UUP Binghamton

The following is an annotated version of a statement from Phil Smith, UUP’s Statewide President, recently forwarded to members. I have provided some explanations, in Italics, of what it means and some of the implications of final passage.

Darryl M. Wood

In this toughest-ever budget battle, UUP achieved some extremely significant gains!

UUP has been one of the few groups in the state during the last few years who has actually advocated for a SUNY budget. The trustees have not been particularly helpful. In addition, with the international, national and state economies going down the toilet, budget negotiations this year have been particularly problematic. Relative to other state agencies, SUNY has done remarkably well, largely the result of a coordinated and concerted effort on the part of UUP and you, its members.

What follows is our first-pass analysis of what's in the more-than 700 page Executive Budget, slated to be enacted sometime tomorrow, Tuesday, 3/31.

-"Fair Share" Tax Reform is included in this Budget and will help stabilize revenue and make the tax system more progressive. An estimated $4 billion will be raised by increasing taxes for those earning $200,000 in adjusted gross income as single payers and $300,000 as joint filers.

The issue of tax reform, and the ‘millionaire’s tax,’ was the top priority of UUP this year. You may remember that the governor was, initially, not interested in moving in this direction. These added revenues will go a long way to resolving some of the structural problems with NY’s tax system.

-In an agreement that UUP fought extremely hard for, the Budget provides that $75 million from SUNY's unallocated reserves will be available to preserve access to student programs and to protect campus positions, which include full- and part-time faculty and staff.

This may well be the most beneficial ‘win’ for UUP. It will maintain access and quality while at the same time ensuring that individuals will retain their positions. While some may argue that this is all about jobs, access and quality will inevitably decline if people are not there to provide service and teach. You should note that SUNY has, system-wide, over $500 Million in unallocated fund balances. This is growing by $40 - $50 Million a year. The state essentially said to SUNY, “We are in difficult budget times and you have moneys to help yourself. Use them to maintain access and quality!”

-The Legislature rejected the Governor's plan to merge The New York State Theatre Institute (NYSTI) with "The Egg."

NYSTI has been a political football since it was separated from SUNY-Albany many years ago. Its educational mission was endangered with the proposal to merge it with a road house.

-The Legislature restored cuts to SUNY's university-wide programs--except for the Levin Institute--by adding back $17.4 million. The Governor's Budget also provides that EOP and EOCs are spared cuts originally proposed by SUNY. In the next few days, I'll send out a list enumerating the above program restorations.

University-wide programs have been of particular concern for everyone. Restoration will be welcomed by all. EOP and EOC’s have been cut in literally every governor’s budget since the early 90’s. Again, if we are to provide access to those most disadvantaged in our state, we need to maintain appropriate levels of funding for both of these programs.

-The Legislature agreed to a $620 increase in SUNY tuition for '09-'10, with 20 percent of it retained for SUNY. The Legislature also provides a new plan for escalating tuition retention in subsequent years allowing SUNY to keep: 30 percent in '10-'11; 40 percent in '11-'12; and 50 percent in '12-'13. This is a significant gain that implements UUP's recent proposal to the Governor, DOB, and the Legislature to phase-in tuition revenues for the benefit of our campuses.

This particular issue has probably generated the most disinformation and frustration on the parts of all involved. For the record, every time SUNY has raised tuition in the past, the state has reduced state appropriations by 100 to 115%. We always lost more than we gained with those tuition increases. The real benefit of tuition increases was that campuses actually kept their own tuition. SUNY, however, used state appropriations to maintain stability in the system. If a campus was hurting because of enrollment declines, state moneys were moved from other campuses to shore up their budgets.

The state was originally going to allow SUNY to keep ten percent (this year) and twenty percent (next year) of tuition collected without a concomitant reduction of state support. This was a dramatic and significant departure from the past. What, in the past, they gave with one hand they took with the other, many times also picking SUNY’s pockets for loose change at the same time. This change is a good thing for SUNY!

