Local government budget impacts in New York encompass the fiscal pressures, revenue challenges, and expenditure mandates that shape the financial stability of the state, its municipalities, and school districts. This page covers CBC’s work on structural budget gaps, pension benefit sweeteners, school aid funding formulas, federal funding risks, and the cost-effectiveness of public infrastructure and insurance programs.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The State should spend less, not more, than the executive budget proposed to avoid destabilizing the budget and putting services at risk.
The State must ensure its own fiscal stability, and any one-time aid to the City should serve as a bridge with the condition that the City is accountable for bringing spending in line with its current revenue base.
The State should save resources proposed for rebate checks as a hedge against the looming risks of economic uncertainty and federal cuts.
The State should enact SEQRA reform to omit sources of delay and obstruction across building types crucial for New York’s future.
The State should reform New York’s auto insurance laws to rationalize the system and save residents and businesses money.
Key Data
In May 2026, the CBCNY noted that increasing Tier 6 pension benefits at a cost of $547 million will pressure local governments and school districts to cut services or raise taxes to fund these benefits.
As of January 2026, New York State and its localities led the nation in tax collections, gathering 78% more taxes per capita than the national average in 2023.
In April 2025, the CBCNY warned that potential federal aid cuts could heavily impact local budgets, as federal aid comprised $7.4 billion of New York City's Fiscal Year 2026 Preliminary Budget.
In August 2024, the CBCNY highlighted that the Medicaid local share shifts $8 billion in costs of the State-run Medicaid program directly to counties and local taxpayers.
In January 2021, the State offset its own expenses by intercepting $200 million in sales tax revenues from New York City and $50 million from other localities, while also intercepting $59 million from counties to fund municipal aid.
The New York State fiscal year 2027 budget increases operating funds by at least 8 percent and leaves a structural gap exceeding $17 billion, while failing to bolster rainy day reserves. Furthermore, the budget includes costly measures like increased pension benefits and school aid for shrinking districts that threaten the fiscal stability of local governments and school districts.
Recommendations related to Local Government Budget Impacts
The State should add to the Rainy Day Reserves rather than leaving the State with a structural gap exceeding $17 billion.
Policymakers should stop increasing school aid to districts with shrinking enrollment, which currently wastes $700 million annually.
The State should avoid increasing Tier 6 pension benefits, as the $547 million cost will pressure local governments and school districts to cut services or raise taxes.
The State must hold New York City accountable for shoring up its own finances to prevent future requests for massive aid or tax increases.
The Governor should continue to resist calls to increase personal income and corporate taxes in the coming year.
The State should publish basic financial plan tables with the budget agreement so New Yorkers do not have to wait to learn how their $268 billion is being spent.
Key Data
$17 billion
— The structural gap left by the state budget.
8 percent
— The minimum increase in State Operating Funds spending.
$700 million
— The amount wasted annually by increasing school aid to districts with shrinking enrollment.
$547 million
— The cost of increasing Tier 6 pension benefits, which pressures local governments to cut services or raise taxes.
$2.4 billion
— The total support provided to New York City in the budget.
$268 billion
— The total amount of state spending in the budget.
New York faces a $20 billion structural budget gap and should prioritize fiscal restraint by spending less than the executive budget proposal rather than increasing taxes or issuing rebate checks. To ensure long-term stability, the state should focus on structural reforms like auto insurance and environmental review processes while holding the city accountable for aligning spending with its revenue base.
Recommendations related to Local Government Budget Impacts
The State should spend less, not more, than the executive budget proposed to avoid destabilizing the budget and putting services at risk.
The State must ensure its own fiscal stability, and any one-time aid to the City should serve as a bridge with the condition that the City is accountable for bringing spending in line with its current revenue base.
The State should save resources proposed for rebate checks as a hedge against the looming risks of economic uncertainty and federal cuts.
The State should enact SEQRA reform to omit sources of delay and obstruction across building types crucial for New York’s future.
The State should reform New York’s auto insurance laws to rationalize the system and save residents and businesses money.
Key Data
$20 billion
— The State faces a structural budget gap of this amount.
78 percent
— New York State and its localities collect this much more in taxes per capita than the national average.
$2 billion
— Reforming auto insurance laws could save New York residents and businesses this amount per year.
$500
— The Assembly proposes a rebate check of this amount to offset energy costs for households earning below $150,000.
$300
— The Assembly proposes a rebate check of this amount for households earning from $150,000 to $300,000.
10 percent
— Insurance reform has been shown to lower premiums by this amount in other states.
$263 billion is the size of the FY27 State budget proposed by Governor Hochul. With strong tax receipts, the State has enough to close next year's gap and put a dent in future gaps, plus fund universal childcare. But risks abound, including a structural budget gap and federal changes to…
New York's auto insurance market is among the most expensive in the country, with high premiums driven by no-fault coverage and joint and several liability laws that expose public entities like the City of New York to excessive legal costs. Implementing proposed reforms, such as capping non-economic damages and limiting joint and several liability, could save residents and businesses up to $2 billion annually without increasing state spending.
Recommendations related to Local Government Budget Impacts
Redefine the “serious injury” threshold to limit the ability of drivers with minor or non-permanent injuries to sue for damages beyond the no-fault limit, which would reduce the financial liability of public entities.
Allow drivers to recover non-economic damages only if the injured driver is not at fault, which would align New York with the modified comparative liability standard used in most other states to limit excessive legal payouts.
Cap non-economic damages in cases where drivers are uninsured or get into accidents while breaking the law to limit the outsized awards that contribute to rate increases and insurers’ mounting losses.
Protect defendants against joint and several liability claims to ensure that defendants, including public entities, are only on the hook for the share of damages that are their fault.
Key Data
$2 billion
— Estimated savings for New York residents and businesses if the state reforms its auto insurance market.
$200
— Minimum savings per vehicle per year for New Yorkers if the state achieves insurance market reforms.
$24 billion
— Total amount paid by New Yorkers in auto insurance premiums in 2024.
$1,896
— Average auto insurance premium in New York in 2023.
17 percent
— Loss incurred by insurers on auto insurance in the New York market in 2023 after expenses.
$50,000
— Highest level of minimum no-fault auto coverage in the nation required by New York.
New York State and its localities lead the nation in tax collections, with residents paying the highest amount per capita and the second-highest amount relative to personal income. Additionally, the state ranks third in the nation for government spending, with per-capita expenditures exceeding the national average by 40%.
Key Data
$15,894
— Total state and local expenditures per capita in 2023, which is 40% higher than the national average.
$12,495
— Total state and local taxes collected per capita in 2023, ranking as the highest of all states.
$153
— Total state and local taxes collected per $1,000 of personal income in 2023, the second-highest rate in the nation.
$18.4
— Corporate income tax revenue per $1,000 of state gross domestic product, the highest in the nation.
$3,454
— Local property tax collections per capita in 2023, which were 71% higher than the national average.
$2,890
— Sales tax revenue per capita in 2023, exceeding the collections of 42 other states.
1,039,069 is the number of kids under the age of five in New York who could ultimately qualify for free or subsidized childcare under the Hochul/Mamdani plan. How should the State and City design a flexible program that meets the needs of diverse families? How should it be phased? What…
Requiring off-site construction factories to pay prevailing wages for public works projects would significantly increase costs for state and local capital projects while reducing the efficiency benefits of modular construction. By mandating these wage standards, the state risks discouraging off-site production, which has historically delivered infrastructure like park bathrooms and pedestrian bridges faster and at a fraction of the cost of traditional on-site methods.
Recommendations related to Local Government Budget Impacts
The Governor should veto A2747A/S2536A to allow the City and State to continue to use off-site custom fabrication without prevailing wages when it would reduce the time or cost of a capital project.
The State should reject the mandate requiring off-site factories to pay prevailing wages, as it would significantly increase the cost of State and locally funded capital projects.
Policymakers should maintain the current exemption for off-site factories from prevailing wage requirements to avoid discouraging off-site producers from bidding on New York projects.
Key Data
$1 million
— Cost of a single prefabricated public restroom compared to $3.5 million for a typical park bathroom built fully on-site.
$3.5 million
— Cost of a typical park bathroom built fully on-site compared to $1 million for a prefabricated structure.
20 percent to 50 percent
— Range by which modular building can accelerate project delivery according to McKinsey estimates.
20 percent
— Potential cost reduction for projects using modular building methods.
30 percent
— Threshold of total project costs that must be covered by public subsidies for a project to be classified as a "covered project" subject to prevailing wage requirements.
Fifty years ago today New York City came within hours of bankruptcy, one of the most significant events of the Fiscal Crisis. This episode features interviews with two of the era’s heroes—Stephen Berger, who served as Executive Director of the State Emergency Financial Control Board, and Eugene Keilin, Executive Director…
Seventeen proposed bills would increase costs for New York State and local governments by expanding pension, disability, and death benefits without providing offsetting savings or enhanced services. These measures, which include twelve bills with estimated immediate costs of at least $30.0 million, bypass the standard budget process and threaten fiscal stability.
Recommendations related to Local Government Budget Impacts
The Governor should veto the 17 bills because they increase costs to New York State and local governments outside of the budget process without enhancing public services.
The Governor should reject legislation that grants targeted benefit enhancements that both increase costs and may encourage further expansions.
The Governor should veto bills that bypass the budget process without providing offsetting savings.
Key Data
$30.0 million
— Immediate estimated costs for twelve of the bills with complete fiscal notes.
$18.1 million
— Annual estimated costs thereafter for twelve of the bills with complete fiscal notes.
$5.9 million
— Annual cost for S6486/A6942, which reduces the service requirement for Tier 3 members of the Unformed Sanitation Force and Uniformed Correction Service.
$5.5 million
— First-year cost for S6671/A7360, which increases the pension benefit for certain Nassau County corrections officers.
$4.9 million
— First-year cost for S5083/A5898, which provides an in-service death benefit for retirement-eligible members of NYSLRS employed as State-paid judges.
$4.2 million
— Annual cost for S6640/A6784, which extends the 'death gamble' benefit to Tier 4 and Tier 6 Special Plan transit members of NYCERS.
Download the Presentation The New York State and New York City budgets are unaffordable and unprepared both for a recession and for federal budget cuts that will start hitting this fiscal year and grow in the future. Check out CBC’s New York State and New York City Fiscal…
New York City faces significant financial risk from potential federal funding cuts, which currently account for $7.4 billion of the fiscal year 2026 preliminary budget. To maintain fiscal stability, the city must prioritize essential services, increase reserves, and eliminate current budget practices that obscure the true scale of spending gaps.
Recommendations related to Local Government Budget Impacts
The City should hold the line on new spending in the Executive and Adopted Budgets.
The City should buttress the General Reserve with at least another $1 billion in fiscal year 2026 to help absorb the immediate blow of federal cuts.
The City should strengthen the Rainy Day Fund by depositing $500 million and reserve the Fund for a short-term emergency like a recession, not for temporary mitigation of recurring federal cuts.
The City should implement a Program to Eliminate the Gap (PEG) to restrain spending growth, focused on streamlining administration, increasing efficiency, and shrinking programs that deliver less value to residents.
The City should end the budget gimmickry and present accurate, reasonable estimates of expenses and revenue, as required by the City Charter.
Key Data
$7.4 billion
— Federal aid included in the City's Fiscal Year 2026 Preliminary Budget.
$91 billion
— Federal aid expected to be received by New York State for fiscal year 2026.
$1.1 billion
— Amount the City spent more on fiscal year 2024 obligations than it received.
$4 billion
— Annual amount of underbudgeting that understates future budget gaps.
$1.4 billion
— Federal public housing operating subsidies received by NYCHA last year.
$14 billion
— Federal funding included in the MTA's 2025-2029 Capital Plan.
$252 billion is the Governor Kathy Hochul’s New York State Executive Budget for Fiscal Year 2026. How much does it matter that New York State and its localities are already #1 in taxes and #2 in spending nationwide? On today’s episode we talk with New York State’s Budget Director, Blake…
New York State is increasingly enacting pension sweeteners and rolling back Tier 6 reforms, which creates significant unplanned costs for state and local governments without improving services. These legislative actions threaten the fiscal stability of pension systems by adding billions of dollars in new liabilities and annual expenses to taxpayer-funded budgets.
Recommendations related to Local Government Budget Impacts
State lawmakers should cut the sweetener habit and should stick to a healthy Tier 6 diet as enacted over a decade ago.
Governors should veto benefit sweeteners that are enacted outside of the budget and collective bargaining processes.
Lawmakers should maintain the valuable Tier 6 reforms, which continue to offer generous defined benefits for public employees.
Legislators should kick this growing habit of enacting sweeteners and leave them on the shelf.
Key Data
$438 million
— The first-year cost to State and local governments from enacted Tier 6 rollbacks.
$1.5 billion
— The annual price tag of just one proposed Tier 6 rollback.
$4.3 billion
— The increase in the net present value of pension benefits resulting from enacted Tier 6 changes.
$714 million
— The estimated first-year fiscal impact of a proposal to reduce employee contribution rates to 3% for Tier 6 employees.
$377 million
— The annual cost increase to State and local governments from changing the final average salary calculation from five years to three years.
$61 million
— The annual pension contribution cost increase to State and local governments from changing the minimum vesting period from 10 years to 5 years.
The Governor is urged to veto 12 bills that would increase costs for New York State and local governments by expanding pension, disability, and death benefits outside the standard budget process. These legislative measures lack offsetting savings and would impose significant new fiscal burdens on public entities.
Recommendations related to Local Government Budget Impacts
Veto the 12 bills that enhance benefits and increase costs to New York State and local governments outside of the budget process.
Reject S8472-A/A8918-A, which would establish a 20-year retirement plan for certain police and officers, costing $70.3 million in its first year.
Veto S8408/A9084, which extends the 'death gamble' benefit to certain correction officers and security hospital treatment assistants, costing $10.4 million in its first year.
Veto S6141-B/A6508-B, which provides additional retirement benefits for Suffolk County correction officers, estimated to cost $5.5 million in its first year.
Veto S7567-A/A9143, which provides an in-service death benefit for certain state-paid judges, costing $3.9 million in its first year.
Key Data
$90.1 million
— Estimated costs of at least eight of the 12 bills immediately.
$16.9 million
— Annual costs thereafter for eight of the 12 bills.
$70.3 million
— First-year cost for S8472-A/A8918-A, which establishes a 20-year retirement plan for certain police and officers.
$10.4 million
— First-year cost for S8408/A9084, which extends the 'death gamble' benefit to certain correction officers.
$5.5 million
— First-year cost for S6141-B/A6508-B, which provides additional retirement benefits for Suffolk County correction officers.
$3.9 million
— First-year cost for S7567-A/A9143, which provides an in-service death benefit for certain state-paid judges.
New York State's current school aid formulas, including expense-based aids and the STAR program, fail to accurately account for local fiscal capacity and student needs, often directing more funding to wealthier districts. Reallocating these funds proportionally to Foundation Aid would better target resources based on actual local wealth and student requirements.
Recommendations related to Local Government Budget Impacts
Formulas should more accurately estimate a district’s capacity and willingness to raise revenue and should use the actual local contribution as the expected minimum local contribution when it exceeds the estimate.
Calculations of local fiscal capacity should account for localities’ other spending obligations—including State mandates such as Medicaid—by adjusting the expected local contribution.
Indices of need and regional cost should be updated regularly and be sufficiently granular to capture variation.
School districts’ building and transportation costs should be explored further to identify reforms that would incentivize efficiency of spending and to improve the funding distribution.
Expense-based aids and the STAR program should be distributed proportionally to Foundation Aid to better target aid based on student needs and local wealth.
Key Data
152
— Number of districts that contributed enough local resources to provide a sound basic education before receiving any State aid in the 2023-24 school year.
$8 billion
— Amount of costs for the State-run Medicaid program shifted to counties and local taxpayers.
$3.3 billion
— Amount of education funding shifted from locally-raised property tax revenue to the State each year by the STAR program.
$135 million
— Additional funding that would be directed to lower-wealth districts if certain aids were distributed proportional to Foundation Aid.
$501 million
— Amount of STAR funding received by districts in the bottom three deciles of wealth last year.
$942 million
— Amount of STAR funding received by districts in the top three deciles of wealth last year.
New York State's school aid funding formulas, including Foundation Aid and the STAR program, fail to effectively distribute resources based on student need and local capacity, often favoring wealthier districts. Reforming these formulas to better account for local circumstances and reallocating funds could shift hundreds of millions of dollars to lower-wealth districts, ensuring a more equitable distribution of state resources.
Recommendations related to Local Government Budget Impacts
The State should more accurately measure a district’s capacity and willingness to raise revenue, and use the actual local contribution as the expected minimum local contribution when it exceeds the measure.
The State should account for a locality’s other spending obligations—including State mandates such as Medicaid, and those driven by economic or social factors such as poverty and unhoused residents—by adjusting the expected local contribution.
The State should quickly phase-out the hold harmless provision to align Foundation Aid with district enrollment.
The State should eliminate the STAR program to better allocate State resources to where they are needed most.
The State should incentivize efficiency of spending on student transportation and building projects.
Key Data
$6 billion
— Total amount of Building and Transportation Aid in the coming school year.
$3.3 billion
— Annual STAR program funding that could be reallocated proportional to the Foundation Aid formula.
$1,805
— Statewide student transportation expenditures per student in 2022, the highest of any state.
$135 million
— Increase in funding for the four lowest wealth deciles if Library, Textbook, Software, and High Tax Aid were reallocated.
$501 million
— Estimated STAR aid received by districts in the bottom three wealth deciles in the 2024-25 school year.
$942 million
— Estimated STAR aid received by districts in the top three wealth deciles in the 2024-25 school year.
The Industrial and Commercial Abatement Program (ICAP) has seen its costs grow six-fold to over $500 million annually, yet evidence suggests the vast majority of projects do not require these tax breaks to be financially feasible. A one-year extension should be signed instead of the proposed four-year renewal to allow for a thorough, objective evaluation of the program's necessity and cost-effectiveness.
Recommendations related to Local Government Budget Impacts
The Governor should veto S9822/A10530 because it extends the Industrial and Commercial Abatement Program without assessing its necessity.
The Governor should sign a one-year extension negotiated as a Chapter amendment to allow time to objectively evaluate the program's cost-effectiveness.
The state should conduct a thorough, objective evaluation of the program to determine if it is an effective use of public funds before renewing it.
Policymakers should implement stricter geographic boundaries for the program to ensure benefits flow only to areas that need them.
The program should include greater restrictions on benefits for retail space and other industries that do not require incentives to be feasible.
The state should shorten benefit durations for projects, as current 25-year abatements are often longer than necessary.
Key Data
3.6 percent
— The portion of projects receiving ICAP benefits that actually required the tax breaks to be financially feasible.
$81.4 million
— The cost of the ICAP program in fiscal year 2017.
$506.3 million
— The cost of the ICAP program in fiscal year 2024.
$500 million
— The amount spent per year on the program without a determination of its effectiveness.
Two-thirds
— The portion of ICAP recipients that receive 25-year abatements.
New York State's education funding system requires reform to ensure fiscal sustainability and equitable distribution, as current formulas often direct aid to wealthy districts rather than those with the greatest need. By updating outdated poverty measures and eliminating inefficient programs like the School Tax Relief (STAR) and High Tax Aid, the state could better align resources with actual educational requirements and fiscal capacity.
Recommendations related to Local Government Budget Impacts
Quickly phase out the hold harmless provision to align Foundation Aid with district enrollment and wealth.
Revise the expected local contribution to be the higher of the district’s actual contribution, or the district’s fiscal capacity.
Update district poverty estimates and regional cost measures for a more accurate assessment of need.
Reassess arbitrary floors and ceilings in formulas to ensure they are limited to extreme situations.
Allocate library, textbook, and software aids based on wealth by modifying the formula or folding the funding into Foundation Aid.
Eliminate High Tax Aid, which provides more aid per student to wealthy districts than below-average-wealth districts.
Eliminate the School Tax Relief (STAR) program to better allocate State resources to where needed most.
Key Data
$38.6 billion
— Total education aid allocated by the State.
$16 billion
— Structural budget gap facing New York State.
30 percent
— Portion of State Operating Funds spending comprised by education funding.
$2 billion
— Amount of State aid sent annually to districts that already spend enough local resources to provide a sound basic education.
$3 billion
— Annual cost of the School Tax Relief (STAR) program.
The proposed expansion of Tier 6 pension benefits would impose a significant financial burden on New York City and other local governments, costing nearly $400 million annually. This unfunded mandate would force local jurisdictions and school districts to increase public employee pension contributions by $320 million in the coming year alone.
Recommendations related to Local Government Budget Impacts
The proposed change to Tier 6 pension benefits is an unnecessary and expensive unfunded mandate on New York City and other localities and school districts that should be rejected.
Key Data
$400 million
— Annual cost to the State and local governments in New York for the proposed change to Tier 6 pension benefits.
$320 million
— Increase in pension contributions for public employees for New York City and other localities and school districts next year alone.
New York State is urged to veto 20 bills that would expand pension, disability, and death benefits for public employees, as these measures impose significant, unfunded costs on state and local governments outside the standard budget process. These legislative actions threaten fiscal stability by creating long-term financial obligations of at least $50.7 million immediately and $30.3 million annually without identifying offsetting savings.
Recommendations related to Local Government Budget Impacts
The Governor should veto S5027/A5208 and the 19 other bills because they enhance benefits and increase costs to New York State and local governments outside of the budget process.
The state should refrain from granting targeted benefit enhancements that increase costs and encourage further expansions that also increase the public’s costs.
Key Data
$50.7 million
— Immediate cost of 14 bills with fiscal notes that would enhance pension, disability, or death benefits.
$30.3 million
— Annual cost of 14 bills with fiscal notes that would enhance pension, disability, or death benefits.
$17.4 million to $22.6 million
— Annual cost increase associated with the bill to passively enroll part-time and temporary employees into the retirement system.
$23.4 million
— Immediate past service cost of the bill extending a one-year final average salary calculation to Tier 6 members of the Police and Fire Retirement System.
$12.2 million
— Annual cost of the 6 sweeteners included in the Fiscal Year 2024 Enacted Budget.
$1.7 million
— Annual cost of the bill removing the age of 50 as an eligibility requirement for service retirement for certain NYCERS members.
The delay in enacting the New York State budget creates uncertainty for local governments and school districts, potentially forcing New York City to account for nearly $1 billion in additional spending without clear state policy guidance. Furthermore, the state faces a structural budget gap between $15 billion and $20 billion, necessitating a budget that prioritizes fiscal stability and transparency.
Recommendations related to Local Government Budget Impacts
The State’s leaders should enact a Fiscal Year 2024 Budget that makes New York more competitive, affordable, and fiscally stable.
The enacted budget should fund programs critical to New Yorkers’ lives and the state’s economic future, while restraining spending growth and paving the path to sunsetting temporary tax increases.
Lawmakers should give the public a reason to have faith in their government by providing basic multi-year financial plan tables that reveal the fiscal impacts of the budget when there is an agreement.
The State should enact a version of the Governor’s sensible, flexible, evidence-based approach to growth targets and streamlining development, along with the other elements of the Governor’s housing plan.
Key Data
$15 billion to $20 billion
— The projected range of the State's massive structural budget gap.
$1 billion
— The amount of additional City spending that could be required due to unknown State policies.
New York City faces a precarious long-term fiscal outlook with widening budget gaps reaching $5.9 billion by fiscal year 2026, driven by increased pension costs and potential economic risks. To ensure future stability and preserve essential services, the city must prioritize improving the quality and efficiency of its operations rather than increasing recurring spending.
Recommendations related to Local Government Budget Impacts
The City must start taking action immediately to restrain spending over the long run to reduce future budget gaps.
The City should both hire for critical functions and eliminate many more, ultimately unneeded, positions.
The City and agencies should have flexibility to shift vacant positions across and within agencies to units and titles that have critical staffing needs.
The City must improve the quality and efficiency of the City’s operations today to preserve services for New Yorkers.
The City needs to implement more transformative changes to ensure future fiscal stability.
Key Data
$4.6 billion
— Projected budget gap in fiscal year 2025.
$5.9 billion
— Projected budget gap in fiscal year 2026.
24,000
— Number of vacant full-time positions remaining after the November Plan.
$350 million
— Expected annual savings from eliminating roughly 5,000 vacant civilian positions.
$865 million
— The City-funded fiscal cliff in fiscal year 2024.
$1 billion
— The City-funded fiscal cliff in fiscal year 2026.
The New York State Legislature has passed 20 bills that would increase public employee pension and benefit costs by at least $99.6 million, often without adequate fiscal analysis. These measures, which include pension enhancements and expanded disability benefits, should be vetoed to prevent further strain on state and local government budgets.
Recommendations related to Local Government Budget Impacts
The Governor should veto the 20 bills that enhance benefits and increase costs to New York State and local governments outside of the budget process.
The Governor should veto the five bills that lack complete fiscal notes, as this is a sufficient basis for rejection regardless of other grounds.
