Summary of Governor Cuomo s Executive Budget Proposal

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1 Summary of Governor Cuomo s Executive Budget Proposal Executive Summary Governor Cuomo s proposed Executive Budget lays out $100 billion worth of investments for New York State including roads, bridges, airports, mass transit improvements, new and improved airports as well as water and sewer projects. In addition, the Governor proposes to invest some of this money to build supportive housing for the increasing number of homeless residents across the state. While many of these investments will be done over time, there is still a big question of how the state will pay for it. What is more disturbing, however, is the lack of funding and investment in services for the developmentally disabled and those in need of mental health treatment. Families across the state, well over 11,000, have been demanding services for residential housing, respite care, and sheltered workshops for their loved ones who are now being cared for in their homes. More and more mental health beds are being taken down with no increase in community supports for those in need. In fact, we have found that many in crisis are being treated in hospital emergency rooms because there are not sufficient beds available. This budget continues to ignore these needs. This lack of funding and services will be a main focus of our budget efforts this year. While the Governor claims that he is going to provide housing for the homeless, he doesn't include any supports for the homeless to be able to live independently. Agency projections do not anticipate any layoffs in this budget. However, on the local government side there is another $70 million for local governments to continue to consolidate and share services across the state. There is no increase in Aid and Incentives for Municipalities (AIM) money included in this budget, and both Consolidated Highway Improvement Program (CHIPS) and Marchiaselli aid remain at last year s funding levels. Education aid will be $2.1 billion over two years and Gap Elimination Adjustment will be eliminated by The Governor once again proposes an education investment tax credit for the wealthy that allows them a 75% tax credit against their contributions to non-public and public schools. There is also a proposal for a tax credit for lower-income families of up to $500 dollars per child for tuition paid at private schools. The Governor continues SUNY 2020 and the accompanying rationale tuition program which allows SUNY schools to increase tuition by up to $300 annually for the next five years. At the same time, the Governor reduces funding for SUNY hospitals by over $18 million. The Governor also proposes freezing tolls on the Thruway until 2020 as well as creating a tax credit for frequent business and individual travelers. In addition, any agricultural or farm business using the Thruway would get a tax credit for the entire amount of tolls paid. One of the more disturbing proposals in this budget would increase health care costs for those retiring after October 1, This would impact current employees by reducing the amount of premiums the state would pay for future retirees with less than 30 years of service. Police, fire, and state corrections officers would be exempted from this proposal. CSEA will work to defeat this proposal. Additionally, there is a proposal to require public employers to publish on their websites and at their workplaces the terms of any collective bargaining agreement yet to be ratified by the members or a legislative body. There is no question that

2 the Governor s intent is to pit public employees against the general public and make it harder to get our contracts approved by the appropriate legislative body. The Governor has evidenced his intent to support a constitutional convention by appropriating $1million to a commission to study proposals that could be proposed at a constitutional convention as well as a proposal to determine who can run as a delegate. Voters will decide whether a constitutional convention should be held on the November 2017 ballot. There are many more details in the attached summary. As we continue to review specific language, we will get that information out to you as soon as possible.

3 Overview Governor Cuomo s Executive Budget proposal includes $145.3 billion in total spending, an increase of 1.7% over last year. Below is an initial review of the Executive Budget proposal. Information will be updated as it becomes available. Infrastructure Investment In his Executive Budget plan, Governor Cuomo has included significant investments in infrastructure. Several of these commitments are over multiple years, and some include portions of the settlement money previously appropriated in the enacted state budget as well as new sources. The most significant investment commitments include: $22 billion over 5 years for upstate capital investments, which includes: $1 billion for bridges; $1 billion for state and local road paving; and $500 million for the Extreme Weather Infrastructure Hardening program to improve the state s readiness for disasters. $3 billion to redevelop Pennsylvania Station and the James A. Farley Post Office, to be known as the Empire Station Complex. $1 billion will be provided to redevelop the Javits Center. Design-build contracts are authorized for the projects at the Javits Center, Empire Station complex, James Farley building replacement, and Pennsylvania Station. $700 million investment in Thruway infrastructure, including the new Tappan Zee Bridge. $250 million for drinking and wastewater infrastructure projects, of which $100 million is new money. $200 million for an Upstate airport competition, where five grants of $40 million each will be awarded to airports north of New York City. $40 million for the New York Works capital infrastructure program. $5 million to study the feasibility of a tunnel from Long Island to Connecticut, the Bronx, or Westchester County. Improvements to and expansion of the Long Island Railroad.

