NY Misses Budget Deadline, Cites Economic Turmoil

It's the first time a governor has missed beginning of the "quick start" process since it was enacted in 2007

View Comments (
)
|
Email
|
Print

    NEWSLETTERS

    TK
    Getty Images

    Gov. Andrew Cuomo has missed the first deadlines of a state law aimed at ensuring the passage of an on-time budget and ending New York's notorious history of late budgets hashed out behind closed doors with little public review.

    No new target dates have been set for the midyear financial plan update for the current fiscal year, which was due Oct. 31, or for the projected revenues for the 2012-13 fiscal year, which were due by Saturday.

    It's the first time a governor has missed beginning of the "quick start" process since it was enacted in 2007. The law overhauling the state budget process was intended to end decades of late spending plans rushed to approval with little public scrutiny, yet filled with tax and fee increases and funding for schools and other programs later criticized by advocates. The deadline was met even during the tumultuous years of Gov. David Paterson, as the Legislature repeatedly returned to Albany to address deficits as the recession started to slam New York.

    "Over the last decade there has been a steady improvement of disclosure and transparency and this is a back tracking," said E.J. McMahon of the fiscally conservative Manhattan Institute. "I can only speculate on the purpose that is being served by it. They certainly have all the information they need to put it out. They know plenty."

    Cuomo, who has been on the road for much of the past week endorsing local Democratic candidates, has said the volatility on Wall Street and in Europe has hindered accurate projections.

    On Wednesday, the Assembly's Democratic majority said it doesn't plan to convene its economic advisers until later this month, which would further delay the budget process. The Senate's Democratic minority released its quick-start report early, on Monday, projecting a surprising $3 billion deficit for the 2012-13 fiscal year and a current shortfall of $250 million.

    A consensus on revenues is due Nov. 15.

    Senate Democratic leader John Sampson used his data to press for a new tax surcharge on New Yorkers making over $1 million a year. It's a measure Cuomo — alone among Democratic leaders — strongly opposes.

    McMahon said the delay could be a "pretext" for Cuomo's administration to include some major tax or spending cut presented as an emergency solution to a surprisingly large revenue shortfall.

    Assembly Speaker Sheldon Silver said last week he thinks Cuomo may change his mind on the millionaire tax. Cuomo's position has drawn criticism from the Occupy Albany protesters camped out across the street from the Capitol. They've called him "Gov. 1 Percent," saying he caters to the rich.

    "It's always better to meet the statutory deadlines than not to meet them, but I don't think there is a great loss from the doing the so-called quick-start conference later in November," said Frank Mauro of the labor-backed Fiscal Policy Institute.

    Critics of the process have said the reliance on closed-door political horse trading still sullies the process, but most good-government groups said the budget reform has forced quicker action and more public debates.

    Mauro, however, is more concerned by the governor's missed deadline on Oct. 31 to provide an updated midyear financial plan. It would track the revenues and spending of the first six months of the fiscal year that began April 1 under Cuomo's first budget.

    "I don't think that there is a justification for not doing as much of the quarterly update as you can," Mauro said. "If they don't want to do their forecast now, that's one thing. But the quarterly updates and financial plan serve other purposes. They provide information that is more up to date on what actually happened."

    Cuomo said the budget delay is needed because of the economic uncertainty in Europe, the unpredictable stock market and reports of reduced bonuses on Wall Street that contribute to about 20 percent of state revenues.

    "Between Greece and Europe and the stock market going up and down, there has been significant amounts of volatility," Cuomo said last week, before the deadline passed. "We want to make sure we have the best possible (projection) because we are going to start making real decisions based on this information. We are getting near serious time."

    "What matters most is that the data is accurate," said Michael Whyland, spokesman for Silver, a Manhattan Democrat.

    There was no immediate comment from the Senate's Republican majority, which is closely allied to Cuomo on fiscal issues and opposes Silver's proposed millionaire tax.

    The Assembly's Republican minority is awaiting the governor's projections, said Minority Leader Brian Kolb. He cites "the volatility in the global markets" as a reason to wait for the "very latest information."

    Before the budget reforms, governors and legislative leaders spent months haggling over how much money there would be to spend. State budgets have been on time just a half-dozen times in the last 35 years. Most resulted in closed-door negotiations between governors and legislative leaders followed by a rushed vote to approve more than $100 billion in spending with little time for public review.

    Cuomo, however, has a relatively new tool for forcing a quick budget resolution. The Paterson administration discovered the power to enact the governor's budget in emergency spending bills once the April 1 deadline has passed, forcing the Legislature to either approve the governor's spending plan or risk shutting down state government.