Potential Delays in State Contract Payments
June 23, 2020
NYS Council members,
As state officials and advocates continue to plead with lawmakers in Washington for fiscal relief for New York, we expect to see more articles like the one (below) discussing potential delays and/or reductions in state contracts due for payment shortly. Our immediate concern is for those of our members with state contracts who are anticipating a payment on or about 7/1 to include NYC providers anticipating a 7/1 1st Q advance payment.
Yesterday we learned that as of 3:00 pm, OMH had not yet received the green light to enter the information required to drive the aforementioned 7/1 payments. There is still time for the state to meet its’ 7/1 obligation but that window is quickly closing. This does not mean state payments to providers will not come, but adequate prep time is necessary for any state agency to get payments into your accounts on time.
We will know more tomorrow. We promise to keep you apprised of any new information. We’ve been on the phone all day, pushing government officials to do whatever is necessary to meet contractual obligations to our sector. In addition, earlier today regional and state associations representing mental health and substance use disorder provider organizations across New York sent a letter to Governor Cuomo urging the Administration to meet all of its’ contractual obligations to our organizations and describing the potential damages associated with late or missed payments. The State must not let us down. We’ve been doing our part under extremely challenging circumstances and now the state must honor its’ commitments to our clients, our employees and our local communities.
We urge all NYS Council members to make a contingency plan to address anticipated state payments that may arrive late. If you have a payment from the state coming due within the next several weeks, consider your options. If you don’t see options or you want to talk it over please call me at 518 461-8200. All conversations will be kept confidential.
State aid to 12 cities to be reduced, BY ANNA GRONEWOLD<https://www.politico.com/staff/anna-gronewold>,
Politico, 6/23/2020 03:42 PM
ALBANY — Twelve New York cities are in line for steep cuts as a result of the state’s fiscal crisis.
Officials from the cities on Tuesday said they received notice from the comptroller’s office that 20 percent of their June Aid and Incentives for Municipalities payments scheduled for this week would be withheld. The state budget, crafted in March as the pandemic hit, allows the governor to adjust spending<https://www.politico.com/states/new-york/city-hall/story/2020/04/02/how-new-york-balanced-its-budget-1271106> on an as-needed basis.
For some of New York’s larger cities, the June payment makes up the lion’s share of the AIM funding stream, which is mostly unrestricted dollars that many cities use to offset property tax increases. The total withholding from the 12 cities — which include Buffalo, Rochester, Syracuse and Yonkers — will be $74 million, according to the New York Conference of Mayors.
Representatives from the comptroller’s office said the state Division of the Budget instructed them to reduce the payments and that they had warned the municipalities about the possibility on June 9.
“We are not reducing support for AIM at this time and instead are holding back 20 percent of the funding as the State contends with a cash crunch caused by a 14 percent drop in revenue due entirely to the pandemic, the federal decision to delay income tax filings to July, and awaits clarity on federal assistance to offset this revenue loss,” Budget spokesperson Freeman Klopott said in a statement.
Klopett said “holding back 20 percent of the funding” is different than “reducing support” because it is not a permanent solution.
The other cities are Amsterdam, Auburn, Corning, Lackawanna, Long Beach, Rensselaer, Watertown and White Plains.
New York Conference of Mayor Executive Director Peter Baynes said that regardless of the long-term viability of the plan, imposing cuts on an as-needed basis creates fear and difficulty for municipalities trying to weather economic losses.
“NYCOM understands that the action by the Budget Division is an indefinite withholding, and not a cut ‘at this time.’ However, the size and continuing uncertainty of these state aid payments will place tremendous stress on city budgets already reeling from plummeting sales tax revenue,” Baynes said in a statement.
Gov. Andrew Cuomo has warned that 20 percent cuts across the board would be likely if Congress doesn’t send more money to states, but he’s also continuously said he was holding off making any decisions because he expected Washington to come through<https://www.politico.com/states/new-york/albany/story/2020/05/29/new-yorks-biggest-budget-move-now-depends-on-washington-1289149>.