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Budget Briefing from Governor Cuomo

Earlier today, Governor Andrew M. Cuomo held a briefing on the FY 2018 State Budget in the Red Room at the State Capitol.

VIDEO of the briefing is available on YouTube here and in TV quality (h264 format) here.

AUDIO of the briefing is available here.

PHOTOS of the briefing will be available on the Governor’s Flickr page.

A rush transcript of Governor Cuomo’s remarks are available below:

Good afternoon. Good evening. Everyone knows the Budget Director of the State of New York to my right, Mr. Robert Mujica, and the Counsel for the Governor to my left, Alphonso David. We wanted to give a quick update on where we are in the budget discussions that are going on this afternoon, for anyone that’s interested. The break for the legislature was supposed to be this evening. I assume that they will break at some point this evening. We’ve made a lot of good progress in a lot of areas, but we have not yet reached a final equation. The Easter break is coming up, and the Legislature has been planning to leave for that break.

First I’m going to give you a little bit of context for the discussions this year because this year is a very different year than any year certainly since I’ve been governor and arguably it’s a different year in government, in politics than we’ve ever seen in this country and in this state, but in terms of where we are with the budget. We passed what has been referred to as a budget extender already. What the budget extender does is it continues all government funding until May 31. What it also did was it funded the state’s full economic development and construction program for an entire year. It’s not just for a short period of time. That’s important because a priority for our administration is and will always be economic development, building the new New York, infrastructure work, roads and bridges, and economic development projects, particularly in upstate New York to spread the time. That extender passed our infrastructure and economic development program, virtually unchanged, for the entire year, and there are hundreds and hundreds of projects that were priorities for the administration that were approved and enacted so in terms of the functioning of government, it is all functioning. The operations are continuing, our economic development efforts are secured for the year, done for the year, and we are moving full speed ahead, infrastructure projects are moving full speed ahead, so there are open columns, but they are not items that are affecting progress of the state. What we don’t have in place yet is Raise the Age is not yet complete. Affordable New York, which is a new version, a new and improved version of the old 421-a program and a full year of school funding. The school funding formula is important because school districts will need to plan for their budget. What we’re going to do is, take my budget proposal, which would increase education at about 3.9 percent, we will do what they call a ‘run’ from that budget and give school districts what number – the amount they’ll receive under that budget, so they can plan. Whatever the final budget winds up being, it is going to be literally a plus or minus the 3.9 percent. Not a minus. It will probably be a little bit of a plus, but for cautious planning, which is what I would ask the school districts to do, it should assume the funding levels that we send them in the run. If the actual budget winds up being a little higher, then so be it. But the 3.9 percent I think is a safe planning number and we will do that by the runs.

We have an agreement on many items. We have agreement on the Millionaire’s Tax, on the middle-class tax cut, on the water program that’s actually passed, on ride sharing, on college affordability, on workers comp, on property tax reform and citizen empowerment to get people involved in their state and local taxes and that discussion, we have agreed on a prescription drug program, which is the first-in-the-nation, on a opioid program, which is a very aggressive program – so, we’ve done a lot of good work.

Open issues: Raise the Age. On raise the age, the last sticking point – well – the current sticking point. The current sticking point is, who does supervision of people who are discharged from what we call hybrid facilities? Does DOCCS correction do supervision over discharged people or does OCFS? Raise the Age, remember, we’ve talked about for many, many years, and it hasn’t passed for many, many years, because it really is the most political, polarizing issue, right? Depending on your philosophy, this is a – can be – an ideologically polarizing. Criminal justice laws are usually lightning rods for ideological differences. And raise the age poses a very important, but controversial hearing. What do you do with the 16-and 17-year-old and how do you treat them? And it may be a 16-and 17-year-old that did a bad act. Maybe it was a 16-and 17-year-old that actually hurt someone. And how do you treat them? Are they criminal? Should they be locked up? Or do you give them a second chance and try to rehabilitate them? And what is that balance? That’s what raise the age poses. If you are a Republican conservative, you see it one way. If you’re a Democratic Liberal, you see it a different way. So that’s what Raise the Age has been posing. That is still an open issue. There’s an issue with the Affordable New York program, the 421-a program, which sometimes was what they would say, late to rent reform where they both expired at the same time. They are now separated because of the delay in passing the new Affordable New York program. So that is an issue of concern more in the Assembly.

