Albany, NY — The Empire Center for Public Policy offered the following reactions to the proposed 2022 State Budget.
“The projected $5 billion annual increase in tax revenue revealed by the state budget director today provided Governor Hochul a historic opportunity to both replenish the state’s depleted reserves and allow New Yorkers to keep more of what they earn. She could have revoked last year’s unnecessary hikes or provided significant broad-based relief to stem outmigration and inspire businesses investment. Instead, beyond investing in the reserves, she directs the vast bulk of the windfall to increased spending,” said Peter Warren, Director of Research at the Empire Center.
“The budget’s record-high $216 billion in proposed spending for the upcoming year builds on the 13 percent increase in last year’s budget, which was supposed to be a one-time spike. The 2021 mid-year financial plan forecast that spending would decline as federal funds run dry and exigent needs related to the pandemic decline. That’s not what’s happening here.
“The legislature will view the Governor’s new programmatic initiatives in the budget as a baseline on which to build. Will she be able to hold the line on spending where she has drawn it — or will her budget be a springboard for a broader election-year spending spree?”
“After the searing experience of the past two years, it’s surprising and disappointing that the governor’s budget includes no major focus on bolstering the state’s pandemic defenses,” said Bill Hammond, senior fellow for health policy at the Empire Center.
“The state Health Department needs more than new lab space. It needs an updated pandemic response plan – informed by close investigation of how and why COVID hit New York so hard – and the personnel and resources to make that plan reality. The cost of this urgently necessary overhaul would be tiny in comparison to Medicaid, yet has the potential to save tens of thousands of lives when the next virus inevitably hits.”
“Medicaid is meant to provide safety-net care to the indigent and disabled, yet years of feckless management in Albany have allowed it to become a catch-all health plan for a third of the state’s population – with more than half of its enrollees living above the poverty line,” said Hammond. “This diverts resources from those who need it most and makes the health-care system increasingly dependent on Medicaid’s below-market reimbursement rates. The governor should be leading the way to rebalance our insurance system – by making private insurance more affordable and accessible and reserving Medicaid for those who have no alternative.”
Growing the health-care workforce:
“Although portions of New York’s health-care industry are experiencing pandemic-driven labor shortages, it’s not clear that Governor Hochul’s goal of growing the health-care workforce by 20 percent in five years is necessary or desirable.” said Hammond. “New York already employs 28 percent more health workers per 1,000 residents than the national average – and over the past decade those ranks grew by more than one-fifth without any particular push by the state.”
Funding for the health-care industry:
“New York’s health-care providers have received almost $14 billion in federal pandemic relief aid over the past two years – about $9 billion of which flowed to hospitals. Lawmakers should seek a clear accounting of how that money was used – and its effect on providers’ bottom lines – before committing to an additional investment from state taxpayers,” said Hammond.
“The Governor’s budget still leaves New York in the dark about the costs of the Climate Leadership and Community Protection Act. Despite committing $500 million to infrastructure and port facilities for offshore wind farms and $250 million for electrifying homes, most costs were left unspecified,” said James Hanley, senior policy analyst at the Empire Center. “Electrifying the state’s 50,000 school buses by 2035 alone will cost the state’s taxpayers about $1 billion a year more than the cost of buying diesel buses. How much of that will the state cover and how much will fall on local school districts forced to comply with state mandates? The budget information the Governor released doesn’t say—and that’s just one very small part of the Climate Act.”
The Empire Center, based in Albany, is an independent, not-for-profit, non-partisan think tank dedicated to promoting policies that can make New York a better place to live, work and raise a family.