governor cuomo budget 2 1 2011 (1) final -2
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-2 0 1 1 1 2 EX EC U TIV E B U D G E TNew York at a Crossroads: A Road to Recovery
February 1, 2011
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:CROSSROADS Road to Recovery
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Budget Presentation
It s about values and choices
It s N O T about numbers
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WHERE ARE WE? New York State is functionally
bankrupt
and needs restructuring
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WE SPEND TOO MUCH t s nothing ew
nly worse
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SPENDING IS DISCONNECTED FROMECONOMIC REALITY
-Increase in State Operating Funds 1999 2010%74
I n
m i l
l i
o n s
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-10 year average
SPENDING RATES AREUNSUSTAINABLE
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- .$17 9B
-201314
- .$15 3B
-201213
-$10B-2011
122
-$
-Out year deficits continue to gro
SPENDING RATES DICTATED BY LAWARE UNSUSTAINABLE
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S PE N D IN GIS HIGH, P E R FO R M ALOW
#34 In results
#1 in Spending
Education
#21 In results
#1 in Spending
Medicaid
#50 In results
.1 6 b
Ann
EconomicDevelopmen
t
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Government spends toomuch & produces too littl
for the people
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,$4 845%66 . . ,above the U S average ranking Wamong states
New York s per capita State and local
HIGH COST OF GOVERNMENT MAKUS ECONOMICALLY UNCOMPETITI
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,$3 755%96 . .higher than the U S average
Median New York property tax bill
HIGH COST OF GOVERNMENT MAKUS ECONOMICALLY UNCOMPETITI
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So we spend too much, gettoo little and it makes useconomicallyuncompetitive!
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And it has gone on for toolong
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THE N E E D TOR E D E S IG G O V E R N M E N T
IS LO N G O V E R D U E
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THE NEED TORECALIBRATE SPENDING
IS LONG OVERDUE
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THE NEED TO REBUILD TECONOMY
IS LONG OVERDUE
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W E W ILL T R A N S FO R M G O V E R N M E N TA R O U N
N EW VA LU ES A N D T E C O N O M IC R E A LITY
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Our government will:
R e d u ce costs
R e w a rd p e rfo rm an ce Pu t Peop le First
Studen
Patien
Taxpaye
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Our government will:
Foster Private Sector Job
Growth
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Our government will:
-Commit to Reality BasedBudgeting
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BUDGET Highlights, , Medicaid Education State Operations L
Government
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MEDICAID
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,More than 1 000 ideas collectedalread
Assumes Governor s Budget Target
MEDICAID R E D E S IG NTEA
Will find ways to serve the patients
:better reduce costs and increase quality and efficiency in the Medicaid program
Collaborative effort to collect and
evaluate reform ideas from health carestakeholders
h h
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Where Does the Money Go? Home Health Care
:Fastest growing program per
recipient spending has increased
. %89 5 -from 2003 2009 Medicaid Pays Certified Home Health Agency ( )CHHA for Home Health Aide Service
Amount CHHA Keeps for Administrative Overhead
Amount Licensed Home Care Service Agency ( )LHCSA Keeps for Administrative Overhead Amount LHCSA Pays in Wages to Home Health Aide
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ichael,owling
IJ
eorge G11
en,aske
GNYHA
,an SistoHANYS
ennis,ivera
SEIU
Stakeholders
.ssm Gottfried.ssm Giglio
APPLAUD THE WORK OF THE MEDICAID REDESIGN TEAM
ara,assel
edicaidMatters
.en
.en
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-010 11 -011 12 ChangeState ,14 356 ,18 011 ,3 65Federal ,31 921 ,26 885 ( ,5 0Local
,7 515 ,7 914 $399Total ,53 792 ,52 810 ( 92
( )n Mill ions
edicaid nReview
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edicaid l l Funds-ear to year cut is $982 mill ion
- %
( )In Millions
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nperspective
. %4%4. %3%3
10 ear Growth Rate- -001 02 to 2010 11
Medicaid( )l l funds
Inflation
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. %7%7 . %3%3
11 ear Growth Rate- -001 02 to 2011 12 Proposal
nperspective
Medicaid( )l l funds
Inflation
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-Using reality based budgeting as opposed
to
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Meets
ALBANY-BASED BUDGETING
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Albany budgets institutionally assume an
exorbitant growth rate that is disconnected from fiscal
reality
ALBANY-BASED BUDGETING
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Permanent law institutionalizesunsustainable spending and growth
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Rate of
Inflation?
