Time now for our MUN moment. Federal
funding cuts from President Trump's One
Big Beautiful Bill are worsening New
York State's finances. According to our
next guest, the state's deficit jumps to
$34 billion over three years. Now, as a
share of total spending, that would be
the biggest since the global financial
crisis. I'm pleased to welcome back
Thomas Dapoli, comproller of the state
of New York to Bloomberg headquarters.
So, a $34 billion shortfall gets your
attention, and that's assuming that New
York State's revenues and expenses are
coming in as expected. How does revenue
and expenses look so far this fiscal
year as compared to projections?
>> Well, actually, this year it's looking a
little better, at least as far as the
first quarter and looking at the July
numbers. So, we're coming in higher than
projected. So, that's good news really
for the coming year. And our fiscal year
started April 1st. It looks like the
current year budget will hold together.
The most immediate impact of the federal
changes about $750 million hit as far as
health care in this year's budget. When
you look at the first quarter numbers,
we were up about $580 million. So, you
know, assuming the economy holds up, we
should be able to manage it. problem is
those outyear budget gaps as you point
out 34 billion uh in the outy years and
that 34 billion does not include the
full impact of the restructuring of the
federal state relationship which is
going to have an ongoing negative impact
as far as federal receipts that we've
depended on for many years particularly
on healthcare
>> so it doesn't reflect that at what point
do you get clarity on that
>> well I think we're all still trying to
analyze the fine print I mean I think
for next year certainly on healthcare
alone you're talking about at least $3
billion hit, you know, for next year.
Um, so that could make that gap even
larger than we have already talking
about over a $7 billion gap at least for
the next year. But that cumulative 34
billion uh is really of great concern.
What it really means is we need to start
planning now uh so that we can avoid uh
the kinds of changes either in terms of
cuts or revenue impact that could hurt
New Yorkers. Let me just stick on the
healthcare uh system for a bit here
because there are different estimates
for how much the one big beautiful bill
will affect uh New York state and
Governor Kathy Hokllo had said that it
would cost the New York healthcare
system about $13 billion a year. What is
your estimate? I I would go along with
that estimate and and I think part of
what you have to consider as well is not
just the direct impact of the of the
cuts and some of the administrative
costs that'll be increased,
>> but we anticipate that one and a half
million New Yorkers could lose
healthcare coverage. What's going to
happen in terms of the quality of their
life? And if folks don't have healthc
care coverage, they're still going to
show up at the hospital emergency room.
If they're not covered, going to have to
be paid for somehow. So, there may be
additional costs that we're not
factoring uh in yet. So there's still a
lot of uncertainty. Most of it though is
going to be on the negative side with
>> So is the state doing enough to prepare
itself for potential massive cuts to all
the services that it does provide.
>> You know, the state is not going to be
able to backs stop all the cuts. We just
talked about healthcare, but the
nutrition programs, the SNAP program,
what we used to call food stamps is a
big area. The changes as far as some of
the energy programs, some of what we had
been expecting for infrastructure,
dealing with climate change, you
accumulate all of that. I mean, you
could be talking about tens of billions
of dollars in terms of long-term cuts. I
wish we had taken a few more steps to
building contingencies in this year's
budget. We do have some reserves, but
we're not going to be able to backs stop
all of the shortfall that we're
anticipating.
>> So, Governor Hokll has said that she
will not approve any tax hikes in the
coming year, but with a $ 34 billion
budget hole over three years, does the
state need to raise taxes in coming
years?
>> That's going to be the negotiation
between the legislature and the
governor. I mean, obviously we do have a
concern in New York about taxpayer
migration. That has been an issue. We
don't want to lose our taxpayers. We
depend very much on the revenues coming
out of Wall Street. So, we hope despite
all of the uncertainty out there, Wall
Street still seems to be doing okay. We
get tremendous tax revenue from Wall
Street. So, we hope those markets will
stay strong. So, I think what you're
going to see for next year as we start
the budget process, it'll kick off in
November. Certainly when the legislature
and the governor reconvene in January,
they're going to have, I think, a much
tougher negotiation on the budget, on
spending questions, on revenue
questions, and I hope we don't resort to
more debt as a way to solve some of
these issues.
>> Right. Well, I mean, this also opens the
door for a lot of other voices here. And
I'm thinking here of the New York City
mayoral candidate, uh, Zoro Ramadani. He
won a broad swath of support, uh, on his
proposal to raise taxes on the rich. And
given these kinds of $34 billion
shortfall headlines, do you support that
proposal? Uh, Mumani's proposal?
>> Well, one of the advantage being control
is I don't have a vote in any of this.
What I do say is that the budget has to
be balanced. So, either you're going to
uh if if we have a shortfall, you have
to either cut programs or you're going
to have to raise revenue, whether that's
income taxes or other kind of taxes. I'm
hoping we also start to be a little
smarter about how we spend our money
because there are ways to save money
without hurting services, without
hurting people. I always say just look
at our controller audits on the Medicaid
program is one way to save significant
amounts of money. But, you know, keep in
mind for New York City, uh the state
legislature, the governor would have to
approve any uh tax hike as far as income
taxes. So, that proposal will be part of
the broader negotiation assuming that
proposal u comes up again. We'll see
what happens in the mayoral election
this year. All right, Thomas Dapoli,
thank you so much for joining us.