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SUMMARY OF THE GOVERNOR'S PROPOSED
2003-2004 BUDGET
Prepared
by the staff of The Business Council
January 31, 2003
Overview
Governor's
2003-04 budget preserves enacted tax cuts, keeps spending flat; some other
taxes would rise
Governor
Pataki proposed a 2003-04 budget that would go forward with $177 million
in already enacted tax cuts, raise taxes on life, property and casualty
insurers and health insurance, and leave overall spending essentially
the same as this year's.
Overall spending,
including federal aid to support recovery in downtown Manhattan, would
drop by 0.1 percent to $90.8 billion, according to the Budget Division.
The state-funds portion of the budget-including state taxes, fees, tuition
and other non-federal revenue-would be reduced by a similar proportion.
Including expenditures moved off-budget, overall spending would rise modestly.
Governor
Pataki said the slowdown in the state's economy caused by the September
2001 terrorist attacks and the national recession created a budget shortfall
of $11.5 billion for the current fiscal year and the 2003-04 year, which
starts April 1. This fiscal year will end with state-funded spending having
risen by an estimated 3.5 percent over the previous year.
Half of the
projected shortfall for the coming fiscal year would result from a $4.6
billion increase in "baseline" spending largely caused by existing
formulas for Medicaid, school aid, and other programs. The remainder stems
from revenue losses due to the slow economy, and the absence of reserves
used to balance the current budget.
The Governor
proposed to balance the budget with a combination of spending reductions
in selected programs, reduced levels of increases for others, targeted
tax and fee increases, movement of some expenditures off-budget, and one-time
revenues.
State aid
to K-12 education would be reduced by $567 million, or 4 percent. The
Budget Division said school spending in New York was the highest in the
nation in fiscal 2002 at $11,400 per student, 44 percent above the national
average. Spending on state agencies' operations would be reduced by $176
million, including a reduction of the state workforce by 5,000 positions.
The budget
proposes to reduce projected spending increases on Medicaid and other
health-care programs by $1 billion. Total expenditures on those programs
would still rise, though-by $515 million, or 2 percent, for Medicaid and
$225 million, or 28 percent, for Child Health Plus.
The budget
proposes to securitize the state's share of the tobacco settlement raising
$2.3 billion.
Following
are the specific budget summaries by issue area.
TAXATION
Scheduled
Tax Cuts
- The proposed Executive Budget implements tax cuts enacted in previous
years and scheduled to take effect in 2003-04. The Budget Division
estimates the value of those tax reductions at $177 million. They
include continued reduction in energy taxes for commercial, residential
and nonprofit utility customers; a reduction in the small-business
tax rate; expansion of the earned income tax credit for working, low-income
New Yorkers; and increase in the deduction/credit for college tuition;
and reduction of the "marriage penalty."
New Tax/Fee
Increases/Changes/Continued Tax Reductions
Governor
Pataki's Executive Budget proposes to:
- Remove the expiration date (taxable years beginning on or after
1/1/3) on Article 32 -- Bank Tax.
- Extend
for one additional year for taxable years beginning before 1/1/4 the
taxable status existing before the Federal Gramm-Leach-Bliley Act.
- Abolish
the net income portion of Article 33 -- Insurance Tax and raise the
premiums tax rate to 2% from 0.7% (life, accident, and health), 1%
(accident and health), and 1.3% (property and casualty). The Budget
Division said the change would raise insurance companies New York
tax by more than $160 million or 23 percent a year.
- Repeal
both the State and the Metropolitan Commuter Transportation District
(MCTD) retaliatory tax credit for tybooa 1/1/3.
- Reimpose
the State Sales and Use Tax on clothing costing under $110.
- Institute
four one-week sales tax holidays (January/April/July/August-September)
from the State's 4% sales tax on clothing costing under $500. Note:
this and the preceding change are expected to raise Sales tax collections
by $363.4 million in FY 2004 and by $418.9 million in FY 2005.
- Revoke
the exemptions adopted by counties of clothing costing under $110
from local sales tax.
- Authorize
counties to adopt four one-week sales tax holidays (matching the State's)
on clothing costing under $500.
