Governor Andrew Cuomo has about 10 days before he has to make some big decisions about New York State’s estimated $14 billion budget deficit. He is hoping that Congress will pass a bailout measure to avert some of the financial pain, but some Republican senators are resisting.
The governor and state legislature set up rules for coping with an expected shortfall when they approved this year’s budget plan in early April, as tax collections were plummeting.
The timeline began on May 15 when State Comptroller Tom DiNapoli issued his April cash report. It found a “drastic” revenue shortfall.
“The revenues are off compared to a year ago by close to 70%,” said DiNapoli. “It’s no surprise, the economy has been on hold.”
The governor’s budget director, Robert Mujica, says that if the next federal relief package now being negotiated in Congress does not contain funds for state and local government, then New York will cut over $8 billion.
“In the absence of the receipt of federal funds, 90% of the state’s spending is in the areas of school aid, health care, social services.”
Cuomo says those cuts would mean reductions to first responders and frontline workers, who have been the heroes of the pandemic.
“Who do state and local governments fund? They fund the hospitals, they fund the police, they fund the firefighters, they fund the schoolteachers, they fund the foodbanks,” Cuomo said Tuesday on Long Island during his daily coronavirus briefing.
The governor has said he does not want to raise taxes in a devastated economy to close the gap.
There’s cause for hope for closing the deficit in a federal relief package passed by House Speaker Nancy Pelosi and other Democrats who lead the chamber. The $3 trillion measure gives $900 billion to state and local governments hit hard by the virus.
But there is resistance among some Republican senators, including Senate Leader Mitch McConnell, who has said he’s unwilling to bail out “blue” states like New York and California.
Cuomo has alternately expressed confidence and deep worry over the future of the House bill, dubbed the HEROES Act. He has castigated McConnell, and said partisan politics have no place during a pandemic.
“In this situation, they should rise above, and this should not be about politics, it should not be about red and blue,” Cuomo said. “The people who are dying here are not Democrats or Republicans, they are Americans.”
But the governor has also said he thinks it is in GOP senators’ own interest to bail out states, because many states led by Republicans are also suffering from the effects of the virus-related economic shutdowns. And many senators, including McConnell, face reelection in 2020.
“Never underestimate a politician’s instinct for self-survival,” Cuomo said on May 15.
State Comptroller DiNapoli says time is running out though. The Senate is not expected back in Washington until May 26 at the earliest.
“The challenge is we need it sooner than later,” said DiNapoli. “If not, we will be faced with those budget cuts.”
The governor and his budget director have until May 30 to decide.
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