Assembly Advances State Budget That Protects Working Families

Addresses largest budget gap in state history through responsible cuts, and asking wealthy to do more
March 30, 2009
Assemblywoman Rhoda Jacobs (D-Flatbush) announced the Assembly will begin passage of the 2009-2010 state budget on March 31. Budget bills have been introduced and are currently aging on legislators’ desks.

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

Assistant Speaker Jacobs added that the budget prevents the deepest cuts to schools, reverses some damaging cuts in health care, and begins implementation of permanent health care spending reforms that will lead to $1.6 billion in savings this year and billions more in future years.

“This budget advances three long-held Assembly priorities: reform of the Rockefeller drug laws to emphasize treatment and prevention over incarceration, 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 – and an increase in the public assistance grant for the first time in nearly two decades,” Jacobs said. “This budget balances the need to take drastic action to rescue the state’s finances. It cuts over $5 billion, while preventing the deepest cuts to our schools and health care system and protecting our most vulnerable residents – our kids, seniors and the sick.”

Jacobs said the budget is a sound, fiscally prudent plan that reflects the economic realities of our state. The introduction of these bills follows a long series of public hearings and public testimony.

Restoring $1.1 billion to School Districts

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 and reduces the burden on taxpayers by restoring $1.1 billion to school districts.

“The budget could have been a disaster for schools, students and taxpayers,” said Jacobs. “Even during the worst economic downturn in decades, we maintained our strong commitment to educating our children and providing them with the tools and skills they will need to compete successfully for the jobs of the 21st century.”

The budget 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 by an estimated increase of $403 million over the 2008-2009 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 2011-2012.

The budget also uses federal funds to help local school districts over the next two years, including:

  • $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; and
  • $794 million under the Individuals with Disabilities in Education Act (IDEA), ensuring that mandatory early intervention, special education and related services are provided to children with disabilities.

The budget also restores $30 million in funding for non-public schools and $10.6 million in funding for libraries.

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 2008-2009 school year.

The budget will continue the Contract for Excellence program for the 2009-2010 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 rejects the Preschool Special Education cost shift onto school districts, which will save school districts $185 million in the 2009-2010 school year. The budget also provides $40 million for Teacher Centers, restores the Adult Literacy Education program, and continues Bilingual Education at $12.5 million.

“Our commitment to education will not only help the state weather this economic storm but will relieve the burden on local taxpayers by providing the extra resources we need to educate children throughout the state,” Jacobs said.

Investing in 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.

“Times are tough and hard decisions need to be made, but New York must keep the dream of a college education in reach for working families,” Jacobs said.

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 – which 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 includes the following restorations to TAP:

  • $31 million to reject the reduction of TAP awards relative to the amount of credits taken;
  • $6.5 million to reject arbitrary academic eligibility standards;
  • $5.7 million to provide award enhancements for families with multiple children in college;
  • $3.7 million restoration for awards to students in default of federal student loans not guaranteed by the Higher Education Services Corporation (HESC); and
  • $3 million to provide awards to graduate students.

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 helping ensure success.

Ensuring Working Families Don’t Shoulder the Tax Burden

Assemblywoman Jacobs said that faced with the largest budget gap 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, health care and services for seniors, children and the disabled.

“Currently in New York it doesn’t matter if you make $40,000 or $40 million – you pay the same 6.85 percent tax rate. That puts a greater burden on the middle class,” said Jacobs. “These modest tax increases for high-income earners – less than 3 percent of New Yorkers – will help provide the dollars necessary for education, health care and other vital services during a critical fiscal crisis.”

The budget calls for a three-year, temporary personal income tax increase to 7.85 percent for those earning over $300,000 (married filing jointly) and 8.97 percent for those earning $500,000.

The budget also provides $3.5 billion in property tax relief by preserving the STAR exemption. The Assembly rejected proposals in the executive budget worth $1.3 billion to raise the sales tax on clothing, increase the gas tax, and impose dozens of small taxes and fees on services that working families depend on.

“We rejected $1.3 billion in nuisance taxes and fee hikes proposed in the executive budget that would have resulted in hardships for families. We can’t expect millions of New Yorkers to balance the state’s budget themselves by scrounging up extra bucks for nearly every aspect of family activity, including gym memberships, haircuts and ballgames,” noted Jacobs.

Protecting Health Care

New York’s budget provides vital funding to protect the most vulnerable patients and ensure working families have access to quality health care by restoring $1.3 billion to health care. In addition, the 2009-2010 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 restores $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 the 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.

“Times are tough and tough choices need to be made – but we cannot balance a budget by compromising the health of working families. The budget ensures New Yorkers have access to quality, affordable health care and makes no recipient cuts,” emphasized Jacobs.

Strengthening our Criminal Justice System

In addition to Rockefeller Drug Law reforms, the 2009-2010 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 budget include:

  • $17.3 million for Operation IMPACT, which coordinates state, federal and local law enforcement in cities across New York;
  • $21 million in federal assistance to support law enforcement, drug courts, drug treatment programs and alternatives to incarceration initiatives (ATI) in conjunction with enactment of Rockefeller Drug Law reform;
  • $79 million for the Crime Victims Board, including funds to pay for victim compensation counseling and forensic rape examinations; and
  • consolidation of the capacity Department of Correctional Services facilities, as well as the closing of three prisons at a savings of $22 million for taxpayers.

Fighting foreclosures and Preserving Affordable Housing

“The budget restores vital funding to fight foreclosures and create more affordable housing,” said Jacobs. 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.

Coming Through for Struggling Families

The 2009-2010 state budget includes a significant investment to help New York’s neediest families. 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 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.

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.

“Now more than ever, our struggling families are depending on a helping hand. In this economy we can’t pull the rug out from under them. We need to ensure the neediest families have the resources they need to get by,” concluded Assemblywoman Jacobs.