New York is looking to overhaul its Medicaid program, which could mean cuts to hospitals, doctors, nursing homes, and other providers as the state aims to fill a projected $6.1 billion budget gap.

The cost of the safety net health-care program is a large portion of the deficit. Gov. Andrew M. Cuomo (D) briefly mentioned the shortfall in this year’s State of the State address and provided some insight as to how he hopes to plug it.

New York’s $174.7 billion budget for the current fiscal year, which runs through March 31, includes approximately $25 billion for Medicaid. Combined state and federal funding is about $73 billion for the program, which provides coverage to more than 6 million low-income New Yorkers, according to the state budget office.

To help fill the current hole, the state plans to delay $2.2 billion in Medicaid payments into fiscal year 2021 and make the delays permanent, effectively pushing debt into the future in perpetuity, according to the state’s mid-year budget report.

“It’s obviously just not good fiscal management overall,” said David Friedfel, director of state studies for the Citizens Budget Commission, a nonprofit fiscal watchdog group.

On a typical day, New Yorkers are usually cursing rather than thanking the city for its creaky, unreliable transportation system. However, with flat-rate fees and 24-hour service, New York’s transportation system actually does wonders to help balance out the cost of living. A new report by Citizens Budget Commission reports that the pricey city is actually one of the most affordable large cities in the US, Curbed NY reports.

While the report shows that New York’s housing costs far outrank the other options, once you factor in the additional monthly costs of transportation, NYC beats out competitors like Los Angeles, Philadelphia and Dallas.

But beware: Affordability is also calculated after factoring in the average income. New York is only affordable when you factor in the high average income for a New York resident, at $69,211 per annum. Even pricier cities, like San Francisco and San Jose, still beat out New York on the affordability index simply because of the even higher income of the average resident. Low-income residents still struggle to afford the expensive metropolis. So, if you’re looking at housing and transportation costs as an absolute relative, cities like Los Angeles, Miami, and Atlanta are still a better bet.

In deference to cost cutting measures and the humungous Albany $6 billion deficit, New York City Mayor rolled out his tentative fiscal year 2021 budget on Thursday. The budget package which includes $95.3 billion in spending is up less than 1 percent from the $94.6 billion the City Hall projected it will spend through fiscal 2020 at the end of June, according to a NY Post report.

Mindful of money problems, this budget contains no big expenditures and has the smallest spending increases DeBlasio has ever requested.

CBC head Andrew Rein said, “The budget problem in Albany is real. We need a sustainable Medicaid program and this is not it in any way, shape or form.”

Next week, New York State Governor Andrew Cuomo will be addressing the budget crisis as he rolls out his initial proposal, according to the Post report.

Fiscal watchdogs believe Gov. Andrew M. Cuomo should have acted sooner, and more boldly, in addressing the state’s multi-billion dollar deficit that appeared last year.

In his recent State of the State address, Cuomo spent just 3% of his 75 minutes discussing the deficit, and he did so broadly and without any specific stated plans to address the $6.2 billion shortfall – the worst since the Great Recession.

David Friedfel, director of state studies at the Citizens Budget Commission, a fiscal watchdog group, urged Cuomo to release a transparent budget plan that does not rely on big tax hikes or shifting costs to local governments – especially when the economy is still growing. “It’s the worst time for the state to be resorting to those types of gimmicks to close a budget gap,’’ he said.

Gov. Andrew M. Cuomo on Tuesday will reveal his 2020-21 budget that includes some big-ticket proposals as well as the legalization of marijuana, while filling a $6.1 billion deficit that threatens funding for schools and health care.

Cuomo said he plans to do it all without further burdens on some of the nation’s highest taxed residents.

“Revenues are actually coming in above expectations,” said David Friedfel, director of state studies for the independent Citizens Budget Commission.

Nonetheless, the state “needs to address the current year’s deficit and next year’s gap by exerting spending control on Medicaid, and education — the two biggest parts of the state budget, while avoiding fiscal gimmicks, costs shifts, and tax increases,” Friedfel said.

It may be $3 billion higher than the current budget plan, but Mayor Bill de Blasio’s $95.3 billion preliminary city spending plan for 2020-21 takes a cautious tone, as the city worries about how Albany will tackle a projected $6 billion budget deficit.

While outlining his projected budget on Jan. 16, de Blasio said there has been less fiscal growth for the city this year due to the $1.6 billion spent on labor settlements and investments, $270 million in debt services, $256 million in education mandates like special education and charter school costs along with $175 million in criminal justice mandates including bail reform.

The mayor did note that he would he would be willing to spend on things like $147 million in wages and benefits for uniform workers, $33 million to aid resiliency efforts at Rockaway Beach and Vision Zero, specifically $98 billion for 4th avenue in Brooklyn to make the thoroughfare safer for pedestrians, cyclists and drivers. The city as also set aside roughly $6 billion in reserves.

“The budget presented today holds the line on new spending programs, which is a welcome and positive change, said the Citizens Budget Commission President Andrew Rein. “However, it misses the opportunity to further improve the City’s preparedness for looming risks— including potential cuts in State aid or weaknesses in the economy.”

In Gov. Andrew Cuomo’s 10th State of the State address last week, he claimed that under his administration, "We have the lowest corporate tax rate since 1968."


New York’s business climate has for years been the subject of criticism from business groups and conservative lawmakers, so we wondered about this claim.

