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03/09/09 Governor Paterson Announcement

GOVERNOR PATERSON ANNOUNCES FIRST STATEWIDE RAIL PLAN IN MORE THAN TWO DECADES

Rail Plan is a Critical First Step for Federal Funding for Passenger and Freight Rail Improvements

Rail Improvements will Increase Speed and Reliability, Help Protect the Environment

Governor David A. Paterson and New York State Department of Transportation (NYSDOT) Commissioner Astrid C. Glynn today announced the release of the 2009 New York State Rail Plan, providing the first comprehensive update of the State’s rail strategy in 22 years and fulfilling a prerequisite for federal funding for rail capital improvement projects. The announcement was made at the Capital District Transportation Authority’s (CDTA) Rensselaer train station.

“Rail transportation is critical to efficiently moving people and goods throughout New York State,” Governor David A. Paterson said. “With the 2009 New York State Rail Plan, we are charting a course for the future. We have prioritized investments to improve intercity passenger rail service and strengthen our freight rail system, while helping to promote the State’s economy and protect the environment by reducing energy use, emissions and congestion on our highways and runways.”

Commissioner Glynn said, “The State Rail Plan provides a contemporary blueprint for managing and improving New York’s railroad infrastructure, an integral part of our transportation network of highways, bridges, transit systems, ports and airports. This far-reaching plan outlines how to utilize existing resources most efficiently and positions us to improve mobility and connectivity across the State by creating a network that makes moving people and goods on rail a truly viable alternative.”

The 2009 New York State Rail Plan spells out a comprehensive strategy for supporting freight and intercity passenger rail service. It calls for expanding freight rail usage and increasing the speed and reliability of passenger rail service across the State. Improved passenger and freight rail service supports energy and environmental goals by moving people and goods more efficiently and taking vehicles off congested roadways.

The Plan presents an inventory of freight and passenger rail system infrastructure needs in New York State totaling more than $10.7 billion during the next 20 years. The Plan also presents trends in rail freight and passenger use and was the focus of considerable public review, including a 45-day public comment period and public workshops held last summer in Buffalo, Binghamton and New York City.

The Plan outlines priorities for funding consideration from the $9.3 billion dedicated for Intercity Rail in the American Recovery and Reinvestment Act, the reauthorization of the Federal Surface Transportation Act which is due October 1, 2009 and for the development of the next State transportation plan, which will succeed the current plan following the 2009-10 State Fiscal Year.

Specifically, it calls for:

• Doubling the number of intercity rail passengers along New York’s three major corridors: New York City to Albany, Albany to Niagara Falls and Albany to Montreal, as well as strategies to increase reliability on all three corridors;
• Providing frequent and convenient passenger rail service connecting cities across the State as an energy and time-saving alternative to driving or flying, helping to reduce congestion on highways and at airports. Rail plan goals include:
  • Achieving on-time performance of at least 95 percent between Albany and New York City;
  • Improving rail service between Albany and Niagara Falls, with connections in Utica, Syracuse and Rochester. The Plan includes a Third Track Initiative, which aims to establish a dedicated third track for high speed passenger rail service across Upstate from Niagara Falls to Albany with a potential for reducing the travel time by 2 hours or more;
  • Shortening the travel time for rail service between Albany and Montreal. Currently, trains take about eight hours to make that trip. The Plan’s goal is to reduce that time to 6.5 hours; and
  • Establishing new passenger service, where viable, such as between Saratoga and Albany, Niagara Falls and Buffalo, and Binghamton and New York City;
• Increasing freight rail usage by 25 percent to reduce growth of truck traffic and energy consumption;
• Allowing modern freight cars to access the New York City metro area and Long Island along routes east of the Hudson River;
• Adding at least three new intermodal facilities/inland ports across the State to serve the rapidly growing container segment of rail traffic, which will help remove long-haul trucks from highways and deliver products to consumers faster; and
• Creating the first “green” short line fleet in the nation.

In addition to the Third Track Initiative, the Plan identifies a number of rail infrastructure initiatives that would strategically improve intercity passenger rail service across New York State. Estimated to cost $671 million over the next five years, these priority projects are expected to be eligible for federal funding assistance. These rail infrastructure improvements would be implemented in partnership with rail service providers.

