ICYMI: GOVERNOR CUOMO OUTLINES FY 2018 EXECUTIVE BUDGET TO MAINTAIN FISCAL RESPONSIBILITY, REDUCE TAXES AND INVEST IN NEW YORK'S MIDDLE CLASS

Yesterday, Governor Andrew M. Cuomo unveiled the proposed FY 2018 Executive Budget, which builds on the state’s fiscal discipline over the last six years while strengthening the middle class, reducing taxes, and making smart investments in New York's future. For the seventh consecutive year, the Budget is balanced and holds spending growth below two percent.

“This year’s budget raises up the middle class and advances our progressive values, all while continuing our record of fiscal discipline. From making college more affordable and revitalizing our infrastructure, to cutting the cost of prescription drugs and doubling the child care tax credit, the budget advances the Middle Class Recovery Act by driving smart economic growth and generating opportunity for all New Yorkers,” Governor Cuomo said. “These sweeping investments will grow good-paying jobs, improve access to high-quality education, and protect our environment – creating a brighter, stronger Empire State for us all.”

Highlights of the FY 2018 Executive Budget:

• State Operating Funds spending is $98.06 billion in FY 2018 – an increase of 1.9 percent. (State Operating Funds exclude Federal funds and capital).
• All Funds spending $152.3 billion for FY 2018.
• Increases Education Aid by $1 billion for a total increase of 4.1 percent, including $961 million for School Aid, bringing the new School Aid total to $25.6 billion.
• Increases State Medicaid spending under the growth cap (3.2 percent) to $18.3 billion.
• Invests $163 million to make college tuition free for middle-class families at SUNY and CUNY.
• Caps price of prescription drugs sold to Medicaid by state review board at no cost.
• Continues $20 billion investment to create and preserve 100,000 units of affordable and 6,000 units of supportive housing.
• Expands Buy American provisions to all procurement over $100,000, protecting our state’s manufacturing and construction sectors.
• Invests $2 billion over five years for the Clean Water Infrastructure Act.
• Supports New York’s middle-class families by doubling New York State Child and Dependent Care Tax Credit.
• Begins Middle Class Tax Cut for six million New Yorkers – saving households $250 on average next year and $700 annually when fully effective.
• Extends tax rate on millionaires – 45,000 taxpayers impacted, 50 percent non-residents.

Continuing the Trend of Fiscal Responsibility

Under Governor Cuomo, New York’s finances have made a dramatic turnaround since the depths of the recession and the preceding high-spending eras. Before Governor Cuomo took office, the annual State Budget grew faster than income 60 percent of the time (or three out of every five budgets), and spending over the entire period grew at an average rate of approximately 7.0 percent, compared to income growth of 6.2 percent. With the adoption of the two percent spending benchmark, the unsustainable trend has been reversed. The FY 2018 Executive Budget continues this trend of fiscal responsibility and builds on the Governor’s commitment to expand opportunity and grow New York’s economy.

• State Spending Growth Held Under 2 Percent For Seventh Consecutive Year: The Executive Budget holds annual spending growth in State Operating Funds to 1.9 percent.
• State’s Outstanding Debt Set to Decline for a Fifth Straight Year: State-related debt outstanding will have decreased during this administration from $56.4 billion in FY 2012 to $50.8 billion by the end of FY 2017. This will be the fifth consecutive year the State’s outstanding debt level has declined.
• New York’s Credit Rating Has Improved: The state now has its highest credit rating since 1972.
• General Reserves Increased: Another planned deposit of $150 million will bring reserves to $2.5 billion – highest levels on record.
• Spending for State Agency Operations Held Flat: Since the Governor took office, Executive State agency operating costs have essentially remained flat through ongoing state agency redesign and cost-control efforts

Investing in Education

The FY 2018 Executive Budget continues the progress made to strengthen educational outcomes and increase access to high-quality learning across New York State. Under Governor Cuomo, education aid has increased $6.1 billion or 31 percent over the last six years. The FY 2018 Budget increases education aid by $1 billion or 4.1 percent, including a $961 million increase in School Aid, bringing the total investment to $25.6 billion – the largest in the history of New York.

