January 19, 2010
CONTACT: Matt Anderson


Important Step towards Changing and Restructuring the Way New York Does Business; Making State Government Smarter, Smaller, and Less Costly

Efforts of Office of Taxpayer Accountability Will Make Government More Efficient & Eliminate Waste

Governor David A. Paterson today announced a series of State agency and public authority mergers and consolidations, as well as actions identified by his Office of Taxpayer Accountability, which he is advancing in his 2010-11 Executive Budget to save taxpayer dollars. These efforts will help move forward Governor Paterson’s goal of a restructured and more streamlined State government at a time when difficult cuts are required across every area of State spending to address an historic fiscal crisis.

“In a time of plummeting revenues and limited resources, it is critical to ensure that important State services are delivered in the most cost-effective and efficient manner possible,” Governor Paterson said. “Given the substantial financial difficulties we are facing, my proposed budget includes significant additional cuts. But the improved efficiencies we are announcing today are another important step forward in our efforts to lower costs and root out waste on behalf of New York’s taxpayers.”

Additional Across-the-board Agency Cuts

Since taking office, Governor Paterson has implemented $1.5 billion in across-the-board, recurring cuts to State agencies ($1.0 billion in 2008-09 and $500 million in 2009-10). The 2010-11 Executive Budget includes an additional $500 million reduction to State agencies, bringing the total amount of recurring across-the-board agency cuts that the Governor has instituted to $2.0 billion.

Prison Closures

The prison population is projected to decline by 1,100 inmates in the current fiscal year and by another 1,000 inmates in the 2010-11 fiscal year. As a result, the Department of Correctional Services will continue to consolidate facilities and eliminate excess capacity. Two prisons will close in January 2011: Lyon Mountain minimum security (Clinton County) and Butler minimum security (Wayne County). Another two prisons will close in April 2011: the Moriah Shock facility (Essex County) and Ogdensburg medium security facility (St. Lawrence County). The planned closures will be undertaken in compliance with the current statutory provisions requiring one-year notification. The consolidation of various dormitories will also be factored into the overall plan, providing flexibility to adjust to unexpected changes in the size and movement of the inmate population. Once the closures are completed, the DOCS workforce will have been reduced by 637 staff, including 17 managerial staff. These actions will save $7 million in 2010-11 and $52 million in 2011-12.

Rightsize Residential Juvenile Justice System

By consolidating and reducing capacity in line with population trends, the State will lower costs and improve the efficiency of the Office of Children and Family Services (OCFS) youth facility system. The Annsville and Taberg residential facilities would be consolidated. Additionally, two other facilities would be downsized to reduce excess capacity, including the Tryon Boys facility in Johnston, Fulton County (eliminate the limited-secure program for boys) and the non-secure residential center for girls in Lansing, Tompkins County. These actions would take place in January 2011 in accordance with one-year notification requirements, reduce facility-wide vacancy rates from 30 percent to 19 percent, and result in reduced staffing needs of 251 positions. OCFS would continue to operate 23 residential facilities (1,209 beds) and five day placement centers with sufficient capacity to accommodate any upturn in placements by the Family or Criminal Courts. Overall, this proposal would produce savings of $3 million in 2010-11 and $15 million in 2011-12.

Workforce Actions

At the close of the 2009-10 fiscal year, the portion of the State workforce that is subject to gubernatorial management is projected to total 132,525. This represents a decline of 5,150 since Governor Paterson took office in March 2008. After implementation of Executive Budget recommendations, the portion of the State workforce that is subject to gubernatorial management would total 131,900 – a decline of 5,775 compared to March 2008. When completed, the annual General Fund savings associated with these reductions would be approximately $457 million, including fringe benefits.

In the 2010-11 Executive Budget, the Governor will seek to implement a number of workforce actions to reduce State employee salary costs. These actions are targeted to save $250 million in 2010-11 and may include options such as a salary deferral or the delay or reduction of a four percent general salary increase.

Mergers and Consolidations

The 2010-11 Executive Budget recommends eight proposals to merge or consolidate State agencies and public authorities, producing full annual savings of $14.8 million. This is the first step in an ongoing process of streamlining State agencies in smart and targeted manner that delivers essential services at a lower cost.

Recommendations in the 2010-11 Executive Budget include:

To streamline the State’s economic development delivery structure and ensure that New York emerges as a leader in the knowledge, technology and innovation-based economy, the 2010-11 Executive Budget proposes merging the Department of Economic Development and the Empire State Development Corporation into a new Job Development Corporation (JDC). The JDC will continue functions performed by the previous bodies, and will be better able to provide economic development and perform job creation activities with improved efficiency. The merger of the State’s economic development bodies is expected to save $4.7 million annually.

