Unshackle Upstate Proposes More Than $9 Billion in State Budget Cuts

ALBANY, NY (09/23/2009)(readMedia)-- Unshackle Upstate has released a list of spending cuts and repeals that will immediately help to improve fiscal conditions for New York's taxpayers and employers.

The savings plan includes recommendations for immediate and long-term budget reductions, as well as suggested repeals and other long-term savings measures. The immediate cuts total $3.74 billion. They include a $2.2 billion reduction in state spending – or 3 percent of the state budget; a state payroll lag ($700 million savings) and a state workforce furlough ($840 million savings).

"It's no longer news that New York has the shameful distinction of being at – or near – the top for income taxes and the cost of doing business," said Unshackle Upstate Executive Director Brian Sampson. "Now that the Legislature is preparing to deal with a mid-year deficit of more than $2 billion, our message to lawmakers and the governor is to stay out of the pockets of taxpayers and employers."

Taxpayers are still reeling from the disastrous Deficit Reduction Plan and the 2009-10 state budget, which will cost families thousands of dollars a year in taxes, fees and assessments, and are driving employers out of business or out of New York. The DRP increased the burden on taxpayers by $1.6 billion and the state budget increased taxes, fees and assessments by $8 billion.

"We were encouraged that some lawmakers voted against this fiscally irresponsible budget," Sampson said. "We hope they can reach across party lines and come to a consensus to implement the reasonable measures we've outlined here."

Additional savings recommendations include consolidating certain back office state services such as payroll, purchasing and information technology ($250 million savings); holding school funding flat in 2010-11 ($2.2 billion); and implementing a variety of Medicaid reforms and fraud enforcement totaling $3.2 billion.

Unshackle Upstate also recommends Tier 5 pension reform originally recommended by Governor Paterson; passage of a Property Tax Cap; consolidation of local and county governments and government functions, and consolidation of school districts, as recommended by the Lundine Commission; and the creation of a Medicaid Commission. For a complete breakdown of recommended budget cuts, please refer to the attachment.

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Unshackle Upstate is a bi-partisan coalition represents more than 45,000 employers with approximately 1.5 million workers in every region of upstate (www.unshackleupstate.com).

Unshackle Upstate's Recommended Cuts to the 2009-10 Budget

Immediate Cuts Savings (in billions)

• 3% cut in state operations. $2.20

- Cuts cannot be passed on to local governments.

- Cuts cannot be shifted to federal stimulus dollars.

• State payroll lag. $0.70

• State furlough. $0.84

- Combination of lag and furlough equal 3% raise received in April.

Long-Term Cuts

• Consolidation of state agencies. $0.25

- Merge back office services such as payroll, purchasing, IT and others.

• Tighten Medicaid eligibility for long term care. $0.40

- Unusual practice in New York of allowing spousal refusal. Should only be permitted under limited circumstances. Closing these areas will encourage purchase of LTC insurance.

• Medicaid Personal Services to national level. $0.60

- Lowering service level to national average will save the state as well as counties billions of dollars.

• Hold School Funding Flat for 2010-11. $2.20

• No Member Items. $0.20

- Includes legislative and executive items.

• Stronger Medicaid Fraud. $2.20

- Reinstate fraud measures cut by Governor Paterson earlier this year. Increase enforcement of fraud by recipient, not just providers.

Total Savings $9.59

Recommended 2009-10 Repeals Cost (Billions)

• 18A Assessment. ($0.50)

• Covered Lives. ($0.24)

• State Insurance Department (Healthy NY). ($0.40)

Impact to General Fund ($1.14)

Additional Repeals

• Systems Benefit Charge. ($0.18)

• Renewable Portfolio Standard. ($0.95)

• Energy Efficiency Portfolio Standard . ($0.33)

Total Additional Repeals ($1.46)