• Prekindergarten: The Budget includes an $800 million investment in prekindergarten to expand high-quality half-day and full-day prekindergarten for three- and four-year-old children in high-need school districts. Preference for these funds will be given to the few remaining high-need school districts currently without a prekindergarten program. This funding builds upon the State’s prekindergarten program for three- and four-year-old students included in the FY 2016 Enacted Budget.
• Community Schools: The Budget provides $150 million—an increase of $50 million—to support the continued transformation of high-need schools into community hubs. This funding supports services that are unique to each school’s individual needs, including before-and-after school programs, summer learning activities, medical and dental care, and other social services.
• Empire State After-School Program: The FY 2018 Budget increases the state’s after-school investment through $35 million in new funding for public after-school programs in the state’s 16 Empire State Poverty Reduction Initiative (ESPRI) communities. This new funding will create an additional 22,000 spots for students in after-school programs, increasing the number of spots in ESPRI school districts by 36 percent.

Increasing Access to Higher Education

Under the leadership of Governor Cuomo, New York State provides more than $7 billion in total support for colleges and universities—an increase of $1 billion since 2012. This investment includes more than $5 billion for SUNY state-operated campuses and CUNY senior colleges, and more than $700 million for community colleges. New York State also provides over $1 billion in financial assistance to students through the Tuition Assistance Program, various scholarships and loan forgiveness programs.

• Tuition-Free College for Middle-Class Families through Excelsior Scholarships: Governor Cuomo proposes making college tuition-free for New York’s middle-class families at all SUNY and CUNY two- and four-year colleges. New York’s tuition-free college degree program, the Excelsior Scholarship, is the first of its kind in the nation and will help alleviate the crushing burden of student debt while enabling thousands of students to realize their dream of higher education. Under the program, tuition-free college would begin immediately for students of families making up to $100,000 annually, and phase in over the next two years to those making $125,000 annually. Once fully phased in, the program is estimated to cost $163 million per year.

Curbing the Cost of Prescription Drugs

The Governor’s Executive Budget continues efforts to control the rising cost of prescription drugs. In Medicaid, gross prescription drug costs have grown by $1.7 billion or approximately 38 percent over the last three years. The Governor is therefore advancing a three-point plan to protect consumers and taxpayers from the health and economic consequences of the rapidly rising cost of prescription drugs. The comprehensive plan includes:

• Creating a price ceiling for certain high cost prescription drugs reimbursed under the Medicaid program by requiring a 100 percent additional supplemental rebate for any amounts in excess of a benchmark price as recommended by the DOH’s Drug Utilization Review Board. The plan will also limit year-over-year price increases for generic drugs paid for by the Medicaid program.
• Imposing a surcharge on high-priced drugs when they are sold into the state. The proceeds collected from the surcharge will be reallocated to insurers to lower insurance premiums for New Yorkers the following year so the cost is not passed on to consumers.
• Regulating Pharmacy Benefit Managers (PBMs) to protect consumers and ensure that PBMs are not contributing to the rising costs of prescription drugs through unfair business practices.

Combating the Heroin Epidemic

In 2016, the Governor signed into law a comprehensive plan to end the heroin and opioid epidemic in New York State. The FY 2018 Budget builds on this progress by investing $200 million to support prevention, treatment and recovery programs targeted toward chemical dependency, residential service opportunities, and public awareness and education activities.

The Governor’s plan includes the following measures:

• Eliminate prior authorization requirements to make substance use disorder treatment available to all.
• Add fentanyl analogs to the New York controlled substances schedule to subject emerging synthetic drugs to criminal drug penalties.
• Increase access to life-saving buprenorphine treatment by recruiting health care providers to become prescribers.
• Establish 24/7 crisis treatment centers to ensure access to critical support services.
• Require emergency department prescribers to consult the Prescription Monitoring Program registry to combat “doctor shopping.”;
• Create New York's first recovery high schools to help young people in recovery finish school.

