NYS preparing for 'federal assault' of funding cuts

Oct 4, 2017

Gov. Andrew Cuomo said he may have to call a special session in December to deal with potential funding cuts from Washington that he calls part of a “federal assault” on New York.

Cuomo said he is developing a plan to manage what he said will be over a billion dollars in cuts to the state’s public hospitals, now that Congress has failed to renew a key program.

“All hospitals will need to find savings,” Cuomo said.

Credit National Public Radio

Cuomo said he is engaged the financial firm KPMG to come up with a proposal to distribute the cuts, and he also will reconvene his Medicaid Redesign Team that revamped the Medicaid program several years ago.

The state Legislature then will have a chance to vote on the cost-cutting plan under the provisions of a new law passed as part of the state budget earlier this year. The governor said the cuts will be “controversial” and “difficult” to allocate. 

“I’m sure it will be a heated argument,” Cuomo said.

The cuts stem from the expiration of the Disproportionate Share Hospital fund, or DSH, which provided money to public hospitals to help pay for care for the uninsured. It ran out on Oct. 1, after Congress failed to renew the fund.

The DSH fund is part of the Affordable Care Act. When the ACA began in 2010, President Barack Obama and Congress intended to eventually phase out the money because under the new national health plan, the number of uninsured people was expected to drop. In New York, the number of uninsured has been reduced by half.

Critics have said Cuomo and state leaders should have known the cut was coming, and the governor acknowledged that he did anticipate that the DSH money would end someday. He compared it, though, to a person being told to stop eating hamburgers because they have high cholesterol and might suffer a heart attack. 

“I know, but I like hamburgers, you know?” Cuomo said. “And I don’t really believe it’s going to happen to me. I don’t think people believed it was ever going to happen.”

Congress also failed to renew funding for the Child Health Plus program for poor children, a program originally begun by Cuomo’s father - the late Gov. Mario Cuomo - and adopted nationwide by President Bill Clinton.

New York will lose a billion dollars, but the governor’s Medicaid director said the program will continue to provide health care for about 330,000 children even though the federal component has now ended. He said the state will now have to come up with the missing money. Jason Helgerson admits it has policymakers “scared.”

It is possible, though, that the cuts could be avoided. Cuomo said Congress could act in December to renew the DSH funding. New York Sen. Chuck Schumer, who is the Senate Democratic leader, and Rep. Nancy Pelosi, the House Democratic leader, cut a deal with President Donald Trump to work out a new federal spending plan by mid-December.

Cuomo said if that happens, the Legislature will not need to meet until January and the cuts will not have to be made. However, Cuomo said, he does not have a lot of confidence in Washington’s ability to act “sensibly” right now.

New York State Comptroller Thomas DiNapoli
Credit WBFO File Photo

In the meantime, Cuomo said he will appeal to the state’s congressional delegation, both Democrats and Republicans, to fight to restore the cuts.

The governor’s plans to cope with federal cuts comes as State Comptroller Tom DiNapoli issued a report finding New Yorkers gave over $40 billion more in taxes in 2016 to Washington than they got back in benefits. DiNapoli said the state received 84 cents for every dollar it sent in taxes to the federal government in 2016.

The report shows most states received more than they paid. The average return for all states was $1.18 per tax dollar sent to Washington.

According to DiNapoli's 2015 analysis, New York generated $19.9 billion more in federal taxes than it received in federal spending in federal fiscal year 2013 - a doubling in the gap.