The document provides an overview of budget calendars and economic indicators for New York State and New York City. It summarizes the composition of revenues and expenditures for New York State and New York City budgets. It also highlights areas of increasing spending such as Medicaid, education, economic development incentives, and capital projects while noting concerns over the long-term fiscal impacts and questionable priorities for settlement funds.

1. Trustee
Budget Briefing
June 23, 2015

2.  Budget Calendars
 Economic Indicators
 New York State
 New York City
Overview

3. Fiscal year begins April 1
Key budget milestones
 January – Executive
Budget
 March – Adopted Budget
 July – First Quarterly
Update
 October – Mid-year
Update
City and State Budget Calendars
New York State New York City
3
Fiscal year begins July 1
Key budget milestones
 January – Preliminary
Budget
 May – Executive Budget
 June – Adopted Budget
 November – Quarterly
Modification

4. Strong Jobs Recovery in NYC,
Rest of NYS Lagging
4
Non-farm Employment Growth Since 2007
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2007 2008 2009 2010 2011 2012 2013 2014
NYC Rest of NYS U.S.

5. High Growth in Low-Paid Jobs
5
Change in NY Jobs from 2007 to 2013
(2013 Average Annual Wage on Top of Bars)
(100)
(50)
-
50
100
150
Leisure and
Hospitality
Health Care
and Social
Assistance
Professional
and Business
Services
Education Retail Trade Financial
Activities
Government
ThousandsofJobs
$27,847
$46,835
$82,969
$51,408 $31,453
$162,653
$57,128

6. 1.8%
1.3%
1.3%
1.1%
1.6%
1.5%
1.3%
1.2%
2015 2016 2017 2018
3.7%
4.4%
5.1%
5.0%
2.8%
3.7%
4.5%
4.2%
2015 2016 2017 2018
New York State Division of Budget
Optimistic Economic Forecasts
6
Annual Employment
Growth
Annual Personal Income
Growth
New York City Office of Management and Budget

7. New York State Budget
7

8. Personal
Income Tax,
$47.1B
(31%)
Sales and
Use Taxes,
$15.8B
(10%)
Business
Taxes,
$8.1B (5%)
Other
Taxes,
$3.5B (2%)
Misc.
Receipts,
$25.4B
(17%)
Federal
Receipts,
$51.4B
(34%)
Composition of NYS Receipts
Fiscal Year 2016
8
$151B

9. Composition of NYS Spending
Fiscal Year 2016
9
$152B
School Aid,
$26.0B (17%)
Medicaid,
$52.0B (34%)
Wages and Fringe
Benefits, $20.1B (13%)
Other Education
Aid, $9.6B (6%)
Other Health,
Social Welfare Aid,
$13.4B (9%)
Other Local Aid,
$10.9B (7%)
Other Agency
Expenses, $7.8B (5%)
Debt Service, $5.1B (3%)
Capital Projects, $7.2B (5%)
CBC “Big Three”
65% of State
Spending

10. High Medicaid, Education Spending
with Average Outcomes
10
(Commonwealth Fund State Health System
Performance, 2014)
19
Ranking out of the 50 states plus D.C.
High Medicaid Spender
(spending per enrollee, FFY2011)
NYS US
$8,901
$5,790
Average Health Outcomes
NYS US
$19,818
$10,700
High Education Spender
(public preK-12 spending per pupil, SY2013)
Average Education Outcomes
(Education Week Achievement Score, 2014)
C-

11. $0
$10
$20
$30
$40
$50
$60
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
State Medicaid Costs Contained over
Short-term, Federal Funds to Rise
11
 State share of Medicaid below ~4% growth cap since FY 2012
 Influx of federal funds - $6 billion from Affordable Care Act in
FY 2016 budget, $8 billion federal waiver to be allocated over
five years based on performance
NYS Department of Health Medicaid
(dollars in billions)
Medicaid Redesign Team begins in 2012
State Enhanced FMAP Federal

12. High Growth in School Aid
Despite “Cap”
12
 School aid cap linked to personal income growth adopted in 2011
has been broken for 3 consecutive years
 $2 billion Smart Schools Bond Act funding to be allocated
 Focus on education reforms
Percent Change in School Aid, School Years 2005 to 2018
5.1%
6.5%
8.5%
10.9%
8.8%
1.0%
-3.5%
-6.6%
3.6% 4.3% 4.9%
6.1%
4.0% 4.6% 5.3%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Actual/Projected Growth Cap
Projected

