In his third budget address, Gov. Andrew M. Cuomo outlined his proposal for the 2013-14 fiscal year on Tuesday, continuing his insistence on avoiding introducing new taxes and furthering mandate relief.
The governors $136.5 billion budget proposal includes several recommendations that would affect local governments, including increased school aid, a reduction in Medicaid spending by municipalities and pension savings.
Mandate relief was clearly a top priority.
Education and Medicaid make up 50 percent of the state budget, Mr. Cuomo said, highlighting their importance in any budget discussion.
For that reason Mr. Cuomos budget proposal includes a 4.4 percent increase in education spending. The proposal also stipulates that localities are responsible for only two percent of the increasing yearly Medicaid costs, down from three percent in last years budget.
By 2016, Mr. Cuomo hopes to hold local governments harmless to any increase in Medicaid costs.
The key here is that the commitment continues, Sen. Joseph A. Griffo, R-Rome said.
Mr. Griffo said he thinks its a positive sign. Ultimately there will be substantial savings, he said.
Assemblyman Kenneth J. Blankenbush, R-Black River, agreed.
As part of mandate relief for local municipal governments, thats a big help, he said.
Another aspect of the governors proposed budget is designed to enable local governments to tackle increasing pension costs. In 2012, the state introduced tier six, a pension amendment for new employees that is easier on the budgets of local governments, but savings will not immediately be seen.
Local governments have a short-term problem, Mr. Cuomo said. Were proposing a tier six financing plan where you are financing against the savings in the out-years.
Mr. Cuomos proposal would encourage localities to enact a stable rate pension contribution option designed to give local governments and school districts access to out-year savings now.
This is a significant way to alleviate the financial stress on local governments. It basically provides a financing plan to get municipalities through this pension bubble, Mr. Cuomo said.
Assemblywoman Addie J. Russell, D-Theresa, said that whenever she speaks with local officials and school officials in her district, pension relief is at the top of their agenda.
Because of the fact that pension costs are what are driving budgets at the local levels this proposal is something that will be helpful. Im glad to see that theres a way to smooth out these pension spikes, Senator Patricia A. Ritchie, R-Heuvelton said
Mrs. Ritchie cautioned that, The devils in the details, and said she is interested in reading the specific budget language once the bill is released.
Mr. Griffo also applauded the governors pension plan proposal.
But Mr. Cuomos pension proposal isnt being greeted with universal enthusiasm.
At first blush it seems like its not a good idea to be borrowing money in anticipation of savings, Mr. Blankenbush said. The bottom line is: you still have to pay it.
The governors proposal may include mandate relief and pension savings, but it doesnt increase the aid given to local governments.
It doesnt surprise me, Mr. Griffo said.
Mrs. Russell agreed.
The economy in the state really has not rebounded to the point where we can just open up our wallets and start handing money out to everyone, she said.
Mr. Blankenbush was not as willing to accept the aid amounts that other legislators were describing as essentially inevitable.
When you have flat aid, and when youre looking at municipalities that are trying to live under the two percent cap and whos operating costs are going up by keeping it flat it also means that municipalities are going to be going into the hole more, Mr. Blankenbush said. Municipalities have to balance their budget.
The Legislature will review the governors budget proposal over the coming weeks. The due date for the state budget is April 1, but Mr. Griffo said, because of this years Easter and Passover holidays, the budget will need to be finalized a week in advance or risk being late.