Andrew Cuomo

Takeaways from the final 2018-19 state budget

Gov. Andrew Cuomo on Friday evening announced a deal on a $168.3 billion state budget. Hours earlier, the spending plan had been in doubt, due to standoffs over such issues as state oversight of yeshivas and the early departure of state lawmakers for Passover, which began on Friday, and for Easter Sunday – which is also the start of the new fiscal year.

Call it the Good Friday agreement.

Gov. Andrew Cuomo on Friday evening announced a deal on a $168.3 billion state budget. Hours earlier, the spending plan had been in doubt, due to standoffs over such issues as state oversight of yeshivas and the early departure of state lawmakers for Passover, which began on Friday, and for Easter Sunday – which is also the start of the new fiscal year.

“I don’t know why you guys look so tired,” Cuomo quipped at the start of his press conference in the state Capitol. “We’re two days early!”

On a more serious note, the governor called it the “most difficult budget we’ve ever done,” due to a $4.4 billion budget gap as well as "attacks" from Washington, in particular the reduction of the state and local tax deduction.

Here are some takeaways from the spending plan, from spending in education and health care – the two biggest parts of the budget – to the policy items and political ramifications.

Fighting Washington

A major theme all year for Cuomo has been pushing back against federal policies that affect New York, most notably the reduction to the state and local tax deduction in President Donald Trump’s sweeping tax overhaul. New York is a high-tax state, and the changes are expected to increase the tax burden of many state residents and even encourage some to move away.

In response, Cuomo said the state budget would do several things to blunt the impact. First, it creates two new state “charitable contribution funds” for health care and education. In a workaround to lessen the impact of the federal tax law changes, taxpayers could divert some of what they owe to these state funds and claim a credit on their tax returns. Local governments and school districts will be authorized to take the same steps.

Additionally, the budget authorizes an “alternative employer compensation expense program” to take advantage of the fact that businesses were not affected by the state and local tax deduction changes. It gives employers the option of implementing a payroll tax for employees that would be offset by a state tax credit for workers.

"It moves from an income tax, primarily, to a payroll tax," Cuomo said. "Property taxes move to a charitable donation tax. Again, it's optional. Some employers will do it, some local governments will do it, but it's our best attempt to avoid the federal assault. The real answer is to repeal SALT."

The five boroughs

One of the biggest policy changes the governor had called for was a congestion pricing plan in Manhattan, and while many of the proposed changes were blocked – at least for now – lawmakers did agree to a $2.75 surcharge on for-hire vehicles booked through apps like Lyft and Uber. The fee will be assessed below 96th Street in Manhattan – which is further north than the original congestion pricing zone that was contemplated – and the funds would go into an MTA “lock box” to help repair the city’s aging subway system. A $2.50 fee on yellow cabs would also go into effect.

The budget also fully funds the $836 million MTA Subway Action Plan that had been on hold while the state pushed New York City to fund cover half the cost. The short-term plan, which will address some of the most pressing repairs and upgrades, will ultimately have half, or $418 million, paid for by the city, Cuomo said. "Basically, its retained from the city, but now the Subway Action Plan is fully funded, and it can actually move full speed ahead," he said. 

The budget also includes $250 million for repairs at the New York City Housing Authority and install a NYCHA independent monitor that will be selected by the New York City Council and a committee of tenants and will work with the city comptroller. Authorized along with the new NYCHA funding is design-build, a project delivery method that can speed up the construction process. New York City has called for blanket authority to use design-build, which is only allowed to be used by certain state agencies and authorities in New York. This year the state is allowing design-build on a project-by-project basis, including for the construction of new jails to replace the Rikers Island and the reconstruction of the Brooklyn Queens Expressway.

School aid

The budget adds $1 billion in education spending, slightly less than the $1.1 billion increase a year ago as the state faced a tougher fiscal situation this year. The state Board of Regents had initially requested a $1.6 billion increase in state education funding, while the governor proposed a $769 million increase. The increase brings state education funding to $26.7 billion, a major portion of the total 168 billion budget.

Apart from school funding, advocates pushed for a more fair distribution of funding among wealthier and poorer school districts. The Cuomo administration instead emphasized the need for more transparency. As part of the budget deal, New York City and other school districts will be required to share how much they plan to spend on each school starting in the 2018-19 school year.

On the yeshiva issue that delayed the budget talks, a compromise was reached that allows for the Jewish religious schools and other private schools to cite long hours of instruction meet state educational requirements, The New York Times reported. Critics have charged the some yeshivas fail provide instruction in basic areas such as mathematics. 

Health care funding

The budget puts state Medicaid funding at $18.9 billion, the second biggest portion of the spending plan after education.

But many of the health care tax hikes proposed by Cuomo in his January budget address as “revenue raisers” were rejected by Senate Republicans, although a tax on opioid manufacturers was included. A so-called “opioid stewardship program” will use a $100 million fund, with revenue coming from manufacturers, to be used for prevention, treatment and recovery services for people struggling with opioid addiction. The original proposal was for a surcharge of two cents per milligram on active opioid ingredients in prescription drugs would have raised $127 million per year.

The controversial proposal to tax the sale of Fidelis, a Catholic-run nonprofit health plan, to the for-profit Centene also went through, State of Politics reported

What dropped out

Several ethics reform measures were left off the table, including addressing the LLC loophole, which allows donors to circumvent campaign contribution limits by donating through limited liability companies. Cuomo rejected a bailout request from the del Lago Resort & Casino, which asked for state funding after it made less than its projected revenues during its first year. Early voting and bail reform also dropped out, as did the state Dream Act.

Political response

Legislative leaders applauded the final plan. Assembly Speaker Carl Heastie said his conference had “crafted a spending plan that makes the necessary investments to strengthen our economy, support working people and preserve essential services that are important to so many citizens.”

State Senate Majority Leader John Flanagan touted the defeat of a number of proposed tax increases. “This budget invests in the shared priorities of hard-working New Yorkers – affordability, opportunity and security,” he said. “It is a solid and fiscally responsible budget that protects taxpayers, creates jobs and supports many other quality-of-life issues important to middle-class families across the state.”

But with elections coming up later this year – for every state lawmaker as well as Cuomo – gubernatorial challengers seized the opportunity to take a shot at the governor. Dutchess County Executive Marc Molinaro, a Republican who is expected to officially announce his challenge on Monday, blasted Cuomo for ramming the spending bills through at the last minute with little time for review. Cynthia Nixon, the actress and activist, continued to criticize Cuomo over the distribution of school aid across the state. 

But the one Cuomo adversary who had a direct role in the budget negotiations had a more upbeat message from the Senate floor.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.