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%4 ?
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%5 ?
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%6 ?
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%7 ?
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.3 2
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The budget that was passed last year calls for a 13.2% increase to nextyears Medicaid spending
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(Permanent) law has built-in ratformulas that continually drive upunsustainable spending
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(Permanent) Law Rates for Medicaid:Previous Years
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(Permanent) Law Rates for Medicaid:Future Years
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Nothing is increasing by theseamounts
Not Inflation & Not Income
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It has no factors to promotegovernment better serving thepeople
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The formula is really a specialinterest protection program
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By Albany budgeting a cut is defined as anything less than their anticipated
growth
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So for Medicaid any reduction from the budgeted. %13 2 growth is a cut
Year-to-year cut is $982 million(2% decrease)
By that language this
budget cuts Medicaid.$2 8 billion
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The deficit is the difference between revenues( . %and budgeted growth 13 2
)for Medicaid $10 billion
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If you assumed deficit was difference between revenue and rate of
inflation the deficit would be $1 billion
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We need to do two thingsClose this year s deficit
Stop next year s deficit from forming by changing permanent and reducing growth
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The new formula will be tito the National Health CPI which is currently %4
annually*Medical Care Component of CPI
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The days of unsustainable spendingMUST END
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The days of Albany being dominatedspecial interestsMUST END
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EDUCATION
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We must change ourthinking
Students, Graduation,Achievement
Put People First
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NEED TO INTRODUCECOMPETITIONS
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COMPETITIONS $250 MILLION GRANT PROGR
FOR SCHOOL DISTRICTS THAT ACHIEVE MEASUR STUDENT PERFORMANCE
Increase 4 rth and 8 th grade Math and Englishproficiency
Close the achievement gap ( . .Improve student outcomes e g graduation)rates
AWARDS TO THE SCHOOL DISTRICTS WITH THEGREIMPROVEMENTS
To Spur Achievement
NEED TO INTRODUCECOMPETITIONS
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COMPETITIONS
$250 MILLION GRANT PROGRA FOR SCHOOL DISTRICTS THAT IMPLEMENTED MA-EFFICIENCIES THAT WILL RESULT IN LONG TERM
SAVINGS OR REDIRECT SAVINGS TO THE CLASSR
To Spur Achievement
FOCUS ON MAJOR COST DRIVERS AND INNOVATIVE IDEAS
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Education Funding thisYear
d
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-2010 11 -2011 12( )Proposed
Ch tate Fiscal
Year,9 848 ,9 602 ( 2
chool Year ,0 925 ,9 380 ( 1
ducation Program in Review
( )In Millions
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ocal Management andedesign Options for
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edesign Options for ducation# Co nso lid ati ons a nd
hared services Out of 676 school dist over 200 districts have, . than 1 000 pupils How there have been only b
consolidations since 20
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-Using reality basedbudgeting
Recalibrate School Aid
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RATE OFINFLATION?
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6%?
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7%?
