Alliance Note: Today marks the beginning of what was slated to be a very busy week for budget negotiations as we approach Easter weekend ahead of the April 1st budget deadline. News from Albany currently suggests while a lot of progress is expected this week, it is unlikely we will have a budget agreement by Friday when lawmakers head home for the holiday.
Where are Negotiations Now?
Reports suggest the budget negotiations are being held up on a few large items, including an agreement on how large the budget will be, how much funding will go to education, and whether our Medicaid program will have cuts or additional funding. The legislature has proposed $13 billion more in funding than the Governor did, and the two sides will need to agree to an overall budget number before negotiations for individual budget items can begin. The three groups will then need to address large budget items including funding for education, Medicaid expenditures, and a plan to create more housing throughout the state.
Current Alliance Advocacy
We are actively advocating for our priorities as negotiations continue. We will be meeting with legislators and the Governor’s office to discuss the need for a flexible 3.2% Cost-of-Living Adjustment to support provider agencies as they manage rising costs which directly affect their ability to provide services and increase workforce pay. Please continue to send messages to the legislature and Governor asking for an unrestricted 3.2% COLA in the final budget. Click here and go down to the second action, titled “3.2% COLA for Mental Health and Addiction Agencies” to send messages.
The Alliance is working with the legislature and the Daniel’s Law Coalition to ensure the final budget includes the proposed $2 million in funding for Daniel’s Law Pilot programs. These pilots will support the State’s Daniel’s Law Task Force by providing data on how the program works in New York, including best practices for implementation which will be critical for statewide expansion. We are continuing to send lawmakers messages urging them to support pilot funding. You can send messages by using this link: Send Messages Today!
Harvey and Luke continue to push for peer-led services to prevent unnecessary hospitalization and support effective transitions from hospitals to the community. We are pushing for the inclusion of funding for more Intensive and Sustained Engagement Team (INSET) programs as well as Peer Bridger Pilots, each of which had $1 million proposed in the Assembly One House bill.
Some other items we are continuing to advocate for include the restoration to cuts to the Adult Home EQUAL Program to support quality of life improvements for the nearly 13,000 people living in Adult Care Facilities in New York and the inclusion of a Commercial Insurance Reimbursement Rate mandate to require commercial insurance providers to pay at least the Medicaid rate for mental health and substance use services provided by organizations which are licensed by the state to provide services. Both items were in the Assembly and Senate one House bills but not in the Governor’s proposal.
Finally, The Alliance is committed to fighting for our member’s priorities which were not included in the legislature or Governor’s budgets. These include the passage of the Treatment not Jail Act, more Peer Run Respites, and funding for Upstate Clubhouse pilots. We know how much the public wants and needs these services and we will be working with other advocates, champions in the legislature, and the Governor’s office to have these essential programs included in the final budget.
We will continue to update you all when we get more information on the budget negotiations as they proceed. The Alliance will be sharing more ways for you all to join our advocacy efforts, including calling your legislators and sending messages. See below for more information on where negotiations stand as we get closer to the deadline.
Budget Mania: NY Spending Holdouts & Headway, Speaker Under Fire, Political Mary Poppins
By Jack O’Donnell | Monday Morning Memo | March 25, 2024
Good morning from Albany where there is plenty of chatter about a “handshake agreement” on the budget by Thursday, allowing lawmakers and Executive Chamber staff to spend Easter with their families. While anything is possible, it is certainly not likely and the betting here is that the Easter Bunny comes before the final budget.
There are major issues still to be resolved between the Legislature and Governor Kathy Hochul including:
- Revenue. There is no agreement on how much the budget will spend; the Assembly and Senate both proposed budgets roughly $13 billion higher than the Executive proposal. Democratic Assembly Member Amy Paulin said once a topline number gets ironed out, things could move quickly offering, “We don’t even have table targets, so it’s very difficult to gauge when this budget process will be over, but that could change tomorrow. Once there’s agreement on some of the big items, it moves very quickly, but as far as I know, that agreement hasn’t happened yet.” To justify the higher spending proposal, the Legislature is pushing for a tax increase on those making more than $5 million, a policy that Hochul has rejected in the past and has promised to do so again this year.