In establishing goals for the future, New York State’s 2009 Rail Plan makes clear the critical importance of a strong federal partnership in support of modern, efficient rail service. Historic federal legislation authorizing funding for intercity passenger rail was approved last year, making a State rail plan a condition of receiving federal rail funds. Since much of the rail system in New York is privately owned, the Plan also highlights the need for partnering with private railroads and other stakeholders to make infrastructure improvements that will make rail travel more attractive to consumers and the business community.

Rail service can be an important contributor to reducing energy use and greenhouse gas emissions. Rail consumes less energy than most modes of long-distance travel and reduces congestion and vehicle emissions as well. A single intermodal freight train can carry hundreds of cargo containers, removing as many as 280 trucks from roadways while using significantly less energy than highway travel. Trains can move a ton of freight an average of 435 miles with each gallon of fuel. Furthermore, intercity passenger rail uses 20 percent less energy per passenger mile traveled than automobiles and 17 percent less than airline travel.

The Rail Plan is the product of collaboration between public agencies, elected officials, planners, Amtrak and New York’s privately owned freight railroads. This effort included an extensive outreach program including daylong, interactive, public workshops to obtain direct input and comments from transportation advocacy organizations, rail industry stakeholders and the public. This approach was aimed at maximizing the Plan’s benefits for all New Yorkers and ensuring that proposed rail capital and service improvements are consistent with public needs.

“New York State Rail Plan 2009, Strategies for a New Age,” is available at the NYSDOT web site at http://www.nysdot.gov/staterailplan. As part of NYSDOT’s commitment to environmental sustainability, electronic downloading of the plan is encouraged.

02/28/09 - Rock Stars at Chill-a-Bration

Here is a video taken at Cortland's Chill-a-Bration held in the Cortland Courthouse Park. Lisa and Connor sang "I Love Rock 'n Roll" by Joan Jett and the Blackhearts.

Judge for yourself, but Lisa and Connor took home the Karaoke Krooner trophy!

12/16/08 - GOVERNOR PATERSON’S EXECUTIVE BUDGET

For Immediate Release: December 16, 2008
Contact: Errol Cockfield | errol.cockfield@chamber.state.ny.us | 212.681.4640 | 518.474.8418
Division of the Budget Contact: Jeffrey Gordon | jeffrey.gordon@budget.state.ny.us | 518.473.3885*

*Please note corrected Division of Budget Phone Number.

GOVERNOR PATERSON’S EXECUTIVE BUDGET
ELIMINATES LARGEST DEFICIT IN STATE HISTORY, REINS IN SPENDING
Proposal Includes Reductions across Every Area of State Spending, Targeted Increases in Revenue; Represents a Balanced Plan for a Balanced Budget

Governor Paterson today delivered a balanced Executive Budget, more than one month prior to the State constitutional deadline, which would eliminate the largest budget deficit in State history – a $1.7 billion current-year shortfall and a $13.7 billion 2009-10 deficit. This proposal includes a series of difficult decisions across every area of State spending, as well as targeted increases in revenue, to address an unprecedented fiscal and economic crisis. The Budget also includes several reforms that will increase government efficiency and lower taxpayer costs in the future.

“For years, record revenues from Wall Street allowed State spending to increase at an unsustainable rate,” said Governor Paterson. “With the financial services industry in the midst of an unprecedented crisis, we must fundamentally reevaluate what our State can afford to spend. Change is unavoidable, and the proposals I have put forward today begin the difficult process of adapting to a new fiscal reality. Just like thousands of families across New York, our State government needs to tighten its belt and limit spending to what we can afford.”

Governor Paterson’s Executive Budget is structured in a unique manner in order to address the challenge of closing a mid-year shortfall. It contains two main components, both of which were delivered to the Legislature today. The first component is a 2008-09 Deficit Reduction Plan. This stand-alone legislation includes a series of actions that are necessary to close the State’s current-year $1.7 billion shortfall. The State financial plan assumes enactment of these actions by February 1.

The second component is Governor Paterson’s complete 2009-10 Executive Budget proposal, which will close the 2009-10 fiscal year $13.7 billion deficit. Consistent with Governor Paterson’s goal to start reducing State spending as soon as possible, the savings actions included in that proposal assumes the budget will be enacted by March 1, 2009, one month prior to the April 1 start of the fiscal year.

