Assembly Advances 2007-08 Budget Plan

Set for Floor Action Later Today, Proposal Builds Upon 'Solid Blueprint' of Executive Budget; Addresses 'Double Blow' of Federal, State Cuts to Health Care

Assembly Speaker Sheldon Silver and Ways and Means Committee Chair Herman D. Farrell, Jr. today unveiled the house's 2007-08 budget that maintains the Assembly Majority's long-standing commitment to education, higher education, health care, health-insurance coverage for children, stem-cell research, property tax relief and local assistance aid for struggling localities.

Silver and Farrell said the $121.2 billion budget would provide necessary and long-overdue resources to our schools while at the same time helping communities hold the line on property taxes. It also builds on the goals advanced in Governor Eliot Spitzer's budget to reform our state's health-care system while making significant restorations to hospitals and nursing homes. The lawmakers noted that half of the increase in spending above the governor is dedicated to meeting critical health care needs.

Highlights of the Assembly budget would:

• eliminate the trend factor and the sick tax that severely impact the health care industry;
• address the Campaign for Fiscal Equity (CFE) decision that requires each child receive a sound, basic education;
• complete the Assembly's plan to provide statewide universal pre-K;
• significantly reform the state's charter school program;
• expand the child care tax credit;
• continue our long-standing commitment to college opportunity programs which make the dream of a college education possible for thousands of students from working families;
• boost funding to Restore NY Communities Initiative;
• restore New York City participation in the state's revenue sharing program, beginning in the 2008-09 fiscal year;
• reject modifications to the prescription drug program;
• join the governor in enhancing the STAR program;
• dedicate $500 million for stem-cell research and provide a 15 percent increase to the Charitable Trust Foundation from the proceeds of a conversion of a not-for-profit health insurer to a for-profit entity. The Foundation supports programs that expand access to health care and improve health education and outreach;
• provide critical resources towards reducing caseloads of child protective workers;
• increase the basic public assistance grant by 10 percent over a two-year period - the first increase since January, 1990; and
• increase the number of mental-health workers in Office of Children and Families (OCFS) operated facilities to better protect children in the state's care.

Silver and Farrell praised the governor for joining the Assembly in addressing the Campaign for Fiscal Equity (CFE) court decision and noted that the Assembly budget would boost the state's commitment to universal pre-kindergarten by raising the minimum reimbursement for school districts from $250 per student to $2,700.

Silver noted that the Assembly continues to be on-track toward enacting an on-time budget and has met the deadlines agreed to by both houses as a result of recently enacted budget reform legislation. Once the Senate has finally passed its budget bills, Silver said joint Assembly-Senate bipartisan conference committees will meet in open, public forums to resolve differences between the two houses' budgets.

Silver said the Assembly budget is comprised of appropriation and Article VII, or "language," bills as well as a resolution used to express the position of the house in cases where recent court decisions have limited the Legislature's ability to respond to budget documents submitted by the governor.

Health-Care Receives Significant Increase

The Assembly budget makes health care a high priority. Specifically, the Assembly budget proposal builds on the governor's and invests $483.3 million more to increase access to health care. Under the Assembly budget, the restoration of the hospital and nursing home "trend factor" would provide $182.6 million to hospitals and $145.4 million to nursing homes statewide. The proposal also maintains the important 2.5 percent inflation adjustment so hospitals and nursing homes can cover rising medical costs.

The Assembly plan also would:

• eliminate the "sick" tax - a burdensome 0.35 percent tax on hospital gross receipts that amounts to $136.9 million per year;
• reject $45.6 million in proposed modifications to the prescription drug program, including the elimination of the exemption for anti-depressants; and
• keep pharmacy reimbursements above the Average Wholesale Price for both generic and name-brand drugs - restoring $34.6 million under Medicaid and $10.6 under the Elderly Pharmaceutical Insurance Coverage (EPIC) program.

The Assembly's budget, like the governor's efforts, improves health care by focusing on patients. Elements of the proposal would expand access to health care, help hospitals, nursing homes and health care workers, restructure Medicaid and eliminate waste in the program.

"While providing a new direction for the future of health care in New York, the governor's cuts to hospitals - particularly when they come on the heels of irresponsible federal actions that will be very damaging to New York health-care industries - raised some concerns," said Silver.

"Given the devastating cuts being proposed by President Bush, we are concerned that the governor's actions could diminish access to hospital and nursing home services in our communities. Our budget makes clear our continued commitment to ensuring any restructuring of our health-care system is carefully deliberated and carried out responsibly, so that no one is left out or shortchanged when it comes to the high-quality care for which New York is known," said Silver.