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. %13 1
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By Albany budgeting a cut is defined as anything less
than their anticipated growth
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.Going forward
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The new formula will be tied the fair and objective revised formula that constrains growth
in school aid to the rate of
(personal income growthdone in a way to ensure adequ funding to high needs districts
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If you don t change now the projected growth in Medicaid a,education next year s budge
deficit will be .15 3i l l ion
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and Albany s cycle of declin will continue
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TATE OPERATIONS
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STATE O PE R A TIO N SHasnt been redesigned since 1927
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STATE OPERATIONS :CORRECTIONAL FACILITIES
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1999
%1 decline
he 1999,4 830 per
STATE OPERATIONS :CORRECTIONAL FACILITIES
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rison Consolidation mplementation Plan
Task Force appointed by the Executive and Legislature
,Assume the reduction of 3 500 beds
Decisions will be completed 30 days after budget is approved
Location of the closures will be decided by the task force
STATE OPERATIONS :CORRECTIONAL FACILITIES
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rison Consolidation mplementation Plan Provide $10 million economic
transformation program for each community impacted by a prison
closing
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REDESIGNING AND RECALIBRATIN JUVENILE JUSTICE SYSTEM
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Reduce system capacity by more than 30percent
Invest in locally based alternatives todetention(State funding increases from $8 million to$48 million annually)
REDESIGNING AND RECALIBRATIN JUVENILE JUSTICE SYSTEM
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Provide $10 million economic
transformation program for each community impacted by a facility
closing
STATEOPERATIONSRi h i
$1.4 billion Total Savings
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Rightsize government save $1million
( SUNY Efficiencies Tuition increases will)not be necessary save $1millionCUNY Efficiencies save $7
millionSUNY Hospitals save $18
million-Cutting Non Personal Service save $48
million/Labor Management Partnerships Workforces
Savings save $45
million
STATEOPERATIONS$450 Million Under Workfor
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/Labor Management Partnerships
Wages and Compensation Public Employee Pensions Health Benefits
Last resort ,Layoffs 9 800
Redesign
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LOCAL GOVERNMENT PERFORMANCE BASEDINCENTIVE
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$75 million fund TO SPURCONSOLIDATION
-Citizen's Re Organization Empowerment Grants of Up to ,100 000Citizen Empowerment Tax Credits Provide
Additional Aid toMerging Local Governments %0
Aid M i i li i AID TO MUNICIPALITIES
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Aid to Municipalities payments will be reduced by % to all,cities towns and villages that received funds
-in 2010 11 BIG 4 CITIES The impact to each of the Big 4 Cities would be%less than 1 of their General Fund
budget
AID TO MUNICIPALITIES
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New York City AIM reduction flast year s budget continued Proportionate reduction of remainder of the
budget
Partnership with Mayor Michael Bloomberg cooperate wherever possible
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REBUILD THE ECONOMY
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New York State Economic DevelopmentProgram New York State Economic DevelopmProgram
CURRENT ECONOMIC DEVELOPMEPROGRAMS
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New York State Technology and DevelopmentProgram Regional Economic Development Program
Strategic Investment Program Community Enhancement Facilities Assistance Program Empire Opportunity Fund
Community Capital Assistance Program Restore NY Program
* *Gen NY sis Program-Multi Modal Program
Centers of Excellence Program
Arts and Cultural Program Economic and Community DevelopmentProgram Downstate Regional Program
- -Upstate City by City Program Downstate Revitalization Fund
Upstate Regional Blueprint Fund Upstate Agricultural Fund
New York State Capital Assistance P Empire State Economic Development
Jobs Now Program Urban and Community Development
-Minority and Women Owned BusinesProgram Entrepreneurial Assistance Program
Small Business Revolving Loan FundCommunity Development Financial InProgram
Innovation Economy Matching Grants Centers for Advanced Technology Pr
Technology Development OrganizationGrants Manufacturing Extension Partnership
High Technology Matching Grants Pr College Applied Research Technology Science and Technology Law Center Faculty Development Program
Technology Transfer Incentive Program
E S TA B LIS H ECONOMIC REGIONALC O U N C ILSHi h Ed D i
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0 RegionalCouncils .t Gov Duffy o Chair
Higher Ed Driven
Public Private Partnerships Single Point of Contact
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udget Recap
BUDGET RECAP General, State Operating and All Funds
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-2010 11 Projected Growth%
-2011 12 base(projecte
d last)year
-2011 12Proposed State
OperatingFunds
,87 204 %11 ,96 534 ,88 103
All Funds
,136 531
. %5 5
,143 981
,132 863
M i l l i
o n s
o f
d o
l l
a r s
BUDGET RECAP General, State Operating and All Funds
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nnual State spending will go up by i l l ion % nnual all funds spending will go
down .y $3 7 bil lion (- . %)7tate Spending up because of loss of
ederal funding 5 bill ion
ederal dollars fell off a cliffBUDGET RECAP Federal Dollars
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IF WE DO THISWE WILL HAVE MADE DRAMATIC PROG
A fair budget, an inclusive process, respects taxpayers,protects the vulnerable
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BEGIN GOVERNMENT REDESIGN FOR A NEW DAYAND START PERFORMANCE FUNDING TO
ETTER SERVE THE
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STOPPED UNSUSTAINABLE SPENDINGCLOSED THIS YEARS DEFICITSTOPPED NEXT YEARS DEFICIT FROM
HAPPENING
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COMMENCED REAL ECONOMIC GROWTH
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REPOSITION N.Y. NATIONALLY TO GROW AGAIN
NO LONGER TAX CAPITAL OF THENATION
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Its up to you
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