General Fund Projections Updated for 21-Day Revisions
Savings/(Costs) (millions of dollars)
2007-08
2008-09
2009-10
2010-11
2011-12
Executive Budget Gaps
0
0
(3,287)
(5,687)
(6,821)
Revenue Reestimates
(1)
(384)
(519)
(523)
(527)
Personal Income Tax
(150)
(275)
(450)
(450)
(450)
Corporate Franchise Tax
0
(50)
(56)
(60)
(64)
Other Revenue Reestimates
149
(59)
(13)
(13)
(13)
21-Day Actions/Savings Plan
(88)
237
130
129
129
Covered Lives Assessment
0
50
50
50
50
EPIC Mandatory Generic and Prior-Drug Authorization
0
19
45
45
45
Medicaid Trend Factor Reductions
0
18
21
21
21
Finance Health Programs from Insurance Assessments
0
25
25
25
25
Sweep Excess EPF Fund Balance (revenue)
0
25
25
25
25
State Operations/Management Efficiencies
4
36
28
28
28
Pension Prepayment
(86)
88
0
0
0
NYRA Land Acquisition/VLT Facility Construction
0
(6)
(47)
(47)
(47)
State Support for Federal Reduction in Byrne/JAG Funding
0
(6)
(6)
(6)
(6)
NYC School Cafeteria Ventilation Projects
0
(5)
0
0
0
High-Need Nursing Program
0
(2)
(3)
(3)
(3)
Roosevelt School District
(6)
(4)
(6)
(6)
(6)
Local Government Efficiency Grants
0
(1)
(2)
(3)
(3)
Reestimates:
89
147
100
(58)
39
Medicaid
50
50
50
50
50
Family Health Plus Enrollment
10
0
0
0
0
Drug Rebate Revenue
0
60
62
64
66
Berger Commission
0
10
14
14
14
HCRA Spending Revisions
40
40
0
(137)
(18)
Lottery/VLT
(20)
5
(9)
(32)
(53)
Dedicated Highway Fund Subsidy
0
(16)
(15)
(15)
(15)
All Other
9
(2)
(2)
(2)
(5)
Net Savings/(Costs)
0
0
(289)
(452)
(359)
21-Day Surplus/(Gaps)
0
0
(3,576)
(6,139)
(7,180)
21 Day Actions/Savings Plan
In response to the weakening economy that has led to a decrease in expected revenue of $384 million for the 2008-09 fiscal year, Governor Spitzer has put forward a package of savings actions that, along with spending reestimates in certain program area, will maintain a balanced budget.
Savings Initiatives
New Savings Actions
$ 261 million
New Investments
$ (24) million
Subtotal
$ 237 million
Reestimates
$ 147 million
Total Savings
$ 384 million
New Savings Proposals: ($261 million savings in 2008-09)
Elderly Pharmaceutical Insurance Coverage (EPIC) Program: Requires prior authorization of prescriptions not covered by Medicare Part D and increased use of generic drugs in EPIC. Under this proposal, an individual’s physician will continue to have final say on which drug is prescribed. (Additional 2008-09 Savings: $19 million)
Covered Lives Assessment: Increases the covered lives assessment by an additional $50 million from $990 million to $1.04 billion. The initial 2008-09 Executive Budget Proposal contained an increase of $140 million (from $850M to $990M) in the covered lives assessment. (Additional 2008-09 Savings: $50 million)
Finance Health Programs from Insurance Assessments: Funds various public health programs (including cervical cancer vaccine, lead poisoning prevention, immunization, obesity prevention) through assessments on insurance companies. (Additional 2008-09 Savings: $25 million)
Medicaid Trend Factor Reduction: Reduces the trend factor increase for hospital, nursing home, and home/personal care reimbursement by a total of 35 percent, an increase of 10 percent compared to the Executive Budget. (Additional 2008-09 Savings: $18 million)
Environmental Protection Fund (EPF): Increases the amount of excess Environmental Protection Fund balance available to the General Fund by $25 million.
State Operations/Management Efficiencies: In State Operations, savings will be achieved through a range of management actions, including staffing controls, overtime management, reduction in non-essential activities, and maximization of federal revenues. Affected agencies include the Department of Taxation and Finance, Department of Mental Hygiene, Department of Health, Office of the Medicaid Inspector General, Department of Motor Vehicles, Division of Housing and Community Renewal, and the Office of Temporary and Disability Assistance.
In total, State Operations efficiencies and management will produce $36 million in savings in 2008-09.
Pension Prepayment: The State’s 2008-09 pension bill contains a reconciliation charge for larger than expected salaries in 2006-07. Prepaying this obligation in 2007-08 will result in interest savings of $1.4 million and will reduce 2008-09 costs by a total of $88 million.
New Investments: ($24 million in new costs in 2008-09)
New York Racing Authority (NYRA) Land acquisition and Video Lottery Terminal (VLT) construction: The Financial Plan now includes capital costs related to creating a VLT facility at the Aqueduct Racetrack ($250 million) and land acquisition ($105 million). These measures are expected to enable construction to proceed at the Aqueduct facility to ensure that VLT revenues from the facility are available for education during the 2009-10 state fiscal year. A total of $6 million in debt service costs for these actions is included in 2008-09.
Federal Reduction in Byrne/JAG Funding: Recommends $6 million in increased General Fund support for aid to crime labs, which is necessary to offset lower-than-anticipated federal aid.
NYC School Cafeteria Ventilation Projects: Provides $5 million in funding to improve ventilation and air temperature conditions in certain New York City school cafeterias consistent with recently enacted legislation (Chapter 4 of the Laws of 2008).
High-Need Nursing Program: Provides $3 million in additional funding for the expansion of high-need nursing programs at public and private colleges and universities.
Roosevelt School District: Reflects enactment of recent legislation (Chapter 9 of the Laws of 2008) that provided an increase in the special academic improvement grant for the Roosevelt School District. The cost of this action is $6 million in 2007-08 and $4 million in 2008-09.
Local Government Efficiency Grants: Increases funding for the Local Government Efficiency Grant program from $25 million to $30 million. These funds complement the restructuring of the program that was put forward in the Executive Budget.
Health Facility Restructuring Pool: $20 million from available HCRA funds to provide urgent assistance to hospitals in critical need for the purpose of restoring financial viability through restructuring under supervision of the Department of Health. (This does not affect General Fund spending.)
Spending Reestimates: ($147 million savings in 2008-09)
Medicaid Spending: Medicaid spending continues to trend below Executive Budget projections across most service categories ($50 million annual savings).
Drug Rebates: The State continues to maximize the collection of drug rebates to offset the cost of the Medicaid program. Medicaid receives a discount from drug manufacturers when the program purchases drugs for recipients, which is primarily negotiated by the Federal government. ($60 million in 2008-09)
Berger Commission: Additional savings are based upon a comprehensive review of the impact of the Berger Commission recommendations on hospitals. These savings are in addition to those already reflected in the Executive Budget ($10 million in additional savings in 2008-09 and $14 million additional annual savings thereafter).
HCRA: HCRA spending reestimates have been revised downward to reflect timing of projected spending in the HEAL-NY program and other program revisions ($40 million savings in 2008-09).
Lottery/VLT Revenues: Lottery revenues for 2008-09 have been revised upward by $5 million, which results in lower General Fund costs for education.
Dedicated Highway Fund Subsidy: Projected declines in tax revenues are expected to require General Fund subsidies to the Dedicated Highway and Bridge Trust Fund above the levels projected in the Executive Budget (Additional cost of $16 million in 2008-09).
All Other: Other reestimates will result in a net $2 million increase in 2008-09 General Fund costs.