Implementing Buy American Act

Each year, New York State spends billions of dollars on the procurement of goods and services. However, existing regulations place little emphasis on ensuring this spending power is leveraged to support all American manufacturing, many which are right here in New York State.

Under the Governor’s “Buy American” plan, all state entities will be required to give preference to American-made goods and products in any new procurements more than $100,000. This measure would implement the nation’s strongest mandate for the purchase of American-made products by state entities.

Protecting the Environment

The FY 2018 Executive Budget initiates an unprecedented investment in clean water programs, increases capital funding for environmental and recreational facilities, maintains historic funding levels for the Environmental Protection Fund, and continues state funding for core environmental, parks and agricultural programs.

• Clean Water Infrastructure Act: To ensure that current and future New Yorkers have access to clean water, the Budget initiates the $2 billion Clean Water Infrastructure Act. Funded at $400 million per year over five years, this historic investment will support critical drinking water, wastewater, and source water protection initiatives.
• Empire State Trail: The Budget invests $53 million for Phase I of the Empire State Trail to develop and connect fragmented stretches of the Hudson River Valley Greenway and Erie Canalway. When complete, the trail network will stretch through the Hudson Valley and Adirondacks from New York City to the Canadian border and along the Erie Canal from Albany to Buffalo. This investment will create the largest state multi-use trail in the nation, attracting new tourists to explore New York’s diverse landscapes and rich history.
• NY Park’s 2020 Initiative: Building on the NY Parks 2020 initiative, which is investing $900 million to upgrade and repair our State Parks, the Budget allocates $120 million in New York Works capital funding – an increase of $30 million from FY 2017. This funding will aid the ongoing transformation of the state’s flagship parks and support critical infrastructure projects. The additional $30 million will target projects that can strategically leverage private funding to improve New York State Parks Recreation and Historic Preservation facilities and services.
• Adventure NY Program: DEC will launch the Adventure NY program, which will improve access to State lands, rehabilitate campgrounds, and upgrade DEC recreational facilities. This new initiative will build on existing efforts and includes $70 million in New York Works capital funding, an increase of $30 million from FY 2017. This funding will also enable DEC to continue to address critical infrastructure needs, including dam safety and flood control projects.
• Environmental Protection Fund (EPF): The Budget continues EPF funding at $300 million, the highest level of funding in the program’s history. Appropriations include $41 million for solid waste programs, $87 million for parks and recreation, $150 million for open space programs, and $22 million for the climate change mitigation and adaptation program.

Enabling Access to Ridesharing Across New York State

The current limitations on the availability of ridesharing services has meant that millions of New Yorkers are not only missing out on an alternative form of transportation, but thousands more are being prevented from pursuing new flexible job opportunities as rideshare drivers.

• Transportation Network Companies to Operate Outside New York City: The FY 2018 Executive Budget authorizes Transportation Network Companies, such as Uber and Lyft, to operate throughout the state and creates uniform licensing requirements.

Delivering Real Property Tax Relief and Relieving Local Government Mandates

New York residents face some of the highest property tax burdens in the nation – with tax bills averaging $11,346 in Westchester, $10,718 in Nassau, and $8,926 in Suffolk counties. In New York, a typical homeowner pays 2.5 times more in property taxes than what they pay in state income taxes. Since taking office, Governor Cuomo has focused on fighting this burden by capping property taxes, improving local government efficiency and restructuring distressed local governments.

Governor Cuomo has also made mandate relief a priority and has eliminated dozens of burdensome requirements for local municipalities. After decades of local government calls for change, the Governor implemented reforms to the binding arbitration process for police and fire unions which require these panels take into account a municipality's ability to pay certain local contracts. Additionally, the Governor’s reforms to the state’s pension system are saving the state, local governments, and school districts more than $80 billion over the next 30 years.