SUNY, and some campuses, have argued that the state was going to do the same thing again. They argued that the Division of Budget (DOB) was using estimated vs actual enrollment numbers to determine how many tuition dollars to retain in state coffers and how much each campus would keep. This would create a shortfall in SUNY’s tuition revenues. Based upon numbers provided by SUNY to DOB, and accepted by DOB, this is incorrect. SUNY will really keep those tuition dollars because SUNY created those numbers, not DOB.

You should also be aware that UUP was working with DOB and the governor’s office to offset some of those retained state general revenue dollars with federal stimulus dollars resulting in an even greater percentage of tuition dollars SUNY could keep. SUNY and student complaints about all this killed that proposal. We keep less because they didn’t understand you don’t complain to the person who gives you money that they aren’t giving you enough.

-While the Legislature went along with the proposed $25 million cut to the SUNY hospital state subsidy, the state will use this money to leverage an increase in federal monies for disproportionate share payments (DSH) to these hospitals in the approximate amount of $48 million. More specific information will follow when we fully decipher how the Stimulus Plan and Medicaid Package impact our hospitals. On the positive side, it appears that our hospitals will benefit by some $30 million per year from the Stimulus Plan's "rebasing" program. However, there are potential downsides for our hospitals from the new Gross Receipts (Sick) Tax of 0.35%, and from what appears to be a redirection of federal Graduate Medical Education (GME) dollars. Again more information will be forthcoming, as a clearer picture of hospital funding evolves.

While you may think the hospitals and health science center funding have nothing to do with our campus, you are mistaken. They are part of SUNY and what affects them affects us. Various federal changes, primarily to Medicaid funding, as well as some state changes in how indigent care is paid for in NYS have created huge holes in funding for the hospitals. In addition, since they generate significant revenue, the state has been even more egregious in how they remove funding for their operations. Several of the hospitals in SUNY are on the verge of bankruptcy with cash in essentially matching cash out with no reserves. These changes, again with some federal matching funds will provide a much needed breather for them. This will help all of SUNY in the long run.

-The Legislature rejected proposals for a Tier V retirement plan for new hires. There was no cut to Retiree Medicare Part B Premium Reimbursement to state retirees; and, there was no cut to state employee retiree health insurance based on years of service.

These proposals by the governor would have been devastating for future retirees and would have created disincentives in the hiring process.

-The Legislature rejected all proposals for SUNY flexibility.

While UUP supported some of SUNY’s call for flexibility, it could not support all. In addition, the state was not going to allow SUNY to remove more controls. While we all decry bureaucracy, remember what the federal government did since the 1980’s with deregulation of banking, financial institutions and mortgages. In a time of more regulation, this was not going to fly!

I will be writing more about SUNY-Buffalo’s UB 2020 Plan as outlined in Assembly Bill AS 2020. Read a future blog on this topic.

-There is no provision to seek elimination of negotiated pay increases for state employees or to create a new state employee pay lag.

Again, a significant win for UUP’s members. This is probably the strangest part of the whole story of the governor’s proposed budget and his calls for renegotiating settled Agreements with the state-wide unions. His original budget called for all funds necessary to fulfill those contractual obligations. This was a significant departure from past gubernatorial budget proposals going back to the late 1980’s. Other than in the year an Agreement was signed, the governor’s budget almost always called for SUNY to eat those costs. After requesting those funds in his budget proposals, he then came out and asked that they be given back. Other than some negotiating in public with dueling press conferences, there was never a serious attempt by the governor to actually renegotiate.

-In what may well be a "message to SUNY," the Legislature provided an additional $20 million in operating aid to CUNY's senior colleges. Our speculation is that this "add" will restore the reserve funds CUNY tapped in preserving its programs, access for students, and faculty and campus jobs. SUNY was asked to tap $40 million of its reserves to aid operating expenses, but it chose to pass that amount along to campuses as a cut under the BAP formula.

[We have since learned that these funds are restoration of CUNY-wide program funds, similar to SUNY-wide program funds.]

Overall, this is a very reasonable outcome in the face of very difficult fiscal circumstances. And, in stark contrast to how other state agencies fared, SUNY came out fairly well, indeed!

I want to send my heartfelt thanks to all of you who have contributed so much to UUP's success in these trying times. Did we make it happen? Yes, we did!

In Union...

Phil