The New York Comptroller’s office on Friday issued an analysis indicating the state faces a potential total $34.3 billion budget gap through 2029. At the same time the office issued a report on shortfalls in rural healthcare. Comptroller Thomas DiNapoli spoke to WAMC North Country Bureau Chief Pat Bradley on both topics, beginning with why his office studied rural health care challenges:
We look at many different issues facing New Yorkers. And back in 2023 we did kind-of a broad overview of issues facing rural counties of New York state to kind of build a profile. And then we've undertaken a series of what we call rural roundtables. And one of the highlights that came out of the rural roundtables we've done so far is the discussion of healthcare: access, quality and the unique challenges facing rural communities. So I said to the staff, you know, let's do a deeper dive. And so we look at 16 counties and we probably found or confirmed what many people in rural communities already know, which is that there's some real challenges in terms of access to care, because there are not the numbers of healthcare professionals in a number of categories, primary care physicians, pediatrics, OGBYN, dentists, mental health professionals. But I think it's fair to say, across the board, access to quality health care in our rural communities, particularly in the North Country, is an ongoing issue. And in the context of what's happening because of actions in the federal government coming out of Washington, what is already a challenging situation is only going to become more challenging.
Mr. DiNapoli, the rural health care shortage has been a long-term issue. Do you sense an increasing severity or were you surprised by any of the data that came out in this current report?
You're absolutely right. It's not a new issue. When we do these kind of reports we do a deep dive. We do the breakdown of the different specialty areas and the different counties. You know, if you want to have a solution to a problem, even a long standing one, you need the information. You need the data. So that's why this report is important and will build on future reports. One of the areas that surprised me was the severity of the lack of mental health care professionals. When you look at some of the national studies, suicide rates are often higher in rural communities. But I think that mental health issues is one that probably has not gotten enough focus in the past. I think another point that is key to underscore is the percentage of folks on Medicaid and hospitals that rely on Medicaid as far as paying for patients. Of the six hospitals in New York state that have the highest caseload of Medicaid patients, which is a key part of the reimbursement to pay for the hospital care, three of those are in our rural communities. So that underscores the fact that these Medicaid cuts that are coming down are going to be a challenge, particularly for our rural hospitals, some of which already are at a very tight margin. Although, as you know, to finally get the federal bill done they created this rural hospital transformation fund. But there's no clear information about how that money is going to be distributed. Are hospitals in New York going to benefit from it or is it going to be targeted, I hate to say it this way, to the red states that they needed to get the votes to get the bill done?
If they are able to distribute that funding, how much would New York need to potentially offset the other federal cuts.
I don't have a specific number for you. But I would assume, based on the totality of the cuts, it would not be an insignificant amount. I would hope New York would not be shut out because we're going to need the help. You know, some of these hospitals already, you know, are on the edge to begin with.
Well, it sounds like even if we can get a share of the money, it's not going to be enough to fully reconcile the cuts that have been made through the other federal bills.
I think it's a fair observation. And again, if you look at the fact that some of these hospitals already are pretty much on the edge to begin with. With Obamacare, Medicaid expansion, Essential Plan, we went from about 10% of our population without health care coverage to less than 5% without health care coverage. These federal changes are going to put us in reverse. We're going to have more people without health care coverage. What does it mean that they won't get health care? No, it means they'll show up at the emergency room. That'll become their doctor's office. Somebody's going to pay for it at some point anyway. It's not like it's going to get so it's just going to, again, complicate and exacerbate what is already a challenging situation. But it's going to be a challenging couple of years. I don't want to see institutions go out of business and I don't want to see people get hurt.
Well, Comptroller DiNapoli, there's been a lot of conversations about the impact on rural hospitals. Do you think, are you highly concerned, that some of New York's rural hospitals will go out of business?
I don't want to scare people, but I'm very concerned about that because a couple of them are on the edge already. So I think that concern is real and that's part of why we did this report is to make sure there is a sense of urgency about looking at these issues that already were there, only going to get worse. People may be breathing a sigh of relief right now because it's estimated, as far as the state, the hit as far as the health care cuts in this current year budget is about $750 million. But those those numbers are only going to get more dramatic as time goes on. We've got to get ahead of this issue and hope at some point for some change in direction coming out of Washington as well.
