Does New York City gain or lose in Cuomo’s budget? Depends who you ask.
After hours of testifying about the state budget proposal in Albany on Tuesday, New York City Mayor Bill de Blasio said there were too many details up in the air for him to describe Gov. Andrew Cuomo’s plan as a net gain, loss or wash for the city.
In all, the mayor said during the testimony that the city was looking at some positive news, such as a proposed $15 minimum wage, paid family leave policy and sweeping supportive housing initiative. But, he said he was concerned that the initial proposal included nearly $1 billion in city obligations.
After Cuomo introduced his initial plan this month that included the cuts to New York City, he said the city would not have to pay a penny more for at least two changes outlined because savings would be identified through efficiencies. If achieved, this could knock out $695 million of the $924.3 million in obligations de Blasio described.
“There’s a lot we don’t know about this budget,” de Blasio told reporters after his testimony at a joint legislative hearing on Cuomo’s executive budget. “There’s a lot of question marks; there’s a lot of areas where we need to hear more detail before we can judge this budget.”
By the state’s accounting, however, the city is slated to receive $322.2 million more than last year from the state. The multi-million difference of opinion hinges on changes to two categories of funding the mayor and governor view differently - money for Medicaid and savings stemming from the refinancing of debt the state assumed on the city’s behalf. And while de Blasio may not feel there is enough information to assess how the city came out in Cuomo’s proposal, some budget watchdog groups said the current draft does not favor the city.
“The cuts as they were outlined in the budget – now, the governor has sort of walked it back a little bit – but as they were outlined in the budget, are more clear and certainly appear more significant than the money that could flow from these other initiatives,” said Maria Doulis, vice president of the Citizens Budget Commission. Doulis also noted that it’s hard to gauge when and how much the city will benefit from various measures in the state budget, including a $20 billion, five-year plan to add affordable housing and expand homeless services across the state and a 15-year supportive housing initiative. “It’s unclear how much of the total pot will go to New York City at the end of the day.”
De Blasio on Tuesday ticked through four major budgetary shifts, which could amount to roughly $924.3 million in additional city obligations. These include about $485 million more in city obligations for CUNY, $209 million more in Medicaid costs, and the loss of $200 million in sales tax revenue now that the governor is seeking to recoup savings the city achieved while refinancing the debt. The final shift the mayor identified was higher contribution rates for charter school tuition amounting to $30.3 million.
However, Cuomo has said the city would not actually pay any more for Medicaid or CUNY, which the governor said could be achieved by trimming the bureaucracy at CUNY and reducing administrative costs for Medicaid. Setting aside efficiencies, state budget documents show $322.2 million in additional funding for New York City this year, including $145.9 million for Medicaid.
A state budget official argued that Medicaid relief has been paid to municipalities to help ensure they do not raise their property tax levy by more than 2 percent annually, and the city has received such funding despite not being constrained by the cap. So in the state budget plan for the upcoming year, the city had been asked to handle 2 percent of its Medicaid cost increases. The state would pitch in the rest, resulting in a net gain of $145.9 million for the city in Medicaid relief.
Not everyone would put the Medicaid money in question in the positive column for the city. Doug Turetsky, chief of staff for the New York City Independent Budget Office, said the $145.9 million was money the city would not have to pay, but it was not a financing stream the de Blasio administration could spend in the same sense as a $364 million bump in school aid for New York City that is also included in the proposed state budget.
The city and state also don’t see eye to eye on some $600 million saved in 2014 by refinancing debt the state previously agreed to assume. Because the state helped bail out the city, it was entitled to the $600 million in question and would seek to recoup it by appropriating $200 million in city sales tax revenue annually for three years, according to a state budget official.
The de Blasio administration testified that a state Court of Appeals decision obligated the state to handle the debt. De Blasio also said the city lost more than $300 million in annual aid to municipality funding the state sets aside for other localities during the debt negotiations.
“There is no justification for this action,” de Blasio told state lawmakers. “These cuts are particularly onerous because New York City is the only municipality in New York state that doesn’t receive direct municipal aid.”