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How will New York State close a $6.1 billion budget deficit

How will New York State close a $6.1 billion budget deficit
Posted at 6:28 PM, Jan 21, 2020
and last updated 2020-01-21 18:28:26-05

N.Y. (WKBW) — New York State is $6.1 billion in the red. Governor Andrew Cuomo laid out some of the ways he intends to close the budget deficit during his FY 2021 Executive Budget Address on Tuesday.

He said much of the deficit comes from the rising amount of money the state spends on Medicaid. Cuomo placed the blame on local governments, saying they've been irresponsible in how they run medicaid programs since the state is paying the bill.

"You have no financial efficiency or economy of scale, or to call up and say I think this is a problem or this is a problem, because you have someone else paying the check," Cuomo said.

Cuomo is reinstating the Medicaid Redesign Team from 2011 to find $2.5 billion in savings. Cuomo said this will have zero impact on local government as long as they follow certain guidelines:

  • Stay within a 2% property tax increase
  • Not exceed 3% Medicaid growth, if the locality does it will pay the annual increase that year.

Erie County Executive Mark Poloncarz said he spoke with other county executives on a conference call to discuss the changes the proposed Medicaid local-share cap would have.

"My fellow county executives and I are concerned about the impact the Governor's FY2021 proposal will have on our budgets, and expressed those concerns to the governor's team. While we all look forward to working with New York State to find additional ways to reduce costs without reducing eligibility for those who truly qualify for Medicaid, since New York State assumed responsibility for the administration of Medicaid, counties have reduced ability to find savings in the program. Furthermore, since the passage of the Affordable Care Act, nearly 80,000 additional Erie County residents receive healthcare through Medicaid due the expansion of Medicaid eligibility."
Erie County Executive Mark Poloncarz

He said Erie County will be doing a further analysis of how the budget proposals will impact the county.

While the Medicaid savings plan is intended to save over $2 billion, that still leaves a $4 billion deficit. There was far less discussion on closing that cap.

While the Governor rattled off a laundry list of new spending items and inconsequential pet projects, like redesigning the state flag, he offered zero acknowledgement of our record-breaking population drain or the state’s precipitous economic decline.
NYGOP Chairman Nick Langworthy

In addition to Medicaid, a lot of time was spent on education, which will see a $826 million increase, which is less than half of the $2 billion requested by the Board of Regents. Cuomo wants to shift money to poorer school districts.

While we agree that additional funding for high-need districts should be a priority, we need to ensure all districts have adequate resources to provide every child in New York State with a high-quality education.
Board of Regents

The CFO of Buffalo Public Schools said the district concurs with the Board of Regents' statement.

The Alliance for Quality Education was not satisfied with the Governor's plan, saying our schools "Don't need an equity masquerade, they need the $3.8 billion the state owes them."

The deadline to pass the budget is April 1st.