Despite a global pandemic that’s made New York a global hotspot for the disease, Gov. Andrew Cuomo and members of the state Legislature this week agreed to approve a timely state budget that includes several top issues, like bail reform and changes to Medicaid.
Lawmakers were expected to approve the final spending plan later Thursday, after which they’ll return to their districts for at least two weeks, and possibly the rest of the year.
But they may have to return to Albany at least three more times this year, depending on how the state’s economy fares over the next several months. They could be presented with an opportunity to adjust state spending periodically based on language in the final budget.
The spending plan will allow the state Division of Budget, which is controlled by Cuomo, to evaluate how much revenue the state collects over three separate measurement periods, and then adjust state spending to reflect the financial reality of the state.
In other words, the state could plan to spend a certain amount of money on something, like a school district or local government, and then reduce its commitment to that entity if revenue is down during a specific measurement period.
That’s to allow flexibility during uncertain economic times in New York, which is projecting between $10 billion and $15 billion in lost revenue over the next fiscal year due to the COVID-19 pandemic. That’s on top of funds the state has spent directly to respond to the disease.
The state is also planning to take advantage of short-term borrowing over the next three months to bridge a gap in revenue between now and when tax filings are due in July. The filing date was moved from April to July to allow time for the pandemic to run its course.
New York state will be allowed to issue up to $8 billion in short-term bonds, according to the state budget, and could borrow $3 billion in lines of credit from financial institutions.
There’s not much in this year’s state budget in the area of increased spending, and no new tax increases were included in the budget. That left some Democrats upset by the agreement, arguing that lawmakers should have raised taxes on the wealthy.
That revenue stream, they’ve said, could be used to divert more state aid to schools in New York. It could also be used to help the state foot the bill for costs related to the COVID-19 pandemic, though the revenue from wealthy New Yorkers wouldn’t be immediately realized.
School aid, in a major blow to advocates, will remain flat over the next fiscal year, according to budget legislation. That means schools can expect as much as they received from the state last year, meaning some tough economic decisions are likely ahead for poorer districts.
David Friedfel from the Citizens Budget Commission said the potential to have the state decrease spending at different points throughout the year could have dramatic consequences for school districts, which are accustomed to having an annual spending plan in place by June.
“It creates a significant problem,” Friedfel said. “It’s going to be very challenging for school districts.”
Friedfel said, from a planning perspective, it would be better for the state to give them a firm commitment now on how much they should expect to lose in the coming months, in terms of state funding.
While the final state budget will take effect immediately, the state’s fiscal condition is still relatively unknown. There’s the possibility the federal government will send more funds to New York, but there’s been no guarantee from federal lawmakers.
New York is expected, however, to receive $6 billion from the federal government for its response to the COVID-19 pandemic. That relief, which was part of a national aid package, was initially in limbo.
Those funds came with a few strings attached. For one, states weren’t allowed to make certain changes to their Medicaid programs if they received the funding.
That put New York in a tough spot. The state was months into a redesign of its Medicaid program, with an expectation that the changes would be approved at the end of March. But lawmakers were considering blocking those changes to receive the federal funds.
In the end, Cuomo and lawmakers agreed to do both. The changes to Medicaid won’t take effect until after the state receives the federal funding, but they will ultimately be enacted. And not all of the changes were in conflict with the federal rules, Friedfel said.
“There are many changes the state was going to make that were not impacted by the federal aid,” Friedfel said.
Aside from the fiscal health of New York, the state budget also addressed several top policy issues, like new changes to the state’s laws on cash bail and the legalization of gestational surrogacy.
"This is a moment in history unlike any other, and government needs to function and deliver results for the people of this state now more than ever — and that's exactly what we did with this budget,” Cuomo said Thursday.
New York’s new laws on cash bail took effect in January and almost immediately received significant pushback from members of law enforcement, Republicans, and Democrats in swing districts. Cuomo also said, at the time, that he would support amending the new laws.
The new laws largely eliminated cash bail for low-level and nonviolent charges in New York. Critics had argued the law went too far, and that cash bail should be reinstated for certain charges, like manslaughter.
Cuomo and Democrats, in the state budget, added a list of new charges that would make someone eligible for cash bail. Among them, to name a few, were assault in the third degree, grand larceny, and aggravated vehicular assault.
The law will also allow judges to set bail for individuals charged with a crime that’s alleged to have caused someone's death, like manslaughter. Judges will also be allowed to set bail for people who are charged with a second crime after being released on an initial charge.
Criminal justice advocates were critical of the agreement, saying it would land more people in jail in the midst of a global pandemic.
“This move directly contradicts other executives and public health experts who are working to reduce jail populations in order to prevent the spread of the virus,” said Paulette Soltani, political director at VOCAL-NY.
Gestational surrogacy will also be legalized in the state budget. The issue was a top priority for several Democrats and Cuomo, who pushed lawmakers to approve the measure last year.
The legislation will allow individuals, or a couple, to enter into a contract agreement with a woman in which they pay her to carry a fertilized egg. The woman will have access to health insurance, medical care, and legal counsel as part of the agreement.
State Sen. Brad Hoylman, D-Manhattan, sponsored the bill before it made it into the budget. He traveled to California with his husband to find a surrogate years ago, and has advocated for the practice to be legalized in New York since.
“As a gay dad, I’m thrilled parents like us and people struggling with infertility will finally have the chance to create their own families through surrogacy here in New York,” Hoylman said.
Lawmakers also chose to act on several other key issues in the budget. The spending plan includes a ban on the sale of flavored e-cigarettes, the legalization of e-bikes and e-scooters, and a restriction on companies pricing similar products differently based on the targeted gender.