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Summary of the FY2009 Budget

Updated April 14, 2008
The following provides a narrative summary of budget provisions of interest to Business Council members. We encourage you to follow up with Business Council staff if you need any additional information, or if you would like to discuss any of these budget provisions.

Overview

The legislature completed action on a reported $121.7 billion state budget for Fiscal 2009.

According to the Division of Budget, the final agreement cuts $1 billion from state agency operations (resulting in a state ops increase of just 1 percent); $828 million of savings with the state's health care budget (including pharmaceuticals, insurance, nursing homes, home care and others, resulting in a 1.2 percent increase in state Medicaid spending, excluding the local cap); a 2 percent ($270 million) reduction in local assistance programs (excluding local school aid); and one year delay in extending  middle class STAR rebates (a savings of  $354 million).

The final budget also includes about $950 million in new revenue measures, including nearly $700 million in new business taxes and fees.

Major spending initiatives included a $1.75 billion increase instate funding for elementary and secondary schools; funding for the expansion of Child Health Plus to cover an additional 70,000 uninsured children; a total of $1.6 billion in “economic development” capital; and nearly $6 billion of capital funding for SUNY and CUNY senior colleges and community colleges.

Taxation

The final budget imposes nearly $950 million in new, modified and expanded taxes on business and individuals. In addition, the budget contained one broad-based tax rate reduction, and extended or increased  two key investment tax credits. An overview of the most significant revenue measures in the final budget agreement is provided below. A more complete review of revenue measures included in the final budget, as well as the text of the tax provisions from the final revenue bill (S.6807-D/A.9807-D) are both available on our web site here.

Significant New/Increased/Expanded/Modified Taxes

Tax Reductions/Modified Tax Credits

Energy

The legislature REJECTED the imposition of the following fees:

Contract Procurement / Local Government Efficiency

The Public Protection and General Government Article VII Bill (S.6806-C/A.9806-C) included a number of provisions related to government procurement and local government consolidation.

Highlights include:

Many of the items proposed in the initial Executive Budget have been omitted from the agreed-upon bill; some issues are likely to be revisited post-budget. Among the items intentionally omitted from the budget bill include:

The Legislature adopted Wicks reform and Project Labor Agreement language in the ELFA Article VII bill (S.6807-C/A.9807-C). Key components include:

Economic Development

The final budget agreement included a significant amount of new economic development funding, created several new development programs, and authorized the Dormitory Authority and the Urban Development Corporation to issue up to $1.285 billion in new debt to support these economic development initiatives. It also extended several existing economic development programs. Details are provided below. These changes are all included in S.6807-D/a.9807-D.

New Programs/Funds

Modified Economic Development Programs– The following actions were taken with regard to existing economic development programs.

Health

In what the Paterson administration is calling a healthcare budget that “enacts historic healthcare reform” and takes “an important step forward in transforming (New York's) healthcare system to lower costs, increase access and invest in primary and preventive care”, the State Legislature approved the healthcare portion of the 2008-09 State Budget (A.9808-C) on Tuesday, April 1.

Taxes on Health Coverage

Dependent Coverage Mandate

Local Health Planning Grant

Nurse Education

Trend Factor for Medicaid Reimbursement

Movement Toward Healthcare Reform, Investment in Primary & Preventive Care

Stem Cell Research

$50 million was appropriated for stem cell research as part of the stem cell initiative that was enacted in last year's budget. $100 million from last year's budget has been reappropriated and made available for awards during Fiscal 2009.

Environment

The most significant environmental initiatives proposed in the Executive Budget were not included in the final budget agreement. An overview of these proposals, and their outcomes, is as follows: