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New York State Budget

The Empire

Details emerge on Cuomo's tax reform package

Tuesday, December 06, 2011

Courtesy of the Governor's office

Details are still emerging on Governor Andrew Cuomo’s tax overhaul that state legislators are expected to review either later this week, or early next. But the basic elements of an agreement, according to news reports, appears to have been reached.

The assiduous Nick Reisman at Capital Tonight reports that the administration will seek to expand the tax breaks to five new ones. Upper-income earners will get relief from the upper-income “millionaires’ tax” surcharge, but will pay more than what they would if rates were to reset to pre-surcharge levels at the end of the month. Middle income earners will, according to a number of reports, be looking at a tax cut.

According to Reisman, the new brackets would be:

  • $40,000 and below
  • $40,000 to $150,000
  • $150,000 to $300,000
  • $300,000 to $2 million
  • $2 million and higher

Jimmy Veilkind at the Times-Union has a great review of current and potential tax brackets here, just as a reference. The tax plan would raise an estimated $1.9 billion for the state, which isn’t quite enough to fill that $3.5 billion hole Cuomo expects next year.

The economic package, as the Governor is pitching it, would also include some non-tax pieces according to Ken Lovett of the Daily News:

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The Empire

Assembly to head back to Albany for special session next week

Friday, December 02, 2011

By Karen DeWitt, New York Public Radio Capital Bureau Chief

The New York State Assembly is coming back to Albany next Tuesday for an afternoon conference, and possibly a special session. Governor Andrew Cuomo has been seeking help from the legislature to close the growing budget deficit.

Assemblymembers have been told by Assembly Speaker Sheldon Silver to come back to the Capitol for a 3 pm conference on Tuesday. They will go into session afterward if there’s anything at that time to vote on.

Governor Cuomo said earlier this week that “there is a need” for a special legislative session to address a $350 million dollar budget gap in the current fiscal year, and a growing $3.5 billion dollar gap for next year.

Among the items Cuomo is seeking is an overhaul of the state’s tax code, with could result in higher taxes on the wealthy, along with tax incentives to help spur job creation. Other steps could include budget cuts or one time revenue raisers. Another option, Cuomo says, is that he could ask the legislature for authority to make the decisions on specific budget cuts.

A Senate source on the Democratic side said they was confident they would be back as well. However, Senate Republicans say they have not scheduled anything for next week at this time.

With Colby Hamilton

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The Empire

Cuomo: State budget numbers 'collapsing quickly'

Monday, November 28, 2011

By Karen DeWitt, New York Public Radio Capital Bureau Chief

Getty

Governor Andrew Cuomo is not ruling out a special session of the legislature in December to deal with a growing state budget deficit.

Cuomo, who is facing a $350 million dollar budget deficit this year, and a $3.5 billion dollar hole in next year’s spending plan, says there’s a need for a special session of the legislature. But he says he won’t call back lawmakers just for the “theater” of it, and will first try to agree on a deficit reduction plan with legislative leaders.

“There’s no doubt that the numbers are collapsing,” said Cuomo. “And collapsing quickly.”

The governor says there are budget reductions that he can do on his own, without the legislature, or he could simply ask the legislature for authority to cut the budget, without requiring lawmakers to agree on a specific plan. He would not say whether large payments due to schools and local governments in December would be deferred, saying all options are on the table.

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The Empire

Bronx State Senator pushes for continued foreclosure relief

Tuesday, November 22, 2011

Courtesy of Sen. Klein's office.

Governor Andrew Cuomo may be talking about as much as a $3.5 billion budget gap next year, but that didn't stop State Senator Jeff Klein, the leader of the Independent Democratic Caucus, from arguing that the state needs to continue partially funding foreclosure services programs.

"We know that many programs and agencies faced similar circumstances in last year’s budget as everyone worked with Governor Cuomo to balance the finances of New York and put our great state back on track. We also know that each of these programs and agencies did important work all of our communities," said a report put out by Klein's office yesterday. "But we argue that the benefits of legal services and foreclosure counseling for struggling homeowners in New York is too great to ignore and the chance of not funding them for a second budget cycle in a row is too risky."

The reported said that a $50 million program to prevent foreclosures assisted 80,000 homeowners and saved at least 14,000 homes. With 250,000 homes in danger of, or going through the process of foreclosure, the report argues, the math makes the case: the loss of these homes would cost an estimated $61 billion in reduced property value and lost taxes.

