A Dozen Things to Look for in the Governor’s Proposed Fiscal Year 2016-2017 Budget
1. Total Spending Growth
For the past five years, Governor Cuomo and the Legislature have sought to hold state-funded operating budget growth to 2 percent annually. How will the Governor propose to keep spending growth below 2 percent next year, and will spending adjustments include any gimmicks or timing changes?
2. Windfall Settlement
Following $5.4 billion in windfall bank settlements last year, State officials now have another $2.2 billion to dole out. Last year’s settlements were allocated for one-time uses, but too much was dedicated to broadly-defined “economic development.” Will the additional bank settlement funds go to infrastructure with documented returns on investment or expansions of “economic development” programs?
3. School Aid
State funding for school districts has increased almost $4 billion over the last four years. Despite these large increases, state leaders have failed to address longstanding distortions in the school aid formulas that drive greater aid to wealthy districts. How much will school aid increase, and will it be distributed through an equitable formula?
Under the Medicaid Redesign Team, the State has kept state-funded Department of Health Medicaid growth below a global cap tied to long-term health care inflation. The growth cap, which is in effect through next fiscal year, will limit growth to 3.4 percent. Will the Governor propose an extension of the cap and any changes to it?
The Governor has pledged $8.3 billion to the Metropolitan Transportation Authority’s (MTA’s) capital plan while legislators have called for upstate parity; furthermore, funding plans for the Tappan Zee Bridge and the Gateway Tunnel are unknown. How much will the Governor propose to spend for transportation infrastructure? How much will be borrowing versus pay-as-you-go capital, and will a new revenue source be proposed?
6. NYC Police and Fire Disability Pensions
This fall Mayor de Blasio and the firefighters union agreed to an enhancement of disability pension benefits for rookie firefighters and police officers; however, more generous enhancements were proposed last year. Will the Governor include the agreed-upon enhancement or a more expansive proposal in the budget?
7. SUNY, CUNY Tuition Plan
In 2011 the State passed a five-year tuition plan, allowing an annual tuition increase of $300 and eliminating the historical practice of using tuition hikes to fill budget gaps. Will the Governor propose extending modest, predictable tuition increases? Will he include funding to cover new contracts with SUNY/CUNY faculty?
8. Tax Rebates
$1.2 billion is already designated for two tax rebates, the Family Tax Relief Credit and the Property Tax Freeze Rebate. Both expire in 2016. Will the Governor extend these rebates?
9. Minimum Wage
The Governor has imposed a $15 per hour minimum wage for state workers and may propose higher wages for private sector workers, including nonprofit social service providers with state contracts. What are the direct and indirect budgetary costs of the minimum wage proposal, including possible offsetting business tax credits?
10. Personal Income Tax
Lower tax rates for middle brackets and higher rates for the wealthy expire at the end of 2017. Will the latter years of the financial plan reflect this expiration?
Since 2000, the number of state inmates has fallen 28 percent, but security staff at state prisons has dropped by only half that rate. After an uptick in staff and inmate assaults and a massive manhunt this summer, will the corrections budget and staff grow? What is the fiscal impact of the Governor's initiative to move 16- to 18-year-olds out of the general prison population?
12. Lump Sums Appropriations
The trial of former Speaker Sheldon Silver shed light on the darker side of New York State budgeting. Each year the state budget includes lump sum funding to be allocated later, often through MOUs or competitions. Will the Governor propose increased transparency for allocations from lump sum appropriations or other budgetary reforms?