The State should avoid granting targeted benefit enhancements that increase costs and encourage further expansions that raise public expenses.
Key Data
20
— Number of bills passed by the Legislature that would enhance benefits and increase costs to New York State and local governments.
$78.6 million
— Immediate estimated cost of the 15 bills that have fiscal notes attached.
$21.0 million
— Estimated annual cost of the 15 bills that have fiscal notes attached.
12 to 20
— Growth in the annual count of benefit sweeteners passed by the Legislature from 2018 to 2022.
The Climate Action Council's Draft Scoping Plan requires more detailed analysis of the cost-effectiveness and economic impacts of proposed greenhouse gas reduction strategies to protect the state budget and stakeholders. Policymakers need to prioritize strategies that maximize environmental benefits while minimizing negative financial consequences for businesses and households.
Recommendations related to Local Government Budget Impacts
Calculate and identify the cost effectiveness of each mitigation strategy to prioritize those with the greatest impact per dollar spent.
Specify the incremental costs of achieving the 2050 goal to support public discussion of the economic impact.
Disaggregate the financial impacts of each strategy on businesses and households to maximize equity and minimize negative economic impacts.
Identify benefits and costs to the economy and their distribution to each stakeholder group.
Utilize market incentives as much as possible, such as a fee system or cap-and-trade, to incentivize low energy intensive choices without prescriptive regulation.
Retain the low carbon benefits of nuclear energy as a key component of the state’s decarbonization path.
Key Data
$300 billion
— Total costs through 2050 on a discounted present value basis for the climate scenarios.
85 percent
— The goal for reducing statewide GHG emissions from 1990 levels by 2050.
The potential public funding for a new Buffalo Bills stadium requires a rigorous, transparent analysis to ensure that the projected economic benefits actually exceed the significant public costs. Policymakers should prioritize evidence-based decision-making, including private investment requirements and clawback provisions, rather than relying on speculative economic impact claims.
Recommendations related to Local Government Budget Impacts
If a State subsidy is proposed, impacts should be identified and used in a rigorous, transparent analysis that shows the incremental benefits will exceed the subsidy’s cost.
Any subsidy should be provided only after private investment and include clawback provisions.
The State should transparently provide an analysis that identifies the benefits and full costs for any proposed stadium subsidy.
The analysis should credibly identify the incremental economic and fiscal impacts attributable to a proposed subsidy and use them in conjunction with the length of time the subsidy would provide benefit to calculate a proposed subsidy’s value.
Ideally, the State should discount the benefits by a factor that represents the benefit that would be accrued should the State use those funds for another purpose.
Key Data
$1.4 billion to $1.7 billion
— Estimated cost range for constructing a new stadium.
$862 million
— Estimated cost to renovate the existing Highmark Stadium.
$27 million
— Estimated annual fiscal impacts in tax revenue generated by the presence of the Buffalo Bills.
$19.5 million
— Annual personal income tax revenue generated for the State of New York related to the team's payroll.
$385.8 million
— Total annual economic output generated by the Buffalo Bills franchise.
New York State's proposed fiscal year 2023 budget includes an adjusted $10 billion spending increase, which requires careful management to ensure long-term fiscal stability and avoid future deficits. The state should prioritize restraining spending growth, improving transparency in budget processes, and ending the practice of capturing $250 million in local sales tax revenue to better support municipalities.
Recommendations related to Local Government Budget Impacts
The Legislature should reject the Executive Budget’s proposal to continue allowing the State to take $250 million in local sales tax revenue.
The Legislature should work to better target school aid to high-need districts, shifting some expense-based aids to foundation aid, eliminating the hold harmless and restraining aid to wealthy districts.
The State should approve the proposed NYCHA Preservation Trust bill, enact procurement reform, and increase financial support for Rental Assistance Demonstration (RAD) public-private partnerships.
The Legislature should enact a law or work with the Executive to implement a statewide comprehensive, performance management program that sets goals for each major program.
The Legislature should support the Governor’s proposal to restore direct State funding to towns and villages in the Aid and Incentives to Municipalities (AIM) program.
Key Data
$10 billion
— The adjusted year-to-year increase in State Operating Funds spending.
$250 million
— The amount of local sales tax revenue the State takes annually from local governments.
$4.2 billion
— The total amount allocated for relief and recovery, including unprogrammed funds and the property tax rebate.
$2.7 billion
— The amount of annual aid received by wealthy districts that already self-fund a sound basic education.
$41 billion
— The cumulative amount of additional federal and State school aid flowing to schools over the next five years.
New York City expects to receive over $22 billion in federal COVID-19 aid, yet current tracking systems fail to provide the transparency and performance metrics needed to ensure these funds are used effectively. To maximize the impact of these resources, the city should implement a robust public tracker and a citywide performance management system that holds managers accountable for program outcomes.
Recommendations related to Local Government Budget Impacts
The City should create a robust public tracker to support diligent management, ensure funds have maximum impact, and allow the public to know how money is being spent.
The Administration should implement a citywide performance management system in which leaders and managers regularly review data, identify problems, and hold managers accountable.
The COVID-19 tracker should be built and maintained by government based on consultation with nonprofit and private organizations and fiscal oversight entities.
The Mayor should establish a COVID Federal Aid Tracking Working Group to develop the overall framework and metrics for each subject area.
The tracker should include the appropriate funding streams, identify the programs being funded, and include performance goals and metrics for program inputs, outputs, outcomes, quality, and efficiency.
Key Data
$22 billion
— Total expected COVID-federal aid between fiscal year 2020 and fiscal year 2025.
$16.5 billion
— Total federal aid in the New York City budget for fiscal year 2022.
$700 million
— Expected American Rescue Plan State and Local Recovery funds not currently reflected in the November 2021 financial plan.
$5.9 billion
— Priority funding for the ARP SLRF.
$7.0 billion
— Priority funding for Education Stabilization Funds.
$251 million
— Funding directed to special education including afterschool and Saturday programs.
The proposed New York State Executive Budget for fiscal year 2023 includes significant spending increases and relies on projected revenue growth, necessitating careful management to ensure long-term fiscal stability. To protect the state's financial future, policymakers should prioritize restraining recurring expenditures, building larger reserve funds, and limiting aid to wealthy school districts.
Recommendations related to Local Government Budget Impacts
New York should take steps to restrain recurring spending to ensure competitiveness, stability, and recovery.
The State should start to roll back last year’s tax increases that made New York’s combined business and top personal income tax rates the highest in the nation.
The unallocated relief fund and overall spending in the plan should be considered the ceiling for negotiation and not the floor as precedent would indicate.
The State should increase deposits into reserve funds so that the total is at least 17 percent of state operating funds, which is a commonly accepted national benchmark.
The State should curtail school aid to wealthy districts, which provide enough local resources to fund a sound basic education.
Key Data
$5 billion
— Additional receipts recognized in the budget in each of the next four years.
$2 billion
— Additional fund proposed by the Governor to be negotiated with the Legislature.
$3.6 billion
— Minimum increase in State operating spending next year.
$25.9 billion
— Increase in State operating spending over the next five years.
15 percent
— Total of state operating funds that the Executive Budget includes for deposits into reserve funds.
$2.5 billion
— Amount that needs to be added to reserve funds over time to reach the 17 percent national benchmark.
New York State is considering 21 bills that would expand pension and disability benefits for public employees, which would impose significant immediate and long-term costs on state and local governments. These legislative proposals, which lack corresponding service enhancements or savings, should be vetoed to prevent unnecessary fiscal strain outside of standard budget and collective bargaining processes.
Recommendations related to Local Government Budget Impacts
The Governor should veto S4719A/A1414A and the 20 other bills because they enhance benefits and increase costs to New York State and local governments outside of budget negotiations and/or collective bargaining processes.
Policymakers should reject these 21 bills as they would grant pension or disability benefits without providing enhanced services to New Yorkers or offsetting savings.
The state should avoid granting targeted benefit enhancements, as this increases costs and may encourage further expansions of public employee benefits.
Key Data
$64.1 million
— Immediate estimated cost of the 15 bills with fiscal notes attached.
$7.8 million
— Annual estimated cost of the 15 bills with fiscal notes attached.
$48.2 million
— First-year cost of the bill establishing a 20-year retirement plan for certain State law enforcement positions.
$1.27 million
— One-time past service cost for the bill allowing sheriffs and correction officers to be eligible for performance of duty disability benefits.
$930,000
— One-time past service cost for the bill increasing the in-service death benefit for Suffolk County correction officers.
$220,000
— Annual cost increase for the bill allowing sheriffs and correction officers to be eligible for performance of duty disability benefits.
New York City's proposed $140 million in small business support programs in the Fiscal Year 2022 Executive Budget risk duplicating existing federal and state aid, potentially diverting resources from more effective recovery efforts. The City should instead focus on identifying and filling specific gaps in current support to ensure fiscal stability and maximize the value of its economic recovery initiatives.
Recommendations related to Local Government Budget Impacts
The City should focus on filling gaps left by federal and State programs rather than creating duplicative initiatives.
It is critically important for the City to identify potential gaps first by determining which businesses are eligible for existing programs and whether those programs meet their needs.
As the City finalizes programs in budget adoption, it should avoid potential redundancies to maximize the value of its efforts.
The City should consider whether increasing efforts to support small businesses in accessing federal aid may be a more efficient use of resources.
The City should clearly identify gaps left by federal and State programs where technical assistance would be most valuable to ensure resources provide the most value.
Key Data
$140 million
— Total funding for three proposed small business support programs in the New York City Fiscal Year 2022 Executive Budget.
$100 million
— Proposed grant funding for the Small Business Rental Assistance program.
$10 million
— Allocation across two years for the Commercial Lease Legal Assistance program.
$30 million
— Amount of City funds included in the proposed $100 million small business loan fund.
$70 million
— Amount of private investment included in the proposed $100 million small business loan fund.
2,000
— Number of small businesses the City aims to support through its proposed loan fund.
The MTA faces a long-term structural fiscal imbalance, with a projected $2.4 billion shortfall in 2024, necessitating significant operational reforms to achieve sustainability. Implementing productivity improvements in maintenance, bus operations, conductor staffing, and health benefits could yield nearly $2.9 billion in annual savings by 2024, helping to avoid drastic service cuts or tax increases.
Recommendations related to Local Government Budget Impacts
Increasing subway facility maintenance productivity to the national median would save nearly $1.9 billion annually, without reducing individuals’ compensation.
The MTA should implement one-person train operation (OPTO) on subways, which would save half of total projected subway conductor spending ($221 million) by 2024.
The MTA should implement proof-of-payment on commuter rail, which would allow MNR to reduce its conductor workforce by roughly 573, yielding annual savings of $138 million by 2024.
The MTA should apply the State’s current cost-sharing agreement for retired New York State employees to its own retired workforce, which would save $263 million annually by 2024.
The MTA should increase the represented employees’ share of premium contributions to the 18 percent level paid by non-represented employees, which could save $130 million annually by 2024.
Key Data
$25 billion
— Estimated cost to the MTA over the 2020-2024 period in pandemic-related spending and lower revenues.
$2.4 billion
— Projected MTA shortfall in 2024.
$2.9 billion
— Total annual savings yield from proposed reforms by 2024.
13,000
— Workforce reduction by 2024 enabled by proposed reforms.
$981 million
— Annual savings by 2024 from subway facility maintenance improvements.
$367 million
— Annual savings by 2024 from bus vehicle operations, facility, and maintenance improvements.
New York City received over $13 billion in federal COVID-related aid across education and flexible funding initiatives between fiscal years 2021 and 2025. This influx of temporary federal support creates a significant fiscal cliff, with potential budget gaps ranging from $1.4 billion to $4.1 billion in fiscal year 2026 as these one-time funding sources expire.
Key Data
$7,629.2 Million
— Total new federal COVID-related aid for the Department of Education from fiscal years 2021 to 2025.
$5,572.4 Million
— Total new flexible ARP federal COVID-related aid for city initiatives from fiscal years 2021 to 2025.
$1,382 to $4,070 Million
— The potential fiscal gap for the city in fiscal year 2026 resulting from the expiration of temporary federal COVID-related funding.
$2,900.2 Million
— Total fiscal relief funding provided through new flexible ARP federal COVID-related aid from fiscal years 2021 to 2025.
New York State is urged to provide full transparency regarding fiscal year 2021 budget withholdings and repayments by publishing monthly, agency-specific breakdowns of these funds. Additionally, the state should eliminate three extraordinary executive budget powers that grant the governor excessive control over spending and subvert the legislature's oversight role.
Recommendations related to Local Government Budget Impacts
The Division of the Budget should publish on its website timely and complete information about funds that were withheld and repaid as part of the fiscal year 2021 State budget midyear adjustment process.
This information should be provided monthly and broken out by agency or recipient, and major program.
The State should provide detail of the 5 percent cuts being made for fiscal year 2022 and beyond, including a clear summary of all dedicated fund transfers to State’s general fund.
The Legislature should omit from the Enacted Budget three extraordinary budget powers that are unnecessary and inhibit the Legislature’s ability to exercise its appropriate role in the budget process.
Key Data
$700 million
— Subset of withholdings that were payments withheld beyond a statutory payment date in calendar year 2020.
$628 million
— Total Transportation withholdings identified in the Assembly Majority’s Yellow Book analysis.
$584 million
— Portion of transportation withholdings listed as non-statutory, non-18b Transit Operating Aid, Mobility Tax.
$426 million
— Amount withheld from the Metropolitan Transportation Authority (MTA) as of February 2021.
$98 million
— Amount cut from the Metropolitan Transportation Authority in fiscal year 2021, pending receipt of federal aid.
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
New York State faces significant budget gaps that require a balanced approach of spending cuts and revenue strategies rather than relying on gimmicks or shifting costs onto local governments. The state should prioritize targeted spending reductions and avoid using short-term debt or revenue intercepts that negatively impact local municipalities and school districts.
Recommendations related to Local Government Budget Impacts
The State should avoid balancing this year’s budget using cost shifts or revenue intercepts that harm local governments.
The State should especially avoid shifting Medicaid costs onto localities.
The Executive Budget should increase use of debt to finance capital expenses and limit capital expenses to investments that are necessary to maintain critical infrastructure, preserve public health and safety, and provide demonstrable economic benefits.
New York State should focus its scarce resources on those districts that lack the local resources to fund a sound basic education.
The State should not convert this to long term debt.
Spending reductions should be targeted to minimize impact rather than reduce all spending uniformly.
Key Data
$200 million
— Sales tax revenues intercepted from New York City to offset Medicaid expenses.
$50 million
— Sales tax money intercepted from outside of New York City to offset Medicaid expenses.
$59 million
— Funds intercepted from counties to fund portions of the Aid and Incentives for Municipalities (AIM) program.
$170 million
— Funds intercepted from New York City to fund the Metropolitan Transportation Authority.
$1.6 billion
— Annual school aid going to wealthy districts that already spend enough local revenues to fund a sound basic education.
New York State's lack of transparency regarding budget withholdings and advanced payments makes it difficult to assess the financial impact on local governments, the Metropolitan Transportation Authority, and nonprofit service providers. Publishing detailed, monthly reports on these fiscal adjustments is necessary to ensure accountability and allow stakeholders to understand the consequences of these funding decisions.
Recommendations related to Local Government Budget Impacts
The Division of the Budget should publish on its website timely and complete information about funds that have been withheld or advanced as part of the state budget adjustment process.
The Division of the Budget should provide this information ideally on a monthly basis to ensure transparency.
The Division of the Budget should ensure that published data is broken out by agency and major program to allow for proper assessment of impacts.
Key Data
$1.5 billion
— The amount in advanced payments announced at the Governor's December 16 press conference.
$2.4 billion
— The total amount of state withholdings through September, as reported in the Mid-Year Financial Plan update.
$10 billion
— The amount of cash shortfalls the Metropolitan Transportation Authority is struggling to survive over the next 4 years.
3,000
— The number of layoffs of adjunct professors at the City University of New York resulting from the lack of payment.
1,800
— The number of nonprofit social service providers reportedly at risk of closure.
$500 million
— The subset of withholdings that were withheld beyond a statutory payment date, as reported in legally required notifications.
New York State and City face combined budget gaps of $73.3 billion over four years, and even with significant federal aid, they will likely need to implement substantial measures to stabilize their finances. Leaders must act with urgency to develop and implement credible fiscal stability plans to address these long-term deficits.
Recommendations related to Local Government Budget Impacts
State and City leaders should act with urgency to develop and implement credible fiscal stability plans.
The State must implement gap-closing measures to address the projected $46 billion shortfall over the four-year financial plan.
The City must implement $10.6 billion in gap closing measures from now through January 2024 to address its projected budget deficit.
Key Data
$73.3 billion
— Total combined State and City budget gaps over four years.
$57 billion
— Total gap closing actions required if federal aid relieves the same portion of gaps as in the Great Recession.
$60.1 billion
— The State's projected four-year deficit.
$13.2 billion
— The City's projected four-year budget gap.
$4.8 billion
— The City's adjusted gap for fiscal year 2022 that must be closed by the release of the Preliminary Budget.
$10.6 billion
— The amount of gap closing measures the City must implement from now through January 2024.
New York State's failure to release a detailed plan for closing its $9 billion budget gap has created significant uncertainty for schools, localities, and non-profits that rely on state funding. This lack of transparency regarding potential cuts to local aid forces these entities to make unnecessary budget adjustments or delay critical decisions while waiting for clarity on future payments.
Recommendations related to Local Government Budget Impacts
The State must release a specific and detailed plan for closing New York State’s fiscal year 2020-2021 $9 billion budget gap to resolve current fiscal uncertainty.
The State should ensure that all stakeholders know the planned reductions for each affected program to allow for proper financial planning.
The State should extend transparent disclosures to State budget actions, similar to the updates provided regarding the COVID-19 response.
Key Data
$9 billion
— The size of the New York State fiscal year 2020-2021 budget gap that requires a specific closing plan.
$1.7 billion
— The amount of aid to localities that the Division of Budget has withheld, creating uncertainty for recipients.
$8 billion
— The amount of potential cuts to local aid outlined in state budget reports.
$1 billion
— The amount of potential cuts to state operations outlined in state budget reports.
New York State's current tax and spending policies often conflict with the Climate Leadership and Community Protection Act's environmental goals, necessitating a realignment of state budget priorities. By modifying tax expenditures and restructuring local aid for schools and transportation, the state can incentivize the transition to renewable energy while maintaining fiscal responsibility.
Recommendations related to Local Government Budget Impacts
The State could limit the residential energy sales tax exemption only to zero emission fuels and renewable energy sources to better support CLCPA goals.
The State could lower, or gradually eliminate, the sales tax exemptions on fossil fuel-based residential energy sources to reduce subsidies for greenhouse gas emissions.
The State could consider eliminating exemptions for fossil-fuel based energy used for non-residential purposes, such as research and development.
The State could consider not reimbursing the cost of installing fossil fuel dependent building infrastructure or vehicles when providing economic development grants.
State aid could incentivize school districts to purchase zero-emission school buses and build the needed charging infrastructure.
The State could transition public facilities away from fossil fuels wherever cost-effective and feasible when replacing aging heating systems.
Key Data
$800 million
— Annual tax exemptions provided by New York State that reduce the cost of consuming fossil fuels.
$178 billion
— The total size of the New York State budget.
$200 million
— Amount spent by the State on utilities for public buildings in fiscal year 2019.
$3.207 billion
— Current program costs for School Building Aid in fiscal year 2020.
$1.990 billion
— Current program costs for School Transportation Aid in fiscal year 2020.
$1.8 billion
— Annual amount provided in economic development grants to companies to subsidize expansion or relocation to New York.
1975 is the year NYC found itself on the verge of municipal bankruptcy. How did the City turn around its fortunes? We present CBC's special panel discussion, "Sages of the Ages." Five New York fiscal experts--Steve Berger, Stan Brezenoff, Gene Keilin, Dick Ravitch, and Alair Townsend-- describe how they helped…
Legislation proposed to establish a Rainy Day Fund for New York City lacks the necessary legal safeguards to prevent the misuse of funds as a discretionary slush fund. To ensure the fund serves its intended purpose of mitigating service cuts during emergencies, the bill must be amended to restrict withdrawals strictly to periods of economic recession or severe crisis.
Recommendations related to Local Government Budget Impacts
The Legislature should amend S.8400/A.9789A to limit withdrawals to times of economic recession or severe emergency.
Any withdrawal from the Rainy Day Fund should be limited only to times of economic recession or severe emergency, as defined in law based on economic and fiscal indicators.
Without an amendment to include necessary restrictions, the bill should be held.
$7.4 billion -- the two-year tax revenue shortfall for the City of New York revealed when Mayor Bill de Blasio released the Executive Budget for Fiscal Year 2021 last month. In this episode we hear from the person who will help guide NYC through one of its greatest fiscal challenges,…
New York State faces an $8 billion budget gap due to the pandemic, necessitating cuts to school aid that should be strategically targeted to protect districts with the least local resources. By prioritizing funding for districts that cannot meet sound basic education standards and reducing aid to wealthier districts that can, the state can close its budget gap while ensuring equitable educational support.
Recommendations related to Local Government Budget Impacts
The State should focus on first ensuring that all districts have sufficient funds to provide a sound basic education, and reduce funds to districts that already have sufficient local resources to meet this requirement.
Decreases in funding should first target districts that do not need State aid to fund a sound basic education.
The State should revisit how New York distributes its school aid dollars by accounting for student need, district wealth, and total district revenues.
By incorporating funding from various aid types into a revised Foundation Aid formula, the State can reduce costs and ensure all districts have the necessary revenues to provide a sound basic education.
Key Data
$8 billion
— Reduction in fiscal year 2021 local assistance spending to balance the state budget.
$1.6 billion
— State aid received by 129 school districts that already raised enough local revenue to fund a sound basic education.
$1.2 billion
— Decrease in State-funded school aid in the Enacted Budget compared to the Executive Budget.
$26.8 billion
— Amount of school aid, representing 38 percent of state local assistance spending.
$237 million
— Total amount of library, textbook, and software aids provided regardless of student need or district wealth.
$223 million
— Total amount of high tax aid that provides more funding to wealthier districts.
New York State's newly established mid-year budget modification process requires greater transparency to ensure the public and legislature understand the impact of potential spending cuts on local governments and school districts. Providing advance notice of these reductions is essential for localities and agencies to effectively plan and manage their financial constraints during the ongoing economic crisis.
Recommendations related to Local Government Budget Impacts
The notification and details of the Executive’s plan should be made publicly available as soon as practicable to ensure the Legislature and the public can reasonably understand possible reductions for each affected program and, where applicable, the impact on each local government or school district.
The notification should include a detailed description of revenue shortfalls or spending overages.
The Division of the Budget, Senate, and Assembly should fulfill their existing obligation to provide “Quick Start” revenue and spending forecasts in the fall of each year to improve and accelerate the revenue consensus and budget negotiation process.
Providing as much advance notice as possible will allow localities and agencies facing budget cuts to plan and manage the impact.
New York State faces significant revenue shortfalls due to the pandemic, with estimates suggesting a potential $34 billion gap over three years and immediate revenue declines of at least $4 billion. To address this, the state should enact a "bare bones" budget that prioritizes essential services and pandemic response while avoiding tax increases and continuing necessary Medicaid reforms.
Recommendations related to Local Government Budget Impacts
The Governor and Legislature should quickly enact a “bare bones” budget that supports the estimated pandemic response need.
State leaders should not consider tax increases at this time, as high taxes and federal caps on deductions risk competitiveness.
The state should leverage and continue as needed the work of the Medicaid Redesign Team (MRT) to address unsustainable expenditure growth.
Officials should appropriately use emergency federal aid to replace lost tax revenues or support the pandemic response, rather than substituting for structural reforms.
The Governor and Legislature should understand this budget will have to be revised in the coming months as more information becomes available regarding economic and fiscal impacts.
New York's Medicaid program faces significant fiscal challenges, with costs rising beyond budgeted levels and consuming an increasing share of the state budget, particularly due to long-term care expenses. To address these deficits and improve fiscal sustainability, the state should implement stricter accounting standards, enhance transparency in reporting, and target spending reductions in high-growth areas like long-term care and health homes.
Recommendations related to Local Government Budget Impacts
The state should make the Global Cap global by including all spending to ensure all Medicaid costs are accounted for and managed.
The state should make the Global Cap a cap by following accounting principles such as modified accrual basis to prevent payment deferrals.
The state should index Medicaid spending to the rolling average of medical inflation to provide a sound strategy and metric for growth.
The state should adhere to and improve the law requiring Medicaid spending transparency by publishing monthly reports and enhancing their content.
The state should focus on areas with high growth rates or extraordinary spending levels, such as long-term care and health homes, to achieve necessary savings.
The state should target supplemental payments based on need to promote equity and reduce total costs among hospitals.
The state should not raise health care taxes because these costs are passed on to New Yorkers as higher health insurance premiums.
