State Budget Update

March 14, 2023

We currently await the release of Senate and Assembly one house budget bills.   The bills generally articulate the budget priorities for each house going into three-way negotiations.  Oftentimes, the bills are aspirational in nature meaning that each house includes proposals it wants to see included in the final enacted budget but may/may not be able to actually pay for.  In summary, one house bills are as much about positioning as they are a realistic window into what the final budget will / will not include.

Several weeks ago state leaders agreed upon a revenue figure (amount of money available beyond what the state needs to cover base budget expenses) of $800M.  The ‘available revenue’ figure doesn’t always accurately reflect how much money will be available by the time the committees and houses come together to identify their spending priorities.  Generally, it is a conservative estimate of what will actually be available.

Lawmakers will have their hands full as they try to accommodate all of the different requests from constituents and their own priorities for their home districts.  In addition, we are hearing that there are major differences in the one house bills to be issued shortly by the Assembly and the Senate, and the Governor’s executive budget proposal in high profile areas including the Governor’s housing expansion proposal, and her bail reform proposal.

In the past, all of the various legislative budget committees (Mental Hygiene, Transportation, Education, Workforce/Labor, Health/Medicaid, Insurance, Human Services, etc.) are assigned an amount of funds (from the available revenue funds discussed above) to pay for priorities they want to fund/add funding to.  Typically the Mental Hygiene Committee gets a small amount of the total revenue that is available.  The likelihood that the Mental Hygiene Committee can come up with the funds nenecessary to pay for the difference between the proposed 2.5% COLA and the 8.5% COLA for the Mental Hygiene sector (OMH, OASAS, OPWDD) is not good.  So, athough we are hearing (it is a rumor until we see it in writing) that both one house bills may include the 8.5% COLA, the MH Committee is not likely to be able to pay for it. As such, the likelihood is good the issue will be kicked up to the Legislative leaders table for further action, and (potentially) additional funds.

We will continue to keep you apprised.