Civil Service Enforcement/Research Department
TO: Kenneth Brynien
FROM: Thomas E. Cetrino, Susan Mitnick, Kristie Sammons, and Mike Marinello
DATE: February 23, 2007
RE: 21-day Amendments to Executive Budget SFY 2007-08
This week the Governor released his 21-day amendments to the Executive Budget for SFY 2007-08. The 21-day amendments and spending re-estimates result in a net positive change of $50 million over 2006-07 and 2007-08. The Executive Budget recommends that this surplus be deposited into the new rainy day reserve which would total $ 175 million.
For SFY 2006-07, the Division of Budget (DOB) now projects a net operating surplus of $1.50 billion in the General Fund, an increase of $36 million from the Executive Budget Financial Plan. The increase in the surplus is due to lower projected spending for several activities, including local aid payments for criminal justice, the prescription drug program for the elderly, and operating costs for State government.
Projected State Operation expenses across all State agencies have been lowered by roughly $10 million in the current year based on DOB’s review of experience to date. Spending has been revised downward for computer systems in the Office of Temporary and Disability Assistance (OTDA) ($8 million), and personal and non-personal service costs in all other agencies ($8 million). Contractual payments related to Labor-Management Committees are expected to be higher by $6 million. The updated Financial Plan does not specify why these payments are increasing and we will ask DOB for an explanation.
DOB has made no change to its revenue forecast. For SFY 2007-08, the 21-day amendments are projected to result in higher costs of $18 million, the impact of which is more than offset by $32 million in savings based on updated spending estimates for several programs including a $2 million savings in State Operation expenses. It is important to note that the changes discussed below only affect appropriations and not actual spending by State agencies for their operations. The Updated Financial plan anticipates that, despite the increased State Operations appropriations in the 21-day amendments, State agencies will spend $2 million less in SFY 2007-08 than originally anticipated in the original SFY2007-08 Executive Budget.
The major changes in State Operations program appropriations within State agencies for SFY2007-08 are as follows:
State Office for the Aging
Adds $200,000 to the Administration and Grants Management Program’s Maintenance Undistributed appropriation to support the administration of the Family Caregivers Council. This appropriation was previously allocated to Local Assistance, which has now been removed.
State Board of Elections
Adds a $5 million appropriation of federal funds to the Regulation of Elections program for a new Help America Vote Act Implementation fund. This funding is for services and expenses related to the development of a statewide master plan for the testing and certification of voting machines. It is a lump sum appropriation which can be used for personal services, contractual services, or other non-personal service purposes.
Department of Health
Adds $1.4 million to a Maintenance Undistributed appropriation in the Administration and Executive Direction Program. These funds are for services and expenses related to collecting and posting retail prescription drug prices on the DOH website as a resource to consumers.
Department of Insurance
Increases the Regulation Program appropriation by $1 million which will fund nine new positions according to the Updated Financial Plan. This increase is due to the addition of a Maintenance Undistributed appropriation, which is for services and expenses related to the coordination of various working groups which will review and recommend system improvements and identify and collect necessary data related to workers’ compensation. Of this allocation $500,000 is for Personal Service and $125,000 is for Contractual Services, with the rest evenly distributed to fund supplies and materials, travel, and equipment.
Department of Labor (DOL)
Adds language to the Administration program’s Unemployment Insurance Fund that gives DOL appropriation authority to permit Federal Veterans’ grant funding for federal Fiscal Year 2007-08 to be used to pay performance incentives to DOL veterans’ program staff. This includes the 43 disabled veterans’ outreach program specialists and 34 local veterans’ employment representatives that are currently represented by PEF. Such payments, which are authorized in Federal law, are not currently permitted under State Civil Service Law. Over the past few years PEF has been engaged in bargaining with DOL management on such payments but we have been unable to reach agreement over how such payments will be distributed. We believe that such payments still need to be collectively bargained with PEF and we will clarify this issue with DOL management and the Division of Budget.
Division of Lottery
Adds a Contractual Services appropriation of $9 million to the Administration of the Lottery Program. This increase can be found within the “contingent and other appropriations” section of the budget and is an addition of funds to the State Lottery Account, which is appropriated to finance services and expenses associated with the non-profit racing association’s operation of the racetracks. The amendment’s narrative states that the amendment includes a “contingent appropriation to provide access to additional State resources should a bankruptcy court determine that amounts previously provided by the State for bankruptcy financing are insufficient to allow NYRA to continue operations through December 31, 2007.”
Office of Parks, Recreation and Historic Preservation
Increases the Park Operations Program funding by $2.32 million: a $2.19 million increase in Personal Service funding, and a $130,000 increase in Nonpersonal Service funding. According to the amendment’s narrative this additional appropriation is necessary for personal service costs of law enforcement staff, which may be related to a recent contract settlement with the union that represents that staff.
Revenue Legislation
The 21-day amendments do make technical corrections to several of the proposed tax loophole closure provisions supported by PEF. The most significant change is an amendment to the Real Estate Investment Trust (REIT) and Regulated Investment Company (RIC) loophole closure legislation that would allow banks with taxable assets under $2 billion to retain tax advantages related to the bank's closely held REIT/RIC. According to DOB none of these amendments would impact the estimated $450 million the loophole closure legislation is expected to raise in SFY 2007-08 and in future years.
The next step in the budget process is for an agreement to be reached by March 1, 2007 on how much revenue is available to spend. According to the legislature’s agreed budget schedule, on March 12, 2007 Senate and Assembly budget bills will be past by each house and Joint Senate/Assembly budget conference committees will immediately commence. Conference committee reports are to be issued by March 28, 2007 in anticipation of passage of a budget by March 30, 2007. It is unclear as to whether this ambitious schedule can be met. We will continue to update you on all major budget developments