Dave Friedfel, director of state studies at the Citizens Budget Commission, a nonpartisan research and advocacy organization in Albany and New York City, said that readers should be aware that companies in New York pay more than just the corporate franchise tax. In addition to the MTA surcharge, set by the state, New York City imposes a 8.85 percent corporate franchise tax.

"Overall, it’s good that New York State’s corporate franchise tax rates are lower than they were and are competitive nationwide, but it’s just a small part of the taxes paid by businesses in New York," Friedfel said.

Mayor Bill de Blasio sounded a cautionary note related to state funding as he released New York's $95.3 billion preliminary budget for fiscal 2021.

De Blasio, briefing reporters on his seventh budget proposal at the City Hall Blue Room on Thursday afternoon, cited looming state cuts to cover its own projected $6 billion budget gap. About $4 billion of that relates to Medicaid overspending. Albany now reimburses the city for $2 billion on Medicaid.

The city is awaiting Albany's sign-off on the establishment of a dedicated rainy day fund. Voters approved the measure in November by a roughly 70% to 30% count.

"We’re going to have to work together [with the state] to make this happen," First Deputy Mayor Dean Fuleihan said at a recent Citizens Budget Commission breakfast.

Mayor Bill de Blasio on Thursday proposed a $95.3 billion preliminary budget for the coming fiscal year that reflects $3.1 billion in growth over last year’s model — but offers no new big-ticket items.

The mayor said he had wanted to include new programs in the budget for the 2021 fiscal year, which starts July 1. But uncertainties stemming from a projected state budget gap of more than $6 billion made it the wrong time for new programs.

Budget watchdogs credited the mayor for holding the line when it comes to new programs but said he hadn’t done enough to buffer the city from potentially massive cuts from the state.

No ‘Rainy Day’ Boost

“Greater spending restraint would allow the city to bolster its fiscal position,” said Citizens Budget Commission president Andrew Rein. “In November, New Yorkers voted resoundingly for the creation of a ‘rainy day fund,’ yet this budget does not include any additional contributions to reserves the city already has.”

The city also added significant new spending to the current fiscal year — the most tacked on in a preliminary budget since 2016.

The bulk of the deficit is attributed to Medicaid shortages, which the mayor said he fears could mean harmful cuts for the city’s public hospitals system.

There is a budget battle brewing between Mayor Bill de Blasio and Gov. Andrew Cuomo.



De Blasio on Thursday proposed a $95.3 billion budget for New York City's next fiscal year, an increase from last year despite the potential for $2 billion in health care cuts stemming from the state budget deficit.

"We have never seen anything like this before in our dynamics with the state of New York," de Blasio told reporters Thursday during his annual preliminary budget briefing in the Blue Room of City Hall. "This is the seventh time I'm doing the budget. This is by far the largest state deficit we have ever confronted — by a lot."

Despite the warnings from de Blasio, the city's overall fiscal health appears to be on track.

Andrew Rein, president of the Citizens Budget Commission, praised the mayor for his limited spending plan, but he warned the city could stand to do more in order to build a rainy day fund to tap into in the event of an economic downturn.

"The mayor held the line on spending, which is a real change and a welcome result," Rein said. "However, he missed the opportunity to increase efficiency and put away money for a rainy day. Remember the voters want a rainy day fund. He could have utilized this opportunity."

Mayor de Blasio on Thursday released a $95.3 billion executive budget proposal for the fiscal year beginning on July 1.

The figure would represent a $2.5 billion increase over the budget approved by the mayor and City Council last June, or nearly 3 percent.

In a press release issued Thursday afternoon, Citizens Budget Commission President Andrew Rein gave de Blasio’s proposal a mixed review.

“The budget presented today holds the line on new spending programs, which is a welcome and positive change,” Rein said. “However, it misses the opportunity to further improve the City’s preparedness for looming risks — including potential cuts in State aid or weaknesses in the economy.”

Rein wrote that after growing more than 6 percent annually in fiscal years 2018 and 2019, city-funded spending growth is projected to slow to 4.0 percent in fiscal year 2020 and 1.7 percent in fiscal year 2021.

“There are no new spending programs presented, and the citywide savings plan is estimated to generate enough savings to offset agency expense increases, which are both positive developments,” he said. “Nevertheless, the fiscal year 2021 savings amount to only 0.4 percent of city-funded expenditures; greater agency efforts are needed to increase efficiency.”

Rein also pointed out that in November New Yorkers voted resoundingly for the creation of a Rainy Day Fund “yet this budget does not include any additional contributions to reserves the City already has.”

Albany’s deficit loomed over the city’s $95.3 billion budget released by the mayor Thursday and, while the figure is $3 billion more than last year's preliminary budget, the spending plan was largely a placeholder with almost no new initiatives.

“The situation is very straightforward and our focus is in one place, and it is Albany, New York," Mayor Bill de Blasio said during a press conference in City Hall's Blue Room, where he added the state deficit is the worst since he took office in 2014.

The state is facing a $6 billion deficit with about $4 billion of that coming from Medicaid reimbursements, and Gov. Andrew Cuomo has hinted that local governments will be asked to foot the bill. The city outlined a worst-case scenario of having to pay for its $2 billion share of the shortfall, which would hit the city's already struggling public hospital system. With that in mind, de Blasio said he was keeping new proposals out of the budget.

“The budget presented today holds the line on new spending programs, which is a welcome and positive change,” said Andrew Rein, president of the Citizens Budget Commission, in a statement. “However, it misses the opportunity to further improve the city’s preparedness for looming risks — including potential cuts in State aid or weaknesses in the economy.”