The $12.5 billion in direct federal aid New York State will receive from the relief package passed over the weekend comes at a crucial time: next year's budget is due on April 1st, and the legislature is poised to wield an unprecedented amount of leverage against an embattled governor to advance their priorities of higher taxes on the wealthy and delivering aid to struggling New Yorkers.
But there's still some unfinished business that complicates this year's budget planning. Under the unusual authority granted to Governor Andrew Cuomo by the legislature last spring at the height of the pandemic, the executive branch was allowed to "withhold" budgeted money to get through uncertain times. Those "withholdings"—which are effectively cuts—amounted to roughly $3 billion, according to a recent state comptroller's report.
The governor's budget office has only alerted the legislature to a fraction of that withheld money, according to Freedom of Information Requests filed by the government watchdog group, Reinvent Albany.
"The public does not know which agencies and authorities had money withheld, and how much was withheld," said John Kaehny, the group's executive director. "That's super important, because they're going into this budget on the legislature side, blind."
Cuomo's budget office has said that all but 5% of these 20% withholdings—lumped into 10 different categories under "local aid payments"—will be restored before the state's new fiscal year begins in April, but without knowing the exact amounts of the withholdings, and which agencies they affected, it is impossible to check whether this is true.
For instance, the extent the state's withholdings from the MTA—$426 million—was first revealed last month, after Gothamist asked the governor's budget office; that figure will be restored, though the cash-strapped MTA still faced a budget cut of $98 million.
"The executive had the extraordinary power this year to make withholdings, or spending reductions, during the course of the year because of how the fiscal landscape was when the budget was enacted last year. All of those details are known by the executive, and we know that some of it has been shared with the legislature, and a fraction of that has been shared with the public," said Patrick Orecki, a senior researcher at the Citizens Budget Commission, another watchdog group.
Orecki added that better-than-expected tax receipts and several waves of federal aid have made the state's fiscal situation much less dire than when a four-year deficit of $60 billion was projected just a few months ago. That deficit projection is now down to around $4 billion.
"It’s very important, especially now, making this budget with much more certainty than we had last year, that the state is clear and transparent about what any spending changes are, whether they’re reductions or investments over the next few weeks," Orecki said.
Another entity affected by the cuts is CUNY, the country’s largest urban public university system, which receives most of its funding from the state; 55% of the system's student enrollment is Black or Hispanic. According to Barbara Bowen, the president of CUNY's faculty union, 20% budget cuts meant essentially laying off 2,900 adjunct professors, though around 1,000 have been hired back. Promised 2% salary increases were also recently frozen, and class sections were cut.
Governor Cuomo's budget proposal also continues the 5% cuts made to entities like CUNY into the next year.
"What's happening now is a kind of forced, no-interest loan to the state government by working class people," Bowen told Gothamist. "We are now subsidizing the state government in part because the state will not tax the rich."
A CUNY representative did not respond to a list of questions, including how much money the state has actually withheld from the system and how much they are slated to get back, but referred us to a November public letter from the chancellor that referenced "a budget shortfall of millions." Cuomo's budget director, Robert Mujica, also sits on the board of CUNY's trustees.
"It’s the mysteries of Albany," Bowen said. "These things may be invisible, but they’re not benign, and they have consequences that are terrible."
A spokesperson for Cuomo's budget office, Freeman Klopott, insisted that the 5% cuts were across the board.
“Federal funding has not yet been approved and, if it is, it won’t be available to New York State until next fiscal year," Klopott said in a statement. "The Executive Budget already reduced withholdings from 20% to a 5% reduction in FY 2021 with amounts that were withheld above 5% being reconciled and repaid by the end of the fiscal year, and any further action is subject to negotiations with the legislature.”
Manhattan State Senator Liz Krueger, who as chair of the Senate's finance committee has the power to subpoena the withholding amounts, said she believed the legislature had enough information to work on—but barely.
"Unfortunately, this governor has not put a premium on transparency when it comes to the budget, or much else for that matter. Certainly the Legislature is very unlikely to give him any special budgetary authority as was done last year under extraordinary circumstances," Krueger wrote in an email response to our questions.
Krueger, who has echoed Senate Majority Leader Andrea Stewart-Cousins and other colleagues in calling for Cuomo's resignation, said that her top priorities included "addressing the pandemic-driven crises in our medical system, social services, housing, and small businesses, and ensuring that we can reopen schools as safely as possible for students, teachers, and staff."
Asked how the budget process will change given that scores of lawmakers are demanding that the governor step down, Krueger replied, "I sincerely don't know how this will all work—neither I nor anyone else has faced a situation like this before."
