NYSAC - New York State Association of Counties

November 14, 2008

Governor Proposes $5.2 Billion, Two-Year Deficit Reduction Plan
This week, Governor Paterson has presented his plan to address a $2 billion deficit in the current fiscal year. The Governor targeted Education and Medicaid, which account for 52 percent of State spending. Overall, the plan is estimated to be worth $5.2 billion: $2 billion this year and $3.2 billion in the next state fiscal year. This plan responds to NYSAC’s call for reduced State spending without cost shifting to counties for delivering state mandated services. However, counties will share in the painful cuts, which include:

Medicaid
The Governor’s plan recommends $1.8 billion in Medicaid and other health care savings over the next two state fiscal years. The plan preserves the local Medicaid Cap and related administrative reimbursement. In addition, the plan

• Eliminates the remaining 2008 (1.495%) and the 2009 (2.1%) trend factors for hospitals, nursing homes, home care and personal care.
• Across-the-board reduction in Medicaid reimbursement rates (8% reduction for the remainder of 2008-09, 2% reduction in 2009-10) for hospitals and nursing homes. The plan further proposes an across-the-board 1% reduction in home care and personal care reimbursement rates.  

Human Services
The cost-of-living adjustment for human service providers will be reduced from 3.2 percent to 2.2 percent. In addition, funding for the Neighborhood Preservation Program and Rural Preservation Program is reduced, the phase-in of the “Bridges to Health” program is delayed; and a $3.0 million operating subsidy for the New York State Housing Authority (NYCHA) is eliminated. In addition, there are major actions to the Office of Children and Families (OCFS) juvenile justice facilities with high vacancy rates, including:

• Closing Six Underutilized Youth Facilities: The Adirondack Residential Center in Clinton County, the Cattaraugus Residential Center and Great Valley Residential Center in Cattaraugus County, the Pyramid Reception Center in the Bronx, the Rochester Community Residential Home in Monroe County, and the Syracuse Community Residential Home in Onondaga County.
• Downsizing Two Underutilized Youth Facilities: The Allen Residential Center in Delaware County and the Tryon Residential Center in Fulton County.
• Closing Three Underutilized Evening Reporting Centers:  These include the Capital District Evening Reporting Center in Albany County, the Buffalo Evening Reporting Center in Erie County, and the Syracuse Evening Reporting Center in Onondaga County.

In total, the 2008-09 Savings under the Governor’s human services proposals is $20 million and $75 million for 2009-10.

Community Colleges
The Governor’s plan reduces per-student base aid to community colleges by an average of 10 percent, from $2,675 to an average of $2,405. To recognize the disproportionately adverse impact that this reduction could have on smaller community colleges if applied in an across-the-board fashion, legislation will be proposed to reduce the impact of the proposal on these colleges, as follows:

• colleges with fewer than 3,000 full time equivalent students will have their base aid payments reduced by $160 per student;
• colleges with between 3,000 and 6,000 students will have their base aid payments reduced by $230; and
• colleges with more than 6,000 students will have their base aid payments reduced by $300.  
• After these reductions, total State base operating aid support for community colleges will be $580 million. 

VLT Aid
The Governor’s deficit reduction plan includes a 50% reduction to aid paid to Video Lottery Terminal (VLT) facility host municipalities.

This reduction, impacting will be calculated against the 2008-2009 VLT payments and take effect in 2009-2010. This reduction does not include VLT aid received by New York City and Yonkers.

For more information regarding the Governor’s proposed deficit reduction plan, please contact the NYSAC Offices. (Ken Crannell)

Counties testify on the impact of the economic crisis and state budget deficit
Today, NYSAC testified about the impact the economic crisis and the budget reductions have on counties across the State. The testimony, presented to the State Assembly’s Ways and Means Committee, highlighted how increasing demand for services and decreasing revenues are part of a perfect storm gathering in New York State.

“The financial crisis impacting Wall Street and the banking industry nationwide is shrinking tax revenues at the state level and calling into question state reimbursement for a range of programs and services delivered at the county level,” said Executive Director Stephen J. Acquario. “At the same time, we are facing increased costs and experiencing a growing demand for services like heating assistance, food stamps and other social services.”

State legislators have been called into a special session on November 18th to address a projected $2 billion current year budget. Forecasts project next year’s budget deficit to be approximately $10 billion.

“Historically, when the state has faced budget deficits, they have closed those gaps, at least in part, by shifting more of the costs of mandated programs and services to counties and county property taxpayers,” said NYSAC President Sarah Purdy, Yates County Administrator.

Counties asked committee members not to balance the state budget by shifting the costs of mandated programs and services to counties, use this current economic crisis as an opportunity to reform the state mandate system, and provide counties with greater flexibility to manage the mandated programs and services administered at the local level.

It's in the Mail: Reduced Funding for EI Admin Contracts
Letters have been sent out to counties officially informing them of reduced funding amounts for Early Intervention Administrative Contracts beginning with the renewal period of 10/1/08 - 9/30/09. The State's federal grant of $23 million, which supports these contracts and almost all of the administrative costs for the Early Intervention Program, has been reduced in two consecutive years, by $1.1 million in 2007-08 and $818,000 in 2008-09. The proportion of the reduction in funding for the contracts with counties (approx. 6%) was significantly lower than the overall grant reduction.

According to the State Department of Health (DOH), all other contracts and internal expenditures supported by the grant are also being reduced to address this funding cut on the grant. DOH informed NYSAC that these reductions are driven in large part by stagnant federal appropriation levels for the program, as well as a problematic funding allocation formula in the Individuals with Disabilities in Education Act (IDEA), which bases state grants on the number of children under the age of three in each state rather than the number of children served in the program. DOH will discuss this issue on next week's all-county call. (Jessica Morelli)

NYSAC calls for articles for the Winter 2009 NYSAC News
The New York State Association of Counties (NYSAC) is planning our Winter 2009 issue of the NYSAC News magazine, and we are seeking articles for submission. The focus of this issue will be on Cost Saving Ideas and Mandate Reforms. During these fiscally challenging times, we are looking to highlight articles that will help counties increase efficiencies and improve the delivery of public programs and services.

Submissions should be between 750 to 1,000 words and include a high resolution (300 dpi) photograph of the author. The deadline for submission is December 26, 2008. All submissions are subject to editing for clarity, content and/or length. NYSAC reserves the right to decide which articles are included in the final publication.

Next Week
The State Senate and Assembly will convene in Special Session on Tuesday, November 18th.

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