March 29, 2013
Governor Cuomo and Legislative Leaders Announce Early Passage of 2013-2014 Budget
Governor Andrew M. Cuomo, Senate Majority Coalition Co-Leaders Dean Skelos and Jeff Klein, and Assembly Speaker Sheldon Silver today announced early passage of the 2013-14 Budget.
The Enacted Budget continues the state's focus on economic growth through a series of initiatives to create jobs and grow the economy including new tax cuts for small businesses, tax cuts for middle class families, major education reforms and investments, and an increase in the minimum wage to $9 per hour. The Budget passed both houses of the Legislature days before the April 1 deadline, marking the first time New York has had three consecutive, on-time budgets since 1984, and the earliest budget since 1983.
Governor Cuomo said, "When I took office more than two years ago, New York was at a crossroads, with families and businesses leaving our state and a government that had lost the trust and confidence of the people. Year after year the budgets were late and the entire process had become a symbol for the dysfunction and chaos of Albany. We promised to build a New New York, and the 2013-14 Budget continues to deliver on this promise. With this budget, New York State is continuing to create good jobs, cut taxes for the middle class, lead the nation in education and civil rights reforms, and provide a model for a government that works. After years of out of control spending, for the third year in a row we have an on-time budget that holds spending growth under 2 percent. This is a budget that all New Yorkers can be proud of, and I commend the members of the Senate and Assembly who worked hard to deliver this budget for the people of our state."
Senate Majority Coalition Co-Leader Dean G. Skelos said, "This is a business-friendly and family-friendly budget that keeps spending within a self-imposed 2 percent cap, and emphasizes Senate Republican priorities to help businesses create new jobs and provide tax relief to struggling middle-class families. Our responsibility is to respond to their needs and to make sure that our economy grows in the years to come and, in this budget, we have achieved those important goals. I thank the Governor, Senator Klein, Speaker Silver and all of my legislative colleagues for their commitment to passing an early, responsible budget for the people of this state."
Senate Majority Coalition Co-Leader and Independent Democratic Conference Leader Senator Jeffrey D. Klein said, "After listening to New Yorkers from across our state, I am pleased to announce that we are enacting the most family friendly budget in a generation. As a result of Governor Cuomo's strong leadership, and the bipartisan, solution oriented approach embraced by all of the leaders, we are putting years of dysfunction behind us and delivering a third consecutive on-time and fiscally responsible budget. When we formed the senate bipartisan coalition last December, the Independent Democratic Conference promised to give low-wage workers, and our state''s economy, a real lift. Today, we're delivering on the promise to give low-wage workers, and our state's economy, a real lift by raising the minimum wage to $9.00 per hour and cutting taxes on small businesses. Today we are doing our part to provide some relief for middle class families by delivering a $350 family rebate check that parents can use to pay down bills or invest in their children's future. With this Budget, the IDC is also following through on its commitment to help our state's veterans find rewarding new jobs when they come home. By providing major tax credits to New York businesses that hire one of our state's returning heroes, we will begin reducing the unacceptably high unemployment rate among New York veterans. I thank Governor Andrew Cuomo, Senate Co-Leader Dean Skelos, Assembly Speaker Sheldon Silver, as well as Senate Finance Committee Chairman John DeFrancisco and Senate Finance Committee Vice Chair Malcolm Smith, for their hard work throughout the entire budget process."
Assembly Speaker Sheldon Silver said, "This year's state budget addresses what have always been the Assembly Majority''s core priorities. It makes the critical investments in public education, public health and affordable housing while honoring the moral obligation to preserve the social safety net. It funds infrastructure development and workforce training, while spurring job creation throughout the state and providing tax relief to hardworking middle-class families and small businesses. In addition, thanks to the persistence of the Assembly Majority, this budget ensures that tens of thousands of hardworking, minimum-wage-earning New Yorkers will be receiving much-deserved and badly needed raises in each of the next two years. I commend the Governor and my colleagues in the Senate for helping to craft a fiscally responsible, early budget that will move our state forward."
Creating Jobs and Cutting Taxes - Key Economic Development Initiatives:
A Balanced, On-time Budget that Invests in Creating Jobs and Cuts Taxes: The Budget closes a $1.3 billion gap with no new taxes or fees.
