Budget Update: Focus on Minimum Wage and Medicaid

NYAPRS Note: Here’s a brief digest on the most recent developments as reported by the Journal News, Times and Time Warner (see links below), mainly on minimum wage and Medicaid issues. While it appears a minimum wage deal is near, there’s no indication about an agreement on pumping state funds into nonprofits to help them keep pace with such increases. No word also on whether we’ll see the $75 million infrastructure investment in community services or on Raising the Age of criminal liability to age 18. Stay tuned….

On time Budget? Despite optimistic predictions earlier in the day that state leaders would reach a deal on the state budget, both houses ended their sessions on Tuesday evening without any announcements of a breakthrough. Legislative leaders met with Gov. Andrew Cuomo for second time late afternoon in the state Capitol on Tuesday to try to negotiate a final agreement on such issues as the minimum wage and paid family leave.

And while it looked like the bills could have been printed starting Tuesday (several budget bills like state operations and debt service apparently are), talks went downhill after Governor Cuomo and Assembly Democrats sparred over the governor's proposal to shift $250 million in Medicaid costs onto New York City. The budget deadline is late Thursday night and Cuomo is expected to waive the three-day aging process for bills by issuing messages of necessity.

$15 Minimum Wage Hike (Journal News)

The budget is expected to include a $15 an hour minimum wage in New York City by the end of 2018, with a $12.50 wage upstate by the end of 2021 that would then be tied to an economic-growth formula -- likely bringing an upstate $15 minimum wage in 2023. But Westchester and Long Island might get to a $15 wage more quickly, perhaps by mid-2021 as initially proposed by the Democratic governor.

James Parrott, deputy director for the labor-backed Fiscal Policy Institute, praised the compromise, saying that 61 percent of the workers who would benefit from a $15 wage would see that by 2021 -- or about 2 million workers.

"Now we're discussing how much and by when and where," Cuomo said.

…Cuomo initially wanted a $15 minimum wage statewide by July 2021, but he has been facing opposition from upstate Senate Republicans and business groups. Cuomo said he didn't expect a carve out from the minimum wage for any sector, such as farms, as initially discussed. But he said the sides are talking about larger business tax cuts than initially proposed.

Cuomo warned that excluding farms or small businesses from the $15 wage would lead to inequities in local economies, saying, "Those small businesses are still in competition with big businesses" and would be forced to raise wages to attract employees.

The sides were also talking about a "safety valve" to give the governor the ability to stop the minimum-wage increases if the economy soured.

Already Cuomo has unilaterally installed a $15 wage for state workers and fast-food workers by the end of 2021. New York's current minimum wage is $9 an hour. (Gannett, Journal News)

New York Times

As for his minimum wage plan, Mr. Cuomo still faces resistance from the Republican-controlled State Senate. On Monday, the Senate’s deputy majority leader, John DeFrancisco, described the Republican caucus as sharply divided. “We’re all over the place,” said Mr. DeFrancisco, who has opposed the $15 wage as a “political number” that would have a deleterious effect on the upstate economy. “All over the park.”

Medicaid (Journal News)

(Amidst a deadlock between the Governor and Assembly Democrats about big cuts to NYC Medicaid program)…Cuomo revealed (a possible compromise) the state expects counties to find $250 million collectively in savings from Medicaid, the health-insurance program funded by state, federal and county governments. The state in recent years has installed a Medicaid cap for counties, meaning they no longer pay for the growth in the program.

Cuomo contended that counties no longer have an incentive to trim costs because the state is picking up the tab. "When you no longer have any economic stake, are you still as judicious in spending money?" he said. "Because now you are basically writing checks on the state’s account

Paid leave (Journal News)

Democrats and Cuomo have been pushing for a 12-week paid-family-leave program as part of state budget negotiations for the fiscal year that starts April 1, and Senate Republicans appear set to agree to the plan after getting some concessions.

…The benefits would be phased in and ultimately provide workers who take leave up to two-thirds of the average salary for 12 weeks in New York. Workers would have about $1 a week taken out of their paychecks to fund the program.

But there appears to be some compromise. The program wouldn't be funded by the New York State’s Temporary Disability Insurance, as Assembly Democrats proposed, and the sides are talking about a longer employment requirement to be eligible. Cuomo, for example, had proposed making the leave available to employees after four weeks on the job.

Federal law provides for 12 weeks of unpaid family leave and exempts employers with fewer than 50 employees. It also requires employees to be on the job for a year before being able to take the leave. (Journal News, Gannett)

Education Aid

Cuomo originally proposed a 4.3 percent increase in school aid, to a total of $24.2 billion. But lawmakers want more and were talking about getting additional aid in the final package.

"We are comfortable that we’re going to have a record increase in aid to education, which should be a focal point in everything that we do,” Senate Majority Leader John Flanagan, R-Suffolk County, said.