memo

 

TO:            Executive Board Members and Council Leaders

 

DATE:       February 9, 2007

 

RE:            Executive Budget SFY 2007-08 – Summary of Major Provisions

 

Attached is a memo from our Civil Service Enforcement/Research Department that analyzes the proposed Executive Budget for SFY 2007-08. Overall the Governor’s proposed budget is an excellent budget for state employees and PEF members. It increases the workforce by 2500 employees, up to 1800 of whom will be represented by PEF. The largest gains will be in the Office of Mental Health (OMH), the Department of Transportation, the Office of Mental Retardation and Developmental Disabilities, and the Department of Taxation and Finance.

 

In addition, due to PEF’s Go Public campaign and the passage of the contract disclosure law, the Executive Budget discloses for the first time the number and cost of consultant contract employees by state agency. The Executive Budget discloses that there will be 7,278 consultant employees during this fiscal year, down slightly from last year’s numbers, who will cost almost $1 billion or an average annual cost of $126,966 per consultant employee. Some State agencies like the Department of Health and the Department of Agriculture and Markets are paying an average of almost $500,000 per consultant employee and 15 agencies are paying consultants more than $170,000 a year. This information points out the need for a cost benefit analysis law, the enactment of which will be a top PEF legislative priority.

 

I am concerned about the proposed closure of the Office of Children and Family Services (OCFS) facilities at Great Valley, Gloversville, Brooklyn, and Mount Vernon. These closures provide much of the funding for the 249 new positions the Executive Budget would add to OCFS, most of which will be added to other OCFS facilities.  PEF is committed to protecting the job security of the members who work at the facilities slated for closure and will do whatever is necessary to work with the Governor and Legislature to achieve that goal. PEF will oppose the proposed suspension of the 12-month notification requirement necessary to close these facilities and I will work with the OCFS Labor Management Committee members to devise the best strategy to maintain these members’ job security.

 

I am also concerned about the mandatory nature of the recommendations of the proposed Prison Closure Commission and the potential for future closures in the Department of Correctional Services and OMH. Over the next week I will work with Statewide Labor Management Chairs and Committee members to finalize our budget priorities and implement a plan to achieve them. We have much to be thankful for in the proposed budget but we will need to act to maintain the gains this budget provides to PEF members.

 

 

 

_____________________________

              Kenneth Brynien

 

cc:        Labor-Management Chairs

 

 

 

 

 

Research Department

 

  

TO:                 Executive Board Members and Statewide Labor-Management Chairs  

 

FROM:           Thomas Cetrino, Susan Mitnick, Stephen Connolly, Jeff Waggoner, Kristie Sammons, and Michael Marinello

 

DATE:            February 9, 2007

 

RE:                 Executive Budget SFY 2007-08 – Summary of Major Provisions

 

 

STATE WORKFORCE IMPACT

 

Under the proposed SFY 2007-078 Executive Budget, the state workforce will increase by 2,500 positions to 197,100 FTE positions.  It is estimated that 1800 of these new positions will be in the PEF bargaining unit. It is interesting to note for the current year, the workforce is projected to be at 194,600 filled positions by March 31, 2007, an increase of 3,200 positions from 3/31/06.  Chart 1 is the DOB’s Workforce Impact Summary Report for Executive Branch agencies in SFY 2006-07.  It details the workforce changes for each Executive Branch and “off-budget” agencies.  

 

Based on the information in Chart 1, the following agencies have the largest net gains in positions in SFY 2007-08

 

·     Office of Mental Health: +405 FTEs, 335 of which are in the Adult Services program which are targeted for the treatment of sexually violent predators.

 

·     Department of Transportation: +411FTEs, which includes 108 new State engineers to reduce the reliance on contract staff. 

 

·     Office of Mental Retardation and Developmental Disabilities: +237 FTEs, which includes 40 FTEs to support the Autism Initiative with IBR, 103 FTEs to support 50 new state operated NYS CARES beds, and 74 FTEs to support 40 emergency developmental center admissions as well as 20 Information Technology FTEs which will be added to replace consultant IT employees who currently work at OMRDD.

 

·     Department of Taxation and Finance: +200 FTEs, which includes 144 new FTEs in the Audit, Collection and Enforcement program most of which will be auditors.

 

·     Office of Children and Family Services: +189 FTEs which includes 249 new FTEs offset by the attrition of 60 FTEs due to the proposed closure of the Great Valley non-secure facility and the Gloversville, Brooklyn, and Mount Vernon community residential homes on October 1, 2007.  The Assembly identifies these new positions as 182 direct care staff and 18 mental health staff which does not equal 249 positions. This proposal will require a change in the current law which requires a one year notification for the closure of OCFS facilities.  According to the Executive Budget Financial Plan the $2 million savings from the closures will fund a significant portion of the cost of the new OCFS positions this year and in the future.

