New York Gov. Andrew Cuomo lashed out at Senate Majority Leader Mitch McConnell last week after the senator voiced opposition to “blue state bailouts” and suggested bankruptcy as a possibility for budget-busted states. Cuomo dared McConnell to pursue the bankruptcy idea: “15,000 people died in New York, but they were predominantly Democrats, so why should we help them?”
This is an absurd charge to throw at McConnell after Congress approved massive assistance for New York to help the state fight and recover from the COVID-19 pandemic. Cuomo just needs to read one of Sen. Chuck Schumer’s press releases to be reminded of the relief New York is getting. Schumer touts over $112 billion in funding and programs.
According to Strategas Research Partners, New York received more like $10 billion in direct aid, plus education funding and support for the city’s mass transit system. The $1 billion-plus tied to education directly supports New York’s education budget. So, federal taxpayers have already indirectly contributed to New York state’s budget.
Meanwhile Cuomo, and even Mayor Bill de Blasio, have been calling for more direct support for their budgets. With Cuomo seeking $10 billion -$15 billion, and de Blasio $1.5 billion. While you have to admire their chutzpah, you don’t have to admire their shamelessness in demanding budget bailouts (or traveling to the gym during a pandemic, in de Blasio’s case). The teachers’ union in New York also joined in, sending a $1 trillion wish list to Congress which includes $2 billion for voting and the repeal of the cap on state and local tax deductions.
McConnell is right to be skeptical. Cuomo’s continued attacks show how he sees an opportunity to go beyond relief and get federal taxpayers to cover for his long-term budget mess.
Under Cuomo, New York’s budget increased from $133 billion in 2010 to $177 billion this year, a 33% increase in spending. State-owned debt is over $50 billion. The gravy train keeps big labor, slush funds, and politically driven projects flush. Even scandal and corruption has not derailed it, despite Cuomo’s close confidants being sentenced to federal prison for bid-rigging.
Don’t forget the Metropolitan Transportation Authority, New York’s transit authority. With $82 billion in total debt, the agency was already strapped due to its big labor-driven waste. A recent review found that “MTA leadership has failed in its duty to safeguard the public’s funds and ensure that waste, fraud, and abuse are deterred and prevented.”
In total, state authorities have $160 billion in debt.
It didn’t have to be this way. If the state had a taxpayer-friendly spending limitation like Colorado does, and held spending increases to population growth plus the rate of inflation, New York would have spent $7.4 billion less than it did from 2012 to 2017. That’s only a 5-year period — and yet more than enough to nix the state’s pre-pandemic 2020 budget gap of $6 billion.
Cuomo also squandered billions in revenue growth and money from litigation with banks. In the New York Post, the Empire Center’s E.J. McMahon summarizes:
Cuomo and the legislature have pursued radical policies, approving a misguided minimum wage ramp up to $15 an hour. This added untold costs for local governments and the state directly through public employees, costing over $800 million in Medicaid. They also imposed crippling union overtime rules on farms last year.
This year, they expanded the prevailing wage (despite the pandemic), which demands even private projects that benefit from any economic development help comply with union wage rules. Now, taxpayers will fork over more for infrastructure.
Despite taxpayers fleeing and recent population losses causing concern over a dwindling tax base, Albany has spent every last dollar available and then some. New York’s finances are a black hole that Washington could throw money into forever — evidenced by the fact that billions of dollars in support from the CARES Act earned McConnell condescending jabs from Cuomo, who quickly sought more money.
A China-inflicted crisis warrants federal action, but giving Cuomo more money with no strings attached is effectively bailing out unions and funding policies that hurt New York taxpayers.
Doug Kellogg is the state projects director at Americans for Tax Reform.
