eventually.

If it's spring, it must be time for the annual budget dance between the mayor and the City Council, as they jockey over funding priorities.
This year, a big part of the dance is over subsidies for the city's three public library systems, and big names like Sarah Jessica Parker and David Byrne are getting into the fray over a proposed $11 million cut.


While the messaging from the libraries make that sound like a lot of money, it amounts to just 3 percent of the $395 million the city's giving the systems for the fiscal year ending June 30. Maria Doulis, vice president of the Citizens Budget Commission, says the cut, even if it is approved, is not draconian.