Cuomo Offers 2 Budgets; Demands $15B From Washington: 'Be Fair'

NEW YORK — Gov. Andrew Cuomo discussed the 2022 executive budget Tuesday, outlining two scenarios that he said hinge on whether or not the federal government steps up to pay the state $15 billion needed to avoid draconian cuts.

As New York moves forward with reconstruction after the coronavirus pandemic, Cuomo has put forth a plan to fuel the economy. He discussed tenets of the plan, including the legalization of recreational marijuana and online betting, investments in infrastructure and green energy, expansion of broadband to all, and reopening the arts, during his four-part State of the State address last week.

Along with the footrace to manage hospital capacity and slow the spread while boosting vaccination distribution, Cuomo has said there is a need to reopen the economy through rapid testing so that businesses can survive.

New York's economy is suffering from two causes, Cuomo said, the first being the cost of the pandemic, including lives lost and businesses shuttered.

"The second is over the past four years New York has been assaulted by the federal government in multiple ways and there's a cost to that also that has come due," he said.

The cost of COVID-19 is $15 billion, Cuomo said. "New York cannot manage a $15 billion deficit. These numbers are all hard to put into context...$15 billion in this environment is just impossible for a state to manage. It's beyond what we can do. It is going to require assistance from the federal government. The question is how much assistance will we get?"

With President-elect Biden proposing the "American Rescue" plan, including a $1.9 trillion stimulus package that includes $350 billion for state and local financing, the question remains how that $350 billion New York will receive, Cuomo said.

"We don't know, in short, what level of aid we will get," he said.

To that end, the state's proposed budget is dependent on that number.

"What we've done with this budget is we've constructed it under two options," Cuomo said. "One, New York State receives $6 billion from the $350 billion. Two, New York State receives $15 billion from the $350 billion...The worst-case scenario is the $6 billion scenario."

The state's four-year financial plan reflects a $39 billion revenue shortfall, or $21 billion in revenue loss over two years, due to closed businesses and individuals who were unable to work and pay taxes, Cuomo said.

In January, 2020, New York's revenue was expected to grow by $5.5 billion but due to the pandemic, it decreased $5 billion, Cuomo said; the state had $7.6 billion in reserves, he said.

"The worst-case scenario is that Washington provides only $6 billion. That would only be 1.7 percent of the $350 billion package. Worst case scenario, I would consider that the 2021 version of the federal government saying 'drop dead' to New York," Cuomo said.

If Washington only allows for $6 billion, that would mean budget cuts and borrowing, to raise $9 billion in revenue, Cuomo said.

The New York State legislature, he said, proposed an income tax increase.

Dramatic cuts could include slashing $2 billion in education funding, about $600 million from Medicaid, a continued 5 percent across-the-board reductions totaling $900 million, and cuts in funding to local governments and social services, Cuomo said.

If the state receives the $15 billion, New York can fund labor agreements, restore the 5 percent reductions, move forward with a middle-class tax cut, and allow initiatives pitched by Cuomo in his State of the State to commence, he said.

"We're asking for fairness. Fairness from Washington. $15 billion in funding, and second, repeal SALT," a federal cap on state and local tax deduction, Cuomo said. Due to SALT, 52 of New York's 62 counties have seen taxes rise, he said.

"Literally, it has been one of the single worst federal actions to befall the State of New York," Cuomo said.

New York, he added, has always given Washington more than it gets back, to the tune of $140 billion over the past five years. New York also subsidizes other states, he said.

Cuomo said if Washington doesn't provide New York its fair share, he is prepared to pursue litigation.

"New York's future is bright. We just need Washington to restore justice and be fair," he said.