The General State Charges budget provides General Fund support for two types of centralized funding: fringe benefits for State employees and fixed costs paid by the State for a variety of activities. These are costs that are incurred by all agencies and are calculated on a government-wide basis. Fringe benefits for State employees funded through the General Fund appear in the General State Charges budget, whereas fringe benefits for State employees supported through Special Revenue Funds do not appear in this budget but instead, appear in individual agency budgets. The General State Charges budget is included in the Public Protection and General Government appropriation bill.

The Executive requests an All Funds appropriation of $2,730,292,000, increase of $256,613,000 over State Fiscal Year (SFY) 2002-03. Market conditions that are causing Pension Fund investment losses and continued escalation of health care costs are causing significant increases in spending for employee pension benefits and health insurance.

The Executive recommends a SFY 2003-04 General Fund appropriation of a $1,307,788,000 for the State's contribution to the Health Insurance Fund. This reflects a 13 percent average increase in the State's share of health insurance premiums. This level of funding assumes $70 million in savings primarily from the Empire Plan. The Executive's proposed changes will require passage of legislation and may also require collective bargaining with State employee unions.

The Pension Fund investment losses are causing steep increases in required employer contribution levels. The $321,839,000 recommended appropriation for SFY 2003-04 is based on an estimated four percent contribution rate. The contribution rate for SFY 2002-03 was one percent.

Article VII

The Executive proposes legislation to reduce the State's share of health insurance premium contributions for State employees and retired State employees. These changes would be subject to collective bargaining for union represented employees. The proposal would increase co-payments for doctors' visits and pharmaceuticals. It would increase the contribution made by employees and retirees toward the premiums paid for health insurance. The legislation includes proposals to modify health insurance contributions for future retirees based on a sliding scale reflecting years of State service.

The Executive also proposes language establishing a market-based index for determining the rate of interest to be applied in court judgments against the State, local governments and certain public authorities. The current rate of nine percent established in 1982 would be replaced with rates equal to the average of the one-year constant maturity Treasury yields.