Governor Cuomo Releases SFY 2021-22 Executive Budget

Following a week of State of the State addresses unveiling various proposals and priorities for the 2021 session, this morning Governor Andrew Cuomo gave his SFY 2021-22 Executive Budget presentation, titled Reimagine | Rebuild | Renew for an all-funds state budget totaling $192.9 billion. Shortly after the Governor completed his address, State Division of Budget Director Robert Mujica also presented on the proposed budget and answered questions from the media. According to Executive Budget documents, the proposed budget keeps spending in SFY 2022 at less than the 2% spending benchmark, closes a two-year $15 billion deficit and lowers the multi-year budget gap over the next five years to $17.5 billion.

The Governor proposes to achieve $500 million in new revenue by authorizing online sports betting and an additional $350 million from legalizing adult use marijuana, $100 million of which would go to a social equity fund.

The budget greatly focuses on continued COVID-19 pandemic response, relying on anticipated federal funding.  The title for the budget proposal could actually be A Tale of Two Budgets, since as the Governor and DOB Director explained, it provides for two possible paths to reach a balanced budget this year:

Option 1: Assuming only a minimum of $6 billion in federal funding (not guaranteed) which is what the budget language released today is based on, the proposal relies on revenue raisers like a new tax on very high earners, halting middle class tax cuts, reducing school aid by $2 billion, imposing $600 million in Medicaid cuts and getting $900 million from a 5% across the board cut in aid to localities funding.

Option 2: Assuming the state gets the $15 billion that it has requested from the federal government, the above cuts and high earners tax would not be needed, and instead funding would be provided for a number of additional purposes to support those struggling most with the ongoing pandemic.
Just before midnight on January 19th, Executive budget bills were released providing the actual language and details on previously mentioned proposals and others not mentioned.  Below, please find an outline of the budget proposals of particular interest from the Health Article VII bill.  We will also be developing a comprehensive Health/Mental Hygiene Executive Budget update to be shared in the coming days as we complete our review of the budget documents.

Key H/MH Budget Highlights Include:

• Extension of the Medicaid global spending cap through SFY 2023
• Elimination of “prescriber prevails” in Medicaid Fee for Service and Managed Care
• Creation of a 340B drug fund to reinvest $102 million annually in savings from the pharmacy drug carve out taking effect 4/1/21 for entities that are non profit or publicly sponsored D&TCs that provide comprehensive healthcare services enrolled in the 340B program in the year 2020
• Reduction of the hospital Medicaid capital rate add on by an additional 5% and discontinue the indigent care pool funding for public hospitals
• Authorization of Telehealth services as follows generating $39.5M in savings in SFY 22:

– Remove location requirements for individual receiving telehealth services
– Establish interoperability of health information exchanges with SHIN-NY through a single statewide consent
– Create interstate licensure with other northeast and contiguous states          – Require state regulated health insurers to have an adequate network of telehealth providers
– Require providers and hospitals to disclose if they offer telehealth services

• Creation of a Medical Respite Pilot for those who lack safe housing and could receive low intensity care through such a service to avoid hospitalizations
• Elimination of $20 premium cost for the Essential Plan for individuals between 150-200% of the FPL
• Authorization of DOH/DFS to seek a federal waiver for the NYS Health Marketplace
• Limits state funding for general health works programs to 10%
• Elimination of e-prescribing exemptions except for emergency situations as determined by DOH
• Continuation of flexibilities and DSRIP regulatory waiver authority through 2024
• Extends the Nurse Practitioner Modernization Act through 2027
• Extends through 6/30/24, ability for OMH & OPWDD facility directors to serve as representative payee for a residents care and treatment
• Extends the ability of OMH & OPWDD to appoint temporary operators through 3/31/25
• Extends the demonstration for children and adult specialized inpatient psych units through 3/31/24
• Extends community investment from psych center inpatient bed closures through 3/31/24
• Provides OMH with flexibility to suspend for one year community reinvestment requirements from facility closures to generate $30M in savings in SFY 22
• Includes the ability of OASAS to develop and implement a scope of practice for addiction professionals including Credentialed Alcoholism and Substance Abuse Counselors (CASACs), and certified recovery peer advocates; Allows OASAS to set fees for the ongoing certification, credentialing and oversight activities of the agency
• Authorizes OMH to establish a schedule of fees for providers’ failure to comply with operating certificate requirements and laws; OMH may also charge fees for applications for operating certificates
• Authorizes OMH & OASAS to create Crisis Stabilization Centers
• Renews Assisted Outpatient Treatment Orders per Kendra’s Law when an individual cannot be located or has experienced a substantial increase in symptoms within 6 months of expiration of the order; Provides for judicial discretion
• Adds new criteria to the definition of “likelihood to result in serious harm” to allow involuntary commitment upon a finding that an individual is experiencing complete neglect of basic needs
• Combines the responsibilities of the NYS Institute for Basic Research in DD currently in OPWDD with the NYS Psychiatric Institute under OMH
• Creates the Office of Addiction and Mental Health Services (OAMHS) integrating OMH and OASAS under one Commissioner appointed by the Governor; Provides for an annual report regarding expenditures for mental health and addiction services, and subsequent recommendations to be made to the Governor and Legislature
• Authorizes integrated licensure for comprehensive outpatient services of integrated physical and behavioral health programs; Expands the definition of facility or provider agency to include licensed comprehensive outpatient service center which can be licensed as a physical health services provider under public health law, as a licensed mental health provider or licensed methadone provider under mental hygiene law, through a newly established integrated framework
• Eliminates the requirement for the Justice Center to administer an Adult Home Advocacy Program

More updates to follow.

