Want to close a budget deficit? Grow by a slower rate than you had previously hoped for.
That’s one of the main ways Governor Andrew Cuomo is proposing to shrink New York’s projected $6 billion gap: increasing the 2020 budget by only 1.9 percent for next year, rather than the much rosier five percent that is a frequent starting point for budget season.
In his budget address at the Egg performance center in Albany on Tuesday, Cuomo also proposed paring Medicaid costs by $2.5 billion — out of about $25 billion in annual costs — without causing any pain. He announced a new commission to figure out how.
“Here are their mandates,” he said. “Zero impact on local governments, 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 1st budget.”
This year’s proposed budget plan was short on details — even by Albany standards — because by press time the governor’s office had not released the official budget bills and financial plan that usually accompany the annual address. Even the inch-thick “briefing book” that outlines the governor’s plan was not printed in advance, as it typically is, and was only released as a 145-page electronic document.
But the general message of the proposed executive budget was clear: full steam ahead on many of Cuomo’s increasingly left-leaning causes — some of them budgetary, some of them not — while fending off calls for raising taxes and increasing spending from the most liberal wing of his party.
“This is the most progressive government in the United States of America, and we are fiscally sound,” Cuomo said. “And you can do both of those things at the same time, they’re not an oxymoron.”
Cuomo discussed other more upbeat parts of the proposed $179 billion budget before getting to Medicaid. He said the state would spend $175 billion over the next five years on infrastructure, including $52 billion on the MTA; $33 billion over the same period (much of it already ongoing, some of it pending voter approval of a bond referendum in November) on environmental projects, including offshore wind development, expanded subsidies for electric vehicles, extreme weather resilience and improvements to the water supply. And there were largely non-budgetary proposals for the environment, too, notably banning single-use styrofoam and making the state ban on hydraulic fracking, in place since 2014, permanent.
He also proposed using the budget process to revisit bail reform, which passed last year and took effect this month, but didn’t elaborate on specific changes.
“Reform is an ongoing process, it’s not that you reform a system once and then you walk away,” Cuomo said. “We need to act on information and not hyperbole. Let’s understand the facts, understand the consequences, discuss it intelligently, rationally and in a soluble way, and then let’s make the decisions that we need to make, and we will do that as we move forward over these coming weeks.”
And legalizing marijuana for adult use is also back on the agenda; the issue was debated last year, initially during the budget process and then, heatedly, toward the end of the legislative session in June.
“I think we can get it done in the budget this year,” said Crystal Peoples-Stokes (D-Buffalo), the Assembly’s Democratic Majority Leader and co-author of the legislature’s legalization plan. “I think that’s unfortunate, and dealing with it through the regular legislative process would be better, but I think, politically, this is how we get it done.”
Education advocates responded quickly to Cuomo’s proposal to increase education spending by $826 million, or 3 percent, bringing total school aid to $22 billion. Cuomo said 80 percent of the increase would go to New York’s poorest schools and pledged an overhaul of funding formulas to bring those at the bottom, which receive $13,000 per student on average — mostly from local sources — closer to those at the top, who receive $36,000.
“You’ll never get to $36,000 if you took your entire 40 percent [the state’s share, compared to local] and funded the poorer schools,” Cuomo said. “But maybe you’d raise them half way. And whatever you did would actually be achieving more equity.”
The Alliance for Quality Education called the proposal “an equity masquerade.”
“Cuomo’s proposal is less than half the of the $2 billion requested by the Board of Regents,” tweeted Jasmine Gripper, the group’s executive director.
New York State United Teachers President Andy Pallotta said the state could do this, if Cuomo would raise taxes on the wealthy.
“Billionaires and the ultramillionaires can afford to pay their share toward essential state services,” Pallotta said.
Senate Education Chair Shelly Mayer (D-Yonkers) said much of Cuomo’s premise was “flawed,” because his “data was inaccurate.”
“I don’t buy that we’re going to rob Peter to take care of Paul,” Mayer said, referring to the proposed shift in funding from poor districts to poor, individual schools.
Cuomo didn’t say who would be on the new health care panel, but he reminded the audience that he convened a similar group in his first term, the Medicaid Redesign Team, which was co-chaired by one of the state’s most powerful hospital executives, Northwell CEO Michael Dowling, and the leader of the influential health care workers union, 1199-SEIU, Dennis Rivera. Cuomo jokingly showed a slide of that team’s “official portrait” featuring Captain America and Iron Man and other heroes from the Avengers movie franchise — and he said none of former panelists were still around to be recruited again, because they’d “fled the jurisdiction.”
Budget watchdogs criticized the state’s practice of pushing overruns into future years, and said the commission’s revival felt too little too late.
“The need to reconvene this was clear a year ago,” said E.J. McMahon, from the conservative Manhattan Institute. “Delaying until now is just tactics, not a solution.”
McMahon said the earlier Medicaid overhaul managed to curb spending, starting around 2011, but the lid — a 3-percent growth cap — started to come off in recent years.
“They benefited from an influx of federal funding from the Affordable Care Act, and they leveraged it to the hilt,” McMahon said.
As enrollment climbed, spending began to outpace the money allocated to Medicaid, resulting in a $1.7 billion deficit last year, which budget officials shifted into the current year. And now the administration plans to make that calendar shift a permanent feature.
“You don’t save money by paying your December rent in January,” said Andrew Rein, president of the Citizens Budget Commission. “The bigger issue is — do you solve the problem now, when the economy is good, or do you leave it to solve until after the economy turns bad?”
Cuomo said he wanted localities to play a greater role in limiting Medicaid growth, proposing a system where they would be penalized for spending increases above 3 percent but would be rewarded for growth rates lower than that. A spokesperson for Mayor Bill de Blasio said Cuomo was unfairly shifting liability to New York City and other localities.
“Whether it’s moms turning to our public hospitals for life-saving breast cancer screenings or first graders learning to read in our public schools, New Yorkers should not be held responsible for the state’s Medicaid gap,” said spokesperson Freddi Goldstein. “We’ll review the details once we have them, but we’re ready to fight to protect New Yorkers.”
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