What the Biden administration means for New York

President Biden takes the oath of office on January 20.
President Biden takes the oath of office on January 20.
ANDREW HARNIK/POOL/EPA-EFE/Shutterstock
President Biden takes the oath of office on January 20.

What the Biden administration means for New York

The state’s finances hinge on getting multiple types of federal aid.
January 20, 2021

The $193 billion spending plan unveiled Tuesday by Gov. Andrew Cuomo included a litany of proposals to help the state recover from the coronavirus pandemic. There were proposals to suspend late fees for tenants, provide paid family leave for people getting vaccines and even cut bureaucratic red tape by allowing bars and restaurants to serve booze while awaiting state approval of their liquor licenses. Ideas like that can go a long ways toward powering the state’s recovery from COVID-19, according to the governor, but the state is nonetheless going to need the help of newly inaugurated President Joe Biden.

“The remaining COVID cost in dollars is $15 billion,” Cuomo said in his budget speech. “It is going to require assistance from the federal government. The question is how much assistance will we get?”

Not only does the state need new federal funding to overcome its multibillion-dollar deficit, its long-term recovery plans also rely on presidential and congressional action in the coming months.

Cuomo is demanding that New York state receive $15 billion out of the $350 billion for state and local governments in the $1.9 trillion relief package that Biden has said he wants to see Congress pass in his first 100 days in office. Anything less than $6 billion in new federal funding would trigger reductions in state spending on education, health care and social services, according to the governor’s proposed budget. Such funding, however, is just one part of the total federal assistance that the governor is seeking in the coming months.

The governor has said the state’s long-term fiscal stability depends on repealing the $10,000 federal cap on state and local tax deductions, which he said has cost the state billions of dollars in tax revenues since it passed as part of the Tax Cuts and Jobs Act of 2017. Billions in additional funding hinge on the federal government approving an extension of the federal Highway Trust Fund before it expires this fall, according to the governor.

While not directly a part of the budget, presidential approval of several state initiatives could have a big impact on the state’s recovery. Those would include the ongoing efforts to implement congestion pricing in New York City, which could raise $1 billion per year for the beleaguered Metropolitan Transportation Authority. Presidential support could also be key for jump-starting long-awaited plans to build the new Gateway rail tunnel under the Hudson River.

Then there’s the pandemic. The governor’s budget memorandum highlighted efforts to save the state billions of dollars by getting the Federal Emergency Management Agency to cover 100% of the state’s emergency expenses related to the pandemic. Cuomo has also said that the success of the vaccine distribution program would need Biden to release additional supplies to New York while leveraging the Defense Production Act to compel manufacturers to produce more vaccines and other supplies needed to bring the pandemic to an end this year.

The budget proposed by the governor will not work without some level of federal largess. State aid to local governments could be reduced beyond the 5% cut they will get in the current fiscal year if the state does not receive at least $6 billion in new federal funding. The extent to which spending on education and social services might rise depends on just how much of the full $15 billion requested by Cuomo actually gets approved by the federal government.

While it remains to be seen just how much help Biden, and soon-to-be U.S. Senate Majority Leader Charles Schumer can deliver to New York state, the governor was clearly feeling big things were coming as he waited for the Trump era to end. “Sometimes the stars line up for change,” Cuomo said Tuesday. ”I believe the stars are lined up for change, but we have to do it. Life is in the doing.”

Zach Williams
is a staff reporter at City & State.
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