During Albany’s annual budget battle, a take-charge governor can exercise extraordinary power over the process.
In 2010, for example, when Gov. David Paterson and the state Legislature could not agree on a spending plan by the end of the fiscal year, the governor threatened to use the “nuclear option”— a short-term spending extension (aka a continuing resolution) to secure a balanced budget.
What is the “nuclear option”?
Here’s Gov. Paterson’s explanation: “The difference between the budget process and the extenders is that the governor writes the extenders, the legislature has to vote it up or down, there are no amendments, no changes, no rejections, or overriding the governor’s veto. It’s either take it or leave it…. We then put our cuts in the next week’s budget extender and the legislature either had to vote it into effect or shut down the government.”
The threat worked and the Legislature backed off and negotiated a budget to the governor’s satisfaction.
Patterson did not fear to use what then Assembly Speaker Sheldon Silver called “naked political power” to impose his will on the Legislature.
Unfortunately, this year Gov. Kathy Hochul, fearful of exercising her budgetary authority, was steamrolled by the state Legislature.
In February, the governor, ignoring the signs of economic slowdown — particularly on Wall Street, which provides 22% of state income tax revenue—proposed a record-breaking $227 billion budget, up $7 billion from the previous year.
The release of the governor’s budget is only the opening gambit. The legislative branch, which has an insatiable appetite, always counters with even more spending.
Unable to agree on a budget plan, the state missed the March 31 deadline.
Refusing to use the “nuclear option” the governor surrendered in late April and agreed to a $229.8 billion budget, up $9 billion.
While the 3.7% increase may appear low — keep in mind this is on top of increases that totaled 22% over the past three years.
Most of the additional spending was allotted to school aid and Medicaid.
Education spending will hit an all-time high of $34 billion.
“School aid,” the Empire Center for Public Policy has reported will have “risen 76% since 2012 — while public school enrollment has fallen more than 5% during the same period.
Put another way, the state will be spending about $9 billion more on a smaller number of students than it would have if school aid had simply kept pace with inflation. Meanwhile, student achievement is declining on both state and national measures.”
As for Medicaid, the governor, who called for the state spending portion to increase by 9%, capitulated to the demands of the Legislature and healthcare unions and agreed to a 13% increase, up $4.2 billion.
“The state’s share,” healthcare expert Bill Hammond has noted, “is on track to be 53% higher in 2024 than it was in 2019.”
Total Medicaid spending for the fiscal year, which includes federal, state and local municipal contributions, is expected to top $100 billion.
New York, with 19.6 million people, will spend significantly more per capita on Medicaid than Florida (pop. 22.21 million) or Texas (pop. 30 million).
What did the governor get in return for knuckling under to the Legislature’s spending demands? Not much. Minor changes in the disastrous Progressive bail reforms.
New York’s spending trajectory is not sustainable.
The state’s budget division is already projecting major shortfalls in the out years; $5 billion in 2025, and in 2026, more than $8 billion.
Those dismal numbers do not, however, factor in an economic recession that will adversely affect tax revenue collections.
The governor, who holds a royal flush in the budgeting poker game, folded to the Legislature’s pair of deuces.
Hochul has proven to be a weak chief executive. And while that’s good news for legislators, unions, big government leeches, radical enviros, and various vendors—it does not bode well for overburdened taxpayers who get stuck paying the bills.