Executive Budget 2007-08

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Frequently Asked Questions

  1. What is the size of the Budget?
  2. How does the Budget impact State debt?
  3. How does the Governor’s proposal impact future Budget gaps?
  4. Does the Budget increase taxes?
  5. Does the Budget increase fees?
  6. What are the assumptions on revenue growth?
  7. What are the major causes for growth in spending?
  8. What are the major reductions in spending?
  9. How much does the Budget maintain in reserves?
  10. How does the Budget impact the State workforce?

What is the size of the budget?

Size of the Budget
(in billions)
  2006-07 Budget
Final Spending		 Percent growth
from prior year		 2007-08 Proposed Percent growth
from prior year
All Funds 113.5 8.8% 120.6 6.3%
State Funds 77.5 11.2% 83.6 7.8%
General Fund 51.1 10% 53.3 4.2%
Inflation   3.4%   2.6%
  • The General Fund is the main operating budget. It finances programs that benefit the State's local governments and supports the operating costs of all state agencies, the Legislature and the Judiciary.
  • State Funds includes the General Fund plus all other non-federal funds used to operate state government, including special revenue funds, which reflect receipts from specific revenue sources designated to specific activities, capital funds used to finance construction costs, debt service funds, and others.
  • All Funds includes the General Fund, State Funds, and all Federal funds received by the state to operate federal programs.

How does the budget impact the State’s debt?

Budget Impact on State Debt
(in billions)
  2006-07 Budget
Debt		 2007-08 Proposed Percent change
from prior year
Debt Outstanding (billions) 48.8 52.6 7.9%
Debt Service 4.3 4.4 3.3 %
Debt Service as % of All Funds 4.2% 4.2% 0%

Only $200 million of the $3.8 billion annual increase in debt is associated with new initiatives by Governor Spitzer. The balance, or $3.6 billion, is due to prior commitments which occurred in 2006-07.

How does the budget impact the future gaps?

Budget Impact on Future Gaps
(in billions)
  2006-07 Final
Projected Gaps		 2007-08 Proposed
Projected Gaps		 Change from
Prior Projections
2007-08 1.6 0.0 -1.6
2008-09 3.0 2.3 -0.7
2009-10 5.1 4.5 -0.6
2010-11 5.4 6.3 +0.9
  • The budget fully closes the 2007-08 budget gap with $2.8 billion in actions that are sufficient to both balance the Budget and fund several new initiatives. Key gap closing actions involve restraining spending, particularly in Medicaid, and increasing revenues by closing tax law loopholes.
  • The value of the savings grows $4.7 billion in 2010-11, helping to offset projected gaps through the life of the four-year financial plan.
  • The budget gaps ahead reflect the use of $1.1 billion in non-recurring resources, including $671 million of prior year surpluses. This compares to the use of roughly $250 million of non-recurring resources currently projected to be needed to balance the 2006-07 budget.
  • The use of non-recurring resources in 2007-08 is reflected in the future structural gap outlined above

Does the Budget increase taxes?

No

Does the Budget increase fees?

The Budget provides increased or new fees that amount to $67.7 million in 2007-08. The largest portion of these fees is $25 million attributable to expanding the bottle bill to non-carbonated beverages and collecting all of the unclaimed funds associated with both carbonated and non-carbonated beverages. The second largest portion of fees is $18.8 million from fines levied on drivers who unsafely exceed the speed limit in major construction zones throughout the state.

What are the assumptions on All Funds receipts growth?

Assumptions on All Funds receipts growth
(in billions)
  2006-07
Final Spending 		Proposed Budget
2007-08		 Percent change
from prior year
Taxes 58.309 60.961 4.6%
Misc. Receipts 18.538 20.044 8.1%
Federal Grants 36.184 37.331 3.2%

Base revenue growth is estimated at 6.5 percent for 07-08. The out-year growth is projected at between 5 and 6 percent.

What are the major causes for growth in spending?

Major spending growth comes from increases in school aid totaling $1.4 billion (8 percent increase), increased cost of providing property tax relief in 2007 totaling $1.5 billion (24 percent increase) and infrastructure of $1.4 billion (43 percent increase), as well as expanding access to health care for children and adults.

What are the major reductions in spending?

Major reductions come from restructuring our health care system to make it more accessible and affordable. The budget generates State savings of more than $1.2 billion in 2007-08 from what it would be in the absence of these changes.

The reductions involve transitioning to a more rational reimbursement system which pays for high-quality care that patients need and offers incentives to providers to deliver care in the most cost-effective manner; appropriately paying for the nearly $2 billion on prescription drugs through the Medicaid and Elderly Pharmaceutical Insurance Coverage programs; managing the care of high cost beneficiaries; and strengthening anti-fraud capabilities, among other initiatives.

How much does the Budget have in reserves?

The Executive Budget maintains nearly $3 billion in reserves, equal to 5.4 percent of General Fund spending. The Budget finances a $250 million deposit to the debt reduction reserve that will be used to pay off high-interest debt. It also makes the first deposit to the State's new flexible rainy day reserve ($125 million) enacted this month as part of a package of budget reforms. The other reserves consist of $1 billion in the tax stabilization reserve, that can be used only to cover a year-end deficit, $350 million in the Community Projects Fund to finance existing spending commitments, and $21 million in the Contingency Reserve for litigation risks.

How does the Budget impact the State workforce?

Under the Budget proposal, the State workforce will increase from 194,600 to 197,068, an increase of 2,468 or 1.3%. The increases include:

  • Additional staff to support the civil commitment of Sexually Violent Predators in the Office of Mental Health according to prevailing statute (+335);
  • Additional staff to improve the health and safety of youth and staff at Office of Children and Family Services youth facilities (+200);
  • Additional staff to improve the State's infrastructure (+89) and reduce the reliance on private contract staff in the Department of Transportation (+108);
  • Additional staff to strengthen Medicaid audit and fraud prevention activities in the Office of the Medicaid Inspector General (+157);
  • Additional staff in critical environmental programs in the Department of Environmental Conservation (+109);
  • Additional staff to address critical facility maintenance projects / maintain new facilities; provide more efficient stewardship; and, increase the number of Park Police in the Office of Parks, Recreation and Historic Preservation (+52);
  • Allow the Temporary State Commission on Investigation to sunset in September 2007 (32 layoffs).
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