For immediate release: April 11, 2017
FPI Statement on 2017-18 Enacted State Budget
There’s no question the newly-minted state budget contains some important public policy issues that should be lauded. However, given the governor’s very vocal concerns about funding threats from Washington, we sadly missed an opportunity to be proactive in protecting New York from potential federal budget cuts, and to provide funding streams to allow flexibility in making adjustments as needed.
While the budget extends the millionaires’ tax in its current form for two years, it fails to adopt the assembly’s proposal to expand the tax further by increasing the number of top-end brackets and making the new structure permanent. The assembly expansion proposal would have generated an additional $2 billion in revenue that could have provided the financial cushion necessary to address potential federal funding losses in 2018. Moreover, passage of the assembly’s proposal would have resulted in a more progressive state income tax structure that could have balanced out the current regressivity of New York’s overall state and local tax structure.
The governor’s “Federal Funding Response Plan,” which was tempered with “dose of democracy” thanks to push-back from the senate and assembly, will not allow the governor to unilaterally determine how to address federal funding gaps. In the event of federal funding cuts, the governor would release a detailed plan on how to close the gap. The legislature would then have 90 days to come up with their own plan, or choose to accept the governor’s plan. This provides the checks and balances needed to ensure a measured response that not only considers state budget cuts, but revenue enhancements as well.
While FPI applauds the recognition of the need for checks and balances regarding unexpected budget considerations, New York fell short in recognizing that same need for economic development spending. Despite multiple federal indictments, poor program audits and lackluster annual reports, the state continues to move full steam ahead on economic development efforts without having in place reasonable accountability and transparency measures to ensure the state is spending this money wisely. The budget contains a new, regrettably misnamed, Comprehensive Economic Development Report that requires the state to only report limited aggregate data. FPI continues to call upon Empire State Development Corporation to create a comprehensive, online “Database of Deals” which would show all of the economic development benefits received by individual companies, and to enact real, common sense procurement and contracting reforms.
On immigration, the final budget agreement represents some important steps forward, but also some real missed opportunities.
We are particularly pleased to see $2 million included to support the work of refugee resettlement agencies. This is a small number in the context of the New York State budget, but it is a huge help at a time when refugees are under attack, and when the federal government is an unreliable partner to the resettlement agencies that serve them. It is also a good news for upstate New York cities, where the overwhelming majority of the state’s refugees live. Those cities rely on resettlement agencies as anchor institutions in their communities, and they depend on refugees and other immigrants to help stem population decline and revitalize the local economy.
The governor made some bold promises around immigrant legal services in the past months, but didn’t include funding to make good on them in his executive budget. It is encouraging to see that the governor, senate, and assembly included in the final budget $10 million for legal services, and potentially for related services such as English language instruction or job training. This is not enough to fully make good on the promise, but it is a real step in the right direction.
There were also, however, some important opportunities that were missed in the budget negotiations. For too many years, the governor and the legislature have been playing games around the New York State DREAM Act. A year when the state is investing in making college affordable for middle-income students would have been an obvious moment to finally pass this long-stalled bill. A targeted expansion of support to English language instruction would seem like a no-brainer, supporting immigrants while helping improve social conditions and economic productivity. The budget did not do anything to increase funding to the Department of Labor to strengthen worker protections, though the department lacks the resources to fully do its job. Discussions about providing health care for New Yorkers who are excluded from existing programs did not get resolved in this budget, representing another important missed opportunity.
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The Fiscal Policy Institute (www.fiscalpolicy.org) is an independent, nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all New Yorkers.