The following appeared on Monday, April 29, 2024, in the Blank Slate Media newspaper chain and on its website, theisland360.com:

After announcing a $237 billion budget deal had been reached with the state Legislature’s radical leftists, Gov. Kathy Hochul made this statement: “Each of us came to the table with really strongly held beliefs, but in the interest of our state, we pulled it together to deliver in a really collaborative way. And I will say we don’t always see that here.”

What a lot of baloney.

The only interests accommodated were those of the Public Employee Unions.

As for spending, the budget has grown by an astonishing 35% since the 2019 pre-COVID $175 billion spending plan. The state’s structural budget is now projected to be north of $16 billion.

Hochul has permitted spending to grow at an unsustainable rate despite an anemic economy that grew by only 0.7% last year—vs. 2.5% nationally — and declining revenue from the biggest source of taxes: Wall Street.

Financial services tax revenues have declined due to 5,000 industry jobs moving to low-tax states and bonus payouts dropping from $42.7 billion in 2020 to $33.8 billion in 2023.

But the scary economic trends didn’t matter to Albany power brokers. As Nicole Gelinas, of the Manhattan Institute, quipped, Albany has been “obviously preparing their next round of milking, while the cow is already part way out of the barn door.”

The budget also sticks it to New York City’s taxpayers.

Mayor Eric Adams’ request that Albany pick up half the tab of the projected $12 billion in migrant costs was rejected. The budget throws him a measly bone—$2.4 billion to house, feed, and clothe over 180,000 migrants.

With commercial property and Wall Street taxes falling out of bed, the city will probably have to cut essential services to cover the costs of onerous “Sanctuary City” laws.

Albany also surrendered to NYC’s United Federation of Teachers.

While Mayor Adams’ control of NYC’s public schools has been extended for two years, his authority has been severely curtailed.

The Board of Regents—which is controlled by the state Legislature—will now run the city’s Panel for Education, not the mayor. (The panel is empowered to approve or reject union contracts.)

There’s more.

Even though the city’s school enrollment has declined by 200,000, to protect UFT jobs the Legislature has directed the city to spend an additional $1.9 billion annually to procure more classroom space and to hire more teachers to accommodate the mandated smaller class size.

Former Mayor Michael Bloomberg, who convinced the Legislature in 2002 to establish mayoral control of schools, had this reaction to Albany’s actions: “It’s a shameless betrayal of the city’s nearly 1 million students that will undermine the progress the city’s schools have made and harm the next generation, leaving them without the skills they need to succeed in future careers—and leaving too many trapped in poverty and tempted by crime.”

Hochul’s budget plan to cut education aid statewide due to declining school enrollment got nowhere.

After the UFT balked, the governor not only stripped the proposal out of the budget but agreed to additional school spending. (Long Island school aid will increase by over $200 million.)

Reacting to the education budget, Ken Girardin, of the Empire Center for Public Policy noted, “The decision to keep filling empty classrooms with state money reflects lawmakers’ commitment to pouring cash instead of scrutiny into the system that’s spending more than any other state….”

Another costly item buried in the budget is the pension giveaway to the public employee unions.

The “Tier 6” reform—championed by Gov. Andrew Cuomo in 2012—that shored up the pension system and included benefit changes that would save state and municipal governments $113 billion over 30 years, was emasculated.

“There is no justifying this giveaway, which will cost over $4 billion,” the Empire Center has noted. “It is a heist from current and future taxpayers that will push property taxes higher and diminish public services. New York employees already get more generous benefits (on top of collecting Social Security) than any private sector group.”

The budget abuses and giveaways I have described are only the tip of the fiscal iceberg.

More on Gov. Hochul’s egregious tax and spend budget in my next column.

The following appeared on Monday, April 1, 2024, in the Blank Slate Media newspaper chain and on its website, theisland360.com:

Buried deep in the state Legislature’s budget is a frightening proposal that if signed into law by Gov. Kathy Hochul would increase the pensions cost for state and municipal employers to the tune of $4 billion.

To understand the impact of the Legislature’s sleight of hand ploy, a walk down memory lane will be helpful.

At the turn of the century, combined annual taxpayer contributions to the state’s defined benefit pension system was $1 billion. By 2010, that figure grew to a staggering $10 billion. (In recent years the cost has been about $16 billion annually.)

To address the ticking pension “time bomb,” Gov. David Paterson persuaded the Legislature to support a modest modified pension plan known as “Tier 5” that covers employees hired on or after Jan. 1, 2010.

While the Tier 5 benefit would cost less, there was a major flaw: New York City employees were not included in the plan.

After taking office in 2011, Gov. Andrew Cuomo realized that the Paterson initiative was not enough to shore up the pension system.

So, in 2021 Cuomo proposed “Tier 6” to further contain defined benefit pension costs.  That bold reform was projected to save state and municipal governments $113 billion over 30 years.

Tier 6 benefit changes included:

• An increase in the minimum full benefit retirement age from 62 to 63.
• Higher employee contribution rates, ranging from 3% to 6%, for those earning $75,000 or more.
• An adjustment in the final average salary calculation to cover five instead of three consecutive highest paid years, effectively reducing the base in most cases.
• A $15,000 cap, indexed to inflation, on pensionable overtime, which was unlimited for pre-2010 hires.

In addition, unlike Tier 5, it included New York City police and firemen hired after April 2012.

On the 10^th anniversary of the Paterson–Cuomo reforms, the Empire Center for Public Policy released a report in December 2021 titled “Tiering Up: The Unfunded Business of Public Pension Reform in New York,” prepared by E.J. McMahon.

