January 20, 2012: Transcript of NYS Division of Budget's Catherine Durand and Dan Sheppard on Governor Cuomo's proposed 2012- 13 Executive Budget and Reform Plan

TOP January 20, 2012: Transcript of NYS Division of Budget's Catherine Durand and Dan Sheppard on Governor Cuomo's proposed 2012- 13 Executive Budget and Reform Plan

Read the transcript from the web chat with NYS Division of Budget's Catherine Durand and Dan Sheppard on January 20, 2012.
Division of Budget said:
Hello, we are Catherine Durand and Dan Sheppard, Deputy Budget Directors of the New York State Division of the Budget. The Division of the Budget (DOB) is responsible for advising the Governor on fiscal policy and working with the Governor to prepare the annual Executive Budget proposal. DOB also works closely with the many state agencies to implement initiatives outlined in the budget, and monitors both spending and operational progress on these initiatives throughout the fiscal year. This past Tuesday, Governor Cuomo presented his 2012-2013 Executive Budget Proposal, which is a bold new plan to continue the process of reforming New York State and the work to put our fiscal house in order. We are sure you have questions about how Governor Cuomo’s budget will impact state agencies and the services you receive as state taxpayers. We look to answering those questions today.

Question from Margaret in Buffalo:
If schools don’t put the teacher evaluation system in place before next January, what happens to the education dollars slated for those districts?

Division of Budget said:
The State Education Department and the teachers’ unions must reach agreement on a teacher evaluation system within 30 days or Governor Cuomo will introduce legislation establishing one. School districts that have not implemented a teacher evaluation system by January 17, 2013 will not receive their share of the $805 million school aid increase included in the Executive Budget.

Question from Hank in Hudson:
Are funds budgeted for the next round of the Regional Council competition?

Division of Budget said:
$200 million is budgeted for the next round of the Regional Economic Development Council competition. This includes $130 million in capital funds and $70 million in Excelsior Tax Credits. In addition, resources from a wide range of existing agency programs will be available to businesses and project sponsors for economic development purposes that are consistent with Regional Council plans through the Consolidated Funding Application. This process provides one-stop access for project sponsors to apply and compete for $800 million of existing funding from a variety of agency and authority programs.

Question from Carla in Syracuse:
What other areas of the budget will be impacted by the elimination of all automatic growth inflators?

Division of Budget said:
Service providers in the following program areas will be impacted: public health programs administered by the Department of Health; services for the elderly administered by the State Office for the Aging; Office of Children and Family Services programs related to foster care, adoption, residential committees on special education, and child care; and Mental Hygiene agency programs administered by the Office of Mental Health, Office of Alcoholism and Substance Abuse, and the Office for Persons with Developmental Disabilities. Beginning April 1, 2013 providers will again be eligible for increases, but rather than being across the board and automatic, increases will be based on providers achieving performance standards and documenting actual costs.

Question from Ana in New York City:
Where will the funds come from for Governor Cuomo’s NY Works infrastructure investments?

Division of Budget said:
New York Works funding will include:
$723 million in New appropriations of State funds in the 2012-13 Executive Budget for infrastructure projects in transportation, economic development and environmental agencies $917 million in New appropriation of Federal funds in the 2012-13 Executive Budget in order to accelerate Federal funds for highway and bridge projects $600 million in existing State funds for ongoing projects and off-budget funds that have been sourced with state funding $760 million in Federal matching funds that will go directly to projects and are not appropriated in the State Budget $9 billion in Public Authority funds for accelerated projects (not appropriated in the State budget). Authorities include the Thruway Authority, the Port Authority of New York and New Jersey and the New York State Energy Research and Development Authority. This category also includes funds contributed to projects by some local governments. $3 billion in Private sector investments and shares of projects that are leveraged by State/Federal/Authority seed investments.

Question from Sheila in Rochester:
How will education performance grants help improve our schools and make sure our students get a better education?

Division of Budget said:
Performance grants encourage school districts to implement innovative reforms that improve student achievement and make the long-term structural changes necessary to reduce costs and deliver more dollars directly to the classrooms. They focus on student achievement in the classroom and great efficiencies in school district management.

Question from Chaz in Henrietta:
Will my school being getting more aid in Governor Cuomo's budget?