4 Economic Development $750 million for Round VI of the Regional Economic Development Council competition. $200 million for the runners up to the Upstate Revitalization Initiative, which are the North Country, Capital District, Mohawk Valley, and Mid-Hudson. Each region would be eligible to receive $50 million. $100 million for the Downtown Revitalization Initiative, a competition where 10 communities would get funding. Another $50 million of Open for Business advertising and $50.5 million for tourism campaigns. State Operations Major budget actions that affect state employees include: The budget does not anticipate any state employee layoffs. Increase health insurance costs for future state employees: The proposed budget would decrease the state s contributions to the costs of health insurance premiums for state employees that retiree on or after October 1, 2016 as follows: Individual Coverage Years of Service Retired at Grade 10 or Above Retired at Grade 9 or Below State would pay 50% + 2% for each year after 10, maximum of 68%. State would pay 54% + 2% for each year after 10, maximum 72%. More than 20 State would pay 74% + 1% for each year after 20, maximum of 84%. State would pay 78% + 1% for each year after 20, maximum of 88%. Dependent Coverage Years of Service Retired at Grade 10 or Above Retired at Grade 9 or Below State would pay 35% + 2% for each year after 10, maximum of 53%. State would pay 39% + 2% for each year after 10, maximum 57%.

5 More than 20 State would pay 59% + 1% for each year after 20, maximum of 69%. State would pay 63% + 1% for each year after 20, maximum of 73%. It would not apply to state police, fire, or correctional officers. In addition, it would not apply to any state employee who retires on a disability pension. In addition, the state would Freeze Medicare Part B premium reimbursements to NYSHIP retirees at $ and would end any reimbursement of the increased costs of Part B for high income retirees. Unified Court System The State Budget proposes a 2.4% increase in spending for the state judicial system. Canal Corporation The Executive Budget proposes transferring the Canal Corporation from the Thruway Authority to the New York State Power Authority (NYPA). The Canal Corporation transfer to NYPA would become effective on January 1, Office of Children & Family Services (OCFS) The Executive Budget recommends $3.88 billion for OCFS, a decrease of $124 million. The budget expects 2,954 FTEs, an increase of 79 over last year. Fifty of these new staff will be placed in youth facilities. Major budget action includes: Raising the age of juvenile jurisdiction from age 16 to age 18. Child care subsidy funding is reduced by $22 million. Increase funding by $10 million to support child care provider inspections related to the Federal Child Care and Development Block Grant. Implementation of a.2% Human Services COLA. Thruway Authority The Executive Budget bolsters Thruway Authority appropriations by a Special Infrastructure Account, which includes a new $700 million appropriation.