• Countywide Shared Services Property Tax Savings Plans Initiative: The FY 2018 Budget continues the Governor's efforts to relieve the property tax burden by proposing a new initiative for voter-approved county-wide shared services plans. Counties will be required to work with the other local governments contained within their county, as well as with the community and civic leaders, to develop these plans. The plans must generate real, recurring savings for taxpayers by eliminating duplicative services and proposing coordinated services to enhance purchasing power, such as sharing expensive transportation or emergency equipment. Taxpayers will then vote on these cost-saving plans in a referendum in the November 2017 general election.
• Indigent Defense: This year, the Governor introduced a plan to extend the provisions of the Hurrell-Harring settlement to the rest of the state. Under this plan, the state will fund one hundred percent of the costs necessary to extend the reforms in the Hurrell-Harring settlement to all of the state’s counties and the City of New York, with appropriate fiscal oversight through the Division of Budget. The annual cost to the State is estimated to be $240 million when fully phased-in. This initiative will guarantee that indigent defendants have counsel at arraignment, provide caseload relief for public defenders local judges and prosecutors, and improve the state criminal justice system for indigent defendants.
• Medicaid Relief: The state has eliminated growth in the local share of Medicaid, saving counties $3.2 billion in FY 2018. All growth in the Medicaid program for counties is being absorbed by the state and New York is also assuming Medicaid administrative responsibilities for counties. This will result in greater efficiencies and help achieve health care reform initiatives.

Building and Preserving 112,000 Units of Affordable Housing Across New York

In 2016, Governor Cuomo put forward a sweeping $20 billion blueprint to combat homelessness and expand access to affordable housing in New York State. This week, the Governor introduced new legislation to create the “Affordable New York” housing program after the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York reached a deal to replace and improve the program previously known as 421-a.

• Affordable Housing Capital Plan: The state is investing $20 billion in a comprehensive, five-year plan for affordable housing to ensure New Yorkers who are homeless or at risk of homelessness have safe and secure housing. The program will create 100,000 new affordable housing units and 6,000 supportive housing units.
• Affordable New York Housing Program: Under the Affordable New York Housing Program, developers of new residential projects with 300 units or more in certain areas of Manhattan, Brooklyn and Queens would be eligible for a full property tax abatement for 35 years if the project creates a specific number of affordable rental units and meets minimum construction wage requirements. The units must remain affordable for 40 years. For all other affordable developments in New York City, the period of affordability and abatement eligibility would be tied to the number of affordable units. This new program will create an estimated 2,500 new units of affordable housing per year.

Enacting Comprehensive Ethics Reform

Legislation submitted with the FY 2018 Executive Budget includes the following measures:

• Advancing a constitutional amendment limiting outside income and creating a full-time legislature.
• Advancing a constitutional amendment imposing term limits for elected officials.
• Requiring members of the Legislature to obtain an advisory opinion before earning outside income.
• Advancing legislation to close the “LLC Loophole.”
• Instituting Public Financing and enacting a number of other campaign finance reforms.
• Subjecting local elected officials to financial disclosure requirements.
• Promoting Increased Transparency Through Comprehensive Reforms to the State Freedom of Information Law.
• Expanding the State Inspector General's authority to SUNY and CUNY not-for-profits.
• Creating new Inspectors General for the Port Authority and the State Education Department.
• Ensuring greater oversight of the state's procurement process.

Driving Economic Growth and Revitalizing New York’s Infrastructure

The FY 2018 Executive Budget continues Governor Cuomo’s focus on revitalizing New York’s economy, creating well-paying jobs and investing in key capital projects across the state. The Governor is also delivering on his historic commitment to revitalize New York State’s infrastructure, and in partnership with public authorities, and local and federal governments, the state is investing $100 billion in transformative projects across New York.

