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Legislative Updates

  The Riddell Group, LLC
119 Washington Ave., 2nd Flr.
Albany, N.Y. 12210
Phone: (518) 434-7400/Fax: 434-0558

Memo

To: All Clients
From: Glenn T. Riddell
Date: 3/30/11
Re: Budget - On Time/Early

Budget Update:

The state legislature finished passing a $132.5 billion budget which cuts overall state spending for the first time in 15 years and closes a $10 billion deficit without borrowing or adding any new broad based taxes.

As hundreds of protestors over ran the capital complaining about cuts, the legislature worked late into the night to deliver the first on time budget since 2005 and the fourth since 1983.

Governor Cuomo said "The legislature not only passed an on time budget but a historic and transformational budget for the people of the State of New York."

The approximately $132.5 billion budget will reduce spending overall by over 2 percent from the current year, eliminate 3,700 prison beds, establish regional economic development councils, bring performance finding to education, redesign Medicaid, and cap next year's education and Medicaid spending. This budget reaches its financial goals with no new taxes and no borrowing, and will also cut next year's projected budget deficit from $15 billion to about $2 billion.

Recent changes to the budget include an additional $272 million in education which includes restoration of funding for schools for the blind and deaf (4201) and summer school special education. Human services funding of $91 million was added and $86 million for higher education including SUNY hospitals, SUNY and CUNY community colleges. There are also miscellaneous program additions of $33 million including aid to localities and agriculture programs. The budget proposal requires the Office of Court Administration (OCA) to reduce its budget by $170 million to reflect a more proportionate share of the state's reductions. There were also $54 million in miscellaneous cuts. As a result, the net add spending to this budget is approximately $250 million. In addition, there are no new member items.

The 2011-2012 budget agreement contains critical components first proposed in Governor Cuomo's executive budget, including redesigning Medicaid and recalibrating the cost of state government, in part, by merging and consolidating agencies as well as curbing spending growth to sustainable and affordable levels.

This budget is a major victory for Governor Andrew Cuomo.

Lawmakers shield funds for member items in Budget Agreement:

Legislators successfully held on to two pots of pork money Gov. Andrew Cuomo had sought to divert to other uses.

The Democratic governor's proposals to shut down a cash member item account in September and to redirect legislators' authority to borrow $100 million for "capital projects" are not present in the budget agreement that was announced Sunday.

Under the budget agreement, Cuomo will direct $30 million of his own pot of capital projects funding, and will get the other $100 million by canceling plans to construct a consolidated data center. Long planned by the Office for Technology, whose director Melodie Mayberry-Stewart unceremoniously announced she is stepping down, Gov. George Pataki promised in 2006 the center would be built in Marcy at the Oneida County campus of SUNY IT. It was later promised to the Capital Region. Now it's dead.

Office of Court Administration

The office of Court Administration submitted their budget request with a $50 million reduction in funds. After Governor Cuomo remarked that the Judiciary is not putting in their fair share of cuts Chief Judge Jonathan Lippman reduced their budget by another $50 million.

That additional cut forced OCA take a hard no hiring freeze and eliminate all judicial hearing officers state wide. Unfortunately, this was still not enough of a cut, for the Governor who insisted that OCA's budget be reduced by another $70 million. This could possibly have an impact on at least 500 employees being laid off or possibly a number of courtrooms closing.

Policy reforms in the 2011-2012 budget include:

Merging of Agencies:

Health Issues:

New York's $54 billion Medicaid program accounts for 40% of the $132.5 billion state budget. It is the largest program in New York State and the most expensive Medicaid program in the Nation. Governor Andrew Cuomo empowered a Medicaid Redesign Team that was charged with identifying initiatives to reduce Medicaid spending by $2.8 billion this year and $4.6 billion next year. The MRT report was finalized and included in the Governor's budget proposals. The final budget includes the majority of the proposals advanced by the MRT.

The Governor's proposal to eliminate a physician's final say in drug treatment for patients remaining in the fee for service system was successfully restored. However, the Governor and the Assembly did not accept language advanced by the Senate to create statutory patient protections in managed care. We should continue to push on this issue during the rest of the legislative session.

Below is a brief explanation of other issues decided on:

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The following items did not make it into the budget and will be dealt with legislatively between now and close of session:

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The Riddell Group, LLC
119 Washington Avenue, 2nd Floor
Albany, NY 12210
Phone: (518) 434-7400
Fax: (518) 434-0558
Email: theriddellgroup@gmail.com