NY State Revenue Projections Sharply Down — Potential for Deep Healthcare Reductions

May 4, 2020 by Mandy Qualls

Filed under COVID-19 for Employers, COVID-19 for the Workforce, For Employers, For the Workforce

Last modified May 5, 2020

The New York State Division of the Budget’s state fiscal year 2020-2021 Enacted Budget Financial Plan projects state revenue during the fiscal year will be $13.3 billion lower than the governor estimated in February. This unprecedented decline in general fund receipts is almost singularly the result of the economically devastating impact of the COVID-19 pandemic.

The Financial Plan states that the “State’s updated economic outlook for FY 2021 is bleak. Most key measures of economic output are expected to drop sharply in comparison to FY 2020. DOB forecasts that non-farm employment will fall by 7 percent; total wages will fall by 7.2 percent, and personal income and wages (excluding bonuses) will fall by 2.2 percent. Financial and insurance sector bonuses, an important source of personal income tax collections, are expected to drop by 50 percent. The State’s unemployment rate is expected to average 11.4 percent, a level higher than any recorded since the current methodology for calculating the rate was introduced.”

One of the areas the Financial Plan intends to reduce spending is the aid-to-localities funding. The proposed $8.2 billion reduction could include massive cuts to Medicaid — a 20% to 30% funding reduction.

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