New State Budget Increases Education, Healthcare Funding—and ‘Backdoor Borrowing’ Deals: DiNapoli

New State Budget Increases Education, Healthcare Funding—and ‘Backdoor Borrowing’ Deals: DiNapoli

Photo Courtesy of Comptroller DiNapoli’s Office

Comptroller DiNapoli recently released his Report on the State Fiscal Year 2018-2019 Enacted Budget.

By Forum Staff
State Comptroller Tom DiNapoli praised the recently passed State budget for increasing funding for important areas such as education and health care—and blasted it for allowing more borrowing and limiting transparency of government spending, according to an analysis released on Friday by New York’s fiscal watchdog.
DiNapoli’s “Report on the State Fiscal Year 2018-19 Enacted Budget,” indicates that the State’s latest financial plan:
• Increases General Support for Public Schools by $863 million, or 3.4 percent, and provides an additional $50 million in competitive grants for prekindergarten, after-school and other programs. Foundation Aid is expected to increase by $618 million.
• Provides more funding to the Metropolitan Transportation Authority, including off-budget proceeds from new surcharges on taxi trips and other for-hire transportation in Manhattan, starting in January 2019. The budget also requires New York City to make contributions for capital and operating costs associated with the plan or risk losing state aid.
• Creates the Secure Choice Savings Program, a voluntary, state-administered retirement savings plan for private sector and nonprofit employees.
• Relies on an estimated $186 million in new tax and assessment revenues, including $100 million from opioid manufacturers and distributors and the impact on business taxes of decoupling from the Internal Revenue Code. It also authorizes the state to use certain health plan reserves of up to $750 million annually for a multi-year period, potentially generating billions of dollars to fund a variety of health and other programs.
• Establishes a new Health Care Transformation Fund to pay for health care programs and other purposes, with authority to transfer moneys to any other state fund at the discretion of the budget director.
• Holds flat most direct aid to local governments. Aid and Incentives to Municipalities, the largest unrestricted aid category for cities, towns and villages, is funded at $715 million, the same level since SFY 2011-12.
• Maintains the appropriation for the Environmental Protection Fund at $300 million.
• Creates a New York State 2020 Complete Count Commission to recommend steps to be undertaken to ensure an accurate count of New Yorkers in the next U.S. Census.
• Includes a revised version of an Executive proposal requiring disclosure of the identities of entities or individuals making expenditures for certain paid Internet or digital political communications but omits several other Executive proposals related to public campaign financing, other campaign finance reforms, and early voting.
However, the comptroller’s report also identifies actions to bypass provisions that are intended to promote oversight and integrity in state procurement, including eliminating competitive bidding and independent review of contracts in certain cases. In addition, the budget provides new lump-sum appropriations for economic development, but does not include any provisions to improve transparency or accountability related to such spending.
The budget was passed on time, but most budget bills were rushed to passage with “messages of necessity,” leaving very little time for review by legislators and the public, DiNapoli noted.
“On the positive, this year’s enacted state budget tackles the tax changes from Washington and gives private-sector workers more options for saving for retirement,” the comptroller added. “But I am concerned that the budget expands public authority backdoor borrowing and fails to build up rainy day reserves. While revenues are currently strong, it’s important to monitor trends moving forward including the ongoing impact of federal tax and budget actions.”

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