 

·     Department of Environmental Conservation: +109 FTEs including 57 new FTEs in the Air and Water program, 19 new FTEs in the Forest and Land program, and 18 new FTEs in the Solid and Hazardous Waste program.

 

·     Office of Medicaid Inspector General: +157 FTEs which will be mostly auditors.

 

·     State Education Department: +97 FTEs including 77 FTEs in the Elementary, Middle and Secondary program. Most of these new positions will be used to monitor compliance with the proposed performance contracts for school districts.

 

Based on the information in Chart 1, the following agencies have the largest net losses in positions in SFY 2006-07:

 

·     Department of Correctional Services: -53FTEs all in the Support Services program.

 

·     Division of Parole: Chart 1 incorrectly shows that the Division has 24 attritions offset by 14 new FTEs for a net loss of 10 FTEs. The Division will not lose any filled positions to attrition in SFY 2007-08; they simply did not add 24 new positions they were authorized to add during SFY 2006-07 because of an over-estimate of the number of FTEs they needed to administer the Local Conditional Release program. The Division will add 14 more FTEs in the Parole Operations program during SFY2007-08.

 

            Chart 2 is derived from the Executive Budget 2007-08 Agency Presentation book and includes FTE changes in all State agencies which have employees represented by PEF, including FTE changes that occurred during SFY 2006-07.  These changes are due to the failure of the Legislature to approve various SFY 2006-07 Executive Budget proposals or to unforeseen changes that occurred in the workforce. For example, it shows that OMH has 241 fewer FTEs than what was estimated in the SFY 2006-07 budget which is due to the Legislature’s failure to enacted Governor Pataki’s sex offender proposals.  It also shows that the Office of Parks, Recreation, and Historic Preservation has 585 more FTEs than was originally estimated for SFY 2006-07 which we believe is due to the conversion of seasonal positions to full-time positions. It is important to note that Column b in Chart 2 is the SFY 2006-07 Executive Budget’s estimate of the size of the agency’s workforce on March 31, 2007, Column c is the SFY 2007-08 Executive Budget’s estimate of the size of the agency’s workforce on March 31, 2007, and Column d is the SFY 2007-08 Executive Budget’s estimate of the size of the agency’s workforce on March 31, 2008.

 

            The Executive Budget projects that the State workforce will increase by 1,100 positions in SFY 2008-09 to 198,200 FTEs. It is projected to remain at that level through SFY 2010-11.

 

 

FACILITY CLOSURES, REORGANIZATIONS, POTENTIAL PRIVATIZATIONS, and A NEW PUBLIC BENEFIT CORPORATION

 

DOCS and OCFS

 

The Executive Budget proposes no prison closures; however, a Prison Closure Commission is proposed. This Article VII bill will establish a commission similar to the Berger Commission to evaluate prison capacity in relation to inmate population trends, and to recommend a specific facility or facilities for closure.  The commission will issue a report of its findings on or before November 1, 2007, and a second report on or before November 1, 2008.  The commission will consist of eight appointees, four by the Governor and one by each legislative leader. None of the appointees can be a public officer, public employee, elected or political office holder, or a registered lobbyist.  The commission is required to consult with affected public employees unions and communities before making their recommendations.  The recommendations of the commission will be implemented unless rejected by the Governor or a majority vote of both houses of the Legislature.

 

The Executive Budget proposes the closure of the Great Valley non-secure facility and the Gloversville, Brooklyn, and Mount Vernon community residential homes on October 1, 2007 (savings of $1.3 million).  Proposed Article VII legislation would amend the closure notification requirement to allow closure by this date. According to DOB the Gloversville home has no residents and the other two homes are operating at 40% of capacity.  Great Valley is operating at 70% of capacity and hardly any of the residents are from communities in the Cattaraugus County area.  Closure of the three group homes was proposed in the SFY 2006-07 Executive Budget but funding and positions were restored by the Legislature.  The Senate attributes the attrition of 48 FTEs to these closures; 28 FTEs at Great Valley and 20 FTEs from the three group homes.  We estimate that PEF has 8 members at Great Valley and 8 members at the three residential homes.  It is important to note that the Executive Budget also proposes to create 249 new positions in OCFS to offset the positions lost at these facilities including a net gain of 173 FTEs in the Youth Facility program.

 

            The Executive Budget also contains an Article VII proposal that would create an Office of the Blind to take over the function of OCFS’s Commission for the Blind and Visually Handicapped. A new 15 member, unpaid executive board, appointed by the Governor and Legislature, would advise the office. The bill would move employees of the Blind and Visually Handicapped to the Office of the Blind under a transfer of function. The effective date for this change is 180 days after enactment.  Funding remains within OCFS in the SFY 2007-08 budget.

 

Other Minor Reorganizations

 

The Executive Budget also proposes to merge the Wireless Network unit into the Office for Technology adding 47 positions to the Office. In addition the Temporary State Commission of Investigation would sunset in September 2007 which would affect 32 M/C employees in New York City.