The Office of Homeland Security, State Emergency Management Office, the State 911 Board, the Office of Cyber Security and Critical Infrastructure Coordination and the Office of Fire Prevention and Control will merge into a single State agency, the Division of Homeland Security and Emergency Services, to provide greater support to local first-responders, improve coordination of a wide array of State and Federal grant programs, and advance the vision of a county-driven statewide communication network, delivering efficiency savings of $1.5 million annually. In addition, the consolidated agency will award new grants from the cellular surcharge to county consortiums to assist in the development of regional interoperable communication networks for use by both State and local first responder agencies.

The operations of the Crime Victims Board, Office for the Prevention of Domestic Violence, and Division of Probation and Correctional Alternatives will merge with the Division of Criminal Justice Services (DCJS). The important missions of these agencies will be preserved, coordinated and enhanced as specialized offices within DCJS. DCJS already provides administrative support to these smaller agencies, and a full merger offers a more efficient and cost-effective environment for the delivery of programs and services for which these agencies are responsible. The merger will also foster improved coordination of policies and programs, and consolidate grant operations. Overall, this action will produce efficiency savings of $1.9 million.

The Executive Budget merges the Office of Real Property Services into the Department of Taxation and Finance, achieving over $1.9 million in full annual savings by consolidating facilities and services in support of agency operations. This merger expands upon the current host agency arrangement between the agencies, which has already reduced overall costs for administrative support by $650,000, and improves coordination of property tax relief efforts. 

The State Employment Relations Board (SERB) will be abolished and the Public Employment Board will absorb its remaining responsibilities for full annual savings of $1.3 million. The case for the elimination of SERB is overwhelmingly clear, as the Federal government has already assumed most of SERB’s prior responsibilities.

The Office of Welfare Inspector General would share administrative services with the Office of Medicaid Inspector General to achieve administrative efficiency and strengthen collaborative efforts to detect and control public benefits fraud.

The Division of Housing and Community Renewal and “nyhomes” will remain separate entities, but will be consolidated under a single management structure that is expected to achieve synergies in areas such as administration, asset management and grant making, producing annual savings of $3.5 million.

The Governor proposes sweeping ethics reform, including the consolidation of all ethics-related functions into a single agency, thereby providing a consistent framework for making advisory decisions on ethical conduct and evaluating potential violations. The new Government Ethics Commission would combine the oversight of both the Executive and Legislative branches, as well as enforcement of the laws governing ethics, lobbying, and campaign finance.

Office of Taxpayer Accountability

On June 13, 2009, Governor David Paterson announced the creation of the Office of Taxpayer Accountability (OTA). Its mission is to save taxpayer money by eliminating waste, fraud and abuse; achieving economies of scale; breaking down silos between State agencies; establishing an enterprise approach to State government; and sharing services to streamline functions. 


In the past six months, OTA has generated nearly $27 million in savings by leveraging the State’s buying power and directing State agencies to cut out wasteful spending by taking actions such as reducing travel by 25 percent, eliminating unnecessary printing and copying, and replacing paper processes with electronic submissions and notifications. In 2010, OTA will take additional actions to root out waste, fraud and abuse by:

  • Increasing the use of debit cards for State payments
  • Taking maximum advantage of the savings to be realized from the use of procurement cards
  • Reducing energy consumption and set electronic devices to “power down” sleep settings
  • Auditing utility services
  • In cooperation with the Office of General Services (OGS), consolidating, renegotiating and auditing leases
  • Finding additional aggregate purchasing opportunities, including enterprise information technology procurements
  • Carefully monitoring and evaluating the State’s fleet Inventory
  • Aggressively overseeing and monitoring agency internal audit plans to insure that audits are risk based, protect taxpayer money, hold state officials accountable for funds being spent as effectively and efficiently as possible, and help prevent and eliminate waste, fraud and abuse.

An increasing crackdown on tax and Medicaid fraud is also an important component of Governor Paterson’s budget. Through targeted initiatives and increased staffing, Medicaid fraud recoveries ($300 million) and tax audit and compliance activities ($221 million) are expected to increase dramatically.


Building on these actions, the 2010-11 Executive Budget advances the specific additional Office of Taxpayer Accountability recommendations detailed below. It is expected that these and its other efforts to streamline State operations will produce recurring savings of at least $50 million in 2010-11. They include the following:


  • Create a one-stop-shop (E-licensing) for businesses and professionals seeking licenses and permits to conduct business in the New York. Five agencies are currently pursuing an enterprise electronic system to modernize and consolidate aging legacy systems or create one where one currently does not exist. Once operational, additional agencies will migrate onto this platform as their systems become obsolete or require major upgrades. Developing a single statewide enterprise application is projected to avoid costs of $9 million, with further savings accruing as more agencies migrate in the future. 
  • Consolidate call centers to improve customer service and lower State spending. Currently the State operates myriad independent call centers and has hundreds of dedicated lines and staff devoted to this function. Initially, savings will be realized by reducing the number of toll free lines and renegotiating contracts. By establishing a central management structure and knowledge repository, the ultimate goal of enhancing staff productivity and decreasing redundancy will be achieved over time. These efforts are projected to generate net savings of $3.4 million in SFY 2010-11.


