Transforming New York: Governor Cuomo's Fiscal Agenda

1. Changing the Culture: A Look at New York Governor Cuomo’s ambitious agenda Presentation byRobert B. WardDeputy Director, Rockefeller Institute January 31, 2011

2. Caveats Governor Cuomo issues his budget today; it will include the bulk of his key fiscal proposals – but perhaps not all This presentation focuses on the budget and structure of government – the Governor has also identified other priorities, including ethics I do not represent the administration Rockefeller Institute of Government

3. The problems on the table • Economic growth lagging behind the nation for most of the past half-century • And people ‘voting with their feet’ • A tax burden among highest in the nation • The highest, by some measures • Like many other states, a large structural gap between spending and revenues Rockefeller Institute of Government 3

4. A strong anti-tax message • ‘New York has no future as the tax capital of the nation,’ Governor Cuomo says • One priority: A tough property-tax cap • Tax levy limit: lesser of 2% or CPI • Particularly tough on school districts, which would need 60% vote to override • School spending has been rising 5.6%/yr • Also covers municipalities except NYC Rockefeller Institute of Government

5. A dramatic change in budgeting? • Governor Cuomo attacks formula-driven budgets as ‘a sham’ • E.g., education formulas drive a $2.9B increase; is a $1B increase a $1.9B cut? • Anyone in the business of state government knows this – but voters don’t • At least a rhetorical attack on spending; perhaps a legislative one as well Rockefeller Institute of Government

6. Executive branch restructuring • Hails back to last such, under Al Smith • A sainted figure in New York history • Spending and Government Efficiency (SAGE) Commission to lead consolidation • If Legislature approves creation, its recommendations would automatically take effect unless affirmatively rejected • McKinsey, Rockefeller Institute are helping Rockefeller Institute of Government

7. Restructuring Medicaid • Emulate Wisconsin model • Stakeholders assigned to find savings • Governor’s budget sets the target • Redesign team including legislators to find solutions by April 1 budget deadline • Largest Medicaid program; many interests • Did it really work in Wisconsin? • If it works in NY, it can work anywhere! Rockefeller Institute of Government

8. Cutting mandates to cut local costs • An executive-legislative-stakeholder team • Led by a top aide to the Governor • Also legislators, municipalities, school boards, unions • This will be especially interesting • Costly mandates involve labor: benefits continuing after contract expires, binding arbitration, prevailing wages Rockefeller Institute of Government

9. Budgeting for performance • $250 million for school districts that raise student performance • And $250 million for those that find administrative savings with efficiencies • New state aid to encourage consolidation of municipalities Rockefeller Institute of Government

10. Contact information Robert Ward wardr@rockinst.org 518-443-5831 Rockefeller Institute of Government