- Double
the filing fees for limited liability companies and limited liability
partnerships to $100 per member of the company or partnership and
increase the minimum fee by 54% to $500 and the maximum fee by 150%
to $25,000. Note: this change is expected to raise Personal Income
taxes by $25 million in FY 2004.
- Impose
an excise tax on new tires of $2.25 per tire. Note: this tax is expected
to raise taxes by $22.5 million in FY 2004 and by $45 million annually
thereafter.
- Split
in half the cost of the Empire Zone Real Property Tax Credit between
the State and municipalities housing the Empire Zone for new investments
made on or after 1/1/4.
- Create
an Unemployment Compensation Tax surcharge on employers averaging
some $1.80 per employee effective 4/1/3. Note: this new tax is expected
to raise UC taxes by $22 million in FY 2004 and by greater amounts
in future fiscal years.
- Decouple
(except for farmers) Personal Income Tax from Federal law for the
Internal Revenue Code section 179 expensing option for motor vehicles
over three tons. Note: this change is expected to raise $1 million
in FY 2005 and by $2 million annually thereafter.
- Require
payments of estimated tax by partnerships, limited liability companies,
and S corporations on behalf on non-resident individual partners,
members, or shareholders and on behalf of all partners, members, or
shareholders that are C corporations. Note: this change is expected
to raise $15 million in FY 2004 and by $25 million annually thereafter.
- Establish
a fourth certified capital company (CAPCO) program to encourage investments
in high technology companies through research centers that are State-supported
through a) the Center of Excellence Program, b) the Gen*NY*sis program,
c) the Centers for Advanced Technology Program, d) the Capital Facilities
Program, or e) the Rebuilding the Empire State Through Opportunities
in Regional Economies (RESTORE).
- Qualify
any subsidiary of the New York Urban Development Corporation as a
certified capital company.
- Double
the annual lobbyist registration fee to $100. Note: this change is
expected to raise fee collections by $200 thousand in FY 2004.
- Increase
the annual nuclear generating facility operator fee from $550 thousand
per reactor to $950 thousand per reactor. Note: this change is expected
to raise collections by $2.4 million in FY 2004.
- Double
the Real Property Transfer Fee to $50. Note: this change is expected
to raise fee collections by $9.6 million in FY 2004.
- Reduce
the dormancy period of uncashed checks from three years to one year
to escheat these funds to the State two years earlier. Note: this
change is expected to raise funds by $38 million in FY 2004.
- Caps
STAR benefits for non-senior homeowners at their 2002-2003 levels.
Governor
Pataki also chose to continue implementation of the following tax reductions
that were previously enacted:
- Reduce the Alcoholic Beverage Tax rate on 0.5% + beer from 12.5
cents per gallon to 11 cents per gallon effective 9/1/3.
- Reduce
the Gross Receipts Tax rate on the commodity portion of gas, electricity,
and steam from 0.85% to 0.4% effective 1/1/4.
- Reduce
the Gross Receipts Tax rate on the transmission and distribution portion
of gas, electricity, and steam for non-residential customers from
1.125% to 0.53125% effective 1/1/4.
- Reduce
the Gross Receipts Tax rate on the transmission and distribution portion
of gas, electricity, and steam for residential customers from 2.25%
to 2.125% effective 1/1/4.
- Reduce
the Gas Importation Privilege Tax rate on out-of-State purchases of
gas and electricity from 0.85% to 0.4% effective 1/1/4.
- Reduce
the Corporation Franchise Tax differential tax rate imposed on S corporations
by 45 percent effective 7/1/3.
- Reduce
the Corporation Franchise Tax rate on firms with net income under
$200 thousand to 6.85% effective 7/1/3.
- Reduction
of the Sales and Use Tax rate on the transmission and distribution
of gas and electricity from 1% to 0% effective 9/1/3.
EDUCATION
- Proposes an overall reduction in school aid of $1.24 billion consisting
in part of:
- $407 million in operating aid (4%)
- $l44 million reduction in building aid
- $15 million enrollment based decline in Growth Aid
- Eliminates separate grants for Universal Pre-Kindergarten and
Class size reduction and discretionary grant programs
- Also proposes to consolidate nine aid programs into the new consolidated
operating aid:
- Comprehensive Operating Aid
- Extraordinary Needs Aid
- Operating Standards Aid
- Gifted and Talented Aid
- Educationally Related Support Services Aid
- Limited English Proficiency Aid
- Summer School Aid
- Academic Support Aid
- Public Excess Cost Aid (special education program aid)
- Proposes to eliminate BOCES aid for routine administrative services.
