New York Gov. David Paterson (D) on Monday proposed cutting this year's state budget by 1%, or $1.04 billion, including $506 million in Medicaid cuts, to avoid a looming budget deficit, the New York Times reports (Peters, New York Times, 8/12).
Paterson has asked state lawmakers to return to Albany, N.Y., on Aug. 19 to reopen the budget and consider his cuts or find their own solutions to avoid a budget deficit that is expected to reach $6.4 billion next year (Scott, New York Post, 8/12). If approved, this year's budget will be $120.2 billion -- a 3.9% increase over last year's budget but less than the inflation rate, which was 4.2% during the first half of 2008.
Paterson is proposing slowing Medicaid spending growth from the budgeted 4% to 1.7% this year (New York Times, 8/12). According to the Rochester Democrat & Chronicle, because the federal government pays for half of New York's Medicaid program and local governments pay 16% of the program's costs, "cuts in programs would have to be considerably above $1 billion to meet Paterson's state-savings figure" (Gallagher/Sharp, Rochester Democrat & Chronicle, 8/12). The Medicaid cuts include $269 million in funding for hospitals and nursing homes.