Spending Growth

Under Governor Paterson’s Executive Budget proposal, 2009-10 General Fund spending would remain flat compared to 2008-09 levels at $55.4 billion. State Operating Funds spending would total $79.8 billion, an increase of $400 million or 0.5 percent.

All Funds spending would total $121.1 billion, an increase of $1.3 billion or 1.1 percent – which would represent the lowest level of growth since 1996-97 when the All Funds budget declined by 0.4 percent. Unlike in 1996-97, however, Governor Paterson and the Legislature, have worked throughout the fiscal year to reduce the size of the 2008-09 budget to address plummeting revenues. If these reductions had not occurred, 2009-10 All Funds spending would have declined compared to 2008-09 by $548 million or 0.5 percent.

2008-09 Deficit Reduction Plan

Governor Paterson’s 2008-09 Deficit Reduction Plan includes $1.7 billion in savings initiatives that are necessary to close the state’s current-year state budget shortfall. This proposal includes $1.0 billion in proposals that were originally put forward for consideration by the Legislature at a November special session as part of an overall $2.0 billion package. Major prior recommendations that will be put forward again include $500 million in health care savings; a $50 million reduction in Environmental Protection Fund (EPF) spending and a $25 million sweep of uncommitted EPF funding; an expansion of the 5-cent bottle deposit to non-carbonated beverages ($118 million in 2009-10); a $620 increase in SUNY annual undergraduate tuition from $4,350 to $4,970, which has been approved by the SUNY Board of Trustees ($62 million); a 10 percent reduction in Community College Base Aid ($15 million); and others.

Of the original $2.0 billion in savings proposed in November, over $1.0 billion are no longer possible to achieve before the end of the fiscal year. They have been replaced by $771 million in new savings put forward today.

These $771 million in new savings initiatives include the elimination of a planned transfer to the Community Projects Fund for member items ($45 million); the implementation of strict state agency spending controls to eliminate non-essential spending ($100 million); the transfer of uncommitted funds from the Department of Law’s special revenue account ($91 million); the transfer of New York Power Authority assets and excess operating funds to the General Fund ($306 million); the use of $100 million from various other fund balances; and other actions. A complete listing of each proposal included in the 2008-09 Deficit Reduction plan is available at www.budget.state.ny.us.

2009-10 Executive Budget

Governor Paterson’s $13.7 billion Executive Budget General Fund savings proposal includes $9.5 billion in recurring spending reductions, which represent 70 percent of total actions. It also contains $3.1 billion in recurring revenue actions, and limits non-recurring actions to eight percent of the overall plan or $1.1 billion.

Governor Paterson said: “The Executive Budget proposal I have put forward today represents a balanced plan for a balanced budget. The vast majority of my plan focuses on recurring reductions across every area of state spending. In order to protect core services, however, it also contains targeted increases in revenue. Given the magnitude of our current crisis, the only way we are going to overcome our budget problems is by acting comprehensively through shared sacrifice.”

Major actions include:

Education: The Executive Budget reduces School Aid in 2009-10 by $698 million or 3.3 percent from 2008-09 while maintaining a commitment to both long-term increases in education investments and the formulas created to equitably allocate these funds. Even after reductions, funding for School Aid would still total $20.7 billion in 2009-10, a 42 percent or $6.2 billion increase compared to 2003-04. Proposed reductions are structured progressively based on district fiscal resources and student need. Savings are also achieved through reductions or eliminations in categorical programs to prevent further reductions in direct aid to schools. Governor Paterson remains committed to the education investment plan advanced in 2007-08 to increase School Aid by $7.0 billion over a multi-year period. But significant funding increases in Foundation Aid and Universal Prekindergarten that were scheduled to be phased-in over a four-year period will now be phased-in over an eight year period to reflect the need to adapt to the difficult fiscal environment. The Executive Budget also proposes mandate relief measures to help school districts control costs.

Medicaid/Health Care: If no actions were taken to control costs, State Funds Medicaid spending would grow 12 percent to $17.3 billion. The Executive Budget proposes taking actions to limit State Funds Medicaid spending to $16.0 billion, an increase of 3.8 percent from 2008-09. The recommendation focus on reforming ineffective hospital, nursing home and home care reimbursement systems to direct spending to more appropriate primary and community based settings. Even after these actions, total federal, state and local Medicaid spending would still increase by $432 million or 1.0 percent compared to 2008-09 to a total of $45.4 billion, and New York’s program would still be the most expensive in the nation.

