It is no secret that we are all experiencing economic challenges. It is my desire to be upfront and clear about New York State’s finances.
This mailing provides you with a detailed overview of New York State’s current fiscal outlook and the legislative initiatives that have been implemented to tackle our financial troubles.
The Assembly remains committed to cutting expenses to tackle current deficits and to secure a stable financial future. Deep deficits and extreme economic times call for tough fiscal decisions to be made not obstructive rhetoric. The New York State budget is not a blank check; it is now a reality check!
New York has unilaterally cut its agencies three separate times over the past two years:
In the enacted 2008-2009 budget, a 3.35% spending reduction for all state agencies was implemented totaling over $500 million.
In July 2008, an additional reduction of 7% was implemented throughout all state agencies coupled with a state workforce hiring freeze. The 7% cut resulted in over $630 million in savings.
The 2009 Deficit Reduction Plan included an across-the-board 11% reduction in agency spending that totaled $500 million in current year savings.
Over the last two years, state agency spending has been reduced by over $1.63 billion!
The Assembly has continued to fight Medicaid fraud and has eliminated over $150 million in waste through more stringent oversight and audits.
Mid Year Cash Crunch
The Assembly worked with the Senate and Governor Paterson to agree on $2.8 billion in cuts to alleviate the state’s immediate cash flow problems. Assemblyman Zebrowski and his colleagues worked to prevent any mid-year cuts to education and preserved hospital reimbursements. Although Zebrowski advocated for a larger cut, the deficit reduction plan implemented tough and necessary reductions in spending, while rejecting tax increases.
Preserving Necessary Funding
Despite the approximate $21 BILLION deficit, the Assembly has fought to preserve specific programs that are critical to taxpayers:
In the 2009-2010 budget, the Assembly fought to preserve STAR property tax exemptions. This allowed homeowners to receive their STAR and enhanced STAR exemptions that were deducted right off their tax bill. Saving taxpayers $3.5 billion.
New York State protected low-income seniors by closing the gap in Elderly Pharmaceutical Insurance Coverage (EPIC) that forced seniors to pick up prescription costs. Saving low-income seniors $468 million.
The Assembly reversed a proposal that would have required new license plates for all vehicles at an increased fee of $25. Saving motorists $129 million.
Maintained universal pre-kindergarten funding at 2008-2009 levels for the next two years.
Preserved and maintained ALL school funding for the 2009-2010 fiscal year.
Rejected hospital reimbursement cuts, keeping healthcare costs low.
The Legislature had to make difficult decisions to cut programs and initiatives, not only to close this year’s budget deficit, but to also shrink future budget deficits. Many of the budget cuts are recurring actions that place New York State in a more secure financial position for future generations.
-Assemblyman Ken Zebrowski
Here are some long term cost savings initiatives that have been implemented:
Creating a new Tier 5 in the New York State Retirement System will save the state through shared pension costs. It will require increased contributions from employees for their pension and health benefits. It will also place significant limits on how much overtime can be counted towards a pension. The creation of a new pension tier will improve the health and stability of the New York State pension fund. Saving taxpayers $50 billion over the next 30 years.
Public Authorities Reform
For decades, unelected “authorities” (MTA, Thruway Authority, etc.) have operated without proper oversight and are running up massive debts. The Assembly passed a comprehensive reform bill that establishes significant restraints on these shadow governments.
New York State’s Fiscal Challenges
The economic recession has continued to slow job creation, wage growth and consumer spending. This has resulted in a sharp decline in tax revenue and receipts that will create a cash flow crisis if appropriate action is not taken.
Here is the recession by the numbers:
Personal Income Tax: -21.6%
Sales Tax: -8.2%
Corporate Franchise: -9.2%
Wage Growth: -5.1%
Employment Growth: -2.6%
New York’s 2009 tax collections have declined in eight of the nine previous months with April revenue declining 42.7%. This has left New York’s overall tax collections $5.1 billion below last year’s level.
These shrinking revenues are compounded with rising costs and unemployment. There are currently over 850,000 New Yorkers unemployed; double the amount in 2007. Within the last year New Yorkers have lost 250,000 jobs.
This crisis is not unique to New York and has created a mid-year fiscal emergency throughout the nation. Over 31 states are reporting projected budget gaps in the current fiscal year. The mid-year budget deficit in New York State currently totals $3.5 billion and has been growing over the past few months.
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