BY E.J. McMAHON
New York and its local governments will soon be showered with tens of billions of dollars in federal stimulus cash—and yet the new state budget will pump even more money into New York’s biggest capital pork-barrel slush fund.
A $385 million appropriation for the State and Municipal Facilities Program (SMFP) was tacked onto the bloated 1,053 Capital Projects appropriations bill set for passage by the Legislature today as part of a total state budget that may top $200 billion (on an All Funds basis) for the first time. In the past, SMFP spending has been funded with bonds issued by the state Dormitory Authority (DASNY).
The SMFP was created in 2013 with an initial appropriation of $385 million and expanded in each budget through FY 2019, giving Cuomo and state lawmakers access to a total of nearly $2 billion. The program has not received fresh funding since FY 2019, and Governor Cuomo’s FY 2022 Executive Budget included only a reappropriation of about $1.9 billion in previously authorized but unspent SMFP funds. The reappropriating also is included in the agreed-upon budget bill.
As described in the lengthy appropriations language, SMFP funds can be used to underwrite almost any capital construction or equipment purchase a state or local politician can think of, including the vast category of privately sponsored “economic development” projects. Most SMFP grants are designed to allow state legislators to take credit for financing local amenities such as skateboard parks, walking trails, school athletic fields, and improvements to municipal buildings of all kinds. Prior to 2013, these were never regarded as state-level capital funding priorities.
There is no provision of law explaining how SMFP projects are selected, or who ultimately controls the process, and there is no requirement for disclosure of the elected official who is directing the money to an individual project.
In practice, however, most SMFP funds are requested by state lawmakers, funneled through legislative leaders to the governor’s Division of the Budget (DOB), which controls the timing and flow of financings by DASNY. While legislators lay claim to most of the money, some of the biggest SMFP outlays have been for Cuomo’s own projects, including $160 million in further subsidies for Tesla’s $1 billion, state-funded solar panel plant in Buffalo, and $25 million for the privately developed and now struggling Empire Outlet mall in Staten Island.
Through 2020, DOB had cleared 4,499 SMFP objects totaling $1.6 billion, as detailed in a searchable database at Empire Center’s SeeThroughNY.net transparency website.
President Biden’s $1.9 trillion American Rescue Plan included $350 billion in direct cuts to states and local governments. New York’s cut of that cash will total nearly $24 billion, including $10.8 billion for counties, cities, towns and villages. Local governments have broad leeway to spend the money for purposes including water, sewer, or broadband infrastructure. Money being fungible, the ripple effect will be to free up huge amounts of capital capacity for the sorts of projects that have been covered by SMFP.
So why, for the first time in three years, is more money being added to the program now? Perhaps the governor and Legislature expect to push more pork out the door in the year ahead, and are afraid of running out of appropriations authority as they approach the 2022 elections.
E.J. McMahon is the founder of the Empire Center for Public Policy.