Is New York State on Track to Become Fiscally Conservative? Will Congress Follow Suit?

Kathryn Nix / February 03, 2011

New York Governor Andrew Cuomo (D) promised during his campaign that he would balance the Empire State’s budget without increasing taxes or borrowing. Left untouched, the state’s $135 billion budget would otherwise result in $10 billion in deficit spending.

This week, Cuomo appears to have taken the first step to making good on his promise. He unveiled a budget proposal that would, on paper, reduce New York’s spending by $3.5 billion from what was spent last year. (This is, however, a deceptively high estimate based on accounting gimmicks. The actual reduction in spending would be lower.) The Wall Street Journal reports that “the budget that Mr. Cuomo unveiled this week closes a gaping deficit with major budget reductions, calling for spending cuts in state hiring, education, health care, aid to universities and payments to cities.”

Cuomo’s plan is to go after an inflated baseline of future spending. Under current law in New York, spending for many programs is on autopilot, so increases go into effect without any action from the state legislature. Rather than making actual cuts to spending, Cuomo has proposed to reduce the rate of growth in spending by increasing the budget based on more reasonable criteria. (more…)