Federal aid provides a substantial portion of the revenue used to fund New York State and City services, including public health insurance, education, housing assistance, and social safety net programs. This page covers CBC’s work on federal funding risks, the impact of potential federal budget cuts, strategies for managing fiscal volatility, and the integration of federal support into state and local financial plans.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The Administration should preserve resources and flexibility to protect New Yorkers from additional federal cuts by increasing the general reserve by $1 billion per year.
The City should prioritize existing programs that cost-effectively improve quality of life and affordability, provide essential services to the neediest New Yorkers, and maintain New York’s competitiveness.
The City should reduce Supplemental Nutrition Assistance Program (SNAP) cost-shifts by lowering the administrative error rate.
The City should effectively and fairly administer work requirements and eligibility checks for SNAP and Medicaid to protect benefits for those who qualify while minimizing errors and misuse.
The City should monitor State actions and coordinate response to ensure smooth programmatic integration and prevent unfunded cost shifts.
The City should restrict rainy day fund use to a recession and not to temporarily backfill recurring federal cuts.
Key Data
In June 2025, the CBCNY reported that 38% of New York State's budget is federally funded, with federal receipts projected at $94.1 billion for fiscal year 2026.
According to an April 2025 report, federal aid comprises $7.4 billion of New York City's fiscal year 2026 preliminary budget, supporting critical services like education for low-income students, childcare vouchers, and family shelters.
In April 2025, the CBCNY highlighted that approximately 80% of federal aid to New York State goes toward health programs, including $58 billion for Medicaid, $13 billion for the Essential Plan, and $2 billion for Child Health Plus in fiscal year 2026.
As of April 2025, the New York City Housing Authority relied on $1.4 billion in federal operating subsidies, which made up 45% of its operating budget, alongside receiving about $730 million annually in federal capital subsidies.
In April 2025, the CBCNY noted that the Metropolitan Transportation Authority's 2025-2029 Capital Plan includes $14 billion in federal funding, following a 15-year trend where federal resources made up 20.1% to 29.5% of capital plans.
New York State's financial plan relies on nearly $90 billion in federal funds, yet recent federal mandates regarding Medicaid and SNAP require careful administration to maximize support and minimize benefit losses. The state must also prepare for potential federal funding cuts by setting aside reserves and strategically backfilling essential services where feasible.
Recommendations related to Federal Aid
Mitigate federal cuts and funding shifts by choosing programs to backfill, supporting healthcare providers serving uninsured patients, and administering eligibility requirements to minimize impacts of change.
Implement eligibility programs well to minimize the loss of benefits for recipients of federal programs.
Minimize SNAP error rates to reduce cost-shifts and maximize federal funds.
Set aside funds for future impacts of federal policy changes.
Redirect $2.25 billion originally budgeted for lawfully present immigrants to reserves in fiscal year 2027 and the $3 billion annually thereafter to gap closing, following federal approval of the Basic Health Plan.
Key Data
$90 billion
— Amount of federal funds the State's financial plan relies on in fiscal year 2027.
$2.25 billion
— Planned spending in fiscal year 2027 freed up by federal approval of the Essential Plan to Basic Health Plan transition.
$3 billion
— Planned annual spending freed up starting in fiscal year 2028 by federal approval of the Essential Plan to Basic Health Plan transition.
791 is the number of staff the City Comptroller can employ for the vital task of auditing City agencies, managing the $306 billion pension fund, registering contracts, analyzing the budget, monitoring the economy—essentially serving as the people's check on the Mayor's office. This episode of What's the Data Point involves…
New York City faces significant fiscal risks from potential federal policy changes that could reduce aid and shift costs to the local government, threatening safety net programs like Medicaid and food assistance. To mitigate these impacts, the City must realign its funds, increase its general reserve, and prioritize essential services to protect vulnerable residents from the consequences of reduced federal support.
Recommendations related to Federal Aid
The Administration should preserve resources and flexibility to protect New Yorkers from additional federal cuts by increasing the general reserve by $1 billion per year.
The City should prioritize existing programs that cost-effectively improve quality of life and affordability, provide essential services to the neediest New Yorkers, and maintain New York’s competitiveness.
The City should reduce Supplemental Nutrition Assistance Program (SNAP) cost-shifts by lowering the administrative error rate.
The City should effectively and fairly administer work requirements and eligibility checks for SNAP and Medicaid to protect benefits for those who qualify while minimizing errors and misuse.
The City should monitor State actions and coordinate response to ensure smooth programmatic integration and prevent unfunded cost shifts.
The City should restrict rainy day fund use to a recession and not to temporarily backfill recurring federal cuts.
Key Data
$1 billion
— The amount by which the City should increase the general reserve per year to strengthen its ability to absorb the initial impact of unexpected cuts or delays in federal aid.
$787 million
— The amount the statewide cost shift would be reduced per year if the SNAP administrative error rate is brought back to its historical range of 6 percent to 8 percent.
14.1 percent
— New York’s SNAP payment error rate in 2024.
6.3 percent
— New York's SNAP payment error rate in 2019.
Download the Presentation The New York State and New York City budgets are unaffordable and unprepared both for a recession and for federal budget cuts that will start hitting this fiscal year and grow in the future. Check out CBC’s New York State and New York City Fiscal…
New York City's fiscal year 2026 budget fails to allocate any funds to mitigate the potential impact of anticipated federal cuts. This lack of preparation leaves the city vulnerable to recurring and growing fiscal pressures as it determines how to absorb these future financial impacts.
Key Data
$0
— the amount set aside to mitigate the impact of federal cuts
The New York City fiscal year 2026 budget agreement fails to adequately prepare for potential federal funding cuts and economic downturns, leaving the city vulnerable to significant revenue losses. By increasing spending rather than bolstering reserves, the budget creates future gaps of over $9 billion and ignores the substantial risks posed by looming federal reductions.
Recommendations related to Federal Aid
The City should put aside $3 billion to soften the first blows of federal cuts and protect against a future recession.
Key Data
$3 billion
— Amount that should be put aside to soften the first blows of federal cuts and protect against a future recession.
$11 billion
— Estimated revenue that a typical recession would sap over two years, which would swamp the City’s reserves.
$9 billion
— Future budget gaps left by the budget agreement after accounting for underbudgeted expenses.
New York State's fiscal plan relies heavily on federal support, with federal receipts accounting for 38 percent of the budget, yet the state has failed to prepare for potential multi-billion-dollar federal funding cuts. Instead of setting aside reserves to mitigate these looming reductions, the state has increased spending, further weakening its ability to manage the financial impact of these changes.
Recommendations related to Federal Aid
The State should have set aside additional money to mitigate the initial impact of federal cuts.
The State should have repaid the unemployment insurance debt with other funds rather than using rainy day reserves.
Key Data
38 percent
— The portion of the New York State budget that is federally funded.
$94.1 Billion
— The total amount of federal receipts in the fiscal year 2026 New York State budget.
New York's recent budget increases spending by more than 12 percent, a move that weakens the state's financial position to handle impending federal funding cuts. To address future budget gaps of $14 billion and a long-run imbalance exceeding $20 billion, the state must prioritize core programs and maintain fiscal discipline while continuing to advocate for necessary federal support.
Recommendations related to Federal Aid
Albany should continue to advocate for the federal support New York deserves.
State leaders should preserve core programs that have greatest impact to re-balance the budget once federal decisions are made.
State leaders should shrink other programs despite likely popularity to re-balance the budget once federal decisions are made.
State leaders should protect recession-mitigating reserves to re-balance the budget once federal decisions are made.
State leaders should hold the line on taxes to ensure New York’s competitiveness to re-balance the budget once federal decisions are made.
Key Data
more than 12 percent
— The rate by which adjusted State Operating Funds spending skyrocketed, which is approximately four times the rate of inflation.
$14 billion
— The amount of future annual budget gaps caused by ballooning spending and lower projected receipts.
$20 billion
— The amount by which the long-run imbalance between receipts and disbursements exceeds once reliance on non-recurring resources is removed.
$49 billion
— The amount the State spent before providing transparency on how the money is being spent.
New York City mayoral candidates are navigating significant fiscal challenges, including the threat of federal funding cuts and the need for long-term budget stability. Candidates are evaluating major expenditures like the $1.2 billion CityFHEPS program while proposing strategies to manage city finances, such as strengthening reserves and prioritizing targeted spending to protect essential services against federal budget volatility.
New York City's fiscal year 2026 budget increases spending to an unaffordable level while failing to prepare for the dual threats of a potential recession and looming federal budget cuts. To mitigate these risks, the city must prioritize high-impact programs and set aside reserves to address future shortfalls from reduced federal funding.
Recommendations related to Federal Aid
The City should add $1 billion to next year’s General Reserve to soften the first blows of federal cuts.
The Mayor and City Council should focus priorities and set aside money to address the next recession and likely reductions in federal funding.
Key Data
$1 billion
— Amount that should be added to next year’s General Reserve to soften the first blows of federal cuts.
$2 billion
— Amount that should be added to the Rainy Day Fund to help prepare for potential federal budget cuts and a recession.
The state budget agreement fails to prepare for looming federal budget cuts by neglecting to set aside funds to mitigate the impact of potential reductions. Instead of creating a fiscal cushion, the budget increases spending, which exacerbates the existing structural budget gap.
Recommendations related to Federal Aid
The State should put money aside to cushion the initial blow of likely huge federal budget cuts.
The State should put aside a few billion dollars now to make it easier to deal with federal cuts later.
New York faces a significant structural budget gap, with projections indicating the state will spend $18 billion more than it collects in the coming years, a situation exacerbated by the threat of potential federal funding cuts. To address these fiscal risks, the state should establish a $2 billion federal cut contingency fund and protect its $20 billion rainy day reserve from being used to backfill lost federal aid.
Recommendations related to Federal Aid
The State should set aside at least $2 billion in a federal cut contingency fund to prevent an abrupt dislocation of services if federal aid drops suddenly.
The State should protect the $20 billion already set aside for a rainy day, ensuring it is held for an economic downturn rather than being spent to backfill lost federal dollars.
The State should keep spending growth close to inflation to restrain spending in light of looming federal cuts and a potential recession.
Key Data
$35 billion
— Increase in State operating funds since fiscal year 2020.
33%
— Percentage increase in State operating funds since fiscal year 2020.
$18 billion
— Amount the State is on track to spend more than it takes in a few years down the road.
$2 billion
— Recommended amount to be set aside in a federal cut contingency fund.
$20 billion
— Amount already set aside for a rainy day that should be protected.
New York City faces significant financial risk from potential federal budget cuts that could impact essential services like housing, health care, and education, which currently rely on billions in federal support. To mitigate these threats, the city must adopt immediate fiscal discipline, including bolstering reserves and ending budget-estimating gimmicks, to ensure it can maintain critical services for vulnerable residents.
Recommendations related to Federal Aid
The city should hold the line on new spending by ensuring the Executive and Adopted Budgets do not add or expand programs.
The city should buttress the fiscal year 2026 General Reserve by adding at least $1 billion to help absorb the immediate blow of federal cuts.
The city should strengthen the Rainy Day Fund by adding $500 million to be reserved for short-term emergencies.
The city should restrain spending growth by identifying actions centrally and by agencies through a “Program to Eliminate the Gap” to streamline administrative overhead.
The city should end the budget-estimating gimmickry to provide New Yorkers with accurate and reasonable estimates of revenue and expenses.
Key Data
$7.4 billion
— Amount of federal aid the city receives that supports vital services like child care vouchers, family shelters, school food programs, and education.
$1.4 billion
— Annual federal operating support that the New York City Housing Authority depends on.
$2 billion
— Amount of federal dollars that fund more than 96,000 housing vouchers administered by the New York City Housing Authority.
$91 billion
— Amount the state receives annually from Washington, which supports Medicaid, the Essential Plan, and education.
$1.1 billion
— Amount the city spent more on fiscal year 2024 obligations than it took in.
