New York state’s new budget for 2021-22 isn’t just a budget of excess.
It’s a budget of poor decision-making, sloppiness and missed opportunity that will saddle New York taxpayers with mountains of taxes for years without having fixed the state’s most serious problems.
The covid crisis once threatened to devastate state finances and add to the state’s burgeoning debt. President Trump and congressional Republicans could not be relied on to provide fiscal relief to blue states devastated by the pandemic, meaning New York was likely to have to undertake serious austerity measures just to keep its finances afloat.
In the wake of the doom and gloom, school districts cut staff and programs in anticipation of a decline in state aid. Municipalities prepared for budget cuts and for raising taxes. Everything from education to infrastructure to health care was potentially on the chopping block.
But that all changed on Nov. 6, when Democrat Joe Biden was elected president and New York Sen. Charles Schumer was elevated to majority leader of the U.S. Senate.
That opened the door to the distinct possibility that New York would indeed get some kind of massive fiscal relief package needed to stave off the deep financial problems on the horizon.
With almost five full months until the state’s April 1 budget deadline, that was the time for the governor and state legislative leaders to formulate a plan for that money to target the state’s most pressing needs — education in poor school districts; aging infrastructure like roads, bridges and water and sewer pipes; inadequate funding for nursing homes and medical care and prescriptions; and unemployment benefits for those affected by the economic crisis.
Instead, they treated the windfall like a drunk person who’d won the lottery, raising the overall state budget $18 billion, to a record $212 billion, and handing out money to whoever wanted it, whether that school district or municipality or government program demonstrated real need or not.
You don’t buy a Mercedes until you feed the kids and fix the leaky roof.
The result is that even with significant help from the federal government — money the state never would have gotten were it not for this crisis — New York still has significant problems to solve and not enough money to pay for to fix them.
For example, an analysis by the Empire Center for Public Policy on the impact of the state budget on healthcare showed the spending plan did little to address rising Medicaid costs that preceded the pandemic and helped create the last budget deficit.
Nor did the budget address the fundamental shortcomings in the state’s medical delivery system that were exposed when the pandemic hit and hospitals and staff were overwhelmed and underprepared.
On education, lawmakers did fulfill a long-denied promise to boost foundation aid to poor school districts, with many of the state’s smallest and most rural districts like Duanesburg, Fort Plain, Mayfield and Schoharie expected to receive about 3% more next year. Albany, Amsterdam and Schenectady will see 10% increases.
That’s all necessary and long overdue.
But then lawmakers also threw significant money at districts that didn’t necessarily need a giant boost to get over their financial troubles, with some districts like Saratoga Springs, North Colonie and Niskayuna seeing a 20% increase in their foundation aid.
As a result, New York will solidify its position as the state that spends by far the most on education per pupil in the nation.
That money could have been used either to provide more support for rural districts or applied to other needs in the budget.
Another example of unnecessary wasteful spending was the Legislature’s decision to add $385 million to the political slush fund known as the State and Municipal Facilities Program.
The fund receives money in the state budget for municipal projects.
That would seem like a legitimate use of state money. That’s what it’s there for, right?
There are no public hearings or debates on how the money is spent, which means it likely goes to those favored by the govenror and legislative leadership, at the expense of the districts of lawmakers who don’t have the same political clout.
The budget also includes controversial new funding, like $2.1 billion for the Excluded Workers Fund, which provides up to $15,600 to about 300,000 undocumented workers who didn’t get federal stimulus relief.
While helping out these overlooked individuals might be reasonable, the state is being overly generous.
California, which provides the largest benefit in the country, only gives $500.
Some of the spending increases will be paid for with new taxes on wealthier individuals and businesses (potentially giving them a new reason to move out of the state), and with new revenue streams like online gambling and recreational marijuana.
Those who received increased or unexpected funding from the budget are no doubt elated. And the budget did address some shortcomings of the past.
But overall, this was a missed opportunity for New York to use an unprecedented boost from the federal government to get its fiscal house in order and address its most serious problems.