Developers, construction companies, and municipalities should be aware of a few initial indicators from the recently passed NYS 2021 Budget.
Spending Cuts: Most significantly, the Budget reduces spending by $10 billion and empowers the State
Budget Director to develop a plan for across the board reductions and implement a reassessment “as
necessary” throughout the calendar year.1
It is not yet clear which programs the State Budget Director
will cut and if those cuts will include further reductions to incentive programs on which developers and
municipalities currently rely.
Changes to Spending: The Budget includes some flexibility to control spending through the year if
revenues fall even further or raise spending if revenues come in higher than anticipated or the federal
government delivers support that offsets the state’s revenue losses. Of note, the Department of Budget
has authority to adopt discretionary spending cuts if there is a 1 percent revenue shortfall that the
Legislature fails to address.
Aid & Incentives for Municipalities: The Budget provides zero aid for small government assistance and
reduces other financial assistance by 68%. On top of this, the Department of Budget has the authority
to delay or withhold local payouts if reassessment revenues fall further. These reductions do not
account for a further reduction of up to 1% of the State Operating Funds disbursements (approximately
$1.02 billion) if the DOB identifies a potential General Fund imbalance of $500 million or more in the
current fiscal year.
We break it all down for you from spending cuts to the increased CHIPS competitive-bid.
We are trained to manage risks and solve problems for you. If you have any questions, please reach out to the Project Development team member you work with most often.