March 31, 2009

Assembly Passes 2009-2010 State Budget Legislation

Silver: Spending Plan Protects Investments in Education, Healthcare, Child Welfare and the Environment, Enacts Historic Medicaid Reforms and Sets the Stage for a Strong Economic Recovery

Assembly Speaker Sheldon Silver and Assembly Ways and Means Chairman Herman D. Farrell, Jr. today announced the Assembly passed the SFY 2009-2010 budget, before the start of the fiscal year, April 1.

Noting the extraordinary economic challenges facing the nation, the lawmakers said the $132 billion spending plan closes a projected a $17.65 billion General Fund gap by implementing $5.1 billion in necessary spending cuts, raising $5.2 billion in revenue, utilizing $1.1 in non-recurring revenues and maximizing $6.2 billion in federal stimulus dollars.

"Faced with the largest deficit in New York's history, our plan makes $6 billion in spending cuts - including $800 million dollars through the Deficit Reduction Package. These cuts include historic reforms to Medicaid that will save $1.6 billion this year and billions more in future years - while leveraging $5 billion in federal Medicaid dollars. In order to balance the budget and prevent deep cuts to schools, healthcare, seniors, child welfare and the environment this budget temporarily increases income taxes on high earners," said Silver.

"In addition, this budget advances two long held Assembly priorities: reform of the Rockefeller drug laws to emphasize treatment and prevention over incarceration and an expansion of New York's nickel deposit law to bottled water - a move that will clean up New York's environment and raise an additional $115 million," Silver continued.

"Our state is on schedule to implement the 2009-2010 state spending plan. This budget is a sound, fiscally prudent plan that reflects the economic realities of our state," Farrell said.

The 2009-2010 state budget continues the Assembly's commitment to providing a quality education for New York State's children despite tough economic times. The budget stabilizes aid to schools by restoring $1.1 billion to school districts.

The budget also lifts the freeze on reimbursable expense-based aids, including transportation, building aid and BOCES - ensuring school districts have access to the funds they need. Overall, schools will benefit from an estimated increase of $403 million with these aids over the 2008-09 school year. Foundation aid for the 2009-2010 school year will remain at current levels. The Assembly continues its historic commitment to foundation aid by phasing in full funding over three years, a year earlier than the executive's proposal, starting in 2011-12.

The budget also uses the federal funds to help local school districts over the next two years. The federal stimulus funding provides $906 million in Title 1 funds, which is financial assistance for schools with high percentages of disadvantaged children to help ensure all children meet the state's academic standards. Additionally, $794 million is allocated for the Individuals with Disabilities in Education Act (IDEA), ensuring that additonal financial support for, special education and related services is provided to children with disabilities.

The budget also rejects the Preschool Special Education cost shift onto school districts, which will save school districts $185 million in the 2009-10 school year.

The Assembly continues its commitment to universal pre-kindergarten by maintaining funding at $376 million. In addition, the budget accepts the executive's proposal to allow for the mid-year expansion of programs that started in the 2008-09 school year.

The budget will continue the Contract for Excellence program for the 2009-10 school year. School districts that are required to prepare a Contract for Excellence will maintain the same level of funding as last year, ensuring schools will not have to reduce spending on allowable programs, including class size reduction, academic after-school programs and full-day kindergarten or pre-kindergarten.

In addition, the budget creates new reporting requirements for New York City regarding its Five Year Class Size Reduction Plan to include detailed information by school on the number of classrooms and teachers that existed prior to receiving CFE funds and the number of new classrooms and new teachers created with funds; actual average class sizes for each year funding was received; and those that received CFE funds and did not reach class size reduction goals and the actions to be taken in those schools to reduce class sizes.

The budget restores $30 million in funding for non public schools and $10.6 million in funding for libraries. The budget also provides $40 million for Teacher Centers, restores Adult Literacy Education programs and continues Bilingual Education at $12.5 million.

Higher Education
Recognizing the significant economic development impact of the State University of New York (SUNY) and City University of New York (CUNY) the budget invests $2.5 billion for SUNY, nearly $118 million more than last year, and $144.4 million more to CUNY, providing it with $1.9 billion.