And then there’s an issue of education funding – specifically, charter funding. There’s always an issue with education funding, how it’s distributed. It’s especially complicated this because there is a law that is on the books that concerns charter schools that really throws a wrench into the machine of government. There is a charter school law that has frozen the tuition increase to charter schools for a number of years. That law expires this year in June. When the law expires, charter schools automatically receive a $1,500 increase per student and that amount is to be paid by the local government. So for example, New York City the increase would be $1,500 per student. It would be $2 million for New York City. That happens automatically. The $1,500 is a windfall to the charter schools I would say. Charter schools would say they deserve it because their tuition was frozen for a long period of time and this was paying them back for past increases they didn’t receive. But $1,500 per student is a very large number. And it happens automatically. The Assembly is opposed to the $1,500 increase – however, if the Assembly does nothing, inaction automatically gives charter schools a $1,500 increase. It’s a unique situation in some ways. If the Assembly does not act, they have actually acted to give charter schools their $1,500 increase. The only way that charter schools don’t get a $1,500 increase is if the Senate agrees to pass a new bill that would restrict or reduce that $1,500. So this is, in many ways, an unprecedented situation. The Assembly must act or they are giving charter schools a $1,500 increase. The Senate must agree to act because if the Senate doesn’t agree, the increase automatically goes through in June. So that has taken the normal education discussion of “fair” in Upstate and downstate and added a significant wrinkle.

I have spoken to the Senate and the Assembly about it a number of times. I’ve urged the Senate that $1,500 would be a windfall. It would be a much larger increase than public schools are getting. You have to factor into that equation that the Charter schools have not gotten an increase for a number of years which is their side of the argument. But that is going to be an area that needs to be compromised. The Assembly can’t just walk away from it, otherwise, they will be giving charter schools a $1,500 raise. The Senate has to be reasonable and that is really the area where the two houses have to come together and compromise and I have been working very hard to do that.

My priorities in this situation – my first priority was resuming government operations, etcetera and getting that economic development and construction program done. We have done that. In the agenda that we already agreed to we have some really exciting programs: college affordability, the first in the nation, prescription drug price restrictions, it’s the first in the nation. So we have a lot of exciting programs that we have already agreed to.

Raise the Age is also a priority and raise the age done right is a top priority, but as Governor, as an executive, probably the number one financial priority is, I want to make sure we do not overcommit ourselves financially. We have never been in this situation before, where you basically have a federal government that has said that, in both their rhetoric and their actions, that there will be a financial cost to the state of New York. Affordable health care would cost us $4 billion. The Collins/Faso Amendment would cost us $2 billion. The proposed federal budget will cost us about $1 billion. I don’t want to do a budget where we have a) either overcommitted financially and then when the federal cuts come to New York, inevitable, we have overcommitted or b) where we don’t have the ability to adjust to cuts. You know you pass a budget and you tell every town, village, school district, “I’m going to give you x,” if we then have a shortfall, I call the legislature back on special session and I say, “Hello my special friends on the legislature we have to cut $2 billion from the budget because we were shorted $2 billion from the federal government,” that is not going to be a pleasant conversation. Legislative bodies are not quick to cut funding, so I want to make sure we have a mechanism in place, especially on Medicaid, that if there are federal cuts, which I believe there will be, and the legislature doesn’t act, if administratively, we can take action that will protect the state of New York. The extenders that I have, the extender that I did and the extenders that I’m planning to do will correlate with the decisions in the federal government. May 31 because May 21 is the presentation of the federal budget. From the budget presentation, they’ll have an idea of where we’re going.

Now. The continuing resolution that the federal government is now functioning under, that expires April 28. We’ll have an idea of what happens then. Federal government may not adopt a full budget for several months. It’s very important to me that we not put our financial feet in cement but we can adjust what we need. I’m taking a cautious approach, because I believe we will have to adjust. Federal government is considering ending the deductibility to state and local taxes. That in and of itself, would be incredibly damaging to the state of New York. It would take an average New Yorker’s taxes and effectively increase it from 20 to 40 percent. And I think we could see flight of higher paying taxpayers if something like that happened. So it’s very important to me as the executive, to make sure that we have that flexibility and not to overcommit. This year, flexibility to me financially is very important.

The federal government, I was in Washington, federal government, for eight years, as you know. Federal government operates under something called the continuing resolution. That is a customary budget device. What a continuing resolution says is, we are not going to set a budget for a full year, we are going to set certain agencies’ budgets for certain periods of time. And that you can adjust. In this landscape, that changes on an almost weekly basis, that is the kind of financial flexibly we need here. You know, picking a number now, and saying this is going to be the number, and not knowing what’s going to happen next week and next month and when the federal government passes the budget or when they don’t pass the budget, or when they do the next continuing resolution, is very hard. So I a m looking for continuing financial flexibility in the budget process, but certainty and permanence in the operations that need to continue which is what we accomplished in the extender.

As a matter of policy, raise the age, affordable housing, these are very, very important issues that are being discussed, and we’ve not yet reached resolution. But the right resolution is more important than just resolution. These are critical issues. And we’ve gotten very good at resolving, closing, and moving on. At this time, in this state’s history, in our current situation, having the right resolution is more important than just having a resolution. And that’s what we’re working towards.

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