State budget cuts funding to NYC, but details are up in the air

If it were any other year, you could imagine New York City Mayor Bill de Blasio grandstanding about the state budget that passed in Albany on April 3. After all, the state’s multibillion-dollar spending plan cuts $138 million from New York City’s public hospitals, leaves the city without an increase in education funding for the first time in seven years, and mandates that the city contribute $3 billion to the state-run Metropolitan Transportation Authority. It forces the city to hand over the NYPD’s Manhattan tow pound  to the state by the end of the year – a deadline City Hall called “unrealistic.” The state also didn’t authorize judges to consider a defendant’s risk to public safety – something de Blasio has long been demanding – and it didn’t raise taxes on the rich to raise revenue, another trademark de Blasio demand. 

Many downstate Democratic lawmakers did make their disappointment heard loud and clear. State Sen. Zellnor Myrie, a de Blasio ally, called the budget “one of the most difficult in this state's history.” State Sen. Jessica Ramos, who used to work for the mayor, called it “an austerity budget filled with regressive legislation that will starve our neighbors and fill our jails.”

But in the days since the budget passed, the leaders of city government have been uncharacteristically quiet about it. De Blasio hasn’t released a statement about it, and his comments the week before the budget passed were mostly conciliatory. New York City Council Speaker Corey Johnson, who negotiates the city budget with the mayor, hasn’t released any statements or posted any tweets about the state budget either, and his office didn’t respond to a request for comment. Same for New York City Comptroller Scott Stringer, the city’s fiscal watchdog. 

But can you blame them? There’s a we’re-all-in-this-together vibe in New York’s halls of government these days. Governors and mayors who used to rail against Trump are now praising the White House, hoping to keep the flow of life saving equipment moving. And even as Gov. Andrew Cuomo has preempted de Blasio on matters like school calendars and closing playgrounds, the mayor has largely accepted it.

The state budget is just the latest example. In January, de Blasio was saying the city had “never seen this kind of threat from the state budget.” In February, de Blasio went up to Albany, where he said the governor’s proposed cuts to the city “would be nothing less than devastating for everyday New Yorkers.” At the end of March, while the budget was being negotiated, the mayor told NY1 that “it was wrong to even think about cutting Medicaid dollars from localities.” But when City & State asked the mayor for his thoughts on the budget on April 2, when nearly all of the details had been settled, his tone was more resigned.

“The governor and the Legislature in their wisdom did what they did. We will deal with it,” he said. “I think in a perfect world, (the budget) would have been the state holding the city harmless. We were not held harmless. But we will live to fight another day.”

The only thing the mayor singled out that day was the state increasing the city’s obligations to the MTA’s much-maligned Access-a-Ride paratransit program – a hot issue, but not nearly on the level of state Medicaid or education funding.

De Blasio may have other reasons for his subdued tone, explained George Sweeting, deputy director of the New York City Independent Budget Office, a watchdog agency for the city budget. For one, it’s too early to assess the budget’s overall fiscal impact on the city. The state budget is always complex, and a new provision that allows Cuomo to make mid-year adjustments further complicates it. ”There’s even more than usual to sort out this year,” Sweeting said. 

Medicaid spending, one of the matters of greatest importance to the city, still isn’t sorted out either, even though the budget has been signed. The state slashed spending, which would require the city to make up some of the difference, but that change will likely be delayed. That’s because the federal government’s latest stimulus bill prevents states from cutting Medicaid if they want to receive any funding. And while the city will be receiving .02% less money for education than it did last year, even though City Hall was expecting an increase of around $350 million to last year’s $11.4 billion haul, de Blasio understands that increases aren’t likely in this economy. The state’s fiscal outlook is far worse than it was just one month ago. State and city alike are expecting massive revenue shortfalls because of the sputtering economy and increased spending to deal with the coronavirus crisis. Cuomo has said the state is looking at anywhere from a $9 billion to $15 billion shortfall. De Blasio himself announced in March that the city would be looking to cut at least $1.3 billion from its planned $95 billion budget. 

“Obviously, the world is entirely different,” de Blasio said at an April press conference. “I gave my (budget) testimony up in February, up in Albany. That seems like a century ago.” 

And the city’s fiscal picture may be different yet a month from now. The mayor is holding out hope that the federal government will pass another stimulus bill that would contain direct help for states and municipalities that have been spending big during the crisis. 

“There could be a lot of help out there,” de Blasio said at an April press conference. “If you take every single dollar that New York state needs to make up its budget deficit, to make it 100% whole, every dollar that New York City needs to make us 100% whole, the federal government could achieve that in a heartbeat.”

The state budget is even more complex this year, and federal funding remains a big question mark. So while de Blasio has been relatively quiet in regards to the budget, Sweeting from the IBO said he’s sure that the city’s budget team is working hard to analyze everything before the mayor releases his own executive budget for the city on April 24.

“If he’s being quiet because (City Hall) is trying to figure all this out, it doesn’t surprise me,” Sweeting said.

On Monday, a de Blasio spokeswoman said as much. “Our focus is very much on COVID,” said Julia Arredondo, deputy press secretary for de Blasio, “but of course we are continuing to assess how the budget will impact the City.”