13. FY 2010 FY 2016
Agency wages, salaries to be
up 0.7% since FY 2010, and all
other agency costs up 13.1%.
But fringes up 48%.
Fringe Benefits
All Other
Agency Costs
(OTPS)
Agency Wages,
Salaries
$26.0M
Tight Control of Agency Budgets
 Wage freeze in FYs 2012 through 2014; 2% raises in 2015 and 2016
 Increased employee health insurance contributions (12-16% for single, 27-
31% for family), new pension tier adopted for FY 2012
13
131,741
119,349
FY 2010 FY 2016
Executive-controlled
workforce down 9.4%
since FY 2010
$23.2M

14. Deferred Pension Contribution
14
 Amortization scheme authorized during recession
 $713M deferral in FY 2015 and $395M planned in FY 2016
 Projected to continue through FY 2020
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Amortized Pension Contributions and Projected Repayment
Schedule, FY 2011 to FY 2029
(dollars in millions)
Amount Amortized Repayment

15. $279
$1,702 $1,606
($2,054)
($2,647)
($4,215)
FY 2017 FY 2018 FY 2019
Unspecified Savings Generate
Future Surpluses
15
 Financial plan shows
surpluses growing to $1.6
billion in FY 19
 But “surpluses” depend on
unspecified savings from
maintaining 2% state
spending growth
 $1.6 billion “surplus” in FY 19
is truly a $4.2 billion gap
 Out-year “surpluses” used to
justify tax cuts last year
“Surplus” vs. True Gaps
(dollars in millions)

16. Questionable Priorities for $5.4B
Settlements Windfall
Unresolved issues with broader plans
 $1.3B for Thruway Authority
 $250M for MTA Penn Station Access
 $400M for upstate hospitals
Broadly-defined and undefined uses
 $1.5B Upstate Revitalization Fund
 $500M for broadband
 $165M for upstate infrastructure
 $150M for shared services, government consolidation
 $150M Long Island “Transformative” Fund
 $150M for emergency response
16
One-time uses, but many unclear investments
 $850M reserve for Medicaid dispute with federal government

17. $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2010 2015
Continued Growth in Tax Breaks
for Economic Development
17
Tax Breaks for Economic Development
(dollars in millions)
BrownfieldsBrownfields
Film
Film
Empire
ZonesEmpire
Zones
Investment Tax Credit
Investment Tax Credit
Excelsior
START-UP NY
$1,190
$946

18. Large Increase in Capital Spending
Total Planned Capital Spending by Function
(dollars in millions)
18
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Other
Bank Settlements
Public Protection
Parks and Environment
Mental Hygiene, Health,
Social Welfare
Economic Development
Education and Higher Ed
Transportation
$11.4B
 $4.5B settlement funds, plus $750M for MTA, $1B for hospitals, $400M
for NYC and Long Island “Transformative Investments,” $200M clean
water fund
 Design-build extended for 2 years, study required
$8.3B
$11.2B
$11.1B $11.3B $11.4B

19. CBC’s Concerns
19
 Long-term impact of new federal funding for Medicaid
through $8B waiver and ACA
 Large increases in school aid without reforms to funding
formulas
 Deferral of pension payments despite economic recovery
and large bank settlements
 Misleading presentation of “surplus” and desire to spend it
 Dubious approved and future uses of large financial
settlements
 Growth in economic development capital, business tax
incentives despite lack of documented success

20. Composition of NYC Revenues
Fiscal Year 2016
20
Total
Taxes,
$52.0B
(63%)
Misc.
Revenues,
$7.1B (8%)
Surplus Roll,
$3.0B (4%)
Other Grants
& Aid,
$0.8B (1%)
Federal,
$7.1B (8%)
State,
$13.0B (16%)
$83.1B

21. Composition of NYC Expenditures
Fiscal Year 2016
21
Personal
Service:
52%
Medical
Assistance,
$6.4B (8%)
Public
Assistance,
$1.5B (2%)
Debt
Service,
$6.5B (8%)
Reserves,
$1.5B (2%)
Other OTPS,
$24.0B
(29%)
Salaries &
Wages,
$25.2B
(30%)
Pensions,
$8.8B
(11%)
Health
Insurance,
$5.7B (7%)
Other Fringe,
$3.6B (4%)
$83.1B

22. Large Growth in FY 2015 & FY 2016
New Initiatives Implemented & Contracts Settled
22
4.0%
1.6%
6.8%
3.8%
0.6%
2.9%
3.9%
2.4%
2010-2014 2014 2015 2016 2017 2018 2019 2015-2019
Avg.
Annual
Actual Planned Avg.
Annual
Fiscal Year
Year-to-Year Expenditure Growth
Note: Adjusted for surplus roll and RHBT drawdowns/funding.

