[NYAPRS Enews] Paterson New Cut Proposal Targets PROS, OMH Housing, TL, State Worker Furloughs

[Harvey Rosenthal]

NYAPRS Note: Stay tuned for what NYAPRS and you can do to respond to
newly proposed cuts by Governor Paterson that would slow the development
of PROS and OMH funded housing, as well as to Timothy's Law. 

 

April 27, 2010   Governor Paterson Calls on Legislature to Pass
Executive Budget, Outlines Gap Closing Plan

Governor David A. Paterson today called on the Legislature to
immediately pass his proposed Executive Budget in a simple up or down
vote and outlined an additional $620 million in actions that, when
combined with his Executive Budget, present a fully balanced gap closing
plan and will put New York on the path to fiscal recovery. Absent
passage of a responsible budget, Governor Paterson will call on State
lawmakers to voluntarily begin five-day sessions next week.

 "Every day that passes without an enacted budget, we lose savings from
the recurring spending reductions and revenue proposals that I laid out
in my Executive Budget. It has been nearly four weeks since the 2010-11
State fiscal year began, and we can no longer delay making the difficult
decisions required to put the State back on path toward fiscal
stability," Governor Paterson said. "New Yorkers deserve to know that
their elected officials are working diligently to protect the State's
finances, and the fiscal situation demands our full attention. If the
Legislature does not stay in Albany to pass a budget, I will be forced
to consider all of my options at that time, including compelling them to
stay."

 Governor Paterson put forward a balanced Executive Budget on January 19
and made amendments to his plan on February 9. Since then, an additional
$620 million gap has emerged that must be addressed in the 2010-11
fiscal year. While State law requires the Governor to put forward an
Executive Budget each year, the Legislature is empowered to enact
additional spending reductions as necessary and no additional Executive
Budget plan is required for the Legislature to act.

 In an effort to spur Legislative action on the budget, Governor
Paterson has proposed additional measures to close the $620 million gap.
This plan includes approximately $324 million in additional spending
reductions - approximately $100 million of which were proposed by the
Legislature, - $211 million in revenue actions and $85 million in other
actions. The Governor called upon the Legislature to take up his budget
proposal, or to immediately identify and enact alternative means for
closing the deficit that rely on real, recurring actions.

 "As elected representatives, it is our job to make the difficult
decisions that may be unpopular today, but that will help us turn the
corner on this crisis," the Governor added. "Budgeting requires
discipline and sacrifice. New Yorkers have already sacrificed a great
deal; we must now enact a responsible budget that honors that
sacrifice."

 For the past four weeks, Governor Paterson has put forward bare-bones
emergency budget bills that include provisions for only the minimum
spending necessary to ensure the orderly operation of State government.
Under the provisions of his emergency budget bills, the Governor has
suspended a scheduled four percent salary increase for most State
employees and halted State funding for capital construction projects,
among other actions.

----------------


Governor Paterson today proposed $620 million in additional savings
actions that, when combined with his Executive Budget, present a
fully-balanced gap closing plan.

 

Major components of the Governor's plan include:


Spending Reductions (2010-11 Savings: $224 million; 2011-12 Savings:
$128 million):