- Education. Both Houses rejected Hochul’s proposal to adjust the formula governing local school aid, instead proposing a $1 million study on the issue. Overall education aid increases by 2.4 percent in the Executive Budget proposal, but under the proposed changes to the aid formula, roughly half of the school districts in the State would receive less aid. Hochul has pointed to declining enrollment and healthy cash reserves in some districts as reasons for the changes saying, “We’re funding empty seats these days when you base it on a formula that goes back to 2008. I want to have the conversations with the Legislature, how we make the right adjustments, how we do what’s right certainly for our students, certainly for the teachers, but also for the taxpayers who are saying, ‘Why is the school system sitting on enormous reserves?’”
- Medicaid Funding. In response to the Governor’s $1.2 billion in Medicaid cuts, the Legislature proposed implementing a premium on Managed Care Organizations (MCO) that would generate roughly $4 billion a year to help fund Medicaid. MCOs would then be reimbursed by the federal government (assuming the Centers for Medicare and Medicaid Services aka CMS approve the plan). Senate Finance Chair Liz Krueger endorsed the proposal saying, “So that’s an easy answer of how we pay for the Medicaid cuts without it impacting revenue from other sections of the budget.” The Senate and Assembly both included a 3% Medicaid reimbursement rate increase, with the Assembly pushing for a 7.5% increase for hospitals and nursing homes. There is a growing consensus around the MCO tax idea. That said, it would only be a temporary fix—it is unlikely to last past three years—and one that does not address the long-term issues of growing Medicaid costs. That said, most everyone in Albany agrees that New York—a longtime donor state to the federal government—should take the federal money (if we can get it) and run.
- Housing. The Legislature and Hochul continue to want a comprehensive housing package. However, the Executive housing proposal was muted after last year’s ambitious proposal was soundly rejected by the Legislature. Progressive lawmakers and housing advocates continue to push “Good Cause Eviction,” a package of policies that would shore up tenant protections and place certain caps on rent increases. Senate Housing Committee Chairman Brian Kavanagh indicated that his conference could be open to a compromise in the budget as long as it included provisions similar to Good Cause Eviction saying, “It’s certainly worth considering.” Any broad package would likely need to include a 421-a deal, a fix for affordable housing owners, labor standards, and incentives for residential conversions. One option that is being floated is a housing fund in the budget with details to be worked out before the end of the legislative session.
- Retail Theft. Hochul’s public safety agenda includes cracking down on organized retail theft. The plan would allocate $45 million to create a Retail Theft Joint Operation, a collaborative effort with state and local law enforcement to identify and respond to organized retail theft. To add to that effort, Hochul has also proposed upping the penalty for assaulting a retail worker and introduced a tax credit to help businesses increase store security. Assemblyman John McDonald offered, “I think there’s open conversation and understanding what it looks like,” but some of his Democratic colleagues are more skeptical, especially as the Legislature has led a long turnaround in state criminal justice policies that have resulted in fewer people being jailed for minor offenses.
- Energy. The Senate included the NY HEAT Act, a priority for many environmental advocates who hope the measure will help expedite the transition to green energy. The Assembly included provisions to eliminate the so called 100-foot-rule, a policy that requires gas companies to provide free natural gas hookups within 100 feet of an existing line, subsidized by existing ratepayers. Opponents of the bill have raised questions about utility reliability if the change is enacted and some powerful voices in organized labor worry the proposal could cost jobs. Mario Cilento, president of the New York State AFL-CIO, said alternative energy should be “readily available and affordable across the state before proposals like the NY HEAT Act are considered.”
- Empire AI. One of Hochul’s most ambitious proposals was her $250 million plan to establish an AI consortium with a cutting-edge AI computing facility at the University at Buffalo. Other consortium partners, including Columbia University, Cornell University, New York University, and Rensselaer Polytechnic Institute, would each contribute $25 million and would have remote access to the computing power necessary to run modern AI software. The funding was included in both legislative proposal and looks to be adopted with more detailed budget language.
With those issues—and plenty of others—still outstanding and only four days until lawmakers are scheduled to leave town, a pre-Easter budget seems unrealistic. Senate Minority Leader Rob Ortt: “There’s no way we’re going to have a budget done on the 28th.”