 

The Executive Budget also proposes to reduce 10 FTEs in the Department of Civil Service (DCS) in SFY 2007-08; some of these positions may be PEF positions.  According to the Senate Finance Committee the “Administrative FTEs will be moved to a ‘host’ agency (typically to the Office of General Services) where routine administrative functions for smaller agencies are consolidated to achieve efficiencies of scale.”  It is anticipated that some intra-agency human resource functions and information technology functions will be moved to the new host agency. In addition, the Executive Budget proposes to cut 20 FTEs from DCS’s Personnel Management Services Program.  According to the Senate Finance Committee the 20 FTEs are being eliminated due to “consolidation of redundant test development functions.”  The Senate further states that “both the Staffing Services Division and the Testing Services Division write tests, which results in duplication of efforts that the Executive proposal seeks to reduce.”  It is important to note that the Department of Civil Service had a workforce of 744 FTEs in SFY 1994-95; with this proposed cut their workforce would be reduced by 201 FTEs or 27% over the last thirteen years.  Their ability to enforce the merit system has been severely constrained by this overall reduction in their workforce.

 

Potential Privatizations – SUNY Hospitals

 

            The Executive Budget commentary for SUNY hospitals states that SUNY Upstate Medical Center will be joined with Crouse Hospital under a single unified governance structure.  This is a significant change from the Berger Commission report which stated that such a governance structure would be have to be under an entity other than SUNY.  This statement in the Budget narrative is not definitive but it may indicate some flexibility on the issue of privatization of SUNY Upstate.  The commentary also states that the Commissioner of Health, in consultation with relevant groups, will study the feasibility of privatizing SUNY's teaching hospitals at Stony Brook, Syracuse and Brooklyn.

 

New Public Benefit Corporation

 

The Executive Budget proposes to establish a new public benefit corporation, the Stem Cell and Innovation Fund Corporation, to implement a new Stem Cell and Innovation program.  The new corporation will make economic development investments in stem cell biology and other life sciences, as well as other emerging technologies, to support economic development in the state of New York by investing in basic applied, translational or other research and development that will advance scientific discoveries and commercial growth.  $100 million is provided in SFY2007-08 to support initial investments in this area.  In total, the Executive Budget would provide $2.1 billion over an eleven-year period, including the proposed $1.5 billion bond act for 2008 and an additional $500 million in planned annual appropriations if the bond act is approved.

 

 

PENSION and  EMPLOYEE BENEFIT ISSUES  

 

            The Executive Budget does not propose an Early Retirement Incentive (ERI) program in SFY 2007-0 as they are increasing the workforce. 

           

General State Charges is the fund in the budget that covers the cost of fringe benefits and certain fixed costs.  Fringe benefits include: health insurance, pension benefits, Social Security and Medicare taxes, Workers’ Compensation, dental, vision and other employee benefits, and fringe benefits for State University of New York (SUNY) employees. The Executive Budget does not propose any explicit changes to State employee or retiree health insurance benefits. The SFY 2007-08 Executive Budget recommends All Funds appropriations of $3.1 billion for General State Charges, an increase of approximately $1 million from the previous year.  This includes a $2 billion appropriation for health insurance, a $226.6 million increase or a 10.8% increase from last year’s health insurance expenditures.  It also includes an $899 million appropriation for the State’s contribution to the retirement system which reflects a contribution rate of 9.2% and is $49.9 million less than the state’s contribution last year because of an increase in returns on the retirement system’s investments.  Actual disbursements/spending for general State Charges in SFY 2007-08 is projected to cost $4.5 billion and will increase to $4.9 billion in SFY 2008-09, $5.3 billion in SFY 2009-10 and 5.6 billion on SFY2010-11.

 

The State’s pension contribution rate to the New York State and Local Retirement System is expected to increase from 9.5 percent of salary in 2007-08 to 9.9 percent in 2008-09, 11.0 percent in 2009-10.  Pension spending in 2008-09 is projected to increase by $41 million over 2007-08 due to anticipated increases in the employer contribution rate.  In 2009-10, spending is projected to grow by another $106 million to a total of $1.3 billion, and remains virtually unchanged in 2010-11.

 

Spending for employee and retiree health care costs is expected to increase by $334 million in 2008-09, $271 million in 2009-10, and another $300 million in 2010-11 and assumes an average annual premium increase of roughly 10 percent.  Health insurance is projected at $3.0 billion in 2008-09 ($1.8 billion for active employees and $1.2 billion for retired employees), and $3.3 billion in 2009-10 ($2.0 billion for active employees and $1.3 billion for retired employees), and $3.5 billion in 2010-11 ($2.1 billion for active employees and $1.4 billion for retired employees).

 

The Executive Budget includes an Article VII bill that authorizes the New York State Insurance Program (NYSHIP) to self insure if doing so is determined to be cost effective to the plan.  PEF’s Contract Administration department has reviewed this proposal and believes it will have no adverse impact on PEF members’ health benefits and may be helpful.

