EJ McMahon of the Manhattan Institute has an interesting op-ed in today's New York Post. He goes after Governor Andrew "The Government" Cuomo for blowing by a set of legally mandated budget reviews. Something's fishy about the whole thing for McMahon--and, to be honest, with many reporters--since the argument that volatility in European markets just doesn't make a lot of sense.
[The Division of the Budget] has coped with even more uncertainty in the recent past. In fall 2001, the budget agency under Gov. George Patakimanaged to issue a financial plan update less than 10 days after the attack on the World Trade Center. In the midst of a full-blown Wall Street panic in fall 2008, with David Paterson barely settled in the governor’s office, it issued its mid-year update two days early. In 2009, as stock-market volatility rose toward record highs, the mid-year report was right on schedule.
So what gives, Gov? In conversations with people involved in the budget process, some directly, there has been a calm reciting of the same reasons the governor has given for the delay. There was no reason, I was told, to be alarmed.
Speaking with folks at the city's Independent Budget Office, I got the same impression. These fall-offs in the market, resulting in Wall Street bonus drops of 20 to 30 percent, had been anticipated for some time. The outlook of the city's budget--which has an even greater dependence on Wall Street to keep it in the black--hasn't turned into a Doomsday waiting game.
So why is Cuomo behaving in a way that can, the longer it goes on, only generate more suspicion? There's certainly the possibility--with all things coming from this administration--that it's a matter of controlling the narrative.
Last year the Governor said we had to make some big cuts, unions had to take zeros, and everyone had to tighten their belts. This year was supposed to be manageable. If Cuomo has to come back and say, well, for reasons beyond my control--which is the truth--we have to find new ways to fill these budget holes, the flood gates open up.
He's backed into a corner: Does he have to go back on his education spending promise? Does he have to agree to the millionaires' tax extension? Given the inches devoted to the subject in his column, McMahon certainly sees this as a possibility. Does he go after Medicaid, the unions (again), or some other area?
This could be just as much trying to delicately negotiate the next steps. There's not a lot of wiggle room and, as has been suggested elsewhere, despite his high approval numbers, the Governor is walking a tight line on a number of issues. Every which way is fraught with political risk, and his administration might be obsessively weighing those.
The State Comptroller Thomas DiNapoli's office just released an update on the budget, using the best info they have. It appears that, no matter which way you turn, the state's budget isn't getting better. While the Comptroller is calling this year's gap "manageable," he says the gap continues to widen in the next three years from now. That brings us into re-election season--which could be the biggest consideration behind the hesitancy in releasing what will likely be budget bad news.