“Preventing foreclosures not only keeps hard-working New Yorkers in their homes now, but saves our neighborhoods from devastating ripple effects later,” Senator Klein said in a statement. “We know that this will be another tough budget year - that's why we're starting this discussion early in order to help protect our neighborhoods and preserve the American dream across New York.”

As the Times-Union's Jimmy Vielkind noted on this yesterday, Klein managed to bring some interesting support to the press conference on this yesterday:

It’s also interesting to me that Klein, ringleader of the Independent Democratic Conference, is uniting in this way with Senate Democrats, some of whom are open in their disdain for his renegade klatch.

Perhaps this portends a coming soothing. Or at least courtship.

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The Empire

Cuomo: Supercommittee failure 'the last thing we need'

Tuesday, November 22, 2011

Courtesy of the Governor's office.

In a set of radio interviews with Albany political reporters Fred Dicker of the New York Post and the Capitol Bureau's Susan Arbetter, Governor Andrew Cuomo blasted the Congressional budget deficit "supercommittee" for failing to come up with a plan, which--at least for now--triggers some $1.2 trillion in Federal spending cuts.

"To the extent it roils the financial markets, it roils the New York economy and the New York budget," the Governor said during Dicker's show this morning.

This point speaks to the heart of what Cuomo's office is now worried about. The earlier statements about 155,000 jobs being lost and the cuts to Medicaid and transportation spending are off the table--at least for now. The focus is, first, on the $5 billion over 10 years figure his office put out yesterday. That averages to less than one half of one percent of the state's budget--not a doomsday figure, as I pointed out yesterday.

But it was pointed out by an official in the administration that, last year, Cuomo asked for a 10 percent cut from agencies that resulted in $1.4 billion in savings. The $500 million figure is talking about direct Federal funding into the state's coffers--money that does help with things like infrastructure, education and other important, non-entitlement services.

But this isn't the real point of concern. "The $5 billion is the tip of the iceberg," the Cuomo administration official said.

The bigger issue for the Governor's office, which he was point out today, was the broader effect the uncertainty coming out of Washington will have on the economy. The most significant short term issue is with Wall Street.

To the extent this destabilizes the market...it's very bad for us," Cuomo said. As it stands, the Dow Jones Industrial Average is down again today. Continued losses on Wall Street--for good or bad--means less tax revenue for the state, and a grimmer budget situation for next year.

"There's a confidence deficit," he said. That issue, the thinking goes, is more of concern than even the direct cuts we could face if the "sequestration" as it stands ends up lopping a trillion dollars out of the Federal budget. A continued lack of confidence--in government, in the recovery--could lead to more widespread economic problems.

That, again, is how the thinking goes at least. The fact of the matter is, as the Governor stated, no one really knows what's going to happen. Which may be as bad, if not worse, than any agreement the supercommittee could have come up with.

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The Empire

Today: Radio Free Cuomo

Tuesday, November 22, 2011

The Governor is taking to the airwaves this morning. He'll be on Fred Dicker's radio program on 1300 AM out of Albany. You can listen to a live stream here starting at approximately 10:10 am.

Less than an hour later, Cuomo will be stopping by (calling in?) to Susan Arbetter's program, The Capitol Press Room, at about 11:07 am. That's also streamable, and you can catch it here.

Expect the Governor to talk about the Congressional "supercommittee" failing to come to a budget agreement and the impact this could have on New York State.

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The Empire

Cuomo on deficit supercommittee: FAIL

Monday, November 21, 2011

Courtesy of the Governor's office

It's official: the Federal Joint Select Committee on Deficit Reduction has failed.

And Governor Andrew Cuomo didn't have anything nice to say about the fact:

Washington's inability to get its fiscal house in order and work in a bipartisan fashion to create jobs represents a fundamental failure of government that has bred frustration and anger among the people and prolonged the worst economic conditions since the Great Depression.

That quote was taken from a statement put out by the Governor shortly before the final death cry of the supercommittee was heard. What were indefinite statements about how the "sequestered cuts"--the big $1.2 trillion in across-the-board and defense spending cuts triggered by the committee's failure--would affect New York can now be looked at as best estimates.

According to the statement, based on the current automatic cuts, "the Budget Division estimates that New York could lose approximately $5 billion in federal funding over 10 years beginning this coming fiscal year."

