PEP, April 2008: State cuts hit NYC

New York City stood to lose hundreds of millions of dollars in aid under the proposed state budget that was moving rapidly toward its April 1 deadline as PEP went to press. Tightening its belt to close a $4.4 billion deficit, Albany planned to stick the city with the tab for services the state used to cover.

With more than 1,700 jobs on the line, DC 37 leaders and activists faced stark fiscal challenges in Albany as they pressed for fairer state funding for the city’s Off-Track Betting Corp. and the New York City Housing Authority. In actions March 18, hundreds urged the state to revise OTB’s distribution formula and to resume funding for public housing for the first time in almost a decade.

The state funding plan for the fiscal year beginning April 1 puts revenue sharing, specific education line items, and programs that aid families and welfare recipients on the chopping block. The $164 million reduction in revenue sharing with the city would cut operating aid for education by $100 million, add $32 million to city costs for education evaluation and administration and cap special education, leaving the city with another $10 million cost item.

The budget also proposes a $15 million cut in welfare aid, a $20 million reduction in aid to the Dept. of Juvenile Justice and a $40 million reduction in family service funds. New York City services 70 percent of the state’s caseloads but would only receive funds to cover 54.5 percent. And the state is billing the city $10 million for processing the city’s personal income tax.

Some pluses
Amid the belt tightening, DC 37 can point to some favorable budget decisions: The proposed budget adds $5 million to improve ventilation in city school cafeterias, and directs Medicaid money to follow patients, so that the Health and Hospitals Corp., which provides most care for the poor and the uninsured, gets a greater share of public funds.

The state budget projects a $284 million windfall this year and $1.5 billion over the next three years, from the conversion of insurers HIP and GHI to for-profit status. If that happens in spite of a city lawsuit against the conversion, the mayor and DC 37 are watching closely to see that the city gets a fair share of the proceeds.

—DSW