$4 billion
— Amount of annual underbudgeting that drastically understates the size of future gaps.
New York City faces significant financial uncertainty as federal aid, which accounts for $7.4 billion of the fiscal year 2026 budget, faces potential cuts that could impact essential services like education, housing, and healthcare. To mitigate these risks, the city must exercise fiscal discipline by restraining new spending, bolstering reserves, and eliminating budget gimmicks to ensure long-term stability.
Recommendations related to Federal Aid
Hold the line on new spending in the Executive and Adopted Budgets.
Buttress the General Reserve with at least another $1 billion in fiscal year 2026 to help absorb the immediate blow of federal cuts.
Strengthen the Rainy Day Fund by depositing $500 million and reserve the Fund for a short-term emergency like a recession, not for temporary mitigation of recurring federal cuts.
Implement a Program to Eliminate the Gap (PEG) to restrain spending growth, focused on streamlining administration, increasing efficiency, and shrinking programs that deliver less value to residents.
End the budget gimmickry and present accurate, reasonable estimates of expenses and revenue, as required by the City Charter.
Key Data
$7.4 billion
— Amount of federal aid included in the City's Fiscal Year 2026 Preliminary Budget.
$1.1 billion
— Amount the City spent more on fiscal year 2024 obligations than it received.
$4 billion
— Annual amount of underbudgeting that understates future budget gaps.
$91 billion
— Amount the State expects to receive in federal aid for fiscal year 2026.
$1 billion
— Amount to add to the General Reserve in fiscal year 2026 to help absorb federal cuts.
$500 million
— Amount to deposit into the Rainy Day Fund to strengthen it for short-term emergencies.
New York State lawmakers should prioritize fiscal sustainability by setting aside at least $2 billion to mitigate potential federal funding reductions. Rather than spreading $3 billion thinly among taxpayers, the budget must address looming federal cuts and avoid excessive spending growth.
Recommendations related to Federal Aid
The budget should prepare for looming federal cuts.
The budget should set aside at least $2 billion to mitigate potential federal cuts.
Key Data
$2 billion
— Amount the state budget should set aside to mitigate potential federal cuts.
$3 billion
— Amount that should not be spread so thinly among taxpayers that it won’t help affordability.
New York faces a precarious budget with an $18.2 billion structural gap and is ill-prepared for potential federal funding reductions. Lawmakers should prioritize fiscal restraint and reserve funds to manage a transition to lower federal aid levels rather than increasing spending.
Recommendations related to Federal Aid
Lawmakers should hold the line on spending, identify the most critical services and needs, and keep money aside to fund a transition path to a new, lower level of federal aid, if cuts materialize.
Rainy Day reserves should be saved to weather recessions and time-limited emergencies, not depleted to temporarily plug recurring federal reductions.
New York needs to live within its means, deliver high quality services, and nimbly deal with any federal cuts while continuing to serve those most in need.
Key Data
$18.2 billion
— The size of the structural gap in the current State budget.
$4 billion
— The amount of recurring spending the Assembly and Senate propose to add on top of the Governor's proposal.
13.7 percent
— The rate of year-over-year adjusted State Operating Funds growth proposed by the Legislature.
$11 billion
— The total increase in State Operating Funds spending in the Assembly plan.
$7 billion
— The portion of the Assembly's spending increase allocated to pay off the State’s unemployment insurance trust liability.
New York City's budget is currently precarious due to rapid spending growth and underbudgeting, leaving the city ill-prepared for potential reductions in federal aid or an economic recession. To mitigate these risks, the city must prioritize fiscal discipline and bolster its reserves to ensure it can maintain critical services if federal funding is cut.
Recommendations related to Federal Aid
The City should add at least $1.0 billion in funding to the fiscal year 2026 General Reserve to help respond to potential federal cuts.
The City should end budget gimmickry and present accurate, reasonable estimates of expenses and revenue to strengthen its fiscal foundation against potential federal aid reductions.
The City should implement a Program to Eliminate the Gap (PEG) to reduce spending growth, thereby improving its ability to manage the fiscal impact of likely federal budget cuts.
The City should refrain from funding any new or expanded programs in the Executive Budget or during adoption to ensure resources are available to bridge potential federal funding gaps.
Key Data
$1.0 billion
— The amount of funding the City should add to the fiscal year 2026 General Reserve to help respond to potential federal cuts.
$3.6 billion
— The amount the fiscal year 2026 preliminary budget is short to provide planned services.
$7.8 billion
— The projected budget gap for fiscal year 2027 when underbudgeting and other mandates are taken into account.
$10.1 billion
— The projected budget gap for fiscal year 2028 when underbudgeting and other mandates are taken into account.
$9.6 billion
— The projected budget gap for fiscal year 2029 when underbudgeting and other mandates are taken into account.
New York City's CityFHEPS rental voucher program has become a fully city-funded expense exceeding $1.1 billion in fiscal year 2025, shifting the financial burden away from shared federal and state funding models used for shelter. Because this program lacks the federal and state cost-sharing mechanisms of traditional shelter, it creates long-term fiscal challenges that exceed the costs of shelter over five years.
Recommendations related to Federal Aid
The City should make decisions about the level of CityFHEPS spending that is appropriate and sustainable as part of a multi-pronged affordable housing strategy to address the fiscal burden of a fully city-funded program.
The City should maximize the impact of CityFHEPS by targeting vouchers to households who will see the most benefits to manage the costs of a program that lacks federal and state cost-sharing.
Key Data
$1.1 billion
— The cost of serving the 52,000 existing CityFHEPS voucher holders in fiscal year 2025.
$20,000
— The average cost to the City per household per year for CityFHEPS vouchers.
27 percent
— The amount by which CityFHEPS costs exceed shelter costs for a typical single adult by the end of the fifth year.
52,000
— The number of households holding CityFHEPS vouchers at the end of 2024.
$519 million
— The fiscal year 2026 CityFHEPS budget, which represents a 52 percent decrease from the current year.
$252 billion is the Governor Kathy Hochul’s New York State Executive Budget for Fiscal Year 2026. How much does it matter that New York State and its localities are already #1 in taxes and #2 in spending nationwide? On today’s episode we talk with New York State’s Budget Director, Blake…
Federal aid accounts for more than $9.6 billion, or 8 percent, of the city's fiscal year 2025 budget, with significant portions directed toward education and social services. To manage potential shifts in federal fiscal, tax, economic, immigration, and regulatory policies, the city is advised to proactively assess risks and opportunities without taking pre-emptive actions.
Recommendations related to Federal Aid
The City should prepare for federal changes by proactively assessing potential risks and opportunities but should not take pre-emptive actions.
Key Data
$9.6 billion
— The amount of federal aid comprising the City's fiscal year 2025 budget.
8 percent
— The portion of the City's fiscal year 2025 budget that is comprised of federal aid.
New York State relies on federal sources for over one-third of its funding, making it vulnerable to potential federal aid cuts and policy shifts. To maintain fiscal stability, the state must avoid using reserves to cover recurring funding losses and should utilize time-limited federal-approved tax revenues for one-time investments rather than baseline spending.
Recommendations related to Federal Aid
The Executive Budget should not propose significant preemptive action given the uncertainty regarding federal aid cuts, but lawmakers should remain cognizant of possible scenarios and identify fiscally sustainable responses.
The State will not be able to fill every possible federal funding loss and should not deplete reserves to plug a recurring hole for just the short term.
The State should use the federal government-approved Managed Care Organization (MCO) tax funds for a one-time investment in health transformation that improves quality and lowers cost.
Key Data
one-third
— Proportion of New York State’s funds that come from federal sources.
$1.5 billion
— Annual amount of time-limited funds provided by the federal government-approved Managed Care Organization (MCO) tax.
New York City received $11,398 million in federal categorical grants during fiscal year 2024, while New York State received $94,276 million in federal grants during the same period. These figures reflect the significant reliance on federal funding streams to support municipal and state operations over the five-year period ending in 2024.
Key Data
$11,398 Million
— Federal categorical grants received by New York City in fiscal year 2024.
$94,276 Million
— Federal grants received by New York State in fiscal year 2024.
$15,202 Million
— The peak amount of federal categorical grants received by New York City between fiscal years 2020 and 2024, occurring in 2022.
$95,307 Million
— The peak amount of federal grants received by New York State between fiscal years 2020 and 2024, occurring in 2022.
10 and 15 are the districts represented by New York Congressman Dan Goldman and Congressman Ritchie Torres. With a newly elected President and Congress, changes in federal policy, funding, and regulation will affect New York State and New York City. So, what are the opportunities and challenges ahead? Where can…
New York State relies on federal funds for 39% of its resources, which primarily support Medicaid, the Essential Plan, transportation projects, and school aid. Because these funds are critical to the state's budget, potential changes in federal policy and elections could significantly impact the state's fiscal outlook.
Recommendations related to Federal Aid
Lawmakers should be cognizant of changes stemming from the federal elections, which will affect the economic and fiscal outlook but are not accounted for in these forecasts.
Key Data
39%
— The portion of the State's resources comprised of federal funds.
$3.2 billion
— The amount the State sets aside to hedge against potential changes in federal tax policy action on the deductibility of State and Local Taxes (SALT).
The New York City Housing Authority faces a persistent operating budget gap, exacerbated by rising expenses and stagnant rent collections, which has forced the agency to divert federal capital funds to cover operating costs. To address these financial and physical challenges, the agency must prioritize structural reforms, including modernizing property management and expanding the use of federal-backed conversion programs like PACT.
Key Data
$100 million
— increase in federal operating subsidy that offset weak rent collections.
$511 million
— of federal capital funds diverted in 2022 and 2023 to fill the operating budget gap.
New York City faces a precarious fiscal situation with a $10.6 billion budget gap, exacerbated by the depletion of temporary federal COVID aid used for recurring programs and insufficient federal support for migrant services. The city must prioritize critical services and increase efficiency rather than raising taxes or depleting reserves to address these structural deficits.
Recommendations related to Federal Aid
The federal government should contribute its fair share to address the immense, unanticipated fiscal cost of the rapid and persistent influx of migrants and asylum seekers.
The State should shoulder more of any non-federal burden to help alleviate the city's fiscal pressure.
The City should prioritize services with significant impact and increase efficiency, as temporary federal COVID aid used to support recurring programs is now depleted.
Key Data
$10.6 billion
— The more accurate budget gap for fiscal year 2025, which includes the impacts of fiscal cliffs and underbudgeted areas.
$7.1 billion
— The budget gap for fiscal year 2025 as shown in the City's financial plan.
$16 billion
— The added costs through 2027 resulting from recent collective bargaining agreements that lacked offsetting productivity increases.
New York City faces a widening fiscal gap of $10.6 billion, driven largely by the costs of supporting asylum seekers and migrants, which have increased by nearly $10 billion over four years. To mitigate this, the federal government should provide a fair share of funding, while the city must simultaneously focus on cost-saving efficiencies and service prioritization.
Recommendations related to Federal Aid
The need for savings overall would be greatly reduced if the federal government would share a fair portion of the costs.
Key Data
$10 billion
— Increased projected spending on asylum seekers and migrants over four years.
90 percent
— Portion of asylum seeker and migrant spending coming from City coffers.
$10.6 billion
— Total fiscal year 2025 budget gap including the fiscal cliff and underbudgeting.
$7.1 billion
— Widened fiscal year 2025 budget gap from the previously estimated $5.1 billion.
New York faces significant budget gaps exacerbated by the reliance on temporary federal COVID aid and other nonrecurring revenues that are now disappearing. Furthermore, federal support for migrant costs has been minimal, totaling only $135 million, while the state faces additional fiscal risks from potential federal shutdowns and congressional budget deals that could reduce aid.
Key Data
$135 million
— The amount of federal funding provided to date for migrant costs, which is enough to cover roughly two weeks’ worth of costs for New York City.
