COVID-19 Impacts State Budget Process, Clouds Spending Plan

By Ronald Kennedy & Adriel Colon-Casiano

Capitol Building

The New York State Legislature approved a $177 billion state budget on April 3. The spending plan — which also included actions on a range of policy issues — was adopted shortly after the April 1 deadline, and the process by which it is developed and adopted were heavily impacted by the effects of the COVID-19 public health crisis.

The final budget is the product of a complex four-month negotiation between the executive and the 213 members of Legislature, and the fiscal implications of the COVID-19 pandemic added huge complications in the last and most pivotal month of discussions.

Even before the public health crisis, the Governor’s initial budget proposal  cut state operational spending and programs in response to initial figures in January indicating a deficit in the billions of dollars. As the budget process unfolded, it became increasingly clear that the economic fallout from the coronavirus will add considerably to the state’s budget deficit. In order to address potential funding shortfalls in the coming year, the enacted budget gives unprecedented authority to the state budget director to make spending reductions.

The public health crisis also had a huge impact on the budget process, during which legislators typically work together in close quarters to develop and finalize budget language. Some legislators cited these challenges when issues on which consensus seemed imminent were dropped from the final agreement. In response to the practical problem of in-person voting, the State Senate and Assembly amended their rules to allow for remote voting by legislators.

Changes in Bail Reform, Discovery Laws

Several matters of particular interest to NYSBA members were addressed in the enacted budget. Historic bail reform measures adopted in 2019 were amended to add sex trafficking, money laundering, child pornography, repeat offenders, and crimes that result in death to the list of offenses that are bail-eligible. Bail can now be conditioned on a mental health referral. Crucially, however, these amendments did not add an element of judicial discretion, a point that Assembly supporters of the initial reforms appeared unwilling to concede.

The enacted budget also extended the period of time in which a prosecutor must provide discovery documents to the defense and appropriated $40 million for costs associated with enhanced discovery measures adopted in 2019.

A new domestic terrorism law will classify an act of domestic terrorism motivated by hate as an A-1 felony punishable by life in prison without parole. A prohibition on gender-pricing discrimination was enacted. Also enacted was a requirement that employers with over five employees must provide paid sick leave.

The final budget legalized gestational surrogacy in New York. Forthcoming regulations will establish rules to hire a surrogate and to guarantee all parties are fully informed and consent. Additionally, the law will create a surrogate’s Bill of Rights to ensure surrogates have control over healthcare decisions, and will streamline the non-birth parents’ path to adopting children delivered by surrogates.

Medicaid Changes

As part of the budget process, Governor Cuomo in January convened the Medicaid Redesign Team II, which proposed cost-saving changes to the state’s Medicaid program. One significant new provision included in the final spending plan relates to Medicaid eligibility and will allow a 30-month look back relating to asset transfers prior to application for Medicaid-funded community care.

The final budget also included statutory changes to limit the liability of health care providers in the context of the COVID-19 crisis.  The new provisions increase the standard of liability to willful or intentional criminal misconduct, gross negligence, reckless misconduct or intentional infliction of harm.

Legislative leaders have stated that they are willing to return to session later this year in order to consider other legislation, but at this time the legislative calendar for the coming months is unclear.

Ronald Kennedy is NYSBA’s director of government relations. Adriel Colon-Casiano is an assistant director of government relations.

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