A report released in February determined that New Yorkers pay the highest combined state and local taxes in the United States.
“Facts and Figure 2017: How Does your State Compare?” compiled by the well-respected research organization, Tax Foundation, stated that 12.6 percent of citizens’ income is paid in New York taxes.
That averages out to about $2,208 per person in income taxes, $2,581 in property taxes per capita and $662 in sales tax collections.
Additional bad news: New York is the most expensive state to live in after Hawaii.
Despite this grim data, for Governor Andrew Cuomo its business as usual. To to balance his proposed $163 billion budget for the 2018-2019 fiscal year that commences on April 1, he raises taxes and fees and employs fiscal gimmicks.
According to the report on the Executive Budget by the Office of State Comptroller, led by Tom DiNapoli, Cuomo’s claim that operating fund spending will increase by a modest 2.6 percent is problematic.
That number is questioned because there are “budget actions that contribute to the appearance of lower State Operating fund growth.”
In other words, the governor is employing fiscal slight of hand shenanigans that include “shifting expenditures to capital project funds, which is outside the scope of state Operating Funds: moving expenditures off budget to a public authority or an off-budget fund or account; specifically, excluding certain spending from the calculated growth of State Operating Funds; restructuring programs such that the cost is reflected on the revenue side of the ledger rather than as spending; deferring expenditures to future years; and others.”
This kind of smoke and mirror accounting brought New York City to the brink of bankruptcy back in 1975.
The Cuomo budget also includes $5.6 billion in anticipated revenue from either temporary or non-recurring from the federal government and in non-federal resources. In other words, “one-shots.”
Sadly, the governor has squandered close to half the settlements received from financial institutions and insurance companies to balance his budgets, including $838 million in this year’s financial plan.
Since 2014, fines received by the state have totaled approximately $4.5 billion.
Of that amount, 49.4 percent have been dedicated to state budget relief while 46.7 percent has been deposited in the Dedicated Infrastructure Investment Fund.
Frankly, all the Wall Street settlement money should have gone to rebuild New York’s decrepit infrastructure. Cuomo has done a grave disservice by siphoning off these precious one-shot revenues to balance his bloated budget.
According to the State Comptroller, the Governor’s Executive Budget Financial Plan is subject to a laundry list of risks and uncertainties, including “federal aid for health care, education, transportation and other purposes, and many programs that drive current funding levels may be subject to change based on current budget and policy discussions in Washington.”
Most disturbing, the financing resources for the $8.3 billion the governor has committed to the MTA for its 2015-2019 capital plan have not yet been identified.
Cuomo’s budget contains tax and fee increases including a 14 percent fee on health insurer profits, an excise tax on opioids, the elimination of the sales tax exemption on energy services, amended tax rate on cigars and a tax on vapor products.
As for the transparency, Cuomo promised New Yorkers when he first ran for governor in 2010, the Comptroller warned, “certain elements for the SYF 2018-2019 Executive Budget falls short with respect to high standards of transparency, accountability and oversight. These include broad grants of unilateral authority to the executive to manage or reshape the Budget; broadly defined allocations of state resources; and use of budget actions that obscure the level and growth of state revenues, spending and obligations.”
In other words, this is a budget that the Comptroller rightly concludes “may diminish New Yorkers’ confidence in their State government.”
Gov. Andrew Cuomo appears to be emulating Gov. Mario Cuomo’s flimflam approach to State spending. And sooner or later it will catch up with our present governor just as it did with Mario in 1994 when voters booted him out of office.