Your report lists a few recommendations to try to alleviate the health care shortage or the potential impact of the federal cuts. A couple of them include expanding and enhancing ways to bring people into this health care system and bolstering the workforce. And when I looked at that, been there, done that. How is your recommendation different?
Yeah. Well, I think what we tried to say is that there have been some valid models, both within New York and outside of New York, that have worked and we just, we need to do more. Not necessarily revolutionary, but we need to do more to provide telehealth, you know, as an opportunity. Can we do more as far as mobile clinics to provide services? Can we do more as far as providing more transportation options, you know, ways in which we can bring the services more closely to home, or bring the people to the services, providing more incentives for folks to go to medical school and then to locate their practice in a rural community. The purpose of our report is to say, hey folks, issues are still out there. We've got some proven models in terms of solutions. Let's make sure we're not giving short shrift to what we need to do to help our rural neighbors.
Comptroller DiNapoli, a release came out indicating that your office says the state will face a $34.3 billion cumulative budget gap through 2029. Why is this gap so severe?
Well, people shouldn't be surprised because when the budget was put together there were out year budget gaps. You know, one of the concerns that I identified when we did our analysis of the state budget process is while it's hard to argue with the policy choices the governor and the legislature made this year focusing on affordability, tax cut for the middle class, expansion of the Child Tax Credit, school aid and health care. But it was built-in that there were going to be out year budget gaps. And I said decisions being made on spending today need to also consider the sustainability of that spending over time. So not a surprise when Division of Budget updated the numbers those gaps are there. But the real point, Pat, that I want to make is that those gaps do not include the calculation of what these federal cuts are going to mean. So my concern is that the gaps may get bigger, probably because of the federal cuts. We also have an economy that's uncertain as to where it's headed. What's interesting so far, we've had one quarter, because remember our state fiscal year begins April 1, where the tax revenues come in higher than projected. So that's good news and certainly in terms of the initial cuts coming out of Washington more likely to be absorbed. But we don't know if that's the trend that's going to hold up. So in this economy you see the volatility in the stock market. Everybody's trying to figure out what the tariff policy is going to mean long term. You already saw the job numbers were going down, very limited job growth. So uncertainty about the economy coupled with the federal cuts, my worry is that the budget gaps may get bigger. So I think this year's budget will hold together. But I think next year's budget process, which will kick off in November not that far away, it's going to be a much more challenging budget landscape, many more difficult questions about spending and revenue in New York state. I think the budget landscape is going to be challenging to get through next year's budget and those out years.
The state budget gaps that you mentioned, are they more of a factor in this three-to-four-year budget gap overall than the federal fiscal policies?
They don't incorporate the impact of those federal fiscal policies. It looked at projected spending and projection of revenue based on current economic trends. If you layer in what we're also trying to calculate the phase of the federal cuts, unless the economy would pick up the expectation’s those gaps will get larger.
Can the state fill those gaps, considering this fiscal climate?
We're not new to having built in gaps. And when you consider the size of the state budget, $254 billion, are there ways to deal with gaps? Yeah. The comptroller always tends to be the lone voice that says don't do more borrowing, make the tough choices on spending and revenue, don't go more into debt. Will it be manageable? We always make it manageable. But what will be the implications of the decisions? And I think that's where the legislature and the governor, I think next year going to have a tougher time grappling with.
Well, we always also seem to hear about the fiscal cliff.
It's there and I think what the impact will be of the federal budget over time the cliff will get steeper. You know, right now, I think the economy is holding together but I think there's just so much uncertainty. I wouldn't count on it being a much stronger economy than it is right now unless we see a reversal in the trend on the jobs numbers. And again the uncertainty, big uncertainty, is the impact of the tariffs. The other issue for New York still is taxpayer migration. We have been losing some of the taxpayers at the higher end. And when you consider the fact that those at the higher end pay a bigger percentage of the personal income tax revenue, our state budget has become more dependent on personal income tax revenue as a prime revenue source than ever before. So there's always a concern about what's the tipping point where we're losing too many of the folks at the upper end that pay a big percentage of that personal income tax revenue. So there's a lot of factors that go into this whole landscape. It's going to be a more challenging landscape next year.
The Comptroller’s office says the $34.3 billion budget gap is $7 billion higher than projections made in the January release of the Fiscal Year 2026 Executive Budget Financial Plan.