In his report, McMahon wrote “The Tier 5 and Tier 6 changes combined are saving New York state and local governments outside New York City more than $1 billion this year, reducing total employer contributions by about 15% compared to what would have been billed to cover workers under previous plans.”

This is all well and good; nevertheless New York’s public pension system plans are very generous. Benefits are in the range of 50% to 75% of final average salaries. On Long Island, for example, several retired school district superintendents are receiving north of $200,000 a year. And don’t forget recipients are exempt from paying New York State and municipal income taxes on their annual benefit.

That’s not all. “State and local employees in New York,” McMahon pointed out, “also belong to the federal Social Security system supported by combined employer and employee payroll taxes whose benefits can raise their annual post-retirement incomes to more than 100% of pre-retirement earnings.”

Not a bad deal.

But the public employee unions are never satisfied.  Hence, in an election year, they are using their clout to pressure legislators to sweeten the pension pot for members who have been employed since 2012.

On March 26, the New York Post reported “state lawmakers are set to make it easier for teachers, cops and other state workers to pad their pensions—and leave taxpayers footing the nearly $4 billon bill….”

Under Tier 6, a retiree’s final benefit is based on average salary over the last five years on the job.

Under the new legislation, the final average salary will be based on the last three years of service.

Empire Center analyst Ken Girardin has written that the new rule “would retroactively increase the pensions for a small group of people who have retired in the past two years and raise the future pensions for roughly half of New York’s public-sector workforce.”

This is an outrageous tax burden to place on civilian taxpayers, many of whom are struggling to make ends meet and do not have a guaranteed defined benefit pension plan.

Contact your state legislators and tell them this expensive and unfair sop to the unions must be rejected.

The New York Conservative Party, of which I am a member, should deny its nomination to any Republican who supports the pension giveaway.

The following appeared on Monday, March 4, 2024, in the Blank Slate Media newspaper chain and on its website, theisland360.com:

In a column I wrote in January, I was pleased to point out that Gov. Kathy Hochul “appeared to acknowledge the state’s deteriorating fiscal condition.” The proof of her concern was in her proposed $230 billion budget that called for a modest increase in spending of $3.7 billion.

Then there was Hochul’s extraordinary pledge to protect taxpayers’ “hard-earned money from politicians who want to raise your taxes.”

I, for one, found Hochul’s budgetary proclamation most refreshing. Perhaps she finally realized that there can be dire consequences if the state government does not halt runaway spending.

Unfortunately, however, the governor’s public embrace of sound fiscal policies is nothing more than play acting.

Why, you ask?

Well, as always, the devil is in the details. And the analysis of Hochul’s budget proposal performed by the office of State Comptroller Tom DiNapoli reveals that it is loaded with ill-considered fiscal gimmicks that on the surface give the illusion of responsible stewardship.

Here’s a summary of the comptroller’s findings:

First, the report states that New York’s “structural budget gap is projected to worsen over the next few years.” Accumulated deficits are expected to hit $20 billion between fiscal years 2025-2026 and 2027-2028.

Next there is the issue of the state’s reserve funds. While state statutory reserve funds have increased to $6.3 billion, there are $13.2 billion set aside as “informal reserves” for “economic uncertainties.”

The informal reserves can be spent at any time on favored projects or causes because they are under the governor’s “discretionary control.” The report notes, “There is no statutory basis for such designated funds and no accompanying guidelines or restrictions or deposits, balance levels, how or when the funding can be used or replenished.”

Very convenient, don’t you think?

This financial gimmick will permit the government to expend state dollars beyond the modest increase in spending she announced in January to much fanfare. Don’t be surprised if a significant portion of those discretionary reserves are used to pay for migrant services.

With recurring spending growing faster than recurring revenue, the governor is using an egregious gimmick to coverup the budget’s structural imbalance: “one shot revenues.” There are $14 billion in “non-recurring resources” that will be expended to balance the budget.  The utilization of “one shots” only augments the out year budget deficits.

Then there is the governor’s scheme to “obfuscate the state’s true debt burden.”

The budget circumvents the state’s debt cap “by utilizing a loophole in the New York Debt Reform Act.” It “misleadingly portrays the Gateway debt [authorized up to $2.85 billion currently estimated at $1.4 billion] as if it is not a part of the state’s direct debt burden.” The Gateway project will expand Northeast Corridor rail travel between Penn Station and Newark.

DiNapoli’s analysts also identified approximately $3.4 billion in spending that is exempt from a competitive procurement process and from the comptroller’s contract oversight authority. “These proposed changes,” the comptroller rightly observes, “reduce transparency, competition, and oversight over a significant amount of taxpayer supported state spending.”

To put it more bluntly, the governor can approve without any oversight billions in contracts to cronies and donors to her campaign treasury.

Finally, there’s the comptroller’s not so rosy outlook on the state economy.

While the national labor force has recovered from COVID, the state has not.

With New York not expected to return “to pre-pandemic employment until the second half of 2026,” this plus the ongoing loss of middle- and upper-class taxpayers to low tax states will the comptroller concluded, “continue to pose a risk to the New York economy and in turn its revenue.”

The governor’s talk about being fiscally responsible is merely empty rhetoric. Hochul’s budget is anything but balanced and the in balance will surely grow after the far-left Legislature finishes with it.

If history is a guide, Gov. Hochul will likely surrender to the demands of legislators to spend more on pork projects and on special interests.

Like many of her predecessors, Gov. Hochul is using sleight-of-hand fiscal tricks to finance her budget, leaving New York’s dwindling number of taxpayers to foot the bill.