Cuomo’s 2021-22 state budget plan leans on federal aid to close $15 billion gap

By Tom Rivers, Editor Posted 20 January 2021 at 8:55 am

Photo from Governor’s Office: Andrew Cuomo presents his executive budget on Tuesday in Albany.

Gov. Andrew Cuomo on Tuesday presented his executive budget that totals $192.9 billion for the fiscal year 2021-22. New York will need the federal government to fill a $15 billion budget gap or else the state will have to make cuts, reduce reimbursements to local governments and non-profits, borrow money and raise taxes, Cuomo said.

“New York cannot manage a $15 billion deficit,” Cuomo said. “These numbers are all hard to put into context. The largest deficit in the State in history was $10 billion and I managed a $10 billion deficit. It was very, very hard. $15 billion in this environment is just impossible for a state to manage. It’s beyond what we can do. It is going to require assistance from the federal government. The question is how much assistance will we get?”

The governor said he believes the Biden Administration and Congress will come through with the aid and help the state get through their fiscal challenges that are expected to last through 2024, when the state anticipates the economy and jobs returning from the pandemic shutdowns. About half of the 1.9 million jobs lost are back, Cuomo said.

The lost jobs include 6,000 people on the state payroll, positions that became vacant this past year and were not refilled.

The state’s tax revenues have taken a hit from Covid’s impact on the economy and the federal government also has siphoned off revenue from the state, Cuomo said, calling New York “a political piñata for this federal government.”

Biden has proposed the American Rescue plan, a $1.9 trillion stimulus package to help the country recover from the cost of Covid. Part of the plan includes $350 billion for state and local financing.

“The question becomes how do they distribute that $350 billion?” Cuomo said. “How much of that funding goes to the New York State government?”

Some highlights of the executive budget include:

• Education – $31.7 billion, up from $29.6 billion or by 7.1 percent. This includes funding for school districts through School Aid, STAR, and federal funds to support operational costs of school districts that educate 2.6 million students statewide. Approximately 70 percent of these funds are targeted to high-need school districts.

The school aid includes $4.3 Billion in Federal Supplemental Funds. Given the extraordinary strain that the pandemic has placed on school districts, educators and students, the budget allocates funds to schools to support ongoing operational and pandemic-related costs.

Cuomo is proposing two new revenue generators that could bring in $800 million to the state.

•Mobile Sports Betting: A new mobile sports wagering market will provide more than $500 million for the state and grow what could be the largest sports wagering market in the U.S. into a profitable industry long-term, Cuomo said.

• Legalization of Adult-Use Cannabis: Cuomo proposes to legalize cannabis for adult use. Legalization will not only ensure public health and safety, but provide an opportunity for the state to generate more than $300 million in tax revenue.

• Reimagine the Erie Canal: Building on the findings of the Reimagine the Canal Task Force, the New York Power Authority Board, which now oversees the Canal Corporation, will invest $300 million over the next five years to integrate the Empire State Trail and Erie Canal into a new “Empire Line” system that will stimulate tourism and economic development, address environmental challenges unknown a century ago, and create an asset that will improve the quality of life in communities along the 360-mile spine of the Erie Canal.

• Affordable Internet for All Low-Income Families: Currently, a basic high-speed internet plan costs, on average, more than $50 a month. The Executive Budget includes first-in-the-nation legislation requiring internet service providers to offer an affordable $15 per month high speed internet plan to all low-income households.

To further bridge the gap, the State will partner with Schmidt Futures and the Ford Foundation to launch a new hardship fund to pay for internet subscriptions for our most in need students who cannot afford $15 per month during this crisis.

• Downtown Revitalization: The pandemic has kept New Yorkers at home to save lives, disrupting the flow of commerce in the downtown communities across the State. These areas need support now more than ever, Cuomo said. To that end, the budget provides $100 million for another round of the Downtown Revitalization Initiative, which has been transforming downtown neighborhoods into vibrant communities where the next generation of New Yorkers will want to live, work and raise families, Cuomo said.

• Enact the Pandemic Recovery and Restart Program: New York will establish three new tax credits and expand another totaling $130 million to help smaller businesses in the accommodation, arts and entertainment, restaurant and musical and theatrical production industries to recover from the pandemic and bring back jobs to New York.

  • Small Business Return-To-Work Tax Credit: This provides up to $50 million in tax credits to support small businesses in highly impacted sectors in the hiring of additional workers through 2021.
  • Restaurant Return-To-Work Tax Credit: This tax credit provides up to $50 million in tax credits to support restaurants hard hit by the pandemic through 2021.
  • Tackling Food Insecurities: The Budget includes $150 million to tackle food insecurity, and adds $25 million to Nourish New York for a total $60 million investment. This critical program helps people who are food insecure to access the nourishment that they need, while providing a market for farmers to sell their products.

• Renewable Energy Projects: New York will contract for another 24 large-scale renewable energy generation projects in 2021, to bring the state’s total clean energy build-out to nearly 100 projects. The 23 solar farms and one hydroelectric facility will produce more than 2,200 megawatts of clean power, generating more than $2.9 billion of investment and creating 3,400 jobs in 16 counties upstate.

• Fund Body Worn Cameras: The budget includes funding to support recently passed legislation requiring all State Police officers on patrol to wear body cameras.