Division of Budget said:
Governor Cuomo’s Budget includes and $805 million increase in School Aid. This includes $250 million in competitive grants to improve student achievement and achieve efficiencies; $265 million in reimbursement for expense-based programs like Transportation Aid, Building Aid and BOCES aid, and $290 million allocated to school districts, with priority given to poorer district and those with large numbers of high need students. You can find how much your school is getting in aid at: http://publications.budget.ny.gov/eBudget1213/fy1213localities/schoolaid/1213schoolaid_bydistrict.pdf or at http://publications.budget.ny.gov/eBudget1213/ExecutiveBudget.html

Question from Ike in Oneida:
I have a young child in Pre-School, but her school is tight on funds. How does Governor Cuomo's budget help Pre-School programs?  

Division of Budget said:
Governor Cuomo’s Preschool Special Education reform proposals are directed at controlling unsustainable costs and do not affect children’s eligibility for services or the level of services they receive. Because counties and the State pay the entire cost of the program and school districts control those costs, the Governor’s proposal would cap the counties’ costs at current levels and have school districts, the State and counties share equally in any future growth in costs. In addition, the Governor’s proposal would eliminate any potential conflicts of interest between evaluators and the providers who supply those services.

Question from Tim in Cny:
How will Governor Cuomo's executive budget help create jobs here in New York?

Division of Budget said:
The 2012-13 Executive Budget funds a comprehensive and coordinated blueprint for economic development programs. The Budget will create jobs in New York State by creating public-private partnerships that leverage State resources to generate billions of dollars in economic growth, improving the State’s infrastructure to support business expansion and supporting regionally-based economic strategies. The New York Works Infrastructure Investment will seed a $15 billion initiative to rehabilitate the State’s critical infrastructure assets and create thousands of jobs by accelerating capital projects. Bridges, highways, parks, waste water treatment facilities, renewable and efficient energy systems, flood control structures, dams, SUNY facilities and other critical infrastructure will be built or rehabilitated. New York Works will succeed principally by seeding projects to attract non-State investments and focusing resources from many agencies and authorities on coordinated goals: to create jobs, attract private investment and improve the State’s infrastructure. State funds are strategically invested to spark investment, not to carry the main load.

The Budget also authorizes a second round of $200 million in funding for the 10 Regional Councils created last year to develop and implement long-term regional plans based on each region’s unique resources and specific priorities. In addition, the first phases of a multi-year $1 billion economic development package is included for the City of Buffalo, which is in desperate need of an economic boost.
Finally, the Budget supports Farm-NY, a series of measures to support farmers and help the agriculture industry grow, including the expansion of the successful FreshConnect farmers’market program.
Question from John in Schenectady:
Will the new Tier VI system impact current state workers' or retirees' pension systems?

Division of Budget said:
The new Tier VI pension plan would apply only to new employees and would not impact any current state employees’ or retirees’ pension plans.

Question from Linda in Ithaca:
I keep hearing all this talk about teacher evaluation. What is this about and why did Governor Cuomo include these measures in his budget?

Division of Budget said:
Teacher evaluations are an important way to ensure high quality teachers for our students. In 2010, President Obama established the Federal Race to the Top Program, where states compete for Federal education funding. One of the requirements for this funding is a teacher evaluation system. The New York State Legislature passed a law last year requiring the State Education Department and the teachers’ unions to develop an evaluation system. New York State schools won $700 million in Race to the Top funds as a result.
Meanwhile, the State and the unions have not reached agreement on an evaluation system and, in fact, the unions are suing the State Education Department. As a result, the Federal government has threatened to withdraw the $700 million award.

In response, Governor Cuomo has given the State Education Department and the teachers’ unions 30 days to reach an agreement on a teacher evaluation system. If they don’t, he will submit legislation establishing one. School districts that have not implemented a teacher evaluation system by January 17, 2013 will not receive their share of the $805 million school aid increase included in the Executive Budget. This is expected to ensure that New York State can retain $700 million in Federal Race to the Top funds.


Question from Marianne in North Hudson, NY, Essex County:
How will the Health Exchange work, and will my health care costs go up as a result of it?

Division of Budget said:
When the exchange is implemented, more than one million New Yorkers will gain health coverage, and if you currently buy your coverage directly you could see your costs drop by more than 60 percent. If you own a small business, you could see the cost of providing coverage to your employees drop by more than 20 percent, and if you work for a small business, you will have access to a broader choice of health plans.

Question from katina in astoria:
Does the administration plan to ever convert defined benefit plans for government workers to defined contribution plans, as has been done in the private sector for decades?

