NYAPRS Member Memo: Here are some highlights of today’s state budget address and materials from Governor Andrew Cuomo, news accounts and collaboration with our friends at MHANYS. We’ll have comments and next steps tomorrow. Attached is the full Budget Book.
The Governor’s proposal includes:
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Restoration of 15% of the Withholds, 5% Cut Going Forward: “Higher-than-projected revenues to the state will permit Albany to restore 15% of the 20% that providers have experienced. Instead, the temporary “withholding” of state aid will become permanent cuts of 5% for local governments. “Amounts that have been withheld in excess of the 5 percent are expected to be reconciled and repaid in the final quarter of FY 2021.” The 5% cut will be restored based on the amount of federal allocations.
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Establish Crisis Stabilization Centers. The Budget authorizes the launch of Behavioral Health Crisis Stabilization centers. On average, more than 100,000 individuals per year benefit from crisis intervention services. These centers will be open 24/7/365 and accept all admissions without referral, including direct drop-offs by law enforcement and other first responders. This effort will streamline stabilization and reintegration for individuals in crisis.
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Continue Support for Existing Residential Programs. The Budget continues the $20 million investment from FY 2021 for existing community-based residential programs. This investment helps preserve access to housing, a critical component of recovery. Since FY 2015, annual funding to enhance support for these existing housing programs has increased by $70 million.
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Convert Rockland Children’s Psychiatric Center (PC) to a Comprehensive Children’s Center. The FY 2022 Executive Budget includes a plan to develop an innovative, voluntary-operated center for children and youth in need of brief, intensive community-based care, including residential treatment. This will provide much-needed community-based and home-based care for youth in this region.
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Support High-Need Individuals. The Budget provides an additional $9.7 million annually for individuals living in transitional adult homes in New York City who wish to transition to more integrated settings in the community.
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Invest in Infrastructure. The Budget also includes $60 million to maintain and preserve community-based residential facilities that allow people with mental illness to live in the most integrated setting possible. More than 47,000 individuals with serious mental illness live in a residential setting overseen by OMH.
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Reduce Local Assistance Payments to Reflect the Fiscal Crisis. As a result of the fiscal crisis caused entirely by the pandemic OMH non-residential local assistance payments will be reduced by 5 percent. These spending reductions may be restored if the State receives requested Federal COVID relief funds.
Creation of an Office of Addiction and Mental Health Services: The Executive Budget integrates the Office of Addiction Services and Supports and the Office of Mental Health into a new Office of Addiction and Mental Health Services. This continues the collaborative work OASAS and OMH have undertaken over the past eight years to better coordinate and ensure access to care for individuals served, including establishing integrated outpatient programs; establishing DSRIP projects focused on integrating care; and including screening requirements in all settings to ensure addiction and mental health needs are identified and treated or referred for treatment.
Minimum Wage: The Executive Budget leverages an additional $38.5 million in State funds to support minimum wage increases for staff at not-for-profits licensed, certified, or otherwise authorized by OPWDD, OMH, and OASAS.
Integrated Licensing: Governor Cuomo has directed OMH, OASAS and DOH to establish a single, integrated license for outpatient mental health, addiction, and physical health services.
Medicaid: Medicaid: Savings in FY 2021 are achieved by reducing rates paid to managed care and long-term care insurance carriers based on lower health care utilization due to the pandemic, the use of available balances, and revisions to estimated costs. In FY 2022, savings are mainly achieved from across-the-board reductions and the use of available resources to support spending. Spending under the Global Cap is expected to increase at the indexed rate.
State Takeover of Local Medicaid Costs. The Budget continues the Governor’s commitment to relieve local governments of Medicaid expenditure growth. In FY 2022, the State will assume nearly $4.8 billion in costs that would have otherwise been incurred by localities.
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Overview
2 Different Budget Proposals
The precariousness of the situation led the Governor to lay out two different budget possibilities: one assuming a federal aid package of $6 billion, and another with the full $15 billion.
$6 Billion Federal Aid Package
If the federal government provided a $6 billion aid package, which the governor called the “worst-case” scenario, he said the state would be unable to fill its budget gap, resulting in cuts of about $2 billion in school funding, $600 million in Medicaid funding and 5% ($900 million) in across-the-board reductions.