The Assembly Majority supports measures to strengthen the Office of the Medicaid Inspector General and create a New York State False Claims Act aimed at rooting out abuse and fraud. The Assembly also supports the addition of 157 new positions - including 100 auditors - to the Medicaid inspector general and authorizes new powers to the attorney general.

Silver noted that over and above the governor's proposal, the Assembly's budget goes a step further in reforming New York's health care system by creating two new health care commissions. The Commission on Health Care Delivery Reform will study and recommend new mechanisms for financing health care. The Commission on Universal Care will study and report on recommendations for providing universal health care in New York State.

The Assembly endorses the governor's expansion of eligibility for the Child Health Plus insurance program so that 400,000 more children would have access to vital health-care services. The plan would increase the eligibility level from 250 percent to 400 percent of the federal poverty level.

In addition to restoration of $427.7 million to health-care providers, the Assembly budget provides an additional $55.6 for other Medicaid and public-health initiatives. These funds would include:

• an additional $24 million for high-need Medicaid public and voluntary hospitals, located primarily in New York City, Westchester, Nassau and Erie counties;
• $5 million as the state share of Medicaid to support 1,500 new assisted-living program beds;
• $2.75 million for the Quality Incentive Payment Program and $2 million for air conditioning for adult homes;
• $4.9 million for clinic transition and information technology funding;
• $4.6 million for a Palliative Care Education Program; and
• $3 million to provide additional support for occupational health clinics.

Seeking a strong investment in cutting edge health-care breakthroughs, the Assembly budget would establish the Stem Cell Research and Regenerative Medicine Support Program in the Department of Health. The Assembly would reserve $500 million in the Health Care Reform Act (HCRA) proceeds from the conversion of a not-for-profit health insurer to a for-profit entity to fund this research.

Silver noted human stem-cell research offers immense promise for developing new treatments, prevention methods and even potential cures for many debilitating diseases such as cancer, Parkinson's disease, Alzheimer's, HIV/AIDS, spinal cord injuries and diabetes. This funding will provide the support needed to make crucial medical advancements that could save or improve the lives of millions.

"It is significant to have a chief executive who truly understands the tremendous potential and critical importance of stem-cell research," Silver said. The Assembly first called for state supported stem-cell research in 2005.

Education: Making a 'Sound, Basic Education' a Reality for All Children

The Assembly plan endorses the governor's $1.45 billion increase for schools across New York State - the largest year-to-year education investment in New York State history. The proposal provides $532 million more over four years to complete the Assembly's plan to provide statewide, universal pre-K to ensure that every four-year-old can get a head start on school by the 2010-11 academic year.

As it has in previous years, the Assembly's Resources + Reform = Results proposal responds to the requirements of the CFE decision, not just for New York City, but for high-needs school districts across the state to ensure every child receives a sound, basic education. The proposal includes the governor's new foundation education formula for predictable, stable, transparent funding - a formula the Assembly has long sought. Silver noted that since the formula uses factors of regional cost, poverty, limited English proficiency and enrollment in the calculation, it better reflects overall student need.

"We welcome a chief executive who is serious about addressing the funding needs spelled out under the CFE ruling," said Silver. "This budget provides a substantial increase in operating aid and dramatically boosts pre-K and class-size-reduction programs to improve education throughout the state."

The Assembly supports the governor's plan for education agreements between the state and school officials that will help ensure that principals and superintendents are doing all they can to improve the standards and success of schools.

Charter School Reform

The Assembly plan authorizes 50 additional charter schools, as well as seeking critical improvements and reforms to the current system for funding charter schools, holding them accountable and providing additional employee protections for those who work in charter schools. Furthermore, the Assembly budget includes the governor's $15.2 million in charter school transitional aid.

Higher Education

The Assembly budget closely follows - and builds on -- the governor's higher education proposals by seeking to strengthen New York's colleges and universities and make the dream of a degree a reality for thousands of students. The Assembly's plan would provide an additional $62.38 million more than the governor's budget to fund higher education initiatives.

The Assembly plan would provide $15 million more in operating aid for the State University of New York (SUNY) and $10 million more for the City University of New York (CUNY) to help the two systems maintain high standards and attract the best faculty. It also would provide a five percent increase in student opportunity programs, such as the Education Opportunity Program (EOP), the Higher Education Opportunity Program (HEOP), Search for Education Elevation and Knowledge (SEEK), College Discovery and the Liberty Partnership Program (LPP). In addition, $10 million was provided for Educational Opportunity Centers (EOC) for operating costs and workforce development labs.

