State Budget Update and More

April 5, 2024

Below please find two opinion pieces published in the Albany Times Union, and the NY Times respectively.  The first commentary is from Dr. Jeffrey Reynolds, CEO at Family and Children’s Association on Long Island (Nassau County).  Jeff is our (NYS Council) Policy Chair.  Go Jeff!  

The other item is an OpEd in today’s NY Times re: NYS efforts to secure the now infamous MCO Tax.  It seems to indicate the Executive is in fact interested in and negotiating with CMS for an MCO Tax.  As you will recall, the MCO Tax proposal first appeared in the Senate and Assembly one-house budget bills although the two proposals were not identical.  

And finally, we’ve included a link to the Capitol Pressroom interview yesterday in which our Assembly OMIG bill sponsor Amy Paulin spoke to David Lombardo from WCNY about the ongoing fight for OMIG Audit Reform. 
At the bottom of this email you will find an update on where state budget negotiations currently stand although this is fluid and could change at any moment!

Good morning,

Commentary: Close this dangerous loophole in our DUI laws

New York Has a Budget Trick to Try on the Federal Government – NY Times Editorial Board, 4/5/24
The state hopes to take advantage of Medicaid reimbursement rules to divert federal funds into state coffers.

The Capitol Pressroom – David Lombardo and Assemblywoman Amy Paulin Interview 4/4:

NYS Council Budget Update: As you know, the State Constitutional deadline for the State Budget came and went on April 1.  The State is currently operating under “extender” spending authority while budget negotiations between the Governor and the State Legislature proceed.  The current extender will expire on April 9 at midnight. 

There are several hurdles to overcome before a budget document can be produced.  They include:  1) how much new revenue is expected to help fill holes/avoid cuts first proposed in the Governor’s executive budget, and 2) which budget cuts can be tolerated in an election year for the 213 legislators?  Yes, I said budget cuts.  That’s because of the status of the MCO Tax proposal.  

The Assembly and Senate majorities continue to voice support for NYS to seek approval to implement an MCO Tax as a source of new revenue.  The tax would draw down millions in new federal matching funds and allow Medicaid restorations instead of the cuts proposed by the Governor to include a major cut to the state’s consumer directed personal care program, Health Homes and also support higher Medicaid rates for hospitals, nursing homes and certain community based providers – goodies the legislators. want to “go home with” this Spring when they return to their districts.  The drawback is that such a tax requires approval from the Centers for Medicare and Medicaid Services (CMS)It feels like lawmakers have come to terms with the reality that there is no guarantee the MCO Tax funding will materialize in time for them to pass a budget that relies so heavily on resources not yet secured and if the Tax does move forward it definitely will not all be available to spend immediately, so the conversation has moved (to some degree) back to having to make some Medicaid cuts for at least part of the upcoming fiscal year.   

One of the big budget cuts that legislators have rejected appears to have been reconciled late Thursday evening. Governor Hochul announced she will not pursue the school aid formula reforms she originally proposed in January.  The legislators uniformly opposed the school cuts and will be relieved not to have to negotiate this topic any further.

The last “big” issue that remains outstanding is housing.  The Governor proposed new funding for housing development and a new tax abatement program to replace one that sunset last year.  Legislators want tenants’ rights to be addressed before they agree to new investments in housing. 

It’s also notable that earlier this week a state Supreme Court justice issued an order striking down New York’s oft-embattled cannabis regulations as the result of a case filed last year by a Seattle company that provides third-party marketing for marijuana businesses and had challenged the constitutionality of the state’s ban on that type of advertising.  This too has an impact on anticipated revenue the state has at its disposal to avoid budget cuts.  

The final spending plan is anticipated to be more than the $233 billion proposed by Governor Hochel, but less than the $246 billion plans the Senate and Assembly have each outlined.  The Assembly Speaker has already announced his members will be in Albany to vote on another spending “extender” to replace the current one which expires on Monday, April 8.