• I LOVE NY: The Budget includes $70 million for I Love NY tourism and business marketing – building on the success of the state’s tv and web advertising, tourism centers and Taste NY promotions. Since 2011, $150 million in state investments have returned an additional $9 billion increase in direct visitor spending, rising from $54 billion to $63 billion. As part of our efforts, the budget proposes legalizing and incentivizing wine and beer sales in movie theatres across the state to drive sales of Taste NY products.
• JFK Master Plan: As part of the Governor’s plan to Transform JFK Airport into a 21st Century transportation hub, the state will provide $1.5 billion to improve roadway access to JFK by eliminating traffic bottlenecks at the Kew Gardens interchange, and increasing traffic capacity on the Van Wyck Expressway. This significant investment of public resources, including an additional $1.5 billion from the Port Authority, will provide impetus for private sector investment at a transformed and reimagined JFK, driving the total investment potential as high as $10 billion.
• Buffalo Billion II: The Executive Budget allocates $500 million over five years to support the second phase of the Buffalo Billion investment development plan. Buffalo Billion Phase II will extend investment in Western New York to the neighborhood level and strengthen existing connections between downtown, suburban, and surrounding areas. Phase II will focus on revitalization and smart growth efforts, improvements to workforce development and job training, growing advanced manufacturing, tourism and life sciences, and connecting communities to foster growth through rail expansion.
• Empire Station: The Executive Budget makes a multi-year commitment totaling $700 million to support the development of the world-class Moynihan Train Hall with more space than Grand Central Station’s main concourse. The new hall will house passenger facilities for the LIRR and Amtrak, as well as feature 112,000 square feet of retail space and over 500,000 square feet of office space.
• Regional Economic Development Councils: Since 2011 the REDCs have awarded nearly $4.6 billion in state funding to over 4,100 projects through a competitive process to spur job creation based on regional priorities. This new strategy has resulted in 210,000 new or retained jobs in New York. The Executive Budget includes core capital and tax-credit funding that will be combined with a wide range of existing agency programs for a seventh round of REDC awards totaling $750 million.
• Life Sciences: The Budget provides $650 million to support the Life Sciences industry, including $250 million in tax incentives, making it more attractive for existing and new firms in life sciences to locate, invent, commercialize, and produce here in New York.
• Kingsbridge National Ice Center: The budget provides an additional $108 million in loan funding for the redevelopment of the currently vacant Kingsbridge Armory in the Bronx into an ice-sports facility. With the bridge loan funding from the state, the project is anticipated to create 400 permanent jobs.
• Town of Woodbury Transit and Economic Development Hub: The Budget supports the acceleration of the $150 million reconstruction project to build the Town of Woodbury Transit and Economic Development Hub. The project, which will create nearly 600 jobs, will overhaul a highly congested corridor that feeds the Woodbury Common Premium Outlets, a regional economic engine.
• Photonics Venture Challenge in Rochester: New York State will establish a $10 million, multi-year Photonics Venture Challenge in Rochester. This business competition aims to support start-up companies that commercialize these rapidly developing technologies through a business accelerator program. It includes a top award of $1 million to the most promising start-up company. There are currently no accelerator programs in the world with a photonics focus and the Rochester region is uniquely positioned to build a nationally recognized program.
• I Love NY Centers: Modeled after the successful Long Island Welcome Center, the state will establish welcome centers – one in each region of the state – that feature an array of experiences including Taste NY, Path Through History, I Love New York and State Parks that highlight each region's tourism assets.
• Long Island Transformative Investments: The Executive Budget invests $160 million from existing capital resources in transformative projects on Long Island. Investments include $80 million for enhancements to sixteen LIRR Stations ($35 million funded by the MTA), $40 million to improve system connectivity with MacArthur Airport and Brookhaven National Lab, as well as $40 million for infrastructure investments that will support economic growth, environmental sustainability and water quality in business districts in Smithtown and Kings Park.
• Round II of Upstate Airport Economic Development and Revitalization Competition: In FY 2017, the Governor established the $200 million Upstate Economic Development and Revitalization Competition. The competition includes $190 million to support airport projects and $10 million allocated through the Governor’s Aviation Capital Grant Program. In the first round, $40 million was awarded to Elmira Corning Regional Airport to activate the airport’s $58 million transformation, and $39.8 million in funding was awarded to the Greater Rochester International Airport to initiate a $63.4 million transformation. In round two, Plattsburgh International Airport will receive $38 million to jumpstart the airport’s $43 million overhaul and Syracuse Hancock International Airport will receive $35.8 million towards their $45.1 million transformation. The bold plans and designs developed by these airports will enhance safety, improve operations and access, reduce environmental impact, and create a better passenger experience.

###