STAR: The Executive Budget eliminates the STAR rebate program ($1.4 billion). The rebate is a check issued to homeowners and has no relation to an individual’s property tax bill. A corresponding enhanced New York City personal income tax credit ($364 million) added in conjunction with the rebate will also be eliminated. The value of the credit will return to pre-rebate levels, declining from $290 to $125 for married couples and $145 to $62.50 for individuals. Funding for the STAR exemption program, which directly shields a portion of an individual’s assessed home value from local property taxation, as well as the standard New York City rebate will still total $3.3 billion – approximately equivalent to spending on the program prior to the creation of the rebate.

Higher Education: Based on the recommendations of the New York State Commission on Higher Education, the Executive Budget would establish the New York Higher Education Loan Program (NYHELPs) which will provide a minimum of $350 million in loans to approximately 45,000 New York State residents attending New York higher education institutions. The loans will be offered at rates well below those currently available in the private loan market. Additionally, a SUNY ($620, 14 percent) and CUNY (up to $600, 14 percent) tuition increase tied to an investment plan is also recommended, which will provide a year-to-year increase in core instructional budget resources for those universities.

Human Services: For the first time in 18 years, the Executive Budget would increase the basic welfare grant. The grant would increase by 10 percent, from $291 to $320 in January 2010; by another 10 percent to $352 in January 2011; and by a final 10 percent to $387 in January 2012. The budget also preserves funding for core programs such as foster care, adoption, child and adult protective services, and domestic violence services. Savings are achieved by reducing or eliminating a number of non-mandated services, many of which have provided valuable services but are supplemental to the state’s core mandated programs.

State Workforce: The state workforce is expected to total 196,292 in 2009-10, a decrease of 3,108 compared to the prior year. This would still represent, however, an increase of 8,927 compared to 2003-04. The 2009-10 decline includes an estimated 521 layoffs, which are mostly limited to the impact of agency consolidations, facility closures, or program eliminations. The Budget also advances proposals to reduce spending for state employees in ways that will minimize further layoffs during a time of economic distress and avoid service disruptions in critically important programs. Proposals include deferring five days of salary payments until a state employee leaves service or the fiscal crisis is declared to have ended; eliminating a scheduled three percent general salary increase for 2009-10; and requiring state employees and retirees to contribute greater amounts to health care coverage. Even after these proposed actions, most public employees will have received a general salary increase of 20 percent compared to 2003-04.

Pension Reform: The Executive Budget creates a new tier of pension benefits (Tier V) for state and local employees. Many of the requirements for Tier V would simply remove pension enhancements added in recent years to Tier IV, including restoring the minimum retirement age to 62 instead of 55, requiring employees to contribute to the pension fund after their tenth year of service, restoring the minimum years of service required to draw a pension from five to ten, and others. New requirements for Tier V include excluding overtime compensation when calculating pension benefits, which will prevent “salary spiking” in an employee’s final years of service. Under the state constitution, Tier V requirements can only apply to new employees. The Executive Budget also includes a proposal to implement a new tier of pension benefits for newly hired City of New York uniformed employees. This proposal is being advanced at the request of the Mayor of the City of New York and will not be acted upon without the consent of the City Council.

Aid and Incentives for Municipalities (AIM): The Executive Budget achieves savings by maintaining AIM funding at current year levels, which would eliminate a previously scheduled $61 million increase, and by eliminating New York City’s AIM payment. Even after these actions, AIM Funding for municipalities outside of New York City will still have increased by $290 million or 62 percent compared to 2004-05 and total $755 million. Unlike other municipalities, which rely more heavily on the AIM program, AIM payments represent 0.5 percent of NYC’s overall revenues. To help offset recommended reduction in AIM and other local government assistance, the Budget advances a range of cost-saving mandate relief initiatives and local revenue enhancements. In particular, Tier 5 pension reform, additional Wicks Law relief, and an expanded red light camera program will provide substantial fiscal benefits for New York City. Other municipalities will also benefit from revenue actions such as removal of sales tax exemptions.

