Changing the Culture: A Look at New York Governor Cuomo’s ambitious agenda Presentation by Robert B. Ward Deputy Director, Rockefeller Institute January 31, 2011

Caveats  Governor Cuomo issues his budget today; it will include the bulk of his key fiscal proposals – but perhaps not all  This presentation focuses on the budget and structure of government – the Governor has also identified other priorities, including ethics  I do not represent the administration Rockefeller Institute of Government 2

The problems on the table  Economic growth lagging behind the nation for most of the past half-century  And people ‘voting with their feet’  A tax burden among highest in the nation  The highest, by some measures  Like many other states, a large structural gap between spending and revenues Rockefeller Institute of Government 3

A strong anti-tax message  ‘New York has no future as the tax capital of the nation,’ Governor Cuomo says  One priority: A tough property-tax cap  Tax levy limit: lesser of 2% or CPI  Particularly tough on school districts, which would need 60% vote to override  School spending has been rising 5.6%/yr  Also covers municipalities except NYC Rockefeller Institute of Government 4

A dramatic change in budgeting?  Governor Cuomo attacks formula-driven budgets as ‘a sham’  E.g., education formulas drive a $2.9B increase; is a $1B increase a $1.9B cut?  Anyone in the business of state government knows this – but voters don’t  At least a rhetorical attack on spending; perhaps a legislative one as well Rockefeller Institute of Government 5

Executive branch restructuring  Hails back to last such, under Al Smith  A sainted figure in New York history  Spending and Government Efficiency (SAGE) Commission to lead consolidation  If Legislature approves creation, its recommendations would automatically take effect unless affirmatively rejected  McKinsey, Rockefeller Institute are helping Rockefeller Institute of Government 6

Restructuring Medicaid  Emulate Wisconsin model  Stakeholders assigned to find savings  Governor’s budget sets the target  Redesign team including legislators to find solutions by April 1 budget deadline  Largest Medicaid program; many interests  Did it really work in Wisconsin?  If it works in NY, it can work anywhere! Rockefeller Institute of Government 7

Cutting mandates to cut local costs  An executive-legislative-stakeholder team  Led by a top aide to the Governor  Also legislators, municipalities, school boards, unions  This will be especially interesting  Costly mandates involve labor: benefits continuing after contract expires, binding arbitration, prevailing wages Rockefeller Institute of Government 8

Budgeting for performance  $250 million for school districts that raise student performance  And $250 million for those that find administrative savings with efficiencies  New state aid to encourage consolidation of municipalities Rockefeller Institute of Government 9

Contact information Robert Ward Rockefeller Institute of Government 10