$15 billion Package
The ‘Fair Funding’ Allocation would restore across-the-board 5% reductions that have impacted the state, and it would pave the way for other programs including middle-class tax cuts, affordable broadband for low-income homes, addressing food insecurity and the state’s Pandemic Recovery and Restart Program – providing credit for restaurants, arts centers and other businesses impacted during the pandemic.
Federal Funds
The political climate in Washington is certainly different: Senator Chuck Schumer, who will take over as majority leader in Washington this week, has promised “better days ahead out of Washington for New York,” though he has stopped short of promising a complete bailout. Still, his influence is already being felt: Last week, Mr. Schumer announced that the city and state would receive $2 billion in emergency funding related to expenses incurred as part of the coronavirus response.
Increased Revenues
Legalization of Marihuana: The proposal creates a complex regulatory system to control the cultivation, distribution, marketing and selling of the drugs to people age 21 and over. Officials believe it can bring in $350 million in tax revenues each year, though a Cuomo budget advisor the marijuana market won’t be fully mature for four years from now. Some lawmakers want marijuana tax revenues dedicated to low-income, mostly minority communities that were hit by high arrest rates during the war on drugs. Cuomo said he’s offering to give $100 million to a “social equity fund” with the remaining $250 million going to the state’s general fund.
Mobile Sports Betting: Cuomo also included in his budget the legalization of mobile sports betting run through computer servers at several upstate commercial casinos and Native American-owned casinos. It could bring Albany $500 million annually.
‘Wealth Tax’: While he has previous opposed raising income taxes on wealthy people, he embraced a tax hike today on people making more than $5 million annually — but only if Washington does not come up with the full, $15 billion in aid he is requesting. He said such a plan would raise only $1.5 billion, 10% of what he says the state needs to close the red ink. The state income tax rate would rise for those affected from 8.82% to 10.82%. The tax hike would not go forward if Washington sends the $15 billion package.
Other Revenue Actions: include a new state and local sales tax imposed on the vacation home rental industry and a new $1 “convenience fee” imposed on motorists who do transactions via online with the state motor vehicle agency. SUNY campuses would be permitted for another year to automatically raise tuition by various levels
Suing the Federal Government
Cuomo did not specify which branches of the federal government he would sue in the event an agreement cannot be reached, though he indicated that the executive and legislative branches have a responsibility to create a Covid-19 relief package that provides aid to states.
Pressure on the Legislature
There will be no pay raises for Executive and Legislative branch employees if there isn’t an on-time budget.
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A ‘Fair” $15 billion allocation would help pay for items like:
$130 million Pandemic Recovery and Restart
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$50 million for a small business rehiring credit
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$50 million to aid impacted restaurants
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$30 million to aid musical and theatrical productions
Healthcare Funding $2.3 billion
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Continues to pay for 1.6 million additional recipients added to Medicaid rolls since 2012
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$100 million for 400,000 low income New Yorkers
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$420 million for vital health services for essential plan enrollees
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$200 million for essential plan quality pool
Higher Education $7.5 billion
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$6 million to incentivize employers to provide childcare
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$6 million for start up grant to create programs in childcare deserts
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$ 1 billion for student financial aid
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$ 200 million for Opportunity Programs
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$2.8 billion for childcare
Housing
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$1.3 billion to address rental assistance crisis
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$20 billion for more than 100,000 homes
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$250 million for a 15 year goals of 20k affordable homes with supportive services, 7,000 have already been created
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$128 million for Homeless Housing and Assistance
Miscellaneous
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$10 million for undocumented
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$15 dollars a month cap on broadband
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$ 150 million to address food insecurity
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$600 million for state labor agreements
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Restore 5% across the board reductions $ 900 million
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Going forward with middle class tax cut $400 million
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3.8 million in education, 1.1 b in additional state support
If New York Doesn’t Get $19 billion ‘Fair Allocation, There will be Cuts including:
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$2 billion in school funding
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$600 million in Medicaid cuts
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$900 million in continuation of 5% across the board reductions