- Proposes
to consolidate BOCES aid into operating aid.
- Proposes
to replace the current building aid program with a priority based
system. Projects approved by the State Education Department after
February 1, 2003 would be selected for funding based on certain priorities
such as alleviating health and safety problems or relieving severe
overcrowding. Also proposes to simplify the manner in which state
aid is calculated for projects approved by voters after July 1, 2003.
- Proposes
to restructure the State Education department by transferring Cultural
Education Programs to a new New York Institute for Cultural Education,
moving Vocational Rehabilitation to the Department of Labor and moving
the Office of the Professions to the Department of State.
- Also
proposes to increase the number of Regents from 16 to 18 with 12 being
appointed by the Governor 6 by the legislative leaders.
Higher
Education
- Proposes that SUNY be allowed to increase tuition by $1200 from
$3,400 to S4,600, and to have more flexibility over tuition increases
in subsequent years.
- Proposes
$183.5 million in cuts to SUNY campuses and $81.7 million to CUNY
senior colleges.
- Proposes
to reduce community college funding for SUNY and CUNY by 15 % or by
$345 per student. Proposes
deferment of one-third of tuition assistance grants until a student
graduates. Students would lose the funding if they take longer than
four years to graduate.
ECONOMIC
DEVELOPMENT
Staff Contact: Ken Pokalsky
- A $58 million transfer from NYPA to the General Fund to provide
continued funding for the "Power for Jobs" program.
- A requirement
that municipalities provide 50 percent of the Empire Zone program's
real property tax refund to eligible taxpayers that are certified
after January 1, 2004.
- $125
million in additional "certified capital company," or CAPCO,
tax credits, which would leverage up to $250 million in new venture
capital for small and emerging businesses related to state-supported
research facilities.
- $75.4
million for ESD's economic development programs, including $32 million
for the "Jobs Now" program and $32 million for the Empire
State Development Fund.
- Permanent
extension of the general loan powers of the New York State Urban Development
Corporation. Its current authority expires on July 1, 2003.
- Additional
appropriations from the "Empire Opportunity Fund" for R&D
facilities, transportation improvements and other infrastructure projects.
- Creation
of new "Centers of Excellence," to be located in Westchester
County and New York City, focusing on biotechnology.
- $5 million
for the "Security through Advanced Research and Technology"
program to assist universities to leverage Federal and private high
tech research funding.
- $5 million
for the SUNY Albany/RPI semiconductor research program.
SMALL
BUSINESS
- Increase in a number of fees including those for real estate and
security broker fees in the Department of law.
- Increases
fees for Limited Liability Company.
ENVIRONMENT
- Superfund/brownfield "reform" provisions that closely
resembles the Executive/Senate compromise bill from last session (see
S.7686-A from the 2002 session). Key components include: a $138 million
annual budget, including superfund, oil spill and brownfield cleanups;
$18 million in hazardous waste surcharges; increases in petroleum
tank registration fees; post-cleanup liability reform; and use-based
cleanups and economic incentives for brownfield sites.
- A 25
percent increase in wastewater permit (SPDES) program fees. Fees for
industrial facilities, currently between $375 to $37,500, will increase
to between $475 and $47,000 based on a total daily average of gallons
discharged. The flat fee for power plants will increase from $40,000
to $50,000. These fees were first enacted in 1983 and last increased
in 1989. The aggregate impact is just $1.5 million.
- A decrease
in the DEC's general fund operations budget from $106 million to $100
million, largely due to a reduction in staff (through attrition or
a shift in funding sources, e.g., to the Environmental Protection
Fund). The DEC's capital budget, largely supported by bonds, revolving
loan funds and federal dollars, would increase by $116 million, to
$653 million.
- Expand
the purposes for which the Environmental Protection Fund (EPF) may
be used to include, among other things, assessment of natural resource
damages in the Hudson River and for beneficial end-use projects at
closed municipal landfills and for municipal landfill gas management
projects at active landfills. The EPF, which receives most of its
funds from the Real Estate Transfer Tax, would receive $125 million
in new funding.
