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Heads I Win, Tails You Lose

Critics charge that when it comes to education and environmental funding—as well as election and ethics reform—the new state budget falls woefully short

by Natasha Scully on April 3, 2014 · 1 comment


After days of protests outside the New York State Capitol and behind-closed-doors negotiations inside, Gov. Andrew Cuomo and legislative leaders concluded a $138 billion budget deal.

Outlined in the budget is a $1.1 billion—or 5.3 percent—increase in education aid, an amount $500 million more than Cuomo proposed. Billy Easton, executive director of the Alliance for Quality Education of New York, says, “It is a big victory for students. It will save vital programs. However it is not enough to prevent cuts.”

According to Easton, in order to avoid program and teacher cuts, education aid required at least $1.3 billion. Falling $200 million short of what was needed to prevent cuts also highlights the fact that, Easton says, “the state is $6 billion behind on the Campaign for Fiscal Equity funding.”

Also appearing in the budget is the first-ever state-funded full-day pre-kindergarten program, an issue New York City Mayor Bill de Blaiso made part of his platform during the 2013 mayoral race.

Despite the $l.5 billon for pre-k, allotted over the next five years, the debate over pre-kindergarten is far from over. When you break down where the $1.5 billion will be spent, many children in upstate and suburban districts are clearly getting the short end of the stick compared to kids in New York City districts. “It is $300 million a year [for the city], which is close to enough for universal pre-k in NYC,” says Easton. “But it only contains $40 million a year for the rest of the state.”

Although $1.5 billion sounds like a big number, the State Education Commission estimates it will cost $1.6 billion per year for statewide universal pre-k, meaning Cuomo and state legislative leaders have crafted a budget falling $1.26 billion short.

Gov. Andrew Cuomo

In addition to the underfunding of a statewide universal pre-k program, Easton says, “There are also questions about whether the Governor added overly cumbersome requirements that will make it difficult to implement.”

In more bad news for public schools, the budget included increased tuition funding for charter school students over the next three years.

With $250 per charter student given in the first year, $350 in the second, and $500 in the third, Easton said, “Charter schools escaped the cuts that school districts received in recent years. Now they are getting a $90 million increase over the next 3 years. This is funding that could have gone to public schools.” On the other hand, Easton says, “It is a positive that the state is paying for this increase instead of the costs being mandated for local school districts to pay.”

The highly publicized outcry against the Common Core standards implementation also made its way into the budget. Under this budget, grades K-2 will no longer be mandated to take the standardized “bubble tests.” As an advocate for New York state education, Easton is glad this change has been made. “These tests are educationally damaging to young children,” Easton said.

As the debates over education aid continue, a $2 billion general obligation bond act—which will be borrowed money to fund one-time capital expenses—is set to be on the ballot in November.

Several tax changes were incorporated into the budget. Of these, the property tax relief plan seems to be getting the most attention. In an effort to control the high property tax rates on New York homeowners, property taxes are set to be frozen for two years. This is designed to push local governments to consolidate services to stay under the tax cap; home owners in districts that stay under the cap will receive rebate checks. Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, says, “Most likely they [local governments] will stay under the cap.”

In the second year tax cuts will be extended only to those local governments that continue to stay within the tax cap but also formulate a plan to save 1 percent of their tax levy per year, over three years.

After being in place for three years, the program is expected to result in more than $1.5 billion in direct property tax relief for as many as 2.8 million taxpayers (an average of $300 a year). Despite this large number, Deutsch is calling the tax freeze regressive, “because the more you pay in property taxes the bigger your freeze rebate. [Thus] the person in a wealthy suburban school district gets more than people in poorer districts.” Homeowners are not the only ones included in the new property tax relief plan; there also will be a New York City renter’s tax credit for anyone whose gross income is under $200,000.

Among the other tax changes laid out in this year’s budget is a planned reduction in business tax rate, manufacturing tax cuts and a phased-in elimination of the utility tax surcharge. The deal also cuts the estate or so-called “move to die” tax. Under the plan, the tax exemption of estates will increase from $1 million to $5.34 million, which will result in 90 percent of estates in New York City paying zero in taxes. Cuomo and lawmakers believe this will keep people in the state and prevent those considering to relocate from doing so, given New York’s “punitive estate tax regimen.”

The issues of ethics reform and public financing of campaigns also made it into the budget. Anti-bribery and anti-corruption laws were strengthened, and limited public financing of elections at the state level will be implemented through a pilot program for the 2014 comptroller’s election. The budget also includes the establishment of an independent enforcement counsel at the Board of Elections, increased transparency of political contributors to independent expenditure committees (PACs), and the disclosure of outside clients of state legislators who had been referred by registered lobbyists.

Even with these actions in place, New York Public Interest Research Group’s Bill Mahoney says, “It is unlikely that what passed will have much of an effect on the behavior of the state’s elected officials.  In the area of ethics reform, not enough was done to change the state’s woefully inadequate enforcement mechanisms.”

With 35 state-level elected officials caught up in scandals in the past eight years, Mahoney says, “In order to truly change the culture in Albany, more systematic changes need to be brought about. Reforms shouldn’t aim to simply increase the penalties for people who violate the law. There needs to be an examination of what is currently legal behavior that shouldn’t be. When politicians can collect hundreds of thousands of dollars of campaign contributions from single donors and spend the money however they want, the effect is often little different from what it would be had they taken a bribe for the same amount. The governor’s budget does not address these systematic flaws.”

Often first to be put on the chopping block for funding raids or outright cuts, the Environmental Protection Fund (EPF) has suffered in recent years. The new budget includes $162 million for the EPF. This is an increase of $9 million over the 2013-14 budget deal, but this is not nearly enough, according to Travis Proulx, communications director for Environmental Advocates of New York. “This budget falls well short of what is actually needed,” said Proulx. “The EPF proves that environmental protections and economic development can work hand-in-hand to improve our communities. Governor Cuomo and state legislators should build on its successes by stepping up and providing proper resources for the EPF.”

Proulx says he sees “no need to reinvent the wheel. We can look at EPF’s track record to know what works, and should build upon these successes. This program has put people to work creating parkland, preserving farmland, protecting waterfronts, opening recycling centers, and more.”

Overall, the budget did not go over well with members of Occupy Albany, who had organized recent protests at the Capitol. Occupy Albany’s Daniel Plaat says that the 2014-15 budget can be summed up in just three words: “For the rich.” When asked to reflect on details of the budget, Plaat did not know where to start. “No Dream Act. No solar power funding. Massive gaps in school funding. No changes to tax rebates for bankers and stock traders.

“Many groups from many sectors lobbied on behalf of their needs and the needs of others and have thus far gone unanswered—unless of course, you are a campaign donor,” Plaat remarks. “The very fact our budget process is four men in a closed room is a slap to anyone who favors democracy over plutocracy. Our system of government does not respond to a majority of people and is not capable of fixing itself.”


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