Gov. Kathy Hochul’s first state budget proposal is what some sports teams might call a “win-now-at-all-costs” budget.
While that might satisfy those happy to see New York climbing out of its financial abyss while filling immediate needs, it may not be what New Yorkers need long-term as taxes remain high and more residents flock to better, cheaper places to live.
This is a budget designed to promote goodwill, not solve structural problems.
The first sign of that is that while state spending in the governor’s budget will increase by $4 billion, it will not require new taxes and fees to support the extra spending.
But $4 billion doesn’t grow on trees. So where is the extra money coming from?
The current budget projections rely on about $22 billion in pandemic relief from the federal government over four years.
Once that aid dries up, the problems it was used to fix had better be resolved, or the state could be forced to raise taxes to sustain those efforts or be forced to cut them.
Another for-instance of win-now thinking: The governor plans to spend $2.2 billion for a property tax rebate program aimed at middle-class homeowners. That’s great.
But you know what’s also a good way to provide the middle class with tax relief? — lower government spending and cut taxes. That’s not what this budget does.
The governor is also making sure institutions like schools and state colleges get a boost in funding.
For K-12 schools, she’s proposing a whopping 7% increase. But New York already boasts the highest per-pupil spending the nation – over $24,000 per student. Increasing state aid without accompanying program and contract reforms or adjustments based on district wealth just reinforces the status quo of high spending.
Same thing with aid to the SUNY and CUNY systems. State-supported higher education would receive an additional $1.5 billion in over the next five years, even though SUNY enrollment has declined 20% in the past 10 years. Why invest more money to educate fewer students?
There is a lot of worthwhile spending in the budget to address immediate concerns, including $1 billion over three years for capital investments in transit and $350 million in relief for small businesses, theaters and musical arts. She’s also included money to boost pay for overburdened and underpaid healthcare workers (but again with no long-term plan to sustain those increases).
Money to address homelessness, poverty and potholes is worthwhile, as is money to reduce gun violence. And we’ll see how she decides to spend money allocated for economic development, which is vital to restoring the economy and retaining residents.
The governor has proposed a win-now budget. But how long can New York sustain this level of spending without raising taxes or cutting programs?
That’s a question the state will have to face not too long from now.