- $22 million in new fees on vehicle tires, to fund
waste tire and tire dump management programs.
- $750,000
in increased fees for underground and surface mining permits. Current
fees range from $1,200 to $2,000; increased fees would run from $1,500
to $4,000.
- A doubling
of "depth fees," on oil and gas wells, with a statewide
impact of $200,000.
ENERGY
Increase
fees paid by operators of the six nuclear power reactors
- The Governor is proposing adjusting the fees paid by nuclear electric
generating facility operators to support local and State Radiological
Emergency Preparedness activities. Paragraph (b) of subdivision 2
of section 29-c of the Executive Law is amended to change the annual
fee per nuclear reactor from $550,000 to $950,000. The new revenue
will be divided among the State and certain localities pursuant to
an existing statutory formula. In 1981, a fee of $250,000 per reactor
was set. It was increased to $550,000 in 1994. The fee increase provides
a total of $2.4 million in new revenue. Per statutory formula, half
of this revenue, or $1.2 million, is provided to the State Emergency
Management Office (SEMO) for training and radiological emergency preparedness
activities, offsetting costs that would otherwise be supported by
the General Fund. The other half of the revenue is divided among specified
counties in accordance with the statutory formula (seven counties
within a 10-mile radius of a nuclear facility –– Westchester,
Rockland, Oswego, Wayne, Monroe, Orange and Putnam) to support radiological
emergency preparedness activities
Re-authorize
the New York Power Authority to make voluntary contributions to the General
Fund to fully support the Power for Jobs program in calendar year 2003
- The Governor is proposing changing the funding formula for the "Power
for Jobs" program. The proposed changes will not effect the operation
of the program at all (i.e recipients, allocation levels, etc). Under
the proposal NYPA is to make a payment to the General Fund equal to
100 percent of the gross receipts tax (GRT) credit provided to businesses
relating to the Power for Jobs program for SFY 2003-04. It also adds
phase five of the program under which an additional 183 megawatts
of power, added by Chapter 226 of the Laws of 2002, becomes eligible
for inclusion in the voluntary contribution by NYPA.
- NYPA
currently is authorized to make a voluntary contribution to the General
Fund equal to 50 percent of the GRT credit available each year to
all local electric distribution companies relating to phase four of
the program up to a cap of $125 million. Chapter 85 of the Laws of
2002 increased NYPA's voluntary contribution limit from 50 percent
to 100 percent for SFY 2002-03 only.
- A similar
bill was enacted in 2002 that provided for a 100 percent contribution
to the General Fund in SFY 2002-03.
- Without
this bill, NYPA will only be authorized to make a contribution of
50 percent of the GRT credit relating to Power for Jobs in 2003-04,
estimated at $35 million. NYPA intends to make a $58 million contribution
to the General Fund, well in excess of the 50 percent limit. This
bill provides the authorization to make this contribution while maintaining
the $125 million statutory limit.
Authorize
certain State agencies to finance their activities with revenues from
assessments on public utilities and cable companies
- Provides authorization to certain State agencies to finance their
activities with revenues generated from assessments on public utilities
and cable television companies. Authorizes certain expenditures of
the Department of Health as eligible expenses for cable television
assessment revenue and authorizes certain expenditures for the departments
of Agriculture and Markets, Economic Development, and Environmental
Conservation, the Office of Parks, Recreation and Historical Preservation,
the Consumer Protection Board and the Office of Public Security as
eligible expenses for utility assessment revenue.
Authorize New York State Energy Research and Development Authority
to make payments to the General Fund from various sources.
- Authorizes
the New York State Energy Research and Development Authority (NYSERDA)
to make payments to the General Fund and the environmental conservation
special revenue fund.
- Authorizes
NYSERDA to make a payment to the General Fund of $1.8 million from
interest earnings from the low-level radioactive waste account; payments
of $330,000 to the Department of Environmental Conservation's environmental
conservation special revenue fund, low-level radioactive waste account
from funds rebated to New York from the Federal government and; $913,000
payment to the General Fund from unrestricted corporate funds.
Authorize
assessments on utilities to be used for New York State Energy Research
and Development Authority research costs
- Provides annual authorization for the New York State Energy Research
and Development Authority (NYSERDA) to obtain revenue for certain
programs through assessments on gas corporations and electric corporations,
pursuant to section 18-a of the Public Service Law.
