ALBANY — New York Sen. Charles Schumer said Monday the state and New York City would both get big boosts in federal financial aid — up to $18 billion altogether over two years — under a new economic stimulus package being developed by President-elect Barack Obama’s transition team and congressional leaders.
The $800 billion economic package is expected to include $5 billion for New York as part of $80 billion to $100 billion in additional Medicaid payments to the states, Schumer said. That’s meant to ensure Medicaid remains strong, and that states can avoid tax hikes and spending cuts that would counteract the federal stimulus, he said
“President-elect Obama understands we have to push money into the economy or it will get worse,” Schumer said. “If the federal government is putting money in while the state governments are taking it out ... the government is giving with one hand and taking away with another.”
The consensus among leaders is the stimulus package should contain more aid for the states, and Medicaid reimbursement is a key vehicle for doing that, he said.
According to Schumer’s office, Congress and the transition team are working to have the stimulus measure signed in to law by the end of January, with a second package to follow the next year. That would mean $10 billion in direct additional health care aid to New York over the two years, though Schumer noted, “If the economy starts moving ahead, the second year may not come to pass.”
The biggest piece of the stimulus package would be for infrastructure spending, such as roads, bridges, schools, hospitals and information technology, with $20 billion Schumer hopes will go nationally to mass transit the first year. That would mean about $4 billion for New York City and projects like the Seventh Avenue subway, he said.
On Sunday, Schumer said the package could allow the Metropolitan Transportation Authority to go ahead with subway station upgrades and hybrid bus purchases among other projects put at risk by the recession and the MTA’s fiscal problems.
The Medicaid boost would involve changing the Federal Medicaid Assistance Percentage, the federal matching rate that funds all states’ Medicaid programs. Under the plan, New York’s rate could be temporarily increased by about 10 percent, resulting in at least $5 billion a year for two years.
“Even with this money from Washington, Albany is still going to have to make very hard choices about service cuts, tax cuts and layoffs,” Schumer said. However, it will help relieve pressure on the state budget, freeing up dollars for education or something else, he said.
“A $5 billion dollar increase in (Medicaid assistance) would be a huge shot in the arm for New York,” Gov. David Paterson said. “The funding, should it happen, is a step in the right direction, but we have a multiyear spending problem that needs to be evaluated in the context of any aid package, and ultimately we have to adjust spending to get New York back on track for the long term.”
Paterson has proposed a 2009-10 budget of $121.1 billion, which includes layoffs, a 3.3 percent cut in school aid, 88 new or higher fees, and the early release of 1,600 inmates. The proposal he released Dec. 16 to the Legislature would increase total spending by 1.1 percent - or $1.3 billion - and close $15.4 billion in deficits over two years.
New York is one of 11 states that divides Medicaid costs with localities. Even if this federal boost goes directly to the state, New York City should still benefit, Schumer said.
Paterson’s budget also calls for cutting 3,108 jobs from the state work force of 196,000. Attrition would account for most of the reduction, but the proposal includes 521 layoffs in 2009-10, largely through consolidating state offices.
New York City would get whacked for more than a half-billion dollars in reduced state school aid, municipal aid and school tax relief.
“President-elect Obama understands we have to push money into the economy or it will get worse,” Schumer said. “If the federal government is putting money in while the state governments are taking it out ... the government is giving with one hand and taking away with another.”
The consensus among leaders is the stimulus package should contain more aid for the states, and Medicaid reimbursement is a key vehicle for doing that, he said.
According to Schumer’s office, Congress and the transition team are working to have the stimulus measure signed in to law by the end of January, with a second package to follow the next year. That would mean $10 billion in direct additional health care aid to New York over the two years, though Schumer noted, “If the economy starts moving ahead, the second year may not come to pass.”
The biggest piece of the stimulus package would be for infrastructure spending, such as roads, bridges, schools, hospitals and information technology, with $20 billion Schumer hopes will go nationally to mass transit the first year. That would mean about $4 billion for New York City and projects like the Seventh Avenue subway, he said.
On Sunday, Schumer said the package could allow the Metropolitan Transportation Authority to go ahead with subway station upgrades and hybrid bus purchases among other projects put at risk by the recession and the MTA’s fiscal problems.
The Medicaid boost would involve changing the Federal Medicaid Assistance Percentage, the federal matching rate that funds all states’ Medicaid programs. Under the plan, New York’s rate could be temporarily increased by about 10 percent, resulting in at least $5 billion a year for two years.
“Even with this money from Washington, Albany is still going to have to make very hard choices about service cuts, tax cuts and layoffs,” Schumer said. However, it will help relieve pressure on the state budget, freeing up dollars for education or something else, he said.
“A $5 billion dollar increase in (Medicaid assistance) would be a huge shot in the arm for New York,” Gov. David Paterson said. “The funding, should it happen, is a step in the right direction, but we have a multiyear spending problem that needs to be evaluated in the context of any aid package, and ultimately we have to adjust spending to get New York back on track for the long term.”
Paterson has proposed a 2009-10 budget of $121.1 billion, which includes layoffs, a 3.3 percent cut in school aid, 88 new or higher fees, and the early release of 1,600 inmates. The proposal he released Dec. 16 to the Legislature would increase total spending by 1.1 percent - or $1.3 billion - and close $15.4 billion in deficits over two years.
New York is one of 11 states that divides Medicaid costs with localities. Even if this federal boost goes directly to the state, New York City should still benefit, Schumer said.
Paterson’s budget also calls for cutting 3,108 jobs from the state work force of 196,000. Attrition would account for most of the reduction, but the proposal includes 521 layoffs in 2009-10, largely through consolidating state offices.
New York City would get whacked for more than a half-billion dollars in reduced state school aid, municipal aid and school tax relief.
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