 

 

CONTRACTING OUT AND CONTRACT DISCLOSURE IN THE SFY 2007-08 EXECUTIVE BUDGET

 

For the first time, the Executive Budget provides detailed reporting on the State’s use of outside consulting services by State agency.  Chart 3 outlines the SFY 2006-07 and SFY2007-08 estimated disbursements for consulting contracts for each State agency, the estimated number of employees employed under these consulting contracts and the average cost per contract employee.  This chart shows that State agencies employed an estimated 7,546 employees under consultant contracts in SFY 2006-07 at an estimated cost of $910.9 million or an average cost of $120,718 per consultant contract employee.  It is estimated that the number of employees employed under consultant contracts will decrease to 7,278 employees in SFY 2007-08, a decrease of 268 contract employees (a 3.5% decrease).  Interestingly, consultant contract employees will be paid $924 million in SFY 2007-08 or an average cost of $126,966 per consultant contract employee, a 5% increase over the average cost in SFY 2006-07.

 

            Chart 4 highlights the fifteen state agencies whose SFY2007-08 contract employee cost will average more than $170,000 per contract employee.  This list is led by the:

 

·         Department of Agriculture and Markets which will pay 35 consultants an average of $574,914 each;

 

·         Department of Health which will pay 500 consultants an average of $439,768 each;

 

·        Department of Labor which will pay 108 consultants an average of 275,688 each;

 

·        Office of Technology which will pay 222 consultants an average of $232,346; and

 

·        Department of Environmental Conservation which will pay 170 consultants pay an average of $200,259 each.

 

The detailed agency analysis spreadsheets sent to Executive Board members for the agencies they represent summarizes the consultant contract information for that agency along with an average cost per consultant employee.  The spreadsheets also note when we notice a large increase in non-personal service or contractual services appropriations in agency programs and recommend that you ask agency management for an explanation of these increases. This information should be used by agency Labor-Management Committees to get more detail on what programs in their agencies are using these consultant contracts and whether that work can be done by state employees.  Agency management should be asked to provide PEF with all contracts relating to the contract disbursements included in Chart 3 for state agency consultant contract employees. This will allow PEF to analyze the contract and work with you to convince agency management to hire State employees to do the work.

 

           

MAJOR REVENUE PROPOSALS IN THE SFY 2007-08 EXECUTIVE BUDGET

 

The Executive Budget proposes to close corporate and other tax loopholes which will raise an additional $449 million in FY 2007-08, $567 million in FY 2008-09, $537 million in FY 2009-10 and $537 million in FY2010-11.  Many of these proposals have been advocated by PEF, the Fiscal Policy Institute and other coalitions that PEF has worked with on State revenue issues. The proposals include:

 

• Requiring corporations that conduct substantial inter-corporate transactions with affiliated companies to file a combined, rather than separate, corporate franchise tax return.

 

• Stopping taxpayer use of corporate status to avoid personal income tax

 

• Extension and restructuring of fees for Limited Liability Companies (LLCs).

 

• Conforming New York to the practices of 18 other states that have decoupled from the federal deduction related to qualified production activities and require taxpayers to add back this deduction for New York tax purposes.

 

• Eliminating the deduction for certain subsidiary dividends received by a parent company from a real estate investment trust (REIT) or regulated investment company (RIC) to ensure that the shareholders of the REIT or RIC pay tax on the income earned by the REIT or RIC.  Wal-Mart has used this loophole to significantly reduce the corporate franchise tax they pay to New York State and New York City as well as other states. According to the Wall Street Journal Wal-Mart has used this loophole to cut their state taxes by about 20% over one four-year period.

 

• Making permanent current tax shelter reporting requirements that expire on July 1, 2007.

 

• Limiting the exemption under the insurance tax for cooperative insurance companies.

 

• Making several changes to the way banks are taxed.

 

In addition the Executive Budget includes an Article VII bill which would raise $100 million annually and $25 million in SFY2007-08 by amending the Environmental Conservation Law (ECL), Economic Development Law (EDL) and State Finance Law (SFL) for the purpose of: 

• Expanding the State’s returnable container act (the “Bottle Bill”) to include non-carbonated beverage containers;

 

• Requiring payment by deposit initiators (generally, manufacturers or distributors) of unclaimed deposits to the Environmental Protection Fund (EPF); and

 

• Providing financial incentives to municipalities, not-for-profit organizations and businesses to enhance container recycling capabilities.