Increase
oil and gas depth fees
- Increases by over 50 percent oil, gas and solution mining depth
permit fees established in the Environmental Conservation Law (ECL)
Article 23, Title 19. These fees have not been changed in over 20
years, since they were established in 1981. By increasing permit fees,
the regulated oil and gas industry will pay a greater portion of the
cost of regulation.
Extend
the authorization for the State to recover from the industry the cost
of appraising oil and natural gas wells for local property taxation purposes
- Authorizes State recovery of costs associated with the appraising
of oil and natural gas wells for local property taxation by continuing
charge backs on their owners. Local governments have benefited from
these services requiring specialized data and methods. Worth $40,000
annually.
TRANSPORTATION
Additional
License Plate fees for Motor Vehicles
- The cost of license plates will increase in 2003 from $5.50 to $15.00
a pair for standard Empire license plates and from $2.75 to $7.50
a pair for motorcycle plates. Fiscal impact is approximately $21.7
million.
Divisible
Load Permits Included in Budget
- The Governor has included in his budget a proposal to add more divisible
load permits. This has been a top priority for The Business Council's
Transportation Committee and is a key issue for the trucking, shipping,
dairy/farming, forest product, petroleum and construction industries.
The shipping, trucking and construction industries have created greater
demand for overweight truck permits than the current statutory limit
of 17,000 permits. This bill increases the annual divisible load permit
authorization to 21,000 effective immediately, with graduated increases
up to 25,000 beginning January 1, 2005 through January 1, 2008. Also,
the bill amends subdivision 15 of section 385 of the Vehicle and Traffic
Law to add a new permit fee for seven axle vehicles; increases the
number of annual divisible load permits authorized by the Department
of Transportation; requires new safety equipment and axle configurations;
and modifies restrictions on crossing weight-posted bridges. Enactment
of this legislation equates to $2.25 million of revenues associated
with increased permit issuances and fine levels.
Require
Hazardous Material license holders to undergo a criminal history background
check
- This bill requires all applicants for a hazardous materials driver's
license to submit their fingerprints for a criminal history records
check. The applicant would submit fingerprints and the required State
and Federal fees to the Department of Motor Vehicles (DMV), which
would then transmit the fingerprints and fees to the Division of Criminal
Justice Services (DCJS). DCJS and the Federal Bureau of Investigation
(FBI) would return any criminal history record to DMV. DMV would review
the criminal history record for a conviction of any felony or terrorism
related offense and determine whether the applicant should be granted
the hazardous materials endorsement. Section 501 of the Vehicle and
Traffic Law requires an additional endorsement for a driver to transport
hazardous materials. The Department of Motor Vehicles sets forth regulations
regarding the requirements for obtaining this endorsement. Fiscal
impact is annual revenue of $2 million.
Increase
various mandatory surcharges on Penal Law and Vehicle and Traffic Law
offenses
- Amends sections of the Penal and Vehicle and Traffic laws to increase
fees and surcharges levied on offenders. Specifically, the bill increases
the existing crime victim assistance fee on felonies, misdemeanors,
and Penal Law violations from $10 to $20. The bill enacts a crime
victim assistance fee of five dollars on all Vehicle and Traffic Law
violations and infractions. Additionally, the mandatory surcharge,
ranging from $20 to $200 and assessed based on conviction type, is
increased by approximately 35 percent. The surcharge and fee cap provided
for offenders convicted of one or more traffic violations or infractions
arising from the same offense is increased from $50 to $100. Projected
revenue increase of $8 million in 2003-04 and $16 million annually
thereafter.
Provide
the annual authorization for CHIPs and Marchiselli local transportation
programs
- Authorizes the 2003-04 CHIPS and Marchiselli local capital highway
assistance programs. The authorization continues capital funding for
$23.9 million of CHIPS aid that was shifted from operating aid to capital
aid in 2002-03. This bill authorizes funding for the CHIPS and Marchiselli
capital aid programs to counties, cities, towns and villages for State
Fiscal Year 2003-04. The current five-year authorization levels for
CHIPS and Marchiselli were first set by schedule in the 2000-01 Enacted
Budget as part of the State's then-new transportation plan. The schedule
was amended in 2002-03 to reflect the shift of $23.9 million of operating
aid to capital aid. This bill provides capital program funding authorization
for State Fiscal Year 2003-04 and amends the five-year schedule to continue
the operating-to-capital shift for 2003-04. Annual authorizations for
CHIPS and Marchiselli spending are made each year since the State Highway
Law requires annual authorization of both the CHIPS and Marchiselli
funding levels.
