City Grapples with Possibility of Losing $600 Million in Federal Funding

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When New York City lawmakers put together their $64 billion budget, they were hoping to get $600 million over the next three years from Washington in the form of Federal Medical Assistance Percentages, or, FMAP funding.

Now, Mayor Michael Bloomberg says the chances of getting that money do not look good: "We have every reason to get more and more worried whether FMAP money will come through."

 When New York City lawmakers put together their sixty-four billion dollar budget, they were hoping to get six-hundred million dollars over the next three years from Washington in the form of Federal Medical Assistance Percentages, or, FMAP funding.
Now, Mayor Bloomberg says the chances of getting that money is not looking good.

WNYC's Azi Paybarah was with the mayor today and tells Amy Eddings what this means and what the city's contingency plans are.

We've heard this before: the money's not coming, the money's not coming, then, all of a sudden, it appears. Why are we still talking about FMAP?

First, you can't rule out the chance the Washington will actually cut funding to New York City. Like the rest of us, they're not flush with money. The FMAP money was part of a horse-trading deal that they gave away to garner support for another bill that would extend unemployment benefits. So, it was on the table, now it's not. The kicker is, unemployed New Yorkers won't get the extended benefits, because New York doesn't have a high enough unemployment rate to actually qualify for that money.

Isn't Albany looking to get federal health care money too? This could affect the state and the city. Can you explain what's at stake here?

New York City could lose some money. The state is hoping to get this money, and they may not get it. That's $1.1 billion. What happens to New York City when the state doesn't get their money is the state has to close their budget. And where do they look to save that? They look to New York City.

So that means less municipal aid for New York City down the line if this FMAP money doesn't end up coming through. Do we have any reason to hope that lawmakers are going to change their mind? The spokesperson for Sen. Kirsten Gillibrand's office told WNYC yesterday that she was hopeful that this money would be returned and restored in the months to come.

There's a lot of hope in Washington.

I understand Mayor Bloomberg talked about this today: "We're not going to get bailed out by some Hail Mary pass, I think that's clear. And whatever happens to us is going to happen to the state many times over and unfortunately when something bad happens to the state, the ways they get out of the problem is to shift the burden to us."

This goes to your comment that when the state needs to cut it's budget one of the places it looks is it's aid to municipalities like New York City.  If the city doesn't get FMAP money, the $600 million, and has to make cuts what will get cut?

I don't have a great answer for you, but the answer right now is sort of everything. Or at least part of everything. City Councilman Lewis Fidler of Brooklyn says, "that's a lot of money and I think that puts everything back on the table. It's difficult for me to see how we can do another $300 million in cuts without there being layoffs.

We've heard this before, thousands of teachers being cut, that didn't happen. Is this realistic or is this just part of the pressure that local lawmakers are ratcheting up in order to get their lawmakers in Washington to take some action and get this money?

It's possible that a fair deal of this is gamesmanship, but it's the kind of gamesmanship that you can't ignore because there's a chance that this could be reality. They put these items in the budget to pressure the New York delegation to deliver this money. They say 'hey we're on the hook for this, you better come through with it and that's part of gamesmanship also.

Speaking of layoffs. Newark Mayor Cory Booker talked today about cutting that city's non-unionized workforce to four days a week, he's also planning on laying off 300 firefighters and police officers facing a $150 million budget gap there. But I've seen stories about New York City having thousands of unused desks and offices, the city cracking down on people with outstanding bills, contemplating charging a fee to take away your garbage--I don't know if that's the situation in Newark, but I know there's potential waste there. Can any of that reducing of waste make up for not getting this federal funding?

It's unclear if that can actually work. Some of the ideas were floated by the newly appointed Deputy Mayor Stephen Goldsmith, but the problem is the money may not be realized in time. The city is facing a nearly $300 million budget gap right now. And the kind of savings that Goldsmith is looking at is really long-term savings that we may not even see at the bottom line for a couple of years. 

What happens now?

Right now there's talks, more threats about layoffs. The City Council went through a pretty delicate budget battle.  They trimmed library services from six to five days, they prevented fire houses from closing, so everything seems like it's on the table.