TO: Executive Board Members

Statewide Labor/Management Chairs

Council Leaders

FROM: Thomas Cetrino, Susan Mitnick, Steve Connolly, and Martin C. O’Connor

DATE: February 16, 2001

The Governor transmitted to the Legislature his 30-day amendments to the 2001-02 Executive Budget on February 13, 2001. The major news surrounding these amendments is that the Governor admits there is an additional $450 million surplus, bringing the total estimated surplus for SFY2000-01 to $1.85 billion. The Assembly has stated that the surplus is closer to $2.4 billion. The Governor puts all of the additional $450 million surplus into reserves, including $250 million into the Debt Reduction Reserve Fund (DRRF) and $200 million into the proposed Fiscal Responsibility Fund. The Fiscal Responsibility Fund is designed to ensure that tax cuts already enacted into law are implemented as scheduled. The Governor has already committed $1.5 billion to this Fund but it has not yet been agreed to by the Legislature.

The money in the DRRF will be used for two purposes. The first is to reduce the State’s reliance on high interest debt. The other is to fund "critical transportation projects on a pay-as-you-go basis." The Governor indicates that this money will be split between these two purposes on a 50/50 basis. This means that there should be an additional $125 million for "critical transportation projects" although the 30-day amendments do not include this provision of funds.

There were few changes affecting the state workforce. The following are the significant additions made to agency budgets in the 30-day amendments:

• $400,000 for the Consumer Protection program in the Consumer Protection Board for additional funds for a contractor to administer the "Do Not Call" telemarketer registry due to higher than expected demand.
• $701,000 to the Consumer Protection program in the Consumer Protection Board reflecting additional resources for consumer energy issues. This breaks down as $516,000 for personal services, $164,000 for fringe benefits and $21,000 for indirect costs.
• $2.8 million in the Regulation of Utilities program in the Department of Public Service for consultant services to assist in an ongoing prudence investigation of Consolidated Edison Company’s actions regarding the outage at the Indian Point 2 power plant.
• $900,000 in federal funds to the Parole Operations program in the Division of Parole associated with maximizing the amount of federal funds that can be used to implement the State’s drug testing, intervention and sanctions programs.
• $235,000 in personal services and $190,000 in nonpersonal services to the Local Government Services program in the Department of State for the Quality Communities program.
• $500,000 of federal funding to the Consumer Food Services program in the Department of Agriculture and Markets for the testing of produce with respect to E-coli, salmonella and pathogens. $280,600 of this appropriation is designated for personal service and fringe benefits.
• $120,000 personal service reappropriation to the Department of Environmental Conservation’s Environmental Enforcement program for the New York City Watershed. The funds are then sub-allocated to the Department of State.
• $3 million to the Administration program in the Department of Health for the development of a time and activity system to improve claiming of federal matching funds. We should be monitoring this project carefully for possible Article 12.17 violations.
• $2.1 million special revenue other appropriation for Helen Hayes Hospital in the Department of Health. This addition is characterized as a technical correction.
• $1.054 million personal service appropriation to the Office of Managed Care in the Department of Health to correctly reflect projected expenditures for employees.
• $500,000 to the Transitional Support and Policy program in the Office of Temporary and Disability Assistance for services and expenses related to the administration of federal homeless grants.
• $4.1 million to the Technical Police Services program in the Division of State Police for services and expenses related to the Communication Assistance Law Enforcement Act (CALEA).
• $6 million loan to Roswell Park Cancer Institute to assist RPCI in maintaining its designation from the National Cancer Institute.

The following are cuts made in agency budgets in the 30-day amendments:

• $305,000 in personal services and $2.6 million in nonpersonal services in the Technical Police Services program in the Division of State Police.
• Reduces personal service funding by $47,000 in each of the following programs within the Department of Environmental Conservation: Administration, Air and Water Quality, Solid and Hazardous Waste Management, and Fish and Wildlife. It is unclear whether any additional position reductions are associated with these cuts.

The 30 day amendments also included changes to the proposed Article VII bills that would implement the Executive Budget. The major changes in these amendments include:

• Modifies the Mental Hygiene Law to double the size of the Capital District DDSO’s Board of Visitors so it can cover the Taconic DDSO, which the Executive Budget proposes to consolidate with the Capital District DDSO. It is important to note that the Executive Budget’s proposal does not propose eliminating patient services at the Taconic facility.

Next week we will forward amended spreadsheets for your agency which reflect the 30-day amendments and break out in more detail all special revenue other and special revenue federal appropriations. We are providing this additional detail because fees or federal grants now directly fund a large number of State employee positions. These spreadsheets will be available on PEF’s website as are all of our department’s memos on the State Budget. We expect the assembly and senate to pass their versions of the budget sometime in March. Passage of the budget by April 1, 2001 remains unlikely. If you have any questions or additional information concerning the budget, please let us know.