State
vehicular blood alcohol standards to meet Federal requirements
- Accelerates the effective date of the State's new standard for driving
while intoxicated (DWI), from November 1, 2003 to July 1, 2003. This
effective date change is necessary for the State to avoid Federal
highway aid penalties in Federal Fiscal Year (FFY) 2004 and to qualify
for a Federal aid incentive award in FFY 2003. Chapter 3 of the Laws
of 2002 reduced the State's standard for driving while intoxicated
(DWI) from a 0.10 blood alcohol content (BAC) limit to a tougher 0.08
BAC limit.
Extend
and conform the State motor vehicle drug penalty standards to Federal
requirements
- Permanently extends provisions to suspend drivers' licenses for
certain drug-related convictions and repeals the accompanying Division
of Criminal Justice reporting requirement. These provisions will conform
State law to Federal standards, thereby averting sanctions which would
reduce the State's Federal highway aid.
- This bill permanently extends provisions in Chapter 533 of the Laws
of 1993, which requires the denial or loss of driving privileges for
a period of six months upon an individual's conviction or adjudication
for any drug-related criminal offense defined in Articles 220 or 221
of the Penal Law; any violation of Section 1192(4) of the Vehicle
and Traffic Law; any violation of the Federal Controlled Substances
Act; or any out-of-state or Federal drug-related criminal offense.
In addition, the bill repeals Section 28 of Part E of Chapter 58 of
the Laws of 1998, requiring the Division of Criminal Justice Services
to prepare a report on implementation procedures.
- The
license suspension provisions enacted in Chapter 533 have annually
been extended since 1994 and a 1-year extension of these provisions
will expire October 1, 2003.
Increase
various Motor Vehicle fees and authorize that these fees and a percentage
of the transportation and transmission tax be deposited in the Dedicated
Highway and Bridge Trust Fund
- This bill increases several motor vehicle fees (data search fee,
emissions inspection fee, certificate of sale fee, and title application
fee) to increase General Fund and Clean Air –– Mobile Source
account revenues. The bill also transfers a portion of Department
of Motor Vehicles' (DMV) generated revenues beginning in 2003-04,
and part of the transportation and transmission tax beginning in 2004-05,
to the Dedicated Highway and Bridge Trust Fund. This redirection of
revenues is necessary to maintain an adequate revenue-to-debt-service
coverage ratio necessary to sell bonds for the Department of Transportation's
(DOT) highway program.
- These
fee increases will generate an additional $18.8 million in General
Fund revenues and $8 million for the Clean Air –– Mobile
Source Account SRO in 2003-04, and in 2004-05 will generate $37.7
million for the Dedicated Highway Fund and $16 million to Clean Air
–– Mobile Source thereafter on a recurring basis.
Establish
the Waste Tire Management Recycling Act
- The bill amends section 27-0703 of the Environmental Conservation
Law (ECL) to require the owner or operator of a facility that stores
1,000 or more tires to provide financial assurance to cover the cost
of closure of the facility at its maximum capacity in a form and amount
acceptable to the Department of Environmental Conservation, before
the Department may issue a permit to operate the facility. Among other
requirements this would provide that tire retailers collect a tire
management and recycling fee of $2.50 for each new tire purchased
by a consumer. The retailer would be allowed to retain 25 cents per
tire, with the remaining $2.25 to be forwarded to the Department of
Taxation and Finance along with a quarterly report.
- Waste
Tire Management and Recycling fee would generate approximately $22.5
million in General Fund revenues, $2.5 million of which would be transferred
to the Environmental Conservation Special Revenue Fund, waste tire
management and recycling account.
CONSTRUCTION
Wicks
law repeal and mandate relief initiatives for localities in Budget
Within the
budget the Governor is proposing local government flexibility and removing
long-standing, State-imposed impediments to efficient government operation.