New York City faces a potential $13.8 billion budget gap for fiscal year 2025, with $6.1 billion of that amount attributed to the costs of serving migrants and asylum seekers. To address these financial pressures, the federal government is urged to provide significantly more fiscal aid to help manage the shared responsibility of the migrant crisis.
Recommendations related to Federal Aid
The federal government should provide much more fiscal aid to assist with the costs of serving new migrants and asylum seekers.
Key Data
$13.8 billion
— Potential fiscal year 2025 budget gap.
$6.1 billion
— Estimated cost of services to migrants next year.
$13 billion
— Potential fiscal year 2025 gap if the asylum seeker cost estimate proves accurate.
New York State Budget Fiscal Year 2024 Major Actions and Fiscal Risks As of First Quarter Update New York City Fiscal Year 2024 Adopted Budget and Outlook
New York State received $13.5 billion in federal aid under the American Rescue Plan Act, which likely offset some economic development spending that the state might have otherwise funded directly. The expiration of this temporary federal support creates a potential fiscal cliff, as the state may face pressure to maintain current spending levels without this revenue.
Key Data
$13.5 billion
— New York State received this amount from the State and Local Fiscal Recovery Funds under the federal American Rescue Plan Act.
$1.1 billion
— The amount of federal funding included in the $1.5 billion ConnectALL broadband program.
New York City's rental assistance programs face a significant fiscal cliff as temporary federal COVID-19 aid expires, leaving the city to cover rising costs for programs like CityFHEPS. To address these long-term housing needs, the federal government must take on a larger share of the financial responsibility, as the city's current budget structure is unsustainable.
Recommendations related to Federal Aid
An effective, holistic strategy should include appropriate voucher funding from the federal and State governments.
Any proposed expansion to CityFHEPS should include a fiscal impact statement that shows how much it would increase costs and identifies recurring revenues to pay for it.
The City should provide realistic estimates of the program’s cost and reflect those in the City budget.
Consideration of the three pending bills that would expand eligibility for CityFHEPS should be based on their impact on City spending and from where the resources would come.
Only the federal government has the capacity and should appropriately bear a substantial responsibility to address the needs.
Key Data
$636 million
— Projected spending on rental assistance programs in fiscal year 2023.
$450 million
— The fiscal cliff in fiscal year 2024 resulting from expiring federal COVID-19 aid and reduced City funding.
$152 million
— State and Local Fiscal Recovery Funds (SLFRF) allocated to support rental assistance programs in fiscal year 2021.
$185 million
— State and Local Fiscal Recovery Funds (SLFRF) allocated to support rental assistance programs in fiscal year 2022.
$6.8 billion
— Projected budget shortfall for New York City in fiscal year 2025.
$10.0 billion
— Projected budget shortfall for New York City in fiscal year 2027.
The state budget allocates $1 billion to assist New York City with the costs of asylum seekers, though this amount is insufficient to address the full scope of the crisis. Consequently, the federal government is urged to provide substantial financial support and policy solutions to effectively manage the ongoing situation.
Recommendations related to Federal Aid
The federal government should provide both significant fiscal resources to cover costs and provide policy solutions to the migrant crisis.
New York City's fiscal stability is threatened by a reliance on non-recurring federal COVID aid and other temporary funding sources, creating significant future budget gaps. The city must prioritize essential programs and increase operational efficiency to avoid service cuts as these temporary federal and city funding streams expire.
Recommendations related to Federal Aid
The City should immediately start to prioritize essential programs, increase its operational efficiency, speed up critical hiring, and shrink lower impact programs to mitigate the impact of expiring federal aid.
The City should be shifting existing vacancies to where they are needed, not adding new positions to improve fiscal stability amidst reliance on federal aid.
The City should make every effort it can immediately and include additional savings in the Adopted Budget to address the fiscal cliffs created by the expiration of federal aid.
Key Data
$600 million
— The amount of federal aid the fiscal year 2024 budget relies on for asylum seekers.
$6.8 billion
— The projected future shortfall in fiscal year 2025, which includes the costs of underbudgeted programs and programs funded by expiring federal COVID and city money.
$10.0 billion
— The projected future shortfall by fiscal year 2027, which includes the costs of underbudgeted programs and programs funded by expiring federal COVID and city money.
The New York City Housing Authority faces a structural budget gap driven by rising operating costs and a record-low rent collection rate, forcing an unsustainable reliance on non-recurring revenue and local subsidies. To achieve long-term fiscal stability, the agency requires structural reforms rather than one-time bailouts to address its deteriorating building stock and financial mismanagement.
Key Data
$248 million
— The amount of transfers from the federal capital subsidy used to balance the 2022 budget.
New York City faces a $1.1 billion fiscal cliff as federal COVID-19 relief and other non-recurring funds expire, necessitating difficult decisions regarding the continuation of programs like rental vouchers and shelter security. Additionally, the city has incurred $1 billion in un-reimbursed spending on migrant services, further straining the budget and highlighting the need for secured federal support.
Recommendations related to Federal Aid
The Administration’s planning for its Executive Budget should address the $1.1 billion fiscal cliff created by the expiration of federal aid and non-recurring funds.
The City must decide whether to cut programs supported by expiring federal aid—including rental vouchers and shelter security wages—or reduce spending on other programs to keep them operational.
Key Data
$390 million
— Amount of federal funds used as fiscal relief to balance the fiscal year 2024 budget.
$1 billion
— Total risks from fiscal cliffs, including the expiration of federal aid.
$1.1 billion
— The size of the fiscal cliff that the Administration’s planning for its Executive Budget should address.
$1 billion
— Reported spending on migrants in fiscal year 2023 for which federal funding has not yet been secured.
New York City faces significant fiscal risks due to its reliance on non-recurring federal COVID aid and the uncertainty surrounding $1 billion in anticipated federal funding for asylum seeker services. If these federal funds are not secured, the city will be forced to cover these costs, potentially exacerbating budget gaps in future years.
Key Data
$1 Billion
— The amount of federal aid for asylum seekers that the City has assumed but not yet secured.
$1.1 Billion
— The total value of fiscal cliffs in the upcoming year resulting from programs funded with City and federal funds that are currently unfunded in future years.
$1.9 Billion
— The total value of fiscal cliffs in fiscal year 2026 resulting from programs funded with City and federal funds that are currently unfunded in future years.
New York City's financial plan relies on $1 billion in federal funding for migrant services that has yet to be secured, risking a commensurate increase in city spending if the aid falls short. Additionally, the depletion of non-recurring federal COVID aid creates looming fiscal cliffs of at least $345 million in fiscal year 2025 and $760 million in fiscal year 2026.
Key Data
$345 million
— The minimum fiscal cliff in fiscal year 2025 created by the depletion of non-recurring COVID aid.
$760 million
— The fiscal cliff in fiscal year 2026 resulting from the depletion of non-recurring COVID aid.
$1 billion
— New spending in the November Plan for migrant services that is anticipated to be funded by the federal government.
New York City's budget includes $1 billion in new spending for services provided to migrants, a cost that places significant pressure on the city's financial plan. The federal and state governments are urged to cover a substantial portion of these expenses to prevent further strain on city resources.
Recommendations related to Federal Aid
The federal and State governments should shoulder a significant portion of the costs for services provided to migrants.
Key Data
$1 Billion
— New spending included in the budget for services provided to migrants.
New York City has received over $25 billion in federal COVID-19 relief funds, yet a lack of robust tracking makes it difficult to determine the impact of these investments. Furthermore, using this one-time aid to fund recurring programs has created a fiscal cliff of at least $1 billion by fiscal year 2026, necessitating a clear strategy for either ending these programs or identifying permanent funding sources.
Recommendations related to Federal Aid
The City should establish a COVID Federal Aid Tracking Working Group to identify critical metrics for federal relief funds.
The City should closely assess how best to allocate the remaining $6.2 billion in funds and provide clear and transparent information about the programs being funded, including goals, benchmarks, and performance metrics.
The City should release a list of programs that will be underfunded when the federal aid is depleted.
The City should quantify the shortfall in funding by program and clearly state whether the program will be ended.
If the City intends to continue these programs with City dollars, it should include them in baseline spending in the financial plan and either widen budget gaps or fund them with resources reallocated from existing programs.
Key Data
$25 billion
— Total federal COVID-19 relief funds New York City will receive from all sources.
$19 billion
— Amount of federal COVID-19 relief funds spent through the end of fiscal year 2022.
$6.2 billion
— Remaining federal funds to be spent over the next three years.
$1 billion
— Minimum federal funding fiscal cliff projected for fiscal year 2026.
$1.1 billion
— Projected federal funding fiscal cliff in fiscal year 2026.
$5.1 billion
— Projected fiscal year 2026 budget gap if fiscal cliff programs are continued without reallocation of City funds.
New York State has benefited from significant federal fiscal relief and higher-than-expected tax receipts, creating a historic opportunity to build reserves and stabilize the budget. However, the state risks future fiscal instability by proposing spending growth that exceeds past trends and fails to implement necessary performance management and budgeting transparency.
Recommendations related to Federal Aid
The Governor and the Legislature should adopt a budget that keeps to the Executive Budget’s top line on spending and focuses on allocating the $5 billion available for relief and recovery (comprised of the funds unallocated for relief, proposed for the homeowner tax rebate, and from the consensus forecast).
The Governor and Legislature should diligently manage and provide oversight of funded programs by developing plans, identifying goals, measuring activities and results, and ensuring accountability by managers and local governments.
The State should publish basic financial plan tables that show the receipts and disbursements with the one-house and enacted budgets to improve budgeting transparency.
The State should implement statewide performance measurement and management to ensure and assess how successful its spending is in delivering results efficiently for New Yorkers.
Key Data
$12.7 billion
— The amount of general fiscal relief provided to the State by the American Rescue Plan in March 2021.
$42 billion
— The cumulative surplus over the four-year period when federal fiscal relief is added to improved base tax receipts.
$55 billion
— The four-year surplus compared to pre-pandemic projections resulting from improved tax receipts, federal fiscal relief, and state tax increases.
$15 to $17 billion
— The estimated annual tax receipts shortfall that would result from a typical recession.
$21 billion
— The amount SOF spending would grow over two years, which is the same amount it grew over the prior ten years.
$10.1 billion
— The amount by which the Governor's budget proposal would significantly increase spending in fiscal year 2023.
$0 is the size of the New York State budget deficit in each year of New York State’s five-year Executive Budget financial plan, as proposed by Governor Kathy Hochul. The Governor’s budget proposal balances the budget in each of the next five years, an unprecedented level of fiscal stability for…
The New York City Police Department's fiscal year 2022 budget utilized $500 million in federal American Rescue Plan funds to replace city-funded personal services, a one-time measure that necessitates a $509 million increase in city spending for fiscal year 2023. Additionally, uniformed overtime spending is projected to exceed the fiscal year 2022 budget by $258 million, requiring significant managerial controls to maintain fiscal discipline.
Recommendations related to Federal Aid
Significant managerial controls will be necessary to keep uniformed overtime closer to budgeted levels this year and next.
Key Data
$500 Million
— Federal American Rescue Plan State and Local Recovery Funds used to replace city funds in the fiscal year 2022 NYPD operating budget.
$533 Million
— The reduction in the City-funded portion of the NYPD’s fiscal year 2022 operating budget.
$258 Million
— The amount by which fiscal year 2022 overtime spending could exceed its budget if current trends continue.
$509 Million
— The increase in City spending in the NYPD agency budget for fiscal year 2023 as City funds replace one-time federal aid.
New York State should exercise fiscal restraint by limiting spending to available non-recurring funds and prioritizing reserve deposits to prepare for future economic downturns. Rather than adding new recurring programs, the state should focus on reallocating existing funds, such as the billions currently provided to wealthy school districts.
Recommendations related to Federal Aid
State leaders should hold the top line on spending, and allocate no more than the $5 billion non-recurring funds already available for fiscal year 2023.
The State should deposit funds into reserves as proposed to ensure the State can weather the next storm and protect New Yorkers.
State leaders should not add recurring programs without reducing other recurring spending.