*	Reduce Member Item Deposit (2010-11 Savings: $50 million): The
2010-11 Budget deposit into the member item accounts would be reduced by
$50 million. The reduction would be split proportionately across the
Governor's and the Legislative accounts. 
*	Reconcile 2009 Medicaid Inflationary Rate Increases (2010-11
Savings: $42 million): Current statute requires the State to reduce
hospital, nursing home, home and personal care rates to reflect final
2009 CPI minus one percent for the period January through March 2009.
The 2009 CPI was finalized at the end of February 2010 at a negative 0.4
percent, which would result in a 1.4 percent reduction to provider
rates. This recovery will result in $42 million in one-time 2010-11
Medicaid savings. 
*	Eliminate Reimbursement for Timothy's Law (2010-11 Savings: $40
million; 2011-12 Savings: $50 million): The remaining Timothy's Law
subsidy - paid directly to insurance companies and valued at
approximately $30 per person annually for 1.6 million individuals -
would be eliminated.
*	Eliminate New Technology Seed Fund (2010-11 Savings: $25
million): Funding for the New Technology Seed Fund, which the 2010-11
Executive Budget proposed creating, would be eliminated.
*	Amortization of Judiciary Pension Costs (2010-11 Savings: $25
million; 2011-12 Savings: $25 million): Assumes the Judiciary will
participate in the Executive Budget proposal to amortize pension costs.
*	Reduce Comprehensive Attendance Program (2010-11 Savings: $14
million; 2011-12 Savings: $14 million): The 2010-11 School Year level of
funding for the Teachers of Tomorrow program, which provides grants to
school districts for the recruitment and retention of teachers,
especially those in the areas of math and science, would be reduced by
$5 million, from $25 million to $20 million.
*	Reduce Council on the Arts Grant Funding (2010-11 Savings: $10
million; 2011-12 Savings: $10 million): The New York State Council on
the Arts awards approximately 2,300 grants per year to not-for-profit
arts and cultural organizations through a competitive application
process. After this reduction, $25.2 million would be provided for these
grants in 2010-11.
*	Reduce Tuition Assistance Program (TAP) for Religious
Institutions (2010-11 Savings: $6 million; 2011-12 Savings: $9 million):
The 2010-11 Executive Budget proposed to lift the statutory prohibition
against providing TAP to otherwise income-eligible students at certain
specialized faith-based institutions that primarily offer religious
instruction or train members of the clergy. This change would continue
to authorize these students to receive TAP, but at an award level that
is 50 percent of the regular TAP schedule.
*	Reduce DOH Tobacco Prevention Program (2010-11 Savings: $5
million; 2011-12 Savings: $5 million): This proposal would reduce
funding for the Tobacco Prevention Program from $57 million to $52
million. The program supports a variety of tobacco use
prevention/cessation initiatives. When coupled with the proposal in this
package to increase the tax on certain tobacco products (see section on
Revenue Actions below) the overall effectiveness of the State's efforts
to reduce the tobacco use by adults and adolescents will not be
impaired.
*	Delay State Capitol Roof Project (2010-11 Savings: $4 million;
2011-12 Savings: $10 million): The Office of General Services has
reevaluated the State Capitol roof rehabilitation project and plans to
focus on the completion of the roof of the North Tower, with remaining
phases of the project being deferred.
*	Reduce Teachers of Tomorrow (2010-11 Savings: $3 million;
2011-12 Savings: $5 million): Funding for Teachers of Tomorrow program,
which provides grants to school districts to attract qualified teachers
to hard-to-staff areas by providing awards and stipend to teacher
candidates, would be reduced by $5 million in the 2010-11 school year.


Cuts Identified by the Legislature (2010-11 Savings: $100 million;
2011-12 Savings: $80 million): 

*	Additional Federal Medicaid Funding (2010-11 Savings: $25
million; 2011-12 Savings: $25 million): As announced by the Obama
Administration in February, the federal government will provide fiscal
relief to states by reducing the Medicare Part-D cost sharing payments
for the 27-month ARRA-authorized enhanced Federal Medicaid period ending
in December 2010. The State will realize $25 million in savings in
addition to the $1.06 billion 2010-11 benefit assumed in the Financial
Plan from the extension for Medicaid spending.
*	Reduce NYSHELPs to Reflect Updated Implementation Schedule
(2010-11 Savings: $19 million): As result of a more gradual
implementation schedule, the full amount of State funds required to
launch the program were less than originally projected. NYHELPs will
make available $95 million of low-cost fixed rate loans for the 2010-11
academic year. 
*	Reduce NYSTAR Innovation Economy Matching Grants Program
(2010-11 Savings: $19 million. 2011-12 Savings: $18 million): The
Executive Budget recommended a $100 million appropriation to support a
10 percent State match to any New York-based research institution that
successfully receives  Federal research awards financed through the
American Recovery and Reinvestment Act (ARRA).  The original $100
million program would be reduced to $29.5 million, which would provide
NYSTAR adequate funding for those projects requiring a State match as a
pre-condition for the ARRA award.
*	Judiciary Budget Reduction (2010-11 Savings: $18 million;
2011-12 Savings: $18 million): General Fund support for the Judiciary
would be reduced by $18 million.
*	OMRDD Additional Community Services Program Cut (2010-11
Savings: $5 million; 2011-12 Savings: $5 million): This action reflects
further delays in developing planned not-for-profit-operated residential
and/or day services opportunities in the community.
*	OASAS Additional Community Treatment Program Cut (2010-11
Savings: $3 million; 2011-12 Savings: $3 million): Funding would be
reduced for not-for-profit-operated chemical dependence and problem
gambling outpatient treatment programs. 
*	OMH Additional Adult Services Program Cut (2010-11 Savings: $3
million; 2011-12 Savings: $3 million): This action reflects further
delays in residential development.
*	OMH Reduce Personalized Recovery Oriented Services (PROS)
(2010-11 Savings: $2 million; 2011-12 Savings: $2 million): This action
reflects slowing the conversion of Continuing Day Treatment programs to
PROS programs.
*	Eliminate the Smart Scholars Program (2010-11 Savings: $2
million; 2011-12 Savings: $2 million): State funding for the Smart
Scholars Program would be eliminated.
*	Eliminate the Hoyt Children and Family Trust Fund (2010-11
Savings: $1 million; 2011-12 Savings: $1 million): State support for
this fund would be eliminated in order to focus limited resources on
addressing immediate situations of abuse and family violence.
*	Reduce Local Social Service District Training Funds (2010-11
Savings: $1 million; 2011-12 Savings: $1 million): State reimbursement
to local social services districts for training costs would be reduced.
*	Reduce State Support for the Olympic Regional Development
Authority (ORDA) (2010-11 Savings: $1 million; 2011-12 Savings: $1
million): State support for ORDA would be reduced to $5.6 million.
*	Reduce Reimbursement for Local Social Service District
Administrative Costs (2010-11 Savings: $1 million; 2011-12 Savings: $1
million): The Waiver Liability Fund was created to reimburse local
social services districts for public assistance-related administrative
costs incurred prior to the enactment of the capped Local Administration
Fund in April 2005. As of March 31, 2010, only New York City has a
liability. The proposed reduction would delay by six years the date at
which the liability is fully reimbursed, from 2042 to 2048.