Division of Budget said:
Governor Cuomo has proposed a new Tier VI pension plan for new employees that includes both a defined benefit plan and an optional defined contribution plan. Under the optional defined contribution plan , the State would provide a minimum contribution of 4 percent of salary. The State would also match employee contributions up to an additional 3 percent. Employees would vest after one year, as opposed to 10 years under the current defined benefit plan, and the plan would be portable if the employee chooses to leave State service. The new Tier VI plan would not affect the retirement benefits of any current State employees or retirees. This would apply only to new employees and would be 50 percent less expensive than the current Tier III and Tier IV pension plans.

Question from katina in Astoria:
What is government doing to crack down on medicaid fraud?

Division of Budget said:
State agencies including the Department of Health, Office of Medicaid Inspector, and the Office of the Attorney General dedicate significant time and resources to preventing Medicaid fraud. As a result of these efforts, every year, we recover or prevent approximately $1 billion in improper Medicaid payments. Examples of the types of anti-fraud/abuse actions we take include: reviewing third party reimbursement to make sure private insurance companies are paying fair share; reviewing payment claims from health care providers to look for strange patterns that would indicate the need for further investigation; collaborating with federal and local government officials (including law enforcement) to investigate suspected fraud; and using new computer-based tools to monitor both the quality of care and the appropriateness of payments.

Question from Anonymous:
How will Governor Cuomo's budget affect retirement plans for state workers?

Division of Budget said:
Governor Cuomo has proposed a new Tier VI retirement plan that would apply to new employees. It would not affect current state employees’ or retirees’ retirement plans. The new Tier VI would reduce pension costs by one half compared to the existing benefit design. Both a Defined Benefit Plan and a new, optional, Defined Contribution Plan would be offered to new employees.

Question from Angela in NYC:
Does Governor Cuomo's budget support public transportation in NYC? Specifically the MTA?

Division of Budget said:
The Executive Budget provides operating support totaling $4.4 billion to transit systems. The MTA will receive nearly $4 billion, an increase of over $190 million from 2011-12, and other transit systems will receive over $430 million, which reflects an increase of $29.6 million.

Question from Sara in Binghamton:
How does Governor Cuomo's budget help ensure that New York's environment remains clean and beautiful?

Division of Budget said:
The Executive Budget continues to support critical environmental programs including the Environmental Protection Fund, which will be maintained at $134 million. In addition, the Budget includes $102 million for the Department of Environmental Conservation to advance flood control, coastal erosion and critical dam safety projects. $94 million is provided for capital rehabilitation and improvement needs in 48 State parks and historic sites and the ski facilities operated by the Olympic Regional Development Authority.

Question from Ally in Buffalo:
What is mandate relief and why is it so important? I keep hearing local leaders talk about it.

Division of Budget said:
Mandate relief is important because mandates on local governments contribute to increases in your property taxes. Governor Cuomo’s budget proposes sweeping structural reforms that will relieve local governments of State mandates that are among the largest drivers of local costs. The Budget provides relief from Medicaid costs by taking over the growth in these costs, which would otherwise be borne by local governments. As a result, counties and New York City will save $1.2 billion over the next five years. The Budget also proposes pension reform by creating a new tier in the State pension system that will save local governments $79 billion over the next 30 years. Finally, the Budget reforms the Early Intervention (EI) and Preschool Special Education programs, without reducing services for children. The EI reforms will save counties $99 million over the next five years, and Preschool Special Education reforms will result in $20 million in cumulative reduced liabilities for the 2013 local fiscal year.

Question from Damien in Albany:
Are judicial or district attorney pay increases part of the Governor's proposal?

Division of Budget said:
Judicial pay increases, as recommended by the Compensation Commission, are included; even as the Judiciary’s budget remains flat. District Attorney salaries remain linked to judicial salaries and the state provides its traditional 40% reimbursement to counties for that new cost.

Question from steve in new york city:
why does state government care how much people running non-profit agencies are paid?

Division of Budget said:
Many services that NYS provides to people in need of assistance—such as Medicaid coverage of home care or nursing home care or care for people with developmental disabilities—are paid for with tax dollars but actually provided by non-profit and for-profit organizations. Governor Cuomo wants to make sure that the dollars are spent on the services, not high salaries. He has proposed to limit the amount that the state pays toward salaries of those who lead these organizations, some of whom are paid well over a million dollars annually.

Division of Budget said:
Unfortunately, we are out of time. We would like to thank you all very much for your questions, and we hope you found our answers informative. If you would like to learn more about the New York State Division of the Budget and Governor Cuomo’s 2012-2013 Executive Budget Proposal, please visit our website: http://www.budget.ny.gov/index.html. Governor Cuomo also put his entire budget presentation, along with related information, online which you can access at: http://www.governor.ny.gov/20122013ExecutiveBudget.