MEMORANDUM IN SUPPORT

A BUDGET BILL submitted by the Governor
in accordance with Article VII of the Constitution

AN ACT to amend chapters 50, 53, 54 and 55 of the laws of 2003, making appropriations for the support of government

Purpose: This deficiency appropriation bill amends Chapters 50, 53, 54 and 55 (as amended by Chapter 684 of the Laws of 2003), which made appropriations for the 2003-04 fiscal year, to meet essential obligations for which funding was not provided in the enacted budget.

Summary of Provisions:

Section 1

amends the 2003-04 Public Protection and General Government Budget as follows:

DEPARTMENT OF CORRECTIONAL SERVICES

This recommended deficiency for the Department of Correctional Services increases the 2003-04 General Fund appropriations in the Health Services and Supervision Programs by $54.5 million. The increase is necessary to fund medical nonpersonal service needs, overtime for security staff and other personal service costs.

DIVISION OF CRIMINAL JUSTICE SERVICES

The recommended deficiency for the Division of Criminal Justice Services increases 2003-04 Special Revenue-Federal appropriations for the Domestic Incident Preparedness Program by $104 million. This increase is necessary to accept and spend recently awarded State Homeland Security Grant Program grants, which Federal guidelines require to be expended before the end of the current State fiscal year.

GENERAL STATE CHARGES

The recommended deficiency for General State Charges adds language that will authorize the use of existing appropriations for litigation costs to support expenses of the Commission on Education Reform in compliance with the June 26, 2003 Court of Appeals decision in the case of Campaign for Fiscal Equity v. State of New York.

HOMELAND SECURITY

The recommended deficiency for Homeland Security increases 2003-04 Special Revenue-Federal appropriations by $100,590,000. This increase is necessary to fully authorize spending of the Urban Area Security Initiative grants awarded to date, which Federal guidelines require to be expended before the end of the current State fiscal year.

Section 2

amends the 2003-04 Education, Labor and Family Assistance Budget as follows:

CITY UNIVERSITY OF NEW YORK

The recommended deficiencies for the City University of New York (CUNY) increase the 2003-04 General Fund, Aid to Localities appropriation for community college operating assistance by $2.258 million and the Special Revenue Funds - Other appropriation for the City University Tuition Reimbursable Account (CUTRA) by $55 million.

The $2.258 million for operating assistance is necessary due to higher than projected enrollment at CUNY community colleges.

The $55 million CUTRA deficiency is necessary to enable CUNY to spend excess tuition revenues generated above the level appropriated for CUNY's tuition revenue offset. This appropriation deficiency will be permanently addressed with the recommended fold-in of sustained excess tuition revenues into the University's gross operating budget in 2004-05.

STATE EDUCATION DEPARTMENT

The recommended deficiencies for the State Education Department increase 2003-04 appropriations for:

• General Fund non-public school aid in the Elementary, Middle, Secondary and Continuing Education Program by $16,000,000, which is necessary to fund higher than expected costs of attendance claims at non-public schools of $8 million each for 2002-03 and 2003-04.
• The School Tax Relief (STAR) Program by $40,000,000, which is necessary to meet additional costs driven by increases in local school tax levies and program participation.
• Special Revenue funds for the Tuition Reimbursement Account in the Office of Higher Education and the Professions Program by $1.4 million, which is necessary to fund an increased number of student reimbursement claims due to the unanticipated closure of several proprietary schools.

HIGHER EDUCATION SERVICES CORPORATION

The recommended deficiency for the Higher Education Services Corporation increases the General Fund appropriation for Student Grant and Award Programs by $33.9 million, to fund the larger than projected growth in the number of Tuition Assistance Program recipients and average award levels.

STATE UNIVERSITY OF NEW YORK

The recommended deficiencies for the State University of New York (SUNY) provide the following increases:

• The 2003-04 Fiduciary Fund appropriation for student loans is increased by $6 million. This increase is necessary to allow the SUNY campuses to fully award their Federal Perkins Loan Program collections, which have increased by 20 percent due to the unprecedented number of borrowers who are consolidating their loans to take advantage of lower interest rates.
• The 2003-04 General Fund appropriation for community college base aid is increased by $2.9 million, which is necessary to fund the higher than projected enrollment at SUNY community colleges.

Section 3

amends the 2003-04 Health and Mental Hygiene Budget as follows:

DEPARTMENT OF HEALTH

The recommended deficiencies for the Department of Health provide the following increases:

• The Elderly Pharmaceutical Insurance Coverage (EPIC) Special Revenue appropriation is increased by $30 million to compensate for insufficient appropriations in the enacted budget and accommodate additional spending due to higher enrollments and the increased cost of pharmaceuticals. The increased spending will be financed by revenue from participant fees and manufacturer rebates and Health Care Reform Act (HCRA) resources. The proposed deficiency appropriation is necessary to access those additional revenues and available HCRA funds.
• The 2003-04 Medicaid Special Revenue-Other, Indigent Care Fund (068) appropriation is increased by $10 million. This appropriation is necessary to access available fund balances to help finance unanticipated growth in Medicaid expenditures in the current year.

Section 4

amends the 2003-04 Transportation, Economic Development and Environmental Conservation Budget as follows:

DEPARTMENT OF PUBLIC SERVICE

The recommended deficiency for the Department of Public Service (DPS) increases the 2003-04 Special Revenue-Federal appropriation in the Regulation Program by $300,000. DPS received notification of a Federal grant award after the 2003-04 budget was enacted and has a limited amount of time in which to spend the moneys.

Section 5

provides that the bill take effect immediately and be deemed to have been in full force and effect on and after April 1, 2003.

Existing Law: This is a new bill.

Statement in Support: Enactment of this deficiency appropriation bill is necessary to provide funding for liabilities occurring in the 2003-04 fiscal year for which no appropriations currently exist.

Budget Implications: The provisions of this bill are accommodated in the current Financial Plan for 2003-04.