As New York state lawmakers prepare to learn details, schools and municipalities face impacts of Governor Andrew Cuomo’s 2019 spending plan. The State Budget, totaling $168.2 billion in spending calls for $100 billion in state operating funds, a 1.9 percent increase. The Governor proposes exploring potential reforms of the state’s tax system- the structure to be determined with lawmakers- as a way of offsetting the impact of the federal tax plan which limits the deduction of property and income taxes to $10,000. Governor Cuomo’s proposed tax plans in response to federal policy changes limiting deductibility of state and local tax plans are found in the preliminary report from the New York State Department of Taxation and Finance. The Governor named several ways of raising revenue in his State Budget Plan, such as

  • Creating a new tax on opioid drug sales, which is expected to generate $171 million, which the Governor said will be used to help fund anti-addiction efforts
  • Maintaining STAR property tax benefits at current levels, instead of proceeding with an expected 2 percent increase
  • Deferring a number of business tax credits through 2020 and imposing new inspection fees on privately operated passenger carriers, such as motor coaches
  • Creating a new pre-licensing course for people to get a driver’s license and then charging them $8 apiece in order to raise nearly $1 million for the state

Highlights of Other Major Proposals Concerning Educational Institutions and Municipalities:

  • Increasing school aid by $769 million - doubling the statutory school aid growth cap and bringing total investment to $26.4 billion
  • Providing $7.5 billion in state support for higher education in New York- an increase of 24 percent since FY 2012
  • Providing $118 million to continue the Excelsior Scholarship and extend the income cap to $110,000
  • Continuing the two-year $60 million appropriation to accelerate reimbursement for the Comprehensive Attendance Policy program
  • Continuing a $5 million reimbursement program for science, technology, engineering, and math (STEM) instruction
  • Creating a Student Loan Ombudsman at the Department of Financial Services to assist in the reduction of student loan debt
  • Continuing $59 billion transportation capital plan to expand the Metropolitan Transportation Authority network, improve roads, bridges, airports rail facilities, ports and transit systems funded through the Department of Transportation
  • Continuing $29.2 billion investment in DOT and Thruway Authority programs for local roads and bridges
  • Maintaining $477.8 million in funding for the Consolidated Highway Improvement Program
  • Providing $225 million to fund the state's match of savings from shared services actions included in property tax savings plans
  • Providing $715 million to maintain core local government assistance through the Aid and Assistance for Municipalities program
  • Maintaining support for the takeover of county Medicaid costs by eliminating required growth over the prior year
  • Providing $100 million for round three of the Downtown Revitalization Program

Look to the MuniBlog for follow-up analysis of the Governor’s proposals and their potential impact. Lawmakers are expected to adopt a state budget by April 1, 2018.