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State okays cuts and fees

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The first round of state budget cuts and increased fees has been completed, with another, far larger deficit reduction package in the offing.

The state legislature approved cuts and fee increases to eliminate a $1.6 billion deficit for the 2008-2009 fiscal year on February 3rd. Of the entire package, $800 million represent recurring savings, so they also will be applied to the looming $13 billion deficit projected for the 2009-2010 fiscal year, according to the office of New York Governor David Paterson.

The changes were broad-ranging, affecting a wide range of arenas, from education to health care, upon which Brooklynites depend.

“We have a long way to go before we close the projected $13 billion deficit for next year but this is a good start,” remarked Paterson, who rejected the idea that the state should wait till the federal government finishes crafting the economic stimulus package, in hopes that it would contain money that could be used to stave off cuts. Paterson stressed, “Despite the deliberations in Washington, New York must get its own fiscal house in order.”

In the area of education, the state legislature approved the governor’s proposal to increase tuition at SUNY for New York residents by $620 annually, from $4,350 to $4,970. This represents a savings of $62 million for the current fiscal year, and $122 million for the following fiscal year. The increase in tuition also means an increase in state spending on the Tuition Assistance Program (TAP).

In terms of health care, there are numerous cuts that have been made, saving $359 million in the current fiscal year, and $386 million in the next fiscal year. Among the cuts in this area is the elimination of unspent funding that had been allocated to non-public hospitals around the state, a total of $9 million in this fiscal year, and $12 million in the upcoming fiscal year. Grants to public nursing homes in the current fiscal year are also being cut by $4.2 million. In addition, the state has changed the financing system for its Healthy New York program, which subsidizes small businesses to aid them in providing health care to employees. Cuts in both this and the next fiscal year total $137 million.

The state’s Environmental Protection Fund is taking a hit, losing $50 million per year; in addition, state arts grants would be reduced by $7 million per year for 2008-2009 and 2009-2010.

Many of the changes affect programs that are partially funded by the state. For example school-based alcohol use prevention programs conducted under the auspices of the state’s Office of Alcoholism and Substance Abuse Services are being cut, $3 million in this fiscal year and $3 million in the following fiscal year. The cuts leave $19 million for the program, statewide.

In addition, economic development programs are being cut. Tourism marketing and the JOBS Now program will each be cut by $1.5 million; two other programs (Technology Transfer and Faculty Development) will be cut by $1 million.

Some of the savings comes from internal changes. For instance, the state is eliminating its 2008-2009 vacation exchange program, in which certain employees could trade unused vacation time for money. That is expected to save $5 million in the current fiscal year.

New York is hardly alone in its budget woes. According to the not-for-profit Center on Budget and Policy Priorities, a total of 46 states have budget problems now and in the future.

The center reports that, “In 42 states and Washington, D.C., 2009 budgets have fallen out of balance since their enactment, producing mid-year deficits that total more than $46 billion (or over 9 percent of budgets). These mid-year shortfalls are in addition to $48 billion in budget gaps that 29 states closed when enacting their fiscal 2009 budgets, which began on July 1 in most states. Total fiscal 2009 budget gaps equal 14 percent of these states’ general fund (operating) budgets.” The only states not currently facing shortfalls are West Virginia, Montana, North Dakota and Wyoming,

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