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���������� Note: The Cuomo Administration continues to hold off on applying $8 billion worth of cuts in the apparent belief that the next round of COVID-19 related funding will include monies for hard pressed states and localities. The possibility of such funding was referenced for the first time last week by chief opponent Senate Majority Leader Mitch McConnell (see ���������� posting this morning). A broad array of behavioral health and other nonprofit groups including ���������� have been urging the Governor to delay possible cuts under this scenario.

����������’s Biggest Budget Move Now Depends On Washington
By Politico  May 29, 2020

ALBANY — ���������� state is slowly embarking on its emergency plan to keep a semblance of budget solvency, even as officials stall on widespread cuts to local governments in hopes Washington will save the day.

The budget department confirmed that the state last week issued $1 billion in short-term borrowing notes — an action budget hawks say hasn’t been taken for many years— to counter the delay in the federal tax filing deadline that’s hampering expected revenues. The notes, expected to be paid back within the fiscal year, are just a portion of the $4.5 billion ���������� is authorized to borrow this way.

But that’s a drop in the bucket for ����������’s financial woes, which include a $13 billion revenue gap and continued aggressive spending to combat the coronavirus. To date, ���������� state and local governments have spent an estimated $3 billion on ����������’s Covid-19 response and officials expect that number to climb as high as $5 billion before the year’s end, according to budget division estimates provided to POLITICO.

The state share has been about $1.9 billion, with hundreds of millions spent on everything from protective gear to remote agency operations to student refunds at city and state universities. While much of the direct spending battling the pandemic will be offset by $5.1 billion in Covid-19 relief funds Congress has already approved, budget officials say they are not yet sure how specific categorization will play out.

But Gov. Andrew Cuomo is holding back on 20 percent across-the-board cuts he’s been saying he doesn’t want to give Congress an excuse to not fund state and local governments in an elusive fourth coronavirus aid package.

Originally, Cuomo’s detailed strategy for was supposed to be released “within the month” of May, according to budget director Robert Mujica, after being pushed back from “mid-May.” But with June approaching, both Cuomo and budget officials now say they are instead hoping the U.S. Senate will take up a bill House Democrats passed earlier this month that is largely in line with ����������’s requests, including billions in unrestricted aid to states.

“I haven’t made any state budget decisions because I want to see what happens with the Washington funding before you get to step two,” Cuomo said during his Thursday briefing. “Finish step one then go to step two.
What’s my state budget going to look like? I can tell you what it looks like if I don’t get funding from Washington. … Let’s see what happens with Washington.”

Capitol Hill dwellers and budget watchdogs are unsure of this strategy. The Republican-led U.S. Senate isn’t in session, and a discussion on the House bill could be weeks or months away. A Democratic congressional source expressed concern that Majority Leader is looking to drag out a Covid-19 vote in the chamber for as long as possible “unless pressure dictates otherwise.”

That pressure could come from governors of states with vulnerable Republican senators — such as in Maine or in North Carolina — that McConnell might need to maintain his strength as majority leader, the source said. In that way, Cuomo’s influence would most likely be felt through his role as vice chair of the National Governors Association, where he and Maryland Gov. Larry Hogan, a Republican, have made .

Cuomo could also be holding back because he’s banking on increased Democratic control in Washington come November, , in hopes that political allies will boost the state by passing ���������� friendly policy in the years to come.

McMahon said he believes some aid from Congress is likely, eventually, but the waiting game and its consequences are not the right moves for long-term financial stability.

“I think the end result will be enough to cover the state’s real gap this year, and to bail out a good portion of the locals’ problems for this year only, but the day of reckoning must come sooner or later, and won’t be any easier even if the governor manages to rake in bailouts for a few more years,” McMahon said in an email.

���������� has taken some other measures to slow spending: The state is under a strict hiring freeze except for certain pandemic response positions and has banned agency spending on discretionary local aid grants and non-essential items such as publications, supplies, equipment and contractual services. ���������� has also put off pay raises scheduled in contracts for some 80,000 state workers.

But stronger and smarter action needs to be taken now, said David Friedfel, director of state studies at fiscal watchdog group Citizens Budget Commission, which outlining “hard choices” the state might need to make to stay afloat. That includes not waiting for Congress.

“To a certain extent it’s simple math — if the additional federal aid doesn’t materialize, and the state makes cuts half-way through the year, the cuts would have to be twice as deep to get the same amount of savings,” Friedfel said.