N.Y. budget leaders want to avoid education, health cuts amid $4.3B gap

In an effort to address a projected $4.3 billion budget deficit next year, New York’s budget leaders, led by State Budget Director Blake Washington, aim to avoid cuts to education and health care services.

During the annual quickstart budget meeting, discussions focused on maintaining current spending levels for education, including fully funded school foundation aid, and increasing funding for health care infrastructure and mental health services.

Director Washington emphasized that Governor Kathy Hochul does not intend to roll back recent investments in education and health care to compensate for the budget gap. Despite acknowledging a mismatch between receipts and spending, the focus is on preserving services while exploring ways to address the deficit.

The state’s budget is estimated to be $231 billion next year, with the multi-year budget gap now lower than initially expected, projected at $9.5 billion for next year and $7.7 billion in Fiscal Year 2027. Officials anticipate a growth of over 3% in school aid and a more than 10% increase in health care spending, attributed to factors such as minimum wage increases and pay raises for home care workers.

Washington ruled out tax increases on high-income earners, stating that the state is at its taxing limit for personal income tax. The economic outlook includes a slowdown in growth and uncertainty about geopolitical factors impacting the budget.

As discussions on the budget progress, concerns about a potential federal shutdown and its impact on lower-income New Yorkers are raised by Senate Finance Committee chair Liz Krueger. The budget includes $1.5 billion for addressing the influx of migrants to New York, and discussions indicate its significance in upcoming budget negotiations.

While some advocate for spending restraint, others emphasize the need to evaluate the efficiency of programs such as Medicaid and reconsider economic development initiatives. The state’s reserve fund of approximately $19.5 billion is expected to remain untouched, according to Governor Hochul and Director Washington.

The revival of the annual quickstart meeting, praised by good-government groups, is seen as crucial for achieving an early consensus on revenue projections and ensuring a timely state budget passage by April 1.