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Queens Chronicle

‘Albany gets it’ — Cuomo commish

Adams says guv’s new budget plan can transform the state government

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Posted: Thursday, February 9, 2012 12:00 pm | Updated: 8:30 am, Mon Feb 27, 2012.

The president of the Empire State Development Corporation was in Queens on Feb. 2 promoting Gov. Cuomo’s budget proposal for the 2012-13 fiscal year.

And Kenneth Adams, who also serves as commissioner of the state’s Department of Economic Development, said the governor’s $132.5 billion proposal is not only a responsible budget, but a plan to transform New York State for the better.

“We closed a $2 billion deficit,” Adams said in a meeting with the editorial board of the Chronicle. “It creates a set of reforms, and economic development initiatives are built into those reforms.”

Adams said the plan builds on reforms Cuomo implemented last year in his first executive budget, such as eliminating automatic budget inflators in such areas as Medicare spending.

“In your budget, you identify income and set spending,” Adams said. “Under Albany budgets, they would set the spending and then chase the revenue to catch up to it. That’s why you had so many one-shot gimmicks in the past.”

Adams said last year’s reforms enabled Cuomo and the Legislature to close a $10 billion deficit.

“This year it started out at $3.5 billion,” he said. “And it was closed with no new taxes, fees or gimmicks.”

That gap was closed by flat-funding state agencies that had budgeted 4.5 percent increases for $1.3 billion in savings, and another $700 million by increasing aid to cities and towns by 2.6 percent instead of the planned 3.9 percent.

The remaining $1.5 billion comes from a new tax bracket that essentially extends the existing millionaires’ surcharge which sunseted this year.

Adams also pointed out that the $132.5 billion for FY 2013 is $200 million lower than this year’s $132.7 billion; and $2.3 billion less than the year before that.

“For two years in a row, state spending is lower,” he said.

Adams said aside from balancing the budget, there are built-in reforms in terms of economic development initiatives, mandate relief, and plans for “reimagining government” and managing the education crisis.

He said Cuomo is looking to use public-private business partnerships in order to secure infrastructure and promote economic growth with a minimal commitment of state cash or risk. He cited the example of Genting Americas, which is looking to spend $4 billion to create a convention center — and possibly casinos in the future — at Aqueduct Race Track.

“A company with a history of success with these kinds of projects around the world wants to spend $4 billion of its own money,” he said.

Another is the state’s attempt to get private companies to build high-capacity electrical lines capable of carrying electricity from where it is generated in upstate and the Canadian province of Quebec and get it to markets in New York City and on Long Island with their increasing demand for energy.

“The government is not taking all the risk,” he said.

As for managing and streamlining state government, Adams said spending reductions are just the beginning. He began by presenting the state organizational chart from 1927 under Gov. Alfred E. Smith, with 18 departments answering to the executive and legislative branches.

Today’s government has 55.

“These agencies and programs are started for good reasons,” he said. “But over time they are built into law.”

He said, for example, that 13 agencies offer a total of 91 job training programs. Another department has 40 affordable housing programs.

“Required by statute,” he said.

He said the time involved with reform means jobs that would be cut by eliminating or consolidating programs likely could be cut through attrition or reassignment rather than layoffs.

And there is what Adams and Cuomo admit is the thorniest issue, that of the governor’s desire to rework the pensions of future hires into the state’s workforce.

The so-called Tier 6 plan, being slammed by state employee unions, would require more employee contributions and would include a 401(k) program as a means of getting the state’s pension funding under control.

“And it doesn’t apply to a single current employee,” Adams said.

Asked about tuition increases at CUNY and SUNY schools, Adams and Austin Shafran, vice president of Public Affairs for the Empire State Development Corp., said while unpopular with students, they are necessary to keep the schools functioning at a high level and attracting better students and faculty.

Adams said spending on the schools is scheduled to go up 2.2 percent in a year where all other departments are receiving flat funding.

He also said students always have expressed a preference for regular, modest increases that they can plan around, rather than getting socked with major hikes every few to several years.

Shafran said the new revenues are remaining within the school systems.

“What people really don’t want to do is pay more and get less because the legislature has swept the account,” he said.

Adams said the totality of the changes Cuomo is seeking will improve the state’s image among businesses nationwide, which routinely ranks New York State last or next to last among the 50 in terms of being business friendly.

He said that image has been earned through years of runaway government spending and runaway taxes to keep up.

And while he said New York always will be an expensive place to do business, the state can move to the middle of the list and still attract business investment.

“With last year’s property tax cap, with two straight years of a balanced budget with decreased spending with no new taxes,” he said. “It’s a sign that Albany gets it. It’s a sign to the business community that we are more focused, that there is fiscal discipline, that we are presenting reforms.”

The budget is due by March 31 for a fiscal year that begins on April 1. And leaders of both the Democratic-controlled state Assembly and Republican-led Senate had optimistic outlooks.

“Overall, we are very pleased with the governor’s budget,” Scott Reif, spokesman for Senate Majority Leader Dean Skelos (R-LI) said.

“It closes the deficit without raising taxes, which is very important to Senate Republicans,” Reif said. “It controls spending; the levels do not go up.”

The GOP also likes Cuomo’s proposals to assist private sector job creation.

And Reif said the process was made easier this year because of a two-year deal struck last year on Medicare and education funding.

“That put us ahead of the game,” Reif said.

Skelos is anticipating an agreement in the Senate by March 22, he added.

In a statement released on the Assembly’s website, Speaker Sheldon Silver said Cuomo “did a great job” outlining the budget so legislators can identify the areas they feel need more attention.

Silver too credited Cuomo for addressing mandate relief by calling on a cap for Medicaid spending, “one of the most expensive programs facing taxpayers of local governments throughout the state.”

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