Sample Budget Report Writing, Norreida Reyes Excerpt: 2001-02 Budget Analysis Review of the Executive Budget, H. Carl McCall, State Comptroller.

February 2001 http://www.osc.state.ny.us/reports/budget/2001/execbud01.pdf

1

Local Governments

This section of the report discusses municipal and county governments; school districts

are covered in the education section. This year’s Executive Budget estimates that its

actions will save local governments $443 million, but a closer examination of the figures

shows very little positive impact on local governments: only an additional $1 million

total for counties, cities, towns, and villages.

Revenue sharing is virtually unchanged, but certain miscellaneous aids are cut. New York

City is particularly disadvantaged, losing $114 million this year and thereafter with the

proposed elimination of the Stock Transfer Incentive Fund. The new unrestricted aid

program for counties that was enacted last year to offset increased costs under HCRA is

continued. However, while the HCRA costs more than double this year, no increase is

provided. This year the Executive is again calling for reform of the Wicks law and an

increase in the E-911 surcharge.

Unrestricted Aids General Purpose Local Government Assistance, also referred to as revenue sharing,

remains virtually unchanged at $562 million. The Executive again proposes to amend the

State Finance Law to permanently end the original revenue sharing formula. The formula,

were it allowed to operate, would generate approximately $2 billion in State tax revenue

sharing for local governments. The formula is annually overridden in budget legislation

with aid amounts frozen or altered across-the-board. Revenue sharing amounts peaked in

1988-89 at $1.02 billion before dropping to the current level.

The Stock Transfer Incentive Fund, which has provided New York City with $114

million in unrestricted aid, is eliminated. The City had received this aid since 1977 to

offset losses from the elimination of the Stock Transfer Tax, and it has become an

integral part of the City’s budget.

Other unrestricted aids, such as emergency and supplemental aids, remain at the same

level as last year. Miscellaneous Financial Assistance, however, has been cut by $5.6

million. Of that amount, $4.5 million for parking garages in Troy and Schenectady is

being reconsidered by the Executive and may be reinstated. The remaining $1.1 million,

which primarily impacts counties, has been eliminated.

State appropriations increase to $17 million to continue funding the $22 million aid

program (county fiscal year basis) designed to offset the costs of last year’s HCRA

legislation ($5 million was given towards those costs in SFY 2000-01). The Executive

Budget does not provide an increase in this aid, although HCRA’s cost to counties (for

the new Family Health Plus Program) is now doubling, and tripling in 2003. The county

share is estimated to be $22.6 million in the 2001 calendar year, $48.2 million in 2002,

and $68.2 million in 2003.

2

…Estimating the Budget’s Impact Each year the Executive Budget provides an overall estimate of the budget’s impact on

local governments. These calculations, sometimes referred to as “puts and takes,” attempt

to measure all of the budget’s impacts, including aid program changes, reimbursement

changes, taxes, local mandates, and other requirements.

The impact of the State budget on localities goes far beyond the direct forms of aid, such

as revenue sharing or the Consolidated Highway Improvement Program (CHIPS). Many

other State programs and reimbursement practices affect local governments, either by

increasing the amount they must spend or by decreasing State reimbursements for

mandated programs. Additionally, many State statutes are altered in budget legislation

that affect local tax collections and impose or revise mandates on local governments.

Federal programs and other events also have an impact, as do State government actions

relating to the administration of federal programs.

An accurate accounting of all the variables is difficult, especially as there are often

different perceptions as to what constitutes an added cost or a source of fiscal relief. Also,

the State’s April through March fiscal year does not match the fiscal years used by local

governments. As such, a comparison on a State fiscal year basis does not match the

impact on local governments in their fiscal years.

This year’s Executive Budget estimates that its actions will save local governments

$442.6 million in State fiscal year 2001-02, through cost reductions, aid increases, and

mandate relief. Nearly 74 percent of this figure is based on increased funding for schools.

The balance includes various increases and decreases in welfare, public protection,

environment, taxes, health, and Medicaid as well as the Stock Transfer Incentive Fund

cut…

…

In summary, after appropriate adjustments, the Executive Budget’s impact on local

governments overall is only narrowly positive (+ $1 million). The budget documents also

claim that the previous six budgets have had a positive impact on local governments

approaching $6 billion. However, that figure is primarily composed of school aid

increases and involves other problems discussed above. Additionally, it excludes or

understates negative impacts that are not fully effective in the first year they are enacted.