Budget outlook is grim for 2018

Dec 15, 2017
Originally published on December 15, 2017 1:31 pm

With a projected multibillion-dollar deficit and looming federal changes that could cost the state billions more, the biggest obstacle in the upcoming 2018 legislative session will be balancing the state budget.

The second-highest-ranking Republican in the Senate, John DeFrancisco, said the budget will be “horrible” and the worst in at least seven years.

“I think it’s going to be very, very difficult,” DeFrancisco said. “Probably the most difficult budget year the governor has had since he’s been governor.” 

The state’s comptroller, Tom DiNapoli, a Democrat, agreed. He said the projected $4.4 billion deficit and lower-than-expected tax collections are only the beginning of the trouble.

“It’s really a triple whammy,” said DiNapoli, who added the federal tax plan and health care cuts come on top of the existing deficit.

Congress already has stopped funding the Child Health Plus program to provide health insurance for poor children, and President Donald Trump ended subsidies that fund a program in New York to help low-income adults get affordable health coverage. If Congress follows through with proposals to completely repeal the Affordable Care Act, New York would lose billions more in Medicaid funding.

The tax overhaul plan also would hit the state hard. Many New Yorkers at the lower end of the income scale would end up paying less in taxes. But the potential loss of deductions for state and local taxes, along with a reduction in the mortgage tax deduction, would result in higher tax payments for many middle- and upper-income earners. That could have ripple effects that would result in a significant drop in state revenue.

Gov. Andrew Cuomo has been railing against the plan nearly every day, calling it “devastating to the state of New York” if it becomes law.

“Everybody’s taxes in the state of New York just went up 20 percent,” Cuomo said.

The governor said he’ll have to find significant savings in order to balance the spending plan.

DeFrancisco, the Senate deputy leader, said it’s going to be difficult to find cuts even in the largest portion of the budget: school aid.

“It will never happen in education,” DeFrancisco said. “There’s no way that’s going to happen.”

DeFrancisco thinks the state is more generous in its Medicaid program than most other states, and he said there is room for reductions there.

DiNapoli said lawmakers won’t be able to borrow their way out of the crisis. He said the state’s total debt of nearly $64 billion — or more than $3,000 for every man, woman and child in the state — is already very high.

“We continue to be one of most highly indebted states in the nation,” DiNapoli said. “We’re going to have a tough session in 2018.”

The budget is due by April 1, and with all the hard decisions to make, many believe it’s going to be difficult to meet that. And there are even fewer work days next year for lawmakers. Passover begins Friday, March 30. Easter Sunday is on April 1.

Cuomo in recent days has tried to offer incentives to lawmakers to finish by the deadline, including perhaps the first pay raise in nearly 20 years.

“I have said, if they don’t pass a budget on time, there should be no conversation about a pay raise,” Cuomo said.

The governor and Legislature established a commission in 2015 to look at whether pay raises are warranted, but it fell through late last year due to infighting between the two sides.

It all starts when Cuomo releases his budget plan in mid-January.

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