Gov. Andrew Cuomo likes to boast of how he’s tamed the state budget, yet the financial-plan update he put out Friday highlights some alarming mismanagement.
Despite a strong national economy, it turns out the state faces a $4 billion Medicaid-spending gap this year and general-fund shortfalls totaling $22 billion over the next three years. (And that’s assuming the economy doesn’t slow significantly.)
Just the budget for the fiscal year that starts April 1 is now $6.1 billion in the red.
Cuomo’s update bluntly admits Medicaid has a “structural imbalance.” Absent fast action, overruns will hit $3.1 billion in fiscal 2021, $3.5 billion in ’22 and $3.9 billion in ’23.
The gov hopes to close this year’s hole by pushing $2.2 billion in Medicaid bills to next year and finding $1.8 billion in savings over the remaining six months. Good luck.
He might also trim next year’s gap by keeping state-funded spending within the 2 percent cap he imposed in earlier years — except that he’s increasingly turned to accounting gimmicks to “stay under” that cap. And he has explicitly exempted ever more of Medicaid from a separate cap he’d imposed on that program’s growth.
Much of the Medicaid explosion is the result of Cuomo’s minimum-wage hikes. Watchdogs like the Empire Center’s Bill Hammond warned that they’d fuel Medicaid costs, yet Cuomo pushed for them anyway.
Then the gov not only declined to take steps to rein in rising costs, he actually OK’d $140 million in bumps to provider reimbursements (after a hospital group gave $1 million to the state Democratic Party).
Even when the hole grew to $1.7 billion in 2018, Team Cuomo simply shifted payments to this year to paper over it.
Taking serious action now will be messy, painful — and resisted by the spend-crazy Democrats who control the Legislature.
Fiscal expert E.J. McMahon rightly credits Cuomo with holding down spending growth during his first two terms. But now the gov faces a mess of his own making — yet another sign that the “third term curse” is no mere superstition.
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