Question: How does a New York governor turn billion-dollar deficits into billion-dollar surpluses? Answer: By waving a “magic footnote.”
That’s what state fiscal expert E.J. McMahon says Gov. Cuomo is doing in the budget plan he just released. As McMahon writes on his blog, NY Torch, the $2 billion surplus Cuomo projects in three years, and the nearly $3 billion pot the year after, are “strictly aspirational” or “hypothetical” or “something other than actual.”
Following all the budget’s explicit plans, McMahon says, would yield deficits. Other fiscal watchdogs, such as state Comptroller Tom DiNapoli and the Citizens Budget Commission, express similar concerns.
It’s worrisome news. Here’s what the “magic footnote” says: “The governor is expected to propose, and negotiate with the Legislature to enact, budgets in each fiscal year that hold State Operating Funds spending growth to 2 percent.”
Translation: Instead of spelling out how, exactly, the state will gin up billions in extra cash over the next few years, Cuomo & Co. simply assume the next few budgets will keep to the governor’s 2 percent spending-growth “benchmark.” Hesto presto, you have a surplus.
Cuomo’s folks, for their part, acknowledge that out-year spending details have yet to be specified but say they’re confident they can meet the 2 percent target, especially since much of the spending is in their control.
They note, rightly, that the governor has hit that goal the past three years.
Give Cuomo credit for holding growth in state-funded outlays below 2 percent; it’s more restraint than New York has seen in years. Let’s hope that trend continues.
This time, it might not be so easy: Albany is planning 4 percent hikes in both Medicaid and assistance to schools (which includes new pre-K spending), and state employees will be demanding raises in their next contract. When the budgets meet reality, New York will need more than a magic footnote.