- Total State Operating Budget: $90.2 billion
- Total All Funds Budget, excluding Sandy and the Affordable Care Act: $135.1 billion
Cutting Taxes for Middle Class Families: Recognizing that New York's taxpayers have been overtaxed for too long, the Budget includes $1.23 billion in new tax cuts to middle class families over three years. Families with incomes between $40,000 and $300,000 will be eligible to receive a new child tax credit of $350 per year, beginning in 2014.
Tax Cuts for Businesses: To provide tax relief to New York's job creators, the Budget includes nearly $800 million in tax relief for New York businesses over three years. With this tax relief, the Budget recognizes that cutting taxes sends a positive sign to the private sector that New York is pro-business and helps reverse New York's longstanding reputation as the tax capital of the nation.
Hiring Tax Credits: To help New York's returning soldiers and young people find work, the Budget includes a permanent tax credit for the hiring of Veterans, and tax credits for businesses that hire youth.
Reducing Costs and Red Tape for Businesses: To reduce the crushing burden of unemployment insurance and workers' compensation, the Budget modernizes and simplifies both systems to provide employers $1.2 billion in savings without affecting workers' benefits.
Investing in the Economy of Tomorrow: The Budget provides the initial funding to launch the Innovation Hot Spots program that will create or designate ten high-tech innovation incubators at locations affiliated with higher education institutions to encourage private-sector growth. In addition, a $50 million Innovation Venture Capital Fund that will provide critical seed and early-stage funding to incentivize new business formation and growth in New York State and facilitate the transition from ideas and research to marketable products.
Workforce Training for Job Openings: New York's workforce training is from a different era and a generic job training program does not fit today's economy. The Budget capitalizes on the opportunity of an estimated 210,000 unfilled jobs in the state by including $5 million for the Next Generation Job Linkage Program that works with employers to identify the job; define the skill; and provide the training for it.
Building on the Success of the Regional Councils: The Budget includes a third round of the Regional Economic Development Councils including $150 million in new funding and $70 million in tax credits.
Promoting Upstate Tourism and Agriculture through Market NY: To bolster tourism and better market NY-made foods and produce, the Budget launches the Market NY initiative.
SUNY and CUNY Campuses Driving Private Sector Job Creation: The Budget includes $55 million for a third round of the SUNY 2020 program and $55 million to launch the CUNY 2020 program to provide competitive grants for projects that connect economic development and academic excellence.
Education Investments and Reforms
Increasing Funding for Education: The Budget reflects New York State's focus on creating a world-class education system that will fully prepare all of New York's students to compete in the 21st Century economy. To accomplish the goal, the Budget includes an increase of nearly $1 billion in school aid. (4.9%)
Pre-kindergarten Program Expansion: Recognizing that quality early education is critical for long-term success and that children who attend full-day pre-k often outperform their peers, the Budget provides a $25 million additional investment for pre-kindergarten with an emphasis on high quality, full-day pre-k. Funding is targeted toward higher need students in lower wealth school districts via a competitive process.
State Increases Tied to Teacher Evaluations: To maintain New York State's leadership in holding teachers accountable for student achievement, the Budget continues to tie increases in funding for education to the implementation of a teacher evaluation system. No implemented teacher evaluation system, no increase in school aid.
Extended Learning Time: Our existing education calendar is still based on an agrarian system and the United States lags behind other nations in terms of how much time students spend in the classroom. In order to provide increased learning opportunities, the Budget includes $20 million to support high-quality extended school day or extended school year programs, with academically enriched programming. Schools that apply to participate in the program must agree to expand learning time by 25 percent. The state will cover the full cost of expanding learning time for students.
Community Schools: Recognizing that a school is not just a "school" in distressed communities and that the demands of schools in wealthier districts are different than demands in lowest wealth districts, the Budget provides $15 million to support innovative programs designed to transform schools into community hubs that integrate social, health and other services, as well as after-school programming to support students and their families.
Reward High-Performing Teachers: To improve results and incentive high-performance, the Budget provides $11 million to implement a program that will offer $15,000 in annual stipends for four years to the most effective teachers beginning with math and science teachers.
