After Biden's Win, New York's Budgetary Waiting Game Continues
By Jimmy Vielkind
Top New York lawmakers say they will continue to wait for a
federal coronavirus relief package before making any adjustments to
the state budget even as fiscal issues pile up for the state's
localities and public authorities.
The wait-and-see approach has ruled the State Capitol since the
spring, when members of the Democratic-controlled state Assembly
and Senate enacted a budget that gave Gov. Andrew Cuomo unilateral
power to hold back spending if additional federal aid didn't
So far it hasn't, although Mr. Cuomo and legislative leaders
said the election of Joe Biden as president would make it more
likely that a new federal package would include significant funding
for state and local governments.
But until it materializes, the window for state lawmakers to
revise the budget enacted in April -- possibly by increasing income
taxes -- is closing. Senate Majority Leader Andrea Stewart-Cousins
said Monday that she wouldn't rule out a legislative session this
year but was still waiting on Washington.
"We have a huge deficit and we need a lot of answers, and most
of those good answers need to come from our federal government. But
everything is on the table," Ms. Stewart-Cousins, a Democrat from
Yonkers, said at a press conference.
A spokesman for Assembly Speaker Carl Heastie referred to a Nov.
13 tweet in which the Bronx Democrat said he was excited about Mr.
Biden's election but wasn't ruling out a special session. There are
no current plans for the Legislature to reconvene before January,
but Mr. Heastie will hold a virtual retreat with members next week
to discuss their next steps.
Mr. Cuomo's budget director, Robert Mujica, said state spending
is $6 billion less than in the previous fiscal year because the
administration has held back payments to municipalities and
social-service providers while also delaying scheduled salary
increases for state employees. The withholdings could turn into
permanent cuts if Mr. Cuomo formally proposes a budget adjustment
-- which could be amended by the Legislature -- but he hasn't done
"We're on track to control spending, and we're talking to the
Legislature," Mr. Mujica said.
The state faces a projected $8.7 billion deficit in the fiscal
year that begins April 1, and the fiscal picture is looking
similarly grim in other public entities that rely on state
New York City Mayor Bill de Blasio said Monday that tens of
thousands of layoffs are still possible next year. Other cities and
counties are developing budgets for 2021 that raise taxes above the
state's 2% cap, a maneuver that requires a vote of 60% of
The Metropolitan Transportation Authority is considering a 2021
budget that would reduce or suspend some weekday subway services
and limit weekend train frequency to every 15 minutes. James
Brennan, a former State Assembly member from Brooklyn, said the
state should step in to provide funding and avoid service cuts; Mr.
Mujica said it isn't in a financial position to do so.
Counties and cities are preparing budgets that take effect with
the new year that reduce their workforces and, in some cases, lay
off or furlough municipal staff. Tompkins County, which includes
Ithaca, adopted a budget that cut expenses by 6% but saw revenue
decline by 10%, according to county administrator Jason Molino. The
county legislature approved a budget that increased taxes by more
than the state-mandated 2% cap.
"We wouldn't have had a property tax increase if we didn't have
such an unknown," Mr. Molino said of an expectation that the state
would cut aid to the county. He also called on the federal
government to send revenue.
Senate Minority Leader Chuck Schumer, a Democrat from New York,
said last week that talks had restarted among his party-mates who
control the House of Representatives and Senate Majority Leader
Mitch McConnell, a Republican from Kentucky.
Mr. McConnell has taken over from Treasury Secretary Steven
Mnuchin as the lead Republican negotiator. Several weeks ago, as
Mr. Mnuchin and House Speaker Nancy Pelosi discussed a roughly $2
trillion bill, Senate Republicans pushed for a far smaller package,
instead proposing $650 billion in aid.
Some unions and progressive organizations in New York say state
lawmakers should convene immediately and raise taxes, arguing that
any federal aid won't be enough to fix such a large deficit.
David Friedfel, director of state studies for the Citizens
Budget Commission, a nonpartisan watchdog, said New York's deficit
for the coming fiscal year is closer to $17 billion because the
official estimate assumes there will be $8 billion of recurring
cuts in the $101 billion operating budget that have yet to be
"It's very unlikely that the federal government is going to
provide aid in the amount or duration where it will be sufficient,"
Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com
(END) Dow Jones Newswires
November 26, 2020 07:14 ET (12:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.