There is a budget battle brewing between Mayor Bill de Blasio and Gov. Andrew Cuomo.
De Blasio on Thursday proposed a $95.3 billion budget for New York City's next fiscal year, an increase from last year despite the potential for $2 billion in health care cuts stemming from the state budget deficit.
BUDGET HIGHLIGHTS
- Preliminary budget proposal for Fiscal Year 2021: $95.3 billion.
- De Blasio calls for an increase of $2.5 billion from last year's proposal. New York City is facing $2 billion in possible health care cuts due to the state budget deficit.
PROPOSED SPENDING HIGHLIGHTS
- $98 million to improve safety on 4th Avenue in Brooklyn
- $590 for Rockaway Beach resiliency improvements
- $106 million for the "Fair Fares" program
RAISING RED FLAGS
"We have never seen anything like this before in our dynamics with the state of New York," de Blasio told reporters Thursday during his annual preliminary budget briefing in the Blue Room of City Hall. "This is the seventh time I'm doing the budget. This is by far the largest state deficit we have ever confronted — by a lot."
Raising alarms of possible cuts to New York City's public health system, de Blasio proposed what he called a modest increase — of $2.5 billion from last year's proposal — compared to his spending wish list in previous years.
"This budget is about keeping the city running and making sure our house is in order, our finances are stable," de Blasio said. "We're taking care of ourselves here in this budget."
It's not clear what types of cuts the city stands to face from the state — Cuomo is set to reveal his state budget proposal Tuesday — but New York state is facing a massive $6 billion budget hole. That's thanks in part to Medicaid overspending, a jump in enrollment, the rising cost of long-term care, the minimum wage hike and cuts from the federal government. Cuts would apply to a majority of Medicaid spending, such as payments to hospitals, nursing homes, and home care providers.
The state is looking to municipalities to help pick up the tab. In his State of the State address eight days ago, Cuomo called for shifting $2 billion in Medicaid costs to New York City so the state can try and fill the budget gap.
De Blasio adamantly opposes that move, vowing Thursday to fight any cuts from the state. The city has made strides in order to turn around the NYC Health + Hospitals system, which had not been solvent in years prior.
"We've never seen this kind of threat to our Medicaid recipients," de Blasio said. "We've never seen this kind of threat to the health and hospitals corporation."
The mayor says he will spend the next few weeks working with the state to find cost-savings, but he warns if that fails the city will need to take a serious look at cutting back some public health services.
City Council Speaker Corey Johnson also voiced concern over the cuts, highlighting that any budget changes to the public hospital's system could mean cuts for some of the most vulnerable New Yorkers.
"I think it's a time for caution given that the state is grappling with a $6 billion state budget deficit, which is being driven by Medicaid spending," Johnson said. "We need to be really careful here in the city."
For New York City's own cost-saving efforts, the mayor said the city has found $714 million in savings across Fiscal Year 2020 and 2021. It comes after de Blasio, in his budget proposal address last February, called for New York City agencies to cut their budgets, looking for $750 million in savings.
Unlike in previous years, the budget proposal doesn't include many new projects, with de Blasio urging caution in the face of possible state budget cuts.
But the mayor has called for some increased spending allocations, including $106 million for the "Fair Fares" program.
De Blasio also took aim at the MTA, saying the city will refuse to provide more funding unless the authority can show signs of managerial improvement.
"We are noting to keep handing over money unless the money is going to be used well," the mayor said.
Despite the warnings from de Blasio, the city's overall fiscal health appears to be on track.
Andrew Rein, president of the Citizens Budget Commission, praised the mayor for his limited spending plan, but he warned the city could stand to do more in order to build a rainy day fund to tap into in the event of an economic downturn.
"The mayor held the line on spending, which is a real change and a welcome result," Rein said. "However, he missed the opportunity to increase efficiency and put away money for a rainy day. Remember the voters want a rainy day fund. He could have utilized this opportunity."
Cuomo's spokesperson shot back at the mayor, saying, "We have heard of smoke and mirrors and political straw men, but how the mayor can claim he is reacting to cuts from the State before the State has even proposed a budget is spreading the political cream cheese too thick even for a toasted bagel."
The mayor's address kicked off budget negotiating season at City Hall. The City Council will begin its round of preliminary budget hearings before it comes back in a few months with a response to de Blasio's plans.
A final budget deal between the mayor and City Council is due by the end of June.
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