On Wednesday January 4, Governor Andrew Cuomo will deliver the 2012 State of the State in Albany, marking the beginning of a new legislative session. We spoke to numerous political consultants, lawmakers and good government groups to find out what New Yorkers can expect from state government this year.
Perhaps the real genius behind Cuomo’s on-time, balanced budget last year was that it also finalized most of this year’s budget as well. Through budget cuts and offsets, the Governor and the legislature were able to close a $10 billion gap last year. While far smaller,a gap has also opened up this year. The tax reform deal pulled together earlier this month helped close that gap significantly, but how the remaining $2 billion or so gets filled this time around is still an unknown.
“We know that they did the deal to do a temporary restructuring of the tax code which is going to bring in some new revenues, and now the question is, what are they going to do in the budget,” said Elizabeth Lynam with the Citizen’s Budget Commission, which has put out its own read on the upcoming budget.
She said she hoped the Governor and legislature resist the temptation to find new sources of revenue (i.e. raising taxes) and instead “move forward with the continued restructuring of the state’s obligations” (i.e. cut state spending on programs).
Democratic State Senator Liz Krueger of Manhattan—the ranking member on the Senate’s finance committee—is worried the Governor will do the opposite. “I'm very concerned there will be pressure to cut even further into critical programs,” she said. She argued that the tax reform didn’t go far enough, and favored revisiting corporate tax loopholes and other potential revenue generators.
One of the big outstanding issues in the coming budget process will be health care. The Governor has promised a four percent increase in spending on health care this year as part of the budget deal last year. But Senator John DeFrancisco, chair of the Senate’s finance committee, says this is the first place lawmakers should be looking to continue to trim the fat.
“I think the most important thing to do this year is to keep the momentum going that we started last year with the $10 billion in cuts in the budget and two percent property tax cap. In other words the fiscally conservative things we have done to try and…get rid of the structural deficit in the State of New York. And that means continual cuts,” DeFrancisco said.
The first place he said he and his Republican colleagues in the Senate majority see that happening is in Medicaid. “That’s the part of the budget that keeps rising exponentially and has to be dealt with in a way that will have year-after-year savings,” he said, pointing to a number of areas, such as limiting what Medicaid will cover and enforcing prescription copays.
The other major area of the budget that will likely come into play is the other promised four percent spending increase made by Cuomo last year—to education. The issue is not whether the spending will go up, but about who will get it and if it will be enough.
“I really think this whole aid to education is going to be a sticking point, and how it's being divvied up,” said Assembly Republican Minority Leader Brian Kolb. He was critical of what he called the Governor’s “cookie cutter approach” and that upstate and poorer districts weren’t getting what they need.
“This is not about teachers, this is not about defending the status quo,” Kolb said. “It’s going to come down to how well we spend the money we do have."
Bob Ward of the Rockefeller Institute at the University of Albany thinks there could be a push to increase the amount the state spends.
“I think the key question will be, can more dollars be found to add to the existing four percentage increase? Certainly the legislature will want to do that.” Ward said. “The teachers unions will be pushing very hard for increases."
Other than the budget, the biggest outstanding issue facing elected officials going into the next session is redistricting. As we wait for LATFOR--the joint legislative task force responsible for drawing districts--to release maps, many see this unresolved issue playing a big role in the early part of the session.
“One of the overriding issues that is out there is [redistricting] and that is something that is keenly important to each of the members, on both sides of the aisle, in both houses,” said Nick Spano of Empire Strategic Planning, an Albany-based consulting firm.
The big question is whether the Governor can negotiate some sort of deal, knowing that he’s vowed to veto any lines that weren’t drawn in a non-partisan fashion. If a deal can’t be put together soon the battle over the lines could be happening in the midst of the budget process, even becoming part of the negotiations.
“If it’s tied to the budget, March will be one of the busiest months we’ve seen in Albany,” said NYPIRG’s Bill Mahoney.
The contentious debate over whether New York should allow hydrofracking upstate will continue to develop as an issue during this session.
“Hydro fracturing will be a big fight over the next year,” said Senator Krueger, who has been an outspoken opponent of the drilling process.
As the state continues to review the process, Kyle Kotary of Empire Public Affairs, an Albany-based PR firm, said he believed “the economics will win” when it comes to hydrofracking.
“If it turns out to be a billion dollar economic boon, I think you're going to find the Governor and thelegislature finding the most environmentally green and sound way to tap into that economic benefit and that energy self-reliance,” Kotary said. “If it turns out to be a billion dollar boondoggle, it's not going to go anywhere because the dollars are either there or they're not. “
As part of the recent tax reform package the legislature affirmed it would likely pursue the process of changing the state’s constitution to make gambling legal in New York.
The Governor has made it clear he’s supportive of the idea, but the devil is in the details, as always. The debate over whether to simply expand operations in areas that already have forms of gambling, or whether to come up with a new system for locating Las Vegas-style casinos in areas will be the real battle. This year, though, expect a more broad discussion as the Governor and legislatures work to pass one of two consecutive-session votes in favor of legalizing gambling.
Economic development and jobs
In a number of conversations the subject of continued economic development being a priority for the Governor was mentioned. This past year’s establishment of regional economic councils gives Cuomo and the legislature a framework to look for more ways to spur job growth. This will likely be an issue pushed hard by Team Cuomo.
“It all begins and ends around the economics,” said Mercury Public Affairs’ Tom Doherty. “The focus is going to be how to balance the budget and at the same time continue to attract jobs to New York.”
Campaign finance reform
“Cuomo promised during his campaign that this will be one of his top priorities,” noted NYPIRG’s Mahoney, but so far there’s been little movement on the issue. Expect Democrats in the legislature to push the issue this session.
Pension reform is another issue the Governor had in the past brought up but which seems to have faded. But that doesn’t mean everyone’s forgotten: In an op-ed today, New York State Republican Chairman Ed Cox challenged Cuomo to live up to that pledge. But if a new pension tier or reform is pursued, New York State Comptroller Thomas DiNapoli said that has to involve multilateral negotiations.
“If there’s going to be serious discussion about a new tier, in the past, as I’ve said, labor has to be part of that discussion, the Comptroller said.
“The tea party wing of the Republican Senate scuttled a deal that was reached" on the federally-mandated health care exchanges, said Senator Michael Gianaris of Queens. He hopes this session will see a resolution that will bring New York in compliance with the law.