Key Data
$2.5 billion
— State-share Medicaid savings goal identified by the Medicaid Redesign Team.
10%
— Reduction in the Medicaid budget represented by the $2.5 billion savings goal.
$1.7 billion
— Amount of Medicaid payments deferred by the State in fiscal year 2019 to adhere to the Cap.
$500 million
— Cost for the health homes care coordination model in its first five years.
$1,000
— Annual increase in health insurance premiums paid by the average commercially insured family in New York due to healthcare taxes.
50%
— Amount by which daily nursing home costs in New York exceed the national average.
New York State faces significant budget gaps totaling $38.6 billion over five years, largely driven by unbudgeted Medicaid spending and requiring careful fiscal management. To maintain stability, the state should avoid shifting costs to local governments, target education aid to underfunded districts, and increase rainy day reserves rather than raising taxes.
Recommendations related to Local Government Budget Impacts
The State should reject any increase in the local Medicaid share, as counties and New York City have very limited control over the program and should not be saddled with absorbing program growth.
The Legislature should reject shifting costs for Temporary Assistance for Needy Families onto New York City and special education out-of-district placement costs onto school districts outside of New York City.
The State should target school aid to underfunded districts, as limiting increases in school aid to only these high-need districts would save more than $750 million.
The State should eliminate the annual Medicaid payment deferral that was initially implemented at the end of fiscal year 2019 to avoid setting a precedent of fiscal irresponsibility.
The State should increase deposits to rainy day funds to ensure it can weather an eventual economic downturn without harmful spending cuts or counterproductive tax increases.
Key Data
$4.0 billion
— Budget gaps in the current year.
$7.1 billion
— Budget gaps in fiscal year 2021.
$38.6 billion
— Total budget gaps over five years.
$18.0 billion
— Portion of five-year gap due to previously unbudgeted Medicaid spending.
The New York State Executive Budget for Fiscal Year 2021 increases education aid by $826 million, yet fails to adequately target funds to the 13 districts that remain underfunded. Instead of providing unnecessary aid to wealthy districts, the state should reform the Foundation Aid formula to prioritize student need and allocate funds to reserves to prepare for potential economic downturns.
Recommendations related to Local Government Budget Impacts
The State should distribute the $1.8 billion in folded education aids according to a revised Foundation Aid formula that fully accounts for student need and all revenue sources.
To better distribute all Foundation Aid based on need, the formula should be fixed to more accurately reflect student need and local revenue efforts, relax hold-harmless provisions, and eliminate automatic minimum increases.
The State should move forward with controlling building and transportation aid costs while ensuring that schools have what they need to provide a sound basic education.
Rather than provide unnecessary aid, the State should dedicate these funds to the State’s reserves in preparation for a recession, which could help offset possible school aid cuts during a recession.
Key Data
$750 million
— The amount by which the Executive Budget exceeds what is needed to fund a sound basic education statewide.
$72 billion
— The amount spent by New York school districts in school year 2018 using local, State, and federal funds.
$13.6 billion
— The estimated amount by which school district spending exceeded what was necessary to fund a sound basic education in 2018.
$826 million
— The total increase in education aid proposed in the Fiscal Year 2021 Executive Budget.
$1.8 billion
— The total amount of ten different education aids folded into Foundation Aid.
$5.1 billion
— The annual cost of building and transportation aid that the State should control.
7 days since the start of budget season, which commenced this year with the New York City Preliminary Budget released on January 16th. The State Budget, released just yesterday, may have a significant impact on the City’s finances this year: with the State facing a large budget gap, the Executive…
Local governments in New York State provide $5.6 billion annually in financial assistance to businesses through entities like Industrial Development Agencies and local development corporations. Because these organizations operate with little transparency, with at least 192 of them spending $1.2 billion in 2017, legislative action is required to authorize state audits and ensure public resources are used effectively.
Recommendations related to Local Government Budget Impacts
The Governor should sign A7476/S5445, which will provide needed oversight by authorizing the Office of the State Comptroller (OSC) to audit local development corporations (LDCs).
Improving oversight of LDCs is necessary to safeguard against misuse of public resources.
The Governor should sign the bill to enhance accountability of local economic development.
Key Data
$5.6 billion
— Annual financial assistance provided by local governments in New York State to businesses directly or through municipally controlled Industrial Development Agencies and LDCs.
$1.2 billion
— Total amount spent by at least 192 LDCs focused on economic development in 2017.
192
— Number of LDCs focused on economic development that spent a total of $1.2 billion in 2017.
New York's education funding formula is flawed, resulting in wealthy districts receiving excess aid while some needy districts lack sufficient resources to provide a sound basic education. Reforming the distribution of state aid to better account for local wealth and actual needs would ensure resources are directed where they are most required while improving fiscal sustainability.
Recommendations related to Local Government Budget Impacts
The State should revamp the Foundation Aid formula and other education aid formulas to properly account for local wealth and actual local funding.
The State should eliminate hold-harmless provisions and guaranteed minimum funding increases to prevent automatic aid growth regardless of need.
The State should use the most up to date data available when calculating aid allocations.
Expense-based aids and other types of education aid, such as high tax aid, should be redirected towards those districts without the resources to provide a sound basic education.
Key Data
$18.4 billion
— Foundation Aid portion of state education aid in school year 2019-2020.
$13.6 billion
— Amount spent statewide in 2017-2018 that was more than necessary to fund a sound basic education for all districts.
$1.8 billion
— Amount the wealthiest decile of districts spent more than needed to fund a sound basic education in school year 2017-2018.
$223 million
— Amount of High Tax Aid specifically targeting additional state aid to wealthy districts.
$724 million
— State revenues received by the wealthiest decile of districts in school year 2017-2018.
$72 billion
— Total amount spent by school districts in New York in school year 2017-2018 using local, state, and federal funding.
Local governments in New York have ceded significant authority to unelected Industrial Development Agencies and Local Development Corporations, which manage billions in debt and tax benefits with minimal accountability. These entities often duplicate efforts and lack strategic focus, necessitating consolidation and stricter oversight to improve the efficacy of economic development spending.
Recommendations related to Local Government Budget Impacts
Consolidate local IDAs into regional IDAs and prohibit LDCs from engaging in economic development activities to reduce duplication and improve coordination.
Improve reporting requirements to ensure data on projects receiving benefits is consistent, accurate, and timely.
Improve accountability by allowing the State Comptroller to audit LDCs to ensure appropriate internal controls are in place to safeguard public funds.
Increase resources for the Authorities Budget Office to allow it to conduct its full scope of work, including properly reviewing reports filed by local IDAs and LDCs.
Key Data
$10 billion
— Total amount allocated to economic development by state and local governments in 2018.
$29 billion
— Combined debt outstanding for LDCs and IDAs at the end of 2017.
$700 million
— Total tax benefits provided by IDAs in 2017.
$1.1 billion
— Amount spent by New York City LDCs on economic development in 2017.
$100 million
— Amount spent on staff wages, salaries, and benefits by IDAs and LDCs in 2015.
$272 million
— Amount in grants provided by LDCs to economic development projects that planned zero new jobs in 2017.
New York City spends $1.4 billion annually on pupil transportation, a cost that would be further inflated by legislation mandating employee protection provisions that courts have previously deemed unlawful. Maintaining flexibility in procurement is essential to avoid locking in high expenses and to secure savings for taxpayers.
Recommendations related to Local Government Budget Impacts
The Governor should veto A7749/S6208, which would impose costly restrictions on school bus contracts in New York City.
The City must maintain flexibility to procure and negotiate pupil transportation contracts to secure savings for future taxpayers.
The state should reject this costly and ill-advised bill to avoid locking in high expenses.
Key Data
$1.4 billion
— Annual cost of New York City pupil transportation.
The state legislature has passed 18 bills that would expand pension and disability benefits for public employees, creating at least $71 million in new costs without providing additional services or offsetting savings. These benefit sweeteners threaten to undermine previous fiscal reforms and should be vetoed to maintain responsible personnel cost management.
Recommendations related to Local Government Budget Impacts
The Governor should veto all 18 bills passed by the Legislature to enhance pension or disability benefits, as they increase costs without providing enhanced services or offsetting savings.
The Governor should send a strong message that past reforms will not be overturned by rejecting these unwarranted expansions of employee and retiree benefits.
The Governor should continue the tradition of containing personnel costs by refusing to adopt benefit sweeteners that undermine hard-fought compromises on pension and health insurance contributions.
Key Data
$71 million
— The projected first-year cost of the 18 bills passed by the Legislature.
$41 million
— The first-year cost of A4431/S5207, which would establish a 20-year retirement plan for certain state law enforcement positions.
$15.7 million
— The first-year cost of A7874-A/S5905-A, which would require New York City paraprofessionals to join the Teachers Retirement System.
$5.6 million
— The annual cost to allow New York City police officers to receive retirement credit for time spent as cadets.
$2.1 million
— The first-year cost to Nassau County for A5324/S5133, which would grant enhanced disability benefits to ambulance medical technicians.
$1.5 million
— The first-year cost to Nassau County for A5021/S3946, which would expand performance of duty disability eligibility for sheriffs and correction officers.
Nineteen proposed bills would increase pension and disability benefits for various public employees, creating significant long-term fiscal liabilities for the state and local governments. These 'benefit sweetener' bills should be vetoed to prevent unnecessary increases in annual contributions and past service costs.
Recommendations related to Local Government Budget Impacts
Governor Cuomo should veto the 19 benefit sweetener bills to avoid increasing long-term fiscal liabilities for the state and local governments.
Policymakers should reject legislation that expands pension and disability benefits, as these measures create unnecessary increases in annual contributions and past service costs.
Key Data
$41.100 Million
— Past services and first year costs for the 20-year retirement plan for law enforcement members.
$15.700 Million
— Past services and first year costs for requiring New York City paraprofessionals to join the Teachers' Retirement System.
$5.600 Million
— Past services and first year costs for allowing retirement credit for New York City Police Department Cadet Program time.
$2.760 Million
— Past services and first year costs for allowing Tier 6 uniformed court officers and peace officers to retire without early age reduction.
$2.090 Million
— Past services and first year costs for granting Nassau County ambulance medical technicians an enhanced disability benefit.
$1.520 Million
— Past services and first year costs for allowing Nassau County sheriffs and correction officers to receive performance of duty benefits.
New York City's fiscal year 2019 budget, while technically balanced, actually resulted in a $255 million deficit when accounting for the 'surplus roll' of prepaid expenses. This trend of spending more than is collected, combined with accelerating expenditure growth and a record-high projected workforce, suggests that current spending levels are unsustainable.
Recommendations related to Local Government Budget Impacts
The Mayor and Council Speaker should continue to identify opportunities to restrain spending much more, particularly in ways that improve productivity so that priority services are preserved.
Key Data
$255 million
— The net difference in spending obligations versus revenues collected in fiscal year 2019.
$4.576 billion
— The amount the City prepaid in fiscal year 2019 expenses at the end of fiscal year 2018.
$4.221 billion
— The amount rolled out in fiscal year 2019 to prepay fiscal year 2020 expenses.
5.7 percent
— The rate at which city-funded expenditures grew in fiscal year 2019.
5.3 percent
— The projected increase in city-funded expenditures for fiscal year 2020.
333,433
— The number of authorized positions for the city workforce projected for fiscal year 2020.
New York's school funding system relies on a flawed Foundation Aid formula that directs excessive resources to wealthy districts while leaving 29 districts without the necessary funding to provide a sound basic education. Reforming these formulas to accurately account for local wealth and actual funding needs would ensure equitable resource distribution and improve fiscal sustainability during economic downturns.
Recommendations related to Local Government Budget Impacts
Significantly revamp the Foundation Aid formula and other education aid formulas to properly account for local wealth and actual local funding.
Eliminate hold-harmless provisions that prevent aid decreases even in cases of declining enrollment or increasing wealth.
Eliminate minimal growth rates that prevent districts from catching up while overfunded districts continue to receive automatic increases.
Use the most up to date data available when calculating aid to ensure accuracy.
Target school aid to those districts that need it to provide a sound basic education.
Key Data
$13 billion
— The amount by which statewide spending exceeds what is necessary to reach a sound basic education.
$1.9 billion
— The amount the wealthiest decile of districts are on track to spend above what is needed to fund a sound basic education in school year 2020.
$83 million
— The total amount of funding needed to bring the 29 districts currently lacking resources up to the level required for a sound basic education.
$475 million
— The amount of state aid received by the wealthiest decile of districts.
$223 million
— The amount of additional state aid specifically targeted to wealthy districts through High Tax Aid.
$20 billion
— The increase in total school district revenues between school year 2006-2007 and 2016-2017.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills that would increase public employee benefits, such as pensions, disability coverage, and health insurance, often resulting in significant, long-term fiscal burdens for state and local governments. These proposed enhancements frequently lack adequate funding mechanisms, potentially straining municipal budgets and increasing taxpayer liabilities.
Key Data
$942.6 Million
— Increase in base retirement allowance computation for New York State Teachers, State and local police and fire, and New York City retirement systems.
$121.7 Million
— Additional annual cost for increasing the salary used in the computation of the special accidental death benefit.
$13.1 Million
— One-time past service cost for modifying the in-service death benefit for Tiers 2 through 6 State correction officers.
$9.3 Million
— Increase in annual contributions and past service costs for Nassau, Suffolk, and Westchester Counties regarding correction officer pension benefits.
$2.09 Million
— Estimated increase in Nassau County annual contributions and immediate past service cost for enhanced disability benefits for ambulance medical technicians.
$1.5 Million
— Increase in Nassau County annual contributions and past service cost for performance of duty benefits for sheriffs and correction officers.
New York State's education funding formula fails to ensure a sound basic education for all students, as it directs significant resources to wealthy districts while leaving 29 districts underfunded by nearly $83 million. Reforming the Foundation Aid formula to use current data and eliminating arbitrary aid constraints are necessary steps to address these inequities and ensure adequate resources reach the districts that need them most.
Recommendations related to Local Government Budget Impacts
Poorly targeted forms of school aid, including High Tax, Library, Textbook, and Software Aids, should be folded into a reformed Foundation Aid formula that uses current data—including actual local funding and student enrollment.
The arbitrary floors, ceilings, phase-ins and add-ons to the Foundation Aid formula should be eliminated.
Key Data
$62.6 billion
— Cost for school districts in New York State to provide a sound basic education to all students in school year 2020.
$70 billion
— Amount school districts are on track to spend in the aggregate.
$961 million
— Increase in total formula-based school aid in the enacted Fiscal Year 2020 Budget.
$83 million
— Amount by which 29 school districts are underfunded despite historic state aid increases.
$4.0 billion
— Amount of $27.3 billion in formula-based aid received by the four wealthiest deciles.
$169 million
— Amount of the nearly $1 billion growth in school year 2019-2020 received by the four wealthiest deciles.
New York State faces a significant funding shortfall for its transportation infrastructure, with $2.1 billion in necessary repairs deferred annually. To address this, the state should implement a vehicle-miles traveled (VMT) fee, which would provide a sustainable, user-pays revenue source as fuel tax revenues decline due to increased fuel efficiency and electric vehicle adoption.
Recommendations related to Local Government Budget Impacts
The State should phase in implementation in order to allow the public sector to build expertise in a new area of revenue generation.
New York should require commercial fleets to transition to a VMT fee.
The State should create a volunteer program for passenger vehicles to provide added insights into the implementation of a VMT for personal vehicles.
New York should provide a multiyear transition to allow ample time to establish the soft and hard infrastructure necessary to implement a near-universal program.
The State should maintain flexibility to accommodate new technology and not commit to a single, proprietary platform.
New York should establish rates that vary by type of vehicle and location to account for negative effects of air pollution and traffic congestion.
The State should execute a clear and transparent rate-setting process so that motorists know how, when, and at what rate a VMT fee is being imposed.
New York should use the VMT fee as an addition to existing sources to help remedy the mismatch between available highway and transit revenues and needed annual expenditures.
Key Data
$5.7 billion
— Annual investment required for the State to achieve a state of good repair on its assets.
$2.1 billion
— Amount of necessary repair work that is deferred annually, representing 37 percent of the total required investment.
51 percent
— Reduction in the inflation-adjusted per-mile direct cost to motorists who travel on State roadways since 1993.
123 billion miles
— Estimated distance traveled by motorists in New York State in 2016.
$1 billion
— Annual revenue that could be generated by an average per-mile fee of 1 cent.
1.5 cents
— Per mile fee charged to participants in Oregon's OReGO pilot program.
The New York State Legislature introduced 189 'benefit sweetener' bills in 2019 that would significantly increase public employee pension, health insurance, and leave benefits, creating substantial long-term fiscal liabilities for taxpayers. These proposed legislative changes include costly measures such as a $942.6 million increase for retirement allowance computations and a $149 million cost for expanding Tier 6 pension benefits.
Key Data
$942.6 Million
— The estimated cost of increasing the base computation for retirement allowances for New York State Teachers, police, and fire systems.
$149 Million
— The immediate past service cost associated with increasing Tier 6 pension benefits.
$121.7 Million
— The additional annual cost of increasing the salary used in the computation of the special accidental death benefit.
$41.1 Million
— The cost of establishing a 20-year retirement plan for law enforcement officers, including regional state park police and university police.
$30.312 Million
— The total potential present value cost to the State for requiring it to pay past, present, and future New York City Off-Track Betting Corporation employer contributions.
$13.1 Million
— The one-time past service cost for modifying the in-service death benefit for Tiers 2 through 6 State correction officers.
The 2019 Benefit Sweetener Scorecard tracks 189 legislative bills that would expand public employee benefits, such as pensions, health insurance, and leave, potentially creating significant long-term fiscal liabilities for state and local governments. These proposed enhancements often carry substantial immediate past service costs and ongoing annual contribution increases for taxpayers.
Key Data
$942.6 Million
— Increase in base retirement allowance computation for New York State Teachers, State and local police and fire, and New York City retirement systems.
$121.7 Million
— Additional annual cost for increasing the salary used in the computation of the special accidental death benefit.
$41.1 Million
— Cost to New York State for establishing a 20-year retirement plan for law enforcement officers.
$13.1 Million
— One-time past service cost for modifying the in-service death benefit for state correction officers.
$9.3 Million
— Increase in annual contributions for Nassau, Suffolk, and Westchester counties plus past service cost for correction officer pension benefits.
$1.5 Million
— Increase in Nassau County annual contributions and past service cost for sheriff and correction officer performance of duty benefits.
New York City faces potential cumulative tax revenue shortfalls of $15 billion to $20 billion during a recession, yet current laws prevent the establishment of a formal Rainy Day Fund to mitigate these impacts. Implementing a structured fund with a target size of $10.8 billion would provide necessary fiscal stability to avoid harmful service cuts or tax increases during economic downturns.
Recommendations related to Local Government Budget Impacts
The City and State should authorize the City to use an RDF by codifying its parameters and amending State law and the City Charter to permit it.
Legislation to establish the RDF should specify the target size, required deposits, and permitted withdrawals.
The target size of the RDF should be 17.2 percent of the pre-recession year tax revenue.
Minimum required deposits should be at least 75 percent of the annual tax revenue growth in excess of 3 percent.
Withdrawals should be permitted during an economic contraction or a severe emergency.
Key Data
$15 billion to $20 billion
— Cumulative tax revenue shortfalls over three years in a recession comparable to the last two.
17.2 percent
— The target size of the Rainy Day Fund relative to pre-recession year tax revenue.
$10.8 billion
— The recommended Rainy Day Fund target size in fiscal year 2020.
75 percent
— The minimum portion of annual tax revenue growth in excess of 3 percent that should be deposited into the fund.
$8.5 billion
— The potential balance of the fund if the deposit requirement had been in place during the recent nine-year expansion.
New York State's current education funding levels are sufficient to provide a sound basic education, as total revenues are projected to exceed the necessary costs by $9.4 billion. Rather than increasing state aid by billions, the state should target a modest $164 million increase specifically to the 32 districts that currently lack the resources to meet educational standards.
Recommendations related to Local Government Budget Impacts
The critical action is to target the distribution of aid to districts that need it, rather than ensure that almost every district gets more no matter its circumstance.
Directing a state aid increase of just $164 million to these 32 districts would provide resources to provide an SBE statewide — and do so without any decreases in state aid for wealthy districts.
Key Data
$62.6 billion
— The estimated amount required to provide a sound basic education statewide according to state education aid formulas.
$72 billion
— The projected total of school districts’ revenues from federal, state, and local sources in 2020.
$164 million
— The total shortfall for 32 districts that currently have less than is needed to provide a sound basic education.
$465 million
— The amount of state aid received by the 10% wealthiest districts as of 2018-2019.
New York State can ensure all school districts provide a sound basic education by targeting $164 million in aid specifically to the 32 districts currently lacking sufficient resources, rather than implementing broad, multi-billion dollar increases. This approach would satisfy constitutional requirements while maintaining fiscal responsibility, as most districts already possess adequate funding to meet educational standards.
Recommendations related to Local Government Budget Impacts
The State should ensure all districts have the resources to provide a sound basic education by increasing aid by $164 million and targeting it to the 32 districts that are currently underfunded.
Policymakers should prioritize this $164 million allocation during budget negotiations to ensure all districts meet educational standards.
Any State aid provided above the necessary $164 million should be targeted to specific educational needs and balanced with the State’s overall fiscal realities.
Key Data
$164 million
— The amount of additional state aid required to ensure all districts have the resources to provide a sound basic education.
$62.6 billion
— The total amount needed in 2020 to provide a sound basic education for New York’s students.
$72.0 billion
— The estimated amount school districts will spend in 2020, assuming no increase in State aid from 2019.
$9.4 billion
— The amount by which projected school district spending exceeds what is necessary to fund a sound basic education.
41 percent
— The increase in school district revenues between the 2006-2007 and 2016-2017 school years.
New York State currently spends enough in aggregate to provide a sound basic education, but the existing aid distribution formula is poorly targeted and fails to accurately reflect local financial capacity. Consequently, the state should prioritize directing any future increases in education aid specifically to the small number of districts that remain underfunded.
Recommendations related to Local Government Budget Impacts
The State should target any increase in aid to those districts that need it most.
Key Data
$69 billion
— Total amount spent on public education in New York State during the 2016-2017 school year.
$9 billion
— Amount by which New York education spending exceeds what is necessary to fund a sound basic education.
$6.6 billion
— Amount of State aid provided to more than 600 districts that exceeds what is needed for a sound basic education.
$200 million
— Total funding needed to bring underfunded districts to the required level for a sound basic education.
$150 million
— Aggregate amount of underfunding for fewer than 30 districts after accounting for the Governor's school aid proposal.
$956 million
— Total increase in state aid proposed in the Governor's Executive Budget.
The New York State Executive Budget for Fiscal Year 2020 fails to adequately control spending or build sufficient reserves to withstand economic downturns, while relying on volatile revenue sources like the millionaire's tax. Furthermore, the budget shifts significant financial burdens onto New York City taxpayers and grants the executive branch unilateral authority to cut local aid during revenue shortfalls.
Recommendations related to Local Government Budget Impacts
The State should build reserves, control spending, and make changes as needed in the budget process rather than expanding executive authority to cut local aid.
The State could fund a sound, basic education statewide with a smaller annual increase if State aid was better targeted to high-need districts.
Additional reforms to program design and transparency are necessary to ensure accountability to taxpayers, including a unified economic development budget, standardized metrics, and improved program design.
Revenues from marijuana legalization should be deposited to the general fund and allocated to priorities as determined in the budget process rather than being dedicated to specific purposes.
New reporting and restored oversight for economic development spending should be established by statute to ensure that both continue under future administrations.
Key Data
$175 billion
— The total size of the Fiscal Year 2020 Executive Budget.
$1.6 billion
— The amount by which the budget decreases fiscal year 2020 revenue forecasts.
$2.3 billion
— The current balance of the State’s rainy day funds, which falls short of what is needed to withstand an economic recession.
$100 million
— The approximate amount of reimbursements and aid cut to New York City in the budget.
$250 million
— The amount of annual revenue the expansion of the sales tax base to include all online retailers is expected to yield for the State.
$4 billion
— The amount by which the State’s $90 billion OPEB liability will be reduced through proposed reforms.
Governor Cuomo's vetoes of various legislative proposals prevented significant new fiscal burdens on state and local governments that would have arisen from expanded public employee benefits. These vetoed measures included costly enhancements to disability, death, and retirement benefits that lacked sufficient funding mechanisms.
Recommendations related to Local Government Budget Impacts
The Governor should continue to veto legislation that expands public employee benefits to avoid imposing additional fiscal burdens on state and local governments.
Policymakers should reject bills that increase accidental disability benefits for public employees, as these measures create significant long-term costs.
Legislators should avoid passing bills that lower retirement ages or enhance death benefits, as these changes negatively impact the financial stability of public pension systems.
Key Data
$13.20 Million
— One-time past service cost for enhancing in-service death benefits for State correction officers.