  • In-source information technology consultants. Pursuant to Chapter 500 of the Laws of 2009, efforts are underway to in-source up to 500 technology consultants, generating millions of dollars. For every 100 outside contractors replaced with State employees, it is estimated that the State will save between $2.5 and $3 million.
  • Launch a new business model to jump start the consolidation of technology services under CIO/OFT. Capitalizing on the strategic vision of CIO/OFT, a charter will be established between OTA and CIO/OFT that requires a reduction in statewide technology costs and a focus on customer-driven business relations. In turn, State agencies will be mandated to utilize CIO/OFT services and adhere to statewide technology policies and principles. A governance structure will be established to ensure that agencies have a voice in how technology decisions are made and service level agreements will be established to ensure transparency and accountability. Outside experts will be sought to help transform OFT’s business model and ensure the State is trained and operating as efficiently and effectively when purchasing IT products and delivering services statewide. The following services will be developed in the coming year:
  • Consolidate all agencies onto a single e-mail platform to gain operational efficiencies. Over 40 agencies will migrate to the State’s email platform over the next eighteen months. By consolidating all State agencies’ e-mail systems into a single system, the State will gain operational efficiencies that are anticipated to result in at least $4 million in annual savings when fully implemented, and will position the State for unified communications beyond e-mail which will further lower information technology costs.
  • Enter into a public-private partnership to develop a shared data center. By pursing a cooperative effort with institutions of higher education and perhaps the private sector, true economies of scale can be achieved, economic development can be advanced and combined resources can be leveraged to develop a new model for future facility projects.
  • Fast track the State’s ability to utilize Voice over Internet Protocol (VoIP). This telecommunications technology will allow for audio and data transmission over the Internet and/or other digital networks to assist agencies with achieving greater operational efficiencies. These efforts have already begun with the Department of Tax and Finance.


  • Transform the State’s decentralized approach to asset management into an enterprise solution that furthers both short-term and strategic objectives. The State will deploy an asset management module to provide immediate insight into its holdings - everything from blackberries to cars to real estate – as a first step towards better management and future decision making. Real estate portfolio optimization will also be vigorously pursued. Outside expert services will be sought to rationalize the State’s disparate, cross-agency processes for managing, operating and disposing of State-owned and leased space. This space utilization effort will be broad, proactive and intrinsically linked to changes in agency missions, workforce and process improvements.


  • Create a single statewide human resources system (e-HR) that contains electronic personnel records (recruitment to retirement) for each State employee. While completion of such a system will take time and resources, in FY 2010-11 the State will start by completing an inventory of the State’s myriad HR systems and business processes to identify best practices and re-engineering opportunities, including time and attendance to reduce waste, fraud, and abuse. A governance structure will be established to ensure appropriate agency involvement.
  • Develop an enterprise Learning Management System (LMS). Deploy a statewide LMS system, while also planning for it to become part of a larger e-HR system in the future. This effort will advance two key budget priorities – delivering low cost online training to first responders through the public safety training facility at Oriskany and assisting managers with tracking the IT skills of the State’s workforce to decrease the use of consultants.


  • Modernize the State’s procurement processes to leverage the State’s buying power and improve efficiencies. The State will issue an RFP to obtain the services of a strategic sourcing vendor to analyze what the State spends in the context of the current market economy and ensure an emphasis on operational improvements. This data will establish standards for commonly purchased goods and services, enabling the State to consolidate purchases at lower prices and with better terms and conditions. Assuming ten distinct spending categories can be addressed next year, we estimate savings of $10 million based on industry standards and other states’ experience.
  • Automate procurement processes. OGS, in cooperation with the statewide Financial System, will pilot new technology to automate procurement process workflow and create an electronic library of standardized bid and contract language to support the effort to create purchasing best practices. 


  • Create a single statewide financial management system (SFS). Efforts are accelerating to create a single, statewide financial system, serving both the Office of the State Comptroller and State agencies. Previously independent projects overseen by OSC and DOB have merged to implement a single shared system, with the first phase expected to be implemented by next year. This joint approach can reduce project costs by $24 million.
  • Improve the collection of all State non-tax debt. Several State agencies and the Office of the Attorney General are collaborating to develop improved processes for debt collection, which will rely more heavily on a centralized, standardized collection agent. A minimum of $5 million in recovered revenue is expected as a result of these improved processes. 


  • EmpireStat will be a critical tool for Governor Paterson and the public to assess whether the State is making real progress in areas that matter to New Yorkers: Economic Development/Jobs, Health Care/Vulnerable Youth, and Public and Road Safety. This tool will be used to conduct agency performance reviews, hold agencies responsible for their performance, report directly to New York State taxpayers on that performance, and provide direction for improvement where necessary.