Revenue Actions (2010-11 Savings: $211 million; 2011-12 Savings: $766
million):

*	Disallow 50 Percent of Business-Related Tax Credit Claims
(2010-11 Savings: $100 million; 2011-12 Savings: $650 million): The
amount of otherwise usable or refundable business-related tax credits
for which taxpayers could apply would be reduced by 50 percent in tax
years 2010-2012.
*	Tobacco Products/Snuff/Little Cigars Tax (2010-11 Savings: $40
million; 2011-12 Savings: $40 million): The tobacco products tax on
chewing tobacco, cigars, pipe tobacco and rolling tobacco would be
increased from 46 percent of wholesale price to 90 percent of the
wholesale price. The tax on snuff would be raised from $0.90 per ounce
to $2.00 per ounce. Little cigars would be taxed consistent with the
proposed cigarette excise tax of $3.75 per pack, rather than the current
rate of 46 percent of wholesale price.
*	Sales Tax Vendor Credit (2010-11 Savings: $23 million; 2011-12
Savings: $23 million): The allowance currently provided to vendors that
collect sales and use tax and remit with their timely filed and fully
paid return would be eliminated for large vendors.
*	Private Label Credit Cards (2010-11 Savings: $18 million;
2011-12 Savings: $18 million): This proposal would close a loophole that
permits certain vendors, such as private label credit card lenders, to
claim a sales tax refund from the State for debts that are not repaid, a
practice prohibited for other lenders.
*	Clarify Room Remarketers Must Collect Sales Tax (2010-11
Savings: $15 million; 2011-12 Savings: $20 million): Clarifies that room
remarketers, such as online retailers, are required to collect State and
local sales taxes. Currently, the hotel collects sales taxes when the
remarketer purchases the room. This clarifies that sales taxes are also
due on the mark-up.
*	Bank Bad Debt Deductions (2010-11 Savings: $15 million; 2011-12
Savings $15 million): Commercial banks with assets in excess of $500
million would be required to claim the actual amount of bad debt, rather
than the amount set aside to cover such debt. This would couple large
commercial banks to Federal provisions.


Other Actions (2010-11 Savings: $85 million)

*	Additional Department of Law Recoveries (2010-11 Savings: $35
million): The Department of Law is expected to generate revenues from
debt collection, recoveries, and litigation in excess of amounts needed
to support their related operations.
*	Expand Manhattan District Attorney's Recovery Sharing (2010-11
Savings: $50 million): Under legislation submitted as part of the
Executive Budget, the State anticipates sharing in recoveries generated
by the Manhattan District Attorney.

Link: http://www.state.ny.us/governor/press/GapClosingPlanFactSheet.html

----------------

 

New York Governor Proposes Furlough For 100,000 State Employees

By Casey Seiler, Albany Times Union  April 28, 2010

 

ALBANY -- Gov. David Paterson will ask the Legislature today to approve
putting 100,000 state workers on furlough without pay for one day per
week until the state budget has been hammered out. With the state budget
almost a month late, the furlough plan is the governor's new cash-saving
proposal as talks with the Legislature continue to stalemate.

