Albany Times Union
With a budget due soon, New York faces a deficit and hard choices about how to close it.
Passing the buck could harm communities, schools, and entities that help the needy.
As the state’s April 1 budget deadline approaches, here’s a word worth keeping in mind for the Legislature and Gov. Andrew Cuomo: balance.
Yes, we all want a balanced budget. But there is more to a well-balanced spending plan than just getting the revenue and expenditure sides of the ledger to match. The budget is about getting priorities straight, too. That includes deciding whose back a difficult budget like this one is balanced on.
Mr. Cuomo’s approach to date hasn’t always been heartening. He has warned schools of cuts as high as 20 percent, and nonprofits that provide services to people with intellectual and developmental disabilities say the state has shortchanged them $400 million in relief they were supposed to get in the pandemic.
Schools, local governments and other entities that depend on state aid fear that the New York will simply look to deduct any money they’re supposed to get in the $1.9 trillion federal American Rescue Plan from their state allocations. Congress sought to short-circuit that sort of shell game, putting provisions in the legislation to try to ensure that federal aid to schools would supplement, not supplant, state funding. State leaders should not be looking for loopholes to get around the spirit of the law.
Mr. Cuomo has not been particularly reassuring on this point, saying when it came to aid cuts only that he’d see how budget talks go and how whole the state is made on its own financial shortfalls. He has said the state faces a roughly $15 billion deficit between the current budget and the next one; the stimulus/relief bill included $12.5 billion for New York state government.
It’s vital that the governor and lawmakers remember that schools, local governments and nonprofits are all dealing with extraordinary costs because of the pandemic, too. Local governments have lost sales tax revenues, and could well be hit with property tax losses in coming years if businesses fail to recover and commercial property values tank. The extra money they’re getting from the federal government cannot only help them deal with their budget problems now and down the road, but should allow them to make smart investments in their communities that will speed their own recovery.
If the state still finds itself short of funds for the coming year, it should not try to pass the bill down to all the schools, local governments and service providers that depend on it for support. As some lawmakers and advocacy groups have noted, state government has far more flexibility when it comes to raising revenue — such as raising taxes on the ultra-rich, who have done quite well in this crisis; imposing luxury apartment taxes; and collecting a small tax on stock transfers that’s been on the books for a century that by itself would net billions and more than close the budget gap.
If raising taxes on the rich or on a booming stock market troubles them, they should consider the alternative. Local governments have only regressive options — raising property and sales taxes. Schools are limited to property taxes, and even those are capped under state law. Nonprofits have few options but to cut staff and services.
As state leaders look to finalize a budget, the balance they should seek is between making the numbers come out right, and ensuring New York maintains a quality of life in which all its residents can thrive.