Gov. Andrew Cuomo will present an ambitious budget proposal on Tuesday that promises to turn deficits into surpluses even as he doles out tax breaks.
One trick will be doing it in a time of slow economic growth.
Cuomo will release his proposed budget for the state fiscal year that begins April 1. But he has already said that the state can amass its first budget surpluses in years as long as lawmakers agree to limit spending increases to 2 percent. The governor said that would allow surpluses to grow to $2 billion in three years.
His claim that “arrows are pointing up” is true. New York, like the rest of the country, is slowly recovering from the recession. So far this year, tax collections of $49 billion are up 5.6 percent, but below projections.
Lucy Dadayan, a senior policy analyst at the Rockefeller Institute of Government, noted that despite higher overall tax revenues, New York and other states still have not caught up to where they were before the recession.
“Yes, we are recovering. But we are recovering at such a slow pace,” Dadayan said.
This is the atmosphere in which Cuomo promises to reverse a trend of deficits and create three years of surpluses that will grow to $2 billion by April 2016. He will have to do this even though two of the largest-ticket items — Medicaid and school aid — are tied to economic indicators that are growing faster than 2 percent. The Cuomo budget relies on an expectation of faster revenue growth.