Key Data
$5 billion
— The maximum amount of non-recurring funds available for fiscal year 2023 that should be allocated.
$10 billion
— The proposed increase in State Operating Funds (SOF) spending for the next year.
$2 billion
— The amount to be allocated jointly with the Legislature.
$1 billion
— The amount identified in the consensus revenue forecast.
$2.2 billion
— The proposed homeowner tax rebate amount.
15 percent
— The target level for building reserves of State Operating Funds (SOF) spending.
The New York City Housing Authority faces significant financial instability due to operating costs that outpace revenues, a declining rent collection rate, and a heavy reliance on city subsidies. To address these challenges, the authority must transition from traditional Section 9 federal funding to alternative programs like Section 8 or Tenant Protection Vouchers to secure necessary capital for renovations and operational efficiency.
Recommendations related to Federal Aid
The City and State should approve the Preservation Trust, which has the potential to generate much needed capital investment and to deliver significant operating savings and productivity improvements.
NYCHA should convert from Section 9 funding to alternative federal funding programs like Section 8 or Tenant Protection Vouchers to raise capital to renovate buildings and restore habitability.
NYCHA needs to redouble efforts to boost productivity and bring operating costs closer to peer housing authorities and private property managers, which sustain operations based on rents and federal subsidies alone.
Key Data
82 percent
— The low point of HUD’s formula-estimated need covered by federal operating subsidies over the past decade.
112 percent
— The high point of HUD’s formula-estimated need covered by federal operating subsidies in 2020.
$1.2 billion
— The amount NYCHA has spent in operating funds since 2018 on HUD-mandated action plans without receiving additional federal funding.
New York State has benefited from unprecedented federal aid and strong tax receipts, providing an opportunity to build significant rainy day reserves and address long-term fiscal stability. However, the state must ensure that these funds, including the $41 billion in cumulative school aid, are managed with greater accountability and performance metrics to deliver actual results rather than just increased spending.
Recommendations related to Federal Aid
The Legislature should ensure the massive influx of school aid delivers commensurate results by identifying and insisting on the spread of best practices and requiring accountability for results and quality.
The Legislature should work to better target school aid to high-need districts, shifting some expense-based aids to foundation aid and restraining aid to wealthy districts.
The Legislature should reject or amend pandemic-induced budget powers and lump sum appropriations that were originally enacted in response to the COVID-19 pandemic.
Key Data
$41 billion
— Additional cumulative funding flowing to schools over the next five years.
$11.4 billion
— Extraordinary federal aid that districts will spend now and over the coming years.
$6 billion
— Special Public Health Emergency Appropriation that the Legislature is recommended to reject.
New York City faces a looming fiscal cliff as COVID-related federal aid decreases, with over $1.3 billion in recurring programs set to lose funding by fiscal year 2026. To address this, the city must develop clear plans to taper federal funds and transition these programs to sustainable, recurring funding sources.
Recommendations related to Federal Aid
City agencies should have clear plans for how to taper federal funds over the next few years.
The Executive Budget should propose a plan to start to transition recurring programs to recurring funding.
Key Data
$1.3 billion
— in recurring programs that will lose their funding by fiscal year 2026 due to the federally funded fiscal cliff.
$375 million
— allocated for the 3K program, which the City explicitly supported using federal aid.
$77 million
— allocated for the Journey Home street homeless program, which the City explicitly supported using federal aid.
$62 million
— allocated for non-profit indirect rate reimbursement, which the City explicitly supported using federal aid.
The Metropolitan Transportation Authority faces an annual structural deficit of at least $2.0 billion, which is currently being covered by $11.9 billion in federal aid and borrowing through 2025. This reliance on temporary funding sources highlights the need for the agency to implement operational efficiencies and maintain planned fare increases to stabilize its long-term finances.
Recommendations related to Federal Aid
The MTA should continue planned fare increases, which would be coupled with the City’s increased funding for Fair Fares to stabilize the MTA’s finances.
The MTA should restructure operations to increase the efficiency of its operations and stave off possible future service cuts or dramatic tax or fare increases.
Key Data
$11.9 billion
— Total amount of federal aid and borrowing covering the MTA's annual structural deficit from 2021 to 2025.
$2.0 billion
— The minimum annual structural deficit faced by the MTA.
$2.9 billion
— Amount borrowed from the Municipal Liquidity Facility (MLF) that may support operations beyond 2025.
$1.6 billion
— Potential re-estimates of revenue and expenses over the plan period.
$321 million
— Amount by which MTA operating expenses ended 2021 below the planned budget.
The City faces a fiscal cliff as over $1.3 billion in programs currently funded by federal monies are set to expire in fiscal year 2026. To manage this, the administration should review federal COVID-related spending to ensure resources are used strategically and do not create unsustainable long-term obligations.
Recommendations related to Federal Aid
The Administration should review federal COVID-related spending to ensure resources strategically support the City’s recovery without creating unsustainably-funded programs.
The Administration should take significant additional actions in the Executive and Adopted Budgets to address the city and federal fiscal cliffs.
Key Data
$1.3 billion
— Programs funded with federal monies, such as 3K expansion and increased overhead for non-profits, that will dry up in fiscal year 2026.
New York State's transportation capital planning process requires significant improvements to ensure that increased state and federal infrastructure funding is used effectively. Without a comprehensive, long-term strategy, the state risks failing to maximize the benefits of the significant additional resources provided by federal infrastructure aid.
Recommendations related to Federal Aid
The State should strategically identify, allocate, and spend the new federal funds along with the added State funds to maximize their benefits.
Key Data
one-sixth
— Proportion of total capital spending by the State currently comprised of federal funds.
The Metropolitan Transportation Authority faces a structural annual deficit of at least $2.0 billion, which is currently being mitigated by borrowing and previous rounds of federal aid. Future financial stability depends on implementing operational efficiencies and maintaining planned fare increases as these temporary funding sources are exhausted.
Recommendations related to Federal Aid
The MTA should use the runway provided by federal aid to implement changes that increase the efficiency of its operations.
The MTA should continue planned fare increases to help stabilize the agency for the future.
Key Data
$2.0 billion
— The structural annual deficit the MTA faces.
$2.9 billion
— The amount of MLF debt that may support operations through 2025.
$9.8 billion
— The portion of the 2020-2024 capital plan funding that was deemed 'at risk' during the summer.
$2,492 Million
— ARPA Federal Aid allocated for 2022.
$1,527 Million
— ARPA Federal Aid allocated for 2023.
$1,740 Million
— ARPA Federal Aid allocated for 2024.
The Metropolitan Transportation Authority faces a $2.7 billion annual structural deficit, which is currently mitigated by federal aid that provides a runway until 2026 to implement necessary fiscal reforms. To ensure long-term stability, the agency must use this period to increase operational efficiency and reduce recurring costs, as failing to do so would necessitate drastic fare hikes or service cuts.
Recommendations related to Federal Aid
To ensure federal aid covers the gap to 2026, the MTA must implement a two-year wage freeze starting next year.
The MTA must implement service cuts starting in 2023 to ensure federal aid covers the gap to 2026.
The MTA must implement the regularly scheduled 2021 and 2023 fare increases to ensure federal aid covers the gap to 2026.
The City should undertake robust efforts to promote its Fair Fares program, which provides half-price transit service to lower income residents.
The MTA and labor leaders should collaborate on strategies including retraining, redeployment, and gainsharing to address the structural imbalance.
Key Data
$2.7 billion
— The MTA faces a long-term structural deficit of approximately $2.7 billion annually.
$2.9 billion
— The MTA could save up to $2.9 billion annually by 2024 through various reforms.
$1.6 billion
— Increasing subway and bus operations and maintenance productivity could save $1.6 billion.
$663 million
— Reducing employee and retiree health care spending could save $663 million.
$512 million
— Reforming how the MTA deploys conductors could save $512 million.
$268 million
— Increasing bus speeds could save $268 million.
New York schools are receiving $11.4 billion in one-time federal pandemic aid to be spent over four years, alongside a $2.9 billion increase in state aid. To ensure these funds improve educational outcomes, the state must implement rigorous management, oversight, and accountability processes to track performance and address learning loss.
Recommendations related to Federal Aid
The State should take significant steps to ensure that the increases in recurring State and non-recurring federal funds drive substantial improvements in educational outcomes.
For the near term, the State should be tracking and publicly reporting key data and holding districts accountable for addressing the pandemic’s negative impacts, including mitigating learning loss and ensuring a healthy return to school.
On an ongoing basis, the State should manage, expect, and hold districts accountable to improve achievement and reduce educational disparities, using data that it makes publicly available.
State leaders should work with districts to set measurable goals to address the disruptions and improve learning outcomes going forward—a process of performance measurement and management that should be applied government-wide.
Furthermore, over time initiatives should be evaluated to identify what works so programs and learning strategies can be either replicated or terminated.
In light of these pressures, the State should consider significantly restraining the new funds it provides to wealthy districts.
Key Data
$11.4 billion
— Amount of extraordinary federal one-time education funding allocated to districts to be used over a four-year period.
$13 billion
— Total extraordinary federal one-time education funding from Coronavirus Response and Relief Supplemental Appropriations and the American Rescue Plan.
$2.7 billion
— Amount of federal aid from annual recurring streams provided to school districts.
$77.9 billion
— Total federal, State, and local resources for school districts in the 2021-22 school year.
$3.6 billion
— Amount of non-recurring federal aid supporting the fiscal year 2025 budget.
$32.5 billion
— Total State school aid for the 2021-22 school year.
At this time last year, New York State estimated that tax receipts would fall short of pre-pandemic estimates by $15 billion annually on average, totaling $60 billion over four years. Receipts, however, have been much stronger than expected. By April 2021, the State reduced its four-year tax receipt shortfall estimate by 80 percent, to $11.8 billion. Over the four-year period, the State also will receive at least $21.1 billion of targeted and general federal fiscal…
New York State has received significant federal aid, including $10 billion in one-time education funds, which must be managed with transparency and accountability to ensure results rather than just spending. Because this federal support is temporary, the state must transition priority recurring programs to state-funded revenue streams to avoid a fiscal cliff when the aid expires in four years.
Recommendations related to Federal Aid
The state should shift priority recurring programs from federal to recurring state revenues over time to mitigate the future federal fiscal cliff.
The state should utilize a data-driven management and accountability process to track and manage the $10 billion in one-time federal education funds to ensure they are used to remediate learning loss and improve educational outcomes.
Key Data
$10 Billion
— One-time federal education funds provided to New York State on top of a $3 billion increase in state-funded school aid.
$3.5 Billion
— Amount in recurring programs currently supported by federal aid that will be in trouble when the aid runs out in four years.
$103.3 billion is the total amount of spending authorized by the City Council for Fiscal Year 2022. While officials call it a budget of $98.3 billion, the larger figure reflects the full amount to be expended, including $6 billion available from the prior year due to higher than expected tax…
$209 billion is the total spending in New York State's Enacted Budget for Fiscal Year 2022. Six months ago, New York State was staring down a four-year revenue shortfall totaling $60 billion—however, revenues have strengthened and the federal government passed a stimulus bill that includes what may be the largest…
New York City received significant federal COVID-related aid across various initiatives, totaling over $7.6 billion for the Department of Education and over $5.5 billion in flexible American Rescue Plan (ARP) funding. These temporary federal funds create a potential fiscal cliff, with a projected budget gap ranging between $1.38 billion and $4.07 billion for fiscal year 2026 as these programs expire.
Key Data
$7,629.2 Million
— Total new federal COVID-related aid allocated to the Department of Education between fiscal years 2021 and 2025.
$5,572.4 Million
— Total new flexible American Rescue Plan (ARP) federal COVID-related aid allocated between fiscal years 2021 and 2025.
$1,382 to $4,070 Million
— The potential fiscal gap for fiscal year 2026 resulting from the expiration of new COVID-related federal aid.
