An argument erupted between the Cuomo administration and the State Comptroller over the Governor’s budget plan, in a dispute that underscores existing tensions between the two.
Comptroller Tom DiNapoli issued his annual analysis of Governor Cuomo’s state budget. It began with praise for the governor’s efforts to continue a long term trend to balance the state’s budgets and to cut down on New York’s formerly notoriously high future budget deficits.
But the report then lists several “concerns," including some proposals that would increase the state’s already large debt burden, and reliance on temporary one shot revenues and federal aid that the report says might not materialize. DiNapoli also thinks the Governor may have too rosy a projection of future tax revenues.
The Comptroller did not speak publicly about the report, but his Chief Deputy Comptroller, Robert Ward, outlined the findings.
“We raise some concerns about rising levels of debt,” said Ward. “And a number of other issues related to structural balance that we feel are important for the legislature and the public to be made aware of.”
Governor Cuomo did not address the criticisms personally, but his Budget Director, Robert Megna, held a conference call to refute the charges. Megna did not directly criticize the Comptroller, but instead blamed DiNapoli’s staff.
“We believe the Comptroller’s staff did him a disservice,” said Megna, who says the report “misrepresents or just totally gets wrong some things that are in the budget."
One of the items that the Comptroller takes issue with is the governor’s one time sweep of $1.75 billion dollars from the State Insurance Fund, which was set aside for worker’s compensation claims. Deputy Comptroller Ward explains.
“The state should not be counting on them to offset ongoing expenses,” said Ward. “If they are to be used it should be for one time purposes.”
Ward says Cuomo and his budget division have said they would use the money for one time expenses, but he says the actual budget legislation “does not explicitly say so."
Megna denies that the sweep of state insurance funds is a one shot, something frowned upon and criticized in past budgets in New York. He says the governor plans to reform the entire worker’s compensation system, and so the money will no longer be needed to pay out claims.
“I think the Comptroller’s staff misses the point,” Megna said.
Overall, the comptroller finds that the governor’s budget relies on $10 billion dollars in non recurring revenue, which is generally considered a poor choice.
But Megna says half of that money is federal relief funds for Sandy repairs and is a one time expense.
“I hesitate to use the word misrepresentation,” said Megna. “It must be a classic misunderstanding.”
The Comptroller accuses the governor of increasing the state’s reliance on so-called “back door” borrowing - using state authorities to borrow money for various projects instead of going to the voters directly.
Megna denies that charge. He says borrowing will remain flat, and capital projects will be paid out on a pay as you go basis.
As for the charge that future tax revenue projections are overly optimistic, Megna says the comptroller’s report displays a “basic misunderstanding” of the recent changes in federal tax policy that have changed when taxpayers report their annual income.
Deputy Comptroller Ward says he finds the budget director's digs against the Comptroller’s staff “puzzling” and “off base," and he says Megna is missing the point of the Comptroller’s budget review, which happens every year.
“Comptroller DiNapoli and any New York State Comptroller is an independently elected official,” says Ward, who says DiNapoli has conducted an “independent” budget analysis.
The disagreement spilled over to Twitter. Cuomo’s chief of staff, Josh Vlasto, tweeted:
.@thomaskaplan facts are facts and our budget numbers are open and clear. Budget office is always available to talk OSC through them.— Josh Vlasto (@JVlasto) February 13, 2013
And Comptroller DiNapoli responded:
On the budget, the facts speak for themselves.Read my office's analysis here:bit.ly/VbibUm— Tom DiNapoli (@NYSComptroller) February 13, 2013
The dispute comes amid continued tensions between the governor and the comptroller, who have never had a close relationship.
It also comes as the Comptroller is deliberating over an even more important proposal in the governor’s budget, a bailout plan for local governments who are drowning in ever-rising pension payments. The governor’s pension stabilization plan would allow municipalities and schools to pay less for pensions now, but more later. The Comptroller has not yet passed judgment, saying he has concerns and is still reviewing the proposal.
Assembly Speaker Sheldon Silver, who was instrumental in helping DiNapoli become Comptroller, has already said that the Assembly won’t approve the governor’s pension bailout plan unless the Comptroller says it’s okay.