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2012 Budget

The Empire

The Empire's 2012 Legislative Session Preview

Friday, December 30, 2011

Will the Governor have another MVP year? (Courtesy of the Governor's office.)

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.

The budget

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.

Health care

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.

Education

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."

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Transportation Nation

Obama Puts Money on Houston's METRO

Tuesday, February 15, 2011

(Houston - Laurie Johnson and Wendy Siegle, KUHF News) There could be more money on the way for Houston's light rail system. President Obama's proposed budget for fiscal year 2012 sets aside a hefty $128 billion dollars for transportation projects across America - a 66% increase from 2010. It’s part of a new six-year transportation bill, pegged at $556 billion dollars. "We view this as a big win for public transit," said Peter Rogoff, the Federal Transit Administrator. Obama's budget includes a record $3.2 billion dollars for 21 capital transit rail and bus projects.

If passed, METRO's light rail project would receive another $200 million allocation - that's up $50 million from last year. The money would go towards the construction of the North and Southeast rail lines. George Greanias, METRO's president and CEO, points out that the proposed money is in addition to the $300 million already allocated to the agency. "We worked very hard last fall to regroup after a very difficult summer," Greanias said. "And I think the way we approached that regrouping work has made an impression on the Federal Transit Administration (FTA), on the Obama Administration."

The transit authority got in trouble with the FTA last year after a four month long investigation found the previous METRO administration had broken federal Buy America laws when it handed over two light rail contracts to a Spanish rail car manufacturer. That violation put $900 million dollars in federal grants on hold. METRO was able to come to an agreement with the Spanish company, ultimately canceling its contract in December. The settlement helped put METRO back on track to qualify for the total federal funds.

Obama's $200 million dollar bump for METRO is part of that pending $900 million dollar grant. Rogoff says there's no question last year's debacle delayed METRO's funding. But he says members of METRO's new administration have been willing to work with the FTA to fix the situation. "We have always said that we were not going to punish the commuters of Houston for the misdeeds of prior METRO leadership," Rogoff said. "And I think the amounts of money we have for both these lines in the budget reflect that." He said the FTA expects to finalize the full funding grant agreements before the end of 2012, and adds that both rail projects are on the list.

The transportation money is part of the Obama Administration’s latest $3.7 trillion dollar budget proposal that would slash spending by 2.4 percent.

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Transportation Budget Responses 5: Senator Jim DeMint

Monday, February 14, 2011

President Obama released his proposed budget for 2012 this morning. We are collecting responses and parsing through everything transportation and infrastructure related in the $3.7 trillion dollars of spending.

We'll be posting various responses and a round-up at the end of the day.

U.S. Senator Jim DeMint (R-South Carolina), chairman of the Senate Steering Committee, issued a harsh critique of the president's budget as spending too much, expanding federal power, and for raising taxes on oil, coal and gas producers.

Much of his response does not have to do with transportation, but he does mention the 68% percent increase over last year's spending levels as evidence of Obama's fiscal irresponsibility.

From DeMint's statement:

“One-third of the President’s claimed ‘savings’ are tax increases so the Democrats can keep up their big-government spending plans. Instead of increasing Washington’s control over areas like education and transportation, we need to devolve these decisions back to the states. It’s time to change course, stop the wasteful Washington spending and begin making the hard decisions to save our nation from the coming fiscal crisis.”

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Transportation Budget Responses 4: U.S. PIRG

Monday, February 14, 2011

The U.S. Public Interest Resource Group likes the allocation to infrastructure in the President's budget.  We'll be posting statements as we get them...and rounding up what's in the budget at the end of the day.

From a U.S. PIRG statement:

Statement by U.S. PIRG Senior Tax and Budget Analyst Phineas Baxandall, on the Obama administration’s FY 2012 transportation budget proposal, which includes a major increase in transportation funding and an $8 billion annual investment in high-speed rail.

“The administration’s budget request proves that President Obama is serious about investing in the future, while bringing much-needed reform to our broken transportation system.”

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Transportation Budget Responses 3: American Public Transportation Assocation

Monday, February 14, 2011

The American Public Transportation Association is pleased with transportation spending levels in the budget, which, if it passes unchanged, would mean a 60 percent increase over last year. The APTA also likes Obama's proposal of a $30 billion infrastructure bank.

President Obama released his proposed budget for 2012 this morning. We are collecting responses and parsing through everything transportation and infrastructure related in the $3.7 trillion dollars of spending.

We’ll be posting various responses and a round-up at the end of the day.

From the APTA statement:

“We applaud President Obama for his leadership and vision in making public transportation and high-speed rail programs a high national priority,” said APTA President William Millar. “Given the difficult federal budget environment and the need to grow jobs and the economy, the President’s proposal recognizes the difference between spending and investment.”

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Transportation Nation

Transportation Budget Responses 2: US DOT, Sec. Ray LaHood

Monday, February 14, 2011

President Obama released his proposed budget for 2012 this morning. We are collecting responses and parsing through everything transportation and infrastructure related in the $3.7 trillion dollars of spending.

We’ll be posting various responses and a round-up at the end of the day.

Here's the official response from the U.S. Department of Transportation. Not surprisingly, Secretary of Transportation supports his boss' budget noting that the $129 billion budget for the Department of Transportation is part of a six-year plan to help "win the future," the emerging slogan of the Obama administration introduced in his State of the Union speech.

A 52 page summary of the DOT budget is online here if you have the printer ink for it.

From the DOT Statement:

“President Obama’s budget for the Department of Transportation is a targeted investment in America’s economic success,” said Secretary LaHood.  “If we’re going to win the future, we have to out-compete the rest of the world by moving people, goods, and information more quickly and reliably than ever before.  President Obama’s investments in rebuilding our crumbling roadways and runways, and modernizing our railways and bus systems will help us do just that.”

Nationwide, our transportation systems are already congested and overburdened.  With the United States’ population expected to grow from more than 300 million in 2010 to more than 400 million by 2050, rebuilding and expanding the capacity of our roads, airports and transit systems is a strategic necessity for long-term economic growth.  The transportation investments proposed in President Obama’s FY12 budget will put Americans to work repairing the bridges and repaving the roads we have now, while supporting the development of the new electric buses and high-speed rail lines of America’s future.

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Transportation Nation

Transportation Budget Responses 1: from Transportation for America

Monday, February 14, 2011

President Obama released his proposed budget for 2012 this morning. We are collecting responses and parsing through everything transportation and infrastructure related in the $3.7 trillion dollars of spending.

We'll be posting various responses and a round-up at the end of the day.

Transportation For America, a transportation reform group that wants to see more investment in infrastructure likes the budget. 

James Corless, director of Transportation for America, issued this statement (excerpted below):

“The President’s proposed budget delivers on his recent promises to ensure we have the 21st century infrastructure necessary to support a revitalized American economy. While we believe the President is right to pursue a front-loaded investment in this budget that will boost employment in everything from construction to manufacturing, we are most excited by the bold proposals to ensure that the money is spent wisely and accountably.

“The Administration’s visionary reforms recognize where we are at this moment in history: Having built the world’s best highway and bridge network, we have to focus on preserving those aging assets while we build the missing pieces of a modern system that allows people and goods to get where they’re going cheaply, conveniently and safely. The Administration is right then, to propose a “fix it first” policy that will ensure that transportation agencies stop siphoning off money intended to rehabilitate bridges and highways. Equally smart are proposals to reward innovation through competitive grants that emphasize greater efficiency, broader and more affordable options and reduced dependency on foreign oil."

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