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
270,000—the number of two-year, four-year, and graduate degree seeking students enrolled in the City University of New York (CUNY). For generations CUNY has been an engine of economic mobility. With New York City sitting at the inflection point between the pandemic-driven recession and its recovery, CUNY will play a key…
The fiscal year 2022 budget agreement utilizes unprecedented federal aid and increased tax revenues to expand spending, yet fails to implement systemic improvements for long-term sustainability. By using temporary federal relief to support recurring expenses, the state risks future budget cuts or tax hikes once these one-time resources are exhausted.
Recommendations related to Federal Aid
It is critical that the enacted budget report identify how the federal funds are being used, so New Yorkers can determine if those uses are wise and how they affect New Yorkers now and the State in the long-run.
The State should avoid using temporary federal funds to support recurring spending, as this sets the stage for future budget cuts or tax increases when the federal aid is exhausted.
Key Data
$22 billion
— More in funds available over the next two years than when the Governor proposed the budget in January.
$4.3 billion
— Annual increase in personal income and corporate taxes agreed upon by lawmakers.
$212 billion
— Total planned All Funds spending.
$5 billion
— Likely increase in school aid.
0.75 percentage points
— Increase in corporate taxes.
24/7 is the number of hours and days New Yorkers traditionally have had access to the subway system. In response to the pandemic the MTA suspended overnight service to clean and disinfect the subway, giving riders the confidence they need to return to the system. The pandemic decimated revenue and…
Federal aid from the American Rescue Plan, combined with stronger-than-expected tax revenues, has largely offset pandemic-related revenue shortfalls, making proposed tax increases unnecessary. Instead of increasing spending, the state should use these federal funds to stabilize long-term finances and restructure spending to support essential needs.
Recommendations related to Federal Aid
The State should use the American Rescue Plan to restructure State spending to be sustainable and alleviate near-term pressure on the State budget.
To the extent allowed, American Rescue Plan funds should be spread over the coming years to support the transition to a sustainable system that supports a sound basic education for all students.
New York’s future would be best strengthened by enacting a budget that builds long-term fiscal stability by prudently budgeting federal aid.
Key Data
94 percent
— Portion of the original projected four-year revenue loss offset by tax revenue strength and federal aid.
$3.7 billion
— Amount by which revenues for the current and next two fiscal years are projected to be higher than before the pandemic.
$9.6 billion
— Projected State surplus over the next 2 years if the Executive Budget is adopted as is.
$5.9 billion
— Projected State surplus over the next 2 years if the Executive Budget is adopted without the Governor’s proposed personal income tax increases.
New York State should utilize anticipated federal aid to balance the budget and address long-term fiscal imbalances rather than funding recurring expenses. With potential aid packages providing over $23 billion in direct support to the state and local governments, the state has a critical opportunity to stabilize its finances without resorting to tax increases.
Recommendations related to Federal Aid
Use federal aid wisely to stabilize the State’s finances.
The Fiscal Year 2022 Enacted Budget should use known and assumed federal aid to balance the budget, support critical non-recurring needs and correct long-term fiscal imbalances.
Federal funds in excess of immediate needs should be used to provide temporary economic relief to business and people affected by the recession.
The State should not use federal funds to support recurring spending, including new ongoing programs, to avoid exacerbating long-run fiscal problems.
If the aid is sufficient and flexible, the State should spread it over time, leveraging it as a bridge to fiscal stability.
Key Data
$15 billion
— The amount the Governor asserted would be "fair" in unrestricted federal aid to avoid new tax increases or spending reductions.
$6 billion
— The "worst case" scenario for forthcoming unrestricted federal aid assumed by the Executive Budget.
$5.5 billion
— Federal aid provided to the State for elementary and secondary education since March 2020.
$5.1 billion
— Federal Coronavirus Relief Funds provided to the State since March 2020.
$12.6 billion
— The amount of direct federal aid current congressional drafts would provide to New York State.
$10.6 billion
— The amount of federal aid current congressional drafts would provide to local governments in New York.
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
New York State can balance its budget without raising income taxes, even if it only receives the $6 billion in federal aid projected as a worst-case scenario. Because federal aid is likely to exceed this amount, the state has a significant opportunity to restructure spending and improve its long-term fiscal health.
Recommendations related to Federal Aid
The State should use the likely excess federal aid wisely and combine it with actions to restructure State spending to put the State on better fiscal footing in the long run.
Key Data
$6 billion
— The 'worst case' scenario for additional federal aid to New York State.
The New York City Housing Authority faces a precarious financial future as it navigates pandemic-related revenue losses and rising repair costs, necessitating additional federal stimulus to stabilize its operations. Despite receiving some federal relief in 2020, the agency's reliance on one-time funding and declining rent collections threatens its ability to maintain housing stock and address critical repair backlogs.
Key Data
$150 million
— Supplemental operating funds provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
$9 million
— Reimbursements provided by FEMA to help offset pandemic response costs.
$11 million
— The amount by which the federal operating subsidy fell below the adopted 2020 budget projections.
$6.5 million
— CDBG funding allocated in the City's fiscal year 2020 budget for lead remediation.
New York State's fiscal plan for 2022 relies on a combination of spending cuts, tax increases, and federal aid to close budget gaps. While the state anticipates receiving $15 billion in federal assistance to eliminate near-term deficits, structural spending reforms remain necessary to ensure long-term financial stability regardless of the final aid amount.
Recommendations related to Federal Aid
No matter the level of federal aid, the State should be pursuing structural spending reforms to ensure that its finances are stable coming out of the recession.
Key Data
$6 billion
— The baseline assumption of federal aid included in the Executive Budget.
$15 billion
— The amount of federal aid the State hopes to receive to wipe out its near-term deficits.
New York State faces significant budget gaps that require a combination of spending cuts and potential federal aid to resolve. The state must prepare a budget that closes these gaps even if additional federal assistance does not materialize.
Recommendations related to Federal Aid
The Executive Budget should present a plan to close the entire State budget gap if it does not receive federal aid.
The State should avoid balancing this year’s budget using cost shifts or revenue intercepts that harm local governments.
Borrowing for operations should be a last resort, used only after the State exhausts less harmful strategies, and should be accompanied by a multi-year fiscal stability plan and increased transparency and oversight.
The State should not convert the remaining $3.5 billion in short-term debt to long-term debt.
Key Data
$8.2 billion
— Budget gap reported for the current year in the October Mid-Year Financial Plan Update.
$16.7 billion
— Budget gap reported for fiscal year 2022 in the October Mid-Year Financial Plan Update.
$908 billion
— Total value of the December federal stimulus package.
$3.5 billion
— Remaining short-term debt that the State plans to repay within the fiscal year.
$7 billion
— Total amount of state reserves, including rainy day funds and the Economic Uncertainties Fund.
New York City's preliminary budget for fiscal year 2022 faces significant fiscal challenges, with a projected $4.3 billion gap for fiscal year 2023 that is likely understated. While federal reimbursement for pandemic expenditures will help avoid certain cuts, additional federal aid will not be sufficient to resolve the city's long-term multiyear fiscal shortfall.
New York State and City face massive budget gaps totaling $73.3 billion over four years, and while federal aid is necessary, it is unlikely to fully resolve these fiscal challenges. Even with significant federal support, local leaders must urgently develop and implement credible plans to stabilize their long-term finances.
Recommendations related to Federal Aid
State and City leaders should act with urgency to develop and implement credible fiscal stability plans.
The State and City must implement significant actions to stabilize their finances in the long run, as federal aid alone is unlikely to solve the entire problem.
Key Data
$73.3 billion
— Total State and City budget gaps over four years.
$57 billion
— Gap closing actions required if federal aid relieves the same portion of budget gaps as in the Great Recession.
$60.1 billion
— The most recent State financial plan's projected four-year deficit.
$13.2 billion
— The City's projected four-year budget gap in the November 2020 Financial Plan.
$13.3 billion
— Federal fiscal relief provided to New York State between fiscal years 2009 and 2012.
$6.8 billion
— Total federal aid provided to New York City between fiscal years 2009 and 2016.
While optimism for federal assistance is understandable, such funding should be viewed as a temporary bridge rather than a permanent solution to the city's fiscal challenges. Consequently, spending must be restrained to sustainable levels to ensure long-term stability once economic recovery occurs and external aid is exhausted.
Recommendations related to Federal Aid
Spending should be restrained to a level that is sustainable when the economy recovers and federal aid is depleted.
New York City must provide a transparent accounting of pandemic-related spending and clarify which costs are expected to be reimbursed by federal aid to avoid widening the budget gap. While federal stimulus offers a bridge to fiscal stability, the City must aggressively manage spending and prepare for potential downside risks rather than relying solely on external relief.
Recommendations related to Federal Aid
The City should provide a detailed accounting of both response costs and core services, such as education, that may cost more during the pandemic.
The City should identify how much of this spending it expects to be reimbursed by the federal government, as unreimbursed costs will increase the budget gap.
The City might also include estimates of additional federal fiscal relief in the November modification.
Key Data
$2.2 billion
— Amount the City has committed to spending on COVID-19-related expenditures in fiscal year 2021.
$118 million
— Amount for COVID-19-related expenditures originally included in the Adopted Budget.
New York City's fiscal year 2021 budget relies on federal aid to offset specific agency costs, such as a $127 million infusion for the Department of Homeless Services and a $948 million reduction in local Medicaid contributions due to federal funding. While federal funds were budgeted at $12.5 billion in fiscal year 2020, they dropped to $7.4 billion in fiscal year 2021, highlighting the volatility of these revenue sources.
Key Data
$127 million
— The amount of federal aid that offset the City-funded decline in the Department of Homeless Services budget.
$102 million
— The City-funded increase at the Fire Department that stems partly from one-time federal funding in fiscal year 2020.
$12.5 billion
— The amount of federal funds budgeted in fiscal year 2020.
$7.4 billion
— The amount of federal funds budgeted in fiscal year 2021.
$948 million
— The amount by which the local contribution to Medicaid was lower in fiscal year 2021 due to federal funding via the Federal Medical Assistance Percentage.
New York City utilized $1.9 billion in federal aid to help close budget gaps in fiscal years 2020 and 2021, with an additional $2.5 billion in FEMA reimbursement expected for pandemic-related costs. While the city continues to lobby for further federal support, it is advised to avoid long-term borrowing as a primary solution for revenue imbalances.
Recommendations related to Federal Aid
While additional federal aid would be appropriate and in line with support given to localities in prior recessions, the City should not turn to long-term borrowing to address an imbalance in revenues and expenditures.
The City should not turn to long-term borrowing to address an imbalance in revenues and expenditures; borrowing should be a last resort.
Key Data
$1.9 billion
— Total federal aid used to close budget gaps in fiscal years 2020 and 2021.
$2.5 billion
— Amount of FEMA aid the City expects to receive as reimbursement for pandemic response costs.
$172 million
— FEMA disaster funds provided for overtime costs that were originally City-funded.
$742 million
— Funding provided through the enhanced Federal Medical Assistance Percentage (FMAP) to close budget gaps.
$793 million
— Funding provided through the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act to close budget gaps.
The Metropolitan Transportation Authority faces a severe fiscal crisis with operating shortfalls estimated between $8.4 billion and $12.6 billion for 2020 and 2021, even after receiving $3.8 billion in federal aid. Despite requesting an additional $3.9 billion in federal support, the agency would still face a cumulative operating deficit of $4.5 billion to $8.7 billion, necessitating difficult management decisions to sustain vital services.
Key Data
$3.8 billion
— The amount of federal aid the MTA has received to help offset pandemic impacts.
$3.9 billion
— The amount of additional federal aid the MTA has requested for 2020.
$8.4 billion and $12.6 billion
— The estimated operating shortfall for the 2020 and 2021 period after accounting for the $3.8 billion in federal aid.
$4.5 billion to $8.7 billion
— The projected 2020-2021 cumulative deficit in the operating budget assuming $3.9 billion in new federal aid is authorized.
