Federal Government Can’t Bail Out The States Forever
Gov. Andrew Cuomo made the right decision postponing the Restore Mother Nature Bond Act from a public referendum vote until 2021.
The $3 billion bond act would shore up new funding for projects designed to mitigate flooding, restore fish and wildlife habitats, upgrade drinking water infrastructure and preserve land. Cuomo proposed the bond act in his State of the State address this January, and it was authorized by the state Legislature in April as part of the 2020-21 state budget.
Cuomo said on Wednesday that New York may face a deficit of upward of $30 billion over two years because of revenue losses related to the pandemic. The state was already facing a $6 billion budget gap in March tied to Medicaid costs.
To his credit, Cuomo said he still believes deeply in the bond act but feels the state needs to have financial stability before committing to such a large bond act. A state that doesn’t know exactly how badly or for how long COVID-19 is going to decimate its revenue streams can’t be putting taxpayers on the hook for $3 billion, no matter how well-meaning the program may be.
The decision sparked blowback from some environmental groups, but the governor’s decision making is sound. Environmentalists were howling pretty loudly last week, with some of their ire aimed at federal lawmakers who have played hot potato with federal aid to states and municipalities.
What will be interesting is what happens next year if the state’s finances aren’t sound. The federal government can’t bail out state governments forever — and when it comes to the Restore Mother Nature Bond Act, the state must be able to stand on its own two feet before assuming that much debt.