Fiscal Cliff Cuts Would be Deepest for New York's Disadvantaged

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New York stands to take a $600 million hit in 2013 if Congress fails to avert automatic spending cuts slated for January, which would fall disproportionately on poor and middle-income New Yorkers, according to a new study. 

The report released Thursday by Comptroller Tom DiNapoli identifies over $200 million in cuts to education programs, $137 million lost to Health and Human Services programs, and hundreds of millions more in federal housing, transportation, and other areas of assistance.

This all comes as part of sequestration, a measure to impose across-the-board reductions in spending to reduce the deficit if Congress can’t agree on a plan of their own.

“Very simply, that translates into cuts in special education, AIDS treatment, health care, public housing, capital investments for transportation–essential services that we need in New York, especially for our neediest families,” DiNapoli said at a breakfast forum on Thursday morning.

Grants and other funding for education would face the largest cuts. The most money would be saved from reductions in Title I, which directs funds to schools and school districts with a high percentage of students from low-income families. DiNapoli estimates an $86 million cut to the program.

“Title 1 and IDEA are the two most concerning right now,” said Lana Ajemian, president of the New York State Parent Teacher Association. “Those districts are more dependent on federal aid.”

An earlier estimate by the National Education Association puts the loss to Title I at $90 million. The second highest reduction comes from IDEA grants for special education, to the tune of $62 million.

Most of the stress on K-12 education wouldn’t be seen until late 2013 or even 2014, Ajemian said. When the state’s education apparatus starts to feel those cuts, it will be in the form of larger class sizes, curriculum changes, job losses, and changes to programs like professional development.

The first education program to be affected by sequestration would be Impact Aid, which goes to school districts containing tax-exempt federal property.

“Military families, children on Indian reservations or federal housing, that’s gonna be the first hit that you see out of the gate in January,” Ajemian said.

DiNapoli’s study also notes a $153 million cut to National Institutes of Health funding in New York, a loss bemoaned by the state’s medical schools and research hospitals. Representatives from the state’s congressional delegation including Charles Rangel, Jerrold Nadler, and Carolyn Maloney went to bat for preserving these funds earlier in the week, arguing the cuts would equate to an overall loss of $1.2 billion to the state’s economy and significant job losses.

Reps. Maloney and Nadler have also joined Congressman Peter King and New York Senators Kirsten Gillibrand and Charles Schumer in calling for the 9/11 Victims Compensation Fund to be protected from the sequester. While not a source of state funding, the VCF, enacted by the Zadroga Act in 2010, was set up to compensate victims and first responders suffering from 9/11-related illnesses and injuries. It would be cut by almost $40 million in 2013.

“What might be promised to John Smith the firefighter, he might not get because of that cut,” said John Feal, a first responder who heads the FealGood Foundation and has been a staunch advocate for the Zadroga Act.

Feal doesn’t think the sequester will happen, though. And if it does, he expects either Senator Gillibrand or Schumer to introduce legislation exempting the VCF from cuts in January.

The state’s congressional delegation can’t do that with every program, though, and in some cases the ramifications of automatic cuts remain unclear. Funding for museums and libraries faces sequester, but officials at the national level are unsure whether cuts would come to states across the board or would be allocated in some other way. New York is also one of nine states that participates in the National Birth Defects Prevention Study—State Health Department officials don’t know whether their funding for the study will be eliminated, or simply reduced.

In some places, the crystal ball is cloudy. In others, it's perfectly clear. Comptroller DiNapoli said there was a recurring theme to what we know about how sequestration will impact the state. 

“The fiscal cliff threatens all New Yorkers, but particularly middle class and lower income families who I think would bear the brunt of these combination of tax hikes and cuts to very, very critical programs.”

Ilya Marritz contributed reporting.