The fiscal year 2021 budget for New York City relies on a mix of reserves, cuts, and uncertain federal aid, leaving the city with significant long-term budget gaps. Because the budget lacks specific, recurring savings plans, future modifications will likely be necessary to address the ongoing fiscal crisis.
New York City faces significant budget gaps exacerbated by the pandemic, and while the administration is seeking federal assistance, the city must continue to implement independent measures to ensure fiscal stability. Relying on potential federal aid is risky, so the city should prioritize structural changes and expenditure reductions to balance the budget without depending solely on external funding.
Recommendations related to Federal Aid
The City should proceed apace to implement actions to close the upcoming and reduce future budget gaps, as additional federal aid is uncertain.
City leaders should seek additional federal aid to provide budget relief, improving future fiscal prospects and providing flexibility in transition to a more efficient government.
The City should lobby for general federal aid to assist with the recovery.
Key Data
$600 million
— Potential gain in already approved federal aid if the Federal Emergency Management Administration (FEMA) waives the 25 percent local share for disaster funding.
$224 million
— Potential budget relief in fiscal year 2022 if the enhanced Federal Medical Assistance Percentage (eFMAP) increase is extended to July 2021.
$717 million
— Potential federal education aid the City could receive in fiscal year 2022 if the State receives federal funds and directs them to districts in accord with current patterns.
$5 billion
— Illustrative amount of additional general federal aid the City is lobbying to receive in fiscal years 2021 and 2022.
$6.5 billion
— Total potential federal aid over fiscal years 2020 through 2022 that could close the budget gaps through fiscal year 2024.
$8.2 billion
— Reasonable estimate of total federal funding, including potential federal aid plus eFMAP and education aid already reflected in the City budget.
CBC hosted a special panel discussion of prominent fiscal experts who helped New York overcome some of the most dire crises of the past. They provided insights and lessons from past experiences to help us understand and navigate the looming crisis. Stephen Berger Chairman, Odyssey Investment Partners; Former Executive Director,…
New York State faces significant fiscal stress due to revenue shortfalls, with projected budget gaps reaching $19 billion by fiscal year 2024. While federal aid provides a critical backstop for stabilizing state finances, additional support is necessary to avoid deep cuts to essential services and address long-term structural deficits.
Recommendations related to Federal Aid
Given the magnitude of future gaps and the resources available in fiscal year 2021, the payment of social security payments should not be delayed despite the federal policy allowing employers to defer them.
Key Data
$61 billion
— New York State has requested this amount in additional federal aid beyond what is needed to respond to the pandemic.
$500 billion
— The HEROES Act passed by the U.S. House of Representatives would provide this amount in direct aid to states.
$10 billion
— The report illustrates the impact of the State receiving this amount in additional federal aid over two fiscal years.
$6.6 billion
— The report assumes this amount in other general federal aid for illustrative purposes.
$1.5 billion
— The federal government has committed to this amount of increased Medicaid funding covering the period of January 1, 2020 to June 30, 2020.
$726 million
— The report projects this amount in federal aid from the extension of Enhanced FMAP through September 30, 2020.
The Fiscal Year 2021 Executive Budget relies on diverting $2.6 billion from the Retiree Health Benefits Trust and $1.4 billion from other reserves to address a significant fiscal crisis. While the budget assumes federal aid will assist, it relies on a $2.7 billion savings program that lacks recurring value, leaving a projected $5.0 billion gap in fiscal year 2022.
New York State's fiscal year 2021 budget relies on $1.1 billion in federal aid for education and up to $4.5 billion for Medicaid to help mitigate revenue losses from the pandemic. While the budget includes necessary spending restraints, it also utilizes potentially unwise fiscal maneuvers like converting short-term borrowing to long-term bonds and lacks sufficient transparency in its new midyear modification process.
Recommendations related to Federal Aid
The Executive should make its plan publicly available so that the Legislature and public can review and debate the new budget modification process.
The Legislature should generate its own contingency plans as soon as possible, so that it can productively respond to potential budget shortfalls within the 10-day period.
The State should address the underlying structural Medicaid problem without harming the health system’s ability to respond to the pandemic.
The State should avoid using long-term debt for operating purposes, as this obligates future generations of New Yorkers to pay for today’s services and needs.
Key Data
$1.1 billion
— Federal aid provided for education in fiscal year 2021.
$4.5 billion
— Federal aid provided for Medicaid in fiscal year 2021.
$7 billion
— Budget gap faced by New York State even before the current economic disruption.
$15 billion
— Estimated revenue loss in the current fiscal year due to economic disruption.
$8 billion
— Amount of short-term borrowing authorized to cover liquidity needs.
$3 billion
— Line of credit the State will be able to access.
The Families First Coronavirus Response Act provides New York with approximately $4.5 billion in annualized federal aid, but this funding comes with conditions that restrict the state's ability to implement planned Medicaid cost-saving measures. Consequently, the state must navigate these federal constraints while addressing structural budget gaps and pursuing necessary health care system reforms.
Recommendations related to Federal Aid
The State should lobby federal lawmakers to clarify and revise the COVID-19 response law to allow New York to implement planned cost savings.
The State budget should include all Medicaid Redesign Team (MRT) proposals, and implement those that do not risk federal funding effective immediately.
The State should omit the provision for local share growth, as its inclusion would reverse an important achievement in State Medicaid finance policy.
The State should include transparency improvements to the Medicaid program to help prevent future budget blunders.
The State should continue collaborative redesign and reform of the health care system, as forward-thinking redesign of fiscal sustainability, quality, and access are needed.
Key Data
$4.5 billion
— The amount of enhanced federal funding provided to the State on an annualized basis.
6.2 percent
— The temporary increase in the federal share of Medicaid costs enacted by the Families First Coronavirus Response Act.
$474 million
— The amount of MRT savings likely to be prohibited under federal law because they relate to eligibility requirements.
$343 million
— The amount of MRT savings categorized as questionable because they require federal approval of changes in the State’s Medicaid Plan.
$831 million
— The amount of the MRT savings package categorized as likely permissible under federal law.
$10 billion
— The amount of enhanced federal funding realized by the State over three years in response to the 2009 recession.
The New York City Housing Authority relies heavily on federal support, receiving $1.049 billion in HUD operating subsidies and $1.135 billion in federal capital subsidies to manage its portfolio of 173,762 public housing units. Despite this funding, the authority faces a significant $8.4 billion unmet capital need, highlighting the gap between available resources and the extensive repairs required for its aging buildings.
Key Data
$1.049 billion
— The amount of HUD subsidies provided for NYCHA's operating revenue in 2020.
$1.135 billion
— The amount of federal capital subsidy allocated to NYCHA's 2020 capital budget.
$3.6 billion
— The portion of the NYCHA 2.0 Plan funding provided by federal sources.
NYCHA's "NYCHA 2.0" plan relies heavily on federal programs like the Rental Assistance Demonstration (RAD) to address its massive capital needs, yet progress remains tenuous due to federal regulatory caps and insufficient federal funding. Achieving the plan's goals requires significant federal action, including lifting conversion caps, increasing appropriations for tenant protection vouchers, and allowing more flexible use of federal capital and operating dollars.
Recommendations related to Federal Aid
The federal monitor should work with the new Chair to increase funding for federal operating and capital subsidies to support NYCHA's turnaround efforts.
Federal authorities should improve the Rental Assistance Demonstration (RAD) program by lifting the cap on conversions, exempting RAD conversions from the tax-exempt private activity bond cap, or creating dedicated tax credits for the program.
Congress should lift the federal prohibition on design-build and best value procurement for federally-funded capital projects.
The federal government should provide additional appropriations for tenant protection vouchers to help NYCHA address its capital needs.
Federal authorities should allow for more flexible use of federal capital and operating dollars, in part to allow NYCHA to reinvest operating savings into capital upgrades.
Key Data
$3.6 billion
— Amount of existing federal funding assumed in the NYCHA 2.0 plan.
455,000 units
— National cap on the number of RAD conversions authorized by Congress.
259,713 units
— Number of units that have closed or have HUD-approved letters of intent for RAD as of September 2019.
$3.1 billion
— Amount of federal funding assumed in NYCHA's $6.4 billion capital plan for 2019 to 2023.
$23 million
— Amount of federal funds NYCHA diverted from other properties in 2018 to subsidize operating costs for developments built by the City or State.
New York City's affordable housing crisis remains severe, with 44 percent of renter households paying at least 30 percent of their income on rent and 22 percent facing severe rent burdens. Because the city's financial resources are insufficient to address these needs or the $32 billion capital requirement for public housing, meaningful solutions require significant support from federal and state partners.
Recommendations related to Federal Aid
The city must seek willing partners in Albany and Washington to preserve public housing and address the housing needs of severely rent-burdened New Yorkers.
The city should acknowledge that it cannot handle the affordability problem on its own and must prioritize federally funded programs to provide low-income, affordable housing.
Key Data
921,000
— More than 921,000 renter households in New York City, or 44 percent of all renters, pay at least 30 percent of their income in rent.
462,000
— Twenty-two percent of households, or more than 462,000 families and single adults, are severely rent burdened, paying 50 percent or more of their income in rent.
$32 billion
— The New York City Housing Authority faces a $32 billion capital need to address the poor physical condition of its public housing units.
The New York City Housing Authority faces a $32 billion capital needs crisis, exacerbated by years of declining federal support and insufficient state and city funding. To address this, the authority should transition to an affordable housing steward model, leveraging public-private partnerships to access stable Section 8 funding and utilizing underutilized land assets for development.
Recommendations related to Federal Aid
Increasing the pace of public-private partnerships to convert public housing units to the more stable Section 8 funding stream will deliver immediate benefits to residents and address more than $2 billion in capital needs through 2022.
Key Data
31%
— Funding coverage of capital needs for the 2007-2011 period.
11%
— Funding coverage of capital needs for the 2012-2017 period.
$8 billion
— Total investment mandated by the recent federal consent decree.
$2 billion
— Capital needs addressed through 2022 by converting public housing units to the Section 8 funding stream.
2020 is the year of the next Census, a national survey that determines the number of seats each state is allocated in the House of Representatives, and informs policy and funding decisions at all levels of government. Phil Thompson, Deputy Mayor for Strategic Policy Initiatives, is in charge of coordinating…
New York's distribution of federal Medicaid Disproportionate Share Hospital (DSH) payments is inequitable, prioritizing certain facilities while leaving the city's public hospital system, Health + Hospitals, to bear the brunt of future funding cuts. State leaders must reform these allocation formulas during the current legislative session to ensure funding is directed to the hospitals with the greatest need rather than relying on outdated, unfair priorities.
Recommendations related to Federal Aid
The State should follow through on the recommendation to convene a workgroup to evaluate revisions to the DSH payment methodologies.
Reforms to the State’s DSH program should be enacted in the current legislative session.
The distribution formulas, particularly that for the Indigent Care Pool, should be revised to direct DSH payments to the hospitals with the greatest need.
State priorities for distributing DSH payments should be adjusted so that Health + Hospitals is not left to suffer DSH cuts alone.
The State should make payments promptly; after DSH funds have been earned and cash is available, the State should disburse the funds without delay.
Key Data
$3.6 billion
— Annual amount of DSH payments distributed to hospitals across New York State.
$1.8 billion
— New York's share of the $12 billion in federal DSH funding, the largest amount of any state.
$724 million
— Estimated loss of federal funding for New York's hospitals in federal fiscal year 2020 under the latest schedule of DSH cuts.
$1.4 billion
— Annual loss of federal funding for New York's hospitals thereafter, or the amount of other supplemental payments made by the State.
73 percent
— Share of H+H inpatients that are Medicaid patients, compared to 52 percent in other New York City hospitals.
$2 billion
— Projected deficits for the Health + Hospitals system in coming years.
The Fiscal Year 2019 Preliminary Budget fails to address potential fiscal risks stemming from the recently enacted federal tax law and possible reductions in federal reimbursement. Without proactive measures to limit spending growth and bolster reserves, the city remains vulnerable to these external financial pressures.