Early College High School Programs: To improve college access and success, the Budget provides $4 million in new state funding to expand Early College High School programs.
Bar Exam for Teachers: To ensure the best and brightest are teaching our children, the State Education Department will increase the standards for teacher certification to require passage of a "bar exam," in addition to longer, more intensive and high-quality student-teaching experience in a school setting.
Other Budget and Legislative Actions:
Raises the Minimum Wage: Recognizing that New York's minimum wage is unlivable and that 19 other states have higher minimum wages than New York, the Budget raises the minimum wage from $7.25/hour to $9.00/hour over three years, beginning with $8.00 by the end of 2013, $8.75 by the end of 2014, and $9.00 by the end of 2015.
Lowering and Phasing Out the 18-a Utility Assessment: The Temporary Utility Assessment on electric, gas, water and steam utilities will be lowered and phased out over three years beginning in 2014-15. This action will result in total utility bill savings of more than $300 million through 2016-17 and over $500 million annually thereafter. The current rate of 2% for public utilities will be lowered to 1.75% in 2015-16, 1.5% in 2016-17 and 0% in 2017-18. The rate of 1% for LIPA will decrease to .75% and .5% over the same timeframe.
Tier VI Savings Pension Financing Option. Recognizing the threat of the pension crisis facing local governments and schools, the Governor proposed a new option for a more stable pension contribution rate that accesses the long-term savings from Tier VI. Working with the pension systems, the Budget includes a plan that accomplishes the Governor's twin goals of greater predictability and immediate fiscal relief, while building in assurances to protect the funds.
Additional Mandate Relief: The Budget reinforces the Governor's commitment to providing additional local fiscal relief by advancing $86 million in local Medicaid savings associated with enhanced Federal payments under the Affordable Care Act. In addition the Budget includes the first major overhaul of the General Public Health Work program which will provide mandate relief for local governments of more than $16 million over five years.
Public Service Commission Reforms
The Enacted Budget implements reforms that will strengthen the oversight and enforcement mechanisms of the Public Service Commission (PSC) to ensure that major electric and gas utility companies are held accountable and responsive to regulators and customers. The implemented reforms were based on recommendations made by the Moreland Commission which was established by the Governor following Superstorm Sandy.
The reforms implemented by the Budget to improve PSC enforcement and oversight and ensure that utilities are held accountable include:
- Tougher Penalties for Violations: The PSC will now be able to recover more robust civil penalties for violating state law, regulations, or PSC orders and will no longer need to bring penalty cases to court
- Aggressive Oversight: The PSC will now be able to undertake a more comprehensive review of utility planning and performance
- Improved Emergency Preparedness: The implemented reforms will require utilities to undertake more robust emergency preparedness planning and oversight
- Stronger Accountability: The PSC will now be able to take whatever measures necessary, including revoking certificates and requiring utilities to divest assets, to ensure that utilities are continually able to provide safe and adequate service.
Protecting the Environment:
Environmental Protection Fund: The Enacted Budget includes appropriations of $153 million for the programs supported by the Environmental Protection Fund, an increase of $19 million. Appropriations include $12.7 million for solid waste programs, $57.9 million for parks and recreation and $82.5 million for open space programs.
Hunting & Fishing: The Enacted Budget streamlines hunting and fishing licenses and reduces license fees to attract resident and non-resident hunters, anglers and trappers to sporting opportunities in New York State. The restructuring simplifies the categories of available licenses and lowers many fees for both resident and non-resident license holders. The proposal also will make permanent a free marine fishing registration, which was scheduled to expire at the end of 2013.
NY Works – DEC: The Enacted Budget includes appropriations for $40 million in capital for the Department of Environmental Conservation under the New York Works statewide capital infrastructure program. The DEC funding will be used for the Brownfields Environmental Restoration grant program, recreational facility improvements, wastewater treatment infrastructure, the plugging and remediation of abandoned oil and gas wells, and e-business initiatives to allow DEC customers to have updated online services.
NY Works – Parks/ORDA: The Enacted Budget also provides $90 million in capital funding for the Office of Parks, Recreation and Historic Preservation under the New York Works Infrastructure program from new appropriations and previously uncommitted re-appropriations to address the large backlog of capital rehabilitation and improvement needs in Statewide parks and historic sites. The Olympic Regional Development Authority will receive $2.5 million from this funding source, including $500,000 for projects at Belleayre Mountain.
