New York state budget (2012-2013)

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The FY 2013 state budget began on April 1, 2012. Lawmakers passed the $132.6 billion budget on March 30, 2012, one day before the end of the fiscal year.[1] Governor Andrew Cuomo, Senate Republican leader Dean Skelos and Democratic Assembly Speaker Sheldon Silver negotiated much of the budget behind closed doors.[2] The final agreement was on a $132.6 billion budget, counting federal funds.[3] The governor vetoed more than $642,000 in items that were going to 122 local groups statewide from the budget on April 11, 2012.[4]

The enacted budget can be found here.

The budget closed what was a $3.5 billion deficit with a tax increase on joint earners making at least $2 million annually and also in part by finding $1.14 billion in savings from consolidating agencies, purchasing and human resources.[5][1]

A deficit emerged as the year went on and was pegged at $1 billion in October 2012. After Superstorm Sandy caused $33 billion in damage, Gov. Cuomo estimated that the storm would cause "an additional $1 billion deficit on the state side, maybe higher." New York Comptroller Thomas DiNapoli predicted it would lead to a short-term falloff in tax revenues. [6]

Highlights of the budget included:

  • $15 billion for NY Works, which focused on infrastructure development and which Cuomo said would create thousands of jobs,[1]
  • $13.1 billion for the Metropolitan Transportation Authority’s five-year capital budget,[1]
  • Increasing Medicaid and education spending by four percent;[3]
  • 10 percent increase in the welfare grant in June;[7]
  • $743 million in new state capital projects, with $232 million set aside for bridges and highway projects.[3]


See also: New York public pensions

Gov. Cuomo signed the pension changes into law on March 15, 2012.[8] The pension changes the legislature approved were less drastic than those sought by Gov. Cuomo, applying to fewer employees and saving $80 billion for the state and local governments in the next 30 years, which was less than the governor had originally hoped. The approved plan, which applied only to new employees, raised the minimum retirement for state workers from 62 to 63 and required most workers to increase the portion of their salaries that they contribute to the pension system from the current three percent to as much as six percent for the highest earners.[1][9] The reforms also included offering a 401(k)- type plan for nonunion workers earning at least $75,000 annually, but unions succeeded in keeping a 401(k)-type option out of the final deal for unionized workers.[1][10]


New York's school districts received $20 billion in state aid for the 2012-2013 school year, an increase of about $750 million, or 3.9 percent, compared to 2011-2012.[11] It was the first increase for education in three years.[12] The budget included a total of $125 million to be allocated for performance grants, including $50 million in continuing payments to the school districts who would receive awards in the first round of grants, and an additional $75 million for a second round of awards to school districts.[13]

A two percent cap on property tax rate growth for FY 2013, however, meant less funding for some school districts. To increase taxes at a rate beyond the cap would require the support of 60 percent of their voters to be approved under state law.[12]

Healthcare Exchange

The budget proposed by the Senate Republicans did not include the creation of a health exchange that was called for by President Obama's Affordable Care Act, although Gov. Cuomo and Assembly Democrats favored the creation of one.[14] The governor said he still wanted to include a health insurance exchange in the state budget, but that he could create an exchange by executive order.[15]

Legislature Proposed Budget

The proposed budget from the Senate Republicans, who held a majority, can be found here. It included four-percent increases in both school aid and health care and a nearly $2 billion deficit. The proposed budget held the annual growth in state spending to two percent, the same cap imposed on local governments and school districts the previous year.[16]

The budget also included tax cuts that Senate leaders said would be paid for by cuts to programs. The incentives included:[16]

  • 20 percent corporate tax cut worth $65 million to 200,000 small businesses
  • 10 percent tax cut for 800,000 small business filing under personal income tax status, saving employers $120 million

The Assembly's proposed budget can be found here.

