WESTCHESTER COUNTY, NY — January 26, 2020 —What’s different about this year’s budget proposal from Gov. Andrew Cuomo has nothing to do with the size of the looming $6 billion budget gap. Albany has successfully wrestled with larger gaps often. The problem is that for the first time we’re headed for a collision between the two sacred cows of state government. This budget pits health care spending against education spending. It’s been a long time coming, and the results will not be pretty.
Health care spending has been increasing at a strong rate. Two dynamics are driving this.
First, we chose to vastly expand services, including long-term care and home care, and to vastly expand the number of New Yorkers eligible for subsidized services, mostly because of Obamacare. As a result, 95 percent of New Yorkers now have access to health care, something to be proud of.
Second, we chose to subsidize rural health care facilities in ways that are socially defensible but very expensive. Small-town hospitals, clinics, nursing homes and networks are operating at high costs. We rightly want care available within a reasonable time and distance. It’s effective. It’s just not efficient.
Similarly, school spending has increased at a strong rate for two reasons.
First, we de-emphasized the wealth of school districts as a criterion for school aid, largely to help New York City, which is a wealthy district with enormous numbers of at-risk students. We also focused additional aid on other urban districts with similar student populations.
Second, we addressed the social costs of high property taxes. The STAR program in particular used state dollars to mitigate high school tax bills, especially on Long Island, in the Hudson Valley and in other suburban districts across the state.
Now the sacred cows have come home to roost, to mix a metaphor. It will be enormously difficult to continue these policies, both economically and politically.
Both sectors have powerful friends. Hospitals, nurses, health care workers unions, and doctors have organized statewide and locally to defend the expanded health care system. This is a good thing.
School boards, teachers unions, and taxpayer groups have similar statewide and local organizations that have done an excellent job in support of schools and school aid.
The easy solutions are unlikely. Soaking the rich has its limits. Even if you zeroed-out state aid for the 50 wealthiest districts, you would not raise anywhere near enough money to meet the needs of the other districts. A billionaire’s tax has similar practical limitations. There will be efforts to move in this direction, and to save elsewhere in the budget, such as the bloated “economic development” giveaways. This makes both political and economic sense; it just won’t be enough.
It is unlikely that Albany will abandon its basic choices. And we’re incredibly fortunate that revenues remain strong. But this budget is likely to contain long-range course corrections the impact of which will be felt more in coming years than immediately. These include a downsizing of the upstate rural health care system; a smaller state contribution to school property tax mitigation; a narrowing of the scope of long-term and home health care programs; a flattening of the rate of school aid increases; and state intervention in the internal distribution of New York City school funds.
In other words, the problems of both sacred cows will be managed, not confronted. There’s a virtue in relative calm and peace in the short term. But the handwriting is on the wall: Structural change is coming in this year’s budget.
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Richard Brodsky is a former state Assembly member.
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Original publication by Times-Union on January 26, 2020. https://www.timesunion.com/opinion/article/Richard-Brodsky-Two-of-New-York-s-sacred-cows-15005891.php