October 31, 2023

As we continue to meet with Administration officials and lawmakers regarding our NYS Council budget priorities, we are also closely following the messaging from the Executive and the Division of Budget (DOB) regarding the state’s financial situation.  

Below is an article from Spectrum News citing a recent memo from DOB Director Blake Washington to Governor Hochul (attached) regarding the potential consequences of continued state spending (at current levels) on the migrant crisis that could negatively impact other areas of the state budget including Medicaid.  

Note:  In related news, last week State Medicaid Director Amir Bassiri, during an address to the members of CHCANYS said that the CMS’ 1115 waiver approval could come within the next month.  

Finally, please note the OMH Funding Opportunity announcement that appears below the budget article. 

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Spectrum News (10/30)  

Kathy Hochul’s administration is considering cutting back on how much the state will spend on the migrant crisis going forward, arguing the “unsustainable” situation could negatively impact other areas of the state budget.

New York City’s struggle to house, feed and offer other services like legal assistance ranks at the top of the state’s “most pressing” burdens, according to an Oct. 28 memo penned by Hochul’s Division of the Budget Director Blake Washington.

What You Need To Know

• The DOB is recommending that state spending be limited to legal services, case management and efforts to connect migrants and asylum seekers to jobs, “as opposed to sharing in more costly services such as indefinite stays in hotel rooms”
• The DOB reported the state will spend nearly $2 billion on the migrant crisis by next April – adding $358 million in spending on top of the crisis’ current $1.5 billion tab
• Out-year budget gaps decreased through 2027, but New York lawmakers still have to reduce a $4.3 billion gap for the upcoming 2025-2026 fiscal year

“[W]e must consider limiting our assistance to targeted interventions such as legal services, case management and efforts to connect migrants and asylum seekers to jobs, as opposed to sharing in more costly services such as indefinite stays in hotel rooms,” Washington wrote to Karen Persichilli Keough, Secretary to the Governor, in the two-page document obtained by NY1.

He said although the state will keep up commitments made to Mayor Eric Adams’ administration laid out in last year’s $229 billion state budget — like reimbursing City Hall for 30% of migrant housing costs and funding tied to mega-migrant sites called Humanization Emergency Response and Relief Centers — they need to reign in spending.

“New York’s ability to pay for these programs is not unlimited. As you know, the governor has publicly stated we are committed to balancing a budget without raising taxes or relying on one-time reserves to fund recurring obligations,” he continued. 

“This will require revisions to projected spending growth for existing programs which will make our ability to provide assistance to asylum seekers and migrants unsustainable.”

He noted that without relief in the form of federal dollars or big change in immigration policy, “New York State can only shoulder this financial commitment for a limited duration without putting other areas of the State budget at risk, such as aid to public schools, support for our health delivery infrastructure, and the readiness of our National Guard.”

Washington’s warning preceded the DOB’s Monday release of its mid-year assessment of the Empire State’s financial picture.

The DOB reported the state will spend nearly $2 billion on the migrant crisis by next April – adding $358 million in spending on top of the crisis’ current $1.5 billion tab. 

That includes footing the bill for expenses tied to a 12-month lease on the federally owned, Brooklyn-based Floyd Bennett Field, which is slated to become the next large-scale migrant shelter. 

Meanwhile, New York faces additional “headwinds, such as lower than anticipated tax receipts thanks to a weakened economy.”

However, the DOB was able to decrease out-year budget gaps through 2027, thanks to belt-tightening measures related to overall operational spending. 

Previous estimates from the DOB projected spending to increase to roughly $9 billion in fiscal year 2024-2025, but according to the authority’s new estimates, that gap was cut nearly in half, to $4.3 billion. Between 2025-2026, the number decreased from a jaw-dropping $13 billion to $9.5 billion and then further drops to $7.7 billion in 2026-2027, down from a projected $13 billion. 

Independent fiscal hawks cheered the effort, but cautioned that Hochul and the legislature still need to focus on plugging the looming $4.3 billion hole over the next several months. 

“What the DOB is doing here is both conservative in budgeting and appropriately cautious to not overestimate what tax receipts are going to be,” said Patrick Orecki, director of state studies at the fiscally conservative Citizens Budget Commission. 

“But there are still multi-billion dollar budget gaps to close. Spending is still growing faster than what the state is taking in over long-term going forward.”

City Hall will soon release its own reassessment of city finances, but previously Adams said the migrant crisis will cost the Big Apple $12 billion over the next three years. 

Nearly 120,000 individuals have arrived in the five boroughs since the spring of 2022 and the Adams administration is currently housing around 65,000 families with children and single adults in taxpayer-funded shelters. 

Adams is fighting in court against a decades-old, “right to shelter” mandate that means the city must provide a bed to any individual who requests assistance. He argues the mandate is dated, and did not account for the unprecedented amount of homeless migrants that arrived in the city over the last year and a half. 

Meanwhile, his administration also greenlit a policy that limited how long migrants can stay in city-run shelters, before they have to reapply for bed placement.

OMH Funding Opportunity: Intensive and Sustained Engagement Teams (INSET) in Western or Central New York

The New York State Office of Mental Health announces the availability of funds for an experienced program administrator, agency or community-based organization to implement Intensive and Sustained Engagement Teams (INSET) in the Western or Central Regions of New York State.

New York’s behavioral health system continues to explore ways to better meet the needs of vulnerable community members living with mental health challenges.

Intensive and Sustained Engagement Teams (INSET) are believed to be effective in reaching, engaging and helping people who are experiencing difficulty engaging in care and/or experiencing difficulty accessing care which is equitable, trauma-informed and supportive. 

An award will be made in the amount of $800,000.00 per year, for each of five years. Of the $800,000.00 total per program, $600,000.00 will be allocated from the General Fund and $200,000.00 will be provided from the federal Community Mental Health Block Grant. 

Please see this link for access to the full RFP: https://omh.ny.gov/omhweb/rfp/2023/inset/index.html