December 2, 2009

Assembly Passes Deficit Reduction Plan To Ensure State Meets Fiscal Year Commitments
Three-way Agreement Helps Close Current Year Budget Gap

Assembly Speaker Sheldon Silver and Ways and Means Committee Chairman Herman D. Farrell, Jr., announced today the passage of a deficit reduction plan aimed at helping to close the current fiscal year budget gap. Under a three-way agreement with the Governor and Senate, the measures (Extraordinary Session Assembly Bills A.21, A.22) cut over $2.7 billion for the 2009-2010 fiscal year.

The legislation includes $1.6 billion in cuts and temporary cash transfers from state agencies, $391 million in federal stimulus funds for education allotted for next year, $250 million from a tax amnesty program and over $600 million in cuts to programs in 134 areas, including higher education, transportation and children and family services. It does not include any mid-year school aid cuts, including private schools, nor does it reduce reimbursements to hospitals, nursing homes and home care.

"We have reached consensus with the Governor and Senate to close a $2.7 billion gap in this year's budget. Although these cuts do not cover the full scope of the deficit - which may be as high as $3.9 billion - we remain committed to making the same sacrifices that everyday New Yorkers have been making already, without allowing the cuts to fall disproportionately on one segment of the population," said Silver (D-Manhattan). "Today's agreement includes real recurring cuts in state spending. These were difficult choices to make, but critical to the fiscal stability of our state."

The Assembly Majority did not accept the Governor's proposed cuts to Supplemental Security Income grants, the Tuition Assistance Program and the school breakfast and lunch program. Silver noted that these reductions would have saved the state little, but would have been devastating for recipients of these crucial funds.

"My colleagues and I in the Assembly Majority recognize that while these reductions may be painful, failing to take such action would lead to greater fiscal problems for the state," said Farrell (D-Manhattan). "Instead of accepting the original deficit reduction plan, we have been able to save the state millions of dollars in federal aid. By reducing with a scalpel instead of an axe, we avoided losing $500 million in federal health care reimbursements due to the state."

The agreed upon reductions included: 12.5 percent cut to remaining balances of local assistance grants; 5 percent cut to operating aid for SUNY, CUNY and community colleges; 5.4 percent cut to the Office of Mental Retardation and Developmental Disabilities; and $107 million in health care actions. The agreement also included several one-time legislative actions, including $200 million from the Battery Park City Authority, $90 million from the Regional Greenhouse Gas Initiative, $10 million from the Environmental Protection Fund and $26 million from the Dormitory Authority. The Governor also agreed to $485 million in agency cuts.