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March 1, 1999

Dear Colleagues:

I am pleased to provide you with the first publication of the Ways and Means Committee New York State Expenditure Report for 1998-99 & 1999-2000. The initiation of this report represents part of our continuing commitment to presenting clear and accurate information to the public. It offers a complete and detailed assessment of the Committee staff forecasts for the State's public assistance programs, the Medicaid program, as well as the State correctional system inmate population. The Committee staff's Medicaid and public assistance forecasts for the current and next fiscal years are a combined total of $354 million below those of the Executive.

The State's public assistance caseload continues on the downward trend which began in 1994. Moreover, we can observe this trend in almost every county. Due to the improving State economy, as well as the ongoing efforts of local governments, we expect to see a continuation of this downward trend through the end of the 1999-2000 State fiscal year.

An improved State economy is also helping to keep Medicaid program growth low by reducing the number of people who need governmental assistance in meeting their health care needs. Other factors restraining program growth include a decline in the rate of medical care inflation, restructuring within the State's health care industry, as well as deliberate policy actions enacted during the last four fiscal years aimed specifically at controlling costs.

Finally, growth in New York State's under-custody inmate population has fallen from the high rates we experienced during the 1980's, to growth of less than three percent per year between 1992 and 1997. This dramatic decline in the rate of growth is due primarily to the fall in the State's crime rate since 1990. The rate of population growth is expected to decline further over the next three years.

The Committee staff projections are reviewed by an independent panel of professional economists drawn from major financial and manufacturing corporations, prestigious universities, and private forecasters from across the State. Assembly Speaker Sheldon Silver and I would like to express our appreciation to all of the members of our Board of Economic Advisors. Their dedication and expert judgement have been invaluable in helping the Ways and Means Committee staff refine and improve their forecasts. They have served to make the work of the staff the best in the State. Of course, they are not responsible for either the numbers or the views expressed in this document.

I wish to acknowledge the fine work done by the talented Ways and Means Committee staff. Their forecasts are integral to the budget process. The Speaker and I look forward to working with each of you to achieve a budget fair for all New Yorkers.

Sincerely,

Herman D. Farrell, Jr.
Chairman

1998-99 and 1999-2000

March 1999

TABLE OF CONTENTS

Executive Summary