According to budget memos the Governor is proposing a myriad of changes
to existing law including:
- Repealing multiple bidding requirements for the State, municipalities,
school districts and public authorities (Wicks Law) to allow for more
flexible and cost-effective public construction contracting methods.
- Arbitration
panels to consider, above all other factors, the financial ability
of a local government to pay an award without increased taxation,
or in the case of the State, without increased taxation or contributing
to a budget deficit in the current or a future fiscal year.
- Amending
the prevailing wage requirements of the State Labor Law to allow construction
wages paid on State and municipal projects to more closely reflect
the true cost of labor in a locality.
- Fostering
cost-effective local governmental cooperation and consolidation by:
authorizing inter-municipal agreements for the joint provision of
services and the sharing of real property taxes; establishing a statutory
process to guide officials when consolidating local governments; and
maintaining unrestricted local aid at 2002-03 levels and permitting
localities that merge to keep 100 percent of their combined aid.
- Bringing
greater parity to the process under which legal claims against a public
entity are resolved by: allowing judgment awards against local governments
and the State to be offset by both past and future compensation from
all collateral sources, i.e. insurance, social security and workers'
compensation, as they are in the private sector; establishing a reasonable
market-based method of calculating interest in court judgments similar
to the method used in judgments involving the Federal government;
and conferring exclusive jurisdiction to the Court of Claims for certain
local government matters.
- Authorizing
local governments to take advantage of electronic bidding and purchasing
tools, and provide New York City schools with greater procurement
flexibility.
- Setting
effective dates including the implementation of changes to binding
arbitration and the expanded investment options.
TECHNOLOGY
- A $98 million Internal Service Fund appropriation for operation
of the consolidated State Data Center. This fund will support positions
previously transferred from State agencies, the cost of operating
the Center's computers and providing the computing services authorized
by agencies.
- A $111.8
million Internal Service Fund appropriation for the New York Intranet
(NYeNet) - a high-speed communications network system supported by
fees charged to State and local users - and for the operation of the
State's telephone system.
- A $1.6
million Internal Service Fund appropriation to coordinate the development
of computer systems that will be used by various agencies and statewide
enterprise agreements.
- The
Executive Budget also transfers the Cyber Security and Critical Infrastructure
Coordination Division from OFT to the Office of Public Security in
order to centralize oversight of the State's security functions.
LABOR
& HUMAN RESOURCES
Staff Contact: Tom Minnick
- The Labor Department, with almost 90% of its workforce financed
by federal grants, will grow due to vocational rehabilitation services
for disabled persons being transferred to the responsibility of DOL.
Specifically, components of the Commission for the Blind and Visually
Handicapped (CBVH) will be transferred from the Office of Children
and Family Services to better coordinate CBVH programs with existing
DOL employment services. Also, the Vocational and Educational Services
for Individuals with Disabilities (VESID), now part of the state Education
Department, and its network of 15 district offices across the state,
will also be transferred. Employment levels will rise from 4,219 full
time equivalent positions in 2002-03 to 5,103 in 2003-04.
- The
Division of Human Rights, charged with investigating and resolving
complaints of illegal discrimination, promoting human rights awareness
through education and acting as a resource in the prevention and elimination
of discrimination, will see no change in their $18,224,000 all funds
appropriation for 2003-04. They will, however, reduce their full time
equivalent positions by 4, from 209 to 205.
- The
Office for Advocate for Persons with Disabilities will maintain its
full time equivalent positions at 16 but will see a small increase
in its all funds appropriation from $1,585,000 to $1,593,000. The
Office for Advocate promotes the inclusion of persons with disabilities
in all aspects of community life.
Health
Care Reform Act
The Governor proposes extending the Health Care Reform Act two years from
July 1, 2003 through June 30, 2005. Included are the following proposals:
- increasing the bad debt / charity care assessment from 8.18% to
8.85%, raising $80 more on an annual basis.
- increasing
the level of graduate medical education "covered lives assessment"
by $35 million, bringing it from $690 million to $725 million. This
increase would be effective January 1, 2004.
- the
Governor states he wants to restructure graduate medical education
payments to reduce reimbursement for indirect costs. He goes on to
state in his Budget Message: "New Yorkers can no longer afford
this generous program that trains 15 percent of the nation's doctors
– half of whom leave New York to practice elsewhere."