That $5 billion sounds like a big figure, but that averages out to $500 million per year. New York State's budget this year was nearly $133 billion, so we're talking about less than half of one percent of the budget. And considering the fact that Federal funds make up about a third of the budget, the impact on just the federal funds coming to New York State seems minimal.

No one wants to have to tack on more money to next year's budget gap--are we looking at being closer to $4 billion now?--but it's worth noting what wasn't in today's statement. Unlike last week's letter to the state's Congressional delegation, the Governor didn't mention the loss of 155,000 jobs or massive cuts to transportation, school aid or Medicaid.

Does this mean Cuomo's office now considers these areas safe for the most part? Today's statement didn't say.

This isn't to say there aren't larger, macro-economic impacts that cutting over a trillion dollars from the Federal budget could have. A good example: the markets closed down sharply today, with the Dow Jones Industrial Average down almost 250 points.These Federal cuts could come as a major economic shock to the system, hurting the already sluggish recovery.

Of course, these cuts wouldn't happen for more than a year. In numerous conversations about the impact of the supercommittee's failing, there was healthy skepticism about the cuts ever even coming about.

But that doesn't mean we should expect Cuomo to back down on the worst-case scenarios any time soon. "Sustaining a crisis mentality helps executives," noted SUNY professor Gerald Benjamin. Heading into another budget session, the Governor is surely looking for any help he can get. How and why, exactly, still remains to be seen.

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The Empire

Governor Cuomo conferencing with economic advisers over possible failure of Congressional supercommittee

Monday, November 21, 2011

Courtesy of the Governor's office.

Anticipating what Governor Andrew Cuomo's office is calling potential loss of billions in Federal aide dollars, a conference call later today with the Governor's Council of Economic and Fiscal Advisors will discuss how to handle the likely failure this week of the Congressional "supercommittee," which was charged with finding a bipartisan compromise to avoid massive cuts to the Federal budget.

The council was formed during the Governor's transition, and represents interests in labor, business, social justice and government. A statement on the substance of the call will come after, but one thing is certain: large-scale Federal cuts, triggered by the supercommittee's failure to produce a plan, will have an immediate impact on the state's budget outlook.

"I recognize the fiscal challenges facing Congress at this critical moment in our nation's history. Rising federal deficits and debt pose a serious threat to the economic viability of this nation and must be addressed in a bi-partisan way with shared sacrifice coming from all Americans," Governor Cuomo said in a letter to the state's Congressional delegation last week. "These are difficult times that require tough decisions. However, the burden of cuts or reductions in tax deductions must be shared evenly by all states and, as New York's representatives in Congress, I urge you to work to minimize the potential damage to New York."

The state receives nearly $40 billion in funding from the Federal government, according to the Governor's office, which represents nearly 30 percent of all funds in the budget. More than half of those funds help pay for Medicaid services.

The AP reported that the Governor's office is saying the triggered cuts could result in the loss of as much as 155,000 jobs--likely a high-ball figure. The most likely hits would come in areas like construction related to transportation and health care services. According to the administration, Federal funds support more than 670,000 jobs in New York State. An administration source said the job loss numbers were based on potential scenarios the state could face if Federal funds went into effect.

Likewise, concerns are being raised over the effect the committee's failure to reach a deal will have on Wall Street. As New York relies heavily on Wall Street profits to fill its tax coffers, a tumble in the markets could have an out-sized affect on next year's budget gap.

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The Empire

Senate Republicans current budget projections rosier than Cuomo's

Friday, November 18, 2011

The State Senate, lead by Senator Dean Skelos, released their budget today. As Michael Johnson at YNN's State of Politics Blog points out, the Senate and Assembly are coming up with very different figures for the current year budget.

[T]hey are projecting that all funds revenue will be $286 million higher than Cuomo’s budget division projects. The Assembly has predicted that revenue will be $187 million worse than the Governor’s forecast – putting the two chambers more than $450 million apart heading into next year’s budget negotiations.

He goes on to point out that the big underlying assumption of these numbers are arguments for and against the millionaires' tax. For the Assembly, a shortfall makes the case that now is not the time to be giving tax breaks. For the Senate, a better-than-expected tax situation makes the exact opposite case--that targeting upper-income earners now is both unneeded and irresponsible.

What nobody is arguing, however, is that next year's budget gap is in the $3 billion range.