In order to prevent local tuition increases or property tax hikes, the Assembly provides $8.16 million for SUNY community colleges and $3 million for CUNY community colleges - increasing state support by $50 per full-time equivalent and attaining the level of state support required by statute.

The Assembly plan invests an additional $105 million for capital improvement needs for SUNY and CUNY to help them upgrade their facilities. Silver noted $75.9 million would go to SUNY and $30 million would be invested in CUNY.

Tax Relief For Working Families

The Assembly budget legislation continues the house's commitment to reducing the tax burden on working families by providing $2.7 billion in much-needed tax relief when fully phased in by 2010. The Assembly tax reduction aims to help New Yorkers raise their families, educate their children, invest in their communities and stimulate the economy.

The Assembly budget contains the governor's three-year, $6 billion property tax cut, providing a tax savings of $1.5 billion in the first year, $2 billion in the next and $2.5 billion in the final year. The initiative follows the governor's recommendation to provide a Middle Class School Tax Relief (STAR) program by enhancing the state's existing STAR program. It would provide relief to those who need it most by distributing benefits based on income.

New York City property and income taxpayers also benefit under the Assembly budget proposal. Under Middle Class STAR, New York City taxpayers will see a tax relief increase based on income level. The average STAR savings for eligible homeowners will increase from $212 to a maximum of $382 and a minimum of $276, depending on income. For New York City seniors who qualify for Enhanced STAR, the average savings will increase from $381 to $495. The house's budget also mirrors the governor's call for a state personal income tax reduction to everyone but the wealthiest two percent of New York City's residents. In addition, the Assembly accepts recommendations by the governor to close loopholes many major corporations use to avoid paying their fair share.

Silver noted that in place of the governor's recommendation for a tax deduction of up to $1,000 per child for private school tuition costs, the Assembly budget proposal would expand the $330 child tax credit proposed last year by the house and enacted in the SFY 2006-2007 budget. This year, the Assembly reduced the age eligibility requirement set at four to 17 years of age to include those under four years old. Under the phased in plan, families with children under four can save up to $109 per child the first year, up to $218 in 2009 and up to $330 in 2010.

Economic Development for Investment and Employment Opportunities

The Assembly budget commits to job-creating programs that will inject new hope in the anemic economies of the upstate region and other struggling localities. These funding initiatives aim to enhance the business climate and create high-paying job opportunities for New York's working families through investments in all sectors of the economy, from small businesses and manufacturing companies to burgeoning high-tech industries.

The Assembly budget also allocates an additional $50 million above the governor for a total of $150 million to continue capital support for the Restore NY Communities Initiative, which the Assembly created in 2006. The program is a sweeping initiative aimed at revitalizing aging and blighted neighborhoods in New York's distressed communities.

The Assembly's proposal provides more than $3.4 million above the governor's budget for the Urban and Community Development Program in Economically Distressed Areas. An additional $1.3 million over the governor's budget is provided for the Entrepreneurial Assistance Program that helps enterprising individuals, including women, minorities and dislocated workers, create businesses.

The house's budget measure also supports the governor's $16 million increase to the "I Love New York" tourism program, a 50 percent increase from last year's budget. The funding is aimed at drawing more visitors from around the globe to our state, a goal the Assembly has consistently supported.

State Funds For Aid To Localities

The Assembly budget maintains the house's pledge to help municipalities meet their financial responsibilities by providing more than $700 million, a $50 million increase above last year's budget, to the Aid and Incentives for Municipalities (AIM) program, an initiative to help localities meet their financial responsibilities. New York City would be able to once again participate in the state's revenue sharing program beginning in 2008-09 fiscal year. The Assembly restored $2 million in AIM aid to 81 towns and villages that were eliminated in the governor's budget. The Assembly also would allow the cities of Albany, Buffalo, Rochester, Syracuse and Yonkers to retain $3.5 million in parking violation surcharges that the state currently receives. Under the Assembly proposal, the funds would be dedicated toward local criminal justice programs.

The proposal contains $25 million to fund the Shared Municipal Services Incentive (SMSI) program, which was reinstated by the governor after being eliminated last year, to promote shared services agreements between municipalities and schools districts. Under the initiative, incentives would be provided to local governments and school districts to merge with neighboring municipalities or consolidate and share such responsibilities as health and highway services or countywide programs.

"The budget presented by Gov. Spitzer is far and away better than any executive state spending plan we've seen for more than a decade. The Assembly budget proposal simply makes the modifications and revisions we feel are necessary to best meet the needs of all New Yorkers," said Silver.