New York’s leaders are continuing to struggle with actions in Congress on the federal budget and tax overhaul that could adversely affect the state’s finances.
Gov. Andrew Cuomo has said it’s possible he’ll call a special session to address potential gaps in the state budget that could total several billion dollars. But he said the uncertainty over what will happen in Washington on health care funding and on major tax changes is making it hard to plan.
“To come back and have a special session, we need certainty as to what is going to happen,” Cuomo said. “The possibilities are devastating.”
The state loses about a billion dollars in federal funding now that Congress has failed to renew the Child Health Plus plan, which offers health care to about 330,000 low-income children in New York. A fund to help public hospitals pay for caring for the uninsured — the Disproportionate Share Hospital fund, or DSH — also lapsed on Oct. 1. The governor has said total losses for New York could be $2.6 billion over the next few years.
Cuomo appeared at an event on Monday with U.S. Sen. Chuck Schumer. Schumer, who is also the leader of the Senate Democrats, said he’s trying to get the money restored.
“I am very hopeful,” said Schumer, who said the DSH funds have been cut in the past but restored “retroactively.”
“If the past is prologue, we’ll be able to restore it,” Schumer said. “We’re going to work very hard to see that it’s done.”
Schumer said he is also hopeful that subsidies related to the Affordable Care Act, cut by President Donald Trump, can be restored. He said the bill by Sen. Lamar Alexander, a Republican, and Sen. Patty Murray, a Democrat, is gaining traction.
The senator did not offer an opinion on whether the governor and lawmakers should hold a special session; he said that’s their business. But he said any potential cuts or adjustments made to the state budget might be short-lived.
“If they acted right now, it might have to be undone rather quickly,” Schumer said.
Assembly Speaker Carl Heastie, who met with his Democratic majority members at the State Capitol earlier this month, said he believes that a special session is probably unnecessary. He said that’s because so far, many of the proposals harmful to New York have not been approved in Congress yet.
“As long as nothing else really bad happens, we may not have to come back,” said Heastie, who added if that changes, he’s happy to confer with Cuomo and state Senate leaders on proposals to consider in a special session.
Schumer and Cuomo called their press conference to denounce a federal tax overhaul plan that also could affect the state’s budget. But they say the plan to end state and local tax deductions from federal income taxes also would directly affect many middle- and upper-middle-class taxpayers. That’s because New York is a state with relatively high taxes.
State Comptroller Tom DiNapoli issued a report that finds New York residents “stand to lose more than $72 billion in reported deductions for income and property taxes” if the proposals to change the federal tax code are approved.
Several of New York’s Republican Congress members as well as all of the state’s Democratic representatives voted against a budget bill that would pave the way for getting rid of the state and local tax deductions. The budget proposal still narrowly passed in the House, however, in a 216-212 vote held Thursday.