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The Empire

Bad budget news continues

Friday, November 18, 2011

First there was the Assembly's "quick start" report released yesterday. There's a bit of uncertainty in the budget gap they see next year--whether it's a full $1.8 billion or if that figure takes into account the shortfall in this year's budget as well--but the message is the same.

[T]he [midyear report] notes that there are serious risks to the economic outlook of the nation and New York State. Problems that were central to the recent recession continue, particularly weaknesses in both the labor market and the housing market. Furthermore, a highly volatile stock market and the European debt crisis have created considerable uncertainty in the financial markets.

Today, State Comptroller Thoma DiNapoli's office heaped on the pile of budget downers with a release saying the October tax revenues were below expectations by $584 million.

“New York’s financial results over the past several months support the recent downward revisions to the State’s Financial Plan and reinforce recent Quick Start projections,” DiNapoli said in a statement. “It is more important than ever to confront our budgetary problems with responsible, recurring actions to ensure a fair and balanced budget that improves the health of our state’s economy.”

The Governor's office has said the budget gap next year could be as high as $3.5 billion.

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The Empire

Cuomo won't budge on millionaires' tax

Monday, November 14, 2011

In a radio interview with Capitol Press Room's Susan Arbetter, Governor Andrew Cuomo stated in no uncertain terms that the new gaps in the budget wouldn't be resolved by extending the millionaires' tax.

"That's my position," Cuomo stated, eluding to his opposition to extending the tax without saying so directly. "Im trying to deal with the hole we have today."

That hole means an additional billion or so dollar gap in next year's budget, and a $350 million shortfall in this year's. The Governor said today's budget report numbers weren't set in stone, but that concrete steps would need to be taken soon. But, for now, he said things will be looked at as provisional.

"I am not taking any dramatic action on these numbers," Cuomo said.

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The Empire

LIVE: Gov. Cuomo on the Capital Pressroom

Monday, November 14, 2011

Susan Arbetter's speaking with Governor Andrew Cuomo at 11:30 am today. You can be certain the worsening budget situation will be discussed. Click here for a live stream of the conversation.

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The Empire

Midyear budget projects potential $3.5 billion shortfall next year

Monday, November 14, 2011

The state's budget division just released its midyear fiscal report--two weeks later than expected--and as anticipated the reports doesn't have a lot of good news. Here's how the statement from the budget office characterized the situation:

Weak and unsettled economic conditions around the world -- illustrated by the Eurozone financial crisis, volatility in the financial markets, and persistently disappointing data on employment, consumer confidence, and income -- have darkened the State's fiscal outlook. The significant positive receipts results early in the fiscal year have been largely eroded as the economy weakened in the summer months. With the prospect of a weak bonus season on Wall Street, even more negative pressure is being placed on the State's receipts outlook.

Next year's budget gap has been revised upwards from about $2 billion to possibly as high as $3.5 billion. This is still nowhere near the $10 billion gap from last year, but it's not the direction anyone would like to see the State's finances headed.

Then there's a $350 million gap that's emerged this year. Governor Andrew Cuomo, according to the release, is looking to implement a plan for closing the gap. This could require breaking the legislature back to a special session. Either way, you can anticipate the calls for continuing to tax higher income earners to piggyback on this news.

The question is whether or not this report will be the thing that changes the Governor's mind. The report is after the jump.

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The Empire

Cuomo won't show his hand, leading to questions about what's up his sleeve

Thursday, November 10, 2011

Getty

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.

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The Empire

The Cuomo Doctrine and "grim" budget situation

Wednesday, November 09, 2011

"We are a progressive society," Governor Andrew Cuomo said on the Fred Dicker Show on 1300 AM out of Albany. "But we're tax payers and we want the government to run efficiency and effectively."

Thus the Governor articulated the Cuomo Doctrine. Not that this is anything new, but I'm not sure he's so clearly articulated. A progressive social doctrine, most easily identified by the push for same-sex marriage, buffeted by a high sensitivity toward tax issues and fiscal discipline. See the millionaires' tax and his battle with the unions.

Cuomo was also asked about the budget situation. Last week the Governor put the breaks on the annual mid-year fiscal report, claiming volatility in the stock market was leading to too much uncertainty for a projection to be made.

How are things looking now? "Grim."

