The Trump administration has rescinded $100 million in grants to the city Health Department used to fight infectious disease, deepening a crisis of funding that has already had officials scrambling to protect core public health functions.
The U.S. Department of Health and Human Services notified the agency on Tuesday that it was rescinding the funds, which the city has received since the pandemic began, “effective immediately,” Interim Health Commissioner Michelle Morse told Crain’s in a statement.
Notice from the feds came a day after officials testified at the City Council that a $200 million extension to spend the pandemic-era money was a silver lining in an otherwise bleak outlook for the agency’s central services. That money, used for immunization and surveillance and credited with the vaccination campaign that ended the high waves of the pandemic, is now cut in half.
The cuts are part of an $11.4 billion reduction in Covid funding from the Centers for Disease Control and Prevention, which the Trump administration abruptly announced on Tuesday, sending state and local health agencies into a tailspin. The cuts include another $300 million to the state Department of Health, the Office of Addiction Supports and Services and the Office of Mental Health, which Gov. Kathy Hochul said, “will be devastating.”
“Make no mistake: there is no State in this country that has the financial resources to backfill the massive federal funding cuts proposed by DOGE and Congressional Republicans,” she wrote in a statement.
The cuts exacerbate what had already been dire straits for the city’s Department of Health and Mental Hygiene, which is navigating the dual headwinds of looming federal cuts to Medicaid and other streams and the ongoing cessation of pandemic-era aid. The new cuts appear to combine both in a way city officials had not anticipated, digging a deep hole in the roughly $600 million the agency receives from the federal government, a significant chunk of its $2.1 billion budget.
Covid funding, which pays for a sizable portion of the city’s disease control work beyond the coronavirus, has already been drying up, forcing the department to triage ways to maintain a “the most critical parts” of its operations, said Morse at the Council oversight hearing on Monday – before the extension was cut.
It’s a “challenging example of the boom bust cycle in public health funding that makes it difficult for us to continue core services when funding only really increases during emergencies,” she told the Council, noting that the agency was already at that time working with the Mayor’s Office of Management and Budget to find ways to fill in the gaps.
The extension was meant to pay for public health lab testing, the city’s front line in detecting disease outbreaks, through July 2026 and immunization work for another year after that, according to Aaron Anderson, the department’s Chief Financial Officer.
“We’re very pleased that we’ve been granted an extension,” Anderson told members of the Council’s health and mental health committees at the time, who audibly expressed approval and relief after weeks of growing anxiety about the state of the city’s public health finances (Council Speaker Adrienne Adams, Finance Chair Justin Brannan and Health Chair Lynn Schulman condemned the cuts in a joint statement Thursday).
The lost funding supported the department’s disease investigation and rapid testing functions, Morse told Crain’s. It also paid for some of the city’s ongoing infection prevention work that helps keep viruses like Covid, flu and RSV at bay, she said.
The department did not immediately say how much of the $200 million has been spent so far or when the extension had originally been granted. The agency is still examining the full extent of the cuts and whether they overlap with reductions in state funding, some of which passed through to counties, said spokeswoman Chantal Gomez.
Even before the cut was announced, Morse and members of the City Council had been urging state lawmakers to restore approximately $60 million a year in public health funding from Albany that had been pulled under then-Gov. Andrew Cuomo in 2019. That funding, which was not included in the state budget proposals of Hochul or the State Legislature, would cover only a part of the cut funds.
