Andrew’s state budget: A Mario redux? – By George J. Marlin

The following appears in the March 15-21, 2013 issue of the Long Island Business News:

When Gov. Andrew Cuomo took office in January 2011, he was hell-bent on proving he was not just another spend-and-tax liberal Democrat.

Unlike his recent predecessors, the governor did not fear using his immense executive power to the fullest to get the state’s fiscal house in order.

His first budget deal eliminated a projected $10 billion operating deficit without raising taxes, fees or issuing long-term debt. It included real spending cuts of about 2 percent and 4 percent caps on Medicaid and education spending, which were statutorily slated to increase 13 percent.

The approved 2011-2012 budget was an impressive achievement and conservatives like me applauded.

Unfortunately, the governor’s resolve was short lived. His 2010 pledge that he would “veto any increase in personal or corporate income taxes” was abandoned.

In November 2011, Cuomo came up with a scheme to extend New York’s so-called millionaire’s tax – it had been set to expire at year’s end – under the guise of “tax reform.” Cuomo said of the 2003 temporary surtax: “I was against it at the time and I still am. It was supposed to sunset. If it doesn’t sunset, it’s a tax.” He did not let it sunset.

Instead, the governor, as well as the Republican Senate, surrendered to public-sector employees and Occupy Wall Street extremists and extended New York’s biggest tax increase since Nelson Rockefeller was governor.

Thanks to the $2 billion in higher taxes paid by top earners, Cuomo was able to balance his 2012-2013 budget and honor his unfortunate pledge to raise school aid and Medicaid funding by 4 percent.

This year, as Cuomo’s attention turns to the national stage and as he moves to the far left on the political spectrum, his 2013-2014 budget employs fiscal gimmicks that helped create past budgetary crises. And these short-term fixes, as Comptroller Thomas DiNapoli recently observed, push off “hard choices to another day.”

First there’s the tax increases: The “temporary” assessment on electric water and gas utilities slated to expire on March 31, 2014, is extended in the Cuomo budget.

This tax will cost ratepayers about $500 million a year.

Another tax extension is on those earning $10 million or more. This tax provision, which will garner $140 million, prohibits high earners from deducting a portion of their itemized charitable contributions.

Then there are the one shots, including a $750 million transfer from the state’s worker’s compensation fund, a $150 million grab from the mortgage insurance fund, and a $100 million sweep from other accounts to support the consolidation of technology procurement services.

DiNapoli’s office has reported that the budget would also expand the “state use of ‘backdoor borrowing’ through public authorities that does not require voter approval.”

The comptroller also warned that the governor’s projected 6.6 percent increase in personal income tax revenues has not been achieved in recent years and may present “a risk in the coming year” or “may not materialize as expected.”

Overly optimistic revenue estimates, “one shot” revenues, “back door” borrowing, tax and fee increases – they all read like a Mario Cuomo budget of yesteryear.

The proliferation of these gimmicks during Mario’s three terms as governor left the EmpireState with one of the nation’s worst credit ratings and dashed his presidential aspirations.

Cloning these budgetary abuses may be equally fatal to the ambitions of Andrew, who would be wise to heed the well-worn words of philosopher George Santayana: “Those who fail to learn the lessons of history are doomed to repeat them.”

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