After a history of budget stalemates and missed deadlines, the New York State Legislature Thursday passed a $132.5 billion fiscal 2012 budget during a late-night voting session.
The budget does not include new taxes and closes a $10 billion deficit. Fiscal 2012 begins April 1. Lawmakers also passed a five-year, $43.5 billion capital spending plan on Wednesday, which includes $5.6 billion of borrowing in fiscal 2012, according to the Senate Finance Committee.
The all-funds budget cuts year-over-year spending by $3.6 billion, or more than 2%. The plan includes $88 billion of state operating spending, which is $1.2 billion, or 1.4%, more than fiscal 2011 spending levels, according to the administration of Gov. Andrew Cuomo.
The budget limits spending for education and Medicaid in fiscal 2012 and fiscal 2013 to help cut combined budget deficits for the next four years to $10 billion from $63 billion. The plan also merges agencies and authorities to generate $50 million of savings and cuts workforce expenditures by $450 million. Additional savings will come from eliminating 3,700 prison beds.
“The budget changes the way our state works in many, many ways,” Cuomo said in a video budget message posted to the governor’s website. “It closes the current $10 billion deficit. It cuts waste and inefficiency and begins significant consolidation of our state government. It overhauls our economic development efforts to create good jobs for New Yorkers throughout the state.”
The budget reduces state aid to school districts by $698 million, or 3.5%. Including $608 million of federal spending cuts, overall school aid will decrease by $1.3 billion to $19.6 billion. Municipal aid is also reduced by 2%.
Carol Kellerman, president of the Citizens Budget Commission, describe the broad outlines and the on-time passage of the budget as an achievement. She noted that the budget implements cuts in areas that are difficult to contain, such as Medicaid and education, and does not include “creative financing gimmicks,” or raise taxes. Kellerman said there are some uncertainties in the spending plan.
“There are some big unknowns about how this will actually operate, in particular with respect to the spending cap in Medicaid that’s supposed to be either determined by providers or implemented by the commissioner of health,” she said. “We don’t really know how that will work and we don’t really know what will happen when specific prison closings are determined.”
While cities, towns, and school districts will receive less state funding, Kellerman said the on-time state budget allows localities to move forward with their spending plans and avoid the uncertainty of a state-level budget stalemate. Still, municipalities will have to absorb reductions in funding.
“The downside is that there are many cuts and there isn’t corresponding relief from unfunded mandates so school districts will have to tighten their belts, in particular New York City,” she said.
The CBC is a nonpartisan think tank that analyses the budget and finances of New York State and New York City.
