January 19, 2021
At 11:30 today the Governor introduced his 2021-2022 executive budget proposal, taking a broad brush approach with his relatively brief presentation, followed by a more in-depth executive budget presentation hosted by Robert Mujica, NYS Director of Budget (ended a few moments ago).
Apparently the executive budget proposal that we will see (in writing) at some point today assumes NYS only receives $6B, but the proposal apparently also includes contingency language in the event NY get the full $15B it has requested from the federal government.
1) If NYS receives some $6B from the federal government, the Governor stated that this would be a ‘disaster’.
2) If NYS receives $15B from the federal government, the Governor stated that this would be a fair number to be applied over two budget years, and that he and DOB Director agree it would be sufficient to avoid severe reductions, borrowing, raising of taxes, etc. in the current fiscal year as well as next year. DOB Director stated that $15B is just 3% of $350B that the Biden Admin will propose for state and local assistance in the American Recovery Act.
Regarding withholds and reconciliation, a total of $2.9B has already been withheld by NYS through Dec. 2020. As such, and absent $15B in federal funding for NYS, we might expect to see a reduction in local aid payments by 5% not 20%, thanks to other sources of revenue including FMAP, etc. *See slide directly below. In this scenario, payment withholds would be reconciled and repaid in the final quarter of FY 2021.
Actual budget documents have not yet posted to the DOB website. There are many layers of the onion to peel over the next days and weeks. We will hold our email information to members until we have enough to warrant another communication.
We will post the entire slide deck from the DOB presentation discussed here on our website shortly.