Empire Zone Reform: The Executive Budget would require all of the current Empire Zone program participants to demonstrate that they are producing at least $20 in actual investments and wages for every $1 that the state invests in order to remain in the program. The reformed program will continue until its sunset date of June 30, 2011, excluding certain sectors such as utilities, retail, and real estate from future participation. These actions are expected to produce savings of $272 million in 2009-10, $292 million in 2010-11, and $310 million when fully annualized. A portion of the demonstrated savings from these reforms would be redirected to a new job creating grant program administered by ESDC and to new research and development tax credits. These initiatives will receive $100 million when fully annualized by 2011-12.

Rightsizing State Government: The 2009-10 Executive Budget lays a strong foundation for improving state operations, beginning the process of streamlining state government by eliminating duplicative services, consolidating overlapping state agencies, closing underutilized facilities, lowering the cost and size of the state workforce, and consolidating back-office operations. To achieve this goal, seven state agencies would be eliminated, merged or integrated with existing agencies. These include the New York State Foundation for Science, Technology and Innovation (NYSTAR) and Department of Economic Development, which would integrate with the Empire State Development Corporation (ESDC); the State Employment Relations Board, which would merge with the Public Employment Relations Board; The Northeastern Queens Nature and Historical Preserve Commission and the Hudson River Valley Greenway Communities Council and Conservancy would merge into the Department of State; The New York State Theatre Institute would merge with the Empire State Plaza Performing Arts Center Corporation (“The Egg”) and the Office of the Welfare Inspector General would merge with the Office of the Medicaid Inspector General.

In addition, the Executive Budget would also establish a new Council on Shared State Operations to oversee the development of a “shared services” model in New York, which seeks to centralize back-office operations to both decrease costs and improve services offered. This approach has been used by the private sector for years and has been increasingly adopted in the public sector. Consolidating administrative functions shared by multiple agencies will free agencies to focus on their core missions of providing essential services to New Yorkers, rather than administrative tasks.

Facility Closures/Downsizing: Several underutilized state facilities would be eliminated or downsized. The Executive Budget recommends closing four prison camps and several annexes, three Office of Children and Family Services (OCFS) evening reporting centers and six underutilized OCFS youth facilities, as well as downsizing two OCFS youth facilities. Additionally, the Office of Mental Health would eliminate 450 beds (11 percent) from its inpatient psychiatric system, moving those patients to more appropriate settings, and the Office of Alcohol and Substance Abuse Services would close its Manhattan Addiction Treatment Center.

Revenue Actions: The Executive Budget includes a balanced package of revenue enhancements. These proposals do not include any broad-based income tax proposals, but do include $3.1 billion in recurring General Fund revenue actions. These proposals ensure that tax burdens are fairly distributed, improve consistency with other taxing jurisdictions, and close loopholes, among other objectives. The budget also includes new or increased fees or fines, most of which finance specific activities and have not been changed in several years.

Some notable revenue increases include: A new, additional 18 percent sales tax on non-diet soft drinks to combat obesity and related diseases, with revenues directed to health care; eliminating the sales tax exemption on clothing and footwear under $110, replacing it with two exemption periods during which clothing and footwear under $500 would not be subject to sales tax; imposing a sales tax on cable and satellite TV/Radio services consistent with the practice of 23 other states; conforming the state sales tax to New York City’s practice of taxing personal services, such as barbering, massages, and hair salons, and credit rating services; repealing an ineffective sales tax cap on gasoline, for which there is no documented evidence provides savings that are passed on to consumers; permanently increasing the assessment on utility companies from 1/3 of one percent to one percent of gross intrastate revenues plus an additional one percent temporary surcharge on those revenues; and other actions.

Budget Deficits

In October, the Division of the Budget projected budget deficits of $1.5 billion in 2008-09, $12.5 billion in 2009-10, $15.8 billion in 2010-11, and $17.2 billion in 2011-12 – a cumulative total of $47.0 billion. Based on greater than anticipated declines in projected revenues, this budget deficit has increased to $1.7 billion in 2008-09, $13.7 billion in 2009-10, $17.1 billion in 2010-11, and $18.6 billion in 2011-12 – a total of $51.1 billion.

Governor Paterson’s proposal would eliminate the 2008-09 shortfall and 2009-10 deficit, as well as make important strides toward long-term structural balance. After implementing the actions contained within the Executive Budget, which will produce $45.2 billion in savings over the next four years, the state’s out-year budget deficits would total $1.8 billion in 2010-11 and $4.0 billion in 2011-12 – a cumulative total of $5.8 billion.

