CUOMO BATTLES GAP
Budget banks on Medicaid savings; school aid hike, legal pot proposed
New York Gov. Andrew Cuomo unveiled a $178 billion state budget proposal Tuesday that hinges largely on reining in the nation’s largest Medicaid program.
Cuomo also proposed a 3% — or $826 million — increase in aid to school districts and called for a new education funding formula that better helps the neediest districts. And he revived his effort to legalize the recreational use of marijuana in the state.
A Medicaid Redesign Team will be asked to find ways to trim $2.5 billion in spending from the program, part of an effort to close a $6.1 billion overall budget gap.
Cuomo said one out of three New Yorkers — about 6 million people — are on Medicaid, the government health care program for people with low incomes.
“And this is something to be proud of,” he said. “But the Medicaid system has to be fiscally sustainable.”
Cuomo, a Democrat, didn’t spell out exactly where he expected those savings to come from, but he hinted the health care industry — which has feared an increase in taxes on health insurance that insurers warn could hike consumer costs — might have to provide “new resources,” eliminate inefficiencies or root out waste, fraud and abuse. His budget director, Robert Mujica, said the Cuomo ad
ministration is leaving the substance of potential solutions up to the Medicaid Redesign Team, which would include representatives from the healthcare industry.
Cuomo said the savings must have “zero impact” on Medicaid beneficiaries. He also promised the state wouldn’t sock local governments with a higher share of program costs, as long as they could keep cost increases to 3% per year or less. Municipalities now have some of their Medicaid costs covered by the state under a deal cut years ago to limit property tax increases.
The redesign team is to report its recommendations before the state Legislature’s April 1 deadline to pass the budget.
Republican leaders said they were skeptical of Cuomo’s optimism that New York can cut $2.5 billion in Medicaid without hurting people or localities. “There’s no way, no way you can say you’ll have no effect on local (governments), and no
effect on beneficiaries,” Senate Minority Leader John Flanagan said.
The Medicaid proposal was part of an overall spending plan that would increase state spending by 1.9%. Cuomo proposed a $176 billion budget last year, a 2% increase over the previous fiscal year.
The release of Cuomo’s proposal launches a process that includes hearings starting next week, legislative spending proposals and tweaks from the governor ahead of a March 31 deadline. The governor has wide influence on the state budget, which has increasingly included policy proposals on top of spending.
Cuomo’s latest budget proposal, for example, includes a range of policies: prohibiting higher prices for products geared toward women, legalizing gestational surrogacy, a task force to consider expanding labor protections for so-called “gig economy” workers, stricter gun policies and adding “e pluribus unum” to New York’s coat of arms. Cuomo’s budget proposal also includes the creation of a new crime that targets domestic terrorism and includes $2 million for the state police’s Hate Crimes Task Force.
Cuomo said New York is set to spend billions of more dollars in coming years to fight climate change, preserve the environment and boost infrastructure thanks to state, federal, local and private-sector spending. He’s also calling on voters to approve $3 billion in bonds to fund habitat restoration and flood-reduction efforts. The bond act includes funding for a state park to be created on land along the Hudson River in the city of Kingston and town of Ulster.
Cuomo said he won’t support new taxes to help close the budget gap.
If recreational pot use is approved this year, sales to retail dispensaries would be taxed at 20%, and the cultivation of cannabis would be taxed at $1 per gram of dry weight cannabis flower and 25 cents per gram of dry weight cannabis trim.
Legalization efforts failed last year over disagreements about where an estimated $300 million in annual revenues from marijuana sales should go. Lawmakers instead reduced criminal penalties for possessing small amounts of marijuana.