The federal tax overhaul passed last month may have enormous impacts in New York and could upend the relationship between the federal government and the states. CBC and the CUNY Graduate School of Journalism gathered experts to assess the impact and potential city and state responses in a special half-day…
NYC Health + Hospitals faces significant fiscal challenges as key federal funding streams like Disproportionate Share Hospital payments are slated for cuts, necessitating a shift in strategy to manage operating expenses and revenue. While Los Angeles successfully improved its public hospital finances by leveraging federal Affordable Care Act Medicaid expansion and waivers to generate hundreds of millions in new revenue, New York's potential for similar gains is limited by its already high Medicaid enrollment and different market dynamics.
Key Data
$545.9 million
— The largest component of the turnaround plan for fiscal year 2017 from a Medicaid waiver to insure the currently uninsured up to 200 percent of the Federal Poverty Level (FPL)
$333 million
— LADHS revenues from expansion in fiscal year 2014
$794 million
— LADHS revenues from expansion in fiscal year 2015
$38 million
— LADHS 'other operating revenues' in fiscal year 2010
$299 million
— LADHS 'other operating revenues' in fiscal year 2011
51%
— Decline in the number of uninsured people in LAC due to Medi-Cal expansion
New York's Medicaid redesign, supported by federal DSRIP funding, faces challenges in effectively integrating Community Based Organizations into Performing Provider Systems due to issues like limited evidence for roles, difficult business models, and uncertainty about future sustainability. To improve engagement, the state should focus on replicating successful models, fostering mutual acceptance of modest expectations, and providing explicit planning for post-DSRIP arrangements.
Recommendations related to Federal Aid
The State should pursue intensified State action to promote adoption of arrangements with CBOs that have demonstrated some success in specific arenas and can feasibly be replicated.
There should be mutual acceptance among CBOs and lead organizations of modest expectations for financial arrangements related to arenas in which clear and effective roles for CBOs are not readily apparent and experimentation is needed.
The State should provide early and explicit attention to planning future arrangements for effective CBO engagement after the DSRIP waiver terminates.
Strategic attention should be given to identifying future funding streams for CBO participation in health care delivery.
Better coordination with the current categorical, non-Medicaid funding streams supporting Tier 1 and other CBOs could make arrangements more cost-effective.
Key Data
$8.0 billion
— Initial federal funds provided over five years for the New York version of the DSRIP program.
$1.8 billion
— Combined state and federal funding added to the support for PPSs within months of initial approval.
$70 million
— Collective total of federal financial support provided to lead organizations to conduct planning.
$11.8 million
— Total amount disbursed by PPSs to Tier 1 CBOs during the first two years (April 2015 to March 2017).
$7.5 million
— Amount awarded to CBO planning consortiums across the State to help small CBOs develop infrastructure.
3.8%
— Share of total revenue budgeted for CBOs across all 14 New York City region PPSs.
We know that New York State leads the country in school spending per pupil. But how do those numbers break down when it comes to federal, state, and local spending? Most of the money comes from local governments through property taxes, which is how wealthier school districts are able to…
New York's hospitals rely on $5 billion in annual Medicaid supplemental payments, but upcoming federal policy changes threaten to reduce this funding, disproportionately impacting municipal facilities. To mitigate these cuts, the state should reevaluate its distribution priorities to ensure a more equitable impact across all hospital systems.
Recommendations related to Federal Aid
The State should reconsider its priorities in distributing Medicaid supplemental payments.
Pending cuts should not fall only on H+H, and adjustments, such as reduced payments to voluntary hospitals with limited reliance on supplementary payments, may be needed.
The State can revise the distribution of reduced federal funding for supplemental payments to make the impact of future federal cuts more equitable.
Key Data
$5 billion
— Total annual supplemental payments provided through four separate programs.
$659 million
— Projected loss in federal funding for New York due to scheduled DSH payment decreases.
$370 million
— Net annual cuts to New York City municipal hospitals slated for 2018.
$2 billion
— Amount by which nationwide DSH payments are scheduled to decrease.
$697 million
— Total projected reduction in supplemental payments based on steady funding, UPL reductions, and DSH cuts.
The New York City Housing Authority has achieved a recent financial surplus due to increased federal and city support, but this stability is threatened by proposed federal budget cuts. To mitigate these risks, the authority must accelerate the implementation of its NextGen strategic plan and continue pursuing cost-saving efficiencies and private partnerships.
Recommendations related to Federal Aid
Lobby the federal government against onerous changes to public housing operating and capital subsidies.
NYCHA should move more forcefully toward implementing NextGen initiatives to improve its finances and operations.
NYCHA is pursuing public-private partnerships with private management companies to stabilize operating costs and improve service outcomes.
Key Data
40 percent
— Portion of NYCHA’s annual $2.1 billion public housing budget funded by federal operating subsidies.
90 percent
— Level of formula-determined need met by public housing operating subsidies in 2016, up from 82 percent in 2013.
$82 million
— Increase in federal support realized by NYCHA in 2016 compared to 2013.
$80 million to $130 million
— Proposed annual cut to federal operating subsidies in the Federal Fiscal Year 2018 Budget.
The MTA's recent capital plan amendment prioritizes expansion projects like the Second Avenue Subway Phase II, despite the uncertainty of federal funding from the Federal Transit Administration's New Starts program. Relying on this potentially precarious federal aid for expansion rather than focusing on critical state-of-good-repair needs for the existing system is fiscally imprudent.
Recommendations related to Federal Aid
Future amendments to the capital plan should reprioritize funds for more appropriate state of good repair work and for the modernization of the subway’s aging signal system, rather than relying on uncertain federal funding for expansion projects.
The MTA board should require more transparency of changes to the capital program and emphasize what the agency can accomplish if capital funds are spent on state of good repair projects, existing system improvements, or both, instead of prioritizing expansion projects that rely on potentially unavailable federal aid.
Key Data
$700 million
— The amount added in commitments for Phase II of the Second Avenue Subway, which the MTA assumes will be funded by the Federal Transit Administration’s New Starts program.
$2.7 billion
— The amount of new capital commitments included in the May amendment for two system expansions, which rely on uncertain federal funding.
The report examines the inequitable burden placed on New York counties by the requirement to fund a portion of Medicaid costs, arguing that the state should assume full financial responsibility. It highlights how federal stimulus funding temporarily reduced local liabilities, but emphasizes that the current local share policy remains a significant fiscal challenge for counties.
Key Data
50 percent
— The federal government pays 50 percent of the program’s costs in New York, which is the lowest percentage under the federal formula.
65 percent
— The federal stimulus program temporarily increased the federal payment for New York to 65 percent.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
The Citywide Savings Program relies heavily on re-estimates and funding shifts, which account for 62% of total savings, while efficiency improvements remain a minor component of the plan. To hedge against economic uncertainty and potential reductions in federal funding, the administration should prioritize recurring savings from government productivity.
Recommendations related to Federal Aid
To serve as a meaningful hedge against budget risks, all of the $500 million in additional savings should come from improving government productivity in ways that generate recurring savings, especially given uncertainty around the future of federal funding.
Key Data
$2,363 Million
— Total savings from re-estimates and funding shifts, which include the substitution of state and federal funds, over the five-year financial plan.
$500 Million
— Additional savings the Office of Management and Budget has committed to finding to hedge against economic uncertainty and federal policy changes.
The federal Department of Housing and Urban Development calculates annual operating subsidies for housing authorities using a regression model that accounts for factors like property age, location, and household type. These subsidies are subject to specific per-unit ceilings, with NYCHA capped at $480 and other authorities at $420, while also incorporating incentives for utility consumption reduction.
Key Data
$480
— NYCHA's monthly per-unit subsidy ceiling before utilities.
$420
— The monthly per-unit subsidy ceiling for all other housing authorities before utilities.
75%
— The portion of utility cost increases that a public housing authority must absorb if consumption levels rise.
The New York City Health and Hospitals Corporation faces significant financial instability, with projected budget gaps reaching $1.7 billion by fiscal year 2018, exacerbated by declining supplemental federal Medicaid funds and the need for more efficient service delivery. To address these challenges, municipal leaders must establish stable funding guidelines and engage in a dialogue with health care experts to rationalize the financial relationship between the city and the corporation.
Recommendations related to Federal Aid
City leaders should develop more rational and stable guidelines for funding HHC in its efforts to meet its mandates.
The new approach should seek to improve HHC’s financial stability, its ability to engage in long-term financial planning, and its incentives for cost-effective service delivery.
City leaders should begin a dialogue with HHC and other national health care experts about the best way to rationalize the financial relationship.
HHC leaders can advocate for conditioning available tax exemptions and funding sources on greater participation by all voluntary hospitals in sharing the burden of caring for the uninsured.
To increase the share of MetroPlus services provided by HHC, patients should be attracted to in-house providers because of their high quality relative to others and their proximity to member residences.
Key Data
$2.6 billion
— The projected cut in DSH funds over the eight-year phase-in period.
$260 million
— The reduction in DSH funds expected in fiscal year 2017.
$1.6 billion
— The amount of unrestricted state and federal aid assumed in the gap-closing plan.
$400 million
— The annual amount expected from the State or federal governments, particularly from the Medicaid Waiver.
$152 million
— The amount of IAAF funding awarded to HHC.
$213 million
— The amount of the IAAF request made by HHC.
The Port Authority Trans-Hudson (PATH) rail system faces growing annual deficits, projected to reach $487 million by 2018, which are currently covered by bridge and tunnel toll revenues. To improve fiscal sustainability, the system should adopt a more equitable funding model that incorporates passenger fares, cross-subsidies from motorists, and new state or local tax subsidies.
Recommendations related to Federal Aid
PATH should adopt a consistent funding structure that shares the cost of operating the transit system among all who benefit, specifically by allocating costs among fares, tax subsidies, and cross-subsidies from auto users.
The agency should consider transferring operating responsibility for PATH to New Jersey Transit (NJT) to facilitate the collection of a tax subsidy and improve coordination with other bi-state transit operations.
PATH could pursue implementing a distance-based fare system to increase the farebox recovery ratio from long-distance passengers and reduce the penalty that short trips incur.
The system should implement peak pricing to charge a premium for users during peak periods, which can generate more revenue while attracting new, off-peak riders.
PANYNJ should rethink the system’s financing policy to ensure that no one group—PATH riders, toll payers, residents, or employers—pays a disproportionate share of the cost.
Key Data
$487 million
— Projected annual deficit for the PATH system in 2018.
$1.2 billion
— Annual amount of state taxes and federal grants supporting New Jersey Transit.
$3.9 billion
— Estimated cost of the new PATH terminal and related amenities.
$2.2 billion
— Estimated total value of damage from Superstorm Sandy to PANYNJ facilities.
$317 million
— Capital contributions received by PATH in 2013, primarily from the federal government.
New York faces a $1.1 billion annual reduction in federal payments for developmental disability services, prompting the state to seek $600 million in alternative federal aid. Relying on such "maximization" schemes or one-time savings to offset these losses is considered risky, necessitating further restructuring of state services to ensure long-term fiscal stability.
Recommendations related to Federal Aid
The state should avoid relying on new federal aid “maximization” schemes or one-time savings to offset the loss of federal funding for developmental disability services.
The state should pursue further restructuring of Department of Health Medicaid services to reduce baseline spending in light of federal funding reductions.
High priority should be assigned to using available state resources to transfer more of the cost of Medicaid to the State rather than relying on federal aid.
Key Data
$1.1 billion
— Annual reduction in federal payments for services provided by the Office of People with Developmental Disabilities.
$600 million
— Amount of alternative federal aid the state expects to receive to offset federal funding losses.
$120 million
— Proposed reduction in state spending for the Office of People with Developmental Disabilities.
$380 million
— Cuts spread among Department of Health programs to address federal funding reductions.
