ALBANY — The proposed federal budget unveiled Monday by President Donald J. Trump has Gov. Andrew M. Cuomo scrambling to revise his $174 billion spending plan with less than three weeks before the state budget is due.
The administration announced on Wednesday afternoon that they have to “re-look at our entire budget” in light of a proposed 20 percent cut to federal health care spending, even though it’s implausible to expect the Democratic-controlled House of Representatives would adopt the president’s plan in anything close to its current form.
“If even a portion of these cuts are allowed to take effect, it would devastate health care in New York,” state Budget Director Robert Mujica said during a news conference at the Capitol.
The proposal has the Cuomo administration reversing course on more than $500 million in health care cuts that were advanced in the governor’s amended budget in response to the realization that the state was facing a massive revenue shortfall for the coming fiscal year, which begins April 1. Health care providers, including hospitals and ambulance companies, said Cuomo’s initial reductions would drastically diminish services.
“Any new spending … should go to restoring those cuts,” Mujica said.
It’s not clear what degree of preparation the administration is considering in response to what will come from Washington, as the budget office said it was too speculative at this point to estimate how much the state would need to set aside.
Shifting the state’s spending priorities could mean reducing the governor’s proposed $1 billion increase in state education aid, which — along with health care — represents one of the largest areas of spending each year.
“We would look at everything, Mujica said.
Bill Hammond, director of health policy for the fiscally conservative Empire Center for Public Policy, acknowledged the negative ramifications of Trump’s spending plan for New York, but dismissed the possibility of the “draconian” cuts being adopted.
Since Trump was elected in 2016, Hammond said, the governor has consistently warned that New York’s funding was under threat. That premise was plausible when Republicans controlled Congress, but even without divided government there were no cuts to Medicaid.
“Cuomo is looking for whatever leverage he can get (in state budget negotiations) … and Washington and President Trump make a nice foil,” Hammond said.
This theory was readily embraced in the halls of the Capitol on Wednesday, when Democratic lawmakers were holding symbolic votes on their budget resolutions, which the Cuomo administration derided as being “from fantasyland.”
The contention stems from the push by both houses of the Legislature to increase spending beyond the governor’s budget proposal, even though legislative leaders defended their plans as being fiscally balanced.
The Assembly is proposing to fund its spending priorities with additional income taxes on millionaires and a higher real estate transfer tax on properties worth more than $5 million.
The governor’s office stressed that they are opposed to any new taxes at this stage in the budget process, aside from taxing the purchase of multi-million-dollar second homes in New York City. Cuomo has already advanced a tax on opioids, the expansion of a downstate surcharge on rental cars to the rest of the state, and collection of sales taxes on online purchases.
Republican lawmakers have spoken out against the increases floated by the governor and legislative leaders, calling for a state budget that would reduce the tax burdens on New Yorkers.
Despite the financial predicament the governor’s administration said the state is facing, Cuomo remains steadfast in demanding that the budget negotiations continue to focus on policy initiatives, including an overhaul of the criminal justice system.
“We can walk and chew gum at the same time,” said Melissa DeRosa, secretary to the governor.
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