Albany Democrats have control of both houses of the Legislature and the executive chamber, plus a healthy economy with growing revenues.
Just one little problem: The state’s $6.1 billion budget deficit, mainly the product of skyrocketing Medicaid spending. Gov. Cuomo’s budget bigwigs’ accounting gimmicks hid the gap’s true size for months before it exploded into public view late last year.
This is a high-stakes test of progressives’ ability to reckon with fiscal reality.
When news of the deficit emerged, it wasn’t surprising but it was depressing to hear Assembly Speaker Carl Heastie reflexively leap to talk of raising taxes. That should be a last resort in a state that has among the highest taxes in America, that is still sorting through the wreckage of a cap on the federal state and local tax deduction, and that saw the biggest resident out-migration of anywhere in the U.S. last year.
The right course is the more politically difficult one: scrub state ledgers to figure out what’s causing the spike in Medicaid, which has grown from $61.5 billion in the 2016 fiscal year to $75.5 billion in 2019, even as the number of people enrolled barely changed.
Some health experts wonder if a well-intended policy shift in the last decade that tried moving New York’s most expensive Medicaid and Medicare patients into managed care may be a factor. Federal watchdogs have warned about potential fraud in a too-lightly-regulated Medicaid personal care program that’s seen ballooning costs.
Cuts and other reforms will anger some lawmakers’ politically powerful allies. That’s life in the big leagues.