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state of new york 2010-11 executive budget briefing book governor david a paterson robert l megna director of the budget[close]
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state of new york executive chamber albany 12224 david a paterson governor january 19 2010 dear new yorkers since the day i became governor i have warned that new york is facing an inevitable fiscal reckoning the mistakes of the past squandering surpluses papering over deficits relying on irresponsible fiscal gimmicks to finance unsustainable spending increases have led us to a financial breaking point there are no more easy answers avoidance behavior is simply not acceptable federal stimulus funding is running dry we have already increased taxes on high-income new yorkers and those who have doubted the severity of our financial difficulties were proven wrong time and time again further spending reductions are both necessary and inescapable the executive budget i am proposing today continues the difficult process of confronting new york s new fiscal reality it attacks our substantial structural budget deficit through recurring spending reductions across every single area of state government given the gravity of the current situation there is simply no other option if we want to end new york s irresponsible pattern of boom and bust cycle budgeting the task of putting our fiscal house in order will no doubt be challenging but by the same token we must not let ourselves fall victim to the same type of special interest scare tactics that have torpedoed past attempts at fiscal reform in area after area new york spends more than any other state particularly health care and education and we will continue to do so even after substantial spending reductions while this executive budget is focused on the immediate issue of closing our 2010-11 deficit it also includes a number of critical long-term reforms that will help us build a stronger state this budget proposes an aggressive mandate reform agenda which will help deliver relief to local property taxpayers at a time when all levels of government are facing significant financial difficulties this budget proposes the most dramatic overhaul of new york s system of public higher education in a generation it provides suny and cuny with the freedom they need to achieve the promise of their full potential in both good economic times and bad www.ny.gov[close]
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this budget lays the groundwork for changing the way our state government does business through mergers consolidations better use of technology and other smart reforms in an era of diminished revenues we must find creative and innovative ways to deliver critical services to the public this budget lives within the stringent spending cap that i have proposed which will help us achieve a structurally balanced budget and return future surpluses directly to property taxpayers in the form of a progressive circuit-breaker this budget makes new york a nationwide leader in addressing two of the most critical public health issues facing the united states today it s well-documented that using cigarettes dramatically increases the risk of lung cancer heart disease and numerous other health problems claiming the lives of more than 25,000 new yorkers per year and costing our state s health care system more than $8 billion leading experts have also noted that soft drink intake is closely associated with obesity which causes serious diseases like diabetes and according to comptroller dinapoli costs our state s health care system more than $7.6 billion each year these staggering statistics which disproportionately impact our poorest and most vulnerable residents many of whom are children require bold and decisive action that s why i am proposing to finance critical health care investments through dedicated taxes that discourage consumption of these unhealthy products above all this budget is a blueprint for a stronger healthier and more fiscally responsible new york the only way we can emerge from this crisis is through shared sacrifice we must stand up and demonstrate that we can make the tough decisions necessary to address our financial difficulties with honesty forthrightness and candor that is exactly what new yorkers expect and deserve from their leaders sincerely david a paterson www.ny.gov[close]
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table of contents director s message .1 eliminating the deficit financial plan summary 5 health care 11 education and arts 23 school tax relief program star 33 local government 37 higher education 43 state workforce 49 public safety 55 economic development 63 environment and energy 69 transportation 75 human services 83 mental hygiene 91 revenue actions 97 key reforms and initiatives reforming higher education 107 mandate reform agenda 115 making government more efficient 119 a healthier new york 127 federal funding for new york 133 additional information legislation required for the budget 139 citizen s guide 149[close]
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director s message as governor paterson has consistently stated new york continues to face extraordinary fiscal challenges the scope of the economic and revenue difficulties our state has experienced over the last two years is unprecedented in recent history though substantial progress has been made toward putting new york s fiscal house in order the process of addressing a financial challenge of this magnitude is a long and difficult one as the governor has noted since his first day in office a sustained commitment to fiscal responsibility is required if we want to build toward future economic recovery the 2010-11 executive budget governor paterson is submitting continues his commitment to that effort this executive budget is built on two important principles they are principles that governor paterson believes will help us achieve a stronger healthier more fiscally responsible new york 1 we must institute substantial spending reductions across every area of the budget to address a fiscal crisis of unprecedented magnitude in recent years state spending has grown at an unsustainable rate financed by record revenues from wall street in the current environment these commitments are no longer affordable that s why governor paterson s executive budget institutes $5 billion in spending reductions across every area of the budget more than three-quarters of the overall gap-closing plan additionally it limits state expenditures to far below the amount permitted under governor paterson s proposed inflation spending cap this spending cap will provide a framework for future fiscal stability and return future surpluses directly to property taxpayers through a progressive circuit-breaker program 2 we must institute smart reforms that address new york s long-term challenges while the immediate task that this executive budget must address is eliminating an over $7 billion 2010-11 budget deficit we also cannot lose sight of the considerable long-term challenges facing our state we have a public higher education system burdened by the type of overregulation that threatens our ability to compete in the innovation economy we have placed numerous mandated cost burdens on local governments that drive up property taxes that s why governor paterson s executive budget proposes the most significant public higher education reforms in a generation and an aggressive mandate reform agenda that will provide relief to municipalities at a time when all levels of government must address substantial fiscal difficulties 2010-11 new york state executive budget 1[close]