23. Health Insurance and Debt Service
Drive Growth
Total
Spending
Salaries and
Wages
HI, no savings
HI, with savings
Debt Service
-10%
0%
10%
20%
30%
40%
50%
60%
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
PercentGrowthsinceFY2014
23

24. 54% of Healthcare Savings are from
Baseline Cost Projections
$84 $132 $140
$261 $115 $118
$251
$55
$377 $414 $455
$400
$800
$0
$400
$800
$1,200
$1,600
2015 2016 2017 2018
$inmillions
"Savings" from
Potential Future Rate
Reductions
"Savings" from
Baseline Projections
Unspecified
Initiatives
One-shots
Recurring Savings
$400
$1,300
$1,000
$700
24
Savings Targets

25. The Citywide Savings Program
(dollars in millions) 2015 2016 2017 2018 2019 TOTAL
Total Savings ($589) ($466) ($641) ($627) ($584) ($2,906)
Debt Service ($241) ($159) ($393) ($365) ($345) ($1,502)
Agency Savings ($348) ($306) ($248) ($262) ($240) ($1,404)
Federal/State Adjustments 44% 11% 2% 2% 2% ($199)
Adjustments/Re-estimates 26% 25% 20% 16% 18% ($303)
Revenues 19% 12% 11% 10% 10% ($181)
Efficiencies/In-sourcing 11% 35% 45% 51% 47% ($500)
Procurement 0% 18% 22% 21% 23% ($222)
25

26. FY16 Headcount 14,400> than FY14
Stays at that level for the length of the plan
26
4,545
3,461
2,082
1,445
0
2,986
Pedagogical Health &
Social
Services
Civilians in
Uniform
Departments
Uniforms, less
police
Police All Other
Increases in FY 2016 Projected Headcount over
FY 2014 Actual
3.9% 12.4% 8.4% 5.5% 4.3%

27. Ten-Year Capital Strategy Totals
$83.8 Billion
Education
$23.0,
27%
Water &
Sewer
System,
$14.7,
18%
Housing,
$7.5,
9%
All Others,
$20.6,
25%
Transportation,
$12.6
15%
Buildings & Equip,
$5.4,
6%
$ in billions
27
Investment
Type
Replacement,
$16.5,
20%
Expansion,
$19.6,
23%
State of
Good Repair,
$47.6,
57%

28. Significant Increase
to Accommodate New Priorities
28
AGENCY
Increase
Over 2014
Strategy
($ in billions)
NOTE
Housing Pres. & Dev. $4.6 Mayor’s Housing Plan
Transportation $4.4 Bridge investments; Road repair acceleration
Education $3.4 Increase in repair and rehabilitation work
Citywide Equipment $3.1 ONENYC energy efficiency; building retrofits
Economic Development $3.0 $2 billion Neighborhood Revitalization Fund
Environmental Protection $2.3 Green Infrastructure Program; Sewer expansion
Health & Hospitals Corp. $1.5 Federal funds for Sandy-related reconstruction
Parks and Recreation $1.5 Doubling investment for repair/reconstruction
Courts $1.1 Mandated program
NYCHA, MTA, Libraries $2.1 Response to agency requests
ALL AGENCIES $30.1

29. Affordability is a Concern: Debt Burden Is High
According to Metrics Used by Rating Agencies
Debt Outstanding, FY2016
5.0%
6.0%
8.5%
13.4%
As a Share of Real
Property Value
As a Share of
Personal Income
Benchmark for "High"
Burden
New York City
Debt Service, FY2016
12.0%
12.5%
As a Share of City-Funded
Expenditures
"Above Average" Burden
New York City
29Note: Does not include debt of the New York City Municipal Water Finance Authority.

30. Additional Risks: HHC & NYCHA
HHC
 HHC’s operating deficits
grow from $618m in FY
2016 to $1.5b in FY
2019 (cash basis)
 Corrective actions to
reduce deficit by $475m
in FY 2016 are
questionable
 City’s plan for HHC to
assume health service
provision for correctional
facilities could further
strain resources
NYCHA
 NYCHA’s operating gap
grows from $150m in
2016 to $194m in FY 2019
 $17b in capital needs
 Mayor providing over
$100m in annual operating
support
 NYCHA & City released 10-
year strategic plan;
includes CBC’s
recommendations
30

31. CBC’s Concerns
Operating Budget
 Additional expenditures will likely be added
 Savings Program is too small, not sufficiently focused
on efficiencies that produce recurring savings to boost
reserves
 Majority of healthcare savings counted toward MLC &
City targets are artificial
 HHC & NYCHA’s financial challenges persist
Capital and Debt
 Capital plan is very large, debt service is growing
 No use of pay-as-you-go capital to limit debt
increases
 Reporting on capital spending is inadequate
31

32. Questions/Comments?
32