New York speaker absence slowing state budget process

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SHAFAQNA – The loss of New York Assembly leader Sheldon Silver from budget negotiations, after he was charged with corruption last week, could delay the state’s budget process and threaten recent strides toward better fiscal management.

Silver has presided over the state’s budget negotiations for two decades as speaker and is widely seen as having clout, influence and experience that will be hard to replace.

His arrest on charges of pocketing $4 million from bribery and kickback schemes comes a little over two months before the state’s budget is due on April 1. It also comes as Governor Andrew Cuomo’s most ambitious legislative program yet, a $142 billion spending plan including contentious reforms to public education, is set to tax the legislature even without the added distraction of Silver’s arrest.

“Whoever replaces him is likely to have very similar politics but Silver brought the weight of 20 years worth of debts paid and clout, and whoever is next won’t bring the same thing to the table,” said Ed McMahon, a senior fellow at the Manhattan Institute, a right-leaning think tank.

It is far from clear how the new budget will be negotiated. An initial plan, reported in the New York Times on Monday, that would see Silver remain as speaker but replaced in the budget negotiations by a group of five Democrats led by Herman Farrell, leader of the Ways and Means Committee and majority leader Joseph Morelle, is starting to look tenuous.

More Democrats are appealing for Silver to step down altogether and Cuomo has suggested that negotiating by committee would complicate the process.

The latest reports suggest Silver may be replaced as speaker entirely.

New York state’s budget process is highly condensed with the state’s fiscal year starting on April 1, compared with July 1 for most other state. That means any delay runs the risk of overshooting the deadline.

“This is truly unchartered territory,” said McMahon. “The executive state budget is a big unwieldy document, so in such a compressed budget period every day counts.”

The Ways and Means Committee, the body responsible for negotiating the budget on behalf of the Assembly, is still missing a permanent secretary, and the fate of Silver’s council Jim Yates, a key budget negotiator, is now also uncertain.

Herman Farrell, leader of the Ways and Means Committee, did not comment. Morelle’s office was not immediately available for comment.

It is unclear how Silver’s absence would impact the outcome of the budget. It could even make certain aspects, such as education reform, easier to pass given Silver’s support for the unions and his position on the left wing of the Democratic party.

It could also make it easier for Cuomo to make permanent a 2 percent cap on property tax increases, a move Silver has opposed.

“It’s much more likely the governor’s agenda will go through if Shelly is weakened and certainly if Shelly is not there,” said Doug Muzzio, a political analyst Baruch College in New York, using Silver’s widely used nickname.

Cuomo has made budget timeliness a barometer of government efficiency. Last year Cuomo produced his fourth on-time budget in a row, the first time that has happened in the state for 40 years.

Credit ratings agencies upgraded the state last year, citing improved fiscal management as one factor behind the move. Standard & Poor’s now rates the state AA+, its highest rating since 1962. The premium over top-rated debt the state pays to borrow money are at their lowest level in over a decade.

While the charges against Silver are unlikely to have a credit impact in themselves, a delayed budget or highly politicized wrangling during the process could tarnish the state’s newfound reputation for fiscal management, making the last four years look like the exception rather than the rule.

Still, credit rating agency Standard & Poor’s said it is not treating events in Albany as a credit risk at this stage. The agency said its upgrade of the state rating was based on recent restraint in spending, which has significantly reduced out-year budget gap projections, as well as a series of on time budgets.

“At this point, we do not expect that to change,” said S&P analyst David Hitchcock.

 

Source : Reuters.com

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