The coronavirus pandemic has just claimed its first big institutional victim: the New York state Legislature, which handed Gov. Andrew Cuomo broad and unprecedented leeway to cut state spending in the fiscal year that began Wednesday.
Under the circumstances, the Assembly and Senate really had little choice. Lawmakers in both parties know full well they lack the stomach for cutting — actually cutting — spending, much less approving historically large budget reductions. And they know better than to quarrel with Cuomo’s estimate that tax receipts have dropped a previously unthinkable $10 billion to $15 billion from the pre-pandemic forecast.
Meanwhile, the economic situation is in greater flux than ever seen at the start of a fiscal year. No one knows how big a budget bailout the state might actually receive from an expected fourth federal stimulus bill in a few months. Yet it’s highly unlikely to fill the entire gaping hole in New York’s budget.
So what can Cuomo now do, and when can he do it? The local-aid budget bill details the basics:
- Through his budget director, the governor will determine whether the budget is balanced during three “measurement periods”: April 1 to April 30, May 1 to June 30, and July 1 to Dec. 31.
- If the budget is unbalanced during any of those periods, the governor will be empowered to “adjust or reduce” any appropriation to restore balance, and those cuts shall be across-the-board — although he can also target “specific appropriations as needed.”
- Prior to making any adjustments or reduction, the budget director must notify the legislative fiscal committees in writing — and the Legislature has 10 days following receipt of that notice to prepare and approve its own plan.
- If the Legislature fails to approve its own plan, Cuomo can go ahead and implement his own cuts.
This is not quite the dictatorial overreach portrayed, both in private and on social media, by some lawmakers, especially Republicans.
First, it is temporary — this year only.
Second, as noted above, if legislators don’t like Cuomo’s cuts, they can enact their own alternative plan “by concurrent resolution,” via a combined vote of both houses — a crucial distinction, because such resolutions cannot be vetoed by the governor.
In the meantime, even now, Cuomo and the Legislature aren’t actually cutting spending — yet.
School aid, the largest piece of the budget, is essentially held flat in the final local-assistance bill. Even including “savings” recommended by Cuomo’s Medicaid redesign team, the adopted budget won’t cut Medicaid spending below this year’s levels, either.
So Cuomo and his budget director, Robert Mujica, can’t lose time. They need to make the first big budget cuts in the April measurement period — starting with school aid, which still must be significantly reduced.
This piece first appeared at the New York Post
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E.J. McMahon is an adjunct fellow at the Manhattan Institute and research director at the Empire Center for Public Policy. Follow him on Twitter here.
This piece originally appeared in New York Post