| Governor Proposes $9 Billion in Budget Cuts |
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| Tuesday, 01 February 2011 15:32 |
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Governor Andrew M. Cuomo has laid out his plans to eliminate New York State’s $10 billion budget deficit for FY2011-2012 which begins on April 1st. As promised, he relied almost entirely on spending cuts -- $8.9 billion in recurring spending actions, or nearly 90 percent of the total plan. The budget proposes gap-closing actions in almost every area of state spending and includes year-to-year reductions in the two largest drivers of State expenditures, Medicaid and School Aid. "New York is at a crossroads, and we must seize this opportunity, make hard choices and set our state on a new path toward prosperity," Governor Cuomo said. "We simply cannot afford to keep spending at our current rate. Just like New York's families and businesses have had to do, New York State must face economic reality. This budget achieves real, year-to-year savings while restructuring the way we manage our state government. This is the first step toward building a new New York." As previewed in “op-ed” pieces circulated yesterday, the Governor harshly criticized what he called “sham” budgeting processes by which “unsustainable” annual increases in spending are forecast from one year to the next. In the areas of both Medicaid and education spending, he said, year-over-year increases of more than 13% are forecast as part of current baseline budget assumptions. “Nothing is increasing by these amounts,” the Governor said, pointing to trends in the Consumer Price Index (CPI), Personal Income Growth and other economic indicators. “It is this cycle of passing unsustainable increases that sets us up to fail year after year.” It is these unrealistic and unsustainable increases which result in the current $10 billion budget deficit estimate, Cuomo argued, claiming that the state would face only a $1 billion deficit if spending growth was held to the general rate of inflation. Going forward, he proposed that Medicaid spending growth be limited to the national Health Care CPI while education spending be held in line with growth in personal income – or approximately 4% annually. As for FY2011-2012, the budget calls for a total reduction of $2.85 billion in Medicaid spending compared to the current financial plan. This represents an actual year-to-year spending reduction of nearly $1 billion or $982 million. Details, however, remain to be worked out. The Governor is tasking his new Medicaid Redesign Team to develop and report proposed gap closing actions by March 1st. On the education front, the Governor is proposing a year-to-year reduction of $1.5 billion – or a total cut compared to baseline projections of $2.85 billion. This represents a 7% reduction in state aid to education. Local school districts, the Governor argued, can make up for the cut through use of $1.2 billion in existing reserves, $600 million in left over federal funding and other management efficiencies. Cuomo took aim at local district administrations, noting that 40% of school district superintendents receive salaries and benefits of $200,000 or higher. He questioned “why they get paid more than the governor of the state”. “Let’s find savings within the bureaucracy,” he said. The budget reduces General Fund State Operations spending by 10 percent at State agencies. Commissioners and agency heads will be instructed to maximize savings in non-personal services. The Governor intends achieve the rest through a variety workforce savings, including the negotiation of a wage freeze. Contracts covering the vast majority of State employees are up for renewal at the outset of the 2011-12 State fiscal year. “If workforce savings cannot be accomplished jointly, as a last resort up to 9,800 layoffs would be necessary,” said the Governor. The Executive Budget proposes to merge or consolidate 11 separate State entities into four agencies to streamline and eliminate duplicative bureaucracy, better align State responsibilities with need and improve services through superior coordination. Proposals include merging the Department of Correctional Services and the Division of Parole into the new Department of Corrections and Community Supervision; and consolidating the Office for the Prevention of Domestic Violence, the Office of Victim Services and the State Commission of Correction into the Division of Criminal Justice Services. Actions for youth and mental hygiene facilities will be taken following careful analysis of vacancy rates, service utilization, and other factors. The budget calls for reducing the number of juvenile justice facility beds operated by Office of Children and Families (OCFS) by approximately 30 percent and replacing them with community-based programs. For prisons, actions to eliminate an estimated 3,500 prison beds will be implemented pursuant to recommendations of a task force created by Executive Order. Recognizing the impact of facility closures on host communities, the Executive Budget directs $100 million in economic development aid for affected areas. The governor also reduced levels of funding for localities by 2% and proposed a variety of other funding shifts, many with signifant implications for individual program sectors. Advocates and Providers Respond As we sent to press, advocates and providers were culling through budget documents to identify additional details – and the likely impact -- of proposed spending cuts. The Council of Senior Centers and Services (CSCS) criticized a proposed reallocation on the use of federal Title XX funding to support child welfare services which would result in a significant loss of funding for the provision of senior services in New York City and other parts of the state. The proposal a replay of a similar proposal last year which had argued would lead to a loss of approximately $25 million and the closing of 110 senior centers. “Last year, these were identified as unintended consequences of this proposal,” said Bobbie Sackman, Director of Public Policy at CSCS. “This year, these are obviously the intended consequences.” “We are concerned about what the 10% cuts to spending at state agencies will mean for nonprofits that contract with those agencies,” said Allison Sesso, Deputy Executive Director at Human Services Council, who went on to praise several components of the governor’s budget. “We like the effort to close unused facilities – juvenile justice, prisons and mental hygiene.” "We can say goodbye to what's left of New York's middle class if this devastating budget proposal is made law,” said Karen Scharff, Executive Director of Citizen Action of New York. “This budget represents the rich, real estate interests, and bankers giving themselves a tax cut by looting New York's working families, school children, sick and elderly. Quality education and good jobs could fuel the economic engine New York needs to recover from this financial crisis. But, cutting billions from the state budget will leave our state's economic engine dry. A budget that increases unemployment, raids school funding, and shuts down hospitals is not what New York needs. Our leaders in state government need to stop looking out for their big money corporate campaign contributors and start listening to the people who elected them." “Instead of further cutting education, the Governor should continue the tax on high-earners, which would provide more than $5 billion in critical revenues,” said Leonie Haimson, Executive Director of Class Size Matters. “Wall Street bankers can afford to pay a little more to help our kids receive a better chance to learn, especially as their mistakes caused the economy to collapse in the first place.” |
Comments
Till recently Gov. Cuomo announced budget cuts 2011, which will affect Medicaid and education. Considering what I’ve mentioned above it is not a wonder that there is not enough money from taxes coming in to cover the state’s budget? And of course if you look at it if everyone that needs to pay taxes doesn’t then these will be the result, and what is in the budget will not be enough to go around for those who do pay taxes and expect a decent education for their own children who are entitled by their parents hard earned tax paying dollars and if the US citizens of this state do not get it together and assert themselves and pressure those whom they’ve elected to do something about our illegal immigration problems as well penalizing those employers who are in violation of law, it would only get worse and those hard-working citizens will continue to get the short end of the stick. It is up to you citizens of New York State, to make the people that we pay, to represent us to take action and stop the bull crapping us. Because enough is enough and if they don't listen then we as citizens have to do what ever necessary to bring attention to these ongoing crises, whatever it takes by any means necessary enough talk time for action they speak louder than words.