On Tue, Jan 19, 2021 at 6:43 PM Lauri Cole <lauri@nyscouncil.org> wrote:

Following is a very limited summary of some budget proposals discussed in the Governor’s Budget Briefing book that we shared earlier today.  Below the summary is information from the Governor’s Budget Briefing today.

Unfortunately the actual budget bills have not yet been posted to the DOB website, so our analysis is limited at this time.

Here are a few highlights from the Budget Book:

• Withholds:  See the attached slide.  The Budget Director discussed the fact that NYS has withheld $2.9B as of 12/2020.  Some economic indicators are better than expected and so, absent the full $15B in federal funding the state expects to reduce local aid payments by 5%, not 20%.  If enactedthe withholds will be reconciled and repaid in the final quarter of SFY 2021.
• Establish Crisis Stabilization Centers. The Budget authorizes the launch of Behavioral Health Crisis Stabilization centers.  This effort will streamline stabilization and reintegration for individuals in crisis.  Unclear as to whether the proposal will be for these centers to be run by voluntary providers, or the state/counties.
• Convert Rockland Children’s Psychiatric Center (PC) to a Comprehensive Children’s Center. The FY 2022 Executive Budget includes a plan to develop an innovative, voluntary-operated center for children and youth in need of brief, intensive community-based care, including residential treatment. This will provide much-needed community-based and home-based care for youth in this region.
• Create an Office of Addiction and Mental Health Services.  
• The budget proposal also instructs OMH, OASAS and DOH to establish a single, integrated license for outpatient mental health, addiction, and physical health services.
• State Takeover of Local Medicaid Costs. The Budget continues the Governor’s commitment to relieve local governments of Medicaid expenditure growth.

Revenue Proposals

Legalization of Marihuana: Creates a regulatory system to control the cultivation, distribution, marketing and selling of the drugs to people age 21 and over. Cuomo Budget Director stated marijuana market won’t be fully mature for four years from enactment of this provision. Cuomo stated verbally that he is inclined  to earmark $100 million to a “social equity fund” with the remaining $250 million going to the state’s general fund.

Mobile Sports Betting:  Cuomo also included in his budget the legalization of mobile sports betting run through computer servers at several upstate commercial casinos and Native American-owned casinos. It could bring Albany $500 million annually.

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The Governor Cuomo went into great detail during his budget presentation regarding what would happen if the federal government fully funds NY’s ‘ask’ for $15B from the total $350B President-elect Biden will propose as part of his American Recovery act.

$15B could be used in areas including (but not limited to):

$130 million Pandemic Recovery and Restart

• $50 million for a small business rehiring credit
• $50 million to aid impacted restaurants
• $30 million to aid musical and theatrical productions

Healthcare Funding

• Continues to pay for $1.6 million additional recipients added to Medicaid rolls since 2012
• $100 million for 400,000 low income New Yorkers
• $420 million for services for essential plan enrollees
• $200 million for essential plan quality pool

Housing

• $1.3 billion to address rental assistance crisis
• $250 million for a 15 year goals of 20k affordable homes with supportive services, with some 7,000 already created
• $128 million for Homeless Housing and Assistance Program (HHAP)

Miscellaneous to include: 

• $15 dollar/month cap on broadband service
• $ 150 million to address food insecurity
• $600 million for state labor agreement
• Restore 5% across the board reductions $ 900 million
• Implement a middle class tax cut at $400 million

Notes from the Gov’s Budget Presentation today:

Governor Cuomo Presents Overview of 2021-22 Executive Budget

Governor Cuomo presented his 2021-2022 Executive Budget proposal this morning in Albany. While we expect more details to come as the budget is published tonight, below is a summary of the Governor’s presentation.

The Governor began his presentation by noting that this budget is defined by COVID-19 and the reconciliation of responsibility for “the battle” and winning the war on the pandemic while next year will be about reconstruction post-pandemic. “The bill for the battle has come due and the question is who is responsible the fiscal liability and responsibility.”

Uniquely the Governor said his budget will include appropriations with two options – one assuming with $6 billion in Federal aid to NYS, and the other with $15 billion in Federal Aid coming to NY, which we detailed BELOW.  NOTE: Both scenarios address the $15 billion current state budget deficit and $39 billion four year deficit.

The Governor tallied the cost of COVID-19 on New York State to $15 billion, which “is beyond what we can do” and will need assistance from the federal government through the “American Rescue Plan” which includes funding for testing, vaccines, schools, stimulus and $350 billion in aid to state and local governments. The distribution of the $350 billion is not yet known, but the budget is dependent on how much New York will receive. The budget has been constructed on two scenarios: one with the state receiving $6B in federal aid, the other on the state receiving $15B in federal aid.

In the $6B scenario, which the Governor deemed the “worst case scenario”, the state would only receive about 1.7% of the federal state and local aid. Should that happen, the state would need to raise revenue, cut the budget and borrow money to generate the remaining $9 billion in needs. Cuts would include $2B in school aid, $600 million in Medicaid as well as $900 million in across-the-board cuts.

In addition, the State would be forced to move the top income tax rate to 10.86% for the State and to 14.7%  rate for NYC residents.

The Governor also repeated his pledge to legalize sports betting which can raise $500M, and legalize adult-use cannabis which will bring in $350M with $100M going to a social equity fund.

The Governor continued his presentation calling on the repeal of the cap on SALT deductions. Additionally, if Washington does not provide New York it’s “fair share” of $15B the Governor announced that the state will pursue litigation.

Finally, should the budget not be completed by April1, there will be no pay raises for the Executive and Legislative branches. The Governor concluded his budget presentation with optimism that the federal government under the incoming Biden Administration, incoming Senate Majority Leader Chuck Schumer and Speaker Nancy Pelosi will deliver for New York.