State faces largest budget crisis in decade. This is why.
Budget documents released Friday afternoon showed the state faces its worst fiscal problems since the recession in 2010, when a
The state Legislature and Gov.
A
The main culprit is exploding costs for Medicaid after the state was able under Cuomo since 2011 to largely keep spending growth to about 3% or 4% a year.
The state's mid-year budget update Friday showed deficits of
So that is fueling an overall budget gap that is estimated to jump from
More than 6 million people are on Medicaid in
"Thanks to Medicaid over-spending,
Rising budget gap, what it means for you
Lawmakers and Cuomo have dealt with relatively small budget gaps in recent years after having to deal with a
In Cuomo's first year, he and lawmakers had to cut school aid by
Now they will face new pressures on how to balance the budget in the coming months.
Cuts shouldn't be done solely within the Medicaid system, said
"Developing and implementing a plan to solve the entire budget problem need not be done entirely within the Medicaid program," he said in a statement.
"Other portions of the budget also should be considered, including mistargeted school aid and unproductive economic development programs."
The state budget's biggest spending items are school aid and Medicaid, and while those have had spending growth in recent years, Cuomo has forced other state agencies to largely keep their spending flat.
Schools are also limited in the ability to raise property taxes to cover any decrease in state aid. A property-tax cap makes it exceedingly difficult to raise school taxes more than 2% a year.
School groups are already lobbying for a
"As schools seek to offer the range of academic programs needed to prepare today's students for success in tomorrow's economy, the fact is that it will take more of an investment to get it right," the
Why is
State officials and experts said the fiscal woes are not a result of an economic downturn, which is usually the case. Instead, it is health-care costs.
"This is different because it is a significant deficit not in the context of any kind of economic downturn," said
"It's a Medicaid problem," he added.
Enrollment in the state's managed long-term care program has been growing at about 13% a year, up to a total of about
Medicaid has helped
But the increased enrollment has come at a cost amid a decline in federal aid for Medicaid expenses, said
Also,
He said a cost-cutting plan will be part of Cuomo's budget proposal in January.
"With increased utilization and medical inflation nationally creating a structural imbalance," Klopott said in a statement, "the
Fiscal watchdogs warned about cutting too deep into New York Medicaid's program, which is one of most robust in the nation.
Part of the plan calls a
Rein called it, "one part gimmick and one part delay."
"The state will make permanent a
"For the remainder, the state again delays presenting a savings plan. Delays only serve to make the solution more painful."
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