Cuomo Slams State Budget Process

January 31, 2011 Updated: February 1, 2011

NEW YORK—Gov. Andrew Cuomo slammed the state’s budget process on Monday, 30 days before he has to finalize his plans for next year’s budget.

“In the past 30 days, as I have prepared the state’s budget, I was shocked to learn that the state’s budget process is a sham that mirrors the deceptive practices I fought to change in the private sector,” Gov. Cuomo wrote in an op-ed piece distributed to newspapers and displayed on the governor's official website Monday—the eve of his much-anticipated and feared budget presentation on Tuesday.

As he prepares to make deep cuts in state spending, the governor revealed the state's process behind setting the budget as a pushing and pulling of special interests and senseless formulas.

“Special interests dominate the process with little transparency; programs continue with no accountability and the taxpayers get the exorbitant bills,” wrote Cuomo.

The $10 billion deficit that has loomed so ominously over budget talks is not, however, a concrete reality said Cuomo. It is based on a projected increase in state spending by 13 percent. So, if he cuts 7 percent off the budget, state spending will still increase by 6 percent over last year's budget.

“Who is responsible for setting the growth in the state’s budget?” asked Cuomo in his op-ed. “The answer is shockingly, no one. It is dictated by hundreds of rates and formulas that are marbleized throughout New York state laws that govern different programs—formulas that have been built into the law over decades, without regard to fiscal realities, performance, or accountability."

The deficit is an abstract number generated by archaic formulas he intends to change. He suggests that new formulas take into account inflation, the Consumer Price Index (CPI), or personal income growth.

Cuts and Changes

In his State of the State address on Jan. 5, Cuomo proposed capping state spending at the rate of inflation. In 2010, the all items index increased 1.5 percent before seasonal adjustment, according to the Bureau of Labor Statistics. A 1.5 percent increase in spending is certainly a downgrade from a 13 percent increase. Some would say, it's going too low.

To increase spending by 1.5 percent [Cuomo] would have to cut a lot of services,” said Frank Mauro of the Fiscal Policy Institute, an independent, nonpartisan, nonprofit research and education organization that works to improve public policy.

Mauro suggests maintaining the temporary additional tax imposed on individual annual incomes of $200,000 or more, or on an annual household income of $300,000.

Mayor Michael Bloomberg and Cuomo have both proclaimed this tax would do more damage than good, driving the rich out of the state and into lower-tax regions. Cuomo made it clear in his State of the State address that he would freeze taxes, eventually reducing them.