6 days ago
New York will struggle to absorb Trump's megabill cuts
'Nobody is prepared to backfill $3 billion in cuts from Congress,' said Blake Washington, the director of the governor's budget office. 'There's no state in the union that can do that, particularly on a recurring basis.'
The dynamic stands to create a political problem for Hochul, who will run for re-election next year and wants to avoid blame for enacting unpopular cuts to services. She preemptively blamed New York's House Republicans for the looming state spending reductions as the package was being negotiated. Last week, her office pointed to an estimated 63,000 jobs that will be eliminated as a result; nearly half are in the health care sector.
The early analysis from her administration, less than a week after Trump signed the measure into law, does not yet include data from the Congressional Budget Office. Already, though, top New York officials are weighing how to make up losses to other spending areas like food assistance.
Health care cuts are a far steeper hill to climb. The state's Essential Plan, which covers roughly 1.6 million low-income New Yorkers who are ineligible for Medicaid, relies on billions of dollars in federal funding that will start drying up in January under the megabill.
On top of that, the state will have to spend upwards of $500 million over several years to stand up a system for administering the megabill's new Medicaid work requirements, Washington said.
Hochul opposes tax hikes, but will face pressure from left-flank state lawmakers as New York grapples with one of its toughest budget years since Covid. Officials previously warned no tax hike will be able to fill the hole created by the federal cuts. Democrats must now sort out how to address the federal spending reductions, which will become a multi-year concern as other aspects of the measure take effect.
