The New York State Assembly and Senate are working on a tentative plan to return to session in the next few weeks. At this time, there is no definitive agenda or details on how long the two houses would remain in session. The thought is that this session would be focused on Coronavirus relief legislation though there is some push to take up other issues as well if there is a return. The return will be virtual and will take advantage of their newly passed ability to conduct sessions remotely. The logistics of this remote session are still being worked out.
If the return is in the next few weeks, the timing of this session would also coincide with the first review of the state’s current financial situation. As you may recall from our budget update, the final enacted budget mostly used the funding numbers proposed by the Governor. However, language was included that there would be reviews of the state’s finances in periodic intervals and as a result of those reviews, budget changes could be recommended. The Director of the Budget will make the initial recommendations and send them to the legislature for review.
The two houses then have 10 days to either pass a joint resolution with their own recommended changes, or they can do nothing and accept the recommendations sent to them. The first review period begins on April 30, so if the two houses were to return in the next few weeks, it will be during the first financial review period, and it may mean that the legislature will take their own action with regard to any potential budget cuts.
Per the Governor’s daily briefing today, the state is currently facing a $13.3 billion budget deficit. Projected out over the next three years, from 2021 - 2024, there is a projected budget deficit of $61 billion. The Governor has made very clear that New York must receive funding from the federal government to help offset these deficits. When the Governor met with the President this week, this was a topic that was discussed, and the Governor reported that the President was open to funding for states and localities to address the budget deficits caused by the Coronavirus.
Since that meeting, the Majority Leader of the U.S. Congress has indicated that he is not inclined to support a bill to help fund state and local governments. There has been significant pushback to this position, so we will be watching carefully to see what actions are taken on the federal level. Without action on the federal level that will send relief to New York, the Governor has indicated that there may need to be at least a 20% funding cut to schools, localities, and agencies in this first financial review period.
We will keep you posted on the legislatures return and the budget situation.
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