6 The Canal Corporation will be transferred from the Thruway Authority to the New York Power Authority (NYPA). The Executive Budget proposes freezing Thruway tolls until 2020, as well as a tax credit for frequent users of the Thruway for tax years Businesses that pay tolls (via EZ-Pass) of $100-$9,999 during the year would be allowed a credit of 50% of the tolls paid. Individuals who pay at least $50 in tolls (via EZ-Pass) would also receive a 50% credit. Farm vehicles would receive a 100% credit for tolls paid. It is estimated that these tax credits will cost $340 million over three years. Office for People with Developmental Disabilities (OPWDD) The Executive Budget recommends $4.4 billion, a $6 million increase from FY The budget expects a workforce of 18,382 FTEs, a decrease of 255. Major budget actions include: The continued planned closure of developmental centers, including Broome Developmental Center. $24 million in funding to transition individuals to community-based settings..2% COLA for not-for-profit human services providers. CSEA will be lobbying for additional funding in this budget to expand the state s role in providing care in community based settings. Office of Mental Health (OMH) The executive budget recommends $3.9 billion in funding, which is an increase of $28 million. The budget recommends a workforce of 14,278, a decrease of 122 FTEs. The Budget continues to fund Sagamore Children s Psychiatric Center but does continue to plan on the Western New York Children s Psychiatric Center being moved to the Buffalo Psychiatric Center. State University of New York (SUNY) The Executive Budget recommends $9.9 billion for SUNY, an increase of $193.7 million. The number of FTE would be unchanged from last year at 43,668. Major budget action includes: Decreases the state subsidy for SUNY hospitals by $18.5 million to $69.3 million. Extend SUNY/CUNY 2020 Legislation for five years, which includes a rational tuition plan that allows campuses to increase tuition by up to $300 per year and $55 million to each university system for competitive development grants Holds SUNY Community College operating aid flat at $2,597 per full time equivalent student. Due to decreased FTE enrollment at SUNY Community Colleges, the allocation is $10 million below the enacted budget.

7 Establish the NY State DREAM Act to provide tuition assistance for undocumented immigrants Workers Compensation Board The Executive Budget recommends $189 million for the board, an increase of $1.9 million. The number of FTEs would be unchanged from last year at 1,165. Major budget action includes: Reforms to the Workers Compensation System. We are still reviewing this proposal to determine its impact on injured workers and CSEA represented employees of the Board and other entities. Gaming Commission The Executive Budget recommends $240 million, an increase of $2.2 million. The budget recommends a workforce of 405 FTEs, the same as last year. Office of General Services The Executive Budget recommends $1.13 billion for OGS, a decrease of $140 million. The decrease is attributable to the elimination of $152 million appropriation for the Harriman Campus Strategic Action Plan. The budget recommends an increase of 115 FTEs. Department of Health The Executive Budget recommends $137.3 billion for DOH, which includes $131.5 billion for Medicaid. The budget recommends an increase of 243 FTEs, which will provide staff to support the fifth year of the local government Medicaid administration takeover. Department of Labor The Executive Budget recommends $3.79 billion for DOL, a decrease of $324 million. This decrease is attributable to reductions in estimated unemployment claims. The budget expects to keep FTEs at last year s level of 2,992. Major budget actions include: Minimum wage The budget calls for an increase in the statewide minimum wage to $15 per hour, phased in as follows:

8 New York City Rest of State July 1, 2016 $10.50 $9.75 December 31, 2016 $12.00 $10.75 December 31, 2017 $13.50 $11.75 December 31, 2018 $15.00 $12.75 December 31, 2019 $13.75 December 31, 2020 $14.50 July 1, 2021 $15.00 Division of State Police The Executive Budget recommends $849.6 million, an increase of $95.6 million from last year. The budget expects 5,608 FTEs this coming year, which is no change from last year. Office of Alcoholism and Substance Abuse Services The Executive Budget recommends $616 million for OASAS, an increase of $17 million over last year to combat the heroin and opioid epidemic. The budget expects 741 FTEs, unchanged from last year. $141 million, an increase of $6 million, to address heroin and opioid abuse. $7 million in new funds for 300 new beds over the next two years to combat heroin and opioid abuse. Department of Transportation The Executive Budget recommends $10.8 billion, an increase of $617.8 million over last year. The budget expects 8,258 FTEs, an increase of 30, attributed to the state taking over snow and ice clearance duties from Columbia and Steuben counties. Funding for the Consolidated Highway Improvement Program (CHIPS) will be held flat at $438.1 million. Funding for the Marchiselli program will be held flat at $37.8 million. Department of Motor Vehicles The Executive Budget recommends $326 million, an increase of $827,000 from last year. The budget expects 2,169 FTEs, a decrease of 10 positions.

