New York State Pols Reach Budget Agreement

With just four days before the 2011-12 state budget goes into effect, New York Governor Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver have reached an agreement on that budget. The $132.5 billion dollar spending plan eliminates the projected deficit for 2011-2012 of $10 billion and reduces the 2012-2013 projected deficit from $15 billion to $2 billion.

The governor's original budget proposal contained many of the measures to be enacted for the agreed upon budget. There are no new taxes and no new borrowings used for funding. Both aid to education and Medicaid growth are capped through a formula, at roughly 4 percent for the 2011-2012 year.

The governor's proposed cap on malpractice settlements is not in the final budget. It would have capped awards for pain and suffering at $250,000. Most of the other recommendations from the governor's Medicaid Redesign Team are in the final draft. To be enacted as permanent law is one recommendation that budgeting for Medicaid be done on a two year basis, instead of a one year basis.

The budget also authorizes the Spending and Government Efficiency Commission to take actions to reduce the number of state programs, agencies and commissions by 20 percent. That report is due by May 1, and the changes will receive legislative oversight before being put into effect. As part of the budget itself, the State Banking and the State Insurance Departments are to be combined into a Department of Financial Services.

Education aid was a major area of contention. Funds have been restored for a number of programs including schools for the blind and deaf. Higher education assistance was partially restored, providing more money for State University hospitals and community colleges. In the governor's original proposal, the State University and City University systems saw 10 percent cuts and most of those cuts remain in the agreed upon budget.

Changes in the criminal justice system are also a part of this agreement. Up to 3,700 beds in state prisons can be eliminated. Juvenile justice facilities will be downsized by 30 percent with a greater emphasis on community services for this inmate population. The merger of Parole and Corrections is expected to save the state $16.8 million.

The budget agreement does not address the governor's campaign promise for a cap on real property tax increases. New York City's rent control law extension is also not a part of this budget. Much of the savings, especially in the area of Medicaid, remains poorly defined projections and assumptions.

New York City Mayor Michael Bloomberg has condemned the agreement. The cuts in spending, according to the Mayor, fail to help the city close a $600 million dollar budget gap in city schools.

Upstate New York resident Charles Simmins brings 30 years of accounting and finance experience and a keen interest in military affairs to the news of the day. His years of experience working with the personnel of the Secretary of Defense's New Media activity on Bloggers' Roundtables provide insights often overlooked by other reporters.