Legislators wanted to set aside $750 million of the increase for general school aid. That would leave Cuomo with $50 million for the competitive program, which was what he secured for the current fiscal year.[14]

Governor's Proposed Budget

The Governor unveiled his proposed $132.5 billion FY 2013 state budget in January 2012, and it can be found here.[5] The budget proposal increased school aid and used $250 million of the $800 million increase for competitive grants to reward performance and innovation.[14]

The governor's proposed budget included a new, less lucrative pension tier that would save local governments money on their contributions to the state pension system.[17] The plan raises the retirement age for new workers to 65 from 62 and gives employees a choice of a 401(k)-type retirement plan instead of a government pension.[18]

“The Executive Budget contains a number of projections that should be considered uncertain, not only because of a vulnerable economy, but also because of other variables,” according to Comptroller DiNapoli. One of the projections was a five percent increase in lottery revenue in the 2012-13 fiscal year, to nearly $2.2 billion, despite slumping sales at the time of the projection.[19]

Under the governor's proposed budget, nonpublic schools would receive approximately $117 million, or a 13 percent increase, to carry out administrative duties the state required, such as taking attendance, giving standardized tests and running immunization programs. Under the Assembly's plan, nonpublic schools would see $118 million, and the Senate's plan would give them $133 million.[20]

A report released on August 2, 2011, by the Division of the Budget predicted a budget deficit of $4.6 billion in FY 2015.[21] Comptroller DiNapoli said on November 10, 2011, that the state's revenues would be $1.26 billion less than estimates, and spending would be $254 million more than projected over the coming three years.[22]

Comptroller DiNapoli also warned that the Governor's proposed budget eliminated certain aspects of budget transparency. The budget would increase the governor's control over the budget process and exempt certain agency contracts from the comptroller's review process as required by law. It would centralize all contract services in the Office of General Services. DiNapoli stated that the budget would give the governor the ability to shift spending among agencies with "minimal oversight or legislative input."[23]


  1. Cite error: Invalid <ref> tag; no text was provided for refs named approved
  2. The Wall Street Journal, "NY's budget: A short course in politics, numbers," March 24, 2012
  3. 3.0 3.1 3.2 The Wall Street Journal, "With Battles Over, State Budget Set," March 27, 2012
  4. The New York Daily News, "Gov. Cuomo trims more than $642,000 in legislative pork from state budget," April 12, 2012
  5. 5.0 5.1 Businessweek, "Cuomo’s New York Budget Ties School Funding to Teacher Grading," January 17, 2012
  6. The Albany Times Union, "Cuomo says Sandy adds $1B to deficit," November 8, 2012
  7. Cite error: Invalid <ref> tag; no text was provided for refs named strike
  8., "Cuomo Signs New Pension Deal Into Law," March 16, 2012
  9. The New York Times, "New York Lawmakers Vote to Limit Public Pensions," March 15, 2012
  10. The Democrat and Chronicle, "Some win, some lose in New York state budget deal," April 1, 2012
  11. The Democrat and Chronicle, "Some win, some lose in New York state budget deal," April 1, 2012
  12. 12.0 12.1 Businessweek, "NY schools, taxpayers wary of tax cap budget hits," March 29, 2012
  13. Office of the Governor, "Governor Cuomo, Majority Leader Skelos, and Speaker Silver Announce Early Passage of 2012-2013 Budget," March 30, 2012
  14. 14.0 14.1 14.2 Businessweek, "Governor, NY Legislature turn to passing budget," March 19, 2012
  15. The Albany Times Union, "A.M. Roundup: Piecing together the budget," March 26, 2012
  16. 16.0 16.1 The Wall Street Journal, "NY Senate pushes tax cuts, incentives in jobs bill," March 7, 2012
  17. The Albany Times Union, "Details of Cuomo's budget proposal," January 18, 2012
  18. Bloomberg, "NYC Mayor Bloomberg Backs Governor Cuomo’s Pension Overhaul," January 24, 2012
  19. Politics on the Hudson, "Some Risky Revenue In Cuomo’s State Budget Plan," February 7, 2012
  20. The Wall Street Journal, "Albany Boosts Private Schools," March 20, 2012
  21., "State budget report: $4.6 billion gap by 2015," August 3, 2011
  22. The Ithaca Journal, "State budget woes worsening, DiNapoli warns," November 10, 2011
  23. Politics on the Hudson, "DiNapoli: Cuomo Risks Transparency in State Budget Proposal," February 7, 2012