9 Four DMV special revenue funds will be redirected to the Dedicated Highway and Bridge Trust Fund. The DMV will be required to develop a system to assist in the automatic voter registration of qualified individuals (see the Ethics section of this document for additional information). Department of Corrections and Community Supervision The Executive Budget recommends $3.182 billion for DOCCS, an increase of $236 million from last year. The budget expects 29,089 FTEs, an increase of 220 attributed mostly to the Raise the Age initiative. Office of Information Technology Services The Executive Budget recommends $839 million, a decrease of $94.7 million from last year. The budget expects 3,585 FTEs, the same as last year. Local Governments Major budget provisions impacting local governments include: 0% increase in Aid and Incentives to Municipalities (AIM) funding. The State will continue to pay for the growth in county Medicaid costs. However, the budget would require New York City to pay for its Medicaid growth. $70 million to encourage local governments to consolidate and share services. Municipalities would be authorized to enter into contracts with the MTA for certain transportation projects. Health Care / Medicaid The State continues to hold Medicaid growth to no more than the 10 year rolling average of the Medical Consumer Price, which is 3.4% this year. This budget expects to spend $63 billion (Total Federal, State and local costs). Roswell Cancer Institute is budgeted to receive $102.6 million, which is the same level of funding they received last year. K-12 Schools Education

10 The Executive Budget recommends a $2.1 billion increase in education aid over the next two years, including a $991 million increase in the Additional education proposals include: The elimination of the Gap Elimination Adjustment by 2018, including a $189 commitment this year to eliminate the GEA for higher need districts. $100 million for investments in community schools. $75 million is specifically dedicated to 17 high need districts. $25 million will be available to districts that do not have a failing or persistently failing school. $27 million increase in state funding for charter schools. $22 million for to expand prekindergarten for three year-olds in high needs districts. Tax credits totaling at least $150 million annually for scholarships, donations to schools, tuition, and teacher supplies. (See Revenue and Taxes section for additional information). Mayoral control of New York City schools will be extended for 3 years. Libraries Library funding will be held flat at $ million. Homelessness and Poverty $20 billion in capital funds for a multi-year statewide investment in affordable housing to address the homeless population. $25 million of new funding to significantly expand the anti-poverty initiative for 10 Upstate New York cities. Planning grants totaling $5 million will be available in ten communities with high concentrations of poverty. In addition, $20 million will be available for grants to match private sector and foundation funding. $20 billion over five years to provide expanded housing options for the homeless population. Revenue / Taxes Small Business Tax Cuts The Executive Budget proposes a tax cut for small businesses estimated to cost $298 million annually. The corporate franchise tax rate would be lowered from 6.5% to 4% for businesses with 100 or fewer employees and revenue of $290,000 or less. The tax cut would be phased out based on income for small businesses with incomes between $290,000 and $390,000. For Personal Income Tax filers who are small businesses, the amount of business income that can be subtracted from tax calculations would be increased from 5% to 15%.

11 Education Tax Credits The Budget also proposes $150 million for three tax credits relating to education that would take effect starting in Education Scholarship and Program Tax Credit The Executive Budget proposes $70 million for a version of the education tax credit that would allow individuals and corporations to donate to education entities. The new version of the credit would provide a tax credit of 75% of a taxpayer s qualified contribution up to $1 million. $50 million in credits would be set aside to Education Scholarship Organizations that provide scholarships to students coming from a family with an adjusted gross income of $250,000 or less (up to $300,000 depending on the number of children). $20 million would be set aside for public schools, school improvement organizations, and local education funds. Family Choice Education Credit This credit would provide a tax credit for lower-income families who pay primary or secondary education tuition during the year. To be eligible for the credit, a family would need to have a New York Adjusted Gross Income of $60,000 or less. The credit would be $500 per eligible student or the actual amount of tuition paid. The Governor estimates that this tax credit will cost $70 million, but there is no aggregate cap included in the budget legislation. Instructional Materials and Supplies Credit This credit would allow public and non-public school teachers a credit of up to $200 for materials and supplies. A teacher would have to have 900 hours of teaching during the school year to be eligible for the credit and would have to file with the Department of Tax & Finance. The aggregate amount of credit allowed under this credit would be $10 million. School Tax Relief (STAR) Program Actions Similar to last year s proposals that did not make it into the enacted budget, the Executive Budget proposal seeks to change the STAR program by transforming the existing exemption into a refundable personal income tax credit. STAR benefits would also be capped at their levels. Additionally, the budget would convert New York City s STAR exemption from a credit against the New York City Personal Income Tax (PIT) to a credit against the state PIT. Ethics/Elections

