Originally published in Issue 1 - Jan 29, 1997

State Budget News

Governor Patakiís 1997-1998 Executive Budget, released January 14th, calls for $66.3 billion in State spending. The Governorís budget benefits from an anticipated $1.3 billion surplus during the current fiscal year. Of this amount, $943 million would be used to eliminate an expected gap in the coming fiscal year.

Several State budget measures would directly affect New York City.

Medicaid reimbursement cost-containment measures would save the State $1.5 billion: $700 million in continuation of existing measures and $847 million in new cuts. The Cityís estimated share of these reductions in reimbursement rates totals $362 million. While the City and State share savings, the loss in funding would be felt by the local health care economy.

The Governorís School TAx Relief (STAR) educational proposal would give the City 40 percent of an estimated $1.7 billion in additional dollars when fully implemented, or $680 million. In addition, City property owners would receive only 8 percent of another $1.7 billion in Statewide property tax relief. When combined, the Cityís share of the STAR initiative totals 24 percent, less than either its 45 percent share of State taxes or its 37 percent share of the Stateís schoolchildren. The Governorís proposal offers only $138 million in additional funding in fiscal year 1997-1998, which raises questions about the certainty of out-year benefit funding.

The impact on the City of the Governorís proposed welfare restructuring remains unspecified. A three-tiered system of programs would serve the stateís current AFDC and Home Relief populations. New York Works would assist able-bodied families, while Temporary Disability Assistance would aid the elderly and disabled. Able-bodied singles and otherwise ineligible welfare recipients would be offered Article XVII Safety Net Assistanceóin-kind benefits from a locally-administered, State-capped block grant. The Governorís budget does not specify the Cityís share of projected funding sources for these three programs.

Finally, the City would lose about $13 million in Consolidated Highway Improvement Program (CHIPS) transportation funding and $3 million in probation aid and incarceration alternative programs.