 

Public employee unions are drawing up battle lines to oppose the
furlough, which the governor wants to start on May 10. "Nuts," was the
one-word statement issued by CSEA President Danny Donohue, echoing the
famous U.S. response to the German demand for surrender during the
Battle of the Bulge in World War II. "Gov. David Paterson's proposal to
furlough state employees is illegal," said PEF President Kenneth
Brynien. " ... We will take every action necessary to stop the
governor's proposal."

 

Although details were still being worked out, state Budget Director
Robert Megna estimated roughly 100,000 workers, or 70 percent of the
state work force, would be subject to the furlough. Each day of furlough
would save the state roughly $30 million, he added. The Legislature will
receive the furlough bill today along with a list of $620 million in
spending cuts designed to close the widening deficit.

 

Health and safety workers would not be required to stay home.
Management-confidential employees, who have gone without a scheduled
general raise in the past two years, would also be exempt. While the
governor was initially putting the proposal forward as a stand-alone
bill, he would not rule out placing it in a future extender bill -- a
move that would put the Legislature in the position of approving a
furlough or bringing about a state government shutdown.

 

Megna said the proposal was in keeping with actions the governor has
taken over the past several weeks to stem New York's cash-flow crisis --
including school payment delays and state-funded capital projects, as
well as the delay of a 4 percent raise that went into effect for many
state workers on April 1. "We believe ... this would fall into the same
mechanism in that we have the ability to do it given the fiscal crisis
that we're facing, and the fact that we do not have a state budget,"
Megna said.

 

In a news conference from the Red Room of the Capitol, Paterson asked
the Legislature to take up his amended executive budget proposal and
give it an up-or-down vote today -- a long shot considering the major
differences in the budget blueprints offered by Paterson, the Senate and
the Assembly.

 

Megna said that while the governor was proposing the furlough as a
stand-alone bill, he would not rule out placing it in a future extender
bill -- a move that would force the Legislature to approve a furlough or
bring about a state government shutdown.

 

Paterson's budget submitted in January included $250 million in
unspecified savings from state work force costs. So far, union leaders
have rejected concessions. Since the fiscal downturn began, many
cash-strapped states -- from California and Massachusetts to Iowa and
Oklahoma -- have used to furloughs to cut costs.

 

Paterson's list of new deficit-closing cuts includes about $324 million
in additional spending reductions, approximately $100 million Paterson
said were proposed by the Legislature. The list also included $211
million in revenue actions and $85 million in other actions. The new
cuts include both large- and small-bore ideas, from a $50 million cut to
the money set aside for member items, otherwise known as pork, in the
current fiscal year to a delay in the current plan to refurbish the roof
of the Capitol for a savings of $10 million.

 

The largest new revenue action would be a two-year reduction of
business-related tax credits, which would save $100 million this year
and $650 million in 2011-2012. Paterson also asked the Legislature to
work five-day weeks beginning Monday until a budget deal is achieved.

 

Since the budget deadline passed at the end of March, the Senate and
Assembly have held to the pre-existing calendar and held only 11 session
days. After today, they'll be gone until Monday. There are only 11
session days set for May.

 

Asked why he isn't forcing lawmakers to stay here in extraordinary
session, as he can do by law, Paterson said, "I'm trying not to be
acrimonious."

 

Legislative leaders were noncommittal on both the furlough proposal and
the call for an up-or-down vote on the governor's budget plan. "The
governor has the right to manage the size of the state work force," said
Assembly Speaker Sheldon Silver, apparently referring to the governor's
power to impose layoffs. Pressed on the specific question of the
furlough proposal, Silver said he needed a more detailed explanation of
the plan.

"We have to review the proposal before commenting further," said Austin
Shafran, spokesman for the Senate Majority Conference.

 

Real Money

Provisions of Gov. Paterson's furlough proposal, which must be approved
by the Legislature:

Agency commissioners will be given the discretion to schedule their
employees' one furlough day per week.

Employees would not be allowed to charge their accruals to offset this
salary reduction, and agencies would not be able to use overtime to make
up for loss of productivity.

The budget director would designate positions providing direct care or
certain security services as "essential," and the employees serving in
those positions would not be furloughed. Examples include correction
officers, nurses and state troopers.

Management/Confidential employees will also not be subject to the
furlough, since -- unlike union employees -- their scheduled general
salary increase has been eliminated in each of the last two years.

http://www.timesunion.com/AspStories/storyprint.asp?StoryID=925757 

 

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