SENATE PROPOSES SOUNDLY BALANCED BUDGET

The New York State Senate Majority has passed a soundly balanced spending plan that addresses the needs of hard-working New Yorkers, contains no new or increased taxes or fees, provides meaningful property and business tax relief, and spends less than proposed in the Executive Budget. The Senate will act on its budget plan tomorrow.

The Senate’s spending plan also fulfills the Senate Majority’s commitment to property tax relief by restoring promised STAR property tax relief that budget was eliminated in the Executive Budget.

Highlights of the Senate Majority budget plan include the following:

The Senate Budget rejects the $1.7 billion in tax and fee increases recommended in the Executive Budget, including:

• a 300 percent tax increase on motor vehicle registration fees
• higher gas taxes
• the "crack tax" on drug dealers
• increased taxes on hospitals, nursing homes and health insurance

In addition, the Budget restores $319 million in scheduled STAR school property tax relief that was left out of the Executive Budget and affirms property tax relief as a top priority of Senate Republicans. This includes restoration of $40 million for the New York City Personal Income Tax credit enhancement.

The Senate budget also rejects the Assembly Democrats’ proposal to increase the State’s Personal Income Tax (PIT) by $1.5 billion, as well as the Democrat-allied Working Families Party’s call for rolling back $16 billion in tax cuts which would lead to an unprecedented assault on taxpayers to pay for additional reckless State spending.

The Senate Budget adds more than $540 million in education aid and creates a fair and equitable funding formula that delivers important State resources to every New York school district.

The budget adds $78.2 million over the Executive Budget for BOCES programs and $114.9 million for High Tax Aid that will ensure that no school district will receive less in High Tax Aid than they did in 2007-08.

The Senate budget also adds $2 million for Teachers’ Centers and $5 million in aid for public libraries.

In higher education, the Senate Budget proposal:

• restores nearly $34 million in proposed reductions to the SUNY operating budget;
• restores the $50 per FTE community college base aid cut;
• restores more than $16.7 million in CUNY Senior College reductions; and
• restores $3.6 million in aid for independent colleges and universities.

In addition, the Senate budget would establish the Student Tuition Relief Initiative for Valued Education (STRIVE) to provide significant relief to New York families to pay for tuition and fees for students who attend a college or university in New York State and whose family’s annual net taxable income is less than $150,000.

The program would limit the student’s contribution for any remaining cost of tuition and fees to ten percent of their annual net taxable income. Students in the STRIVE program must participate in 20 hours of community service annually and maintain a minimum grade point average of 2.0 during their first and second years and 2.5 during their third and fourth years.

To encourage graduates to stay in New York State, STRIVE awards are converted to loans if graduates do not reside in New York State for five years after leaving college.

The Senate’s budget restores $482 million in cuts to the state’s health care budget and rejects $394 million in higher health care taxes proposed by the Executive. The Senate budget also rejects almost $399 million in new health care spending for a net restoration of $83 million.

The Executive Budget includes an elaborate and complicated proposal to change the hospital reimbursement system that has been in place for more than 25 years. This proposal would update the methodology by which rates are paid to hospitals for inpatient services. The proposal contained no detailed or accurate information on the impact that this rebasing proposal would have on facilities throughout New York State.

The Senate Budget rejects the Executive’s rebasing plan and protects the quality of health care in New York State by ensuring that changes to the hospital reimbursement system are accomplished in an open and transparent process while seeking input from health care providers and other stakeholders.

The Senate rejects half of the proposed two percent shift in public assistance costs to the counties totaling $20 million that would have increased the burden on local taxpayers. In addition, the Senate rejects the shift of $35 million in youth detention costs to local government.

The Senate plan would also prohibit the enactment of any mandate on school districts or municipalities that would have an impact of $10,000 on any single local entity or $1 million statewide.

OTHER BUDGET HIGHLIGHTS

• The Senate restores local CHIPS roadwork funding in the amount of $9.4 million to bring the 2008-09 funding level in line with the 2007-08 level of $312.5 million;
• The Senate rejects the Executive’s proposed State and Local Bridge Preservation Program, in anticipation of $100 million in new Federal bridge funding, and the submission of a new five-year transportation capital plan;
• The Senate rejects the Executive’s proposal to authorize the sale of assets connected to the Javits Center and the Senate continues to support the expansion of the Javits Center; and
• The Senate rejects the Executive’s recommendation to close three correctional facility camps and one medium security correctional facility;
• The Senate rejects the Executive’s proposal to expand the Medical Parole statute that would release additional inmates from correctional facilities;
• The Senate recommends eliminating the Office of the State Inspector General and transferring the powers and duties of the Office to the Department of Law under the supervision of the Attorney General. Funding for the Office, $7.2 million, will also be transferred to the Department of Law;
• The Senate rejects the Executive’s proposal to redeploy 92 State Troopers assigned as School Resource Officers to assist in crime reduction efforts as part of Operation IMPACT. Instead, the Senate adds funding of $5.6 million for a new recruitment class of troopers.
• The Senate includes $25 million to be used for child abuse, sexual assault and domestic violence prevention services.

While the Senate Budget rejects the taxes and fees proposed in the Executive Budget, the Senate substitutes other revenue sources to ensure a balanced budget, and advances approximately $300 million in across the board spending cuts and $600 million in other cuts.

The Senate Republicans have advanced a constitutional spending cap to address the need to limit taxes and spending going forward and to further increase accountability for taxpayers.

The proposed constitutional amendment would prevent the Executive from submitting a Budget that increases spending by more than four percent over the previous year’s Budget and force both houses of the Legislature to live within reasonable spending limits.

Under the Senate proposal, year-to-year State spending increases would be limited to 120 percent of the Consumer Price Index (CPI) or 4 percent, whichever is less. In any given year, fifty percent of tax revenue that exceeded the cap would be placed in a reserve fund and fifty percent would be returned to taxpayers in the form of direct tax rebates.

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