- requires
payors of GME (see above bullet) to submit their reports to the state
electronically.
- establishes
a HCRA amnesty plan to encourage payors to remit overdue HCRA surcharges,
assessments and other payments without interest charges and penalties.
- Increasing
the assessment on Medicaid from 5.98% to 6.47% – some of the money
going to bad debt/charity care and graduate medical education.
- extends
the Child Health Insurance Program and shifts children who are between
100%-133% of the federal poverty level off the Medicaid program onto
the Child Health Insurance Program.
- rolls-back
eligibility for Family Health Plus from 150% to 133% of the federal
poverty level.
- sets
up a framework for the use of money generated by any conversions of
not-for-profit health insurers to for-profit status, beyond the conversion
of Empire Blue Cross.
Medicaid
- establishes a Preferred Drug Program for the Medicaid program. The
selection of preferred drugs will be guided by the Department of Health's
Pharmacy and Therapeutics Committee. The Department will hire a contractor
to administer the new program. Certain drugs for AIDS, mental health
treatments and organ transplants will continue to remain available.
- reduces
pharmacy reimbursement rates for both Medicaid and the state's Elderly
Pharmaceutical Insurance Coverage (EPIC) program.
- recommends
increases in prescription drug co-payments by Medicaid and EPIC recipients.
- Recommends
the state assume the entire local government share of prescription drug
costs. Local governments would be required, in turn, to pay a 37% share
of fee-for-service hospital, outpatient and clinic expenses. The Governor
estimates this to be a net gain for local counties.
- re-establishes
a 0.7% non-reimbursable assessment on total hospital revenues for
inpatient and outpatient services. The tax is to be phased-out by
March 31, 2007.
- implements
a new regional average reimbursement system for nursing homes.
- eliminates
the return on equity incentive to for-profit nursing homes.
Public
Health
- changes the early intervention system to require a contribution
from health insurers and parents. Health insurers would be required
to cover the first $5,000 in early intervention costs where a child
has health insurance. Early intervention providers would bill Medicaid
and health insurers directly.
- funds
the physician profiling system by using revenue generated by physician
fees as part of the Office of Professional Medical Conduct.
- Establishes
a "forge-proof" prescription program to reduce the illegal
marketing of prescription drugs.
- finances
immunization, newborn genetic screening and selected community health
programs from insurance industry assessments. These programs are now
paid out of general state revenues.
SUNY Hospitals
- Recommends converting SUNY hospitals to private, not-for-profit
corporations.
CONSUMER
- Replace the current $110 sales tax exemption on clothing and footwear
with four one-week exemptions at $500.
RESEARCH
& DEVELOPMENT
- Funding continued for the five designated Centers of Excellence.
Additional Centers to be established in Westchester County and New
York City focusing on biotech research.
- Funding
for the Empire Opportunity Fund (EOF) which finances major infrastructure
projects included those related to high technology research and development.
- $25
million in funding for Centers of Advanced Technologies (CATS)
- $7.5
million in funding for attracting and retaining research faculty.
- Targeted
expansion of the Certified Capital Company (CAPCO) program to provide
up to $250 million in private capital to companies which collaborate
with state-supported research facilities.
- Continued
funding for the Security Through Advanced Research and Technology
(START) program.
- Specific
funding for various university specific research programs including
$ 5 million for the SUNY Albany/RPI Focus Center-NY semiconductor
research program; $500,000 for the Cornell Nanoscale Information Technology
Center; $500,000 for the Columbia University Molecular Nanostructures
Transport Center; $500,000 for the RPI Nanostructures Directed Assembly
Center; $500,000 for the RPI Center for Advanced Interconnect Systems
Technologies; $400,000 for the Cornell Materials Research Science
and Engineering Center; and $300,000 for the Cornell Nanobiotechnology
Center.
WORKERS'
COMP
- The Executive Budget for 2003-04 recommends $163.7 million in support
for the Workers' Compensation Board which is a reduction of $3,933,000
over last years funding levels.
- Authorizes
the Workers' Compensation Board to make certain payments on behalf
of insolvent self-insured private employers, outside of State appropriated
funds.
Prepared
01-31-03
Revised 02-03-03
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