Governor Cuomo unveils budget proposal

Argues narrative of $6 billion deficit; Hopes to legalize marijuana in budget

Mike Baggerman
January 21, 2020 - 1:11 pm
Governor Andrew Cuomo unveils his 2021 budget proposal. January 21, 2020.

Governor Andrew Cuomo unveils his 2021 budget proposal. January 21, 2020.

ALBANY, N.Y. (WBEN) - Governor Andrew Cuomo unveiled his proposed budget on Tuesday afternoon.

In it, Cuomo pitched a climate change agenda worth $33 billion over five years and a $275 billion infrastructure program. He also pushed for legalization of cannabis as part of the budget, saying that passing it in the budget is the best chance to do it in 2020.

"Without the budget (it) can often languish," Cuomo said. "I suggest we get it done in the budget."

Cuomo also said the budget should address the controversial bail reform laws but stressed that the reforms need to be done on information and not hyperbole.

Much of Cuomo's speech Tuesday highlighted the $2 billion for 6 million people on Medicaid in New York. Cuomo said he plans to have the state assume the local share of medicaid growth to reduce the pressure on the property tax cap. He incentivized local governments by saying if they exceed three percent medicaid growth, they will pay the annual increase for that year. However, if those same municipalities stay under the three percent, they will receive 25 percent of savings by the state government.

Cuomo also wants to bring back the Medicaid Redesign Team, which he said saved taxpayers $19.3 billion since 2011. His goal this year is to save $2.5 billion.

"That's the amount we need to close the Medicaid shortfall and to make those structural changes going forward," Cuomo said.

Cuomo pushed back on the figure of $6.2 billion deficit, arguing that a "deficit" only means "the shortfall from the projected growth to the actual growth in programs".

"It's the projected growth differential," Cuomo said. "The answer is to reduce the level of growth, not cuts. You say deficit and they say 'you're going to have to cut'. No. You're going to have to reduce the rate of growth. That's exactly what we have done in this budget."

Legislative leaders said they want lawmakers involved in trimming Medicaid. “How we get there is the issue, and we certainly want to be involved in that,” Democratic Senate Leader Andrea Stewart-Cousins said.

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 Republican 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.

Advocacy groups from across the state that point to signs of a growing New York economy are calling for increased spending on schools, mental health programs, anti-poverty efforts, substance abuse prevention, environmental protection and infrastructure projects. The governor proposed a 3% — or $826 million — increase in school aid and called for a new education funding formula that better helps the neediest school districts.

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.

Some liberal groups are calling for higher taxes on the wealthy to help address the looming $6 billion deficit this year and down the road.

“It’s going to hurt people,“ Strong Economy for All Coalition Executive Director Michael Kink said of the cuts. ”Billionaries and ultrabillionaires have all the money. Asking them to pay their fair share should restore these cuts.”

Cuomo said on top of Medicaid savings his administration will close the budget gap with over $1 billion in higher-than-expected tax revenues and $1.8 billion in local aid savings. The governor’s budget would allow state budget officials to cut local aid by up to 1% if the state faces a potential budget imbalance of $500 million or more.

Cuomo had warned of a tough budgetary season and said he won’t support new taxes to help close a budgetary gap. Cuomo’s budget would cut taxes for small businesses and require certain New York businesses to provide paid sick leave.

Higher-than-expected Medicaid spending fueled by large enrollment growth had been one reason for a ballooning budget gap that was disclosed months ago after lawmakers had passed last year’s budget. Cuomo’s budget director said Tuesday that the administration believes there’s waste, fraud and abuse in Medicaid that’s not getting addressed.

“Some of it frankly, I think that the department was not actually tracking,” Mujica said. “And we accept responsibility for that. That’s why we’re fixing it.”

Leaders of nursing homes and hospitals warn further cuts will harm vulnerable New Yorkers and are calling on the state to work with providers to find possible savings. Cuomo’s administration has previously announced 1% cuts in payments to health care providers this year under the program, and has pushed for other Medicaid payments cuts in the last year.

“We can’t balance the budget on the backs of vulnerable New Yorkers who depend on Medicaid funding to live,” Consumer Directed Personal Assistance Association of New York Executive Director Bryan O’Malley said.

The governor is also trying once again to legalize marijuana in New York.

Sales to retail dispensaries will be taxed at 20% under the governor’s proposal, which would also tax the cultivation of cannabis 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 on where an estimated $300 million in annual revenues from marijuana sales should go. Lawmakers instead reduced criminal penalties for possessing small amounts of marijuana.

Cuomo is calling for a new state university center to study cannabis and hemp. He also wants to work with neighboring states that are also considering legalization.

It’s unclear whether lawmakers seeking reelection this year will pass marijuana legalization. Will Barclay, the top Republican in the Assembly, said it seems contrary that Cuomo and the state is trying to reign in vaping while also proposing to legalize marijuana.

The governor’s proposal would ban both flavored vaping products and the sale of tobacco products — including e-cigarettes — in all pharmacies.

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