Reserve Levels/State Debt

The 2009-10 Executive Budget proposal maintains $1.2 billion in reserves, equal to 2.2 percent of General Fund spending. State debt is projected to grow by $2.6 billion (5.0 percent) to $54.2 billion, largely due to investments in economic development, transportation, and higher education.

GOVERNOR PATERSON DELIVERS $5.2 BILLION, TWO-YEAR DEFICIT REDUCTION PLAN

Savings of $2 Billion in Current Year, $3.2 Billion Next Year Are Spread Across All Areas of State Spending


Plan Represents Series of Tough Choices Necessary to Address Record Four-Year $47 billion Budget Deficit

Governor David A. Paterson today announced a comprehensive, two-year $5.2 billion deficit reduction plan that will entirely eliminate the State’s $1.5 billion current-year shortfall, protect against further declines in revenue in a volatile economic climate, and make a substantial down payment on next year's deficit.

Governor Paterson’s proposed reductions are spread across virtually every area of State spending, including education, health care, human services, the State workforce, and others. These actions would produce $2 billion of savings in 2008-09 and $3.2 billion in 2009-10.

“The deficit reduction plan I have put forward today represents a series of difficult choices across virtually every area of State spending,” said Governor Paterson. “The only way we are going to overcome this unprecedented crisis is through shared sacrifice. I look forward to engaging in a productive dialogue with the Legislature about the actions we must take at next week’s special session to address our State’s record budget deficits.”

Governor Paterson’s plan would close the State’s $1.5 billion current-year shortfall, while also providing a $548 million cushion against additional declines in revenue during 2008-09. These proposed actions would also reduce the State's 2009-10 deficit from $12.5 billion to $8.8 billion and four-year budget deficit by from $47.0 billion to $35.9 billion.

After implementing Governor Paterson’s deficit reduction plan, 2008-09 All Funds spending would still total $119.2 billion, an increase of $3.1 billion or 2.7 percent over the previous year. State Operating Funds spending would total $77.0 billion, an increase of $1.9 billion or 2.5 percent. Inflation is currently projected to be 4.2 percent for 2008-09.

Governor Paterson continued: “The unfortunate reality is that many worthy programs with laudable goals, some of which I have supported in the past, will have to experience reductions in funding. These are not decisions that I have made lightly. With the State facing the largest deficits in its history, we have no other option but to make these tough but necessary choices. In times like this, government needs to put the public interest ahead of special interests - this budget plan tackles this financial crisis head-on and addresses the State's collective needs for fiscal responsibility.” Governor Paterson’s plan includes the following major components. A full listing of all proposed actions is also attached.

School Aid (Fiscal Year 2008-09 Savings: $585 million, Fiscal Year 2009-10 Savings: $844 million).
The deficit reduction plan would decrease the rate of growth in School Aid in the 2008-09 School Year by $836 million ($585 million in the 2008-09 State Fiscal Year). Even after these actions, 2008-09 School Year School Aid would still increase by $1.0 billion or 5 percent compared to 2007-08 and total $20.7 billion. Moreover, the level of School Aid spending statewide in 2008-09 would represent an increase of $6.2 billion or 43 percent compared to 2003-04. According to the US Census Bureau, New York spent on average $14,884 per pupil on its public schools in 2006 – the highest amount of any State and 63 percent above the national average.

Medicaid/Health Care (2008-09 Savings: $572 million, 2009-10 Savings $1.2 billion).
The deficit reduction plan recommends $1.8 billion in Medicaid and other health care savings over the next two years. Major actions include reducing reimbursement rates and eliminating trend factor increases across all sectors, recouping Early Intervention overpayments from New York City, using unspent Graduate Medical Education (GME) funds for financial plan relief, and discontinuing funding for several HCRA programs. Additionally, to ensure that the insurance industry contributes its fair share of savings, assessments levied upon that industry will be increased.

Even after these actions, 2008-09 State Funds Medicaid spending is still expected to increase over the next year by $145 million or 1 percent to $15.3 billion. Additionally, State Funds Medicaid spending is still projected to increase by $1.5 billion or 10 percent in 2009-10.

Other Education-related Programs (2008-09 Savings: $36 million, 2009-10 Savings: $16 million).
The deficit reduction plan recommends a number of other savings actions in education-related areas outside of School Aid. These include reduced funding for grants awarded by the NYS Council on the Arts by $7 million and reduced funding for Bundy Aid to private colleges and universities by $2 million. It would also reduce library aid by $20 million on a one-time basis and continue to provide reimbursement to non-public schools for attendance-taking consistent with the methodology used in 2007-08 thereby saving $7 million.

