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With revenue plunging, NY officials weigh first spending cut in 9 years, sources say

New York state Assembly members meet in the

New York state Assembly members meet in the Assembly Chamber on the opening day of the legislative session at the state Capitol in Albany, N.Y. Wednesday, Jan. 8. Credit: AP/Hans Pennink

ALBANY — With revenue plunging, New York lawmakers on Tuesday were considering enacting a state budget that might reduce spending $2 billion or more from last year, with cuts across many categories amid the pandemic, sources said.

A $2 billion reduction would put the state spending plan for fiscal 2020-21 at $173 billion, or about a 1.1% decrease from New York’s previous budget. If enacted, it would mark the first overall cut in state spending since 2011, Gov. Andrew M. Cuomo's first year in office.

And it would represent a $5 billion to $6 billion reduction from what lawmakers were expecting to spend before the coronavirus pandemic spread and triggered business shutdowns across the nation. Some said the year-to-year cut could be larger. 

In a move also prompted by the pandemic, lawmakers also likely were to include an unprecedented proposal to allow Cuomo to make quarterly spending adjustments based on the state’s economic picture, and to temporarily bust the state's debt cap.

“We do a budget on funding we have now," Cuomo said Tuesday. "If we get more funding, we’ll increase the allocations. If we get less, we reduce the allocations.”

The state’s fiscal year begins Wednesday, and some legislators and officials said they hoped to begin voting on multiple budget bills late Tuesday. Negotiations have been protracted and more secretive this year in Albany because of social distancing requirements. 

As the deadline approached, here’s where high-profile proposals stood, according to multiple sources:

  • Legalization of marijuana appeared dead, as expected. Too many disagreements over financial details still existed with too little time.
  • Aid to school districts was under debate, though legislators said some trims were likely. “Foundation aid,” the largest aid category for school operations was likely to be held at last year’s levels. Other types of aid could be cut, reducing the overall amount sent to districts. Last year, Albany spent $27 billion on school aid.
  • Restructuring and cuts to Medicaid were still uncertain. Cuomo in January proposed shifting some costs to counties and cutting some hospital payments to growth of the health care program for the poor. Hospital financial stress and federal aid have changed the picture.
  • Changes to new bail laws were a sticking point in finalizing the budget. Cuomo and the Democratic-led Senate wanted to add more crimes to the list for which a defendant can be remanded to jail. Many Assembly Democrats are opposed. Last year, lawmakers eliminated bail and remand for almost all misdemeanors and nonviolent felonies, prompting critics to say they went too far.
  • Borrowing capacity for the Nassau Interim Finance Authority would be doubled to $800 million to help the county deal with the financial fallout of the coronavirus.
  • A new domestic terrorism “hate” crime law would be established.
  • Among the proposals dropping out of discussions were ones to allow booze sales in movie theaters that don’t already serve dinner, and to force any public official earning more than $100,000 annually to disclose income tax filings.
  • A ban on flavored vaping products, including menthol, was likely to be included.

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