Economy

Governor Cuomo is taking credit for the state budget’s turn around from huge gaps to healthy surpluses, but a watchdog group says  Cuomo is relying on future funds that have not yet materialized.

Cuomo often lists his achievements as governor when he gives speeches, and he likes to recount how he turned the state’s finances around, as in his Inaugural address earlier this year.

“We turned a $10 billion dollar deficit into a $5 billion dollar surplus,” Cuomo said on January 1st.

Governor Cuomo has spent the days leading up to this joint State of the State and budget message rolling out a number of new programs and proposals, including an anti-poverty agenda that includes raising the minimum wage, and tax cuts for small businesses.

Cuomo says as part of his budget, he’ll include a new phased in increase of the minimum wage to $10.50 an hour by the end of 2016. In New York City, the rate would rise to $11.50 an hour. The governor says New York City is arguably “the most expensive market” in the U.S.

When Governor Cuomo gives his budget address on Wednesday, the state will begin the year with a $5 billion surplus, a big change after years of budget deficits.

When Cuomo first came into office, the state was facing a $10 billion budget gap. Now, in 2015 the state has a $5 billion surplus, the largest since the 1940’s.  The money is a one time windfall from various bank settlements, over charges of improprieties during the financial crisis.

The state Comptroller, Tom DiNapoli advises using the money for one time expenses. He says don’t confuse a windfall with a surplus.

Governor Cuomo wants to invest $1.5 billion dollars to help the struggling upstate economy, but there’s a catch. They have to compete for the money.

Cuomo says his budget plan will include an upstate revitalization fund, but it won’t be distributed to all of the state’s economically depressed regions. Instead, the seven regions will be competing for a share of the funds. The rules are, only three will receive grants of $500 million dollars each.

“Why the competition?” Cuomo asked rhetorically. “Because I believe in competition.”

Calling it the “major problem facing the state”, Governor Cuomo announced  a plan to reduce New York’s  highest in the nation rate of property taxes for some homeowners. But the program was not received with open arms by everyone.

Under Cuomo’s proposal, homeowners who pay  6% or more of their annual paychecks in taxes, will get a credit on their tax bills. Renters will also receive an equivalent credit.

The governor says the state’s consistently high property taxes are driving young people and businesses away, and reducing those taxes will be top on his agenda in 2015.

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