 

As a result of the bill, monies from unclaimed deposits will be paid to the State and deposited in the EPF to support critical ongoing environmental programs, and litter and the volume of solid waste produced from unclaimed beverage containers will be reduced.  Bottles, cans and jars used to contain liquor, wine, infant formula, milk and dairy products, rice and soy milks, dietary supplements, medications, concentrates and soups remain exempt from the bottle bill

 

THE STATE’S FIVE YEAR FINANCIAL PLAN AND HOW THE SFY 2007-08 EXECUTIVE BUDGET IMPACTS CURRENT AND FUTURE BUDGET GAPS

 

            The SFY 2007-08 Executive Budget recommends All Funds spending of $120.6 billion, a $7.097 billion or 6.3% increase over last year’s budget.  DOB points out that when spending is adjusted to exclude State-financed local school tax relief through the School Tax Relief (STAR) program, the State cap on local government Medicaid costs, and the full takeover of the Family Health Plus (FHP) program, spending increases by 3.8% in the General Fund, 6.3% in State Funds, and 5.2% in All Funds.  State Operations, which accounts for the cost of running the Executive, Legislative, and Judicial branches of government, is projected to total $18.629 billion in All Funds spending in SFY 2007-08, an increase of $785 million (4.4%) from estimated SFY 2006-07 All Funds spending.  $16.6 billion of State Operations spending is for Executive Branch agencies and $2 billion is for the Legislature and Judiciary

 

            It is important to note that the simple analysis that many make that compares State government spending growth to the Consumer Price Index (CPI) growth is flawed.  The CPI measures the growth in cost of a basket of goods purchased by the typical urban consumer.  State government does not purchase the same goods with its spending as a consumer.  For example the cost of health insurance is not included in the CPI but it is a major purchase of State government and its cost has generally grown at a greater rate than the CPI.  The Fiscal Policy Institute believes a better comparison to make is to compare State spending to the growth of the State’s total personal income.  State spending as a percent of the State’s total personal income has declined from about 8.4% in 1990 to about 8% in 2006.

 

            DOB projects the State will end SFY 2006-07 with a $1.462 billion surplus which will be put in a separate “Spending Stabilization” reserve and used to reduce the budget gaps for SFY 2007-08 through SFY 2010-11 budget gaps. The State will also deposit $81 million into the Tax Stabilization Reserve Fund, bringing this fund up to $1 billion.  The main reason for the SFY2006-07 surplus is an underlying annual receipts growth of 11.9 % in SFY 2006-07. DOB attributes this growth primarily to personal income tax growth due to continued profitability and compensation gains for financial services companies and their employees, continued growth in the downstate commercial real estate market values, improvements in overall economic activity, especially in New York City and surrounding counties, and continued positive impact of high-income taxpayers on personal income tax growth.  DOB projects that base tax receipts will grow by 6.5% in SFY 2007-08, 5.7% in SFY 2008-09, 5.6% in SFY 2009-10, and 4.8% in SFY 2010-11.  DOB projects that the rapid expansion in base revenue will slow modestly in 2007-08 and beyond, reflecting a slowing national economy, a continued cooling of the housing market and more modest gains in the equity markets.

 

            The Executive Budget projects that the State has to close a $1.608 billion budget gap in SFY 2007-08.  This gap will be closed with $2.81 billion in savings (which grow to $4.659 billion in SFY2010-11). This savings plan includes:

 

·        $1.299 billion in Medicaid, health and mental hygiene savings which will grow to $1.738 billion in SFY 2010-11;

 

·        $1.062 billion in other savings including $455 million in non-recurring resources (“one-shots”) and $85 million in State Operations non-personal services savings. Overall these savings will grow to $2.384 billion in SFY 2010-11.

 

·        $449 million in tax loophole closures which will grow to $537 million in SFY2010-11.

 

These savings are offset by $1.873 billion in new initiatives which include a four year plan to raise school aide by $7 billion by School Year (SY) 2010-11 which will cost $1.413 billion in SY 2007-08 and translates into a $371 million increase in SFY 2007-08.  The other major initiative is the new property tax relief proposal which will cost $1.211 billion in SFY 2007-08 and will grow to $2.152 billion in SFY 2010-11.  The State will use $1.874 billion in prior year’s surpluses by using $671 million in SFY 2007-08 and $401million in each fiscal year from SFY 2008-09 through SFY 2010-11 to reduce the out-year budget gaps

 

            All these actions will still result in a $2.308 billion General Fund budget gap for SFY 2008-09, a $4.449 billion budget gap in SFY 2009-10, and a $6.210 billion budget gap in SFY 2010-11 as detailed in Table 1.  These out-year budget gaps create a risk for the State workforce even though it is projected to grow through SFY 2010-11 and create a challenge for the upcoming contract negotiations.  Prison and OMH facility closures are a real threat in future fiscal years.