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director s message additionally it is clear that new york faces a public health crisis that requires bold and decisive action we can no longer afford to ignore the grave public health risks associated with cigarettes and high-calorie soft drinks too many new yorkers are losing their lives to lung cancer heart disease diabetes and other serious health problems that s why governor paterson s executive budget would put in place taxes intended to discourage consumption of these unhealthy products as well as finance critical health care investments and even with these revenue actions tax and fee increases represent less than 14 percent of the overall gap-closing plan governor paterson s executive budget continues his efforts to put in place a more costeffective and efficient state government the reforms he has outlined are critical if we want to emerge from this crisis and achieve a strong economic and fiscal recovery governor paterson is confident that our state government can meet this challenge and move new york forward toward those important goals robert l megna nys budget director 2 2010-11 new york state executive budget[close]
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financial plan summary i overview the economic downturn continues to exact a toll on new york state s finances in the midyear update the division of the budget estimated that the general fund had a budget gap of $3.2 billion in the current year and $6.8 billion in 2010-11 the deficit reduction plan approved in december 2009 provided $2.7 billion in savings leaving a deficit of $500 million still remaining in the current year rather than proposing additional gap-closing measures in the current fiscal year when the range of options for achieving recurring savings is increasingly limited the state expects to carry the 2009-10 deficit forward into 2010-11 where it is addressed in the executive budget as part of a responsible multi-year plan that emphasizes recurring savings after accounting for the carry-forward of the deficit from 2009-10 and a reduction in estimated tax receipts based on updated information the executive budget needs to close a budget gap of $7.4 billion in 2010-11 and begin to address even larger gaps in future years of $14.3 billion in 2011-12 $18.3 billion in 2012-13 and $20.7 billion in 2013-14 ii executive budget financial plan the executive budget gap-closing plan fully eliminates the 2010-11 budget gap including the $500 million deficit carried forward from 2009-10 and reduces the gap in 2011-12 by more than one-half from $14.3 billion to $6.3 billion the gap-closing plan holds annual spending growth for all measures 0.7 percent in the general fund 0.9 percent in state operating funds and 0.6 percent in all funds substantially below inflation and the level permitted under governor paterson s proposed spending cap 2010-11 new york state executive budget 5[close]
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financial plan summary reduces spending for local assistance and agency operations the portion of the budget that can be controlled most effectively in the short-term by a combined total of more than $500 million compared to 2009-10 and maintains the state s rainy day reserves at $1.2 billion the table below summarizes the gap-closing plan the plan does not count on the united states congress approving additional federal aid for states either through an extension of fmap or in other forms which at this point remains highly speculative it also does not advance any proposals to close the budget gaps with deficit borrowing which would likely have an immediate adverse impact on the state s credit rating and add to long-term budget imbalance iii composition of the gap-closing plan overall 92 percent of the gap-closing plan is comprised of recurring actions that help lower the budget gaps in future years under the proposed plan the combined four-year gap 2010-11 through 2013-14 is cut in half declining from $61 billion to $29 billion the chart below summarizes the shares of the gap-closing plan by broad category 6 2010-11 new york state executive budget[close]
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financial plan summary recurring reductions to current-services spending total more than $5.6 billion1 and constitute 75 percent of the gap-closing plan the proposed reductions affect nearly every activity financed by state government ranging from aid to public schools to agency operations to capital commitments the gap-closing plan includes $1.0 billion in tax and fee increases as well as a plan that would permit grocery stores to pay a franchise fee for the privilege to sell wine 92 million tax and fee increases include a new excise tax on syrup used in soft drinks and other beverages 465 million a $1 per pack increase in the cigarette tax 218 million and assessments on health care providers 216 million all of which are earmarked to help pay for existing health care expenses in addition audit and compliance activities are expected to increase the tax base by approximately $221 million annually non-recurring resources which comprise less than eight percent of the actions proposed in the executive budget total $565 million importantly this is less than the annual growth 1 includes value of the drp see table and the explanation of the deficit reduction plan herein 2010-11 new york state executive budget 7[close]
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financial plan summary in savings achieved by recurring gap-closing actions which grow in value by approximately $1.2 billion from 2010-11 to 2011-12 as a result non-recurring actions have no adverse effect on the gap in 2011-12 because they are more than offset by the growth in recurring savings the table below summarizes the non-recurring actions iv impact on spending the executive budget proposal would hold spending by all standard measures to less than the two percent rate of inflation the table below summarizes the annual change in spending the annual spending growth in state operating funds is affected by the rapid annual increase in debt service and fringe benefits which are difficult to reduce in the short term due to existing constitutional statutory and contractual obligations 8 2010-11 new york state executive budget[close]
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financial plan summary category 2009-10 in millions 2010-11 in millions change in millions percent total state operating funds spending debt service fringe benefits state agency operations local assistance 79,182 4,922 4,436 16,018 53,806 79,927 5,766 4,873 15,565 53,723 745 844 437 453 83 0.9 17.1 9.9 2.8 0.2 the executive budget makes substantial progress toward structural balance but future budget gaps remain significant when federal stimulus funding ceases at the end of 2010 over $4 billion in costs will revert to the state and the fiscal outlook for the federal government makes it highly unlikely that aid will be extended at comparable levels accordingly governor paterson has asked lieutenant governor ravitch to develop a comprehensive plan to eliminate the remaining structural imbalance within four years the lieutenant governor working with a group of fiscal experts will develop and evaluate options to help bring the long-term growth in spending in line with the receipts 2010-11 new york state executive budget 9[close]
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