If there is any spending restraint in this year’s state budget, it’s at the state agencies.
According to Jeffrey Gordon, chief spokesman for Gov. David Paterson’s Budget Division, the agencies are being held to a 1 percent increase in operating budgets as compared to last year. That’s 3.35 percent less than former Gov. Eliot Spitzer had proposed in February, Gordon said.
The state budget for the fiscal year starting April 1 was passed last week.
The spending restraint applies, for example, at the State University of New York, where it could translate into larger class sizes and fewer new employees, according to SUNY spokesman David Henahan. How to economize will mostly be decided at the campus level, Henahan said.
Plans to semi-privatize the state Lottery, included by Spitzer and Paterson in their proposed budget legislation, were rejected by the Legislature. That affects SUNY because Spitzer was planning to use the Lottery “monetization” to fund a $4 billion endowment for the state university — while raising perhaps 10 times that amount for other state purposes.
Gordon said the budget did pass the framework for a SUNY endowment, without including a funding source. But the Paterson administration has not given up on finding a way to tap into the Lottery to fund the endowment, Gordon said.
The Schenectady-based Lottery is one of the state agencies subject to spending restraint. But its spokesman, John Charlson, said it may not be as much affected as other agencies because the Lottery also generates revenue by selling tickets. Those revenues have been rising for the past six or more years, he said, and so far the economic downturn has not adversely affected them.
Spokesmen for the state’s largest public-employee labor unions, the Civil Service Employees Association and the Public Employees Federation, were not ready Friday to discuss the budget in detail. The CSEA Web site said: “There are many bright spots in the budget for CSEA but also some areas of concern, particularly as the economic forecast continues to look gloomy. More details about how the budget affects CSEA members will be posted shortly.”
PEF spokeswoman Darcy Wells did say the budget language prohibits using layoffs as an economy measure, which protects PEF members. She said PEF would be concerned at potential agency measures such as a hiring freeze. A freeze could create staff shortages, she said, and would be especially damaging if it led to the hiring of more private contractors, at greater cost to taxpayers.
But Wells also said, “We understand the economic crunch,” and PEF is willing to work with the Paterson administration.
E.J. McMahon, director of the fiscally conservative Empire Center for New York State Policy, said the budget spending this year was not as unrestrained as “the four blowout years” that preceded it but was still much too high. And what restraint there is, he said, amounts to picking “low-hanging fruit,” not the fundamental reforms that are needed.
But McMahon was not mourning the rejection of the Lottery monetization plan, which he said “sounded like a gimmick” and had never been adequately laid out by the administration.
The budget includes big increases in school aid, local assistance and capital projects, expands spending in areas such as housing and the environment and makes more people eligible for subsidized health insurance.
Soon after he became governor in March, Paterson announced he was lopping off $800 million from the budget proposal of his predecessor, Spitzer.
At least $500 million of spending was put back into the budget by the Legislature with Paterson’s agreement. And despite all the talk about fiscal restraint, the budget passed last week is up almost 5 percent from last year’s — at least if you include capital spending and federal spending passed through the state government. State operating funds, which includes school and other local aid as well as agency operating costs, are up a total of 4.5 percent, according to Gordon,
But state agencies will have to make do with barely more than last year and are still figuring out how to accomplish that. The Budget Division will be working with them to come up with spending plans to meet the 1 percent growth target, Gordon said.
Erik Kriss, spokesman for the Department of Correctional Services, said the budget removed the option of closing prisons such as Camp McGregor in Saratoga County, which Spitzer had proposed as an economy measure. He declined to say what other economy measures the department is considering. “We’re identifying areas of potential saving,” Kriss said.