 

Table 1

PROJECTED GENERAL FUND BUDGET GAPS FOR

SFYs 2007-08 THROUGH 2009-10

($ in millions)

                                                                                                    2007-08             2008-09                 2009-10             2010-11

 

Gap (before 2007-08 Recommendations)                            (1,608)                  (2,995)                   (5,089)              (5,359

 

Value of 2007-08 Recommendations                                   2,810                       3,383                      4,460               4,659

 

  – Medicaid/Health/Mental Hygiene                                 1,299                           958                      1,924               1,738

 

  – All Other Savings                                                               1062                        1,858                      1,999               2,384

 

  –Revenue Loophole Closures                                              449                            567                         537                 537

 

  –New Initiatives/Spending Additions                              (1,873)                 (3,097)                  (4,271)            (5,961)

 

  – Use of Prior Year Surplus                                                 671                            401                         401                401

 

  –Remaining Gap (after Recommendations)                     0                             (2,308)                   (4,499)            (6,260)

 

 

 

It is important to note that these General Fund budget gaps are based on economic forecasts of slower growth in the State’s economy over the next three fiscal years. They will be larger if the State experiences a greater turndown in the State economy than the Executive Budget forecasts and smaller if the State economy grows faster than the Executive Budget forecasts.  

 

 

SUMMARY OF EXECUTIVE BUDGET PROPOSALS FOR MAJOR STATE AGENCIES

 

This section highlights the most important recommendations in the Executive Budget for the State agencies for which major changes have been proposed.  Executive Board members and Statewide Labor-Management Chairs will receive a more detailed analysis for each of their agencies in a separate mailing. 

 

PUBLIC PROTECTION AND GENERAL GOVERNMENT (S2100/A4300)

 

Department of Civil Service

 

• According to the Executive Budget Agency Presentation the Department of Civil Service will be developing an Integrated Testing System (ITS) to enhance the quality and timeliness of test scoring, list certifications and employee placements. 

 

Department of Correctional Services

 

• An Article VII bill which would allow DOCS to incarcerate parole violators, relieving pressure on participating local jails.  According to DOCS management this proposal could result in up to an additional 5,000 inmates/parole violators housed in DOCS facilities.

 

• An Article VII bill which would create a second commission of experts to conduct a comprehensive review of State laws governing how persons are sentenced to and released from prison, as well as a close examination of the use of alternatives to incarceration.

 

• The Executive Budget proposes creating re-entry transitional centers which involves DOCS transforming existing facilities into transitional centers.  Facilities which will be transformed into transitional centers were not identified in the Executive Budget.  DOCS and the Division of Parole would coordinate their efforts to transition an inmate as their release date approaches.  According to the Executive Budget the role of parole officers in the transition planning process will be strengthened.  According to the Senate, the Executive Budget proposes additional parole officers to provide support and supervision in the community.  We assume this is the purpose of the additional 14FTEs.for SFY 2007-08.  This issue should be clarified at statewide labor management.

 

Division of Parole

 

• The Article VII bill which would allow DOCS to incarcerate parole violators to relieve pressure on participating local jails also impacts parole officers.  The parole violators will participate from the DOCS facility via video teleconferencing in the revocation hearing that will be held at the local correctional facility.  In addition, administrative law judges will be given greater latitude in tailoring the sentence to the violation, including reducing some time assessments for certain parole violators, based on a recommendation submitted by a supervising parole officer.  The Executive Budget expects this move to save $13 million and appropriates $1.1 million of this savings to pay for the additional 14 parole officers.

 

• Strengthening the partnership between DOCS and the Division of Parole. “A through assessment will be made of the roles and responsibilities of these two agencies , to ensure that resources are invested in programs that result in the best outcomes for both inmates and the community”

 

Office for Technology

 

• The Executive Budget re-appropriates $99.3 million for the consolidated data center at a “single, efficient primary site.”  It provides no specifics on where that site is located.  It also mentions, “continuing design and beginning construction” of the center.

 

• An increase of $5.9 million (+5.2%) in the State Data Center Account – Internal Service Fund. According to the Senate and Assembly $5.1 million of this increase is for the rental of interim data center space and capacity expansion at the North Pearl Street facility.  Whether the rental of this data center space contemplates approval of the proposed contract with IBM and its Rochester data center or the movement of state servers to other private entities or outside the proximity of the current data centers should be clarified at statewide labor management.

 

 

EDUCATION, LABOR AND FAMILY ASSISTANCE (S2103/A4303)

 

Higher Education Services Corporation

 

• $5 million in the HESC Premium Payments Account (SRO) is for Contractual Services, specifically related to rental cost increases and potential moving expenses. The potential for relocation should be explained at statewide labor management.

