Sunday, January 24, 2010

Death by a Thousand Cuts

The NY Nonprofit Press reported on Governor Paterson's Executive Budget announcement. As the article relates:

Was it a bloodbath or a surgical strike? The impact of Governor David Paterson’s Executive Budget for FY2010-11, which proposes to close a $7.4 billion deficit with $5.5 billion in spending cuts and $1.4 billion in taxes and other revenues, varies markedly across the nonprofit human service sector. Most providers and advocates were expecting something close to Armageddon – or even California. At the end of the day, some programs had escaped relatively unscathed while others were eliminated entirely. The most common assessment was “death by a thousand cuts” as another round of significant budget reductions followed multiple prior year cuts, slicing ever deeper into the heart of services.

On a macro level, the Governor proposes that state agencies cut approximately $1 billion from their operations. The two largest components of the budget were given the highest profile in announcing initiatives to close the gap. School aid would be reduced by $1.1 billion while health care would absorb a $1.9 billion gap closing plan, including $1 billion in spending cuts and over $216 million in Medicaid Provider Assessments. Read more here.

Thursday, January 21, 2010

NYS Comptroller Survey Results & More

Last week NYCON was asked to provide feedback to the Comptroller's Office on how late New York State contracts and payments were affecting real nonprofits in the community. NYCON has already collected almost 250 responses - and more nonprofits are responding every day.
• 66% of nonprofits responding said they currently have a line of credit
• 66% of nonprofits responding said that they had borrowed money because of delayed government contracts and/or payments in the last two years.

Well over 100 comments were also submitted to the Comptroller´s Office. Click here for a sampling of these comments (a full list will be posted soon on the NYCON website.) Still want to add your feedback? Click here for the survey.

Want to know what else you can do? The Comptroller's Office will be holding nonprofit forums around New York State soon. NYCON will inform our members when those forums are scheduled.

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Wednesday, January 20, 2010

New York To Implement Long Term Economic Reforms To Eliminate Budget Deficit

the Gov Monitor blog offered the following news from Governor David A. Paterson, who proposed a 2010-11 Executive Budget that makes significant spending reductions in order to eliminate a $7.4 billion deficit and institutes key reforms to put New York on the road to economic and fiscal recovery.

The Executive Budget proposal includes spending reductions across every area of the budget; limits State spending to far below both the Governor’s proposed spending cap and the rate of inflation; implements the most significant public higher education reforms in a generation; and provides fiscal relief to local governments through an aggressive mandate reform agenda.

“Since the day I became governor, I have warned that New York is facing an inevitable fiscal reckoning,” Governor Paterson said. “There are no more easy answers. We cannot keep spending money that we do not have. Significant spending reductions are necessary if we want to emerge from this crisis and build a strong fiscal and economic recovery. Together, through shared sacrifice, we will move forward toward a more hopeful and optimistic future for New York.”

Eliminating the Deficit
Governor Paterson’s 2010-11 Executive Budget closes a $7.4 billion deficit through $5.5 billion in recurring spending reductions (74 percent of the overall plan), $1.0 billion in actions that increase taxes or fees (less than 14 percent of the overall plan), $430 million in revenue actions that do not increase taxes or fees, and $565 million in non-recurring actions. Overall, 92 percent of Governor Paterson’s gap-closing plan represents recurring actions that will help the State continue to address its future projected budget deficits.

Major spending reduction recommendations include:
  • School Aid. A $1.1 billion or five percent year-to-year reduction in School Aid, targeted progressively based on local school district wealth and student need. Even after this reduction, overall recommended 2010-11 School Aid spending of $20.5 billion would still represent a $6.1 billion or 42 percent increase compared to 2003-04 – twice the rate of inflation (19 percent). Additionally, this $1.1 billion reduction represents only 2.1 percent of overall school district budgets, which total more than $52 billion, including State and local contributions. School districts also have reported undesignated reserves of more than $1.5 billion statewide.
  • Health Care. $1.0 billion in Medicaid and health care savings, including reductions to providers and various programs, enhanced Medicaid fraud recovery efforts, and other measures.
  • Agency Spending. More than $1.0 billion in reductions to State agency operations spending, including $500 million in additional across-the-board agency cuts, $250 million in negotiated workforce savings (including $28 million from administratively rescinding, for the second consecutive year, the scheduled general salary increase – four percent – for non-union management/confidential employees), prison closures, youth facility right-sizing, agency mergers, shared service initiatives through Governor Paterson’s Office of Taxpayer Accountability, and other actions.
  • Hundreds of other individual reductions detailed below and on the Division of the Budget’s website (

Read more here about other plans and details from the Governor.

