Day 1 of New York's new fiscal year arrives with no budget in place
April 1 arrived with no agreement on the state budget, and for the first time in over a decade, there’s no clear indication of when a spending plan might be passed.
State Comptroller Tom DiNapoli warned that if the impasse lasts beyond next Monday, the paychecks of some essential state workers might be delayed.
On the first day of the new fiscal year, just one of 10 budget bills had been approved. The debt service bill was passed on the evening of March 31. Senate Finance Chair Liz Krueger could not say when the remaining nine might be ready for passage.
“We have quite a few budget bills remaining to get done,” Krueger said. “We don’t have them.”
Gov. Andrew Cuomo has touted his track record of relatively on-time budgets during his three terms in office as a sign of a properly functioning state government.
This year, the governor is facing four major scandals, including multiple allegations of sexual harassment and accusations that he and his staff covered up the actual number of nursing home deaths during the COVID-19 pandemic.
Several newspapers have reported that Cuomo manipulated the coronavirus testing program during the height of the pandemic last spring to favor family and friends, and that he may have used his staff to help him write a book, which, if proven true, would be against the state’s public officers law.
Cuomo has not spoken publicly, but his budget director, Robert Mujica, told Spectrum’s New York 1 on March 31 that the governor’s troubles are not affecting the talks.
“The budget negotiations have been seamless,” Mujica said. “Just like any other year.”
One of the major sticking points is a proposal backed by Democrats who lead the Legislature to impose $7 billion in new taxes on New York’s wealthy and on corporations.
New York is receiving $12.5 billion in federal stimulus money, so the new revenues are not immediately needed. But Michael Kink with the Strong Economy for All Coalition, which favors taxing the rich, said the federal aid is a one-time cash infusion that won’t fund needed services in the future or help correct growing income inequality.
“Long-term investments in the communities that have been hardest hit by COVID are important right now, and we’re not going to get that from a one-shot burst of federal funding,” Kink said. “It takes recurring revenue, and it takes long-term investment.”
Kink said the state’s estimated 120 billionaires have made over $100 billion in profits during the pandemic and can afford to pay a little more.
Cuomo supports a $2 billion tax plan that includes some new taxes on the rich and the delay of a planned middle-class tax cut. He’s said that he worries that raising taxes too high on the wealthy will only cause them to leave the state, or at least change their primary residence to a lower-taxed locale. He’s also said that the pandemic-driven trend of working from home could mean more people will work remotely from other places.
Mujica said the governor and lawmakers are trying to strike a balance that will grow the post-pandemic economy without hampering it.
“So that we don’t reach a tipping point, where instead of helping with the recovery, we’re actually harming it,” Mujica said.
The Assembly and Senate also want to spend more than the governor. They would like to increase education aid by $4 billion to fulfill a court order issued 15 years ago that said New York’s schools were severely underfunded.
New York State United Teachers union President Andy Pallotta said the money has been owed for too long.
“We need to recognize that the state of New York has short-changed public education for years,” Pallotta said.
Lawmakers are also seeking up to $3.5 billion for a fund for unemployment payments and other services to undocumented New Yorkers who lost their jobs during the pandemic.
Sen. Samra Brouk, a Democrat from the Rochester area, said many are front-line or essential workers who risked their lives to do their jobs during the pandemic.
“They are worth getting the same benefits and resources and supports,” Brouk said. “They deserve those just as much as any other worker.”
A plan to expand mobile sports betting in New York that could generate as much as $500 million in annual revenue, is also not yet finalized.
DiNapoli warned late Thursday that if the budget is not adopted by Monday, 39,000 state workers, many in health care and correctional facilities who have been front-line workers during the pandemic, may see their April 8 paychecks delayed.
“Many are essential workers who must show up at work every day and put in long, hard hours,” DiNapoli said.
Many New Yorkers are hurting, DiNapoli said, and he said it is important that a final agreement be reached quickly.