By Jimmy Vielkind

ALBANY, N.Y. -- Gov. Andrew Cuomo will propose a state budget Tuesday without knowing a big variable: how much federal assistance is coming to fill a deficit exacerbated by the coronavirus pandemic.

Robert Mujica, the Democratic governor's budget director, said in an interview that the prospects of significant aid increased with the coming inauguration of President-elect Joe Biden and Democrats winning control of the U.S. Senate.

Mr. Biden on Thursday proposed a $1.9 trillion coronavirus relief bill that sets aside $350 billion for state and local governments. U.S. Sen. Chuck Schumer (D., N.Y.), who is poised to become the chamber's majority leader, said in a statement he was pleased with Mr. Biden's proposal.

"We need to know what the whole picture is," Mr. Mujica said. "That will decide all of those things: the level of reductions that we need, if we need any borrowing and what tax increases, if any, we need."

Mr. Cuomo has said he would raise revenue by legalizing mobile sports betting and marijuana, but he has resisted calls from state legislators and labor unions to increase income taxes. On Friday, the governor said he was seeking $15 billion in aid from Washington, which is the size of the state tax revenue shortfall his office attributes to the pandemic.

The state budget division currently projects an $8.7 billion budget gap for the coming fiscal year, but the exact scope of the deficit is unclear. That figure doesn't account for additional federal aid for education and health care approved in December. It also assumes $8 billion of recurring savings in the current fiscal year, which ends on March 31.

Mr. Mujica said the state has saved $6 billion in the current fiscal year by holding back part of its planned payments to schools, local governments and social-services providers. The delays could become permanent cuts. The state has also saved $215 million by deferring pay increases for state workers that had been scheduled to take effect in April, Mr. Mujica said.

Andrew Rein, president of the Citizens Budget Commission, a nonpartisan watchdog, said these actions wouldn't necessarily become recurring savings. Mr. Rein estimates the coming fiscal year's deficit will be around $10 billion. He started by adding this year's $8 billion placeholder and the official $8.7 billion projection deficit projection for next year, and then worked down.

Some of the gap will be covered by $4 billion of education aid included in the federal bill approved in December, Mr. Rein said. Some is covered by better-than-expected tax revenue, as projected by state Comptroller Tom DiNapoli.

Mr. DiNapoli, a Democrat, said a stronger-than-expected recovery in the financial industry gave a rosier picture for the state. In a cash report released Friday, his office found tax receipts for the first nine months of the fiscal year are roughly $1.8 billion ahead of its projections.

"In spite of the pain that continues to be out there for many New York families, in terms of the overall revenue picture, it's come back better than we anticipated," Mr. DiNapoli said in an interview.

Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com

(END) Dow Jones Newswires

01-19-21 0714ET