Department of Banking
The enacted budget makes the following changes to the Executive Budget (analysis as of 4/2/ 2007):
- Decreases the department’s All Funds budget by $1.3 million. The entire decrease is in the contractual services appropriation for the Regulation Program. We believe this cut is related to the Mortgage Loan Originators Program. The impact of this cut should be clarified at Statewide Labor Management.
The Senate recommends (analysis as of March 16, 2007):
- Reduces by $2 million the contractual services appropriation in the Regulation Program which the Senate claims is for the Mortgage Loan Originators Program.
The Executive Budget recommends (analysis as of January 31, 2007):
A SFY 2007-08 workforce of 550. This is unchanged from the adjusted FTE level for FY 2006-07. The following chart identifies adjustments in current fiscal year’s FTEs by program (if the FTE’s are the same the program is not listed):
Program
FY 2006-07 Adjustment
FY 2007-08 Difference
Regulation
-25
0
- The total appropriation for Personal Service is $42.4 million, an increase of 5%. The reason for the decrease in FTEs in the Regulation program during SFY2006-07 should be clarified at statewide labor management.
- An All Funds increase of $5.9 million, or 6.4% from SFY 2006-07.
- There is a significant increase in the non-personal services appropriation in the Regulation program and a large appropriation for contractual services ($14,501,000) which we suspect is the appropriation that has been significantly increased. The reason for this large contractual services appropriation and for its increase should be clarified at statewide labor management.
- An increase of 5 in the estimated number of employees employed under consulting contracts in SFY2007-08 for a total of 16. The average cost per contract employee will increase by 121% from $49,253 per contract employee to $108,875. The reason for this increase and the purpose and use of these contract employees and whether they can be replaced by state employees should be clarified at statewide labor management.
- Significant changes in loopholes currently in the law that governs New York State bank taxes. These tax changes would:
ü Close a loophole that allows banks that use certain subsidiaries to shelter income. The proposal would revoke the election for companies that meet certain conditions, such as those that have become inactive, cease to be a taxpayer under the business corporation tax, or are part of a corporate reorganization. Some banking corporations have placed large portions of their investment portfolios in these corporations so that this part of the banking business is subject to less tax under the corporation franchise tax.
ü Conform New York to federal rules and the practices of other states that allow certain banks to deduct only bad debts that have been actually written-off rather than amounts placed in reserve.
ü Require the add back of expenses related to subsidiary capital under the bank tax, and eliminate the 20 percent reduction in the wage factor portion of the apportionment formula to ensure the bank tax appropriately reflects a bank’s presence in New York.
Banking Department Program Details-State Operations Enacted Proposed Enacted Change in Percent Program 2006-07 Budget 2007-08 Budget 2007-08 Budget Appropriation Change All Funds $92,019,000 $97,942,000 $96,642,000 $4,623,000 5.0% Special Revenue-Other $92,019,000 $97,942,000 $96,642,000 $4,623,000 5.0% $0 Personal Services $40,390,000 $42,452,000 $42,452,000 $2,062,000 5.1% 0 Administration (SRO) $21,766,000 $22,086,000 $22,086,000 $320,000 1.5% Personal Service $4,440,000 $4,665,000 $4,665,000 $225,000 5.1% Regular $4,661,000 $4,661,000 Temporary service $3,000 $3,000 Holiday/overtime compensation $1,000 $1,000 Nonpersonal Service $2,676,000 $2,771,000 $2,771,000 $95,000 3.6% Supplies and materials $150,000 $150,000 Travel $100,000 $100,000 Contractual Services $170,000 $170,000 Equipment $1,000 $1,000 Fringe Benefits $2,087,000 $2,191,000 $2,191,000 $104,000 5.0% Indirect Costs $168,000 $159,000 $159,000 ($9,000) -5.4% Special Revenue-Other (SRO) $14,650,000 $14,650,000 $14,650,000 $0 0.0% Siezed Assets Acct - (SRO) $150,000 $150,000 $150,000 $0 0.0% Nonpersonal Service $150,000 $150,000 Contractual services $100,000 $100,000 Equipment $50,000 $50,000 Banking Dept Settlement - (SRO) $500,000 $500,000 $500,000 $0 0.0% Nonpersonal Service $500,000 $500,000 Contractual services $350,000 $350,000 Equipment $150,000 $150,000 State Transmitter of Money Insurance Fund Acct (p.542) $14,000,000 $14,000,000 $14,000,000 $0 0.0% Analysis & Compliance $4,100,000 $4,287,000 $4,287,000 $187,000 4.6% Special Revenue-Other $4,100,000 $4,287,000 $4,287,000 $187,000 4.6% $0 Banking Department Acct - (SRO) $4,100,000 $4,287,000 $4,287,000 $187,000 4.6% Personal Service $2,583,000 $2,715,000 $2,715,000 $132,000 5.1% Regular $2,707,000 $2,707,000 Temporary Service $3,000 $3,000 Holiday/overtime compensation $5,000 $5,000 Nonpersonal Service $1,517,000 $1,572,000 $1,572,000 $55,000 3.6% Supplies and materials $3,000 $3,000 Travel $133,000 $133,000 Contractual Services