Higher Education (2008-09 Savings: $115 million, 2009-10 Savings: $233 million).
The deficit reduction plan recommends increasing both SUNY (from $4,350 to $4,950) and CUNY (from $4,000 to $4,600) annual undergraduate tuition by $600. Tuition for these institutions has not been increased since 2003-04, and before that in 1995-96. Spring 2009 tuition will increase by $300. The full annual $600 increase would become effective in the following academic year.

The new recommended tuition rates are below 2003-04 levels after adjusting for inflation ($5,100 for SUNY, $4,700 for CUNY), and also below those at all public colleges in the Northeast and Mid-Atlantic regions. Moreover, even after this increase, SUNY and CUNY tuition would still be below the $5,000 threshold for Tuition Assistance Program (TAP) awards, ensuring that the neediest students would have their entire tuition costs covered.

In a departure from more than 30-year old practice of using 100 percent of the revenue resulting from tuition increases to offset General Fund spending on higher education, SUNY and CUNY will be allowed to retain 10 percent of the fiscal benefit from the 2008-09 spring semester increase and 20 percent of the full annual increase in 2009-10 for increased investment.

Commensurate with the 10 percent reduction in operating support for SUNY and CUNY senior colleges already enacted earlier this year, the plan also reduces per-student base aid to community colleges by an average of 10 percent, from $2,675 to an average of $2,405. To recognize the disproportionately adverse impact that this reduction could have on smaller community colleges if applied in an across-the-board fashion, legislation will be proposed to reduce the impact of the proposal on these colleges, as follows: colleges with fewer than 3,000 full time equivalent students will have their base aid payments reduced by $160 per student; colleges with between 3,000 and 6,000 students will have their base aid payments reduced by $230; and colleges with more than 6,000 students will have their base aid payments reduced by $300. After these reductions, total State base operating aid support for community colleges will be $580 million.

Local Governments (2008-09 Savings: $134 million, 2009-10 Savings: $110 million).
The deficit reduction plan includes several actions related to local governments. The proposal eliminates $41 million in additional Aid and Incentives for Municipalities (AIM) funding for New York City that was added in the 2008-09 Enacted Budget. New York City will still receive an AIM payment of $205 million in 2008-09.

For municipalities outside of New York City, the plan would maintain 2009-10 AIM payments at 2008-09 levels, eliminating a previously scheduled $61 million increase. Even after these actions, AIM payments outside of NYC would still total $755 million in 2009-10, an increase of $290 million or 62 percent compared to 2004-05. Governor Paterson is also proposing to reduce 2009-10 VLT Impact Aid for 17 municipalities by 50 percent compared to 2008-09 levels and limit eligibility for this program to municipalities that already participate. Yonkers would not be impacted by this VLT Impact Aid proposal. Although these actions will not provide savings in the 2008-09 fiscal year, Governor Paterson believes it is important to enact these reductions now so that local governments will have an opportunity to prepare for these changes in State aid before the beginning of their 2009 fiscal years and to modify their spending accordingly to find cost efficiencies.

Workforce (2008-09 Savings: $137 million, 2009-10 Savings: $167 million).
Governor Paterson will partner with State employee unions to reduce personnel costs, and has proposed the following actions for collective bargaining: delaying salary payments for five-days worth of work during the current fiscal year until an employee leaves State service, and withholding the 3 percent, 2009-10 salary increase previously negotiated with several unions before the State’s finances deteriorated to their current level. He has proposed the following actions that do not require collective bargaining: requiring new State employee retirees to pay for a greater portion of their health care costs; requiring State employees and retirees to contribute to the Medicare Part B premiums; and rescinding a vacation exchange program for Management/Confidential employees.

Human Services (2008-09 Savings: $20 million, 2009-10 Savings: $75 million).
In the area of human services, major recommendations include partially reducing a cost-of-living adjustment for human service providers from 3.2 percent to 2.2 percent; reducing funding for the Neighborhood Preservation Program and Rural Preservation Program; delaying the phase-in of the “Bridges to Health” program; and eliminating a $3.0 million operating subsidy for the New York State Housing Authority (NYCHA), which has a $2.8 billion operating budget. Currently, no other local housing authority in the State besides NYCHA receives an operating subsidy.

