2016-2017

FINANCIAL PLAN
greater share of these jobs. Meanwhile, more than a third of states have had more than two percent
growth in state and local government employment since the end of the recession. Besides a
reduction in public services, steep government downsizing has cost jobs that offer a middle-class
life; jobs held by people whose spending in their communities directly leads to more private sector
employment. In many upstate regions, New York's budget austerity has accounted for much of the
erosion occurring in middle-class jobs.
Spending Cap Will Result in Nearly $10 Billion in Future Cuts
Even in areas where state spending in nominal dollars is increasing, the state is often committing
less in real funding support compared to the 2011 fiscal year, despite six years of a recovering
economy. Continued adherence to a two percent spending cap in the next three budgets after this
one means that, unless the policy is changed, unforced austerity will continue. The number of
subsidized child care slots falls far short of the need, library hours have been cut back, and the
maintenance of public buildings and infrastructure has suffered.
On top of the cuts sustained in the past five years of austerity and recovery, substantial further
budget cuts will be layered on in order to keep within the two percent spending limit. These as-yet
unspecified cuts total $9.5 billion, or an average of $3.2 billion a year. The figure below shows the
budget cuts that are detailed by program area as part of this year’s proposed gap-closing, as well as
the additional unspecified cuts in future years that will be needed to stay within the state’s two
percent spending cap.
With Medicaid and school aid likely to increase moderately over the next three years, most of the
$3.2 billion annually in further cuts almost certainly will be concentrated in the remaining areas of
the state budget: social welfare, higher education, public health, parks and environment, and aid to
local governments. For these budget areas taken as a whole, further spending reductions of $3.2
billion a year translate into staggering service reductions.
New York State Economic and Fiscal Outlook 2016-2017 | 9