LEGISLATIVE AFFAIRS: New York State Faces $6-Billion to $8-Billion Budget Gap Over the Next Three Years

Philip Weiden | November 2019

New York is facing a dire fiscal crunch over the next 2 to 3 years. The state faces a $6-billion to $8 billion deficit according to the governor’s budget office. The deficit is due, largely, to ballooning costs for Medicaid.

The State Legislature and Gov. Andrew Cuomo will need to produce a balanced budget by April 1st, which is the date required for the state to have its fiscal year budget in place. This will likely result in some combination of cuts along with fee and tax increases to close the gap in the state budget.

Cuts will need to be made within the Medicaid program. “This is different because it is a significant deficit not in the context of any kind of economic downturn,” said Bill Hammond, the Empire Center’s director of health policy. “It’s a Medicaid problem,” he added.

This is the first time in decades that the state faces a major budget deficit during good economic times. Counties, along with the state and federal government contribute to Medicaid in New York State. “Increased enrollment has come at a cost amid a decline in federal aid for Medicaid expenses”, said Freeman Klopott, a spokesman for the State Budget Division. Over six million people (one third the state’s population) are on Medicaid.

Healthcare is an extremely complex issue with many moving parts to it. One unknown is what affect the 2020 Presidential election might have on Medicaid funding. Any change on budgetary health care issues at the federal level will likely have significant implications for state and local budgetary issues in New York.

As an organization concerned with affordability and the orderly right to own and transfer real property we urge the governor, and the state legislature to keep transfer taxes and other already onerous real estate taxes at current levels.

Philip Weiden
Legislative Affairs columnist Philip Weiden is the Government Affairs Director for the Hudson Gateway Association of Realtors.