Governor Paterson is recommending several actions that will help right-size the Office of Children and Family Services’ (OCFS) juvenile justice system. These actions include:

- Closing Six Underutilized Youth Facilities: The Adirondack Residential Center in Clinton County, the Cattaraugus Residential Center and Great Valley Residential Center in Cattaraugus County, the Pyramid Reception Center in the Bronx, the Rochester Community Residential Home in Monroe County, and the Syracuse Community Residential Home in Onondaga County.
- Downsizing Two Underutilized Youth Facilities: The Allen Residential Center in Delaware County and the Tryon Residential Center in Fulton County.
- Closing Three Underutilized Evening Reporting Centers: These include the Capital District Evening Reporting Center in Albany County, the Buffalo Evening Reporting Center in Erie County, and the Syracuse Evening Reporting Center in Onondaga County.

The facilities recommended for closure or downsizing have an average vacancy rate of 63 percent. Great Valley and Rochester have 100 percent vacancy rates.

Overall, these actions will result in a 255 full-time equivalent reduction in the size of the OCFS workforce. The agency will make all possible efforts to ensure that this reduction is achieved through attrition.

Other Actions (2008-09 Savings: $424 million, 2009-10 Savings: $514 million).
The deficit reduction plan also includes a number of other actions in the areas of environmental conservation, economic development, and financial management.

During the August 2008 special session, funding for most new executive and legislative programs was reduced across-the-board by 50 percent and 6 percent, respectively. Governor Paterson is recommending reducing new legislative programs by 50 percent of remaining spending, commensurate with the reduction enacted for new executive programs.

Governor Paterson is also proposing to expand the current 5-cent deposit on beer and soda containers to water and other non-carbonated beverages, capture all unclaimed deposits, and use that funding to offset other financial support to the Environmental Protection Fund. Additionally, spending in the EPF would be reduced by $50 million, which would be transferred to the General Fund. Notwithstanding these budgetary actions, the EPF is still projected to have a year-end balance of $34 million, and there will be no impact on any current funding commitments for environmental conservation.

Governor Paterson’s plan would reduce funding for several economic development initiatives, including local tourism matching grants ($1.5 million), JOBS Now ($1.5 million), the Focus Research Center at Albany Nanotech/RPI ($2.6 million), Technology Transfer ($1 million), and Faculty Development programs ($1 million). It is also recommended that the Centers for Applied Research and Technology program be allowed to expire at the end of 2008, providing savings of $900,000.

Other proposals include transferring excess revenues from certain State authorities and special revenue accounts into the General Fund, including the New York Power Authority ($40 million in 2008-09, $25 million in 2009-10) the Dormitory Authority ($6 million in 2008-09), the Office of Temporary Disability Assistance’s federal administration account for child support enforcement activities ($100 million in 2008-09, $5 million in 2009-10), the Battery Park City Authority ($20 million in 2008-09, $250 million in 2009-10), and the Empire State Development Corporation ($60 million in 2008-09, $8 million in 2009-10). Transferring funds from the Battery Park City Authority would be negotiated with that organization’s board, the Office of the New York City Mayor and the Office of the New York City Comptroller. It is expected that any potential transaction regarding the BPCA would include a comparable financial benefit for New York City as well.

Additionally, $50 million in eligible capital expenses for affordable housing previously anticipated to be financed on a pay-as-you-go basis will be financed through bonding.

“Thus far, in partnership with the Legislature, New York has acted swiftly and responsibly to respond to a deteriorating fiscal environment. And we must do so again at next week’s special session by making hard choices, not looking for easy answers,” said Governor Paterson.

Governor Paterson continued: “Raiding our $1.2 billion in rainy day reserves sounds logical, but doing so would provide only a fraction of the funds we need, does nothing to address next year’s record deficits, threatens our State’s good credit rating, and leaves us with no options to meet year-end expenses if the downturn is worse than expected. Delaying action in hopes of help from Washington sounds sensible, but doing so sends a message to our nation’s leaders that we aren’t willing to solve our own problems. Raising taxes in special session sounds easy, but ignores the fact that overspending is at the root of our problem.”

Full Detail on the Governor’s Proposals can be found on the web at: www.budget.state.ny.us.