The budget rejects the $49.9 million cut to the Tuition Assistance Program (TAP), a program that provides eligible New York residents annual grants of up to $5,000, based on income, that students do not have to pay back. The cut would have based TAP awards on the number of credits a student takes, reducing TAP grants for full time students who take less than 15 credit hours.

The spending plan also adds the following restorations to TAP: In addition, the budget restores $3.6 million for the Collegiate Science and Technology Entry Program (CSTEP), and maintains funding for the Educational Opportunity Program (EOP), the Higher Education Opportunity Program (HEOP) and the Search for Education, Elevation and Knowledge (SEEK) program. Through counseling, tutoring, financial assistance and drop-out prevention, these programs are dedicated to encouraging enrollment in college, and also to helping ensure success.

Temporary Increase in Personal Income Tax
Faced with the largest deficit in New York's history, the budget imposes a three year temporary income tax increase on high earners that will raise $4 billion and prevent deep cuts to education, healthcare and services for seniors, children and the disabled.

The budget calls for a three-year temporary PIT increase for those earning over $300,000 married filing jointly to increase to the rate of 7.85 percent and for those earning $500,000 the rate would go up to 8.97 percent.

The budget also provides $3.5 billion in property tax relief by preserving the STAR exemption. The Assembly rejected proposals in the Executive Budget to raise the sales tax on clothing, increase the gas tax, and impose dozens of small taxes and fees on services that middle class families depend on.

Health Care
Using federal funds aimed at helping state and local government stabilize their budgets, New York's budget provides vital funding to protect the most vulnerable patients and to ensure working families have access to quality health care by restoring $1.3 billion to health care. In addition, the 2009-10 budget begins permanent health care reimbursement reforms and investments that will lead to $1.6 billion in savings this year and billions more in future years.

The budget restores millions of dollars to New York's health care facilities by rejecting $332.6 million in executive cuts to hospitals and $195.6 million to nursing homes.

The budget restores $49.9 million to the Elderly Pharmaceutical Insurance Coverage (EPIC) program - which is designed to lower prescription drug costs for seniors with fixed incomes - and $2.8 million to the Medicaid program to restore coverage for drugs denied by Medicare Part D. This "wrap around" coverage is essential in ensuring that EPIC beneficiaries do not leave the pharmacy without their needed drugs.

In order to ensure infants and toddlers with disabilities or developmental delays receive needed services and treatments, the budget rejects all executive changes to Early Intervention Program (EIP) - including changes that would have exempted children with certain speech-only delays from participation and established parental and provider fees for participation.

Public Protection
In addition to Rockefeller Drug Law reforms, the SFY 2009-10 budget provides essential funding for initiatives that reduce crime in cities, provide addiction services, protect witnesses in criminal cases and victims of domestic violence, while also closing underutilized state prisons.

Public protection items included in the SFY 2009-10 include:

The budget restores vital funding to fight foreclosures and create more affordable housing. Additional provisions commit $25 million for foreclosure prevention services to assist New Yorkers victimized by aggressive and deceptive lending practices. The final budget rejects the executive's proposed cuts to the Neighborhood Preservation and Rural Preservation programs, which provide support to citizen-led, not-for-profit housing and community-based organizations that create and preserve affordable housing opportunities in urban, suburban and rural areas throughout the state.

Human Services
The 2009-2010 state budget includes a significant investment to help New York's neediest families. To help New York's neediest, the non-shelter portion of the public assistance grant will increase by 10 percent over the next three years, beginning July 1, 2009. This marks the grant's first increase in more than 18 years.

The budget accepts a savings of $11.5 million to be realized through the closure or downsizing of 11 youth facilities and restores $64.7 million in funding for local detention services. The budget also covers local detention costs at 49 percent. The budget fully restores detention services, as well as 90 percent of youth programs funding, while providing additional funds for alternatives to detention and community reinvestment.

The budget also directs $914.2 million to the Child Care Block Grant. To keep children safe, the spending plan makes it less costly for child care providers to check the Statewide Central Register of Child Abuse and Maltreatment by rejecting the executive's proposed $25 fee. And the final budget rejects the executive's proposal to eliminate state funding for Community Optional Preventive Services (COPS), restoring $29 million to an initiative that preserves family stability and prevents troubled youths from sliding into foster care or juvenile justice.