New York’s FY 2013-2014 budget: Economic growth and education fuel progressive capital of the nation

Published: May 30, 2013


New York Governor Andrew Cuomo presented the 2013-2014 budget on October 29, 2012. During the governor’s state-of-the-state address on January 9, 2013, he highlighted several major accomplishments, including:
·        Eliminating the budget gap (in January 2011 it was projected to be $17.4 billion by 2013-14)
·         State operations spending is held to 2 percent growth year over year
·        Establishing the following reforms:
o    A property tax cap
o    A new pension system (Tier VI)
o    Lowest middle-class tax rate in 58 years
The state budget experienced an increase of 8 percent from 2013. Over the past two years, Governor Cuomo has worked to rebuild the state and establish a comeback. His strategies this year focus on economic growth, creating a world-class education system, and fiscal integrity for New York to become “the progressive capital of the nation once again.”

Regional Economic Development Councils and the New York Works Task Force have been established to reinvent economic planning and coordinating capital plans with 45 state agencies and authorities. New programs and investments “will focus on accelerating the commercialization of new technology to create new businesses, providing additional resources for regional economic strategies and marketing the state’s tourism assets to bolster economic growth,” according to the budget.
Governor Cuomo strongly emphasizes improving education throughout New York, which has the highest per-pupil spending ($18,618) among states, yet lags behind in graduation rates. The New NY Education Reform Commission was established in April 2012 to study best practices in public education and present recommendations to the New York school system. These recommendations will take effect this fiscal year, as will a 3 percent increase in school aid.
The governor also stresses establishing better teacher evaluation systems (Annual Professional Performance Review system); school districts that enforce this new procedure will be eligible for school aid. Other initiatives include enforcing pay-for-performance initiatives and rewarding high-performing teachers.
The social services vertical experienced the biggest increase (55 percent), mainly due to Hurricane Sandy. The Disaster Assistance budget includes $30 billion to continue recovery and rebuilding efforts.
The health care vertical saw an increase of 9 percent. The Medicaid Redesign Team (MRT) was established in 2011 to develop policies to control Medicaid spending and develop policies. These recommendations will be enacted in FY 2014 with a 6.7 percent budget increase dedicated to improving Medicaid initiatives. New York is expected to save an estimated $17 billion over the next five years because of these reforms.

The state’s IT budget increased by 16 percent, and the general government vertical saw the biggest increase (48 percent), mainly due to large IT projects released by the Office for Technology. Specific projects include statewide public safety communications, the state’s data center, and an IT initiative program.


The health care and higher education verticals saw a 2 percent and 3 percent increase, respectively. Additionally, several verticals saw a decrease in IT spending, including economic development/regulation (98 percent), natural resources/environment, and justice/public safety (both at 18 percent). These decreases are attributed to projects previously funded in FY 2013 being either completely removed or having their budgets decreased dramatically. As a result, more funding is given to other verticals, specifically general government.
Analyst’s Take
Governor Cuomo’s vision can be summed up in his following statement: “New York state is rising to build a smarter, stronger state than we’ve ever had before.”
He has emphasized investing in technology to create new business and improve New York’s economy, and projects such as “innovation hot spots” will connect “higher education institutions to encourage private-sector growth.” The increase of funds for large projects across the education and economic verticals will also help bolster economic growth and will be a good opportunity for vendors to consider investing in.
Cuomo has an ambitious agenda to improve a range of initiatives, from education to gun control to women’s rights. It is clear that, based on the success of the past two years and the improving economy, the governor feels confident that more jobs will be created, education will be reformed, and other initiatives will prosper.