By Jimmy Vielkind 

ALBANY, N.Y. -- Lawmakers and unions criticized Gov. Andrew Cuomo for pushing ahead with a plan to reduce Medicaid spending as part of the state budget due Tuesday even as New York responds to the novel coronavirus pandemic.

Several Democrats who control the state Senate as well as labor and progressive groups warned that cuts to the program, which provides health care to more than 6 million New Yorkers, would be devastating. They urged Mr. Cuomo to accept federal money approved earlier this month and to tax the wealthy rather than making cuts.

"It's absolutely insulting and it's just wrong," State Sen. Julia Salazar, a Democrat from Brooklyn, said of the Medicaid changes during a Sunday press conference. She said they would hurt poor patients and hospitals on the front lines of responding to the epidemic.

The Medicaid issue emerged as a late flashpoint in the budget after the virus shut down large segments of the economy and state tax receipts cratered. The Democratic governor's budget office predicted state revenues were somewhere between $9 billion and $15 billion below the $88 billion projected in February.

"The problem with the budget is the numbers," Mr. Cuomo said Sunday. "I'm not going to pass or sign a phony budget."

The governor said he didn't support raising taxes. He proposed a $178 billion spending plan in January, but has acknowledged in recent days that circumstances have changed to the point that it is basically moot. A planned 3% increase in the amount of state aid to public schools is now in doubt, he said.

However, Mr. Cuomo said he was forging ahead with a plan to reduce spending in the state's Medicaid program by $2.5 billion. The state approached its new fiscal year with a $6.1 billion deficit, largely driven by Medicaid cost overruns. Mr. Cuomo filled the gap mostly by assuming higher revenues as well as $2.5 billion in savings from a so-called Medicaid Redesign Team of industry stakeholders.

The team's recommendations include decreasing the reimbursement rates the state pays for hospitals and nursing homes, as well as changes designed to slow the growth of a long-term-care program in which sick or disabled New Yorkers hire assistants to help them at home.

State officials have looked to Washington for help with the budget, but the governor said there were provisions in the second coronavirus stimulus bill approved by Congress that would block the redesign team's proposals, as well as his plan to shift more Medicaid funding responsibility back to New York City and the state's other counties.

U.S. Senate Minority Leader Chuck Schumer said that second stimulus bill would provide up to $6 billion a year in additional Medicaid funding for New York. Mr. Cuomo blasted Mr. Schumer, a Democrat from Brooklyn, for agreeing to the provision.

Mr. Cuomo and his budget director, Robert Mujica, said they believed the federal aid might be closer to $4 billion and that they would rather push ahead with the redesign team's recommendations.

"It takes waste and fraud and inefficiency out of the system," Mr. Cuomo said. "I have no choice. Two-and-a-half billion per year recurring is worth more than $6 billion one shot."

New York Senate Majority Leader Andrea Stewart-Cousins, a Democrat from Yonkers, said in a television interview last week that she believed the redesign team's proposals were conceived before the coronavirus pandemic and should be revisited. American Federation of Teachers President Randi Weingarten, whose union includes members in New York, said she was surprised by Mr. Cuomo's position.

"Right now, what's more important is to keep everybody afloat. It's puzzling to me," she said.

A third federal stimulus bill included $5.1 billion of direct aid to New York to cover costs associated with the coronavirus. Mr. Cuomo again said the measure left New York shortchanged because it did nothing to alleviate the state's vanishing revenues.

Given the uncertainty, Mr. Cuomo, Ms. Stewart-Cousins and Assembly Speaker Carl Heastie, all said they were discussing budget language that would give the governor the power to unilaterally cut state spending if its receipts didn't materialize.

Write to Jimmy Vielkind at


(END) Dow Jones Newswires

March 30, 2020 09:32 ET (13:32 GMT)

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