Proposed Legislative Changes to 2012 Executive Budget

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Senate

The Senate's proposed budget included $132.5 billion in total spending, about $400 million, or 0.5% less than the Executive Budget. The Senate Republicans accept the Governor's recommended caps on future Medicaid and education spending, which is in line with previous Senate Republican calls for passage of a State spending cap.

The Senate budget makes $280 million in school aid restorations, and by their calculation, adopts $2.755 billion of the $2.9 billion in reductions and reforms recommended of the Governor's Medicaid Redesign Team. It also would give counties the authority to opt out of optional Medicaid services. The Senate has not accepted the Governor's Excelsior program reforms, and continues to work on alternative economic development proposals.

The Senate also proposes several significant tax and fee reforms, including: permitting deferred business tax credits earned from 2010 to 2012 to be treated as refundable overpayments in 2013; accelerating the sunset of $700 million per year in Section 18-a energy assessments by two years; and proposing a package of tax credits targeting communities affected by correctional facility closures.

The Senate's press release on their budget package is available here.

The Senate's detailed summary of its proposed budget changes is available here.

Assembly

The Assembly's proposed budget includes $133.0 billion in total spending, virtually the same level as proposed in the Executive Budget.

It restores $467 million in education aid for the 2011-12 school year, including $200 million for general support to public schools. It accepts most of the Executive Medicaid Redesign Team recommendations for hospitals, nursing home, home care and pharmacy but rejects the medical malpractice reforms as proposed by the Team.

The most significant change proposed to the Governor's budget is the Assembly's proposal for a one year extension and modification of the upper income personal income tax surcharge, affecting taxpayers with taxable income over $1 million for the 2012 tax year. This is expected to raise $700 million in Fiscal 2012 and $2.6 billion in Fiscal 2013.

It generally accepts the Governor's proposed amendments to the Excelsior Jobs program, and the Executive Budget's capital funding to be directed by the proposed regional economic development councils.

The Assembly's press release on the budget package is available here.

The Assembly's detailed summary of its proposed budget changes is available here.

Staff Contact: Ken Pokalsky

Modifies the Excelsior Jobs program (S.2811/A.4011, Part G) by extending the program by five years, extending the eligibility period for all Excelsior tax credits from to 10 years, modifying the real property, jobs and investment tax credits, and making additional changes.

• Senate – Not included.
• Assembly – Accepts most of the Executive Budget proposal, reduces the cap on total available Excelsior tax credits in 2016 through 2020 by $50 million per year.

Creates a permanent replacement for Power for Jobs and related NYPA energy costs savings programs; with 910 MW in blended NYPA hydro and purchased power; contracts up to 7 years duration; expanded eligibility criteria; and set-asides for upstate facilities, economic development projects and small business/not-for-profits.

• Senate – Has passed the Governor's program bill.
• Assembly – Has not taken action on the Governor's program bill.

Authorizes $200 million in competitive grants to newly created regional economic development councils, including $130 million in capital funding from reprioritizing existing economic development funds; and $70 million in tax credits from the enhanced Excelsior Jobs Program. Regional councils are to be established by Executive Order.

• Senate – Capital funding not included.
• Assembly – Accepts Governor's proposal and includes $130 million in capital funding.

Clarifies that taxpayers remain eligible for Empire Zone tax credits past the program's 6/30/10 expiration date unless they are decertified by ESDC. (S.2811/A.4011, Part C). 7,500 businesses remain eligible for Empire Zone tax credits.

• Senate – Not included.
• Assembly – Accepts the Executive Budget proposal as is.

Extends the investment tax credit for certain financial services activities (without changes) under the corporate franchise, bank, insurance and personal income tax until October 1, 2015. (S.2811/A.4011, Part E).

• Senate – Eliminates the sunset date resulting in a permanent extension of the ITC.
• Assembly – Accepts Governor's proposal.

Makes permanent the Urban Development Authority's ability to make economic development loans; this supports other proposed changes to convert state grants programs to loan programs. (S.2810/A4010 Part G).

• Senate – Extends UDC loan authority to 7/1/12.
• Assembly – Extends UDC loan authority to 7/1/12.

Extends the state's Linked Deposit Program for four years; increases the business-specific cap on aggregate loans from $1 million to $2 million. The program has unused loan capacity of $192 million. (S.2810/A4010, Part H).

• Senate – Accepts the Executive Budget proposal as is.
• Assembly – Accepts the Executive Budget proposal as is.

Repeals the so-called state cost recovery assessment on IDAs as of April 1, 2011; increases the cap on total state recoveries on public benefit corporations from $55 to $60 million per year. (S.2810/A4010,  Part J).

• Senate – Accepts the Executive Budget proposal as is.
• Assembly – Accepts the Executive Budget proposal as is.

Provides $100 million in targeted economic development funding for communities impacted by prison closings and consolidations.

• Senate – Proposes alternative economic development assistance program.
• Assembly – Accepts the Executive Budget proposal as is.

Merges the Foundation for Science, Technology and Innovation (NYSTAR) and the existing high technology and research and development programs to the Empire State Development Corporation. (S.2812/A.4012, Part D).

• Senate – Proposes alternative economic development assistance program.
• Assembly – Accepts the Executive Budget proposal as is.

The Executive Budget contains no significant environmental regulatory initiatives.

