According to the latest numbers from the New York State Division of Budget (DOB), the State faces a $14.5 billion budget deficit this fiscal year and a $62 billion deficit in fiscal years 2021-24. DOB has said that without state and local aid from Congress, it will be forced to use its existing authority to make massive cuts—including 20-30% cuts to Medicaid and education.
Meanwhile, when or if the Legislature, which met remotely in July, will reconvene this year remains unclear. The Assembly and Senate could respond to a DOB “savings plan” and pass bills responding to the ongoing COVID-19 pandemic. Many legislators have called for tax increases on the wealthy to mitigate potential cuts, but Governor Andrew Cuomo generally has been cool to that idea, saying that no combination of revenue raisers and cuts could compensate for a lack of support from Washington, DC.
After New Jersey Governor Phil Murphy reached agreement with his state’s Legislature to raise taxes last week, DOB Director Robert Mujica issued a statement highlighting that combined taxes in New York City were already higher than New Jersey’s new top rate.