New York state Budget Director Blake Washington on Thursday provided an initial update on the impact federal spending cuts will have on New York. 

Washington said there will be a $750 million impact from Medicaid cuts in the final quarter of the state fiscal year in January. 

He said this is something the state should be able to manage through, but the state is also projecting a $3 billion loss in federal funds for the next fiscal year. 

This is on top of the already expected $7.5 billion budget gap. 

Washington said there are still a lot of unknowns with the impact of the bill that they're keeping an eye on. 

"We at the Division of Budget, but certainly from the governor herself, it's the human impact, the systems impact that we're most worried about here and those are the things we're going to be looking at as we move forward," Washington said.

"These are going to require some really challenging discussions in the next handful of months and into next year's budget," he also said. "We'll do it with the legislative leaders, but there's no taxing our way out of this, there's no way the state of New York can finance what's been hoisted upon us. There's no way any state can do that frankly, so there's going to be hard decisions as we move forward."

It's still unclear if state lawmakers will return to Albany this year for a special session to respond to aspects of the federal changes. 

State Assembly Democrats are meeting Friday to discuss the impacts.