How federal policy could bust NY's finances

ALBANY -- About one third of the state budget is reliant on aid from Washington and changes in federal policy could threaten "much of that funding," Comptroller Thomas DiNapoli warned Friday.

In his annual review of the proposed state budget, DiNapoli said New York's $162 billion budget is dependent on $54 billion from the federal government.

So New York's finances would be tethered to any major changes by the Trump administration on policies related to the Affordable Care Act, immigration or infrastructure, the comptroller's report said.

"These funds are critical to help pay for essential investments in human services, transportation, education, environmental programs and health care," DiNapoli's report said.

In particular, New York's massive Medicaid program totals more than $60 billion a year, and the budget proposal introduced Jan. 17 by Gov. Andrew Cuomo relies on an additional $3.3 billion over the next four years.

Gov. Andrew Cuomo's office has estimated New York could lose as much as $3.7 billion if the Affordable Care Act is merely repealed, leaving 2.7 million New Yorkers without health insurance.

The Trump administration is eying a replacement for so-called Obamacare.

The state Legislature and Cuomo will begin budget negotiations in earnest next month to get a deal by March 31 for the fiscal year that starts April 1.

DiNapoli said Cuomo's plan would address the state's infrastructure needs and reduce out-year budget gaps, but also gives the executive branch more authority over spending.

"Several proposals raise issues regarding checks and balances over use of the public’s dollars and would diminish independent oversight," DiNapoli said.

The state's financial picture is aided by Cuomo's proposal to extend the current income-tax rates on the wealthy -- which brings in about $4 billion a year.

But DiNapoli, as he has done in the past, raises concerns about Cuomo's proposal to gain more control over the budget.

For example, the plan would give Cuomo the ability to increase or decrease planned expenditures and more easily move around money from one agency or another.

DiNapoli warned that the budget would also limit his oversight on state spending.

The warning comes amid a scandal in Cuomo's office: His former top aides and upstate private developers were charged in an alleged pay-to-play scheme and bid rigging.

"Eliminating these provisions creates risk of misuse of such resources and higher costs for taxpayers," DiNapoli said.

Cuomo's office said DiNapoli's review found many positives with the state's finances, saying the additional state control is needed to deal with potential losses in federal aid during the year.

"We are pleased that the comptroller’s report recognizes the fiscal discipline and intelligent investments that characterize this budget," Morris Peters, a spokesman for the state Budget Division, said.

"The report also rightly identifies the significant risk to federal revenues, which is why the budget includes prudent language – long supported by rating agencies and good governance groups – to help the state manage mid-year deficits.”

Other highlights in the budget, DiNapoli said:

-- Projects slower employment growth over the next two years compared to 2016, but stronger gains in overall economic activity.

-- Increases school aid by $961 million, or 3.9 percent.

-- Estimates state-funded Medicaid spending to grow by $5.1 percent to $23.4 billion; federal and local spending make up the rest.

-- Proposes the "Excelsior Scholarship" program to make SUNY and CUNY tuition-free for income eligible

tudents, costing $71 million in the coming fiscal year and reaching $163 million in two years when households earning less than $125,000 a year would be eligible.

-- Includes a proposed Clean Water Infrastructure Act authorizing $400 million annually over five years, with $75 million planned to be spent in the 2017-18 fiscal year.

 

Gannett


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