He went on to say that "the news is not good" and that the current projections, when they're finished, will need to be looked at as guides for the upcoming budget. "These numbers are not just another forecast," Cuomo said. "We're going to have to make decisions on these numbers."

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The Empire

Three reasons Cuomo won't back down on the millionaires' tax (and one reason he might)

Friday, November 04, 2011

Update at the bottom.

Courtesy of the Governor's office.

It’s possibly the biggest issue facing Governor Andrew Cuomo heading into the next legislative session: the so-called “millionaires’” tax. Cuomo has held his ground against a growing chorus—including the leader of the Assembly, Speaker Sheldon Silver—that’s making the Governor’s opposition a real issue. The Occupation movement has changed everything, pitting the Democratic governor against protesters who are backed by major public support for extending the tax.

But there are three good reasons why Cuomo won’t back down—and a big one that could change his mind.

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The Empire

Cuomo delays state's fiscal reporting

Friday, November 04, 2011

By Karen DeWitt, New York Public Radio Capital Bureau Chief

Courtesy of the Governor's office.

Governor Cuomo’s budget office delayed releasing its annual mid-year budget report and future financial forecast. They cited uncertainties over the European debt crisis and delays in collection of some business taxes due to two hurricanes that hit the state in late summer for the delay.

The governor’s budget office planned to hold preliminary hearings on next year’s state spending plan during the first week of November. But the hearings have been postponed, as have the mid-year budget report and financial forecast.

“There are a number of factors that we’re weighing, there’s significant volatility in the market right now,” said Cuomo. “We want to make sure we have the best information possible, because we’re going to start to make real decisions based on this information.”

Those decisions include how much to spend on key programs like school aid and health care, the largest portions of the budget. After Cuomo and the state legislature cut $10 billion dollars in last year’s budget, they promised they would increase spending on schools and health programs by 4% in the next budget.

In addition, the cost of two devastating hurricanes that hit New York in late summer have yet to be tallied, says the state budget office. Cuomo estimates the total cost at more than a billion dollar, and granted business affected by flooding from the storms a delay in filing their quarterly state income taxes. Payments due September 15th were not received until November 1st.

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The Empire

Comptroller DiNapoli: budget problems ahead

Wednesday, October 19, 2011

From a new report on the state's fiscal condition released today by the Comptroller's office:

Growth in revenue collections in several major categories of taxes is slowing, and at the midpoint of the fiscal year, Personal Income Tax, sales tax, and business taxes are lagging recent projections by $400 million. If these trends continue, the state may need to adjust its revenue projections downward.

This is probably a major part of the problem. From Susanne Craig's post yesterday in the Times DealBook on Goldman Sachs and other Wall Street banks decreased profits:

New York, the nation’s financial hub, is bracing for the fallout. Wall Street, which accounts for 14 percent of the state’s tax revenue, is expected to lay off an additional 10,000 employees in the area by 2012, bringing total layoffs since 2008 to 32,000, according to a recent report by the New York State Comptroller.

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The Empire

DiNapoli: NYC and NYS budget shortfalls likely

Tuesday, October 11, 2011

WNYC reporting:

The State Comptroller's office says budget targets for New York City and New York state will likely fall short this year. The reason is a drop in Wall Street revenues.

Comptroller Thomas DiNapoli released the new forecast Tuesday morning.  It found that New York's tax revenues will be down about a third compared to last year.

"Keep in mind 2010 was a very strong year so, to put it in context, this is still going to be a good year and a profitable year, it just shows that some of the high profitability we saw last year you're not going to see again this year," DiNapoli said.

You can read the rest of the article here.

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The Empire

State budget report: $4.6 billion gap by 2015

Wednesday, August 03, 2011

Despite a spike in tax collections, the governor's budget office today released a report that took the wind out of the sails of anyone hoping for an improvement in the state's fiscal situation.

"Positive operating results through June 2011 compared the Enacted Budget forecast are
believed to be timing-related and do not provide a basis for revising the annual estimates of receipts or disbursements at this time," the report said.

The good news is that things aren't getting any worse. The reports says budget projections remain on track, we have $2.6 billion more in the bank than this time last year, and our operating budget is nearly $2 billion better off than expected.

In the coming weeks the state's two biggest labor unions--Public Employee Federation and Civil Service Employees Association--that represent 60 percent of the state's workforce, are set to vote on contracts that are a big portion of the $450 million in savings that are being counted.
2011-12FP_JulyUpdate

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