$2.42 Million
— Increased annual contributions and past service costs for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Annual cost increase for removing the limit on overtime pay for calculating final average salary for Tier 6 New York City Transit Authority employees.
$1.50 Million
— Annual and one-time retroactive costs for allowing Tier 6 uniformed court officers to retire without early age reduction.
New York State's requirement for local governments to fund a portion of Medicaid creates an inequitable and regressive financial burden that consumes a significant share of local budgets. To address this, the state should implement a comprehensive plan to eliminate the mandated local share of Medicaid while ensuring fiscal responsibility and regional equity.
Recommendations related to Local Government Budget Impacts
It is time for New York to adopt measures that will completely eliminate the required local share of Medicaid.
The State should design a way to eliminate the mandated local share in a reasonable time period.
Takeover proposals need to include provisions for the continued exclusion of these additional payments from the takeover.
A requirement could be placed on counties to reduce their property tax levies in concert with the local takeover.
Flexibility should exist for such special circumstances [elective local shares] if the local government desires.
Key Data
$7 billion
— Annual cost burden on local governments for Medicaid services.
$7.6 billion
— Statewide frozen annual local share of Medicaid.
8.6 percent
— Average of local districts' gross expenditures spent on the Medicaid local share in 2016.
$15 billion
— Savings for local districts from fiscal year 2005 through fiscal year 2018 due to the cap and freeze.
$1.3 billion
— Annual Medicaid costs exempt from the local share freeze.
$6.955 billion
— Estimated 1-year cost to the State for a full takeover of the local share of Medicaid.
New York State and local governments allocate over $8 billion annually to economic development, yet oversight of the entities managing these funds, such as Industrial Development Agencies, remains insufficient. Implementing systematic, thorough reporting and consolidating these numerous agencies would improve transparency and accountability for the public funds used in these projects.
Recommendations related to Local Government Budget Impacts
New York State should further consolidate economic development, as there are more than 100 IDAs and close to 200 local development corporations across the state.
The Authorities Budget Office should strengthen enforcement powers to allow for the suspension of an IDA’s operations for noncompliance.
The state should expand Authorities Budget Office resources to allow for more thorough analysis of IDA and LDC inputs into the Public Authority Reporting Information System.
The state should authorize the State Comptroller to audit local development corporations.
The state should expand the proposed reporting requirements to local development corporations.
The state should expand reporting requirements to State entities engaged in economic development.
Key Data
$750 million
— Amount in benefits provided by IDAs as of 2015, the vast majority of which were through tax reductions.
100
— Number of IDAs operating across New York State.
200
— Number of local development corporations (LDCs) operating across New York State.
$8 billion
— Amount allocated by state and local governments per year toward economic development.
2020 is the year of the next Census, a national survey that determines the number of seats each state is allocated in the House of Representatives, and informs policy and funding decisions at all levels of government. Phil Thompson, Deputy Mayor for Strategic Policy Initiatives, is in charge of coordinating…
In December 2018, several legislative bills proposing pension and benefit enhancements for various public employees were vetoed, preventing significant fiscal impacts on state and local government budgets. These vetoed measures included proposals that would have required retrospective payments from participating counties and increased annual contributions for various law enforcement and court personnel.
Key Data
$13.20 Million
— One-time past service cost for enhancing in-service death benefits for State correction officers.
$2.42 Million
— Increased annual contributions and immediate past service cost for accidental disability retirement for law enforcement and forest rangers.
$4.70 Million
— Annual cost increase for removing the limit on overtime pay inclusion for New York City Transit Authority employees.
$1.50 Million
— Annual costs and one-time retroactive cost for allowing uniformed court officers to retire without early age reduction.
Twelve proposed benefit enhancement bills, which were ultimately vetoed, would have imposed significant fiscal burdens on state and local government budgets through various pension and disability expansions. Several of these legislative measures carried multi-million dollar price tags, illustrating the potential long-term costs of such benefit increases.
Key Data
$13.20
— One-time past service cost in millions for the enhancement of in-service death benefits for state correction officers under bill A10015/S7525.
$4.70
— Annual cost increase in millions for removing the limit on overtime pay for Tier 6 New York City Transit Authority employees under bill A7599-A/S5731-A.
$2.42
— Increased annual contributions and immediate past service costs in millions for accidental disability retirement benefits for law enforcement and forest rangers under bill A7600-C/S5594-C.
$1.50
— Annual and one-time retroactive costs in millions for allowing Tier 6 uniformed court officers to retire without early age reduction under bill A9910/S7704.
New York City faces nearly $1 billion in additional operating and capital expenditures for fiscal year 2019 due to state-mandated costs and prior budget actions. To manage these financial pressures alongside other city priorities like the Fair Fares initiative, the city must exercise fiscal restraint and maintain budget flexibility.
Recommendations related to Local Government Budget Impacts
The City will need to exercise restraint in other areas to manage the additional $1 billion in spending requirements.
The City’s budget should retain flexibility to address City Council priorities, such as the Fair Fares initiative, amidst these new fiscal burdens.
Key Data
$970 million
— Total anticipated impact of State budget actions on the New York City FY 2019 Executive Budget.
$418 million
— Cost to the City for the Metropolitan Transportation Authority Subway Action Plan.
$200 million
— Estimated annual cost for the Raise the Age initiative.
$121 million
— Shortfall in formula-based education aid for New York City.
$212 million
— Cost of the Fair Fares initiative to provide half-cost MetroCards to New Yorkers below the federal poverty line.
New York State's inequitable distribution of Disproportionate Share Hospital (DSH) payments disproportionately harms New York City Health + Hospitals, which faces significant financial deficits. With federal funding cuts looming, state leaders must reform the allocation methodology to ensure funds are directed to the hospitals with the greatest need rather than leaving the city's safety net system to bear the brunt of the losses.
Recommendations related to Local Government Budget Impacts
The State should follow through on the recommendation to convene a workgroup to evaluate revisions to the methodologies for distributing DSH payments.
Reforms to the State’s DSH program should be enacted in the current legislative session.
The distribution formulas, particularly that for the Indigent Care Pool, should be revised to direct DSH payments to the hospitals with the greatest need.
State priorities for distributing DSH payments should be adjusted so that New York City Health + Hospitals is not left to suffer DSH cuts alone.
The State should make payments promptly; after DSH funds have been earned and cash is available, the State should disburse the funds without delay.
Key Data
$3.6 billion
— Total annual DSH payments distributed to hospitals across New York State.
$1.4 billion
— Annual loss of federal funding for New York hospitals after federal fiscal year 2020.
$2 billion
— Projected deficits for New York City Health + Hospitals in coming years.
73 percent
— Share of inpatients at New York City Health + Hospitals that are Medicaid patients.
$168.3 billion is the size of New York State's Fiscal Year 2019 Budget. CBC's David Friedfel joined WT[D]P to discuss spending in this year's budget, as well as how the MTA, NYCHA, and New York City fared in the process.
The Tax Cuts and Jobs Act threatens to reduce New York City's competitiveness by capping state and local tax deductions, potentially driving residents and businesses away while causing unplanned tax increases. To mitigate these negative effects, the City and State must implement practical solutions that protect the local economy without allowing federal policy to dictate unsound local tax strategies.
$9.5 billion is CBC’s estimate of the extra taxes New Yorkers will pay due to the cap on the state and local tax deduction, known as the SALT cap, enacted in the Tax Cuts and Jobs Act of 2017. Andrew Rein, director of CBC's Special Committee on Federal Tax Changes,…
New York State's proposed education budget increases school aid by $769 million to $26.4 billion, exceeding the established school aid cap for the first time. While the proposal directs more funding to high-need districts, it fails to account for enrollment changes and continues to distribute aid to wealthy districts, necessitating a comprehensive reform of the Foundation Aid formula.
Recommendations related to Local Government Budget Impacts
The State should reform the Foundation Aid formula to ensure the highest needs districts are properly funded without unnecessarily sending aid to the wealthiest districts.
Instead of limiting growth in the largest components of expense-based aids, the State should distribute those funds through a revised Foundation Aid formula to encourage districts to allocate funds to the highest priority needs.
The Governor should limit school aid growth and make reforms to the distribution of aid to better direct it to the neediest districts.
The State should reform the formula to address the flaws that distort the total distribution of $17.5 billion in Foundation Aid.
Key Data
$769 million
— The increase in New York State school aid proposed in the Fiscal Year 2018-2019 Executive Budget.
$26.4 billion
— The total amount of school aid proposed in the Fiscal Year 2018-2019 Executive Budget.
$17.5 billion
— The total amount of Foundation Aid proposed in the budget.
$119 million
— The amount the State would save by imposing a growth limit on Building Aid in school year 2018-2019.
$132 million
— The amount the State would save by limiting BOCES and Transportation Aids growth in school year 2018-2019.
$50 million
— The amount proposed in new competitive grants for prekindergarten, after school programs, and other programs.
Federal tax law changes threaten to create an unplanned $1 billion net state tax increase for New Yorkers, necessitating immediate legislative action to mitigate negative impacts. While addressing these threats, the state must ensure that complex tax proposals, such as the voluntary Employer Compensation Expense Tax, undergo thorough analysis and oversight to avoid unintended consequences.
Recommendations related to Local Government Budget Impacts
New York should take quick action on immediate threats while ensuring that appropriate analysis and deliberation continue on more complex issues that pose challenges over the longer term.
An alternative to consider is to uncouple from specific federal changes that would have the most undesired effects, such as the personal exemptions and child tax credits, and allow conformity with others.
The proposed legislation must assure the funds are governed by the same transparency, accountability, and legislative oversight requirements as apply to other governmental spending.
The proposal will need to be fully analyzed and informed by the continued input of experts and stakeholders to ensure it is the right version of the right solution.
It is appropriate to continue refining the proposed Employer Compensation Expense Tax beyond and outside the budget adoption process.
Key Data
$1 billion
— Unplanned net state tax increase on New Yorkers resulting from the federal tax cut package without state-level changes.
The Governor's proposal to allow the MTA to create tax increment financing districts in New York City without local approval threatens to divert essential tax revenue from city services like public safety and education. This approach undermines local autonomy and fails to adhere to standard fiscal practices, such as limiting district duration and ensuring revenue is strictly used for the projects that generated the value.
Recommendations related to Local Government Budget Impacts
The State and the MTA should use the powers granted to them under the existing TIF law to partner with New York City when considering the use of value capture for future projects.
Transportation improvement subdistricts should sunset after a period of time so that incremental revenue eventually reverts to the city’s general fund.
Incremental revenue should be segregated to repay the costs of the specific projects that created the value rather than being used for general operating budgets.
The MTA should limit the use of value capture to truly transformative projects rather than those that do not add capacity.
The MTA should reduce the size of subdistricts to align with industry-standard transit zones, such as a one-half mile buffer, to avoid diverting revenue unrelated to specific improvements.
Key Data
75 percent
— Maximum portion of the tax increment the City would be required to remit to the MTA.
$100 million
— Minimum estimated cost for an MTA capital project to be eligible for a transit improvement subdistrict.
one mile
— Distance from an MTA capital project within which the MTA could capture property tax revenue.
one-half mile
— Industry-standard transit zone buffer recommended by the Center for Transit-Oriented Development.
New York taxpayers could lose as much as $14.3 billion in federal tax deductions because of the capping of the state and local tax deduction in the new federal tax law. NYS Budget Director Robert Mujica and NYC First Deputy Mayor Dean Fuleihan discuss the potential impact and possible responses…
The federal tax overhaul passed last month may have enormous impacts in New York and could upend the relationship between the federal government and the states. CBC and the CUNY Graduate School of Journalism gathered experts to assess the impact and potential city and state responses in a special half-day…
The passage of the federal 'Tax Cuts and Jobs Act' prompted the formation of a special committee to evaluate the legislation's substantial effects on the economy, property values, and tax revenues of New York City and State. This group aims to identify the most significant impacts and develop strategies to mitigate potential harm to local government budgets and the public.
The data points are 348 and 74. 348 is the number of Local Development Corporations and Industrial Development Agencies in NYS. These corporations made $16.2 billion in economic development investments from 2011 through 2015, yet only 5 of the state's 62 counties have had job growth higher than the national…
This episode's datapoint is "60+," as in the combined years of professional experience of special guests Renee Boicourt and Kent Hiteshew in matters of public finance. Listen to a live recording from CBC's recent event, "Fiscal Crises," where our expert guests discussed lessons learned from the bankruptcy of Detroit and…
New York State and its localities face increased financial burdens from numerous legislative bills that expand retirement, disability, and death benefits for government employees. These proposed benefit enhancements threaten to erode the fiscal savings achieved through the implementation of Tier 6 pension reforms, prompting calls for a gubernatorial veto to maintain fiscal prudence.
Recommendations related to Local Government Budget Impacts
The Governor should veto A711B/S1411B, which represents an expensive enhancement to volunteer firefighter benefits.
The Governor should veto the 15 other bills passed by the legislature that provide expensive enhancements to government employee and retiree benefits.
The Governor should veto these bills to preserve the fiscal restraint that has been sought over the last six and a half years.
The Governor should veto these bills to avoid eroding the savings that New York State and its localities experience from the implementation of Tier 6.
Key Data
$13.7 million
— Past service costs associated with A5133a/S4077, which would enhance death benefits for State correction officers who are retirement eligible but die before retiring.
$8.9 million
— Immediate past-service cost for A7185A/S5484A, which provides a special accidental death benefit for uniformed New York City sanitation employees.
$6.8 million
— Annual cost to New York City for A7185A/S5484A, which provides a special accidental death benefit for uniformed New York City sanitation employees.
$1.75 million
— Immediate past service cost for A7135/S5704, which would increase disability benefits for various ambulance medical technician titles within Nassau County.
$1.15 million
— Past-service costs for A7134/S5130, which would increase disability payments for Nassau County sheriffs, deputy sheriffs, under sheriffs, and correction officers injured by a civilian.
$394,000
— Past service costs for A3332/S3670, which would allow Tier 6 uniformed court officers and peace officers to retire early.
We know that New York State leads the country in school spending per pupil. But how do those numbers break down when it comes to federal, state, and local spending? Most of the money comes from local governments through property taxes, which is how wealthier school districts are able to…
Today’s data point is $66 billion – the amount New York’s school districts received in revenue during the 2015-2016 school year. The state's 674 districts collect an average of $23,635 per student - however, 15 districts surpass this amount, collecting $40,000 per student, while 11 districts fall short, collecting only…
New York State's $5 billion in annual Medicaid supplemental payments are critical for sustaining hospitals, but looming federal cuts threaten to disproportionately impact municipal facilities like NYC Health + Hospitals. To ensure equity, the state should reconsider its distribution priorities and potentially reduce payments to voluntary hospitals that rely less heavily on these funds.
Recommendations related to Local Government Budget Impacts
The State should reconsider its priorities in distributing Medicaid supplemental payments.
Pending cuts should not fall only on H+H, and adjustments, such as reduced payments to voluntary hospitals with limited reliance on supplementary payments, may be needed.
The State can revise the distribution of reduced federal funding for supplemental payments to make the impact of future federal cuts more equitable.
Key Data
$5 billion
— Total annual supplemental payments provided through four separate programs.
$370 million
— Net annual cuts in 2018 that New York City municipal hospitals are slated to bear.
$659 million
— Projected impact on New York of the scheduled $2 billion nationwide reduction in federal DSH payments.
$697 million
— Total projected reduction in supplemental payments based on steady funding, a 5 percent reduction in UPL payments, and a $659 million DSH cut.
$2.2 billion
— Receipts from supplemental payments for H+H in fiscal year 2016.
$1.4 billion
— Projected receipts from supplemental payments for H+H in fiscal year 2020.
The 2017-2018 state budget increased school aid by $1.1 billion, yet failed to reform the Foundation Aid formula, resulting in an inequitable distribution that continues to favor wealthier districts over those with higher needs. Implementing a more targeted funding approach could have saved taxpayers $118 million while directing an additional $1.9 billion to low-wealth, high-need school districts.
Recommendations related to Local Government Budget Impacts
The Foundation Aid formula should be reformed so that it can accomplish its original purpose, ensuring that regardless of a district’s wealth, students receive the resources necessary to achieve a sound basic education.
In order to adequately fund education in all districts without excessive state spending, the state should implement more comprehensive modifications to the Foundation Aid formula.
The state should adopt the proposed funding model that would have directed approximately $2.8 billion toward low-wealth, high-need districts while increasing total spending only $569 million over 2016-2017 levels.
The state should eliminate the guaranteed minimum increases for every school district, which are provided regardless of need or enrollment decline.
The state should remove the provision requiring that districts receive at least 44.75 percent of aid calculated under the Foundation Aid formula, as these are modest in their impact and do not address underlying problems.
Key Data
$1.1 billion
— The increase in school aid in the Enacted State Budget for Fiscal Year 2017-2018, representing a 4.4 percent rise.
$130 million
— The total amount of "Additional Increases" provided to 507 of 674 school districts in the amended formula.
$118 million
— The total amount state taxpayers could have saved had the state adopted the proposed alternative funding recommendations.
$1.9 billion
— The additional funding that would have been directed to low-wealth, high-need districts under the proposed alternative funding model.
$2.8 billion
— The amount of funding that would have been directed toward low-wealth, high-need districts under the proposed alternative funding model.
$569 million
— The total increase in spending over 2016-2017 levels under the proposed alternative funding model.
New York State is operating under an emergency budget that extends spending levels from the previous fiscal year while allocating $2.5 billion for water infrastructure. This temporary measure avoids a government shutdown but introduces fiscal uncertainty for local governments and school districts, necessitating a prompt agreement on reforms to aid formulas and economic development spending.
Recommendations related to Local Government Budget Impacts
The Legislature and Governor should promptly come to an agreement that includes needed reforms to the State’s Foundation Aid formula.
The Legislature and Governor should promptly come to an agreement that includes improved targeting and disclosure of economic development spending.
The Legislature and Governor should promptly come to an agreement that includes overall fiscal discipline.
Key Data
$2.5 billion
— Amount allocated for water infrastructure in the emergency budget.
seven years
— Time elapsed since New York State last operated under an emergency budget.
May 31
— Date through which state agencies will operate under the extended spending levels.
New York's requirement for local governments to fund a portion of Medicaid costs creates significant fiscal inequities, placing a disproportionate burden on taxpayers in less affluent counties. Eliminating this local funding requirement would align financial responsibility with state control and provide necessary relief to local government budgets.
Recommendations related to Local Government Budget Impacts
The state should take steps to fix a long-standing problem with how it pays for the program: its unusual requirement for substantial local government financing.
The State should assume responsibility for the local share liability over a period of four or five years.
Full state financing is the best way to achieve continued cost control in a program fully controlled by the State.
New, statewide revenues will be required to replace the current local share in a way that relieves the disproportionate burden placed on taxpayers in low income counties.
Key Data
$7.1 billion
— The amount New York's counties are projected to pay for Medicaid in state fiscal year 2012.
$6.5 billion
— The amount New York's counties paid for Medicaid in fiscal year 2008.
$4.6 billion
— The total local Medicaid payments made by New York City in 2008.
13 percent
— The portion of total expenditures New York's counties are projected to pay for Medicaid in state fiscal year 2012.
16 percent
— The portion of total expenditures New York's counties paid for Medicaid in fiscal year 2008.
3 percent
— The annual growth rate allowed for local Medicaid costs, which exceeds the 2 percent property tax growth cap.
ABNY Power Breakfast participants discuss the potential impact of proposed federal policies on the New York budget and the overall economy. Maria Doulis , Vice President, Citizens Budget Commission. Moderator Dean Fuleihan , Director, Mayor's Office of Management and Budget Latonia McKinney , Director, NYC Council Finance Division Preston Niblack , Deputy…
New York State's education funding debate centers on how to distribute aid effectively, with advocates calling for $4.3 billion in additional funding while a proposed formula reform suggests only $569 million is needed if $2.7 billion is redirected to needy districts. By fixing the flawed Foundation Aid formula, the state could better meet its constitutional obligation to provide a sound basic education without relying on excessive spending increases.
Recommendations related to Local Government Budget Impacts
The state should fix the Foundation Aid formula and redirect $2.7 billion to needy districts.
The state should return Foundation Aid to its intended purpose: directing aid to the neediest districts.
The state should transform how the funds are distributed to ensure that not as much additional money is needed.
Key Data
$4.3 billion
— Additional funding requested by advocates for next year.
$2.1 billion
— Additional funding proposed by the Board of Regents.
$1 billion
— Additional funding budgeted by Governor Andrew M. Cuomo.
$569 million
— Additional funding needed if the state fixes the Foundation Aid formula.
$2.7 billion
— Amount of funding to be redirected to needy districts under the proposed formula.
$146 million
— Additional funding Buffalo would receive under the proposed formula.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
New York State's proposed school aid budget increases total funding to $25.6 billion, but the revised Foundation Aid formula fails to address existing inequities by directing resources to wealthy districts rather than those with the greatest need. Instead of making current flawed distribution patterns permanent, the state should reform the formula to ensure all districts are fully funded based on actual student needs and sound educational requirements.
Recommendations related to Local Government Budget Impacts
The state should fix the problematic features of the Foundation Aid formula to ensure scarce state dollars are directed to the districts that need them to provide a sound basic education.
Policymakers should stop driving unnecessary resources to wealthy districts by eliminating arbitrary floors, ceilings, and phase-ins that warp the formula’s original intent.
The state should reform the Foundation Aid formula to address current inequities rather than making them permanent.
The state should fully fund all districts under a corrected Foundation Aid formula, which would require an additional $569 million.
Key Data
$1.1 billion
— The proposed increase in total school aid for the 2017-2018 fiscal year.
$4.3 billion
— The amount certain advocates claim local districts are owed in Foundation Aid based on current formula outputs.
$569 million
— The additional funding required to fully fund all districts under a corrected Foundation Aid formula.
$16.5 billion
— The total amount of Foundation Aid proposed for the 2017-2018 school year.
$768 million
— The increase in formula-based aids for the 2017-2018 school year.
New York City's fiscal planning faces significant challenges, including managing a homeless shelter census exceeding 60,000 people and addressing $17 billion in unmet capital needs for the New York City Housing Authority. The budget must prioritize recurring efficiency savings over one-time financial maneuvers while ensuring transparency in capital strategy and controlling headcount growth.
Recommendations related to Local Government Budget Impacts
The preliminary budget should increase the size of the Citywide Savings Program and rely more on deriving recurring savings from increased efficiency instead of debt service savings, re-estimates, and funding swaps.
The city should avoid continued growth in headcount and refrain from claiming savings in the current year from positions that remain vacant.
The Preliminary Ten-Year Capital Strategy should be revised to provide improved information on the needs and expected outcomes of proposed investments.
The city should address the fiscal condition of NYC Health + Hospitals by developing a detailed plan to address its fiscal condition rather than relying on additional subsidies.
The city should increase support for the New York City Housing Authority to address $17 billion in unmet capital needs.
Key Data
60,000
— The number of people in the homeless shelter census.
$1.5 billion
— The amount budgeted for homeless shelter funding in fiscal year 2017.
$1.1 billion
— The amount assumed for homeless shelter funding in years subsequent to fiscal year 2017.
$17 billion
— The amount of unmet capital needs for the New York City Housing Authority.
This presentation, from the CBC panel discussion "The Berger Commission: 10 Years On," reviews how health care services in New York City have evolved since the New York State Commission on Health Care Facilities in the 21st Century, known as "The Berger Commission" issued its recommendations in 2006.
The 2016 Benefit Sweetener Scorecard identifies over 60 active legislative bills that threaten to impose hundreds of millions of dollars in annual costs on State and local governments. Because approximately half of these proposals lack a specified fiscal impact, the actual financial burden on public budgets could be substantially higher than currently estimated.
Key Data
60
— Number of active bills identified in the 2016 Benefit Sweetener Scorecard that could impact <b>State and local government budgets</b>.
The state legislature has passed ten bills that would expand government employee and retiree benefits, potentially eroding the fiscal savings achieved through recent pension reforms. These measures, which include increased disability payments and more generous retirement plans, would impose significant new costs on state and local taxpayers.
Recommendations related to Local Government Budget Impacts
The Governor should veto A9702/S7023, which would eliminate required employee contributions in the New York State Retirement System and the Local Police and Fire Retirement System, shifting costs equal to 6.6 percent of salaries from employees to state and local taxpayers.
The Governor should veto A6612b/S4001b, which would allow counties to offer correction officers and deputy sheriffs a pension equal to 50 percent of salary after 20 years of service, costing counties as much as 7 percent of salaries.
The Governor should veto A9440/S6936, which would allow State Court peace officers to retire after 30 years of service at age 55, costing the State $100,000 in the first year.
The Governor should veto A5133c/S1000d, which would increase payments for total disability benefits to $600 from $400 per week for volunteer firefighters and ambulance drivers.
The Governor should veto A7146a/S5012a, which would extend the deadline to file for accidental disability retirement benefits, impacting the state with a cost of $244,000 for the individual known to be affected.