12 Pension Forfeiture for Public Officials The Executive Budget once again proposes an amendment to the state Constitution that would allow public officials convicted of a crime to be stripped of their pension. The proposed amendment references the broad definition of public official, which includes all public employees, instead of limiting the impact to elected officials. To become law, this resolution would need to pass the legislature this year, pass again in 2017 or 2018, and then be placed on the ballot for approval by voters. Freedom of Information Law Changes The budget would require each house of the state legislature to follow the provisions of the Freedom of Information Law (FOIL). Changes to FOIL would also require the proposed terms of a public sector collective bargaining agreement to be made available to the public at the earliest of: When such terms are sent to members of the employee organization for ratification; When such terms are presented to the employer for ratification; or When the provisions of such agreement requiring approval by the appropriate legislative body are submitted to such body. The terms of such agreement would also be required to be placed on the website of the public employer or on GOER s website. Close the LLC Loophole The Executive Budget proposes closing the LLC Loophole to limit limited liability corporations (LLCs) to the $5,000 corporate contribution limit instead of the individual contribution limit, currently set at $65,100 for candidates for statewide elections, $18,000 for State Senate candidates, and $8,800 for State Assembly candidates. Public Financing of Political Campaigns The Executive Budget would establish a voluntary system for the public financing of political campaigns, including for campaigns for delegates to a constitutional convention. The campaign finance fund would be financed through a tax check off, funds in the abandoned property fund, from the General Fund, or from private donations. Outside Income Limitations for State Lawmakers Legislators would be required to limit their income from outside sources (in addition to their legislative salary) to 15% of member base salary (currently $79,500). Automatic Voter Registration

13 The budget would provide that qualified persons be automatically registered to vote when applying for a new or renewed motor vehicle license or identification card issued by DMV. Early Voting The budget would establish that each county have at least one polling site available for a 12-day period of voting prior to any special, primary, or general election. Each county would be required to operate one polling place per 50,000 voters, up to seven polling locations. Paid family leave Other Issues Overview A new paid Family and Medical Leave Benefits Law (FMLB) is proposed in the Workers' Compensation Law as a parallel benefit to the existing Temporary Disability Insurance Law (TDI). The law would allow employees to take up to 12 weeks off to take care of a sick family member (child, parent, grandparent, grandchild, sibling, spouse or domestic partner), to bond with a child during the first 12 months after birth, adoption/foster care, or because of a qualifying call for a family member to active military duty. The bill provides job protection to ensure that anyone who uses the leave will have their job preserved and there is no retaliatory action for taking the leave. The new benefits would be required of all private sector employees and public sector employees would be eligible only if there is an opt-in through collective bargaining agreement. Employees would have to fully pay for this benefit. Cost This cost would be in addition to what is currently required of employees for TDI. The current cost of TDI is capped at 60 cents per week. The bill stipulates that the cost for new family leave benefits would be paid for entirely by the employee and will be determined annually by the Department of Financial Services. Benefits Starting on 1/1/2018, employees would be paid 35% of their wage but it cannot exceed 35% of the state s average weekly wage (AWW). 1/1/2019, employees would be paid 40% of their wage but it cannot exceed 40% of the state s AWW. 1/1/2020, employees would be paid 45% of their wage but it cannot exceed 45% of the state s AWW. 1/1/2021, employees would be paid 50% of their wage but it cannot exceed 50% of the state s AWW.

14 $1 million for commission to develop a blueprint for a constitutional convention. $300 million Environmental Protection Fund investments (up from $177 million in ). Allowing for Mixed Martial Arts matches in New York State.