Even as Gov. Andrew Cuomo talks about multi-year tax cuts and surpluses, potential state budget challenges loom on the horizon.
Cuomo’s election-year budget plan claims the state can rack up a $2 billion surplus by 2017, as long as the governor and state lawmakers agree to keep spending growth under 2 percent over that time.
The governor has yet to specify how that out-year goal will be reached. But as the Citizens Budget Commission said in a recent post on its site: “hard choices lie ahead” for the surpluses to become a reality.
And those choices could come with big-ticket items like universal prekindergarten and tax cuts in the mix.
- PRE-K: The fight over the expansion of universal prekindergarten is often portrayed as a clash of wills between Cuomo and New York City Mayor Bill de Blasio. Either way, statewide pre-K will be costly. State Education Commissioner John King Jr. gave a rough estimate that it would cost $1.6 billion a year. The state currently spends $410 million per year and Cuomo would phase in $500 million in more funding.
- TAXES: Cuomo last month proposed property-tax relief and corporate-rate reductions as part of a broad range of tax cuts, freezes and repeals. The costs for 2015 would be $657 million, but they would more than triple next year to $2.1 billion once more of the program is phased in.
“A lot of these tax cuts are back-end loaded … They don’t cost a lot now, so you can balance the budget,” said Frederick Floss of the Fiscal Policy Institute.
Another complication is a law already on the books until 2018 that enacted a temporary income tax surcharge on New York’s wealthiest residents that brings in roughly $2 billion a year. A decision by the governor and lawmakers to continue it could be politically difficult. A decision to let it expire would be costly financially.
- TAPPAN ZEE: When Cuomo announced the arrival in port of a giant crane that will be used to build a replacement to the Tappan Zee Bridge, the head of the Thruway Authority told lawmakers they have yet to have a plan to pay for the $3.9 billion project.
The state has secured a low-interest $1.6 billion federal loan, and officials have mentioned Thruway bonds backed by tolls.
The Thruway’s bridge costs are different from general state budget items like pre-K and tax cuts, and there is no indication in Cuomo’s budget proposal that general fund money would be used to pay for the rebuilding.
But there are concerns among commuters that bridge’s tolls would have to be raised well beyond $5 to pay for the rest of the project.