The Governor should veto A7784/S5762, which would provide cash and medical benefits for State parole officers injured in the line of duty equal to full salary rather than 60 percent of gross wages.
The Governor should veto A10030/S7216a, which would expand the presumption that a medical condition was caused by public sector employment to include heart disease experienced by Department of Environmental Conservation police and forest rangers.
The Governor should veto A10614/S8071, which would expand the presumption that a medical condition was caused by public sector employment to include heart disease, lung disease, and certain forms of cancer for uniformed officers, costing the State $25,000 annually.
The Governor should veto A10003/S7386, which would eliminate restrictions on transferring between New York City public retirement systems, costing $25,000 annually.
The Governor should veto A10369a/S7174b, which would allow certain members of the New York State Retirement System and the Local Police and Fire Retirement System to opt out of Tier 3 and into Tier 5, potentially accruing additional benefits.
Key Data
6.6 percent
— Cost shift from employees to state and local taxpayers for early retirement plans.
7 percent
— Potential cost to counties for enriched pension benefits for correction officers and deputy sheriffs.
$100,000
— First-year cost to the State for allowing State Court peace officers to retire after 30 years of service at age 55.
$600
— New weekly payment amount for total disability benefits for volunteer firefighters and ambulance drivers.
$244,000
— Cost for the individual known to be impacted by the extension of the filing deadline for accidental disability retirement benefits.
$25,000
— Annual cost to the State for expanding medical condition presumptions for uniformed officers in the Division of Military and Naval Affairs.
New York's Medicaid program, which consumes over $60 billion in annual taxpayer funds, has implemented redesign strategies like managed care and value-based payments to curb rapid cost growth and improve care quality. While these initiatives have successfully slowed spending and reduced the average cost per enrollee to $8,620, significant challenges remain in enrolling vulnerable populations and ensuring the long-term sustainability of new delivery systems.
Recommendations related to Local Government Budget Impacts
New efforts should be made to work with federal officials to develop procedures that encourage and perhaps require managed care and Health Home enrollment in the future.
Continued strong monitoring of the evolution of Performing Provider Systems (PPSs) and their action plans is essential to ensure they achieve measurable improvements.
New York should consider setting more aggressive Medicaid cost-saving goals exceeding 3 percent, as the current 2.8 percent target appears modest.
State regulations regarding the permissible extent of risk shifting from health plans to providers and related reserve requirements may need revision to better protect consumers.
Key Data
$60 billion
— Annual taxpayer funding for the Medicaid program in New York.
$53.8 billion
— Total spending by the New York State Medicaid program in federal fiscal year 2011.
4.8 million
— Total managed care enrollment in New York Medicaid as of the end of 2015.
$7.4 billion
— Total funding authorized for Performing Provider Systems (PPSs) to improve care quality.
$8,620
— Average annual cost per Medicaid enrollee in New York in 2014.
$1.0 billion
— Annual reduction in payment rates for services to individuals with developmental disabilities effective in fiscal year 2014.
The New York State Enacted Budget for Fiscal Year 2017 increased school aid by $1.4 billion, yet the distribution of these funds disproportionately benefits affluent districts rather than those with the greatest need. This allocation strategy fails to address systemic issues like 'hold harmless' provisions and expense-based reimbursements, which continue to misdirect aid and exacerbate spending disparities between wealthy and needy school districts.
Recommendations related to Local Government Budget Impacts
The State should address long-standing problems with the distribution of school aid, such as hold harmless provisions.
The State should reform reimbursements for spending that misdirect aid to ensure funds are allocated more equitably.
Key Data
$1.4 billion
— The actual increase in school aid for the fiscal year, which exceeded the statutory growth cap.
10.4 percent
— The increase in school aid per pupil for the most affluent 10 percent of school districts.
7.3 percent
— The increase in school aid per pupil for the neediest school districts.
$434 million
— The amount allocated for the elimination of the Gap Elimination Adjustment.
$690
— The statewide average increase in school aid per student.
6.1 percent
— The annual increase in school aid from $22.9 billion to $24.3 billion.
The New York State Lean Initiative has successfully reduced wait times at the Department of Motor Vehicles by over 50 percent and decreased processing times for health care facility certificates from 157 days to 100 days. The state is now exploring the expansion of these efficiency practices to local governments, potentially offering a pathway to lower service costs and improved taxpayer value.
New York's requirement for counties and New York City to fund a portion of Medicaid costs creates significant fiscal disparities, with New York City facing a per capita burden of $597 compared to the $190 state average. Reversing the state's commitment to assume growth in these expenses would exacerbate existing inequities where taxpayers in different regions pay vastly different amounts for the same program.
Recommendations related to Local Government Budget Impacts
The State should not reinstitute New York City’s contribution toward growth in Medicaid expenses, as it would be a giant step backwards.
The State should continue its policy of taking over the growth in local Medicaid spending rather than rescinding it.
Key Data
$597
— New York City's Medicaid burden per capita.
$190
— Average local share of Medicaid costs per capita throughout the rest of the State.
$10.00
— New York City's local Medicaid costs per $1,000 of income.
$3.63
— Average local Medicaid costs per $1,000 of income for the rest of the State.
$96
— Putnam County's local Medicaid costs per capita.
$1.70
— Putnam County's local Medicaid costs per $1,000 of income.
The dispute over $600 million in sales tax revenue stemming from the Sales Tax Asset Receivable Corporation (STARC) refunding should be resolved by using the funds to pay down long-term debt rather than being claimed by either the City or State. This approach would provide lasting relief to taxpayers by reducing future debt service obligations instead of simply splitting the contested cash between government entities.
Recommendations related to Local Government Budget Impacts
The resolution of the current controversy should be neither in favor of the State’s or City’s claim to the contested $600 million, nor a “splitting of the baby” to give half to each, but rather the money should be put to a use that yields longer term savings for taxpayers.
The City and State should pay off outstanding debt that requires debt service payments over a period longer than three years and closer to the duration of the STARC bonds.
A negotiated division between the City and State should be reached to give relief to city and state taxpayers over the longer term.
Key Data
$600 million
— The amount of New York City’s sales tax revenue the Governor’s Executive Budget proposed to divert to the State.
$2.5 billion
— The amount of outstanding Municipal Assistance Corporation (MAC) debt that STARC was created to pay off.
$170 million
— The amount the State guaranteed annually to repay the STARC debt.
$637 million
— The amount the City borrowed in excess of what was needed to pay off the outstanding STARC bonds during the 2014 refunding.
$500 million
— The City’s annual debt service burden that the STARC creation eliminated over five years.
The New York State Executive Budget for fiscal year 2016-2017 receives mixed grades, with concerns raised over the reliance on unspecified savings, lack of transparency in economic development spending, and the shifting of financial burdens onto local governments. Specifically, the proposal increases Medicaid and CUNY costs for New York City while failing to reform school aid formulas that disproportionately benefit wealthier districts.
Recommendations related to Local Government Budget Impacts
The state should avoid rolling back the cap on local government Medicaid and CUNY expenses for New York City.
The state should implement reforms to binding arbitration to ensure it sufficiently accounts for a local government's ability to pay.
The state should improve school aid formulas to stop favoring wealthier districts over those with greater needs.
The state should improve performance reporting for economic development programs to ensure subsidies are effective.
The state should avoid reliance on unspecified savings to achieve future budget balance.
Key Data
$2.3 billion
— Total amount of one-time legal settlement funds proposed for spending in the Executive Budget.
$3.9 billion
— Unfunded costs associated with the Tappan Zee Bridge replacement project.
$590 million
— Amount of new school aid allocated through restorations that favor wealthier districts.
$1.7 billion
— Amount of unspecified savings relied upon to achieve budget balance in fiscal year 2018.
Legislative proposals to increase disability benefits for uniformed employees carry significant long-term fiscal costs for New York City. Several bills, such as S5656, would require hundreds of millions of dollars in additional actuarial contributions by fiscal year 2019.
Key Data
$889.3 Million
— Actuarial Present Value of NYC Contributions for S5656 in FY2019.
$850.2 Million
— Actuarial Present Value of NYC Contributions for A6046/S4269 in FY2019.
$849.9 Million
— Actuarial Present Value of NYC Contributions for S3966 in FY2019.
$39.1 Million
— FY2015 Budget Increase for S5656.
$37.8 Million
— FY2015 Budget Increase for A6046/S4269.
State legislators introduced over 50 bills during the 2015 session to enhance public employee pensions, threatening the fiscal stability achieved by recent reforms. The Governor is urged to veto four specific bills that would increase retirement benefit costs and potentially lead to a costly rollback of taxpayer savings.
Recommendations related to Local Government Budget Impacts
The Governor should veto four bills that would increase the cost of public employee retirement benefits.
The Governor should veto A7490/S3010, A6771A/S4907, A5327C/S3948B, and A7547/S5785 to prevent a costly rollback of savings for New York taxpayers.
Key Data
over 50
— Number of bills introduced during the 2015 session to enhance state and local government employee pensions and benefits.
four
— Number of specific bills recommended for veto that would increase the cost of public employee retirement benefits.
New York State's recent legislative package adds nearly $1.5 billion in annual expenses, primarily through a new property tax relief rebate program that relies on uncertain future budget surpluses. This spending commitment creates fiscal pressure, as the state faces projected out-year budget gaps that could reach $4.2 billion by fiscal year 2018-2019.
Recommendations related to Local Government Budget Impacts
Lawmakers must be prepared to enact cost-saving measures to produce the surpluses they just spent.
Key Data
$1.5 billion
— New state obligations annually.
$1.3 billion
— Annual cost of the new property tax relief rebate program when fully implemented.
$4.2 billion
— Projected out-year budget gap in fiscal year 2018-2019.
$250 million
— Increase in aid to nonpublic schools.
$25 million
— Funding provided to the Yonkers school district.
$19 million
— Funding to address economic hardship in municipalities with fossil fuel plant closures.
New York State legislators have introduced numerous bills that would enhance public employee benefits, collectively increasing taxpayer costs by at least $140 million. These legislative proposals threaten to erode previous pension reforms and reduce administrative flexibility for managing rising retiree health insurance costs, placing additional financial strain on local governments.
Recommendations related to Local Government Budget Impacts
The legislature should reject the bills detailed in the scorecard because they would add to already costly pension expenses for the State and for local governments and would erode the landmark reforms enacted in 2012.
State legislators should ensure that these benefit sweetener bills do not advance to the Governor’s desk to prevent increased costs for State and local governments.
Key Data
$140 million
— The collective annual cost increase to New York taxpayers from the introduced benefit sweetener bills.
$40 million
— The first-year cost of A.8032/S.5656, which improves disability benefits for recently hired employees.
$40 million
— The upfront cost of A.7801 and S.5245, which improve death benefits for retirement-eligible State correction officers.
$14 million
— The cost of A.5596/S.4644, which would allow Tier 3 and 4 retirees who retired prior to 1999 to be reinstated in earlier tiers.
$11.5 million
— The revised first-year cost of A. 7854B/S. 5705B, a disability pension proposal for New York City’s uniformed employees.
$8.4 million
— The cost of S.3919, which enhances cost-of-living adjustments for retirees.
New York's Brownfield Cleanup Program has functioned primarily as a real estate development subsidy rather than an environmental initiative, with the tangible property tax credit accounting for 85 percent of total benefits. To ensure fiscal responsibility and prioritize actual remediation, eligibility criteria for these tax credits should be tightened to focus on genuine cleanup costs rather than general redevelopment.
Recommendations related to Local Government Budget Impacts
The state should tighten eligibility criteria for the Brownfield Cleanup Program to ensure it functions as an environmental cleanup initiative rather than a real estate development program.
Policymakers should better focus tax credit benefits on the cost of cleanup and environmental remediation rather than general redevelopment.
Key Data
$1.1 billion
— Total tax breaks issued by New York to clean up and redevelop 115 sites between 2008 and 2013.
85 percent
— Share of total program benefits accounted for by the tangible property tax credit.
58 percent
— Amount by which the tangible property credit cost exceeded developers' actual site cleanup and groundwater remediation costs.
$963 million
— Total cost of the tangible property credit.
$609 million
— Total cost of site cleanup and groundwater remediation.
64 percent
— Share of total tax breaks accounted for by the top 10 projects.
The FY2016 Executive Budget utilizes $5.7 billion in bank settlement proceeds for various investments while attempting to close a $1.8 billion baseline gap by reducing local government assistance by $1.4 billion. Despite a $1.1 billion increase in school aid, the proposal lacks necessary reforms to school finance formulas and requires more robust financing plans for major transportation entities.
Recommendations related to Local Government Budget Impacts
It is time to overhaul antiquated and byzantine school aid formulas to ensure funding flows according to need and district ability to pay.
Viable financing plans are imperative for both the MTA and Thruway Authority to address the gigantic holes in their capital plans.
The State should develop viable capital plans for the Thruway Authority and the MTA to ensure the proposed allocation of settlement funds is likely to pay off.
Key Data
$1.4 billion
— Amount subtracted from planned spending in local government assistance to help close the budget gap.
$1.1 billion
— The proposed increase in school aid contingent on the adoption of dramatic school reforms.
$1.8 billion
— The true baseline gap in the FY2016 financial plan.
$5.7 billion
— Total bank settlement proceeds used for one-time expenditures and investments in the FY2016 Executive Budget.
$850 million
— Funds set aside to settle federal Medicaid liabilities.
$750 million
— Additional capital appropriations for the MTA for FY2018 to FY2020.
The fiscal year 2016 New York State budget proposal includes positive steps like capping spending growth and reforming special education rate-setting, but it also relies on questionable pension deferrals and lacks a rational distribution plan for school aid. The plan allocates significant one-time bank settlement funds to infrastructure and economic development, though these resources could be more effectively utilized to address long-term capital needs and fiscal stability.
Recommendations related to Local Government Budget Impacts
The increase in school aid should be targeted to the neediest districts, and the allocation details should be available to the public for review and analysis well in advance of budget adoption.
The Legislature should understand the aspirational aspect of the financial plan and refrain from adopting large, long-term spending commitments or tax reductions.
All the outstanding liabilities regarding pension deferrals should be repaid.
The $1.5 billion in one-time settlement funds, in particular, would be better invested in infrastructure needs rather than economic development spending.
It is important not to allow design-build authority to permanently lapse to ensure the state can continue to produce better-designed and lower-cost projects.
Key Data
$64.5 billion
— Cumulative budget gaps over the four-year financial plan projected in January 2011.
$14.2 billion
— Cumulative budget gaps over the four-year financial plan projected in the budget released in January 2015.
$850 million
— Set aside for a possible settlement of a rate dispute with the federal government over Medicaid payments for residential facilities for the disabled.
$315 million
— Deposit to rainy day funds for future economic downturns.
$3.4 billion
— Annual cost of the School Tax Relief (STAR) program.
$3.2 billion
— Required payments to state employee pension funds that the State will have deferred by the end of the current fiscal year.
Five proposed legislative bills threaten to reverse 2012 pension reforms by increasing costs for the state and local governments through expanded benefits and automatic enrollment in more expensive plans. Vetoing these measures is necessary to maintain fiscal responsibility and protect the savings achieved by previous pension reforms.
Recommendations related to Local Government Budget Impacts
The Governor should veto A7862/S5644, which would transfer SUNY police officers to the Police and Fire Retirement System, generating a one-time cost of $10 million and new annual obligations of $1 million for the State.
The Governor should veto A9162/S7716, which would circumvent a recent court ruling by allowing Tier III and V police and firefighters to join an optional 20-year retirement plan without any employee contributions.
The Governor should veto A9392/S7120, which would automatically enroll members of the Police and Fire Retirement System in the more expensive, optional 20-year plan unless members opt out.
The Governor should veto A8160/S5153, which would increase disability pensions for Suffolk County probation officers from one-third to one-half of final average salary.
The Governor should veto A9051/S6810, which would provide new disability pensions of 75 percent for certain classes of ambulance personnel in Nassau County.
Key Data
$10 million
— One-time cost generated by transferring SUNY police officers to the Police and Fire Retirement System under A7862/S5644.
$1 million
— New annual obligations for the State resulting from the transfer of SUNY police officers under A7862/S5644.
$218,000
— Annual cost to Suffolk County for increasing disability pensions for probation officers under A8160/S5153.
$1 million
— Upfront cost to Suffolk County for increasing disability pensions for probation officers under A8160/S5153.
$170,000
— Annual cost for providing new disability pensions of 75 percent for certain classes of ambulance personnel in Nassau County under A9051/S6810.
Legislative proposals in 2014 sought to expand public employee benefits, creating significant fiscal liabilities for state and local governments. These benefit sweeteners included various pension enhancements and disability provisions that collectively carried substantial long-term costs, with some individual bills requiring hundreds of millions of dollars in additional funding.
Key Data
$1.1 Billion
— Past service cost associated with bill 4890, which increases the pension benefit formula for certain Tier III, IV, and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits for bill 9594, which conforms disability retirement benefits for New York City Tier III police members.
$374 Million
— One-time costs for bill 5324, which allows members of various retirement systems to receive additional service credit.
$110 Million
— One-time cost for bill 4920, which allows certain employees to include unused vacation time in final average salary calculations.
$11.6 Million
— Past service costs for bill 7862, which allows SUNY police officers to transfer to the NYSLPFRS pension fund.
$13 Million
— Annual contributions required for bill 4914, which provides a performance of duty disability benefit to certain Department of Corrections employees.
New York State legislative proposals in 2014 included numerous pension enhancements and disability benefit expansions that would have imposed significant fiscal burdens on state and local governments. These "benefit sweetener" bills carried substantial costs, including over $1.1 billion in past service liabilities and hundreds of millions in additional actuarial present value for specific retirement plans.
Key Data
$1.1 Billion
— Past service cost associated with replacing the current benefit of 1.5% of final average salary with a 2.0% benefit for certain Tier III, IV, and V members.
$617.9 Million
— Increase in the Actuarial Present Value of benefits in fiscal year 2019 for the bill conforming Ordinary and Accidental Disability Retirement benefits for New York City Tier III police members.
$374 Million
— One-time costs for New York State and Local Retirement System (NYSERS) associated with allowing members of Tiers III and IV one month of additional service credit for each year of service after 10 years.
$1,699 Million
— Total estimated state-level costs for the various pension enhancement bills listed in the 2014 scorecard.
$116 Million
— Total estimated local-level costs for the various pension enhancement bills listed in the 2014 scorecard.
Legislative proposals to expand public employee pension and disability benefits carry a total estimated cost of $1.815 billion, creating significant fiscal pressure on state and local government budgets. These benefit sweeteners include various retirement and disability enhancements that, if enacted, would impose substantial long-term financial obligations on taxpayers.
Key Data
$1,699
— Total estimated cost in millions to the state for the listed benefit sweetener bills.
$116
— Total estimated cost in millions to local governments for the listed benefit sweetener bills.
$1.1 Billion
— Past service cost associated with the proposal to increase pension benefits for Tier III, IV, and V members.
$617.9 million
— Increase in the Actuarial Present Value of benefits for bill 9594 in fiscal year 2019.
$708,000
— One-time cost associated with the creation of a new alternative retirement plan for peace officers.
$34.9 million
— Annual contribution required in fiscal year 2015 for the proposed changes to New York City Tier III police member benefits.
New York State's proposed $807 million increase in education aid is poorly targeted, as current distribution formulas favor wealthier districts over those with the neediest students. To ensure equitable funding, the state should abandon the Gap Elimination Adjustment restoration approach and instead utilize up-to-date foundation formulas that prioritize student need and district ability to pay.
Recommendations related to Local Government Budget Impacts
State leaders should adjust the distribution of school aid to give more to the districts with the neediest students and least ability to pay on their own.
The State should abandon the Gap Elimination Adjustment (GEA) restoration approach for distributing school aid.
Operating aid should be funneled through up-to-date foundation formulas rather than outdated methods.
The formulas that distribute expense-based aid should be refined to reduce costs and to be better targeted.
Key Data
$807 million
— The proposed increase in education aid for the 2014-15 fiscal year.
3.8 percent
— The percentage increase in education aid from school year 2013-14 to 2014-15.
$323 million
— The amount of the proposed aid increase distributed as a partial restoration of the Gap Elimination Adjustment.
$280 million
— The amount of the proposed aid increase allocated to categories covered by expense-based formulas.
3.9 percent
— The proposed year-to-year growth rate for expense-based aid.
2.4 percent
— The proposed year-to-year growth rate for foundation aid.
Governor Cuomo's 2014-15 Executive Budget proposes increasing total education aid to $21.9 billion, with a significant portion allocated through expense-based formulas that disproportionately benefit affluent districts. To maintain the Governor's 2 percent growth limit on state operating funds, school districts will need to exercise continued fiscal discipline.
Recommendations related to Local Government Budget Impacts
If the adopted budget is to limit growth in state operating funds to 2 percent as the Governor intends, then continued fiscal discipline for school districts will be required.
Key Data
$21.9 billion
— Total proposed education aid for school year 2014-15.
$807 million
— Total increase in education aid from school year 2013-14.
$323 million
— Proposed increase in general operating aid distributed through formulas tied to student need.
$280 million
— Proposed increase in expense-based and categorical aid.
-$1.3 billion
— Proposed level of the Gap Elimination Adjustment (GEA) under the Governor's plan.
$4.6 billion
— Total proposed aid for transportation and building in school year 2014-15.
Preschool special education services in New York have seen expenditures grow by 73 percent to $1.37 billion between 2001 and 2012, driven by a 27 percent increase in service enrollment and a 91 percent increase in service intensity. Legislative action is required to mandate provider audits, ensure qualified management, and address conflicts of interest to curb fraud and improve cost-effectiveness in this fragmented delivery system.
Recommendations related to Local Government Budget Impacts
The state should require that every provider be audited at least once by the State Comptroller by March 31, 2018 to reduce fraud and abuse.
Legislation should require that Executive Directors of providers be fully engaged and qualified for their positions to ensure proper management.
To avoid potential conflicts of interest, the state should require a school district's Committee on Preschool Special Education (CPSE) to consent in writing whenever the same program provider conducts the evaluation and also provides services.
The State Education Department (SED) should complete a study of alternative reimbursement methodologies and monitoring protocols to identify further reforms.
Key Data
$1.37 billion
— Total expenditures for preschool special education services in 2011-12, representing a 73 percent growth over the decade.
73 percent
— Growth in expenditures for preschool special education services from 2001-02 to 2011-12.
91 percent
— Increase in the number of preschoolers receiving more than one authorized service from 2001-02 to 2011-12.
27 percent
— Increase in the number of children receiving special education services from 2001-02 to 2011-12.
99 instances
— Number of inappropriately documented spending and mistaken billing cases revealed by audits from 2007 to 2012.
$12 to $38 per hour
— Range of rates for Special Education Itinerant Teacher (SEIT) services in the Western New York region in 2012.
Expanding universal prekindergarten in New York State would impose significant fiscal burdens on local school districts, with estimated property tax levy increases ranging from 0.7 percent to 7.1 percent depending on the scope and funding model. Given the state's existing structural budgetary challenges and the high local tax burden, policymakers must carefully weigh the costs of such an expansion against the potential long-term benefits.
Recommendations related to Local Government Budget Impacts
New York’s leaders should review the history of such efforts and take stock of some key realities before raising public expectations regarding the expansion of pre-k programs.
Policymakers should avoid underfunding services for those students who could benefit most for the sake of achieving universality.
State leaders should consider that adding as much as $4 billion to the $51 billion cost of public education to make the program both richly-resourced and fully universal would impose a significant new fiscal burden on already highly taxed New Yorkers.
Key Data
$4 Billion
— The estimated cost to make the pre-k program both richly-resourced and fully universal.
7.1%
— The estimated school tax levy increase needed to fund universal pre-k for three- and four-year-olds at K-12 general education spending levels.
$51 Billion
— The current cost of public education in New York State.
232
— The number of school districts in New York that have not yet begun a Universal Prekindergarten program.
$80.60
— The local tax burden per $1,000 of personal income in New York, which is 72 percent higher than the national average.
New York State's 2013-14 budget increased school aid by $1.1 billion, exceeding the established cap tied to personal income growth and distributing funds inefficiently across both wealthy and needy districts. Future fiscal stability requires more disciplined school aid allocations that prioritize highly targeted increases for less affluent districts to avoid exacerbating out-year budget gaps.
Recommendations related to Local Government Budget Impacts
New York State should ensure that school aid allocations are more disciplined in the coming year to improve the state's fiscal footing.
Policymakers should prioritize highly targeted, substantial increases for the less affluent districts to meet pressing needs without supersizing out-year budget gaps.
Key Data
$20.8 billion
— formula-based aid allocated for school year 2013-14
$937 million
— increase in formula-based aid over the prior year
$1.1 billion
— total school aid increase for the 2013-14 school year
$7,760
— average formula aid per pupil for school year 2013-14
$14,511
— formula aid per student for the highest need-lowest wealth districts
New York State's 2014 school aid budget allocates $20.8 billion in formula-based funding, representing a $937 million increase over the previous year. While some funds target needy districts, the distribution includes $223 million in High Tax Aid that benefits wealthier districts and specific line-item grants for select areas.
