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NY seeking $60B in federal funding because of coronavirus impact

Governor Andrew M. Cuomo delivers briefing on Coronavirus

Governor Andrew M. Cuomo delivers briefing on Coronavirus pandemic. Credit: Don Pollard

WASHINGTON — New York state said Thursday that it needs at least an additional $60 billion in direct federal funding along with millions of dollars more from Medicaid and FEMA formula changes in the next coronavirus aid package being crafted in Congress.

New York’s massive request, which is part of the National Governors Association’s bid for $500 billion for all states and territories, would be spread over three fiscal years, unrestricted and could be used for revenue shortfalls, according to the association.

“To ensure New Yorkers continue to have full access to essential services and the strong economic foundation they support, we have joined 49 other states and the territories in requesting $500 billion in unrestricted funding,” said New York Division of Budget spokesman Freeman Klopott. Up to $60 billion of the funds would be for New York, he said.

The governors association first asked for the $500 billion during negotiations over the interim coronavirus aid package that was enacted on April 24, but Senate Majority Leader Mitch McConnell (R-Ky.) and the White House rejected it as a “blue-state bailout.”

Now it is being considered for the fifth federal coronavirus aid package.

Joining the Cuomo administration in asking for billions of dollars more federal money because of the pandemic and economic shutdown are New York hospitals and doctors, businesses groups and local governments.

A total of at least $64 billion — including $9.1 billion in direct aid and savings to the state government — already has been awarded to New York individuals and couples, unemployed workers, businesses and public agencies, a Newsday review found.

Yet every sector in the state insists they need much more to ease the crushing economic blow from the cost of treating the sick, shutting businesses and stay-at-home orders.

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Here is a review of New York requests.

New York state

The state is focusing its request to Washington on the $60 billion in direct unrestricted aid, a near doubling of the Medicaid reimbursement rate and an agreement that the federal government will pay the state’s 25% share of FEMA funding, Klopott said.

All are part of the aid request by the governors association, whose vice chair is Gov. Andrew M. Cuomo.

Raising the Medicaid reimbursement rate to 12% would result in possibly a billion dollars or more for the state. The state said the 6.2% rate set in the second coronavirus aid package enacted in March will bring in $1.45 billion from it through Sept. 30.

If the federal government pays the state’s 25% share of FEMA emergency funds for the pandemic, the state will receive significant savings. FEMA has obligated $1.36 billion to New York for the pandemic but the final figure is still pending.

Edmund J. McMahon, research director of the fiscally conservative Empire Center for Public Policy, questioned the size of the state’s request. “The goal of state and local aid should be to give them what they need, and only what they need, to avoid truly disruptive cuts in public services in the next couple of years,” he said.

Klopott said the federal aid to states now will pay off later. “State spending cuts will not only harm New Yorkers who rely on these supports,” he said, “but also weaken our ability to lead the national economic recovery.”

Long Island

A special $40 billion fund for “hot spot” states based on the percentage of national infection cases ranks as a top priority for the Long Island congressional delegation. Based on the CDC’s current tally, that would bring about $10.6 billion to New York state.

Another top request is direct funding for the towns, municipalities and villages that were too small to get grants from the CARES Act enacted at the end of March. And any funding for state and local governments should allow use of funds for budget shortfalls, the lawmakers said.

And the delegation is calling for the next bill to include a repeal or easing of the $10,000 cap on deductions for state and local taxes.

New York City

New York City is seeking $7.4 billion to help it with the cost to its economy of fighting the pandemic. Mayor Bill de Blasio has used that figure as the financial toll on the city, which is the U.S. epicenter of COVID-19 cases and deaths. The funding would cover hazard pay, its health care infrastructure, relief for building owners and tenants, increased small business protections, increased social services benefits and increased food stamps under the supplemental nutrition assistance program.

Hospitals and doctors

New York hospitals need additional direct federal funding, targeted to “hot spots” such as New York state, to meet the high cost of treating patients with COVID-19 amid huge revenue losses, the Healthcare Association of New York State said.

A top priority is to bolster New York State’s finances so that it does not have to cut state Medicaid funding by as much as 20% to 30%.

The association seeks changes in formulas used to distribute health care funding, including tweaks to Medicare and Medicaid payment systems, that could be worth billions of dollars.

Meanwhile, doctors with private practices need greater access to small business loans and medical school loan debts should be forgiven for young physicians and residents, especially for those who have pitched in to treat the infected patients, said the Medical Society of the State of New York.

Business groups

More money needs to be added to the popular paycheck protection program and the economic injury disaster loan program, lawmakers said, especially for smaller companies with few employees that have been shut out of the first two rounds of these programs. Businesses also are calling for allowing a higher percentage of the forgivable loans to overhead costs such as rent and mortgages, which is now limited to 25% with the other 75% restricted to keeping employees on the payroll.

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