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You likely have already heard that last night, for the first time in 18 years, the State budget was finalized before the April 1^st deadline.  From our friends and partners of Unshackle Upstate and Hinman Straub, allow me to share with you the following synopsis of what was (and what was not) included in the 2011-2012 budget:

Legislature Approves 2011-2012 State Budget

The State Legislature has completed action on all of the state’s 2011-12 budget bills.

This is the first time in decades that a state budget has been in place before April 1^st, and both the timeliness and the content of the budget are being viewed as significant achievements for Governor Cuomo.

The approximately $132.5 billion spending plan represents a 2% spending reduction from the 2010-11 fiscal year.  It also closes a $10 billion deficit without imposing any new broad-based taxes, and reduces the projected 2012-13 budget deficit from $15 billion to $2 billion.  In so doing, lawmakers agreed to a series of actions that will result in spending cuts for education and healthcare, the merger of several state agencies, and the closure of a number of prisons.

Highlights of the enacted budget include:

• Recharge NY – creation of a permanent economic development power program to replace the Power for Jobs program
• Creates a new Department of Financial Regulation — by merging the Banking and Insurance Departments
• State Agency consolidation – the Consumer Protection Board is merged into the Department of State; NYSTAR is merged into the Department of Economic Development (also known as the Empire state Development Corporation); and the Division of Parole and the Department of Correctional Services are emerged into a new Department of Corrections and Community Supervision
• Prison closures – the Governor gains the authority to reduce up to 3,700 beds with just 60 days notice
• Cuts in education and health spending — including a two-year appropriation that includes a small increase in the 2012-13 fiscal year
• Education Performance and Efficiency Grants – makes $500 million in competitive grants available to school districts that demonstrate significant improvements in student performance or that undertake long term structural changes to reduce costs and improve efficiency
• Regional Economic Development Councils – these are funded through the budget, but the details of these entities will be established in an Executive Order to be issued by the Governor
• Enhancing the Excelsior Jobs Program – provides greater benefits to support job creation efforts
• Juvenile Justice Reform – makes significant changes to the state’s juvenile justice system, to encourage greater use of community-based alternatives, downsize the state juvenile facilities system by more than 30%, invest resources in enhanced services for juveniles in state custody

A number of high-profile matters were not part of the budget.  These include:

• an extension of the high-earner tax (“millionaires tax”)
• a cap on medical malpractice awards
• an extension of rent control laws
• a real property tax cap
• significant mandate relief
• the proposed HCRA surcharge on health insurance policies; and
• UB 2020 – though the Governor has committed to holding a stakeholder summit on this important Western New York initiative

Legislators were able to complete work on budget bills despite the presence of hundreds of protestors organized by the Strong Economy for All Coalition.  The protesters, who included public school teachers, college instructors, students, New York City renters and health care advocates, sought additional funding for education, and want the “millionaires tax” extended in order to pay for it.

This morning I had the pleasure of heading up to Syracuse University (my alma mater!) to hear and see Governor Cuomo present the last of his statewide regional visits on the Executive Budget.  At the event, Governor Cuomo relayed his pledge to push forward his $132.9 billion budget ahead, and gave no indication of flexibility or retraction in his push to cut both school and health care spending. Last week, the Senate and Assembly passed their own versions of the budget that come close to meeting Cuomo’s plan (see my previous blog post for details on the Senate and assembly budget versions). The deadline for passage is April 1, next week. In his speech, Cuomo talked about three charges: stop Albany dysfunction, curb government overspending and foster economic development and job growth.  Cuomo defended his plan, saying it will slow down spending without raising taxes, a move toward creating more jobs in the state. To access Governor Cuomo’s press release covering both his budget and his trip to Syracuse, as well as comments and feedback from Syracuse region Senate and Assembly members, please visit: http://www.governor.ny.gov/press/032311budgetsyracuse.

This week, the Senate and Assembly released their recommended changes to the Executive Budget. The Senate’s proposed budget included $132.5 billion in total spending, about $400 million, or 0.5% less than the Executive Budget. The Senate budget makes $280 million in school aid restorations, and by their calculation, adopts $2.755 billion of the $2.9 billion in reductions and reforms recommended of the Governor’s Medicaid Redesign Team. It also would give counties the authority to opt out of optional Medicaid services. The Senate has not accepted the Governor’s Excelsior program reforms, and continues to work on alternative economic development proposals. The Senate also proposes several significant tax and fee reforms, including: permitting deferred business tax credits earned from 2010 to 2012 to be treated as refundable overpayments in 2013; accelerating the sunset of $700 million per year in “Section 18-a” energy assessments by two years; and proposing a package of tax credits targeting communities affected by correctional facility closures.

To view the Senate Press Release on their budget, please visit: http://www.nysenate.gov/press-release/state-senate-passes-responsible-budget-reduces-spending-invests-new-yorks-priorities-a

The Assembly’s proposal includes $133.0 billion in total spending, the same level as proposed in the Executive Budget. The most significant change proposed to the Governor’s budget is the Assembly’s proposal for a one year extension and modification of the upper income personal income tax surcharge, affecting taxpayers with taxable income over $1 million for the 2012 tax year. This is anticipated to raise $700 million in Fiscal 2012 and $2.6 billion in Fiscal 2013.

To view the Assembly Press Release on their budget, please visit: http://assembly.state.ny.us/Press/20110315a/

Hello!  Welcome to our latest way to keep our state’s manufacturing community up-to-date on all things of importance to manufcaturing!  Please check back for future blog posts! Thanks for your support! KB