Governor Paterson’s Deficit Reduction Plan is a comprehensive two-year, $5 billion plan to help eliminate New York’s massive budget gap and help bring the State back to fiscal stability.
11.13.2009 - Did you know that education and health care represent more than half of all projected spending ($31 billion) in the state’s $55 billion General Fund? The General Fund is the main operating account of the state and has a projected $3.2 billion deficit in the current year. Given that health care and education make up such a large share of the budget, it was necessary for Governor Paterson to include cuts to those areas as part of a responsible Deficit Reduction Plan.
11.05.2009 - Did you know that Wall Street bonuses are still projected to decline by 22 percent in the current fiscal year, despite the fact that some individual firms are reporting strong earnings? The financial services industry as a whole remains in the midst of a fundamental restructuring, which will continue to depress state tax collections.
Some Wall Street firms have disappeared altogether during the financial crisis and won't be paying any bonuses at all. Efforts are continuing at the federal level to limit executive compensation. And many bonus payments come in the form of stock that is not immediately taxable. It's clear that there should be little optimism that an 11th hour surge in Wall Street revenue will remove the need to make the tough choices proposed in Governor Paterson’s Deficit Reduction Plan.
11.04.2009 - Did you know that, while using the state’s “Rainy Day” reserves to help close our current-year budget deficit may sound like an easy answer, it could have some extremely negative fiscal consequences? First, it may very well lead to a downgrade in the state's credit rating, which would make it more expensive New York to borrow money for roads, bridges, and other infrastructure projects, leaving even fewer tax dollars available for other critical priorities. Second, it’s a “one-shot” solution that wouldn't do anything to address a looming $40 billion structural budget gap projected over the next three years. Third, if we fully exhaust our reserves, we'll be left with no other options at the end of the fiscal year if the economic downturn is worse than anticipated.
All this, for something that would cover little more than one-third of our $3.2 billion current-year deficit. That’s why Governor Paterson's Deficit Reduction Plan leaves the state’s Rainy Day reserve fully intact.
11.03.2009 - Did you know that even after implementing Governor Paterson’s proposed Deficit Reduction Plan, recommended funding for the Aid and Incentives for Municipalities (AIM) program of $715 million would still represent an increase of 54 percent or $249 million compared to 2004-05? That’s an average annual increase of almost 9 percent in AIM funding for local governments outside New York City.
11.02.2009 - Did you know that the average New York State recession lasts twice as long as the average national recession? That's why, even though there are some encouraging signs that the US economy is recovering, state revenues have continued to plummet.
Based on the Division of the Budget's latest forecast, the current New York State recession will not end until at least the second half of 2010. Accordingly, there should be little optimism that an unexpected rebound in tax collections will remove the need for responsible actions to close our mid-year budget gap. Immediate, further spending reductions are necessary, such as those proposed in Governor Paterson's Deficit Reduction Plan.
10.30.2009 - Later today, the Division of the Budget will formally release its mid-year financial plan update, which will show that the state must address a structural deficit of $44 billion over the next five years -- an increase of $6 billion from the most recent projections in July. That’s why Governor Paterson’s Deficit Reduction Plan includes a proposal to cap state spending increases at the rate of inflation, which will eliminate the state’s structural deficit, and then return future surpluses directly to taxpayers in the form of a circuit-breaker property tax relief program. For more information on this spending cap/circuit-breaker initiative, see the following link: http://www.ny.gov/governor/press/press_1029091.html
10.29.2009 - Did you know that Governor Paterson’s proposed Tier V pension reform -- a key component of the Deficit Reduction Plan -- would save taxpayers nearly $50 billion over the next thirty years, while still providing a secure retirement for public employees? Read the savings analysis at the following link: http://www.budget.state.ny.us/pubs/press/2009/press_release09_pensionReform.html
10.27.2009 - Did you know that even after implementation of the DRP, 2009-10 School Aid spending ($21.2 billion) would still represent a $6.8 billion or 47 percent increase compared to 2003-04? Based on US census data, New York spends more total per pupil than any other state and 63 percent above the national average.
10.26.2009 - Did you know that New York spends more per capita on Medicaid ($2,283) than any other state and twice the national average? The next highest state (Rhode Island) spends $1,659 per capita – 27 percent less than New York.
10.23.2009 - Did you know that 95 percent of school districts have reported undesignated reserves in excess of their proposed DRP reduction? For a district by district breakdown of reported reserves, go to the State Education Department’s property tax report card website at http://www.emsc.nysed.gov/mgtserv/propertytax/
