analyses Patkai's Budget

Preliminary Analysis of Gov. Pataki's Proposed FY'97 Budget

On Dec. 15th, Gov. Pataki released his latest budget proposals for the upcoming fiscal year which begins on April 1st. Although the Legislature can, and often does, modify the Gov.'s proposal, it will provide the basic framework for negotiations. In general, the Gov. claims the State faces a projected budget deficit of nearly 4 billion dollars, and in order to close the gap, he proposes huge cuts in social programs, primarily in health care (especially mental health), education, and public assistance. Much of this deficit results from tax cuts passed by the legislature last year at the Gov.'s insistence.

The Gov. has until Jan. 15th (30 days) to make "corrections" to his budget before sending it on to the Legislature for its approval. The Legislature has until April 1st to come to an agreement on a budget; however, this deadline is rarely met, and seems unlikely this year, too. Should the matter drag on into the Spring, such a circumstance will leave scant time for the Legislature to consider other non-budgetary legislation, (in health care) such as the Managed Care Bill of Rights, Medicaid managed care, hospital rate (re-/de-)regulation, funding of "safety net" programs, privatization, and experimental treatments.

Based on the Gov.'s "budget narrative" (the summary document which accompanies release of his detailed budget), the following cuts/changes are proposed:


The Governor claims that funding for the AIDS Institute and its programs is kept level from FY'96 (this year) --i.e., there will be no funding cuts. If so, this would make it the second year that the AIDS Institute would be spared by the Pataki administration. (Last year's budget was also kept level with FY'95, the last year of the Cuomo administration.)

However, the State is changing its method of accounting from an "accural" system to one which is "cash-based". (Unclear what this means; it may just be technical.) Advocates claim that based on their analysis, the AIDS Institute budget will actually suffer a $12 million cut resulting from this change. Accordingly, Commissioner Barbara DeBuono announced at a joint Assembly-Senate hearing on the portions of Gov. Pataki's budget concerned with health care held in Albany on Wed., Jan. 10th that the State would rectify this matter to add back $12 million to the AIDS Institute budget.

One main sticking point remains adequate funding for the State's HIV Uninsured Care Programs (i.e., ADAP, ADAP Plus, HIV Home Care, and HIV Nutritional Support). To date, the State has only contributed around $400,000 of its own monies to fund these programs. (Many other states contribute a more-significant percentage to their similar programs.) There has been a shortfall of $3.6 million for the State's ADAP programs this year (FY'96), with a significantly larger increase due this coming year, especially as protease inhibitors come on line and are (perhpas) added to the program.


Gov. Pataki proposes a whopping $1.1 billion cut in the State's spending on its Medicaid program. Given the linkage to the federal and local government via matching funds, such a cut would actually result in more than a $3 billion cut in Medicaid overall. Among the major targets, hospitals and nursing homes reimbursements will be reduced by $1.4 billion; home and community-based care by $420 million; mental health programs by $60 million; alcohol and substance abure treatment by $42 million, and worst of all, coverage for clients on "home relief" (re-dubbed by the Pataki administration as "Temporary General Assistance") by $500 million (one-half billion!)

Gov. Pataki proposes to double the numbers of Medicaid recipients enrolled in manadatory managed care, yielding supposedly $24 million in savings. (The State's voluntary Medicaid managed care program "sunsets" at the end of June, and must be renewed or re-vamped. Pataki has not yet submitted his proposal yet, so it's hard to understand how these changes will occur.) Based on the Gov.'s initial Medicaid managed care proposal (the infamous "1115 waiver" submitted the federal Health Care Financing Administration a year ago) dubbed "The Partnership Plan", so-called "special needs plans" will be created for, among other conditions, recipients living with AIDS, so that they will be exempted from mandatory enrollment in the so-called "mainstream" plans; however, asymptomatic HIV-infected recipients will NOT be exempted.

Under the pretext of eliminating "big government inefficiencies" and fostering "local innovation", Gov. Pataki proposes to turn over the Medicaid funding and responsibility for specific programs to the counties in the form of BLOCK GRANTS: home and community-based care (personal care, home health/nursing, long-term care, consumer-directed personal assistance, assisted living), mental health care, alcohol and substance abuse treatment, and the newly-dubbed "indigent medical care" (for the poor, the uninsured, those on ADC and Temporary General Assistance (home relief)). At the same time, he proposes funding cuts averaging around 20% for these programs. The net result is that local officials (Rudy Giuliani, Fran Reiter, Marva Hammond, et. al.) will be left holding the bag as to how to either make up the difference or ration the care. Simultaneously, they will be given the ability to re-structure the programs in ways which supposedly "make sense for localities", AND the State will cut back severely on its monitoring, oversight, and regulation.


Gov. Pataki proposes a 26.5% cut in the basic cash assistance grant. SSI and "medically needy" recipients seem to be unaffected. He also proposes to limit Temporary General Assistance (home relief) to 60 days (2 months) in any calendar year, and a 5-year total lifetime limit --INCLUDING MEDICAID COVERAGE, and "Aid to Dependent Children" (ADC) benefits to 5 years total. After that, clients will have to rely on optional, local "indigent medical care" programs (see above).

Gov. Pataki proposes a "local option" block grant of public assistance programs, that is, if the counties want to run their own public assistance programs outside the purview of strict state oversight, they may be able to do so.

Gov. Pataki proposes to end "Jiggets" rent grants and most "special needs" grants.

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