Wednesday, January 18, 2012
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ALBANY - Governor Andrew Cuomo today unveiled his 2012-13 Executive Budget and Reform Plan, which expands on the reforms enacted last year to continue building a New New York. As a result of the tough decisions and bipartisan cooperation of the past year, the State is able to close the current deficit without broad cuts, new taxes, fees or gimmicks. In addition, the Governor's Executive Budget proposes major reforms to reduce the cost of government for taxpayers, implements accountability in our schools to put students first, and puts the State in a position to leverage billions of dollars in private sector investment to grow the economy and create jobs.
"Because of the tough choices and the historic reforms we achieved last year, we are able to propose a pro-growth budget, tackle broad fiscal reform, drive accountability in our schools to put students first, and leverage tens of billions of dollars of new investment to create jobs without significant cost to the taxpayer," Governor Cuomo said. "Through fiscal discipline and working in partnership with the private sector, we are making New York a pro-growth State once again. This budget represents the next step in our plan to transform New York State."
The Governor's Executive Budget closes the current $2 billion budget deficit with no new taxes or new fees. It also proposes sweeping mandate relief and pension reform that will save taxpayers and local governments billions of dollars and launches historic education reform to put students ahead of the education bureaucracy. The Executive Budget also lays the groundwork for an innovative $25 billion economic development agenda, funded largely by leveraging billions in private sector investment rather than by taxpayer dollars.
The State operating budget increases by less than 2 percent while honoring the two-year commitment made in 2011-12 to increase School Aid and Medicaid funding at approximately 4percent.
Highlights of the plan include:
- Closing the current budget gap with no new taxes, fees or gimmicks, and including zero growth in State agency spending;
- Eliminating automatic spending inflators and implementing reforms throughout the budget to ensure that spending increases for service providers reflect performance and actual cost;
- Allocating $1.3 billion in State investment designed to spur a total of $25 billion from other sources to launch and accelerate major infrastructure projects and create thousands of jobs;
- Creating a plan for the State to take over 100 percent of the costs of Medicaid growth that will be phased in over three years, saving local governments $1.2 billion over the next five years;
- Creating a pension reform plan that will save State taxpayers and local governments outside New York City $83 billion, and will save New York City $30 billion over the next 30 years;
- Increasing school aid by $805 million, including $250 million linked to improved academic performance and management efficiency, and implementation of an enhanced teacher evaluation process.
Due to the structural reforms enacted in last year's budget as well as the reforms proposed in this budget, the budget gap in 2013-14 is projected at $715 million. That is the lowest "first out-year" budget gap in two decades. The Executive Budget recommendations cut the projected four-year deficit by more than half, from $16.4 billion to $7.4 billion.
The Executive Budget includes:
- All Funds spending of $132.5 billion in the fiscal year that begins April 1, 2012, a decrease of $225 million from 2011-12. The back-to-back decline in All Funds spending represents the first time in decades that this has occurred.
- State Operating Funds spending of $88.7 billion, an increase of $1.7 billion, or 1.9 percent. State Operating Funds exclude federal funds and long-term capital spending.