Tuesday, January 12, 2010

Paterson wants to merge economic-development agencies

The Albany Business Review reported that Empire State Development Corp. (ESD) and the New York State Department of Economic Development would combine operations under a plan the governor's office announced today.

It's one of seven ideas for state agency mergers included in Gov. David Paterson's 2010-2011 state budget. The moves would result in total annual savings of nearly $15 million, according to the governor's office. Read more here.

Sunday, January 10, 2010

State tax collections drop 11% nationally

The Albany Business Journal reported that a new report reveals New York and states across the nation have suffered the worst decline in tax revenue in more than four decades.

State tax collections dropped 11 percent from July to September 2009, the latest data available, according to the Rockefeller Institute of Government. The Albany-based research group is the public policy wing of the State University of New York system.

The first three quarters of 2009 marked the largest drop in state tax collections since at least 1963, the institute’s Jan. 7 report found. Early data for the fourth quarter of 2009 shows continued declines, though seemingly more moderate than what was experienced earlier in the recession.

New York is one of 28 state economies that, as of November, was continuing to decline, the report said. The findings were based on an index measuring unemployment, sales tax collections, private-sector employment and average weekly hours worked by manufacturing employees. Read more here.

Thursday, January 7, 2010

Gov Paterson's State of the State Address

WBNG-TV reported on Paterson's State of the State Address. As WBNG related: In his second State of the State address, Governor David A. Paterson today outlined his plan to rebuild New York through firm and decisive steps ,including fiscal and ethics reform and an economic development plan that puts New Yorkers back to work.

The Governor laid out an agenda to end the culture of over-spending and abuse of power that has for too long dominated State government, including a proposal for sweeping and comprehensive ethics reform - the centerpiece of which is a new independent Ethics Commission.

Governor Paterson also announced a replacement for Empire Zones – the Excelsior Jobs Program – which includes three aggressive tax incentives for targeted growth industries, the Sustainable Neighborhoods Project to revitalize prime housing stock that sits vacant in urban cities across New York State and the Manufacturing Legacy Program to leverage the strengths of the State’s manufacturing industries to guarantee the economic security of the people who are carrying its legacy into the twenty-first century. In addition, the Governor proposed a bold initiative to revive the New York Insurance Exchange that would bring buyers and sellers of complex commercial insurance closer together, providing increased transparency and security for everyone in the process. Read more here.

Wednesday, January 6, 2010

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Sunday, January 3, 2010

New York finishes 2009 with cash, so Paterson orders payments to school districts reported that New York’s government finished 2009 with some cash on hand, and Gov. David Paterson said local aid payments he ordered withheld in December should be released in January.

A report from state Comptroller Thomas DiNapoli showed $883 million available at the close of business Thursday. He noted there was a $600 million year-end shortfall in the general fund, the account used to pay for state operations and local assistance, and said that was a first in recent history.

“I want to be sure everybody in the state understands we are not running out of money,” Paterson said. Bondholders were aware of the narrow margins and New York’s credit rating should not be affected, he said.

Paterson had withheld $750 million in aid to schools, local governments and nonprofit service providers, saying the government might otherwise run out of cash. On Thursday, he said that decision, which prompted a lawsuit by the teachers’ union and schools, was necessary.

“I would assume that in January, when the revenues come back, I would complete the payments that we delayed to the entities that have been afflicted,” Paterson said. “At that point, I will issue a budget that will project what we would think will be the necessary cuts.”

The state likely faces a deficit of about $8 billion in the next fiscal year, which begins in April, Paterson said. Some payments may need to be delayed again when major bills come due in March, he said. Read more here.