Key Data
$20.8 billion
— Total formula-based school aid allocated for school year 2014.
$937 million
— Increase in formula-based school aid over school year 2013.
$223 million
— Final amount allocated to High Tax Aid after a 9% increase.
$171 million
— Addition to Foundation Aid in the enacted budget.
$196 million
— Addition to the Gap Elimination Adjustment (GEA) restoration.
$11 million
— Specific appropriations added outside of formula-based school aid.
New York State's proposed budget includes a pension "stabilization" plan that would lower local government costs in the short term but increase them long-term, while also failing to provide sufficient mandate relief for local municipalities. To improve fiscal health, the state should prioritize transferring more Medicaid costs from counties to the state and enact meaningful mandate relief measures rather than relying on unsustainable short-term fixes.
Recommendations related to Local Government Budget Impacts
The Legislature should enact real mandate relief measures that aid local governments.
The Legislature should reject the pension 'stabilization' plan, as its adoption could threaten the viability of the pension funds and erode New York’s historically good practice of paying pension bills on time.
The State should assign high priority to using available state resources to transfer more of the cost of Medicaid to the State, as New York’s counties continue to pay for a much larger share of the program than counties in other states.
The Legislature should support the Governor’s proposed 2 percent cap on binding arbitration awards for fiscally distressed employers to better control labor costs borne by local governments.
Special education mandate relief proposals approved by the State Education Department last year should be reintroduced and passed this session.
Key Data
$50 million
— The total pool for school year 2012-13 competitive grants, of which only a small portion was awarded.
$17 million
— The amount awarded to 36 of the State’s 696 districts from the competitive grant pool.
2 percent
— The proposed cap on binding arbitration awards for fiscally distressed employers to help control local government labor costs.
25-year
— The duration of the optional fixed rate pension funding plan proposed to provide short-term fiscal relief for localities.
New York's proposal to allow local governments to pay fixed pension contribution rates threatens the long-term financial health of pension funds by delaying necessary payments. This approach risks undermining the state's history of full funding and could force future taxpayers to cover significant shortfalls.
Recommendations related to Local Government Budget Impacts
The New York State Teachers’ Retirement System Board should reject the Governor's proposal to allow local governments to opt into a "fixed rate" pension contribution plan.
Local governments should pay pension benefit obligations when they are due rather than relying on fixed contribution rates that may lead to underfunding.
Key Data
12%
— Proposed fixed pension contribution rate for members of the Employees’ Retirement System.
12.5%
— Proposed fixed pension contribution rate for members of the Teachers’ Retirement System.
18.5%
— Proposed fixed pension contribution rate for members of the Police and Fire Retirement System.
94%
— New York's pension system funded ratio in 2010, ranking the state 5th nationally.
8%
— The assumed rate of return for pension investments.
6.6%
— The ten-year earnings average for pension investments.
The proposal to allow local governments to pay fixed pension contribution rates threatens the long-term financial stability of pension funds by underfunding them in the near term. Instead of providing sustainable fiscal relief, this approach risks shifting significant financial burdens to future taxpayers and undermining the state's history of fully funding its pension obligations.
Recommendations related to Local Government Budget Impacts
We believe this proposal would endanger the future financial viability of the pension plans and recommend you reject it.
The safest bet for meeting the benefit obligations is to pay what is due when it is due.
Key Data
12%
— Pension payment rate for members of the Employees’ Retirement System under the proposed fixed rate plan.
12.5%
— Pension payment rate for members of the Teachers’ Retirement System under the proposed fixed rate plan.
18.5%
— Pension payment rate for members of the Police and Fire Retirement System under the proposed fixed rate plan.
94%
— Percentage of pension liabilities covered by assets in New York in 2010.
7.5%
— Assumed annual rate of return for pension funds.
6.4%
— Ten-year earnings average for pension funds.
Eight bills introduced in the New York State Assembly would increase public employee pension benefits, imposing at least $1.35 billion in additional costs on state and local employers. These legislative proposals threaten to erode recent efforts to control pension expenditures by increasing benefit multipliers and requiring higher annual contributions.
Key Data
$1.35 billion
— Total costs added to State and local employers by eight bills enhancing pension benefits.
$1.1 billion
— One-time cost imposed on the State by bill A4890.
0.2 percent
— Additional annual contribution required to cover members of Tiers 2, 3, and 4 pension plans under bill A4890.
1.5 percent
— Original benefit multiplier for service rendered after 30 years.
2 percent
— Proposed benefit multiplier for service rendered after 30 years under bill A4890.
New York City's health insurance costs for employees and retirees more than doubled between 2002 and 2012, reaching $4.8 billion and becoming a primary driver of projected budget gaps. Implementing employee and retiree premium-sharing alongside the elimination of Medicare Part B reimbursements could generate up to $2.2 billion in annual savings by 2016.
Recommendations related to Local Government Budget Impacts
The City should implement premium-sharing by employees to align with private sector and other government practices.
The City should require premium-sharing by retirees, as few private sector employers offer retiree health insurance and public sector employers typically require retirees to contribute more.
The City should eliminate Medicare Part B reimbursement, as this practice is rare among state and local governments.
Key Data
$1.8 billion
— Projected savings in fiscal year 2014 if the recommended health insurance reforms are adopted.
$2.2 billion
— Projected savings in fiscal year 2016 if the recommended health insurance reforms are adopted.
$83 billion
— Estimated unfunded liability for retiree health insurance and other post-employment benefits (OPEB) as of fiscal year 2011.
$4.8 billion
— Total cost of health insurance for New York City municipal employees and retirees in fiscal year 2012.
$2.0 billion
— Total cost of health insurance for New York City municipal employees and retirees in fiscal year 2002.
$280 million
— Cost to the City in fiscal year 2013 for reimbursing retirees and their spouses for the full out-of-pocket cost of Medicare Part B premiums.
New York faces fiscal challenges that require reforming flawed school aid formulas, extending the Medicaid growth cap, and providing mandate relief to local governments struggling with mounting fiscal pressures. Additionally, the state should freeze economic development spending until current programs are thoroughly reviewed and accountability metrics are fully evaluated.
Recommendations related to Local Government Budget Impacts
State leaders should redesign the school aid formulas instead of putting more money in the hands of school districts through the same seriously flawed methods.
The Legislature and the Governor should extend the Medicaid growth cap for at least five years to help assure realization of the waiver application’s savings projections.
Governor Cuomo should press for adoption of the pending mandate relief proposals in the fiscal year 2013-14 budget to alleviate fiscal pressures on local governments.
No additional funds should be authorized for economic development programs until a thorough review of all of them has been conducted to assess whether they are working.
Key Data
$982 million
— The projected budget gap in fiscal year 2013-14.
$20.1 billion
— Education aid, the largest item in the state budget in the current year.
$15.9 billion
— Medicaid spending, the second largest item in the state budget in the current year.
2 percent
— Year-to-year Medicaid spending growth contained in the first nine months after the first Medicaid Redesign Team proposals were implemented.
4 percent
— The rise in the number of Medicaid beneficiaries during the same period that spending growth was contained to 2 percent.
$245 million
— Estimated annual savings from Mandate Relief Redesign Team proposals that were left on the table.
New York State faces critical fiscal decisions, including the need to reform inequitable school aid formulas and extend the Medicaid growth cap to ensure long-term sustainability. Additionally, the state should provide relief from burdensome local mandates and freeze new economic development spending until existing programs can be thoroughly evaluated for effectiveness.
Recommendations related to Local Government Budget Impacts
State leaders should redesign the school aid formulas to eliminate inequities and reduce reliance on flawed "hold harmless" provisions.
The Legislature and the governor should extend the Medicaid growth cap for at least five years to help assure the realization of savings projections.
State leaders should provide relief from state-imposed mandates that burden local governments and school districts with unnecessary expenses.
No additional funds should be authorized for economic development programs until a thorough review of all of them has been conducted to assess whether they are working.
Key Data
$20.1 billion
— Education aid, which is the largest item in the state budget.
$15.9 billion
— Medicaid spending, which is the second-largest item in the state budget.
$245 million
— Estimated annual savings from mandate relief proposals that were left on the table.
$7 billion
— Total amount the state and its local governments spend on economic development each year.
227
— Number of mandates New York imposes on school districts beyond those required by federal law.
5.5
— Student-to-staff ratio in New York special education, compared to the U.S. average of 10.1.
New York's public education system spends $18,825 per student annually, significantly higher than the national average of $10,292, with transportation costs alone averaging $1,100 per pupil. Poorly designed state aid formulas contribute to these high costs by failing to incentivize efficiency and providing excessive reimbursement to many school districts.
Key Data
$18,825
— Per pupil spending in New York per year.
$1,100
— Average transportation spending per pupil in New York in 2010.
140%
— Amount by which New York's transportation spending exceeds the U.S. average of $459.
90%
— Cost-based reimbursement rate for many school districts.
6.5%
— Minimum aid ratio for the wealthiest school districts.
495
— Number of school districts that receive more than half of their transportation costs reimbursed.
New York State school districts face significant fiscal pressure due to rising special education costs, which have grown at an average annual rate of 7.5% over the last decade. Proposed legislation requiring districts to cover private school tuition based on non-educational factors would exacerbate these financial burdens and should be rejected in favor of reducing the existing 200 state-imposed mandates.
Recommendations related to Local Government Budget Impacts
Governor Cuomo should veto A.10722A/S.7722A, a bill that would allow for consideration of a child’s “home environment and family background” in special education placement determinations.
School districts need relief from the more than 200 special education mandates currently imposed by the state, rather than additional requirements that add to their costs.
Key Data
7.5%
— Average annual growth rate of special education spending in New York State over the last decade.
200
— Number of special education mandates currently imposed by the state on school districts.
New York's local governments face severe fiscal strain due to state-imposed mandates and limited revenue options, yet the state legislature continues to add costs rather than providing relief. Key reforms, such as repealing the Triborough Amendment and unnecessary school district mandates, are essential for localities to achieve fiscal health.
Recommendations related to Local Government Budget Impacts
The Legislature should pass the bill to repeal unnecessary mandates on school districts (A10290/S6688) to curb the high cost of special education and enact contracting reforms.
State leaders should repeal the state law known as the Triborough Amendment, which discourages collective bargaining by awarding public employees automatic step increases after contracts expire.
The state must stop imposing more mandates on local governments to allow them to manage their way to fiscal health.
Key Data
7.5 percent
— Average annual growth rate of instructional spending for special education in New York over the past decade.
20 percent
— Rate at which special education spending growth outpaced general education spending growth.
200
— Number of state-imposed special-education mandates that exceed those required by federal law.
75 percent
— Disability benefit amount for police and firefighters entitled to coverage for a staph infection.
Local governments in New York are increasingly borrowing money to cover separation costs like accrued sick leave and vacation pay, a practice that threatens long-term fiscal stability. To address these unfunded liabilities and the even larger burden of retiree health insurance, municipalities should implement preventive policies to limit accruals and establish dedicated reserve funds.
Recommendations related to Local Government Budget Impacts
State officials should develop alternatives to borrowing to cope with the underlying problem of accrued liabilities for separation costs.
Local governments should implement preventive policies, such as not allowing the lifetime accrual of vacation days and placing tighter limits on the amount of unused sick leave that can be converted to cash payments.
Towns, cities, and villages should be required to fund at least partially their accrued liabilities for separation costs.
The Legislature should allow borrowing only on the condition of future requirements to build adequate reserves.
The State should establish standards for funding more adequately future separation costs and OPEB liabilities among all localities and the State itself.
Key Data
$46.6 million
— Total annual budget for the city of Glen Cove.
$1.8 million
— Separation costs generated by the retirement of six police officers in Glen Cove.
4%
— Percentage of Glen Cove's annual budget consumed by separation costs for six retiring police officers.
$3.9 billion
— New York City's accrued liability for vacation and sick leave at the end of the 2011 fiscal year.
$83.9 billion
— New York City's OPEB liability at the end of the 2011 fiscal year.
$1.2 billion
— New York State's accrued liability for vacation and sick leave at the end of the 2011 fiscal year.
New York State imposes 227 special education mandates that exceed federal requirements, creating unnecessary financial burdens for school districts. Legislative action is required to pass relief measures that would streamline administrative processes, rationalize payment rates, and reduce costly due process proceedings.
Recommendations related to Local Government Budget Impacts
Legislative leaders should bring the special education mandate relief bills to a successful vote to eliminate costly mandates that do not improve the quality of services offered by school districts.
The legislature should amend the laws to implement the special education mandate relief package approved by the Board of Regents.
The state should align the membership of the teams that make decisions about special education services at the preschool and school age level with federal requirements.
The state should reduce administrative and paperwork requirements for school districts.
The state should establish more rational regional payment rates for certain special education service providers.
The state should shorten the timeline for due process hearings to prevent drawn-out and costly proceedings.
The state should require mediation before disputes proceed to impartial hearings.
Key Data
227
— distinct special education mandates imposed by New York State above and beyond those required by federal law
Rising costs for retiree health benefits are crowding out funding for essential government services, forcing local governments to choose between benefit reductions and service cuts. Legislative efforts to restrict the ability of officials to modify these benefits threaten to remove the fiscal flexibility needed to manage these growing, multi-billion dollar unfunded liabilities.
Recommendations related to Local Government Budget Impacts
Public officials should retain the discretion to alter retiree health insurance to avoid laying off police or closing libraries.
State legislators should reject bills that would prevent government officials from reducing current benefit levels, as this forces the sacrifice of core services.
State and local elected officials should not have their hands tied by legislation that removes their latitude in addressing retiree health-insurance costs.
Key Data
$1.6 billion
— New York City's cost for retiree health insurance in fiscal year 2012.
$1.3 billion
— The state's cost for retiree health care in fiscal year 2011-12.
44%
— The increase in city budget for retiree health-insurance costs over the five years prior to 2012.
$84 billion
— The estimated unfunded liability for New York City's retiree health benefits.
$56 billion
— The estimated unfunded liability for the state's retiree health benefits.
$200 billion
— The Empire Center's estimate of the statewide unfunded liability in 2010.
The 2012-13 New York State budget implements a modest 2 percent spending increase and establishes a multi-year plan to reduce the local government share of Medicaid costs. While the budget includes positive reforms like coordinated capital planning and limited reliance on fiscal gimmicks, it continues to expand fragmented economic development programs that lack sufficient accountability.
Recommendations related to Local Government Budget Impacts
Performance metrics and evaluative analysis should be systematically employed to identify failing programs for elimination or redesign before new programs are grafted onto to an already fragmented governance structure.
Instead of being subjected to additional parochial constraints, the power programs should be completely overhauled.
The State should pursue the gradual full State assumption of Medicaid costs in the future to alleviate the local tax burden.
Key Data
$6 billion
— Annual economic development spending in New York State, including capital grants, tax breaks, and direct subsidies.
$900 million
— Projected fiscal year 2013-14 budget gap.
$770 million
— Capital support provided to the Metropolitan Transportation Authority.
$170 million
— Estimated deposit to the rainy day fund for the current year.
$150 million
— Capital grants allocated for regional economic development councils.
$7.85 million
— Increase in the payment in lieu of taxes for the City of Albany in fiscal year 2013.
New York's proposed $805 million increase in school aid is poorly targeted, with competitive grants and categorical aid formulas often favoring wealthier districts over those with the greatest student and financial needs. To ensure equitable support, the state should prioritize distributing funds through the foundation aid formula while limiting competitive grants and capping growth in categorical aid.
Recommendations related to Local Government Budget Impacts
The proposed $805 million increase should be highly targeted to the neediest districts by relying heavily on distribution through the foundation aid formula.
Categorical aid should be frozen or subject to a tight growth cap to prevent untargeted distribution.
The competitive grant program should be much smaller, if not eliminated, as it creates barriers for struggling districts.
All the formulas for distributing school aid should be reexamined in coming years to ensure they align with current fiscal realities.
A full-on effort to retool the school aid formulas should be launched to remove excesses and inefficiencies built during flush years.
Key Data
$805 million
— The Governor's proposed state aid increase for school districts.
$2.2 billion
— The total amount school aid was cut from its $21.7 billion peak in school year 2009-10.
17.6 percent
— The statewide average reduction in foundation aid per student from school year 2009-10 to 2011-12.
13.1 percent
— The average increase per student proposed for the wealthiest/lowest need districts in the 2012-13 school year.
2.8 percent
— The average reduction in aid per student experienced by the high need district group during the two-year cut period.
10.1 percent
— The average reduction in aid per student experienced by the low need district group during the two-year cut period.
New York City faces a new fiscal reality where the large revenue surpluses of the past decade have vanished, forcing the city to rely on temporary one-shot resources to balance its budget. To address this, the city must move beyond short-term fixes and implement structural changes, such as reforming generous health insurance policies for municipal employees and retirees.
Recommendations related to Local Government Budget Impacts
The Mayor and City Council should tackle spending arrangements that drive budget growth and out-year deficits instead of relying on temporary solutions.
The City should reform its generous health insurance policies for municipal employees and retirees to address long-term fiscal challenges.
The City should avoid relying on non-recurring resources like one-shot revenue sales to balance the budget.
Key Data
$1 billion
— The amount of additional tax revenues consistently exceeded in every fiscal year from 2003 to 2011.
$5.3 billion
— The high point of unanticipated tax revenues reached in fiscal year 2007.
$114 million
— The amount by which fiscal year 2012 tax collections are running above the initially budgeted sum.
$42.2 billion
— The total tax revenue amount for fiscal year 2012.
$7 billion
— The amount by which Wall Street profits are running below what was assumed when the budget was adopted.
$1 billion
— The revenue generated from the sale of taxi medallions used to balance the fiscal year 2013 budget.
New York's public pension systems place an outsized financial burden on taxpayers, with local governments contributing 87 percent of pension funding compared to a national average that is significantly lower. Adopting the proposed Tier VI pension reform would align employee contribution rates with national norms and implement a risk-sharing mechanism to protect taxpayers from market volatility.
Recommendations related to Local Government Budget Impacts
New York should adopt the Tier VI proposal to increase employee contributions to pension funds to a range of 4 percent to 6 percent of wages.
Policymakers should implement the 'risk-reward' approach to share the downside risk and upside potential of pension asset market performance with employees.
Key Data
87 percent
— Share of New York's local pension plan contributions that came from local taxpayers in 2009.
7:1
— New York's ratio of employer to employee contributions for local pension systems, compared to the national average of 4:1.
89 percent
— Share of total contributions made by New York State and its local government entities to state-run pension systems in 2010.
11 percent
— Share of total contributions made by employees to New York State and local government state-run pension systems in 2010.
78 percent
— Percentage of state and local pension plans nationally that required employee contributions greater than 3.9 percent in 2009.
$8.3 billion
— Total amount contributed to New York’s local pension plans in 2009, representing nearly one-third of the national total.
New York's current policy requiring local governments to fund a significant portion of Medicaid costs creates an inequitable financial burden that conflicts with the state's property tax cap. Governor Cuomo's proposal to have the state assume responsibility for Medicaid cost growth offers necessary relief, though further action is required to fully address the remaining $8 billion in local Medicaid expenses.
Recommendations related to Local Government Budget Impacts
The Governor and legislative leaders should begin planning for more far reaching, longer term initiatives that will fully solve the problem of inequitable local Medicaid funding.
New York State should revamp the current policy that requires counties to pay a large, inequitable share of Medicaid costs.
Key Data
$7.1 billion
— Medicaid costs required to be paid by New York's counties in the 2011-12 state fiscal year.
13 percent
— Local government share of the $54 billion in projected total Medicaid expenditures.
$54 billion
— Projected total Medicaid expenditures in the 2011-12 state fiscal year.
3 percent
— Annual statutory cap on the growth of localities’ Medicaid expenses since 2005.
5 percent
— Average growth in total Medicaid costs since 2005.
2 percent
— Property tax growth cap adopted in June 2011.
New York's state and local tax burden is among the highest in the nation, driven largely by rapidly rising public employee pension costs that threaten local government budgets and the state's property-tax cap. Implementing a new pension benefit package for new employees could align the state with national norms and generate $123 billion in savings over the next 30 years.
Recommendations related to Local Government Budget Impacts
The governor should use his influence in the budget process to bring about more affordable pension benefits at all levels of government.
A pension reform proposal should be included in the governor's budget, and the Legislature should swiftly adopt it.
Implementing a new package of pension benefits for new employees would bring New York more closely in line with national norms, saving New York state and local governments $123 billion over the next 30 years.
Key Data
$143
— New York's state and local tax burden per $1,000 of personal income in fiscal year 2009.
$12
— Pension costs per $1,000 of personal income in fiscal year 2009.
$574
— Annual tax paid per person for public employee pensions.
$8.6 billion
— Expected New York City pension costs by fiscal year 2014.
$1 billion
— Expected MTA pension costs by fiscal year 2014.
$123 billion
— Projected savings for New York state and local governments over the next 30 years from a new pension benefit package.
Rising public employee pension costs are placing significant fiscal pressure on New York State, local governments, and the MTA, forcing trade-offs with other essential services and straining budgets under property tax caps. Implementing the proposed "Tier VI" pension reform, which includes higher employee contributions and a higher retirement age, is necessary to align benefits with national norms and achieve long-term fiscal sustainability.
Recommendations related to Local Government Budget Impacts
The New York State Legislature should adopt the "Tier VI" pension reform plan in a timely manner to address the rising costs of public employee pensions.
Governor Andrew Cuomo should include the "Tier VI" pension reform plan in the upcoming Executive Budget.
The state should consider extending optional defined contribution plans to other groups of employees to provide more portable retirement benefits.
New York should eliminate overtime from the final average salary (FAS) calculation for new employees to prevent pension padding.
The state should increase the retirement age to 65 for new workers to align with national trends and modern working life.
Key Data
$574
— Combined state and local pension cost per capita in New York, which is more than twice the national average.
$93 billion
— Estimated savings for New York State and local governments over 30 years from the proposed Tier VI pension changes.
$30 billion
— Estimated savings for New York City pension systems over 30 years from the proposed Tier VI pension changes.
$488 million
— Increasing costs of pensions and health care for school districts from school year 2011-12 to 2012-13.
$96 million
— Amount by which the increase in health insurance and pension costs for cities in fiscal year 2012 exceeded the allowable property tax levy increase.
4.1 percent
— Portion of total state and local spending in New York accounted for by employer contributions to pension funds.
New York State's spending has grown significantly since 2008 despite a shrinking tax base, necessitating structural reforms to key cost drivers like pensions, school aid, and Medicaid. To achieve a more sustainable budget, the state must eliminate reliance on fiscal gimmicks and one-shot revenues while reevaluating economic development spending and school aid distribution formulas.
Recommendations related to Local Government Budget Impacts
The state should enact a new pension tier for new hires that raises the retirement age and vesting period while reducing pension spiking from overtime.
New York should rejigger school-aid programs to run more efficiently by reopening distribution formulas to address the great disparities in local districts' wealth and capacities to fund their schools.
The state must continue curbing growth in Medicaid spending and phase out the inequitable local financing scheme that requires poorer counties to shoulder an unfairly large share of costs.
Policymakers should resist the temptation for more economic-development spending and halt the growth of these grants.
The state should reduce reliance on fiscal gimmicks, such as the deferral of business-tax credits and the amortization of pension payments, which mask the structural deficit.
Albany should forgo one-shot revenues, which are one-time cash injections that disappear in future years even though the spending they pay for continues.
Key Data
$1.7 billion
— The budget gap remaining after the tax hike on high earners.
$15 billion
— Total spending increase in the current year compared to fiscal year 2008.
7 percent
— The amount by which New York's tax base has shrunk.
$120 billion
— Estimated savings over 30 years from the proposed new pension tier for new hires.
$785 million
— Total economic-development grants awarded in the month of December 2011.
$200 million
— Additional economic-development grants intended to be proposed in the executive budget.
New York's requirement for local governments to fund a portion of Medicaid creates an inequitable financial burden that disproportionately affects taxpayers in less affluent counties. Eliminating this local funding requirement would align financial responsibility with state control and provide necessary relief to local budgets facing property tax caps.
Recommendations related to Local Government Budget Impacts
The State should assume responsibility for the local share liability over a period of four or five years.
New York should eliminate the local funding requirement for Medicaid.
The State should implement full state financing to achieve continued cost control in a program fully controlled by the State.
Key Data
$7.1 billion
— Projected amount New York's counties will pay for Medicaid in state fiscal year 2012.
$6.5 billion
— Amount New York's counties paid for Medicaid in fiscal year 2008.
13 percent
— Portion of total expenditures that New York's counties will pay for Medicaid in state fiscal year 2012.
3 percent
— Annual growth cap on the local Medicaid share enacted in 2005.
$555
— Medicaid cost per capita for New York City, the highest in the state.
