Three weeks after proposing his $175 billion dollar budget, Governor Andrew Cuomo announced the state is now $2.3 billion in the hole.
Cuomo is pointing to the federal tax laws as the main culprit. Now, the Governor says the budget he put forward is no longer supported by the revenue. He now has until mid-February to make some major adjustments.
Stephen Acquario, Executive Director of New York State Association of Counties calls Monday’s announcement “troubling”. Acquario said there’s a lot of competing interests at the Capitol right now, but his job is to bring the interests of the local taxpayers. He argues New Yorkers already have high property taxes, so any cost shifts to the local level would not be welcome news.
“Local governments receive funding from the state to run local affairs and run state programs and if the state does not have those revenues, we just don’t want that to shift back to local governments,” said Acquario.
Education and Health Care make up roughly 60% of the Governor’s current budget proposal. So the cuts will likely start there. Acquario also suggests looking at economic development and infrastructure priorities. He also mentioned adding the internet sales tax which could provide some immediate relief.
David Freidfel, Director of State Studies, with the Citizens Budget Commission said the state has closed deficits like this before by implementing strong spending controls.
“If state spending were to stay flat going into next year, the gap would shrink immediately to about $400 million,” said Friedfel.
He went on to that say that cutting the property tax relief credit which is over a billion dollars wouldn’t be a bad idea either.
Many are also wondering if the legislature is now more likely to consider the passage of recreational marijuana as a revenue enhancement. State Comptroller, Tom DiNapoli says similar to what they saw with gaming, recreational marijuana wouldn’t bring the immediate revenue they’re looking for. He believe it will take a few years after implementation to see any real profits.