New York City faces significant budget gaps exacerbated by Hurricane Sandy, leading officials to seek federal reimbursement to offset recovery costs and manage structural deficits. The city's reliance on one-time revenue sources and funding shifts to state and federal governments highlights the need for more sustainable, long-term fiscal solutions.
Key Data
165
— Number of positions shifted from City funding to **federal and state funding** as part of total attrition.
$134.4 million
— Amount of funding shifts in fiscal year 2013, which generally consist of transferring certain costs to the **state or federal government**.
$186.3 million
— Amount of funding shifts in fiscal year 2014, which generally consist of transferring certain costs to the **state or federal government**.
$50 million
— The value of funding shifts, which consist of transferring costs to the **state or federal government**, falls to less than this amount in fiscal years 2015 and 2016.
The New York City Health and Hospitals Corporation faces significant fiscal challenges as federal Medicaid supplemental payments are in jeopardy and operating deficits are projected to grow through 2016. To address these shortfalls, the corporation must identify new funding sources or significantly improve service delivery efficiency to avoid drastic reductions in care for needy residents.
Recommendations related to Federal Aid
If the HHC and the City cannot identify sources for these funds and to replace any lost supplemental Medicaid payments, then HHC will need to redouble its efforts at delivering services more efficiently or face a dramatic reduction in the services it can provide to New York City’s needy residents.
The HHC and the City must identify sources for these funds and to replace any lost supplemental Medicaid payments.
Key Data
$1.6 billion
— Annual revenues expected from special Medicaid supplementary payments that may be in jeopardy.
50 percent
— The amount by which federal DSH payments are called to be cut by 2019 under the national health care reform law.
$250 million
— The amount of unspecified gap-closing actions from the State and federal governments required in fiscal year 2013.
$850 million
— The amount of unspecified gap-closing actions from the State and federal governments required in fiscal year 2016.
$2.0 billion
— The combined federal and City Medicaid supplemental support provided in fiscal year 2007.
Federal deficit reduction efforts are expected to negatively impact state revenues, as federal aid currently accounts for 33% of the state budget. Consequently, any unexpected revenue should be directed toward resolving existing fiscal challenges, such as labor savings and budget gimmicks, rather than funding new spending or tax cuts.
Recommendations related to Federal Aid
The state should prioritize using any unexpected revenue to address existing fiscal issues, such as finalizing labor savings, rather than funding new initiatives.
New York should reduce its reliance on undesirable fiscal gimmicks, such as the deferral of business tax credits and pension payment amortization, before committing to new spending.
Any surprise surplus should be utilized to help lower the projected budget gap for the next fiscal year, such as by paying down debt or reversing deferrals, instead of implementing tax cuts or spending restorations.
Key Data
33%
— Federal aid accounts for this portion of the state’s budget, primarily funding the Medicaid program.
$174 Billion
— New Yorkers pay this amount in federal income taxes, which is the second highest of all the states.
New York State's 2011 budget included $608 million in federal Education Jobs Fund money, which significantly lowered the impact of school aid cuts that were originally projected to be much higher. While these federal funds helped mitigate the reductions, the final budget distribution undermined need-based targeting, resulting in wealthier districts receiving a higher percentage of restored aid than poorer ones.
Recommendations related to Federal Aid
If the State can no longer keep the promises it made to radically increase school aid when it revised the foundation aid formula in 2007, then the basic formulas by which school aid is distributed should be reopened to improve their targeting.
Now that the budget is completed, lawmakers should undertake a serious examination of how best to achieve sustainable and equitable allocations going forward.
Key Data
$608 million
— Federal aid not included in the enacted budget school aid totals for school year 2010-11.
6.3 percent
— Average school aid cuts if all districts spent federal funds in school year 2010-11.
3.5 percent
— Average school aid cuts if all federal money is still available.
$1.5 billion
— Governor's proposed school year to school year cuts.
$10 billion
— Total budget gap the school aid cuts were intended to help close.
$20.7 billion
— Starting point for school aid cuts before accounting for federal aid.
New York State has relied on $6.6 billion in federal American Recovery and Reinvestment Act funding to support its budget, but this temporary assistance is expiring. To achieve long-term fiscal sustainability, the state must restructure spending commitments rather than continuing to rely on temporary revenue measures and federal stimulus.
Recommendations related to Federal Aid
It is now time to allow these temporary revenue measures to phase out and to begin to restructure spending commitments.
In order to avoid a perpetual reliance on one-shot revenues and tax increases, spending growth must be more closely aligned with long-term revenue growth.
Key Data
$6.6 billion
— Amount of funding the state received from the federal American Recovery and Reinvestment Act (ARRA) in the current fiscal year.
$1.1 billion
— Amount of soon-to-expire federal American Recovery and Reinvestment Act (ARRA) funding available for the next fiscal year.
New York City's budget balancing actions between 2009 and 2011 totaled $3.4 billion, yet relied heavily on revenue measures and shifting staff and programs to temporary federal funding sources rather than permanent expenditure reductions. Future fiscal stability requires structural reforms to pension contributions and health insurance premiums to avoid further cuts to essential services as federal aid and other revenue sources fluctuate.
New York City's fiscal year 2011 budget gap was largely closed through temporary revenue actions, including $159 million from the federal education jobs bill and other federal and state funding shifts that are not recurring. The city should reduce its reliance on these temporary measures to close budget gaps and instead pursue structural reforms to reduce employee health insurance or pension costs to avoid future service cuts.
Recommendations related to Federal Aid
The City should reduce its reliance on temporary federal and state funding shifts to close budget gaps and instead pursue structural reforms to reduce employee health insurance or pension costs.
Key Data
$159 million
— Funding from the federal education jobs bill used to sustain 4,000 teacher positions.
$24.3 million
— Funding from the federal Department of Homeland Security used to fund police overtime.
$7.9 million
— Federal Highway Administration funds used for transportation projects.
New York City's fiscal year 2011 budget relies on $600 million in federal Medicaid aid, the absence of which would necessitate further service cuts. While the budget avoids tax increases through agency savings, it faces long-term structural deficits as previous surplus rollovers are exhausted.
Key Data
$600 million
— The amount of federal aid for Medicaid included in the adopted budget that, if not received, would likely trigger further service cuts.
New York State's 2010-11 budget proposal addresses a $6.7 billion deficit by relying on $4.4 billion in federal stimulus aid while avoiding assumptions that such aid will continue beyond the original package. The plan focuses on structural balance through spending controls in school aid and Medicaid, rather than papering over future fiscal problems with temporary federal funding.
Recommendations related to Federal Aid
The Legislature should seize the opportunity to move the State's finances toward structural balance by embracing the Governor's proposal for real and recurring spending reductions.
The budget presentation should not attempt to paper over future problems by showing continued increased levels of federal aid.
Key Data
$4.4 billion
— Amount of federal stimulus aid sustaining the 2010-11 budget.
$220 million
— Amount of federal stimulus aid estimated to be available to New York one year later.
$6.7 billion
— Size of the budget hole in the 2010-11 fiscal year.
New York's 2009-10 budget relies heavily on $13.3 billion in temporary federal stimulus funds to support recurring spending, creating a significant risk of future budget gaps when this aid expires. Instead of using stabilization aid to offset tax and fee increases, the state utilized these funds to maintain unsustainable spending levels, leaving a projected $13.7 billion budget gap to address in three years.
Recommendations related to Federal Aid
The $7.4 billion in federal stabilization aid should have been used primarily as a substitute for tax and fee increases, not as a substitute for the kinds of spending changes that will be needed when the funds run out.
State leaders should have used federal funds to create a path to a more sustainable long-term spending level rather than sustaining recurring spending commitments.
State leaders should avoid relying on temporary federal stimulus aid to sustain recurring spending commitments, as this creates a risk of large future budget gaps.
Key Data
$24.6 billion
— Total federal stimulus package for New York expected over 27 months.
$13.3 billion
— Amount of federal stimulus funds the fiscal year 2009-10 budget relies on.
$6.1 billion
— Amount of federal funds used to close the budget gap by supporting general fund spending.
$7.2 billion
— Amount of federal funds added to the all funds budget for infrastructure projects, food stamps, unemployment assistance, and welfare grants.
$14.6 billion
— Total federal stimulus funds already spent by State leaders.
$7.4 billion
— Amount of federal stabilization aid that should have been used as a substitute for tax and fee increases.
New York is set to receive $24.6 billion in federal stimulus funds, which should be used to avoid harmful tax increases and budget cuts while addressing the state's $14.0 billion budget gap. Rather than relying on one-time fiscal gimmicks, the state should prioritize structural spending reforms and debt reduction to ensure long-term fiscal stability.
Recommendations related to Federal Aid
The state should avoid adopting harmful tax increases, such as hikes to the personal income tax and the gross receipts tax on utilities, to protect economic competitiveness.
New York should form a commission to examine the question of how to reform the state's tax structure to address issues of fairness, stability, and the division of responsibilities.
The state should roll back assessments on health insurance providers that were recently enacted as part of the deficit reduction program to prevent higher costs for consumers.
Legislators should adopt the changes in the Medicaid program proposed by the Governor to make nursing home and hospital rates more reasonable and rational.
The state should refrain from adopting the foundation aid cuts to school districts proposed in the budget and instead restore funding to the neediest districts.
New York should phase out unnecessary payments to the wealthiest school districts by ending 'high tax' and 'hold harmless' aid increases.
The state should end the middle class STAR program because it is poorly crafted and difficult to administer.
New York should eliminate ineffective or unnecessary programs, such as the Empire Zones program, and close underutilized institutions.
The state should adopt a new pension tier and other compensation changes for public employees to address rising costs and local tax burdens.
The state should avoid raiding public authorities or relying on other one-shots to close budget gaps, as temporary federal funds are a better alternative.
Key Data
$787 billion
— The total sum committed by the federal government to aid the economy over 27 months.
$24.6 billion
— The estimated amount of federal stimulus money New York will receive.
$14.0 billion
— The revised budget gap for New York State for fiscal year 2009-10.
$18.7 billion
— The projected budget gap in year three of the financial plan.
$1.2 billion
— The amount of school aid cuts proposed in the Governor's budget that should be restored to the neediest districts.
$500 million
— The amount the Battery Park City Authority would borrow under a proposed transaction to cover state operating costs.
New York City faced an $8.8 billion budget gap for fiscal year 2004, which it addressed through a combination of tax increases, spending cuts, and shifting costs to other levels of government. The city sought nearly $500 million in intergovernmental aid, including specific measures directed at federal and state officials, to help bridge this significant financial shortfall.
Key Data
$500 million
— The amount of intergovernmental aid the City is seeking to help close the fiscal year 2004 budget gap.
$200 million
— The value of the menu of federal actions proposed to provide intergovernmental assistance.
$158,153,000
— The amount of agency actions attributed to a funding shift to the federal government.
New York City cannot rely on federal aid to close its budget gaps, as much of the promised $21.7 billion in post-9/11 recovery funds is restricted to specific transportation projects, tax credits, or development corporations rather than general operating expenses. Consequently, the city must pursue strategies that do not depend on external financial assistance, such as lifting legal mandates and implementing Medicaid cost controls.
Recommendations related to Federal Aid
The City should seek more federal aid vigorously but not count on it to close budget gaps.
The City should pursue Medicaid cost controls that benefit both the State and City to assist with budget balancing.
The City should focus on lifting legal mandates that do not cost the State money to help close the budget gap.
The City should pursue re-authorizing a commuter tax as a way for the State to assist the City without costing the State money.
Key Data
$21.7 billion
— Commitment from the federal government to help New York City recover from the terrorist attacks of September 11th, 2001.
$7 billion
— Amount of federal aid for transportation projects to be carried out by the Metropolitan Transportation Authority and the Port Authority of New York and New Jersey.
$5 billion
— Amount of federal aid in the form of federal tax credits that go directly to individuals and businesses.
$2.7 billion
— Amount of federal aid allocated to the Lower Manhattan Development Corporation.
$13.7 billion
— Amount in State and federal aid for specific categorical purposes such as education and social services.
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