Jan 17, 2018

Gov. Cuomo releases state budget proposal

Gov. Andrew Cuomo released his budget proposal this week for the upcoming fiscal year, and in it, detailed how he plans to address a $4.4 billion budget deficit without a big increase in taxes. Comptroller Tom DiNapoli, Moody’s Investors Service, several lawmakers and Gov. Cuomo have all described the current budget year as "difficult."

The governor is facing the largest budget deficit since his first year in office. Accordingly, Cuomo limited growth in the $153 billion budget to 2 percent ($168 billion) while figuring out how to come up with new sources of revenue. The governor already has told state agencies that they should prepare zero-growth budgets. He blames many of the budget problems on changes in the federal tax law enacted by Congress last month, and the repeal of the mandate for individuals to buy health insurance.

Gov. Cuomo said the federal tax changes will cost the state an extra $14 billion per year in net payouts to the federal government. He proposed allowing businesses to assume their employees’ income taxes as a payroll tax.

The budget proposal includes no cuts in state aid for core services. School aid is proposed to increase by $769M to $26.4 billion (3 percent); Medicaid spending would increase by $593 million to $18.9 billion (3.2 percent); and total Medicaid costs would increase by $1.7 billion to $70 billion (2.5 percent).

Also included in the proposal is a plan to raise $1 billion in new revenue. Proposals include a new tax on opioid prescription drugs, a broadening of internet sales taxes to all items sold by vendors with $100 million or more in annual sales (not just those vendors with a presence in New York state), $500 million from insurance providers that convert from not-for-profit to for-profit status and a new tax on health-insurance providers.

Gov. Cuomo also included a call for the legislature to pass the DREAM Act to provide college tuition assistance to children of undocumented immigrants.