[NYAPRS Enews] TU: State of the NYS Budget

[Harvey Rosenthal]

NYAPRS Note: An excellent summary trying to bring clarity to a complex
ever changing never ending process. 

 

State Of State Budget: Questions And Answers, And A Look Ahead At The
Process 

by
<http://www.timesunion.com/TUNews/author/AuthorPage.aspx?AuthorNum=215>
Jimmy Vielkind And
<http://www.timesunion.com/TUNews/author/AuthorPage.aspx?AuthorNum=82>
Rick Karlin, Albany Times Union  June 30, 2010 

 

ALBANY -- After a furious few days of punch and counter-punch between
the Legislature and Gov. David Paterson, the state budget battle settled
into something of a lull on Tuesday. But while non-budget legislation
passed in both the Assembly and the Senate, the Capitol's attention
remained focused on the reaction to Paterson's Monday-night veto of
elements of the Legislature's spending plan, and the expectation that
the rest of the week could bring more political combat. 

But as long as the calm lasts, we can address a few questions about the
state of the state budget, and where the action might be headed:

 

When will the budget be finished?

As with a lot of questions surrounding this budget, it depends.
Technically, the budget could be completed at 12:01 in the morning
Thursday, since that would clear the mandatory three-day "aging" period
for the budget's revenue bill. It was amended late Tuesday.  That budget
bill, though, would have to be approved by the governor or vetoed within
10 days of its receipt. To get the governor's approval, lawmakers still
have to come up with another $400 million to $500 million in revenue or
savings, Paterson has said. Additionally, the governor wants a
contingency plan for what could be an additional shortfall of up to
$1.06 billion in federal Medicaid funding. The governor on Tuesday also
said he wants lawmakers to adopt his proposal for giving SUNY campuses a
measure of autonomy in setting tuition, and some sort of property tax
cap. 

The real bottom line is that, with appropriations passed on Monday, the
threat of a government shutdown is gone, and lawmakers could take quite
a while to finish the budget. Some on Tuesday were talking about
continuing to resolve the particularly sticky issue of SUNY tuition
after the July 4th weekend, and then finish the budget. 

 

What happened to the revenue bill?

The bill was amended late Monday night because of concerns raised by
several lawmakers. At the request of Sen. Ruben Diaz Sr., D-Bronx, a
provision that would have allowed same-sex couples to file joint tax
returns was excised. If the language had stayed in place, Diaz
threatened to withdraw his support of the bill, which will need the
support of all 32 Democrats in the chamber to pass. The bill was also
amended to keep a school tax relief program for properties worth over $2
million and to allow New York City not to reduce the charitable giving
deduction in its income tax. As a result of the tinkers, the bill can't
be voted on before a minute past midnight tonight.

 

Can Paterson veto parts of the revenue bill? 

Because it's an Article VII bill, the governor can accept or veto the
entire package with no line-item vetoes. That's different from what he
did Monday with the appropriation, or spending side of the budget plan.
The big question here is whether the governor believes the revenue bill
generates enough money. As of late Tuesday, the governor's budget office
contends that it falls as much as $500 million short.

 

Paterson vetoed $420 million in restored education aid. Can the
Legislature override the veto?

Probably not. An override would need 42 votes in the Senate, and while
the 32 Democrats who voted to pass it can be counted on, the leader of
the 30-member Republican bloc said Tuesday that Democrats "should not
expect or count on Senate Republicans to bail them out of the mess that
they have made of this budget and the damage they are inflicting on
taxpayers." Assembly Speaker Sheldon Silver leads a conference of 107
members -- more than the 100 votes needed for an override -- but was
noncommittal about what would happen, especially considering the Senate
likely can't act successfully. Silver said he would discuss an override
with his conference -- and only after the revenue bill passes.

 

Paterson vetoed almost $200 million in member items, also known as pork.
What about an override?

All the dynamics above apply here, too, but it's less likely for two
reasons. First, lawmakers would be required to override every individual
member item -- about 6,800 of them. That's a lot of voting, and a lot of
time that could be spent on a beach or the campaign trail. Also, it
would look a little less palatable to voters to stand up for your pork
rather than alleviating cuts to students.

 

Paterson insists on a contingency plan for the possible loss of federal
Medicaid money. Why won't lawmakers go along?

The governor believes that part or all of $1.06 billion worth of federal
Medicaid money assumed in the original 2010-11 budget won't be coming.
Under the federal stimulus program, each state last year received extra
FMAP or Federal Medical Assistance Percentage money to help offset
growing Medicaid costs. But Congress, feeling pressure about the growing
federal deficit, is having second thoughts about continuing the program
this year. As a result, Paterson wants a contingency plan, which could
include an escrow fund to cover a possible FMAP shortfall. A percentage
of money would come off the top from the various state agencies and
programs and go into the contingency fund, which could then be tapped if
there was an FMAP shortfall.

If there is no shortfall, the money would go back to the various
agencies.

Lawmakers have resisted because creating an account of up to $1.06
billion would mean cuts in other areas, or higher taxes. Also, Assembly
Democratic Majority Speaker Sheldon Silver has suggested that creating a
contingency fund could be self-defeating if federal lawmakers concluded
that the state has money set aside for the loss of those monies.

Negotiations over the FMAP issue have been ongoing this week. Senate
Democratic Majority Conference Leader John Sampson, for instance said
Tuesday he was in negotiations with the governor over how to jump-start
an FMAP contingency fund talks. And Paterson is set to travel with nine
other governors today to Washington seeking FMAP money.

At least nine states have developed contingency plans for FMAP
shortfalls, according to the National Conference of State Legislatures.
Those include using reserve funds in Idaho and Maryland, and reducing or
eliminating some benefits in California.

 

What taxes or other revenue-raisers appear dead?

No one is talking about Gov. Paterson's proposal to tax sugary
beverages, a measure he said would serve the dual purpose of fighting
obesity and raising money for the state's coffers. Also dropped is a
plan to sell wine in grocery stores; the plan was included in Paterson's
last omnibus budget extender but rejected by legislators in their budget
plan.

What revenue measures that have not appeared might get rolled out to
close the gap?

The most onerous: an income tax increase or borrowing. Borrowing isn't
on the table in any of the plans right now, but the Assembly seemed
willing to do up to $2 billion of borrowing earlier this month. As for
income taxes, a labor-centric coalition, including the Working Families
Party, are still actively lobbying for it.

 

http://www.timesunion.com/AspStories/storyprint.asp?StoryID=946284 

 

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