 

Department of Labor

 

• A FY 2007-08 workforce of 3,805.  This is an increase of 10 FTEs from the adjusted FTE level for FY 2006-07.  The 10 new positions will be created to enhance enforcement of the minimum wage law and according to the Senate will be bilingual positions

 

• An All Funds decrease of (-$511,690,000), or (-11.7%) from SFY 2006-07.  Most of this decrease is in the Unemployment Insurance Benefit Fund program’s Enterprise Fund appropriation (which we believe pays UI recipients) and the elimination of a $30 million Special Revenue other appropriation (we do not know how this funding was used by DOL).  These issues should be clarified at statewide labor management.  The Senate and Assembly indicate that the $30 million appropriation for the UI Interest Assessment has been eliminated because the State has repaid federal borrowing and the UI Trust Fund no longer has a structural deficit

 

SUNY

 

• The Medicaid reform proposals makes the following changes to Graduate Medical Education (GME) aid: limits GME payments to actual cost; and redirects $24 million (state share) in HCRA GME pool payments to establish a $48 million Medicaid payment to public hospitals that serve more than 35 percent of Medicaid recipients.  According to SUNY management the GME changes could result in a $13 to $15 million loss collectively to all three SUNY hospitals.   It is unclear whether this potential funding loss will have any impact on staffing levels at the SUNY hospitals.  This issue should be clarified at statewide labor management.

 

 

HEALTH AND MENTAL HYGIENE (S2104/A4304)

 

Department of Health

 

·          A FY 2007-08 workforce of 5,998.  This is an increase of 90 FTEs from the adjusted FTE level for FY 2006-07.

 

·          Establishes a new Office of Health Insurance Programs (OHIP). This new office will assume responsibility for all government health insurance programs, including Medicaid, Child Health Plus, Family Health Plus, and the Elderly Pharmaceutical Insurance Coverage Program. The Office will also be responsible for developing strategies to reduce the number of uninsured. To ensure that Medicaid pays for the right care in the right setting and at the right price, OHIP will oversee rate setting policies within the Department and also at OASAS, OMH and OMRDD. This office is not specifically funded in the Executive Budget but we assume it is funded by and oversees the Child Health Insurance, EPIC, Health Care Finance, Office of Medicaid Mgt and Office of Managed Care Programs.  This issue should be clarified at statewide labor management.

 

·          Establishes the Offices of Information Technology and Long Term Care Services and Programs. These offices are also not specifically funded in DOH’s budget and the Medicaid Management System program remains a separate program in DOH’s budget. How these offices are funded and what programs they are located in with DOH’s budget should be clarified at statewide labor management.

 

Office of Medicaid Inspector General

 

·          The 157 FTE increase will include, according to the Agency Presentation, the following: 100 new auditors, 35 staff to strengthen fiscal and personnel operations, and 22 information technology staff which include 6 positions dedicated to the development of data mining tools and 4 positions dedicated to the expansion of the internal fraud database.

 

Office of Mental Health

 

·          There are no closures identified in the budget, however the budget calls for inpatient services to be “right sized in order to be more cost effective and to better meet regional needs.”  This will “require the full cooperation of all key stakeholders, including…State employee unions.”

 

·          Provides an increase of $2 million for additional mental health services in DOCS, including the development of a Regional Mental Health Unit for those with serious and persistent mental illness. The increase of 38 FTEs in the Forensic Program is associated with these services.  According to the Senate Finance Committee, the new 100 bed Special Housing Unit will be at Marcy Correctional Facility in Oneida County.

 

·          Provides $46 million for treatment of sexually violent persons (SVPs).  According to the Senate and Assembly $19.2 million in additional funding is available for this purpose.  Calls for additional legislation (not Article VII) to allow civil commitment.   The FTE increase of 335 corresponds to increased services for the Sexual Offender Treatment Program (SOTP).  It is likely that the reduction of 250 FTEs in SFY2006-07 is related to delayed expansion of the SOTP program in the current fiscal year.  This should be clarified at Labor/Management.

 

Office of Mental Retardation and Developmental Disabilities

 

·          According to the Senate 40 FTEs will support the Autism Initiative with IBR (Community Services Program), 103 FTEs will support 50 new state operated NYS CARES beds (Community Services Program), and 74 FTEs will support 40 emergency developmental center admissions (Institutional Services Program).

 

Commission on Quality of Care and Advocacy for Persons with Disabilities

 

• According to the Assembly the Commission staff will be relocated to Schenectady.  $160,000 is appropriated for this purpose.

 

 

TRANSPORTATION, ECONOMIC DEVELOPMENT AND ENVIRONMENTAL CONSERVATION (S2105/A4305)

 

Environmental Conservation

 

• Many of the 109 new FTEs are PS&T positions.  According to the Assembly analysis, the new FTEs include: 24 new engineer, geologist and program specialist positions in the Division of Water, including 10 staff for the Dam Safety program; 8 positions in the Division of Fish Wildlife and Marine Resources, including wildlife and fish pathologists, and six biologists to implement the new Fishing Promotion program; 19 position in the Division of Lands and Forests, including 9 related to wetlands regulation and 10 for natural resource damage claims; 11staff in the Division of Solid and Hazardous Waste, including 3 related to implementation of the Bottle bill, 3 related to aquatic pesticide control, 2 related to electronic waste programs and 3 related to the radiation program; 7 positions in the Division of Environmental Enforcement, including 5 attorneys and 2 paralegals; 10 staff in the Division of Air, including 3 chemists and 7 engineers; 7 positions in the Division of Environmental Remediation, including 2 chemists and 5 engineers; 4 positions in the Division of Environmental related to enhancing the Department’s pollution prevention program; and 6 positions in Regional Affairs to be distributed across the DEC regions.

