Public Employee Press

New state budget shortchanges city hospitals

Acting 125 days past the deadline, New York State lawmakers finally settled on a $136 billion budget Aug. 3 that will include $2.8 billion in federal aid from the new jobs bill for education, Medicaid and health care.

The Health and Hospitals Corp.'s $1 billion deficit will no doubt grow due to a shortfall in state aid.

While money from the jobs bill under the Federal Medical Assistance Percentages (FMAP) program will offset some of the deficit, it was not immediately clear how the state would distribute the funds.

"While this budget could have done more harm than good, overall it isn't as bad as it could have been," said DC 37 Political Director Wanda Williams.
"We faced deep cuts but the FMAP monies will lessen the impact for us until next year, when federal stimulus funds will not be available to cushion the severe deficits the city and state are projecting, should the economy not turn around."

The state budget cuts Aid Incentives to Municipalities (AIM) funds to New York City by 60 percent, or $250 million from the $600 million it provided last year.

The legislators rejected Gov. David Paterson's plans to give state and city universities more autonomy to set tuition rates and to raise revenue by taxing sugar-sweetened beverages and the sale of wine in supermarkets. The state will resume collecting sales tax on clothing under $110.

The recently approved federal $26.1 billion jobs law gives states desperately needed funds to support public services and the municipal employees who provide them.

The federal assistance provides the state with $1.4 billion for education and health care, $800 million toward Medicaid costs and $600 million for state aid to education.

The education funds are targeted not only for teachers but also for school support staff, such as members of DC 37's Local 372 (see story above). The funds from the federal jobs legislation could help avert layoffs in the public schools.