Gov. Cuomo Outlines Proposed Budget, Including CNY Priorities

Jan 21, 2020

Gov. Cuomo delivers his budget address in Albany Tuesday.
Credit Governor Cuomo's Flickr page

Projects that impact Central New York made it into Governor Cuomo’s 2020 budget address Tuesday.   He teased some of them in his state of the state speech earlier in the month, but including them in his $178 billion budget proposal is a good sign they’ll be funded. 


"Three-Hundred million dollars through NYPA [New York Power Authority] to reimagine the Erie Canal; $70 million for a new workforce training and education program [Regional STEAM School in the former Central High School] in Syracuse; $9 million for the Skydome, which is a very exciting project where they're bringing drones, unmanned aerial systems and their tech companies to be tested in Oneida County."

Cuomo has also set aside $5.8 billion for upstate roads and bridges.  But the state is facing a $6.1 billion deficit, the largest in a decade, some of it due to the increasing cost of Medicaid.  Cuomo has re-enlisted the Medicaid redesign team from 2011 with the tall order of making significant reforms in a short window of time. 

"Zero impact on local government.  Zero impact on beneficiaries.  Find industry efficiencies and/or additional industry revenue, root out waste, fraud, and abuse, and get this done in time for the April 1 budget."       

At the same time, Cuomo wants to hold local governments more responsible for keeping Medicaid costs under control.  If growth is above three percent, counties will pay the bill.  If costs are below three percent, they’ll get 25 percent of the savings from the state. 

Cuomo also wants to change how education is funded.  His three percent, or $826 million dollar increase in education aid comes with a proposal to more equitably distribute the states 40 percent share of education funding.  He says it’ll be a start to closing the $23,000 per-student difference between the wealthiest and poorest schools.

 "The most progressive approach: Take your 40 percent, start funding the bottom schools, keep funding the bottom schools, and see how high you'll get.  By the way, you'll never get to $36,000 [per pupil in the wealthiest districts] if you took your entire 40 percent and funded the poorest schools."    

The Alliance for Quality Education was quick to discredit Cuomo’s funding plan.  In a release, Executive Director Jasmine Gripper says black, brown, and low-income children have been waiting for equity for nine years, and that they need the $3.8 billion that the state owes them.

Cuomo once again hopes to use the budget process to pass progressive legislation, ranging legalizing marijuana and banning flavored vaping products…to the first-in-the-nation inclusive equal rights amendment and establishing paid sick leave.

NO NEW REVENUES TO CLOSE BUDGET GAP

by Karen DeWitt, Capitol Correspondent

Credit Governor Cuomo's Flickr page

Cuomo's $178.6 billion budget proposal detailed plans of how to deal with a $6 billion budget deficit largely caused by increased costs for Medicaid, as well as plans to legalize the adult recreational use of cannabis in New York.

The costs of Medicaid have been rising, partly due to more people receiving health care through the Affordable Care Act, or Obamacare, and increases in the state’s minimum wage, which has led to higher labor costs.

Governor Cuomo, in his budget speech, focused on rising costs in the Medicaid programs administered by local county governments, who pay a share of the program. Since 2013 though, the state has paid for all cost increases incurred by the counties, and the City of New York’s Medicaid programs.       

Cuomo says because the state pays for the cost overruns, which he say run in the billions of dollars, the local governments don’t have the incentive to hold the line on costs.

That’s the blank check syndrome,” Cuomo said.

Cuomo says the state will continue to cap the county government’s Medicaid costs, but he says there will be new conditions on that help. He says counties must stay within the state’s 2% per year property tax cap, and must not increase their year to year spending on Medicaid by over 3%, or the state will no longer help them with the extra costs. He says if counties can limit that growth, he’ll reward them by allowing them to keep a portion of any savings incurred.

The governor says he will reconvene a Medicaid redesign commission to trim $2.5 billion out of the Medicaid budget. But he says the cuts will not have an impact on Medicaid patients, and overall he plans to increase health care spending by 3 percent.

Counties responded cautiously, saying, in a statement, that they are willing to help the governor achieve his goals.

Bill Hammond, health care policy analyst with the conservative leaning fiscal watchdog group the Empire Center, says the factors leading to the Medicaid overspending are not really the fault of local governments.

Local governments did not cause the rise in Medicaid costs,” Hammond said. “Penalizing them or giving them skin in the game is not an effective way of reducing costs.”

Hammond says it’s unlikely the legislature would agree to penalizing local governments if they don’t hold down costs.

The governor also wants to increase school aid spending by 3 percent, or around $826 million more dollars.  Cuomo continues to say that simply adding more money alone is not the answer, and he says he wants to target more of the existing aide to the state’s poorest schools. He predicts it will cause a political battle between richer districts and poorer districts. 

We need the guts to do it,” Cuomo said. “The current formula is designed to achieve political needs, not equity.”

Cuomo says he still plans on staying within his self imposed 2% spending cap, because he plans to limit spending in the rest of the budget to 1% or less.

The governor did not propose any major new revenues to help close the deficit, a financial analysis by his budget office predicts that increases in existing tax revenues will help close the gap.

One plan that could bring in $300 million in additional revenue when fully implemented is the proposed legalization of adult recreational use of marijuana. The governor proposes a 20% tax on retail sales of the drug, along with a wholesale tax of $1 per gram of cannabis “flower”.

Democratic legislative leaders also responded cautiously to the governor’s plan. Senate Leader Andrea Stewart-Cousins says she does not want all the health care decisions though left to a commission.

“There’s no way that we won’t be involved,” Stewart-Cousins said.  “Because it’s extremely important, obviously.”

Stewart-Cousins says she supports the governor’s aim to reduce the growth in Medicaid spending without harming patients.

Cuomo also made a case for another pay raise for lawmakers. The second phase of a planned raise has been delayed because a related requirement that lawmakers also forgo most outside income was thrown out in court. The governor say he’d support the next phases of the pay increase if lawmakers agree to release their tax returns.