Believe it or not, we are almost exactly six months away from the next executive budget. That may be tough to hear for Albany watchers considering this year’s extended budget battle only ended about two months ago.
The person whose pen will sign off on what promises to be another tough budget shaped by the state’s spending growth and the continued impacts of the federal spending bill will be the winner of another battle: New York’s race for governor. Incumbent Democrat Kathy Hochul is facing off against Nassau County Executive Bruce Blakeman, with Hochul leading in the polls.
One year after the One Big Beautiful Bill Act sent shockwaves through Albany as officials feared immediate and catastrophic cuts, the impact has been more gradual as changes are phased in. Some won’t be felt until after election day.
This past budget cycle, changes in Medicaid funding led the state to drop nearly 400,000 people from its expanded Essential Plan and seek a federal waiver to deal with what could have been even more significant coverage loss.
In the next go-round, federal changes are expected to impact Medicaid eligibility, introduce new administrative burdens for the state through more frequent recertification, and change how Supplemental Nutrition Assistance Program (SNAP) benefits are funded.
Hochul told Spectrum News 1 that her strategy looking ahead to the 2028 fiscal year revolves around cushioning the impact of spending cuts on eligible New Yorkers by slimming down aspects of the state’s Medicaid program that she says are bloated or wasteful.
“In the past they were trusted partners in providing major support,” she said. “Knowing they’re unreliable, we’re trying to find ways to cut down our own healthcare costs to make sure we’re not having to have cuts for people who deserve it and need it.”
While Hochul’s spearheading of a transition of the Consumer Directed Personal Assistance Program, or CDPAP, to a single fiscal intermediary has been widely criticized, she pointed to the transition as an example of how she has already taken on inefficient use of state Medicaid resources.
“People criticize — but we’ve now saved over two billion dollars in a program that I can now churn back into providing care,” she said. “What I’m trying to do is make government more efficient.”
Blakeman blames Hochul and the state for being in the position of having to tighten the purse strings, rather than the federal government for pulling some support.
“We don’t have a revenue problem in New York state, we have a spending problem,” he said.
He insisted he is the best candidate to root out wasteful spending to deal with less assistance from the federal government.
“There is fraud, waste and abuse, and the taxpayers are paying for it. That ends when I become governor. I will cut out the fraud, waste and abuse; we’ll cut taxes, we’ll cut utility bills, we’ll make it more affordable to live in the state of New York,” he said.
Andrew Rein, president of the Citizens Budget Commission, emphasized that New York’s complex budget issues are unlikely to be addressed by vague cuts promised by candidates running for governor.
“You have to make the right choices, the smart choices, and implement it well,” he said.
He stressed the state faces real issues heading into 2027: how — or whether — to continue one-time fixes to Medicaid eligibility stemming from H.R. 1 while keeping pace with its own massive spending and out-year budget gaps, all while fielding incoming new impacts from the federal spending bill.
The state will be forced to take on more of the cost of SNAP benefits. In addition, changes to Medicaid eligibility are expected to create new administrative burdens and potentially result in even more individuals being dropped after thousands lost coverage on July 1.
Both situations could result in individuals who rely on the programs losing coverage and ultimately straining community resources, local governments and safety-net systems.
“What happens to those people who are now food insecure if they lose benefits?” he said.
Rein said whoever wins in November will need to come in with a plan to deal with the complex nuances of the situation paired with the usual challenges of the state’s massive spending plan.
“More rapid recertification and participation requirements — if you do those poorly, people will lose coverage for minor paperwork issues. It’s incumbent upon the state to have a plan and implement that plan, and transition to the new system very well,” he said.
While the CBC encourages the next governor to resist income tax hikes to fill the void, Emily Eisner, acting executive director and chief economist for left-leaning Fiscal Policy Institute, said the state should expand its role, funding care for individuals who have already lost coverage and working to ensure the state can keep up with increased administrative costs.
“Providing state and city funds to shore up coverage and also to make the programs as good as possible in their administration so we can pull in the most federal dollars,” she said. “New revenue will be required if we want to put more state dollars into these programs.”
Neither candidate has been receptive to the idea of raising income taxes to expand state services, though Hochul has supported targeted revenue increases around the margins, including taxing luxury second homes in New York City.