Senate Finance Minority Staff Analysis of the 2011-12 Executive Budget Senator John L. Sampson Conference Leader Senator Carl Kruger, Ranker Senate Finance Committee/Minority Joseph F. Pennisi, Secretary Senate Finance Committee/Minority February 7, 2011 SENATE FINANCE COMMITTEE Senator Carl Kruger – Ranking Member Minority Members Senator Ruben Diaz Senator Martin Malave Dilan Senator Thomas K. Duane Senator Michael Gianaris Senator Liz Krueger Senator Neil D. Breslin Senator Velmanette Montgomery Senator Suzi Oppenheimer Senator Kevin S. Parker Senator Jose R. Peralta Senator Bill Perkins Senator Gustavo Rivera Senator Toby Ann Stavisky Senator Andrea Stewart-Cousins ii February 7, 2011 Dear Colleagues: On Tuesday, February 1, Governor Andrew Cuomo proposed his Executive Budget for State Fiscal Year 2011-2012. The context into which this budget proposal fits is similar to that of the past two years. We are still dealing with the aftermath of the most serious economic crisis since the Great Depression, and State revenues continue to trail the rate of spending increases built into the budget. The result is a projected $10 billion deficit. As the Governor’s proposal attempts to address this reality, it relies almost exclusively on spending cuts to close this deficit. In so doing, it places virtually the entire burden of balancing the budget on the backs of the State workforce and those who rely on State government to provide them with vital services. There is no doubt that this budget will entail significant pain for New Yorkers. As such, the Legislature has an obligation to the public to review the Governor’s proposal and finally enact a budget which shares that pain fairly across the many segments of our population. The data prepared by Finance Committee staff and provided in this document will provide greater insight into specific proposals within the Executive Budget which must be discussed in depth and modified when necessary. This process will ensure an equitable budget which creates jobs, controls spending and, ultimately, continues to address the day-to-day needs of New Yorkers and protect the most vulnerable residents of our State. Sincerely, Senator Carl Kruger Ranking Minority Member, Senate Finance Committee iii STAFF ANALYSIS OF THE SFY 2011-12 EXECUTIVE BUDGET As prepared by the Senate Finance Committee Staff Joseph F. Pennisi Secretary to the Senate Finance Committee Felix O. Muñiz Michael J. Laccetti Director of Budget Studies Director of Fiscal Studies Jacqueline Y. Donaldson Janet G. Ho Paul Alexander Denise Gagnon Gopa Barua Cheryl Halter Alicia Criss James Hugger Rosa Maria Castillo Kesper Lei Liao Kathleen Childs Matthew Peter Tanya Dugal Dwayne Robertson Kit Flood Carrie Schneider Sally Frank Angela Stempky Schedule Of Joint Legislative Public Hearings On iv 2011-12 Executive Budget Proposal Date Location Time Topic February 7th Hearing Room B 10:00 AM Local Government February 8th Hearing Room B 9:30 AM Environmental Conservation February 9th Hearing Room B 9:30 AM Public Protection February 10th Hearing Room B 9:30 AM Higher Education February 14th Hearing Room B 9:30 AM Economic Development February 14th Hearing Room B 1:00 PM Taxes February 15th Hearing Room B 10:00 AM Elementary & Secondary Education February 16th Hearing Room B 9:30 AM Human Services February 16th Hearing Room B 1:00 PM Housing February 28th Hearing Room B 9:30 AM Transportation March 1st Hearing Room B 10:00 AM Health/Medicaid March 2nd Hearing Room B 9:30 AM Workforce Issues March 2nd Hearing Room B 12:00 PM Mental Hygiene v FINANCIAL PLAN HIGHLIGHTS Table of Contents HIGHLIGHTS OF SFY 2010-11 EXECUTIVE BUDGET ................................. 4 FINANCIAL PLAN OVERVIEW ...........................................................................................4 EDUCATION .........................................................................................................................10 HIGHER EDUCATION .........................................................................................................13 MEDICAID REDESIGN TEAM ...........................................................................................17 HUMAN SERVICES .............................................................................................................18 AGENCY CONSOLIDATIONS AND MERGERS ..............................................................20 PRISON CLOSURES TASK FORCE ...................................................................................23 ECONOMIC DEVELOPMENT ............................................................................................24 LABOR ...................................................................................................................................25 LOCAL GOVERNMENT ASSISTANCE .............................................................................29 MANDATE REFORM ...........................................................................................................35 PROPERTY TAX RELIEF ....................................................................................................36 ECONOMICS, REVENUE AND CAPITAL ...................................................... 37 ECONOMIC OUTLOOK .......................................................................................................37 GENERAL FUND RECEIPTS ..............................................................................................42 ALL FUNDS RECEIPTS .......................................................................................................43 PERSONAL INCOME TAX ..................................................................................................44 ALCOHOLIC BEVERAGE CONTROL LICENSE FEES ...................................................47 ALCOHOLIC BEVERAGE TAXES .....................................................................................48 AUTO RENTAL TAX ...........................................................................................................49 CIGARETTE AND TOBACCO TAXES ..............................................................................50 HIGHWAY USE TAX ...........................................................................................................52 MOTOR FUEL TAX ..............................................................................................................53 MOTOR VEHICLE FEES .....................................................................................................54 SALES AND USE TAX .........................................................................................................56 BANK TAX ............................................................................................................................58 CORPORATE FRANCHISE TAX ........................................................................................59 CORPORATION AND UTILITIES TAXES ........................................................................61 INSURANCE TAXES............................................................................................................63 PETROLEUM BUSINESS TAXES .......................................................................................65 ESTATE TAX ........................................................................................................................67 REAL ESTATE TRANSFER TAX .......................................................................................68 PARI-MUTUEL TAX ............................................................................................................69 RACING ADMISSION/BOXING AND WRESTLING EXHIBITIONS TAX ....................71 METROPOLITAN TRANSPORTATION AUTHORITY RECEIPTS .................................72 MISCELLANEOUS RECEIPTS ............................................................................................74 LOTTERY ..............................................................................................................................75 REVENUE ACTIONS ...........................................................................................................79 ARTICLE VII REVENUE BILL ...........................................................................................80 CAPITAL SPENDING AND FINANCING ..........................................................................90 PUBLIC PROTECTION AND GENERAL GOVERNMENT ......................... 94 DIVISION OF ALCOHOLIC BEVERAGE CONTROL ......................................................94 Senate Finance Committee – Staff Analysis Page 1 FINANCIAL PLAN HIGHLIGHTS AUDIT AND CONTROL (OFFICE OF STATE COMPTROLLER) ...................................95 AUTHORITY BUDGET OFFICE .........................................................................................96 DIVISION OF THE BUDGET ..............................................................................................97 DEPARTMENT OF CIVIL SERVICE ..................................................................................98 COLLECTIVE BARGAINING AGREEMENTS .................................................................99 CONSUMER PROTECTION BOARD ...............................................................................100 STATE COMMISSION OF CORRECTIONAL SERVICES .............................................101 DEPARTMENT OF CORRECTIONAL SERVICES..........................................................102 DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION ..................103 DIVISION OF CRIMINAL JUSTICE SERVICES