LEGALcurrents®

Overnight, it was announced that a deal had been reached at the federal level on a $2 trillion stimulus plan that includes checks of $1,200 checks going directly to many Americans, a massive boost to unemployment insurance which will increase an additional $600 per week for four months on top of what individual state’s unemployment programs offer, $367 billion loan program for small businesses, $500 billion fund for industries, cities and states, $150 billion for state and local stimulus funds, $25 billion for transit systems, and $130 billion for hospitals.

The Senate and White House have agreed to the bill and the House is reviewing now.  The Senate is expected to vote on the bill sometime today.  No word yet on when the House will vote on the legislation or if the House will ask for further changes.  Once passed and signed, it is anticipated that the individual checks will start arriving in mailboxes within a few weeks.

As the federal government worked on the federal stimulus bill, New York State lawmakers continued to work toward a final budget deal in New York.  During his press briefing today, Governor Cuomo stated that the federal stimulus bill would be “terrible” for New York and make it difficult to pass a final budget.  According to the Governor, the federal stimulus bill has only $3.8 billion for New York and $1.3 billion for New York City.  The Governor’s budget director has indicated that New York will need between $9 and $15 billion to cover lost income as a result of the Coronavirus pandemic.  The original House proposal released earlier this week had $17 billion in funding for New York.  The Governor stated that he has asked the New York House delegation to make changes to the Senate bill and fight for more funding for New York.

As we wait to see what the final federal bill will look like, there are still the existing state-level funding issues that occurred before the Coronavirus outbreak.  One of the main points that needs to be addressed is New York’s Medicaid budget.  Medicaid was already facing a budget deficit, which is why the Governor had convened the Medicaid Redesign Team II (MRT II) to make recommendations on how costs could be capped.  While those MRT II recommendations were made last week, leadership in both houses are now questioning how any cuts can be made to the facilities now at the heart of the Coronavirus fight.

These healthcare costs are being coupled with other financial challenges that New York is dealing with including massive new costs being incurred to fight Coronavirus and the loss of revenue from having New York on PAUSE in place.  The federal stimulus package will be crucial to New York figuring out a final budget.  If the funding level is closer to the House number, the decisions will be easier.  If the funding level is closer to the Senate number, there will be some very difficult decisions to be made.  This potential is leading the Governor and the leaders of the Senate and Assembly to explore a variety of options including emergency loans for New York, authorizing the State Dormitory Authority to seek a temporary line of credit, and expanding access to dedicated fund balances that have surpluses, which would allow New York State government to continue to function until this situation is resolved.

All of these conversations are happening now, and we anticipate that the negotiated budget could include some or all of these proposals to help New York address its financial situation.  It also seems as though there are some policy proposals still on the negotiating table including changes to the bail reform law, moving the Presidential Primary date to June 23 to coincide with the state and federal primaries, and potentially legislation to authorize surrogacy and ebikes and scooters in New York.

One more item of note from the Governor’s press briefing.  While the cases continue to increase, and there is not concrete data yet, there is evidence to suggest that New York on PAUSE is slowing hospitalization rates, which would mean that we are in fact bending the curve.


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