On Tuesday, January 19th, Governor Andrew Cuomo released his Fiscal Year 2022 Executive Budget Proposal. This year’s $192.9 billion plan is significantly different from past budget, because it presents two scenarios that depend largely on how much relief New York receives from the federal government to put towards the $15 billion deficit the State is facing.
The first scenario presented by the Governor assumes that the State will receive the full $15 billion. Under this scenario, education spending could be increase by $3.8 billion, the State would be able to follow through on a middle-class tax cut that was previously enacted, the State could restore some of the money withheld from local governments last year, and the State could create a $130 million COVID relief program that would provide various tax credits to restaurants, theaters, and other small businesses to help them recover from the economic impact of the pandemic.
The second scenario, which the Governor called the “worst case scenario,” assumes that the State receives $6 billion from the federal government. This scenario would result in various tax increases, spending cuts and borrowing.
Currently, it looks like New York will receive far more than the $15 billion they are asking for. On Thursday, February 11th, U.S. House Speaker Nancy Pelosi notified New York’s democratic delegation that, under President Biden’s $1.9 trillion COVID stimulus package, the State will receive $50 billion in funding. This would include $12.6 billion earmarked for New York State coronavirus recovery funding, $12.3 billion for the State’s schools, $10.64 billion will go to local governments, $8.8 billion for the MTA and State transit, $483 million for small businesses, and $418 million for airports in the State. The U.S. House of Representatives is expected to act on the bill before the end of February, and Senate Majority Leader Chuck Schumer has said the Senate will pass the bill before March 14th.
There were several notable proposals in the Governor’s Executive Budget proposal. Some of the most notable include:
- Legalizing adult-use recreational marijuana, which the State projects could generate $350 million in annual revenues.
- Legalizing mobile sports betting, which the State projects could generate $500 million in annual revenues.
- Allowing movie theaters to apply for liquor licenses to serve alcohol to patrons attending movies rated PG-13 and higher.
- Affordable Internet for all low-income families.
- Comprehensive regulatory telehealth reform.
- Creation of the Office of Addiction and Mental Health Services.
- Enacting the New York Medical Supplies Act.
- Enacting the COVID-19 Emergency Eviction and Foreclosure Prevention for Tenants and Owners of Commercial Real Property Act of 2021.
The Governor announced 30-day amendments to his proposal late on Thursday, February 18th. The first notable amendment was made to the Governor’s proposal to legalize adult-use of recreational marijuana. Specifically, the amendments include a $100 million Cannabis Social Equity Fund, reductions to criminal charges related to improper sales, and enabling the use of cannabis delivery services.
The largest amendment, however, came in the form of an entirely new proposal providing sweeping reforms to New York’s nursing homes. The proposal includes three pillars, each with their own set of reforms. The Governor’s proposal is laid out as such:
- INCREASING TRANSPARENCY
- Requiring nursing homes to post their rates for each payer on a public website, updated annually;
- Requiring the posting of all facility owners;
- Requiring the posting of a list of all contracts or other agreements entered into for provision of goods or services for which any proportion of Medicaid or Medicare funds are used by the facility within 30-days of execution of the agreement; and
- Requiring information regarding staff be included in an application to establish a nursing home.
- HOLDING OPERATORS ACCOUNTABLE FOR MISCONDUCT
- Increasing civil monetary penalties to $25,000 for violations of the Public Health Law, including increasing penalties for willful violations of Public Health Law or regulation;
- Removing the requirement to provide adult care facilities a 30-day period to rectify violations prior to imposition of a penalty;
- Building off legislation signed by the Governor in 2019, requiring any nursing home with a repeat Infection Control Deficiency to work with the Quality Improvement Organization, or a state designated independent quality monitor, at the nursing home’s own expense, to asses and resolve the facility’s infection control deficiencies; and
- Streamlining the process to appoint a receiver to protect patient health and safety.
- PRIORITIZING PATIENT CARE OVER PROFIT
- Requiring that nursing homes spend a minimum of 70% of revenue on direct patient care and a minimum of 40% of revenue on resident staffing;
- Establishing a nursing home profit cap and limiting certain unscrupulous transactions, including but not limited to related party transactions over fair market value and payment of compensation for employees who are not actively engaged in or providing services at the nursing home; and
- Limiting the overall proportion of management salaries and setting a cap by regulation dependent on the size of the facility, for managers and executives.
The Governor has said that he will not sign the budget if it does not include nursing home reforms.