ALBANY – Gov. Andrew M. Cuomo Tuesday proposed a 2014 state budget that boosts state aid to public schools by 3.8 percent, imposes new property tax hike restrictions on localities, cuts some individual and business taxes while raising some fees and commits the final $680 million of the billion dollar economic development program he unveiled two years ago for the Buffalo area.
Exactly how the $680 million for the Buffalo Billion program will be spent, or if it will all be earmarked this year, is uncertain and likely would not be known until well into the year when other possible projects are identified.
The fiscal plan, coming in an election year for Cuomo and all state lawmakers, proposes a total tax cut package of $2 billion, though only $500 million of that will come in the 2014-15 fiscal year.
The tax cuts, which include corporate income tax reductions, a $25 million reduction for upstate manufacturers and freezes property taxes for homeowners in localities that meet certain conditions, such as keeping the overall tax levy within the state’s tax cap program. The property tax freeze would be eligible for all school districts and the Big Four cities, including Buffalo, and available in all other localities in 2015.
Cuomo said his property tax program would have the state provide financial relief to homeowners if the localities in which they live agree to abide by the state’s 2 percent property tax cap in the second year. In the following three years, homeowners will get the tax relief only if their local governments show how they will save one percent in operating costs in each of the three years.
He cited Erie County, noting how it has 1,044 units of local governments, including villages, school districts, sewer, water and fire districts. He said those Erie County governments charge $1.6 billion in annual property tax levies. Saving three percent over three years in all those Erie County local units will cut their expenses by $48 million, Cuomo said, adding that they can make those savings by consolidating and sharing services with neighboring local governments.
“It’s can’t be that there aren’t economies of scale,’’ Cuomo said.
Seeking to avoid a nasty potential fight with Bill de Blasio, the new mayor of New York City, Cuomo is proposing to spend $1.5 billion in state funds over five years to let schools offer prekindergarten programs on a voluntary basis, according to an administration official who spoke today on condition of anonymity. The mayor has been calling for a tax hike on wealthy people, a move Cuomo opposed even though a couple years ago he extended a tax surcharge on such residents.
Cuomo wants to spend $720 million over five years to fund an expansion of after-school programs for public school students. The money will partially come from gamblers at the four new casinos expected to be awarded later this year and set to open as early as next January.
The governor’s overall funding plan for schools calls for a $807 million increase, or 3.8 percent from the current year. That takes overall state aid to the state’s 700 school districts to $21.9 billion.
The increase level is well below the $1.3 billion that the state Board of Regents say is needed and the $1.9 billion sought by several advocacy groups. Precise district-by-district funding allotments will not be available until later this afternoon.
The overall budget will total $137.2 billion, up from $135.3 billion this year, on an all funds basis, which excludes “extraordinary" aid from the federal government for Hurricane Sandy relief efforts that skewed the numbers.
On a state funds basis, which is the main portion taxpayers finance, the budget plan requests $92.3 billion, up from $90.2 billion this year.
About 5 percent of the budget goes just to servicing past borrowings. Cuomo wants to add to the state’s debt level by asking voters this fall to approve $2 billion in borrowing to fund new technological advances in schools as well as to create new classroom space for the additional nursery school offerings. Details on how the money will be spent have not yet been made public.
A number of funding plans are back-loaded, which critics say is a fiscally dangerous method that does not take into account surprises in the economy that could greatly affect the ability of politicians today to pay for their future promises. Of the $1.5 billion pre-K program, for instance, only $100 million is expected to go out the door this year, the Cuomo budget proposes.
After some sour publicity with his plan in the past to cut state funding to Roswell Park Cancer Institute, Cuomo’s budget this year proposes to maintain the hospital’s state funding at $103 million “by replacing an expiring $25 million capital grant with a commensurate amount of local assistance funds." Officials were not available to explain the provision.
The budget plan also envisions an overall increase in state aid to higher education, but seeks to cut operating assistance to the State University of New York.
Cuomo has already said he will ask voters this fall to approve a $2 billion borrowing to fund new technological advances in schools as well as to create new classroom space for the additional nursery school offerings.
The governor’s budget also calls for the creation of a hotline at a state ethics agency he controls for government employees to report cases of workplace sexual harassment against them. Last week, The Buffalo News reported that several state legislators, in the aftermath of the sexual harassment allegations made against former Assemblyman Dennis Gabyrszak of Depew, wanted a place outside of the Legislature’s internal operations where victims could report sexual harassment without fear of retribution by their bosses.
The governor was silent, however, on proposals by Assembly Democrats to hike the minimum wage every year pegged to the inflation rate, or on calls by a small group of Senate Democrats to let parents lock in current college tuition levels for their children’s future education, or on Senate Republican proposals to change or kill off a couple thousand regulations they say kills job creation efforts.
Cuomo said his overall budget reduces spending from prior projections by $2 billion, including $1.6 billion in local assistance by such steps as eliminating automatic increases for private health and human service entities that perform front-line care on behalf of the state.
The Medicaid health insurance program will also see a 3.8 percent state aid increase, and Cuomo also wants to spend – presumably through borrowing – $1. 2 billion on improvements for health care facilities.
While he is cutting taxes, he is also raising taxes, including assessments on cable tv companies to finance certain programs at the Department of Health and will either increase, keep intact or make permanent fees on everything from pesticide application companies to oil and gas production firms. He also proposes to “close the resident trust loophole," which the one budget briefing book supplied to reporters this afternoon did not explain.
Cuomo also wants to eliminate the cost-of-living adjustment for the Enhanced STAR property tax program, which is used by qualified senior citizens. The STAR tax break has been adjusted every year since 2003 and Como will keep the eligibility level at $81,900 in 2014 but kill the cost-of-living adjustment after that.
Cuomo also put into his budget a plan to have taxpayers fund the campaigns of politicians. Donations up to $175 to a campaign would be matched at a $6 to $1 level by taxpayers.
An existing program that seeks to clean and re-develop old industry sites known as brownfields would be changed to reduce costs; tax breaks under the Cuomo plan would only go for cleanup efforts and a property would have to be vacant for 10 years to qualify.
The budget also freezes at current levels the main state aid funding for localities, stiffens penalties for repeat drunk drivers and people under the age of 21 who text while driving, makes cuts to transportation programs and gives a $2.3 million increase to cash-strapped upstate transit programs to the $175.9 million they now receive.