• Make permanent pesticide registration fees and the current time frames for review of pesticide product registration applications. (S.2810/A.4010, Part S).
  • Senate - Extend registration fees through 7/1/14.
  • Assembly - Accepts Executive Budget proposal.

S 2809-C (Health Article VII Bill)

• Senate and Assembly eliminated Governor's Part A, Section 11, which would have prohibited insurers from denying early intervention claims because services were rendered outside the terms of the policy including out-of-network, fee charged beyond negotiated rate, services provided exceeding those within the terms of the policy.
• Senate adds a new Part A, Section 24 which is substantially similar to language in Senator Klein's 2010 bill S. 5374-B, which modernizes language in the Insurance Law as it relates to medical malpractice insurance.
• Senate adds a Sections 25, 25-a, 25-b, 25-c, each of which amends various sections of the Insurance Law to include language which stipulates that group health, individual and HMO insurance policies which provide drug coverage authorize the insured the option to purchase drugs from a network mail order pharmacy or from non-mail order pharmacy that is a network provider, provided that the non-mail order pharmacy offer such drugs at a price comparable to that of the mail order pharmacy. The language also stipulates that co-pays for acquiring drugs through either method be the same.  

S. 2809-C, Part H (which reflects the incorporation of the Governor's Medicaid Redesign Team's recommendations):

Senate

• Intentionally omits presumptive eligibility periods for Medicaid for individuals transferred from a general hospital to either long term care or certified home health care agency; bundling of pharmaceutical costs into Medicaid managed care; DOH authorization to establish a fee schedule for drugs and dispensing fees for preferred and non-preferred drugs; authority to override a doctor's decision on the use of prescribed drugs that are not on the preferred drug list; limitations on spousal refusal; home care worker wage mandates; and proposals to address the provision of home care services to managed care enrollees. 
• Adds a new Section 34-a which authorizes the Commissioner of Health to develop and implement standards for certification for patient centered medical homes for Medicaid fee-for-service and Medicaid managed care, FHP and CHP programs.
• Intentionally omits Section 49 which creates a workgroup on the future of public nursing homes.
• Retains the proposed language for the New York State Medical Indemnity Fund and the Hospital Quality Initiative; the Senate includes revised language for the expiration of the Quality Initiative.
• Accepts proposed $250,000 cap on non-economic damages in medical malpractice cases.
• Includes more extensive language in Section 66 on Accountable Care Organizations than was in the MRT recommendations.  
• Accepts extension of the HCRA Amnesty.
• Intentionally omits Section 68 which included authorization to extend the HCRA surcharge to out-patient and radiological services.
• Substantially revises Section 87 to alter the recommendation on long term care insurance tax credits from the MRT. The Senate language proposes to increase the credit to 75% of the premium paid in the first year the policy was purchased; 50% in the following year; and 25% of the premium paid in the third year.  

Assembly

• Accepts bundling of pharmaceutical costs into Medicaid managed care; authorizing the Commissioner of Health to establish a fee schedule for drugs and dispensing fees for preferred and non-preferred drugs; providing authority to override a doctor's decision on the use of prescribed drugs that are not on the preferred drug list; establishes and funds the public health services corps; delinking workers' compensation and no fault from Medicaid in-patient hospital rates; home care worker wage mandates; Extension of the HCRA Amnesty; authority to impose the HCRA surcharge on out-patient and radiological services; and the provision of home care services to managed care enrollees; and the Long Term Care Tax Credit recommendations.
• Rejects limits on spousal refusal; proposes to prohibit spousal refusal for legally responsible relatives who are not absent when income and resources of the relative exceed 200% of poverty.
• Rejects proposals related to increases in, or establishment of new Medicaid, FHP and CHP copayments.
• Intentionally omits Section 49 which creates a workgroup on the future of public nursing homes.
• Rejects proposed language for the creation of the New York State Medical Indemnity Fund, related changes to the Civil Practice Law, and the establishment of a $250,000 cap on non-economic damages related to medical malpractice actions. Assembly adds a new Section 52 which creates a Neurological Impairment Fund of up to $57 million within the Department of Financial Services to be administered by a NYS Neurological Impairment Board. The fund shall be used to mitigate or subsidize costs related to medical malpractice or premiums of  medical  malpractice  insurance, as defined in subsection (b) of section fifty-five hundred one of the insurance law, related to obstetric services of qualified hospitals.

Implements the major recommendations of the Task Force on Group Self-Insurance. Eliminates, except under certain limited circumstances, the provisions of workers' compensation coverage for private employers by group self-insured trusts. (S.2807/A.4007, Part G).

• Senate intentionally omits the language proposed to address assessments on inactive workers' compensation group trusts and set new standards for group self-insured trusts to continue.
• Assembly - Retains Governor's proposed Part G language on workers' compensation group self-insured trusts and makes additions to it including (but not limited to) new language which would subject employers who were members of a GSIT, as of 1/1/2016,  to assessments except for those employers that have entered into a settlement agreement or payment plan with the WCB and remain current on that plan; are members of a GSIT that has transferred all of its liabilities via a loss portfolio transfer; have paid all monies billed them by the Board; or can demonstrate that the administrator of the inactive trust has assessed such employer for its pro rata share of the trust's outstanding liabilities and the employer has paid such assessment.