New York State plans to cut spending on localities by $8.2 billion in fiscal year 2021, according to the state’s financial plan released on Saturday.
Featured on the list of localities is higher education, which includes CUNY, its state equivalent SUNY and financial aid programs like the Tuition Assistance Program. Other institutions to be hit with budget cuts include K-12 schools, public transit and Medicaid.
The planned spending cuts are based on a projected loss of tax revenue because of COVID-19. “The pandemic has caused economic activity in the nation and the State to drop abruptly and dramatically,” reads the document, which also cites a decline in tax revenue of 14% over the past two months and projects an average unemployment rate of over 11% for fiscal year 2021. The plan likens New York’s current financial situation to the Great Depression.
The state also plans for the loss of tax revenue due to the coronavirus to extend far beyond 2021, the document says. It expects a loss of $60.5 billion through fiscal year 2024.
These numbers are highly dependent on how the coronavirus pans out and whether the federal government sends economic aid, among other factors. Gov. Andrew Cuomo warned in a press briefing on Monday that if the federal government doesn’t send aid, it could result in cuts of 20% for various state institutions, including education. “You can’t spend what you don’t have,” Cuomo said.
While the governor proposes no tax increase to assuage this situation, some believe the state should raise taxes to counteract coronavirus losses. “8.2 billion in education cuts is devastating,” tweeted New York State Assemblymember Robert Carroll. “The State Legislature must reconvene and raise taxes,” he wrote. Assemblymember Yuh-Line Niou tweeted, “Please let us raise revenue.”
According to the document, the state’s Division of the Budget expects to submit a plan to the state legislature next month that will include precise projections for reductions in funding for localities.
In its four-year financial plan published earlier this year, CUNY projects mandatory cost increases of more than $100 million per year at senior colleges, which get most of their funding from the state. These projected cost increases are expected in the form of raises to university employees and increases in other expenses such as campus maintenance.
The university’s financial plan also includes tuition revenue increases in keeping with several years of moderately increasing CUNY tuition. Since state law prevents CUNY from increasing tuition by more than $300 each year, the university will not be able to offset the decrease in state funding with proportional tuition increases.