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Cuomo Closes $2B Gap, Offers State Medicaid Takeover, Ultimatum to Schools

Governor Cuomo released a state budget plan that closes a $2 billion dollar gap, recommends a phased in state takeover of county health care costs, and offers an ultimatum to schools to accept a  teacher evaluation program or lose access to increased school funding.

Cuomo closes this year’s budget gap by reducing spending at state agencies by over a billion dollars. He already agreed to raise taxes on the wealthy back in December.

The governor’s budget does not include any lay offs, but would achieve savings through merging several state agencies. The Lottery Division and the Racing and Wagering board would form one entity devoted to gambling policy, and the Department of Civil Service and governor’s Office of Employee Relations would merge.  The Department of Transportation would shrink from 11 regions statewide  to just six, and 25 boards and commissions would be eliminated.  The Belleayre ski center in the Catskills would come under the Olympic Regional Development Authority, which runs Gore and Whiteface in the Adirondacks.

The governor  says “there are no new or increased fees or taxes” in the budget, but he does close “loopholes” in the collection of taxes on cigars and loose tobacco, netting an estimated $18 million dollars. Fees for security guards and real estate brokers would be spun up, requiring them to buy licenses that would  last twice as long, from two years to four years, but must be paid for in advance.  

The governor recommends a gradual state takeover of county Medicaid costs, something the local government leaders had been requesting, saying they could not afford to pay their share of the health care program after Cuomo and the legislature imposed a 2% property tax cap in 2011.

But Cuomo is likely to get some resistance from state worker unions over a plan to offer a new benefit tier to future state employees. The plan would up the retirement age to 65 and end early retirements, require workers to pay more for their pension benefits, and for the first time offer 401k’s as an option.

But perhaps the biggest fight Cuomo will face is over his drawing a line in the sand over teacher evaluations.   Cuomo is following through with a promise to increase school funding by 4%, but says schools won’t receive the money unless they comply with a new teacher evaluation plan. The teacher evaluations are required in order for the state to be eligible for $700 million dollars in federal funding, as part of the Race to the Top grants. Several schools failed to reach agreements with teachers by the December 31st deadline, and the federal education secretary, Arne Duncan, has warned that the funds are in jeopardy.

Despite the lean economic times, there are some new spending projects in Cuomo’s budget. The governor is following through with an announcement to spend  billions of dollars  to repair roads and bridges, including the reconstruction of the Tappan Zee Bridge. The governor hopes $1.64b in state and federal funds could generate additional investments totaling $15 billion dollars that would also pay for flood control and renewable energy systems.

The governor keeps spending for the Environmental Protection Fund even at $134 billion dollars, and does not recommend any more staff at the Department of Environmental Conservation to regulate hydrofracking. He’s said previously that since fracking has not yet been  approved, there’s no reason yet to hire more monitors.

And , for the first time in three years,  the state police will be hiring  again. Cuomo has allocated money to recruit and train up to 230 new troopers.

Governor Cuomo's full spending plan is available online.

 

Karen DeWitt is Capitol Bureau chief for the New York Public News Network, composed of a dozen newsrooms across the state. She has covered state government and politics for the network since 1990.