GOVERNOR PATAKI INTRODUCES 2006-07 EXECUTIVE BUDGET

Fiscal Integrity, Economic Freedom, a Secure Future for New Yorkers Plan Controls Spending, Increases Fiscal Reserves to $4B, Proposes $3.2B in Tax Cuts, Boosts School Aid by $634M, Increases Local Government Aid to All-Time High, Advances New Medicaid Anti-Fraud Measures, Provides Strong Support for Public Security and Renewable Energy and Environmental Initiatives

Governor George E. Pataki today proposed his 12th and final Executive Budget – a soundly balanced, fiscally-responsible plan that promotes fiscal integrity, ensures economic freedom, and secures a strong future for New Yorkers.



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“Two weeks ago, I set before you an ambitious agenda that builds on the achievements we’ve realized together over the last 11 years, addresses some of New York’s most pressing challenges today, and prepares our state and its people to succeed in the global economy of tomorrow,” Governor Pataki said. “Today, I present you a budget that furthers these and other goals and sets this ambitious agenda into motion. It heeds the lessons and successes of the past, meets the evolving demands of the present, and anticipates and addresses the emerging challenges of the future.”

“As we go forward, let’s stick to the guiding principles that have seen us through the challenges of the last 11 years. Let’s remain committed to creating jobs and improving our economic climate, building up our fiscal reserves, cutting taxes, restraining spending and debt, and enacting major reforms like those that have made our state a better place.”

“Today, New Yorkers are safer, more secure and more prosperous than they were when we began our course of progress in 1995. But our work is not done, there’s much more to do. Our journey continues. The path to progress is not always an easy one. But it is the right one for New York and its people. The budget I’m sending you not only sustains our progress, but builds toward a future of unlimited potential and opportunity.”

The $110.7 billion Executive Budget closes a modest $700 million budget gap and restrains overall spending growth. It increases the State’s total reserves to $4 billion and uses the projected $2 billion 2005-06 surplus to reduce out-year gaps – further strengthening New York’s fiscal outlook. It also reduces the projected 2007-08 out-year gap to $1.9 billion, or less than 4 percent of the General Fund. This compares favorably to the 1995-96 out-year gap Governor Pataki inherited, which was $5 billion or 15 percent of the General Fund.

Under the 2006-07 Executive Budget, General Fund spending would total $49.6 billion, an increase of $2.4 billion. State funds would grow by $4.6 billion and total $75 billion. All Funds spending would total $110.7 billion, an increase of $4.4 billion. After adjusting for a one-time increase in State spending resulting from last year’s takeover of local Medicaid costs and new proposed enhancements to STAR (property tax relief that is technically treated as budgetary spending) -- the annual percentage increase of each spending category is 2.4 percent for the General Fund, 4.8 percent for State Funds and 2.9 percent for All Funds. Unadjusted annual percentage increases would total 5.1 percent for the General Fund, 6.6 percent for State Funds and 4.1 percent for All Funds.

The Executive Budget would continue to strengthen the State’s finances while providing a solid framework to allow the Governor and Legislature to enact an on-time, fiscally prudent final State Budget this year. The Executive Budget would reduce property, income and business taxes by $3.2 billion; provide record aid to New York’s schools and local governments; build on the Governor’s successful criminal justice agenda; and include strong support for energy and environmental initiatives championed by the Governor.

The Governor’s 2006-07 Executive Budget also includes:

A new “STAR Plus” direct property tax rebate of $400 and provides a new STAR COLA for seniors;
a new pro-family tax cut package that cuts the income tax rate, eliminates the marriage penalty and estate tax, and provides a $500 heating tax credit for lower-income seniors;
a new $500 per child tax credit for parents of kids who live in districts with underperforming schools;
a comprehensive plan to encourage the development of renewable energy, reducing reliance on imported energy;
more than $1.1 billion in new job-creating business tax cuts;
a new, wide-ranging Medicaid anti-fraud initiative to combat waste, fraud and abuse;
a $634 million school aid increase – the largest ever proposed by a New York Governor;
a new scholarship program for college students who commit to teach math and science in New York;
local aid increases up to 11 percent for cities and 3.25 percent for towns and villages;
funding for 100 new State Police investigators to target criminals who illegally possess, use or sell guns;
$192 million to construct a new-state-of-the-art facility to house and treat sexually-violent predators; and
the highest amount of funding ever -- $180 million -- for the State’s Environmental Protection Fund (EPF).