Cuomo’s plan to make cities pay
$178B budget reins in Medicaid
ALBANY — Gov. Cuomo presented a $178 billion fiscal plan for the state on Tuesday, vowing to tackle New York’s Medicaid-induced deficit by overhauling the program and capping spending for local governments.
The governor’s plan to address the deficit, projected to reach $6 billion next year, involves upping expectations for tax receipts to the tune of $2 billion, reconvening a task force to find $2.5 billion in savings and another $1.8 billion in cuts to local governments in the form of “efficiency” initiatives.
Cuomo also wants to incentivize local governments to limit spending of the stateadministered program — which could leave the city on the hook for millions.
Under Cuomo’s plan, the city and other local governments would be forced to cap Medicaid spending growth at 3% each year, otherwise they will be stuck paying the difference. The city usually sees an annual increase of around 10% in Medicaid costs, according to data available on the city Health Department website.
“So, they have a financial incentive and they have a financial disincentive,” the governor said during an afternoon address in the capital. “Save money, make money. Go over 3%, you pay the increase. It allows us to still pay the entire cost, but it gives them accountability and financial incentives in how it runs.”
Growth in the state’s Medicaid costs in the city in 2019 were 7%. If the 3% growth cap had been in place last year, city residents would have been on the hook for $646 million, according to a city insider.
Cuomo argued that the state’s Medicaid costs have skyrocketed over the past six years, ever since the state cut a deal to cover Medicaid costs if counties limited property tax increases.
Currently, about 6 million people, mostly elderly and poor New Yorkers, are covered by the health care program in the state.
An aide to Mayor de Blasio said the city will review the proposal once more details are available.
“Whether it’s moms turning to our public hospitals for lifesaving 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 de Blasio spokeswoman Freddi Goldstein. “We’ll review the details once we have them, but we’re ready to fight to protect New Yorkers.”
Cuomo said the redesign team will report its recommendations before the April 1 deadline to pass the budget.
“We’re going to have to make structural changes to this program,” he added.
Also included in the governor’s proposal were legislative promises to legalize marijuana, raise education spending by 3%, expand a new child tax credit, prohibit the sale of flavored vaping products and tobacco products in all pharmacies, reduce business taxes and continue an already planned tax cut for the middle class.
“You can be a progressive, and you can be fiscally sound, and that’s exactly what this budget does,” Cuomo said.
Cuomo also included a tentative deal to legalize e-bikes and e-scooters, just weeks after vetoing a similar bill, and he called for the creation of a new program that targets domestic terrorism in addition to $2 million for the state police’s Hate Crimes Task Force.
Another measure would force all state elected officials with government salaries more than $100,000 to release tax returns for the sake of transparency.
A spokesman for the governor said the city will realize an estimated $315 million positive impact from the proposed budget, including a $224.4 million increase in formula-driven school aid and other bumps in spending.
Reactions to the governor’s proposals were mixed as advocates hoping for higher taxes on the wealthy were left disappointed and fiscal watchdogs called for more details on the Medicaid plan.
Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) and Assembly Speaker Carl Heastie (D-Bronx) are preparing to present their own budget proposals and say they’re ready to work with the governor on the bulk of the issues raised Tuesday.
“As budget presentations go it was pretty low-key, as always there’s the details, but I’m looking forward to getting our hearings going and … see if it all makes sense,” StewartCousins said.
“At this point it’s just proposals,” Heastie said. “I know there was a lot of concern that the locals were going to be asked to share in the cost off the bat. It’s the governor’s first proposal and we have to see how it effects the localities. It’s a good first step that it’s not an automatic shot at the local governments that they have to pay an increase.”