Governor Cuomo Presents Overview of 2021-22 Executive Budget (powerpoint attached)
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 sometime today, below is a summary of the Governor’s presentation. The Budget Director Rob Mujica will provide further updates at 1 PM here: governor.ny.gov
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 in order and cut the budget 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.
In a “fair funding scenario” where the state receives $15B, funds would be available for a litany of state priorities including:
· $600M for labor agreements
· $900M to restore 5% across-the-board cuts
· $400M for a middle-class tax cut
· $3.8B in education support
· $10M for the Liberty Defense Fund
· Funding for the low-cost broadband initiative
· $150M for food insecurity programs
· $2.8B in support for childcare/families including co-pay caps, tax credits and grants
· $7.5B in support of higher education
· Funding for healthcare and pandemic recovery
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.