July 23, 2008
CONTACT: Jeffrey Gordon


Challenging Fiscal Environment Will Force Agencies to Identify Areas for Possible Reductions

New guidelines issued today by the New York State Division of the Budget (DOB) will require State agencies to better focus their 2009-10 spending proposals on their core missions, according to New York State Budget Director Laura Anglin.

As part of Governor David Paterson’s vision of a more fiscally responsible State government, under the new Core Mission Budgeting process, each agency will be asked to develop a comprehensive inventory of programs it administers and to distinguish those that are most closely related to the agencies’ core mission from those that have other policy goals.

Governor Paterson said, “For years, our State government has simply accepted the fact that spending will increase without a fundamental reevaluation of what we spend money on. We can no longer afford this kind of budgetary inertia. This year, agencies will need to take a harder look at what they do and prioritize their spending to ensure the budget delivers the services the public both needs and deserves.”

Anglin said, “Budgeting with limited resources forces hard choices among competing priorities, but this can only be done with a thorough understanding of the difficult tradeoffs that will be involved. Our new process will help the public better understand how their money is spent and the choices we are making.”

Core Mission Budgeting will take place in two stages:

  • First, agency commissioners will be asked to create a comprehensive inventory of every program that they administer, along with the dollars spent and employees dedicated to each activity. Commissioners will be required to designate whether each one of these programs has a high, medium, or low relation to the agency’s core mission.
  • Second, in August the Division of the Budget will issue the annual “call letter” to agencies asking for formal budget requests. In these requests, agency commissioners will be asked for budgets that reflect the priorities they have identified.

“This new ranking approach does not mean that initiatives with a low-relation to agencies’ core mission are unworthy programs, but in the midst of a fiscal crisis, we have to separate the critical functions of our State government from those that we can no longer afford,” Anglin said. “Every program cannot be top priority. Unlike in past years, many lower-priority programs may have to be eliminated or experience real, year-to-year reductions.”

The DOB sent out a request for Core Mission Budgeting information to each agency today. This information will represent recommendations from the agency commissioners for consideration by the Governor as he develops the 2009-10 State budget. This information will be sent back to the DOB by August 22 and will be made public afterwards.

This new budgeting procedure is being issued as New York faces increasing fiscal challenges. This month, Wall Street, which accounts for 20 percent of the state revenues, officially entered a bear market. The New York securities industry has reported losses of over $40 billion during the last three quarters. Financial services firm layoffs are expected to total 3,500 in New York — six percent of the overall workforce, which is roughly the same percentage impact on employment within that industry as occurred after 9/11.

The DOB will issue an updated Financial Plan reflecting the impact of recent economic developments next week.

“Our current negative economic picture represents both a challenge and an opportunity to break from the past and chart a new course for the way we do budgeting,” Anglin said.

Click here to see a copy of the Budget Bulletin issued to State agency commissioners today: