February 15, 2015. Gov. Andrew Cuomo’s budget proposal takes some positive steps forward in clearly acknowledging, for the first time in his tenure, the incredible child poverty and income inequality that exist in our generally affluent state. He also wisely recognizes the need to give greater property tax relief to those who need it most rather than spreading it too thinly.

However, for every step forward the governor takes in addressing some critical issues, he takes two steps back by continuing his austerity spending at a time when we need to be investing in New York and by conditioning positive proposals on toxic and often unrelated requirements.

The governor should scrap his self-imposed two percent state spending cap. State tax revenues, total wages, and personal income are projected to grow by four to six percent annually over the next four years. There is no reason to hold annual spending growth below two percent if it means that we are under-investing in education and poverty reduction.

The sheer magnitude of continued “unspecified” spending cuts forced by the two percent spending cap—$1.7 billion in fiscal year 2017, $3.3 billion in 2018, and $4.8 billion in 2019—will inevitably starve our schools and public universities and prevent our state from making the investments needed to expand opportunities for those struggling to lift themselves out of poverty.

In the governor’s “Let’s Make a Deal” budget proposal, too many of the otherwise good public policy initiatives are linked to the acceptance of bad policy that in some cases undermines the initial proposal and in others is utterly unrelated to it. This represents Albany wedge politics at its worst.

The governor proposes increasing education funding by $1.1 billion (only half of the $2-plus billion that nearly every education and student-focused organization in the state is demanding), but only if the Legislature agrees to draconian education reforms that mistakenly blame teachers for poor student outcomes in underfunded, high need, low wealth districts. We need more education funding in high needs districts and a serious investment of state funds in combatting child poverty if we are to improve graduation rates.

The governor proposes a property tax relief plan — a circuit breaker — that wisely ties a family’s property tax burden to its income level, targeting meaningful relief to over one million New Yorkers that need it the most. However, he destructively links this relief to local compliance with a misguided property tax cap, and he funds the needed tax relief with future surpluses predicated on billions of unspecified future spending cuts that will be required by his self-imposed two percent state spending cap.

Similarly, the DREAM Act is a clear win for the state, with a modest cost and a strong return on investment. But, rather than support it outright, he ties it to the misguided and controversial Education Investment Tax Credit, which provides the greatest economic benefits to the wealthiest New Yorkers and allows private interests to dictate education spending.

This year, New York state faces the extraordinary situation of having a surplus of $5.4 billion, funds resulting from settlements related to banking industry malfeasance. The governor proposes allocating a portion of the $5.4 billion in bank settlement funds to much-needed infrastructure repairs, as is highly appropriate. However, the executive budget also includes a proposal to divert $1.5 billion of this money to a “cut throat” competition among the seven upstate Regional Economic Development Councils, with all seven competing for three pools of $500 million. Upstate economic development is a crucial state priority, but what’s needed is a smart overall strategy for development, not an approach that pits one region against another.

The governor dubs his budget an Opportunity Agenda for New York. There are, however, far too many missed opportunities in this budget proposal. What New York really needs is a Shared Opportunity Agenda, one that will benefit all New Yorkers. We must devote more resources and apply less politically encumbered policy to our schools, to our communities, and to strengthening our safety net if we are to truly combat income inequality in our state.

Ron Deutsch
Executive Director