Cuomo resists tax hikes amid budget deficit

New York Gov. Andrew Cuomo opposes efforts to solve the state’s multibillion-dollar budget gap through tax increases.

The Democratic governor said Monday during an Association for a Better New York luncheon that raising taxes is not the answer for combating an estimated $6.1 billion budget deficit that is driven largely by a $4 billion increase in Medicaid costs. State Assembly Speaker Carl Heastie, D-Bronx, said last month that higher taxes should be on the table as a potential solution to the budget shortfall.

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“Money is not going to solve our Medicaid problem,” said Cuomo during Monday’s luncheon held at the Ziegfeld Ballroom in midtown Manhattan. “The health costs have to be addressed structurally and a one-shot dose for the system of sugar to give us a short high with revenue is not the answer.”

The press offices for Heastie and Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, did not respond to requests for comment Tuesday on Cuomo’s opposition to higher taxes. Cousins would not commit last month to looking at increased taxes or fees after Heastie said they should be considered. The legislature returns to Albany Wednesday.

Cuomo is scheduled to deliver his annual state of the state speech Wednesday afternoon with his budget address slated for later in the month. The Democratic governor stressed that part of his reluctance to embrace tax hikes stems from concerns that many New Yorkers have already been hit hard by higher taxes on the federal level. The Tax Cuts and Jobs Act signed by President Trump in December 2017 capped deductions for state and local taxes imposed at $10,000, which Cuomo said has created an extra financial burden for many in the Empire State and especially in New York City.

“The one saving grace has been we have been able to say we have reduced your taxes on the state level and I want to continue to be able to say that,” Cuomo said. “The answer isn’t always more money.”

The Cuomo administration announced in November it was eyeing potential savings to address the budgetary challenges caused by Medicaid including across-the-board reductions in rates paid to providers and health plans along with cuts in discretionary payments. The state is also focused on avoiding a piercing the Medicaid Global Cap while also maintaining a balanced general fund. New York’s long-term Medicaid enrollment increased 12% in 2019, more than twice the expected rate of growth, according to the State Department of Health.

Cuomo’s remarks during the question-and-answer portion of Monday’s program came a week after the DOH announced that New York’s healthcare providers will see a 1% drop in Medicaid reimbursements for the next three months. This plan would save $126 million for the 2020 fiscal year that ends March 31 and $500 million next year if the cut stays in effect.

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