Investing in Transportation:
DOT Transportation Capital Programs: The Budget provides the first year of appropriations for a new 2-year transportation program that will provide $7.1 billion in transportation capital investments in 2013-14 and 2014-15. Highlights of the 2013-14 Budget include:
- $155 million for a new project acceleration initiative that will advance projects from future years into 2013-14, for a total highway construction program of $1.9 billion for the year;
- $75 million of increased funding for the CHIPS local road program, for a total program of $438 million for the year;
- A $10 million increase for aviation facilities, for a total aviation program of $14 million for the year;
- A $10 million increase for freight rail facilities, for a total rail capital program of $20 million for the year;
- $5 million in new funding for downstate suburban and upstate transit systems, for a total program of $21 million for the year.
Transit Aid: The Budget includes $4.7 billion in Transit Aid to systems throughout the State, including nearly $4.25 billion for the MTA and $454 million for other systems. The Budget also reallocates the distribution of revenue collected from the corporate and utilities taxes to provide an equitable share to Upstate transit systems.
DMV Customer Service Initiative: The Budget provides funding for a new DMV customer service initiative that invests in technology to upgrade DMV service delivery systems. The initiative includes:
- A self-serve queuing system for State DMV office customers that will allow customers to reserve a place in line from a home PC or smart phone;
- Self-service kiosks in State DMV offices and other high traffic locations;
- Website redesigns and mobile-web-ready transactions;
- Technology to achieve an expanded customer-centric call center;
- A rewrite of the entire transaction processing platform to streamline transactions, increase efficiencies and reduce customer wait times; and
- Expanded office hours to include operating on Saturdays in select DMV locations.
Hardening our Fuel System
Alternative Power Sources for Gas Stations: The Enacted Budget authorizes a grant program, to be administered by NYSERDA, to enable gas stations to install the wiring necessary to be capable of installing backup generators in the event of an extended power outage. NYSERDA will also be authorized to enter into lease agreements with companies that provide generators, in order to establish a pool of generators available for deployment. NYSERDA will utilize federal funding and other funds that may be available. Gas stations located near controlled access highways and evacuation routes and 30 percent of all retail outlets that are part of a chain will be required to install the necessary wiring. The bill will only apply to the downstate region, and gas stations selling less than 75,000 gallons of fuel per month will be exempted.
Other Budget Actions
Health Care: The Budget maintains the Medicaid spending cap enacted in 2011-12 and recommends funding consistent with its provisions. The Budget achieves $58 million in savings from public health and aging programs through program reforms, enterprise-wide efficiency measures, and general cost-control efforts. In addition, the Budget continues the state's implementation of the New York Health Benefit Exchange that will serve as a centralized marketplace for the purchase and sale of health insurance, in accordance with the Affordable Care Act.
Mental Hygiene: The Budget reforms and restructures state and local Mental Hygiene programs and administrative practices by enhancing community mental health services, utilizing less costly and more effective in-state community residences, placing aggressive cost controls on agency operations, and maximizing payments from third-party payers. The Enacted Budget also reflects roughly $90 million in savings in OPWDD necessitated by reductions in Federal aid. The savings will be implemented following consultation with a workgroup of relevant parties, with recommendations designed, to the greatest extent possible, to generate savings via reduced administrative costs, enhanced audit recoveries, and improved program efficiencies.
Human Services: The Budget provides core supportive services for needy populations and authorizes the state to undertake pay for success initiatives, also known as social impact bonds, totaling $30 million over the next five years. The program will attract outside funding for preventative programming with repayment made only if performance standards are achieved and savings exceed program costs.
Public Safety: The Budget closes two prisons – Bayview in Manhattan and Beacon in Dutchess County. Bayview had been evacuated and has remained vacant as a result of Superstorm Sandy. These closures will reduce annual operating costs of the Department of Corrections and Community Services by $20 million and eliminate 432 excess beds, while still preserving the quality of services for incarcerated women. The Budget also targets $11.4 million in funding to Alternatives to Incarceration and employment programs to reduce recidivism by targeting the highest risk offenders.