April 9, 2008
CONTACT: Jeffrey Gordon


Governor David A. Paterson today announced that the Enacted State Budget has a positive $3 billion impact on local governments for Fiscal Year 2009. This includes a benefit of nearly $1.4 billion for New York City and $1.7 billion for municipalities outside of New York City.

“With all levels of government facing fiscal challenges, we worked with the Legislature to balance the needs of local governments along with the responsibility of producing a prudent State budget,” said Governor Paterson. “The State tightened its own belt so it could continue to provide critical support to local governments.”

The largest increase was in school aid, with a school year increase of nearly $1.75 billion, including a $644 million increase for New York City schools.

Other impacts to local governments include:

  • Aid and Incentives for Municipalities (AIM): Municipalities outside of New York City will receive $767 million in total AIM funding, a $67.5 million (9.7 percent) increase from last year. This includes the $55.9 million in additional aid proposed in the original Executive Budget, plus another $11.6 million in new special assistance for certain cities. Significant increases are included for Buffalo (+10.8 percent); Rochester (+17.4 percent); Syracuse (+10.8 percent); Albany (+13.3 percent); Binghamton (+10.8 percent), and many other municipalities.
  • NYC AIM: The Enacted Budget provides $246 million in AIM aid to New York City. The Executive Budget had originally proposed providing $164 million in AIM funding, which was half of New York City’s previously scheduled $328 million payment for 2008-09. Under this proposal, the full AIM payment of $328 million will be restored in the 2009-10 fiscal year.
  • Economic Development: The Enacted Budget includes significant new investments in economic development that will benefit municipalities across the State. Key components include a $1.6 billion statewide capital plan and a $700 million Upstate Revitalization Fund. In addition, $150 million in competitive grants will be available under the third and final year of the $300 million RESTORE NY Communities program.
  • Wicks Reform: The Enacted Budget reforms the Wicks Law, which will provide savings to local governments by increasing the dollar thresholds on construction contracts that require multiple bidding. In New York City alone, this reform will produce long-term capital savings of more than $200 million in the City’s upcoming 2009 Capital Plan.
  • Local Government Efficiency Grants: The Enacted Budget includes $29.4 million in grants to encourage local government consolidation and shared services, a $4.4 million increase from last year.
  • CHIPS Funding: The Enacted Budget includes a $51 million (16 percent) increase in local highway and bridge capital funding through the Consolidated Highway Improvement Program (CHIPS). CHIPS, supported by bond issuances paid through the Dedicated Highway and Bridge Trust Fund, will be funded at $363 million in 2008-09.
  • Medicaid Cap, Family Health Plus (FHP) Takeover: Continuing the implementation of the State takeover of Family Health Plus program and capping county Medicaid costs will save New York City and counties $916.8 million the 2009 local fiscal year.

The Enacted Budget agreement does not include a number of Executive Budget proposals advanced to benefit municipalities, including authorization to increase county mortgage recording fees; a cap on county preschool special education costs; the authority for certain municipalities to install red-light cameras to identify individuals committing traffic violations; and local mandate relief on litigation and procurement costs.

The Budget also does not include Executive Budget recommendations to increase local government costs for public assistance and youth detention programs. This restoration avoids an estimated $88 million increase in costs for counties and New York City in 2009.

As a necessary step to ensure a balanced state financial plan, the Enacted Budget includes across-the-board reductions in a range of local assistance initiatives, with education and entitlement programs exempted from this action. Overall, this measure will have a local fiscal year 2009 impact on municipalities of $50.9 million – $27.8 million in New York City, $21.6 million for counties, and $1.5 million for all other localities.