Implements savings adjustments to the state fiscal plan

Authorizes the Department of Taxation and Finance to institute an accounts receivable discount program from January to March 2010. This program would reduce the amount of interest and penalties on outstanding tax liabilities provided the taxpayer pay the outstanding liability in full. Outstanding liabilities eligible for this program are those assessed prior to January 1, 2007 and are those for which an assessment or final determination by the Tax Department has been issued. This measure would increase State revenues by $250 million in SFY 2009-10.

Part b

BATTERY PARK CITY TRANSFER

Authorizes the Battery Park City Authority to transfer $200 million to the General Fund of the state. In addition, this part would authorize the financing of any interest rate exchange agreement termination payments with bond proceeds.

Part c

VARIOUS SWEEPS AND TRANSFERS

Authorizes the transfer of funds from various accounts and public authorities of the State to the General Fund. This part will increase General Fund receipts by approximately $348 million in SFY 2009-10 and this part also includes an blanket authorization to sweep an additional $300 million in State fiscal year 2009-10. PART D: NYSHIP OPERATING AS A SELF-INSURED PLAN

Authorizes NYSHIP to operate as a self-insured plan. This part will increase State revenue by approximately $5 million in SFY 2009-10. It is further estimated that this measure will save $30 million when fully annualized. Major elements of this proposal include:

* This would be applicable for a variety of employee health benefits.

* The State currently contracts with licensed insurance companies for various health benefits and pays all necessary risk charges associated with having insurance. As a result, the insurance carriers pay specialty taxes and insurance assessments which they then pass along to the State as charges.

* NYSHIP already functions like a self-insured plan, therefore it is paying these excess fees and taxes for no real reason. Regardless of the premium paid, the State pays the actual billed costs of health benefits. As a result, insurance companies charge these high risk fees, but in actuality incur minimal risk because of what the State is required to pay.

* Legislation would not require the State to be self-insured, it would simply give them the choice going forward.

* If this was passed, the State would create a more competitive environment among the current insurers and would broaden the field of competition allowing third party administrators to bid on contracts.

* Sources of savings will come from increased competition, maximizing cash flow, earning higher interest on reserves, achieving full savings from network provider discounts, reducing administrative expense charges, eliminating state premium taxes, and eliminating insurer risk charges.

Part e

TOBACCO BOND REFINANCING

Increases the cap by $700 million on the amount of bonds authorized to be issued by the Tobacco Settlement Corporation. It is estimated that an additional $500 in net bond proceeds may be realized based on current market conditions.

Part f

PORT AUTHORITY TRANSFER

Authorizes the transfer of $200 million from the Port Authority of New York and New Jersey to the State's General Fund.

Part g

VLT EXPANDED HOURS

Authorizes an expansion of the hours of operation of video lottery gaming as prescribed by the Division of the Lottery. This action may result in the expansion of hours as prescribed by the Division of Lottery. This measure may result in additional revenues to the State of $39 million in SFY 2009-10.

Part h

DIESEL EMISSIONS REDUCTION ACT (DERA) AMENDMENT

Exempts State vehicles, and vehicles owned by transit authorities, from having to undergo a diesel emissions retrofit, provided that such vehicles are within 3 years of retirement. The vehicles would be prohibited from being on the road after retirement. Savings would accrue to individual transit systems since large amounts of money would not be required to retrofit vehicles within three years of retirement.

It is anticipated that the provisions of this legislation would save transit systems approximately $36 million in the current fiscal year. While there are no estimates for the savings to some of the smaller transit systems, the savings to the larger systems are described below:

* Metropolitan Transportation Authority (MTA): $30,000,000 * Capital District Transportation Authority (CDTA): $1,750,000 * Central New York Regional Transportation Authority (CNYRTA): $300,000 * Rochester Genesee Regional Transportation Authority (RGRTA): $2,900,000 * Niagara Frontier Transportation Authority (NFTA): $850,000

Part i

STATE SPENDING CAP

This legislation will cap the growth of state spending and tie it to the rate of inflation.

Section one of this part establishes the short title for the "annual spending growth cap act."

Section two of this part would amend the State Finance Law ("SFL") to add a new Article 17, establishing a state spending cap.

* New SFL § 250 sets definitions for article 17.

* New SFL § 251 establishes a spending cap, which limits the growth of state operating funds spending to no more than the average rate of inflation of the four previous calendar years. In addition, the section requires the governor to certify that the executive budget is consistent with the cap and the comptroller will provide, within five days of action by the Legislature upon the budget, a determination as to whether the state budget as enacted exceeds the annual spending growth cap. Finally, the section provides that if the Comptroller finds that the state budget as enacted exceeds the annual spending growth cap, the Governor and Legislature must take corrective action, such as a veto, reducing state agency spending within the control of the Executive or enacting amendments to achieve spending reductions, to ensure that funding is limited to the amount of the annual spending cap.

* New SFL § 252 provides that upon a finding of an emergency by the Governor, he or she may declare an emergency by executive order. Based upon such declaration, the Governor may submit and the Legislature may authorize a budget containing a percentage increase in state operating fund spending over the prior fiscal year that exceeds the annual spending growth cap.

Section 3 would make the act effective immediately.

In 2010-11, it is expected that the cap would limit state Operating Funds spending to no greater than $81.9 billion, which reflects an increase of $1.987 billion or 2.49 percent from the prior year. This capped spending level would be $3.903 billion below the most recent current law estimates of state Operating Funds spending for 2010-11 ($85.861 billion, an increase of $5.891 billion or 7.4%) projected in the Division of the Budget's Mid-Year financial plan.

Part j

COMMISSION ON GOVERNMENTAL RESTRUCTURING

Establishes a Legislative Commission on Governmental Restructuring to investigate and provide recommendations on how best to restructure the State government to achieve savings for the taxpayers of the State of New York.

Section one states the legislative intent and purpose for establishing the commission. It also outlines areas of inquiry.

Section two establishes the twelve member commission and how it is comprised. This section also outlines the powers of the commission, and the expectations placed on the commission in terms of deadlines and reports.

Section three states the effective date of this part.

Consolidation and restructuring of State agencies, offices, bureaus, etc. are areas in which large savings targets may be able to be achieved. With the State in difficult financial times, it is important to investigate these areas to identify where and how such savings could be achieved. The commission will conduct this investigation and return its findings to the Legislature in an expedient manner.

The commission is not compensated, only necessary and actual expenses will be funded by the State.

Existing law

Part A amends the Tax Law, Part B amends the Public Authorities Law, Part C amends Chapter 56 of the Laws of 2009, Part D amends the Civil Service Law and Finance Law, Part E amends Section one Part D3 of Chapter 62 of the Laws of 2003, Part F amends Chapter 43 of the Laws of 1922, Part G amends the Tax Law, Part H amends the Environmental Conservation law, Part I amends the State Finance Law, and Part J does not amend existing law.

Justification

State government spending has grown substantially in recent years especially in good economic times. Such growth has forced the State to take drastic actions to stabilize its finances when revenues decline dramatically during periods of economic difficulty. To end this pattern of boom and bust cycle budgeting, and impose greater fiscal discipline on state government, this legislation would enact a strict cap limiting the growth of State operating Funds spending. This legislation also creates a joint legislative commission to explore and report findings on regarding how the State delivers services. Other parts of the bill provide necessary gap closing measures for the current fiscal year.

Legislative history

New Bill.

Fiscal implications

This bill through savings, revenue, and other measures provides a net gain to the General Fund of approximately $1.878 billion in SFY 2009-10.

This bill also directly supports local transit systems around the state through mandate relief.

Effective date

This act shall take effect immediately.