 

Agriculture and Markets

 

• The SFY 2006-07 $40 million capital appropriation for the new Food Laboratory is reappropriated in the proposed budget; no indication is given as to where the Food Laboratory will be located.  However, the Senate analysis indicates that the Food Lab will be located in Geneva.

 

Department of Motor Vehicles

 

• An All Funds decrease of (-$14 million, or -10%) from SFY 2006-07.  This decrease is primarily due to the elimination of a $20 million maintenance undistributed appropriation in the Administration program that was added by the Legislature last year to off-set the loss of support from the Dedicated Highway and Bridge Trust Fund (DHBTF).  However, according to the Assembly analysis, this spending authorization was never made available to the Department.  It appears that the Executive Budget proposes some additional support from the DHBTF for the new 46 DMV positions in the Transportation Support program. After accounting for the $20 million offset added by the Legislature last year, which is not continued in the proposed Executive Budget, the support from the DHBTF is increased by $9.45 million, $2.268 million of which is for personal services. This appears to be inadequate to support 46 new positions and contractual increases for those already working in the program. The purpose of these new positions, their funding source, and when they will begin should be clarified at statewide labor management. 

 

Insurance Department

 

• According to the Assembly analysis, $1.3 million in the Regulation Program is related to 45 new Insurance Investigation Trainees.  More detail should be sought at statewide labor management as this increase in FTEs is not reflected in the Executive Budget proposal.

 

Tax and Finance

 

• 56 of the 200 new FTEs are in the Technology and Information Services program.  This reflects the Executive Budget intention to invest in technology infrastructure and personnel to maximize collections. 

 

• Also discussed in the Executive Budget is the aging workforce at Tax and Finance.  The Budget document says that the Department is experiencing heavy attrition “of its aging workforce.”  To deal with this the Department will (1) continue its management development initiative to plan for succession; (2) continue training programs and opportunities for staff, and; (3) fully utilize existing personnel assets through reorganization, reclassification and redeployment.

 

 

FINAL OBSERVATIONS

 

There are a number of factors that will impact budget negotiations all of which create the potential for difficult and contentious budget negotiations and a late budget. 

 

There is strong opposition in the Senate and Assembly to the Medicaid and health care cuts proposed by the Governor and a central part of his savings plan.  SEIU 1199, the Greater New York Hospital Association, and other health care groups are expected to lobby the Legislature to reduce many of the Governor’s savings proposals.  In addition, the Senate has expressed strong reservations about the Governor’s proposed school aid formula reforms because they will result in Long Island school districts not getting the 13% share of school aid increases they have been receiving in the past.  Business groups like the Business Council have also expressed opposition to the Governor’s proposed corporate tax loophole closures.  The Governor has said he is willing to negotiate with the Legislature but that he will not give up the principles and reforms that are the core of his budget. 

 

It is also clear that the Governor and both houses of the Legislature are currently engaged in a conflict over the Legislature’s decision to elect Assemblyman Tom DiNapoli to the Comptroller.  There are also unconfirmed rumors that the Governor is actively trying to convince some Republican Senators to switch parties so that the Democrats can control the Senate.  Other unconfirmed rumors state that the Governor is trying to replace Speaker Silver.

 

In addition the Legislature could look to the use the funding that the Governor has dedicated to hiring an additional 2500 state employees to restore health care cuts or to provide the funding necessary to reject the corporate loophole closures.

 

In addition to this memo, we are forwarding to the respective Executive Board members and Statewide Labor-Management Chairs our department’s line-by-line analysis of the Program Details–State Operations portion of the budget for all State agencies.  This memo and the complete agency analysis will also be placed on the PEF website.

 

      We will also include on PEF’s website a link to Executive Budget Appendix I, which contains a summary of all agency budgets.  Executive Board members and Statewide Labor-Management Chairs who do not have a computer to access PEF’s website and want a copy of their agency’s budget should call the Research Department at 1-800-342-4306 ext. 280 and request a copy.

 

								Chart 1
WORKFORCE IMPACT SUMMARY REPORT
ALL FUNDS
2005-2006 THROUGH 2007-2008
Major Agencies	2005-06    Actual (03/31/06)	2006-07 Estimate (03/31/07)	Abolitions	Attrition	New Fills	Fund Shifts	Mergers	Net Change	2007-08 Estimate (03/31/08)
Audit and Control	2,399	2,463	0	0	21	0	0	21	2,484
Children and Family Services	3,714	3,870	0	(60)	249	0	0	189	4,059
Correctional Services	31,768	31,567	0	(53)	0	0	0	(53)	31,514
Education	3,013	3,077