Taxes & Spending

Cuomo’s N.Y. Budget Follows Christie’s Lead

New York Gov. Andrew Cuomo (D) and legislative leaders in the state announced an agreement on the governor’s first budget over the weekend, offering hope for the first on-time budget in New York in five years.  The budget deal represents a major victory for Cuomo, as his budget is expected to pass largely unchanged from his original proposals.  Assembly Speaker Sheldon Silver (D) lamented, “The governor is extraordinarily strong and powerful right now.”

Based on some of the provisions in New York’s budget, the same might be said about another relatively new Northeast governor—because Cuomo’s budget bears a striking resemblance to the first-year budget of Republican New Jersey Gov. Chris Christie.

Cuomo’s $133 billion spending plan has three main elements:  It reduces overall state spending versus the previous year, it makes cuts to education and health care programs, and it closes a $10 billion budget deficit without new taxes.  Overall spending would be reduced by nearly 3% under the plan, including cuts of more than $450 million in operating costs for government agencies, which is expected to result in layoffs of state workers.  On education and Medicaid spending, the budget calls for a two-year appropriation, essentially fighting next year’s battles on those two contentious issues this year.

By comparison, Christie’s first budget closed an $11 billion shortfall with across-the-board cuts in every agency and department of the state government, some of as much as 39%.  Christie’s budget reduced state aid to education by $800 million on top of the state withholding $475 million in unspent aid to schools from the prior year’s budget.  The governor also cut state aid to municipalities by $445 million in reducing state spending by 9% from the last budget of the Jon Corzine administration.

The similarities don’t end there.  Christie’s first budget battle featured a tax fight with legislative Democrats over the governor’s refusal to extend an income tax surcharge on so-called millionaires.  Democrats in control of the legislature passed two bills authorizing the tax on incomes of more than $400,000, only to see them vetoed within the hour by the governor.  In his veto message, Christie chided Democrats, calling tax increases, “the failed, irresponsible, and unsustainable fiscal policies of the past.  Now is not the time for more of the same,” Christie wrote.

In refusing to use tax increases to balance the budget in New York, Cuomo too refused legislative Democrats’ insistence on extending the state’s deceptively named “millionaire’s tax,” actually a 2% surcharge on incomes of more than $200,000.  Silver said he will pursue separate legislation to get the tax reinstated just as New Jersey Democrats attempted, calling it “the right thing to do.” 

But Cuomo is just as insistent.  Echoing Christie, Cuomo said that the tax represents, “the old way of solving the problem.  We just can’t do that anymore,” Cuomo told reporters recently.  “The working families of New York cannot afford tax increases.  The answer is going to have to be that we’re going to have to reduce government spending,” he said.

Democrats in the legislature have only to look across the Hudson River to see the likely outcome in their tax battle with the governor.  Should they manage to get an increase through the Republican-controlled state Senate, Cuomo’s veto would likely stand, just as New Jersey Democrats failed to override Christie’s.

If New York Democrats are wondering where Cuomo will go next once the budget is finalized, they have only to look across the Hudson again.  Immediately after his first budget passed last year, Christie turned his attention to capping property tax increases in New Jersey, proposing a state constitutional amendment that would limit increases to 2.5% annually without voter approval.  Ultimately, Christie won a 2% statutory cap with limited exceptions and including a referendum requirement for higher increases.  Cuomo has also proposed a 2% property tax cap for New York , but his proposal has so far been unacceptable to assembly Democrats.   

In his second budget address last month, Christie claimed credit for a raft of budget-cutting proposals nationwide.  Asked specifically about New York’s budget deal, Michael Drewniak, Christie’s spokesman, told HUMAN EVENTS the highlights of the deal, “look familiar to us.”  But he was circumspect about whether Christie’s policies had an impact beyond the state’s borders. 

“Gov. Christie has noted and credited Gov. Cuomo with being vocal about those common challenges and, in many ways, proceeding similarly in recognizing the need for shared sacrifice, spending cuts and discipline, and the pitfalls of imposing new and higher tax increases,” Drewniak said. 

“I suppose [Christie] can take credit for establishing this as the new normal, and taking the lead last year in facing down these realities that are now being taken up by a new class of governors around the country.  In Gov. Christie’s view, these are the fights that must be had in the states and at the federal level to ensure that future generations have the opportunity to prosper.”

Christie himself was more direct in his budget address last month.  He specifically cited Cuomo and California Gov. Jerry Brown (D), along with Republican governors in Florida, New Mexico, Ohio, and Wisconsin, to bolster his case that New Jersey—and by extension his policies—is helping lead the nation in a new direction.

Andrew Cuomo’s first budget seems to prove the point.


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