GNYHA President to Testify on Budget in Albany

New York State’s Shrinking Deficit, April 2005–January 2006 ($ in billions)

New York Governor George E. Pataki’s proposed budget for the State fiscal year, which begins on Apr. 1, 2006, contains an estimated $1.3 billion in savings and cuts from health care programs, including Medicaid—this despite the fact that the Governor’s own estimate of the projected deficit for the next fiscal year is only $751 million. In other words, the health care cuts alone are 75% higher than the savings the Governor believes are necessary to balance the entire $110 billion State budget for the coming fiscal year. In addition, more than 61% of the savings in the Governor’s budget come from cutting Medicaid, with only 39% coming from all other programs combined.

“There is no justification for cutting health care programs this year, period,” said GNYHA President Kenneth E.Raske.“Not only is the health care community in dire financial straits—so much so that the State created a commission to try to manage the rash of hospital and nursing home closings and bankruptcies that have affected every region of the State—but when all is said and done, I am convinced that more recent budget estimates will find that the State will not run a deficit next year at all. All the data I have seen indicate that the economy is growing rapidly. We may even be facing a surplus.”

There is no justification for cutting health care programs this year, period. . . . when all is said and done, I am convinced that more recent budget estimates will find that the State will not run a deficit next year at all.    —Kenneth E. Raske, President, GNYHA

Mr. Raske’s comments are based on his observations of economic data, but also on past history. In virtually every budget year, the deficit projected by the State Division of the Budget (DOB) has been re-estimated downward, sometimes quite significantly, before the Governor and the State Legislature actually started their budget negotiations in earnest. In addition, the history of DOB’s deficit projections for State fiscal year 2006–07 shows a dramatic trend downward. In April 2005, DOB projected that the deficit for the coming fiscal year would be $3.2 billion. In its first quarter update released on Aug. 1, 2005, DOB reduced its estimate to $2.9 billion. In the mid-year update released on Oct. 30, 2005, DOB reduced the estimated budget deficit further, to $2.5 billion. DOB officials stated in December 2005 that the deficit was down to $2.0 billion. By the time the Governor released his budget proposal on Jan. 17, 2006, the estimate had shrunk to $751 million. In addition, the Governor estimates that the State will finish the current fiscal year with a $2 billion surplus.

Mr. Raske will be testifying before the joint budget committees of the New York State Legislature on Feb. 7, 2006, in Albany, NY. For copies of his testimony, members of the press should contact Brian Conway at GNYHA.