13 percent
— Increase in local Medicaid administrative employees between 2005 and 2010.
New York City's current method of defining a balanced budget relies on a unique set of accounting rules that masks significant financial deficits, whereas adopting a more comprehensive standard would better reflect the city's true fiscal health. By shifting to a framework that accounts for long-term liabilities like depreciation and retiree health benefits, the city could avoid passing the costs of today's services onto future generations.
Recommendations related to Local Government Budget Impacts
New Yorkers should be giving much more attention to the financial results disclosed under the new GAAP rules.
Municipal leaders should adopt a new standard for local financial management that aligns with the more comprehensive GAAP approach.
New York City should abandon its unique set of accounting rules that allow operating expenses to be labeled as capital investments and paid for with borrowed funds.
Key Data
$5 million
— The reported surplus in the City's General Fund for fiscal year 2011.
$282 million
— The deficit the City would have faced in fiscal year 2011 if GAAP were strictly applied.
$9.6 billion
— The deficit reported in fiscal year 2011 under the new GAAP standard.
$53.3 billion
— The added expense recognized in fiscal year 2006 when the accumulated OPEB liability was first reported.
$11.7 billion
— The amount of red ink under the new GAAP standard in fiscal year 2010.
New York State imposes over 200 special education mandates beyond federal requirements, driving unsustainable spending growth that necessitates regulatory reform. Proposed changes would allow school districts to better tailor services to student needs and control costs without compromising quality.
Recommendations related to Local Government Budget Impacts
The Board of Regents should approve the proposed changes to special education regulations to bring procedures more in line with federal requirements.
The State Legislature should pass the necessary changes to State law to provide school districts with greater flexibility to control spending.
Multidisciplinary school committees should be allowed to determine what evaluations to administer based on each student's needs instead of adhering to blanket mandates.
Key Data
$10,874
— Average cost of instruction per general education student in New York State in 2008-09.
$26,551
— Average cost of instruction per special education student in New York State in 2008-09.
7.5 percent
— Average annual rate of increase for special education instructional spending over the past decade.
5.5
— Student-to-staff ratio in New York's special education system.
10.1
— U.S. average student-to-staff ratio for special education.
New York State's special education mandates, which exceed federal requirements, contribute to unsustainable instructional spending growth that significantly outpaces general education costs. To manage these rising expenditures amidst property tax caps and reduced state aid, the Board of Regents and the Legislature should adopt proposed mandate relief measures to provide school districts with greater operational flexibility.
Recommendations related to Local Government Budget Impacts
The Board of Regents should approve the proposal to conform the membership of the Committee on Special Education (CSE) to federal IEP team membership by repealing state-imposed requirements for additional members.
The Board of Regents should align the Committee on Preschool Education (CPSE) membership with the federal IEP team by repealing the requirement for an additional parent member.
The State should adopt the federal standard for initial evaluations by repealing the state-specific requirement that every evaluation include a physical examination, psychological evaluation, and social history.
The Legislature should repeal the requirement that Boards of Education maintain specific plans and policies for the declassification of students with disabilities.
The State should reduce administrative overhead by repealing the requirement that the Commissioner of Education approve early intervention services and transferring sole responsibility to the Department of Health.
Key Data
$10,874
— Average cost of instruction per general education student in New York State during the 2008-09 school year.
$26,551
— Average cost of instruction per special education student in New York State during the 2008-09 school year.
7.5 percent
— Average annual growth rate of instructional spending for special education over the past decade.
5.5
— Number of students per staff person in New York's special education system.
10.1
— National average number of students per staff person in special education.
$1.3 billion
— Amount by which state aid for school year 2011-12 was cut from the previous year’s level.
Legislation allowing school districts to borrow funds to cover pension contributions threatens to undermine the property tax cap and unfairly shift financial burdens onto future students and taxpayers. Instead of relying on debt to manage rising pension costs, which grew from $211 million in 2000 to over $925 million in 2010, the state should pursue structural reforms to pension benefits to ensure long-term sustainability.
Recommendations related to Local Government Budget Impacts
The Governor should veto A6309/S4067 to ensure the property tax cap functions as intended.
The state should implement real and lasting changes to pension benefits to ensure long-term sustainability.
The state should prevent pension costs from being shifted to future students by rejecting borrowing schemes.
The state should prioritize the creation of a new pension tier for public employees.
Key Data
$211 million
— Employer contributions to the New York State Teachers’ Retirement System in 2000.
$925 million
— Employer contributions to the New York State Teachers’ Retirement System in 2010.
16 percent
— The average annual growth rate of employer contributions to the New York State Teachers’ Retirement System between 2000 and 2010.
125 percent
— The amount of required 2011 pension contributions that school districts would be allowed to borrow under the proposed legislation.
The proposed legislation allowing school districts to borrow funds to cover pension contributions should be vetoed because it undermines the property tax cap and shifts financial burdens to future taxpayers and students. Instead of borrowing, the state should implement lasting pension benefit reforms to ensure long-term sustainability.
Recommendations related to Local Government Budget Impacts
The Governor should veto A6309/S4067 to prevent school districts from borrowing to cover pension costs.
The state should implement real and lasting changes to pension benefits to ensure they are sustainable over the long run.
Policymakers must guarantee that a new pension tier becomes a high priority for every taxpayer and school district official in New York State.
The state should prevent costs from being shifted to the students of tomorrow by rejecting the proposed borrowing legislation.
The Governor should ensure the property tax cap works properly by rejecting legislation that undermines its discipline.
Key Data
$211 million
— Employer contributions to the New York State Teachers’ Retirement System in 2000.
$925 million
— Employer contributions to the New York State Teachers’ Retirement System in 2010.
16 percent
— The average annual growth rate of employer contributions to the New York State Teachers’ Retirement System between 2000 and 2010.
125 percent
— The amount of 2011 pension contributions that school districts would be allowed to borrow under the proposed bill.
15 years
— The repayment period for the proposed school district borrowing.
Legislation (A6309/S4067) that would have allowed school districts to borrow funds to cover pension contributions over 15 years threatened long-term fiscal stability by deferring costs to future taxpayers. Opposing such measures is essential to prevent the masking of true retiree benefit costs and to maintain sound public finance practices.
New York State's recent budget includes a property tax cap for local governments and school districts, but it also contains a concerning provision allowing school districts to borrow for pension payments. To ensure fiscal stability, the state must achieve over $1 billion in unspecified budget savings and prioritize comprehensive pension reform and transportation infrastructure funding.
Recommendations related to Local Government Budget Impacts
The bill giving school districts the right to borrow to fund pension payments should be destined for a prompt veto.
The state must achieve the more than $1 billion in unspecified savings in the adopted budget to avoid a serious mid-year budget deficit.
Serious pension reform, important to the fiscal stability of New York City as well as the state, should become a top priority.
The state must figure out how to fund the pressing capital needs of the MTA and the rest of the State's transportation infrastructure.
Key Data
$2,500
— Monthly rent threshold for luxury destabilization.
$200,000
— Annual income threshold for luxury destabilization.
$1 billion
— Amount of unspecified savings in the adopted budget that must be achieved to avoid a mid-year deficit.
two percent
— Annual property tax growth limit imposed on local governments and school districts.
New York City could avoid 4,300 teacher layoffs, 20 fire company closures, and various social service cuts by adopting the labor agreement template established between the State and the Civil Service Employees Association. Implementing these measures, including wage freezes, furloughs, and health insurance premium contributions, could generate $1.4 billion in savings for the City in fiscal year 2012.
Recommendations related to Local Government Budget Impacts
The City’s leaders and the Municipal Labor Committee should consider adopting the State’s template for municipal savings on salaries and wages and health insurance to avoid layoffs and service cuts.
The City should implement a five-day furlough for all municipal employees to save $400 million in 2012.
The City should require employee contributions toward health insurance premiums, mirroring the CSEA agreement, to save $735 million.
The City should adopt the State’s long-standing policy for retiree premium-sharing to save an additional $290 million in fiscal year 2012.
The City should extend the wage freeze to a third year to achieve $388 million in savings in 2013.
Key Data
$3.8 billion
— Five-year savings if the State agreement is adopted by all State employees.
$1.4 billion
— Potential savings for New York City in fiscal year 2012 by following the State template.
$400 million
— Savings from a five-day furlough for all municipal employees in 2012.
$735 million
— Savings from requiring City employees to make health insurance premium contributions.
$915 million
— Savings from health insurance premium contributions by 2015.
$290 million
— Savings from adopting the State’s retiree premium-sharing policy in fiscal year 2012.
The state budget agreement includes $7.6 billion in cuts to Medicaid and school aid, while relying on over $2 billion in uncertain savings and unspecified efficiencies. To ensure long-term fiscal stability, the state must address outstanding issues like pension reform, property tax caps, and the removal of unfunded mandates on local governments.
Recommendations related to Local Government Budget Impacts
Rent regulation in New York City, which will expire on June 15, should be extended without expansions that would provide assistance to high-income families and harm low- and middle-income households whose rents are not regulated, avoiding expansions that would harm low- and middle-income households.
Unfunded mandates imposed by the state on localities and school districts, particularly unnecessary special education requirements, should be removed so they are not forced to raise local taxes.
A property tax cap will need to be designed carefully to avoid hardship for needy communities that do not receive sufficient state aid to adequately fund services.
A new pension tier should be created for all state and local public employees that raises the retirement age, increases employee contributions and ends the inclusion of overtime in pensionable salary.
Key Data
$7.6 billion
— Cuts from a mushrooming set of baseline commitments in the state budget.
$450 million
— Planned savings to be negotiated with the public employee unions.
$640 million
— Savings to come from an overall Medicaid spending cap.
$1 billion
— Unspecified efficiencies in agency operations counted on to balance the budget.
$2 billion
— Total of 'known unknowns' counted on to balance the budget.
The New York State budget includes school aid cuts that disproportionately affect poorer districts by undermining need-based targeting, despite the availability of federal funds that reduced the overall impact of these reductions. Lawmakers should re-examine the distribution formulas to ensure that future school aid allocations are both sustainable and equitable across districts of varying wealth.
Recommendations related to Local Government Budget Impacts
If the State can no longer keep the promises it made to increase school aid, the basic formulas by which school aid is distributed should be reopened to improve their targeting.
Lawmakers should undertake a serious examination of how best to achieve sustainable and equitable allocations going forward.
Key Data
$1.5 billion
— Proposed school year to school year cuts in school aid.
$10 billion
— Total budget gap that necessitated school aid cuts.
$608 million
— Federal aid not included in the enacted budget school aid totals for the 2010-11 school year.
6.3%
— Average school aid cuts if all districts spent federal funds in the 2010-11 school year.
3.5%
— Average school aid cuts if all federal money remained available to districts.
New York State's proposed $1.7 billion reduction in school aid disproportionately affects poorer districts, which rely more heavily on state funding. By removing specific provisions that limit cuts for wealthier districts, the state could spare 380 low-wealth districts from budget reductions while ensuring the burden is borne by those with greater ability to pay.
Recommendations related to Local Government Budget Impacts
The legislature should focus on improving the distribution of aid cuts to make them more targeted and improve their progressivity.
The two provisions that diminish and distort the overall targeting of the cuts should be removed from the formula by which the cuts are allocated.
The formula by which school aid reductions are made should be improved so that the burden is borne more squarely by those who can most easily absorb the cuts.
Key Data
$21.2 billion
— Total state school aid expenditure, which comprises one-quarter of the State operating budget.
$1.7 billion
— Proposed reduction in school aid by Governor Andrew Cuomo.
$750 million
— Amount that could be generated from deeper cuts to the wealthiest 30 percent of districts if specific reduction limits were removed.
$5.5 million
— Average local tax base per pupil for the wealthiest 10 percent of school districts.
$548,789
— Average local tax base per pupil for the statewide median.
$16,065
— Statewide median per pupil expenditure for school districts.
New York City has implemented multiple rounds of budget cuts since 2008, totaling nearly $2.2 billion in expenditure reductions, yet these efforts have disproportionately impacted agencies like education and social services while leaving large categories like pension and health benefits largely untouched. To address future deficits, the city should shift its strategy toward reforming pension fund contributions and health insurance premiums through collective bargaining and state legislative changes rather than relying on repeated agency-level cuts.
Recommendations related to Local Government Budget Impacts
The city must identify and approve ways to reduce spending for pension fund contributions and health insurance premiums for employees and retirees to avoid substantial new cuts in agency budgets.
The city should implement new initiatives to reduce the “all other” budget category, which consists largely of pension fund contributions and health insurance premiums.
Unions must be willing to accept changes in collective bargaining over health benefits to help achieve necessary budget savings.
Wide support must be garnered to push the State Legislature to authorize changes in future pension benefits to generate significant future savings.
Key Data
$3.4 billion
— Total value of budget balancing actions proposed in the six Programs to Eliminate the Gap (PEGs) spanning fiscal years 2009 and 2010.
$2.0 billion
— Actual agency expenditure reductions yielded from the $3.4 billion in proposed PEG actions.
$593 million
— Revenue raising measures identified in the City's PEG documents.
$2.4 billion
— Deficit the City faces in the next fiscal year.
274,061
— Number of full-time employees at the end of fiscal year 2010.
6,588
— Number of fewer full-time employees at the end of fiscal year 2010 compared to June 2008.
Governor Cuomo's 2011 executive budget proposed closing a $9 billion budget gap through significant spending reductions, including $2.9 billion in school aid cuts and $2.9 billion in Medicaid savings. To address fiscal challenges, local governments—where 70% of expenses are for labor—are urged to implement changes to pensions and compensation, while the state is encouraged to consolidate corrections facilities and rationalize Medicaid spending.
Recommendations related to Local Government Budget Impacts
Public employee unions should agree to reduce compensation costs so that many of them do not have to lose their jobs.
Localities need to make changes in pensions and compensation to address the fact that 70% of their expenses are for labor.
The governor should get behind Mayor Bloomberg's proactive agenda for the city regarding labor and pensions.
Rationalizing care for high-cost populations should be the primary source of Medicaid savings.
The state should consolidate the corrections work force and facilities because the prison population has been declining for years.
Key Data
$9 billion
— The amount of budget gap closure proposed by Governor Cuomo.
$2.9 billion
— The total amount of school aid cuts proposed.
70%
— The portion of local government budgets that goes toward labor expenses.
72%
— The percentage of Medicaid expenses that go toward services for the 24% of enrollees who are elderly or disabled.
$50,000
— The average annual cost for individuals in nursing homes.
10,000
— The number of state agency layoffs threatened to back up proposed reductions.
New York school districts exhibit wide variability in employee health insurance contribution rates, with many districts requiring significant percentage-based contributions or flat dollar amounts for coverage. These varying contribution structures directly impact local government budgets by determining the extent to which taxpayers subsidize employee health benefits.
Key Data
35.0%
— Clarkstown Central School District employee contribution rate for individual and family health insurance premiums.
20.0%
— Nanuet School District employee contribution rate for individual and family health insurance premiums.
$386.00
— Monroe-Woodbury School District individual employee contribution for health insurance premiums.
100%
— New Suffolk School District family employee contribution rate for health insurance premiums.
5%
— Yonkers School District individual employee contribution rate for pre-7/1/2007 hires.
$816.00
— Monroe-Woodbury School District family employee contribution for health insurance premiums.
New York's Medicaid program requires significant cost-saving reforms, including adjusting nursing home payments to national norms and tightening eligibility rules to prevent misuse. The state should also accelerate the takeover of Medicaid administration from local governments and implement mandatory managed care for dual-eligible individuals to reduce high expenditures.
Recommendations related to Local Government Budget Impacts
The Redesign Team should adjust nursing home payments to bring them more in line with national norms to reduce Medicaid costs.
The State should move more quickly to takeover Medicaid administration from counties and New York City to streamline operations and reduce costs.
The State should create more uniform and tougher rules and practices for determining long-term care eligibility to curb misuse of the program.
The State should promptly improve administrative practices with respect to the authorization of home care hours to reduce the number of personal care hours provided to enrollees.
The New York State Department of Health should immediately begin coordinating with the federal government to create a mandatory managed care option for 'dual eligibles' to cover acute and long-term care more cost-effectively.
Key Data
$2.3 billion
— Total personal care expenditures in 2008.
83 percent
— Share of all personal care expenditures that occur in New York City.
21 percent
— Amount by which New York’s nursing home rates exceeded the national average in 2008.
$5.8 billion
— Potential annual savings identified in previous reports on Medicaid cost containment.
$1.2 billion
— Recommended annual savings from a 2008 report on nursing home payment systems.
49 or more hours
— Weekly personal care hours received by more than half of recipients in New York City.
New York faces a $9 billion projected budget deficit, driven in part by rapidly escalating public employee retirement costs that have grown from $100 million to $1.5 billion in a decade. Unfunded liabilities for retiree health benefits alone reach $56 billion for the state, threatening the ability of local governments to maintain essential public services.
Key Data
$9 billion
— Projected budget deficit for New York state for the upcoming year.
$1.5 billion
— Current annual pension contributions paid by New York state.
$56 billion
— Unfunded liability for retiree health benefits for the state.
515,000
— Number of public employee retirees and beneficiaries.
$61,295
— Average pension received by police and firefighters who retired in 2009.
$25,440
— Average pension received by regular civilian employees who retired in 2009.
New York's Medicaid spending is the highest in the nation, costing $50 billion annually and placing a significant financial burden on local governments that are required to fund a portion of the program. To address this, the state must restructure the system to lower costs and improve health outcomes, rather than relying on measures that only target the edges of program spending.
Recommendations related to Local Government Budget Impacts
Gov. Cuomo should create a multiyear plan that addresses the problem of excessive spending on Medicaid by restructuring the system to provide better health-care outcomes and lower costs.
The state should address the number of people enrolled, payment rates to providers, and the extent to which services are utilized in order to contain Medicaid costs.
The state needs to bring down the cost of care where it is exorbitant to meet its obligations to the neediest New Yorkers without slashing other public services.
Key Data
$50 billion
— Annual cost of Medicaid in New York.
$2,283 vs. $1,026
— New York's per-capita Medicaid spending compared to the national average.
14 percent
— Share of all national Medicaid spending that occurs in New York.
24 percent
— Percentage of Medicaid enrollees who are elderly or disabled.
72 percent
— Percentage of Medicaid dollars consumed by elderly or disabled enrollees.
$12.5 billion
— Annual cost of long-term care for the elderly and disabled.
State spending caps often fail to curb government growth and can lead to unintended consequences, such as shifting financial responsibilities to local governments or encouraging the proliferation of special districts. Instead of formulaic caps, New York should consider alternative fiscal reforms like more rigorous balanced budget requirements, accrual-based accounting, and enhanced rainy day funds.
Recommendations related to Local Government Budget Impacts
The state should establish a more rigorous and comprehensive balanced budget requirement to improve fiscal discipline.
New York should move the executive and legislative budgets from a cash basis to an accrual system in accordance with generally accepted accounting principles.
Policymakers should enhance the allowable size of the state’s rainy day fund and require that funds are dispersed only in an emergency.
The state should impose a new constitutional debt limit to rein in state borrowing.
The government should provide more timely and meaningful fiscal information to legislators and to the public.
Key Data
$17 billion
— Amount state spending would have been curbed in fiscal year 2007-08 under the proposed cap.
$60.3 billion
— The hypothetical spending cap in 2007-08 based on the three-year rolling average of the national inflation rate.
$77 billion
— Actual expenditures in state operating funds in fiscal year 2007-08.
$93 billion
— The hypothetical spending limit in fiscal year 2007-08 if set at 10 percent of annual personal income.
$16 billion
— The amount by which the hypothetical 10 percent personal income spending limit exceeded actual spending in fiscal year 2007-08.
$3.2 billion
— Total rebate checks sent to Colorado taxpayers between fiscal year 1996-97 and fiscal year 2000-01.
Granting formula budgets to city agencies undermines the democratic budget process by shielding entities from public scrutiny and limiting the fiscal flexibility of elected officials. This practice complicates budget management and risks creating the same catastrophic fiscal constraints seen in California, where extensive revenue earmarking has forced deep cuts to essential services.
Recommendations related to Local Government Budget Impacts
The Charter Revision Commission should reject establishing formula budgets for any City agencies or offices besides the IBO.
The City should maintain the current budgetary discretion exercised annually by the mayor and the council.
Policymakers should avoid opening the door to further restrictions on the ability to keep spending in check by guaranteeing funding to any particular office or function.
Key Data
10%
— Minimum annual budget allocation guaranteed to the Independent Budget Office (IBO) as a percentage of the approved budget of the Office of Management and Budget.
12.5%
— Increased formula budget allocation for the IBO to cover estimated costs for newly mandated activities relating to public school performance analysis.
two-thirds
— Estimated portion of California’s general fund revenues that were earmarked for specific purposes according to a 2002 report.
one-third
— Portion of the California budget over which the state actually has discretionary control, according to a 2002 report.
Legislative efforts to enhance benefits for state and local employees threaten to add costs to an already unaffordable pension system. Vetoing these benefit sweeteners is necessary to maintain fiscal responsibility and prevent further financial strain on the state.
Recommendations related to Local Government Budget Impacts
The Governor should veto the bills enhancing benefits for state and local employees and retirees to prevent further strain on the pension system.
The Governor should veto bill A8664-A/S5748A, which would make the final average salary calculation for New York City teachers more generous.
The Governor should veto bill A8509A/S5633A, which enhances pension packages for uniformed employees by allowing members of the State Department of Corrections to defer vacation days.
The Governor should veto bill A10068/S7078, which allows certain employees in nursing titles to switch from a defined contribution to a defined benefit plan.
The Governor should veto bill A10753/S7544, which would set a precedent for State police officers to receive death benefits for longer periods of service.
Key Data
25
— Number of bills tracked on the annual Sweetener Scorecard that enhance benefits for state and local employees and retirees.
$1.1 million
— Annual cost in added contributions for the bill that would make the final average salary calculation for New York City teachers more generous.
5
— Number of vacation days per year that members of the State Department of Corrections would be allowed to defer under the proposed pension enhancement.
The 2010 scorecard tracks various legislative bills that propose 'benefit sweeteners,' such as retirement plan enhancements and additional service credits for public employees. These proposals, which often increase long-term pension and benefit costs for local governments, are monitored to show their progress through the New York State legislative process.
New York's proposal to defer pension contributions for state and local governments creates a long-term financial burden, with an estimated $5.8 billion repayment cost outweighing the $4.5 billion in short-term savings. This strategy, combined with the continued addition of benefit sweeteners, shifts significant costs onto future taxpayers and threatens the long-term stability of public pension funds.
Recommendations related to Local Government Budget Impacts
State leaders should foreswear efforts to please labor unions with benefit sweeteners that add to future costs.
Policymakers should develop more aggressive plans to provide permanent, long-run savings rather than relying on short-term fiscal gimmicks.
Local governments should reject the option to stretch pension payments, as this creates hidden debt that will negatively impact future budgets.
Key Data
$4.5 billion
— Cumulative reductions in pension fund contributions over the six-year period of the stretch proposal.
$5.8 billion
— Estimated cost to repay the deferred pension contributions.
$1.5 billion
— Reduction in total assets for State pension funds by fiscal year 2025-26 under the amortization plan.
$217 million
— Reduction in the State's required pension fund contribution in fiscal year 2010-11.
$856 million
— Reduction in the State's required pension fund contribution in fiscal year 2013-14.
85 percent
— Increase in required taxpayer support for New York State employee pensions from fiscal year 2010-11 to 2013-14.
New York State's long-term debt burden, including bonded debt, pension liabilities, and other post-employment benefits, places it in a 'danger zone' compared to other states, with a debt-to-resources ratio of 1.099. To improve fiscal health, the state must address these significant long-term obligations, which are exacerbated by the division of financial responsibilities between the state and its local governments.
Key Data
$120.0 billion
— Total long-term liabilities for New York in 2008.
$20.4 billion
— Amount by which New York would need to lower its long-term liabilities to fall below the 'danger zone' threshold.
$48.1 billion
— Combined unfunded pension and OPEB liability in New York.
1.099
— New York's debt-to-resources ratio, which ranks fourth highest among all states.
$71.9 billion
— New York's long-term debt outstanding.
New York faces a $7.5 billion budget gap, necessitating unavoidable reductions in school aid that should be implemented through targeted cuts rather than across-the-board decreases. By reallocating state aid away from the wealthiest districts, the state can protect funding for the neediest schools while managing fiscal constraints.
Recommendations related to Local Government Budget Impacts
Harm to the neediest districts could be further minimized by even greater targeting of school aid reductions.
The state should halve the $900 million in state aid provided to the wealthiest districts to restore funding for districts in the six poorest deciles.
Limited available funding should be targeted to the neediest schools and pupils rather than distributed broadly.
Key Data
$7.5 billion
— Estimated budget gap for the coming year.
$1.1 billion
— Proposed reduction in school aid for fiscal year 2010-11.
$20.5 billion
— Proposed total school aid for fiscal year 2010-11.
