Gov. Andrew Cuomo's call for New York City to pay much more toward the City University of New York system and Medicaid is a financial gut punch, according to a municipal bond analyst.
"It's an additional burden on the city," said Howard Cure, director of muni bond research for Evercore Wealth Management.
Cuomo on Wednesday proposed his $145 billion budget for fiscal 2017, which state lawmakers must approve by March 31. By some estimates, CUNY and Medicaid cuts could blow an $800 million hole in the city's balance sheet.
"You worry about the city's budget," said Cure. "The mayor is trying to set aside some rainy day money and I'm somewhat concerned that it could fluctuate."
De Blasio intends to speak before lawmakers in Albany in two weeks.
"Clearly, if something actually is going to undercut our ability to provide health care to our people or to support our students, I'm not only going to speak up, but work hard to address it," the mayor told reporters in Albany late Wednesday afternoon. "But it's premature to go into detail because we're only seeing it for the first time now."
The city for years has paid minimally toward CUNY's budget. The city now stands to pay 30%.
Cuomo's plan would require the city to cover its own Medicaid-expense increases. The state had been covering the extra costs for the city and counties after a law passed in 2011, early in the governor's first term, designed to cap property tax hikes at 2%.
"The state's philosophy is that the city has a surplus and is not subject to the cap," said Cure.
A big plus for the city, according to Cure, is the Albany savvy of city budget director Dean Fuleihan, once a high-level advisor to former state Assembly Speaker Sheldon Silver.
"New York City has a really great budget director," said Cure. "Dean Fuleihan has experience working on the state budget inside and out."
The city must also budget $2.5 billion – quintuple its previous amount -- to the $29 billion five-year capital program of the Metropolitan Transportation Authority, which operates the city's subways and buses, two commuter rail lines and several bridges and tunnels.
Under a deal Cuomo brokered last year, the governor committed $8 billion of state money, subject to legislative approval. A state review board must still approve the MTA capital plan.
Wednesday's budget news resurrected discussion of a Cuomo-de Blasio feud that has simmered over the past year.
De Blasio said Wednesday that he and his budget staff will comb the finer points of the budget before speaking to the legislature.
"I think at least in the Assembly the city has some friends," said Cure. "The mayor does not have a lot of friends in the Republican-controlled Senate."
Cuomo, as part of his $10.4 billion plan to combat homelessness, said the state would partner with state Comptroller Thomas DiNapoli to audit homeless shelters statewide, while New York and Buffalo city comptrollers Scott Stringer and Mark Schroeder, respectively, would review and inspect shelters in their cities.
Calling homeless shelters "our invisible city," Stringer has already begun an audit of city shelters.
"Increased state support is critical to addressing this challenge," he said. "As always, my office will be carefully reviewing the proposed budget and will present testimony in Albany later this month."
