Budget Reduces Spending, Does Not Include New Taxes, But Brings Steep Cuts

April 11, 2011
I am pleased to report that the state budget passed on time this year. It finally put the brakes on spending, and did not include any new taxes or revenue streams. In the last two years, taxes and fees increased by $10 billion. This tax-and-spend mentality was simply not sustainable. I’m pleased the trend did not continue with the 2011-12 budget.

The budget closes the $10 billion deficit without resorting to new taxes, fee hikes or borrowing. This was the kind of budget gimmickry we, unfortunately, had come to expect from previous leaders and state budgets. For the first time in 15 years, state spending was reduced. This is monumental. Also, the budget process itself was more collaborative. Joint conference committee meetings were held; rank-and-file members participated in budget discussions. I served as our conference’s spokesperson for the higher education budget committee meetings. These committee meetings did not take place last year or the year before. Without these meetings, the process—left to three men in a room—was frustrating, to say the least.

This also was the first budget to reflect difficult economic times our state and nation has faced in the last three years. Other budgets relied on federal bailout money and revenue generation schemes, which overburdened the already-overburdened taxpayers. With these sacrifices in spending, however, came steep cuts to state aid. Healthcare and education especially saw steep declines in state aid. We were able to negotiate state aid on a two-year plan for schools, and districts will see a 4% increase in state aid next year. We also were able to restore some school aid from the Governor’s original proposal so districts did receive slightly more than what they initially anticipated.

The cuts this year are no doubt difficult and unfortunate for districts to manage; low-wealth school districts will be forced to cut programming and educators. Unfortunately, a new school aid formula was not a priority again this year. There was some good dialogue in Albany on this topic this year, however, downstate leaders still play a key role in how state aid is dispersed. We need a more equitable state aid formula so low-wealth districts will not have to eliminate support staff and programs for students. We also should open the dialogue to incentivize cost-savings measures for districts—much like localities have done with sharing services and personnel.

I’m pleased that Power for Jobs was replaced with a better plan for businesses called Recharge NY. This makes low-cost power for businesses something they can count on for up to seven years. Two years ago, without a budget in place on time, Power for Jobs was one of the programs that was in jeopardy of expiring. Without emergency extender bills, 500 businesses enrolled in the program would have had to pay an exorbitant amount for energy. We can’t take those risks as a state. Leaving the question of how much a basic commodity will cost up to the state budget process is unfair to those businesses. I was happy to support Recharge NY to improve economic conditions for business so they can better plan on energy costs for the long term. Recharge NY doubles the amount of discounted electricity to businesses Upstate, and also avails itself to farmers that pay residential rates.

The budget also created $2.3 billion in Medicaid savings, restored some school aid from original proposals to $134 million for Upstate and created agency mergers to save $450 million in workforce savings. I have advocated for many of these cost-savings measures for some time. Though the cuts in aid are hard to bear, I’m pleased our state budget finally reflects our financial situation, which puts our state in better standing.

More can be done, however, to ease the tax burden on property owners in the form of mandate relief on localities. We also should look further at waste, fraud and abuse within the Medicaid program. This is still our biggest expense by far and more can be done to create efficiencies.

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