$52 billion
— Total spending on education in New York State in fiscal year 2007-08.
$28,754
— Average per pupil expenditure in the wealthiest 10 percent of districts in 2006-07.
$16,463
— Average per pupil expenditure in the poorest 10 percent of districts in 2006-07.
New York City's budget gap of $4.1 billion is being addressed through temporary measures like a $395 million drawdown from a retiree health insurance trust fund, while failing to account for $200 million in new pollution-remediation expenses. Despite higher-than-expected tax revenue, the city must prioritize structural cost-cutting rather than relying on one-time fixes and uncertain labor concessions.
Recommendations related to Local Government Budget Impacts
The city should avoid using one-shot measures like the $395 million drawdown from a retiree health insurance trust fund to balance the budget.
The city must not allow additional tax revenue to serve as an excuse to avoid needed cost-cutting.
The city should properly account for mandated items such as the $200 million in new pollution-remediation operating expenses that were previously capitalized.
Key Data
$4.1 billion
— The currently projected budget gap for New York City.
$395 million
— The amount of the drawdown from a retiree health insurance trust fund used as a one-shot measure.
$200 million
— The cost of new pollution-remediation operating expenses previously capitalized that the budget fails to recognize.
$500 million
— The amount of future concessions from labor unions assumed in the mayor's plan.
New York's local governments and school districts face significant fiscal strain as required employer contributions to pension funds have surged from $292 million in 1999 to $2.6 billion. These rising costs, driven by legislative pension enhancements, contribute to a local tax burden that is 78 percent above the national average.
Recommendations related to Local Government Budget Impacts
Legislators should refrain from introducing or supporting any pension sweetener legislation during the remainder of the session.
Legislators should support the legislation endorsed by Governor David Paterson and New York City Mayor Michael Bloomberg that would create a new pension tier for future workers to provide more reasonable and affordable pension benefits.
Key Data
$292 million
— Required employer contributions to pension funds in 1999.
$2.6 billion
— Required employer contributions to pension funds as of 2009.
$5.6 billion
— Total pension benefit payments reached in 2008.
78 percent
— Amount by which the local tax burden in New York exceeds the U.S. average in dollars per $1,000 in personal income.
35 percent
— Amount by which the combined state and local tax burden exceeds the U.S. average.
9 to 1
— Ratio of employer to employee contributions in New York’s State and Local Retirement Systems.
Extending Tier II pension provisions to new police and fire hires would prevent the application of cost-saving Tier V reforms, which are necessary to curb rising state and local pension expenses. Uniformed employees currently receive significantly more generous retirement benefits than civilian counterparts, with public employers contributing nearly double the percentage of salary to fund their pensions.
Recommendations related to Local Government Budget Impacts
The Governor should veto A3426/S1409, which would extend Tier II provisions to new police and fire hires.
New uniformed employees must be eligible for Tier V benefits along with civilian employees to effectively curb rising state and local pension costs.
Any effort to exempt uniformed employees from Tier V benefits, even on a temporary basis, should be rejected.
The Governor should resist any effort to exempt certain classes of employees from the provisions of Tier V.
Key Data
86 percent
— of uniformed employees that retired from the New York State Police and Fire Retirement System were under the age of 60.
$48,900 to $66,586
— range of annual lifetime pension payments for uniformed employees who retired last year.
20 percent
— of salary that public employers are expected to contribute to fund the pension of a uniformed employee.
11 percent
— of salary that public employers are expected to contribute to fund the pension of a civilian employee.
New York State faces significant fiscal pressure, and current mandates that prevent school districts from adjusting retiree health benefits without union approval exacerbate these local tax burdens. Vetoing legislation that extends these restrictions would allow local districts to better manage skyrocketing costs and provide necessary relief to taxpayers.
Recommendations related to Local Government Budget Impacts
Governor Paterson should veto A4628, a bill that would renew the provision prohibiting school districts from reducing retiree health insurance benefits without union approval.
State leaders should roll back costly mandates that prevent school district managers from controlling skyrocketing costs and managing local budgets.
New York State's fiscal policies, including high Medicaid mandates and inequitable school aid, place an excessive tax burden on local governments that is 158 percent of the national average. To address these issues and improve transparency, the state must reform its pension and debt management practices, reduce reliance on off-budget borrowing, and implement more rigorous multi-year financial planning.
Recommendations related to Local Government Budget Impacts
Reduce State-mandated local government Medicaid costs more than authorized by the 3 percent cap on local growth enacted in 2005.
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Redesign the State-mandated pension benefits for future state and local government workers through changes such as raising the minimum retirement ages, increasing the required employee contributions, eliminating inclusion of overtime in benefit calculations, and eliminating variable supplements for uniformed workers.
Lower Medicaid expenditures by eliminating long-term care eligibility loopholes that extend benefits to middle-class residents.
Discontinue issuance of State-funded debt to cover operating deficits.
Integrate public authorities’ proposed borrowing for capital investments with the State’s capital plan in order to prevent inefficient use of borrowing capacity.
Subject public authority borrowing to more rigorous financial review by an enhanced Public Authorities Control Board or by the Division of Budget.
Reduce the State’s future debt by lowering capital spending and/or increasing pay-as-you-go financing.
Prepare more extensive multi-year financial plans.
Require that lump-sum appropriations meet specific program criteria and be subject to sunshine provisions.
Key Data
158 percent
— New York's local government tax burden as a percentage of the national average.
$1.1 billion
— Savings for local governments in the current fiscal year resulting from Medicaid reform measures.
$7,912
— New York's average Medicaid spending per beneficiary, which is 176 percent of the national average.
$105.8 billion
— Total debt outstanding for the State and its authorities at the end of fiscal year 2004–05.
$4.2 billion
— Projected budget gap for the next fiscal year based on the budget enacted for the current year.
$3.4 billion
— Annual appropriations for the STAR school aid program in the current fiscal year.
Rising pension and health insurance costs for public employees are placing significant strain on state and local government budgets, necessitating reforms to labor cost structures. Proposed measures include reducing annual pay increases, increasing retiree health insurance contributions, and providing municipal managers with greater authority to control labor expenses.
Recommendations related to Local Government Budget Impacts
The state should eliminate one annual pay increase, typically averaging 3 percent, for state employees that was planned as part of recent collective bargaining agreements.
The state should require retired state employees to pay a larger share of their health insurance premiums.
The state should embrace the governor's proposals, and consider enhancing cost-sharing for current workers as well.
Mayors, county executives, school boards and other municipal managers need the state to give them tools to control labor costs.
Key Data
$5 billion
— The amount of new tax proposals required to address state budget issues.
3 percent
— The average annual pay increase for state employees planned as part of recent collective bargaining agreements.
75 percent
— The portion of family health insurance premiums currently paid by the state for retired workers.
$25 million to $500 million
— The projected growth in annual savings from the proposed pension changes.
New York's Medicaid nursing home payment system is the most expensive in the nation, costing $45 billion in fiscal year 2008-09, yet it fails to ensure higher quality care or adequate staffing levels. Reforming this outdated, facility-specific payment method to align with national standards and quality outcomes could save the state and localities over $1.2 billion annually.
Recommendations related to Local Government Budget Impacts
New York homes should be staffed at the federally recommended level of 4.1 hours of care per patient per day.
An auditing system should be developed to detail whether the level of staffing assigned to a patient meets the criteria required according to the patient’s RUG category.
New York State should develop a set of quality indicators such as those being used in other states and being tested by Medicare to assess patient outcomes.
Homes should not receive their full daily rate if they fail to meet minimum quality standards.
Homes exceeding quality standards should be eligible for bonus payments.
The State should set base rates linked to competitive national standards not historic costs.
Key Data
$1.2 billion
— Annual savings for the state and localities by changing the way the Medicaid program pays nursing homes.
$45 billion
— Projected cost of New York's Medicaid program in fiscal year 2008-09.
4.1 hours
— Federally recommended level of total nursing care per patient per day.
$103 million
— Estimated savings for localities from a new nursing home payment system.
98 percent
— Percentage of New York nursing homes that do not meet federally recommended staffing levels.
$187
— Average daily rate the Medicaid program pays nursing homes in New York.
New York's local taxes are 79% above the national average, largely due to state-imposed unfunded mandates that force local governments to cover costs without local control. A newly passed bill, A9393A/S6457A, threatens to exacerbate this by prohibiting local officials from negotiating retiree health insurance benefits, potentially locking in billions in future liabilities.
Recommendations related to Local Government Budget Impacts
Governor David Paterson should veto the legislation (A9393A/S6457A) to prevent an unfunded mandate that restricts local government fiscal control.
Local government leaders must maintain the flexibility in negotiating with unions to effectively manage the escalating costs of retiree health insurance.
State officials should ensure that local governments have a say in the costs they must bear rather than decreeing benefits without local input.
Key Data
79%
— New York's high local taxes are above the national average statewide.
$49.7 Billion
— Estimated state liability for government retiree health insurance.
$57.8 Billion
— Estimated New York City liability for government retiree health insurance.
New York City should maintain its commitment to Generally Accepted Accounting Principles (GAAP) by ensuring any requested deferrals for new standards like GASB 49 are strictly temporary and limited to one year. The city must prioritize transparent accounting practices over avoiding difficult budget tradeoffs, ensuring that remediation expenses are properly managed within the existing budget process.
Recommendations related to Local Government Budget Impacts
The Board should make clear on the public record that any deferral of GASB 49 will be temporary and not a permanent or long-term exemption.
Any deferral granted for GASB 49 should be as brief as is necessary and practical, specifically limited to one year.
The Board should reject the argument that GASB 49 is not appropriate for budgetary practices.
The Board should reject the argument that GASB 49 compliance should be avoided because it forces difficult choices between remediation and other operating expenditures.
The City should use its budget process to address the difficult tradeoffs among multiple services to taxpayers.
In order to promote fiscal reform, the Citizens Budget Commission (CBC) convened three separate agenda-setting conferences for key stakeholders in the state budget process in 2007. Each session focused on one aspect of fiscal reform with a goal of identifying specific changes for the coming budget cycle. The expectation is…
New York State's high local tax burden is driven by heavy reliance on property taxes for school funding, significant Medicaid mandates on counties, and a fragmented local government structure. Proposed reforms to address these issues include implementing income-based circuit breakers, shifting Medicaid financing to the state, and consolidating local government units to improve efficiency.
Recommendations related to Local Government Budget Impacts
The current unnecessarily expensive pension system should be reformed by converting to a defined contribution rather than a defined benefit system.
State law could require arbitrators to award wage increases that will not necessitate tax increases or require that any wage increase be funded in part by productivity gains.
An easy and transparent way to improve upon the STAR rebate program is to base a household’s rebate on property taxes as a share of income.
A complete state takeover of local Medicaid expenses would ameliorate fiscal pressures by shifting financing of Medicaid to the State.
The State might also benefit from consolidation in its property tax assessment units to reduce costs and ensure greater equity.
Key Data
$111 billion
— Total annual amount New Yorkers pay in state and local taxes.
$61 billion
— Total annual amount collected in taxes by local jurisdictions in New York.
$2.2 billion
— Amount required from counties (excluding New York City) for Medicaid mandates in fiscal year 2005.
$4.7 billion
— School property tax relief spending in fiscal year 2007-08, up from $600 million in 1998-99.
3,421
— Number of local government units in New York State counted by the U.S. Census.
$2.6 billion
— Estimated cost of a circuit breaker program that refunds property taxes above 5 percent of income for low-income homeowners and 7 percent for others.
New York City's park system requires more consistent and transparent management of its public-private partnerships, alongside better incentives for generating earned revenue to support park improvements. The city should shift routine maintenance costs from the capital budget to the operating budget and establish objective standards to ensure equitable park conditions across all neighborhoods.
Recommendations related to Local Government Budget Impacts
Create a stronger incentive for increasing concessions and other earned revenues by dividing growth in these revenues between the City’s general fund and a new fund dedicated to parks improvements.
Institutionalize responsibility for strategic planning for parks within municipal government.
Bring all parks to an acceptable condition by targeting new resources to the parks with the greatest need.
Improve productivity in parks maintenance and operations by establishing measures of park use and unit costs.
Encourage preventive maintenance and longer periods of usefulness by funding routine repairs and replacements in the operating budget.
Make the relationships between the Department of Parks and Recreation and its nonprofit partner organizations more transparent and consistent with core guidelines.
Key Data
$780 million
— Total City funds allocated for Department of Parks and Recreation facilities in fiscal year 2006.
$394 million
— Amount needed to bring major Department of Parks and Recreation assets to a state of good repair in fiscal year 2007.
$81 million
— Total revenue generated by the Department of Parks and Recreation in fiscal year 2006.
$63 million
— Annual net amount devoted by nonprofit conservancies to services in the parks.
$48.1 million
— Concession revenue generated by the Department of Parks and Recreation in fiscal year 2006.
$111 million
— Estimated cost for converting 290 public school yards into public playgrounds.
New York State's fiscal health is strained by high local tax burdens driven by state-mandated Medicaid costs, inequitable school aid, and generous public employee pension benefits. To address these issues and improve transparency, the state must reform its debt management, reduce operating deficits, and implement more rigorous, multi-year financial planning.
Recommendations related to Local Government Budget Impacts
Reduce State-mandated local government Medicaid costs more than authorized by the 3 percent cap on local growth enacted in 2005.
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Redesign the State-mandated pension benefits for future state and local government workers through changes such as raising the minimum retirement ages, increasing the required employee contributions, eliminating inclusion of overtime in benefit calculations, and eliminating variable supplements for uniformed workers.
Lower Medicaid expenditures by eliminating long-term care eligibility loopholes that extend benefits to middle-class residents.
Discontinue issuance of State-funded debt to cover operating deficits.
Integrate public authorities’ proposed borrowing for capital investments with the State’s capital plan in order to prevent inefficient use of borrowing capacity.
Subject public authority borrowing to more rigorous financial review by an enhanced Public Authorities Control Board or by the Division of Budget.
Reduce the State’s future debt by lowering capital spending and/or increasing pay-as-you-go financing.
Prepare more extensive multi-year financial plans.
Enforce and build upon new requirements for reporting by public authorities.
Key Data
$105.8 billion
— Total debt outstanding for the State and its authorities at the end of fiscal year 2004–05.
$1.1 billion
— Savings for local governments in the current fiscal year resulting from Medicaid measures.
$5.8 billion
— Estimated annual savings from changing Medicaid policies.
$4.2 billion
— Projected budget gap for the next fiscal year.
$7,912
— Average Medicaid spending per beneficiary in New York.
$3.4 billion
— Annual appropriations for the STAR program in the current fiscal year.
New York State and its local governments have increasingly relied on public authorities to issue debt, often circumventing constitutional limits and resulting in debt levels that exceed affordable thresholds. This reliance on authorities has led to fragmented capital planning, insufficient oversight of project-revenue and conduit borrowing, and a lack of accountability in governance and financial reporting.
Recommendations related to Local Government Budget Impacts
Eliminate the misuse of authorities’ debt powers by setting comprehensive constitutional limits on the amount of State-supported and City-supported debt that can be issued.
Improve the oversight of non-State-funded authority debt by replacing the PACB review process with more comprehensive capital planning and project feasibility studies subject to professional, transparent review.
Improve the effective use of tax-exempt conduit debt by requiring more explicit advance allocation of its purposes and more competition among private entities for its benefits.
Make authorities more accountable through more complete and accessible reporting of financial and other information.
Enhance the governance of authorities through greater independence and professionalism among board members.
Require that authority borrowing backed by the entity’s project revenues be limited to projects that are part of a long-run, capital plan reviewed and approved by the relevant elected officials.
Require that both project-revenue backed and private conduit borrowings be subject to professional review of a feasibility study in order to avoid undue risks.
Implement new, more comprehensive standards for the content of publicly reported information promulgated in 2006 with strict oversight by the State Comptroller and the Authority Budget Office.
Establish a standard screening process for proposed board appointees, which discloses information about their qualifications and potential conflicts of interest.
Eliminate 'hold over' appointments by obliging board members to leave office shortly after their term expires if they are not re-appointed to a fixed term.
Key Data
$227 billion
— Estimated total debt borrowed by New York state and local governments and their authorities.
$41 billion
— Amount of 'backdoor' debt issued by authorities on behalf of the State that did not follow the constitutional procedure requiring voter approval.
$10 billion
— Amount by which State-supported debt in 2003 exceeded the State's danger-zone threshold.
$78.2 billion
— Combined total debt issued by the City of New York and authorities accountable to the City.
$56 billion
— Amount of authority debt in the form of project revenue backed debt.
$40 billion
— Amount of authority debt in the form of private conduit debt.
New York State's excessive debt, which has nearly doubled since 1990 to $46.7 billion, threatens the state's economic future by creating a competitive disadvantage and relying on unsustainable 'backdoor' borrowing. To address this, the state must implement binding constitutional debt limits linked to affordability and restrict the use of borrowed funds to long-term capital investments rather than operating deficits.
Recommendations related to Local Government Budget Impacts
Voters should reject bond referendums such as the Transportation Bond Act of 2005 until debt is brought under control.
The State needs a new constitutional limit that does not require voter approval for every debt issuance, but does impose a binding limit that is linked to ability to pay.
Establish a new debt limit based on the concept of affordability as determined by an independent Debt Policy Committee.
Apply the limit to all forms of state-backed debt, including such bonds issued by authorities.
Restrict the use of borrowed funds to true capital investments.
Key Data
$46.7 billion
— Total outstanding state-funded debt.
$43.0 billion
— Amount of 'backdoor' borrowing that does not require voter approval.
$11.5 billion
— Amount of backdoor borrowing used to underwrite annual operating deficits.
$19 billion
— Amount of new debt planned to be added in the next five years.
$2.9 billion
— Amount of borrowing authorized by the Transportation Bond Act of 2005.
$7 billion
— Borrowing exempted from statutory limits in fiscal years 2003 and 2004.
New York State faces a significant fiscal challenge in meeting court-mandated school funding requirements, which are estimated to cost between $2.5 billion and $8.6 billion annually. To address this, the state should prioritize internal efficiencies, such as consolidating small districts and optimizing teacher time, while also exploring new revenue streams like expanded gambling and tax restructuring to avoid placing an undue burden on local property taxes.
Recommendations related to Local Government Budget Impacts
The State, rather than local school districts, should be responsible for raising the additional funds needed for a sound basic education.
A significant portion of the resources needed for a sound basic education should be raised through the elimination of inefficiencies in the education system.
Expanded gambling activities should be used to generate about $2 billion annually for improved education, but these activities should be restricted to “destination” type casinos.
A new statewide system of accountability for schools should be established.
The classroom space requirements for a sound basic education should be met through a combination of two measures - redistricting of existing schools and operating existing schools on a year-round schedule.
Teachers should be given financial incentives for better performance.
Financial incentives should be used to overcome shortages in selected teaching job titles.
The managerial discretion of principals should be expanded to give principals more authority over how to engage, deploy and otherwise manage their staff.
The State should establish a longer-run goal of significantly increasing the share of all public school funds raised from statewide revenues.
Improved enforcement of the existing sales tax on remote transactions should be used to generate significant new revenues in future years.
Key Data
$2.5 billion to $8.6 billion
— Range of estimated annual additional funding needed for a sound basic education.
$1.2 billion
— Annual savings that can be generated by making more efficient use of teacher time, consolidating small school districts, and reallocating State aid.
$2 billion
— Annual revenue that could be generated by authorizing new sites for housing video lottery terminals.
$950 million
— Estimated annual yield from broadening the sales tax base to include items currently exempt.
$320 million to $435 million
— Estimated annual yield from redefining the corporate income tax to include certain revenues now excluded.
$175 million to $595 million
— Estimated annual yield from extending the sales tax to include consumer purchases of professional services.
State-level school finance reforms, often driven by court mandates, frequently lead to significant shifts in local government revenue structures, including changes to property tax reliance and the redistribution of funds between districts. While these reforms aim to improve educational equity and adequacy, their success in boosting student performance is often limited and depends heavily on whether additional funding is well-targeted toward proven interventions like early childhood education and smaller class sizes.
Recommendations related to Local Government Budget Impacts
A court victory does not ensure timely or effective policy responses, so political leaders must be supportive of court policy directions to ensure action is prompt and effective.
Success in terms of generating additional spending for public schools does not automatically equal success in terms of improved educational outcomes, so additional spending must be well-targeted to result in gains in student achievement.
The forms of spending most likely to have positive results are expansion of pre-kindergarten opportunities and small class sizes in the early elementary school grades.
Key Data
$1.2 Billion
— Additional state aid to education raised by Kentucky over two years following the Kentucky Education Reform Act.
$825 Million
— Amount committed by New Hampshire for education in the fiscal year 2000-01 biennium.
$922 Million
— Estimated revenue for the Vermont Education Fund in the 2000-01 school year.
$1.4 Billion
— Two-year increase in state funding for education enacted by Ohio in Spring 2001.
$18.8 Billion
— Total spending on public education in Texas in fiscal year 1996-97, the year after Edgewood IV was decided.
26%
— Reduction in total property taxes in Michigan following the adoption of Proposal A.
New York's state budget process is characterized by persistent lateness and dysfunction, leading to the displacement of costs onto localities and contributing to high per capita local property tax burdens. To address these issues, the state should pursue constitutional reforms that establish a more accountable and transparent budget process, including public campaign financing and independent redistricting.
Recommendations related to Local Government Budget Impacts
New York should retain a constitutionally-based executive budget, but New York should also recognize and incorporate in its constitution the legitimate and hard-won role of the state legislature in budgeting.
The state constitution must also be amended to assure greater accountability of members of both legislative houses.
Two less draconian but still fundamental steps are the adoption of legislative redistricting by commission and serious reform in campaign finance.
Public financing of legislative election campaigns, with concomitant limits on direct and indirect private funding, would be salutary.
Constitutionalization of the beginning of the fiscal year might be a first step toward establishing a real budget deadline.
Key Data
$10,750,658
— The proposed budget for legislative fiscal staffs for 2003-2004.
$170 million
— The total appropriated in 2003 to fund projects advanced by Senate Republicans and Assembly Democrats.
$1.5 billion
— The total available to Governor Pataki, Speaker Silver, and Majority Leader Bruno to separately allocate in the 1998 election year.
$30–40 million
— The estimated cost of a public financing program for state legislative races in New York.
New York State faces a severe fiscal crisis with multi-billion dollar deficits, necessitating a multi-year plan that prioritizes expenditure reductions and structural reforms over long-term borrowing. To alleviate the state's high combined tax burden, the state should assume greater responsibility for Medicaid costs and implement school finance reforms to reduce the fiscal strain on local governments.
Recommendations related to Local Government Budget Impacts
The State should bring the budget into balance over three years by reducing expenditures to what the current revenue system supports by making productivity gains and by cutting services in a way that protects the neediest New Yorkers.
The State should close the gap between spending and revenues in the three-year, interim period by imposing a temporary and declining tax and by avoiding borrowing.
The State should be required to balance its budget based on Generally Accepted Accounting Principles (GAAP) in order to prevent the accumulation of a deficit.
The Division of Budget should be required to prepare a four-year financial plan with quarterly updates.
All off-budget accounts should be brought on budget to ensure a unified statement of all planned revenues and expenditures.
The State should pursue a long-run effort to lower total Medicaid costs and finance them more from statewide sources to reduce the local tax burden.
The State’s long-run agenda should include school finance reform that helps narrow gaps in per-pupil spending between rich and poor school districts.
Key Data
$4.4 billion
— The deficit incurred by New York State in the fiscal year that ended March 31, 2002.
$5.6 billion
— The amount of spending cuts proposed in the Executive Budget for fiscal year 2003-04.
$9.3 billion
— The gap to be closed in the fiscal year 2003-04 budget.
$11 billion
— The projected gap in fiscal year 2005-06 due to baseline spending increases.
$5.1 billion
— The annual local burden for Medicaid in New York.
New York State and City budgets for fiscal year 2002 faced significant criticism for failing to address long-term structural imbalances, relying on political strategies rather than sound fiscal planning. Both governments were urged to implement meaningful reforms, such as adopting GAAP accounting, improving productivity, and better managing capital investments to ensure long-term stability.
Recommendations related to Local Government Budget Impacts
State leaders should manage the financial plan on a GAAP rather than cash basis to improve transparency.
The State should show the enacted budget's impact on future years in the budget presentation.
State leaders should address the State's high local taxes with better programs than STAR.
The City should enact significant productivity improvements to deliver more competitive services.
The City should work to repeal the burdensome Wicks Law to improve capital project efficiency.
The City should set effective limits on borrowing to manage debt service growth.
Key Data
124 days
— The bare-bones state budget was 124 days late.
25 years
— City headcount has increased to its highest levels in 25 years.
8 percent
— Debt service payments are growing by 8 percent per year over the next four years.
$36 billion
— The five-year $36 billion capital plan would go much farther toward meeting the City’s considerable capital needs if existing facilities were used more intensively.
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