Last year the state moved to cut spending amid a $1.2 billion decline in revenue, leading to steep reductions in aid for programs that provide services to people with developmental disabilities. 

But on Wednesday, the state moved to restore what had amounted to a 20% withholding of funds first imposed last year amid the worst of the COVID-19 pandemic, the Office for People with Developmental Disabilities announced in a memo. But permanent cuts of 5% are still on the horizon for providers and much of their budgets will be shaped by what New York receives in federal aid over the next several weeks. 

"Although this action is subject to change, based upon the level of federal aid made available to New York State, your organization should continue to plan for the 5% reduction to be implemented," the agency wrote in the memo. 

Gov. Andrew Cuomo announced in January a similar move that withheld 20% in funds for schools in New York. 

The uncertainty has led to complications for service providers in New York as the pandemic has increased costs. Still, lawmakers accelerated the restoration of the funding first lost last year. 

"For caregivers and providers across New York there was no difference between a withhold and a funding cut," said Sen. John Mannion, the Democrat who leads the Senate Disabilities Committee. "The bottom line was they were receiving 20% less from the state to provide vital services - on behalf of the state – for the most vulnerable among us during a global pandemic."

The state budget is expected to pass by March 31.