GOVERNOR’S PROGRAM BILL PROGRAM BILL #3 2 4 2010 sunravoonEXTRAORDINARY SESSION #! Part A: Purpose: AN ACT to amend the state finance faw, in relation to establishing the FMAP contingency fund and providing for the repeal of such provisions upon. expiration thereof (Part A); and to amend chapter 100, of the laws of 2010 relating to making appropriations for the support of government, in relation to the effectiveness thereof; and to repeal certain provisions of such chapter relating thereto and relating to state aid payment dates to school districts (Part B) This bill would help the State maintain a balanced budget in the event the Federal government does not extend enhanced Federal Medical Assistance Percentages ("FMAP") through the end of 2010-11, The extension of FMAP is expected to provide '$1.086 billion in General Fund savings, but there is a significant risk that an FMAP extension will not be approved, or will be approved at a level less than expected in the State's Financial Plan. Summary of Provisions and Statement in Support: This bill is a prudent measure in response to the financial uncertainty caused by the Federal government's inaction on FMAP. The key provisions of the bill include the following: 1, Starting September 16, 2010 and continuing through the fiscal year, payments from aid to localities appropriations in the General Fund and State special revenue funds would be reduced by a uniform percentage established by an allocation plan. The reductions would continue until $1.085 billion in FMAP savings have been realized. 2, The savings from the reductions would be deposited into a new FMAP. Contingency Fund “lock box" established in the State Treasury. 3. Certain types of appropriations would be exempt from the uniform reductions, including those for public assistance, debt service, and court judgments. 4. ifan FMAP extension is ultimately approved in 2010-11, the payment reductions will cease. Together, these provisions would provide for uniform, relatively modest reductions in payments across the widest possible number of programs until the Federal government acts on FMAP.Budget Implications: This bill would permit the State to set aside resources to deal with the risk that the Federal government will not extend enhanced FMAP. By setting aside money now, the State can avoid the need to impose cuts later in the fiscal year, and provide recipients of State aid with more time to adjust their own financial operations. Part B: Purpose: This bill would ensure the continuation of funding for the Longitudinal Data System necessary for the State’s Race to the Top application, and would address the payment date of certain school aid payments. Summary of Provisions and Statement in Support: This bill would amend Chapter 100 of the Laws of 2010 to ensure continuation of appropriations to fund services and expenses related to the State Longitudinal Data System. This $20.4 million capital appropriation will be used to support the State Education Department's efforts to create a long term student tracking system to serve as a diagnostic tool to improve both student and teacher effectiveness. This initiative is a key ingredient in New York's State’s Race to the Top application. This bill also changes the timing provision for certain State aid education payments from September 1, 2010 to no later than September 30, 2010. This change is necessitated by the continued cash flow issues facing the State. Budget Implication: ‘These provisions are part of the 2010-11 Financial Plan, and maximize Federal dollars as well as provide cash flow relief during continued economically difficult times.