Budget Deficit Worries State Leaders

October 9, 2020

New York State’s massive budget deficit, which the Division of the Budget (DOB) most recently estimated at $14.2 billion this fiscal year, continues to dominate discussion in Albany. DOB has said that without substantial relief from the Federal government, it may be forced to make unilateral, massive cuts to State programs—including 20-30% cuts to Medicaid—using its extensive “superpowers.”

While prominent Democrats in the Legislature have called for tax increases on the wealthy to address the shortfall, Governor Andrew Cuomo repeatedly has said that the most effective solution is help from Washington, DC. Last week, responding to gridlock in Congress, Cuomo said he was unlikely to make significant cuts before the outcome of next month’s elections becomes clear, saying he believed Democrats would make gains and come to New York’s aid.

“I’m not going to do any damage to the State’s economy until you tell me that is the last resort,” Cuomo stated at a press conference. “I think in all probability, either Congress will pass a package or Joe Biden will be elected or the Senate will go Democratic. So, I will wait for those more probable outcomes before doing irreversible damage.”

The Legislature, which could respond to any decision by DOB to make cuts, has not indicated any plans to return to session in the near future.