How Kids, Schools, Health, And Local Governments Will Get Slammed By New York's New Budget

Richard Ravitch

Lieutenant Governor Richard Ravitch has announced an assault upon the causes of New York’s budget deficit, calling for dramatic changes in the way the state plans its spending.

New York Governor David Paterson had previously announced his own austerity measures to combat the state’s burgeoning books.

Here we’ve highlighted the best of both, in what might be a preview for your state.

Check out who is going to get slammed >

School Aid Via American Recovery and Reinvestment Act Funding: Cut 26.6%

This aid was sourced from the federal government, to make up for budget shortcomings in the previous fiscal year.

Source: New York State 2010-2011 Executive Budget

Local Government Assistance: Cut 29.1%

Applied to municipalities in need of support for programs and to incentive programs for local action.

Source: New York State 2010-2011 Executive Budget

Other Fringe Benefits: Cut 31.6%

Negotiated fringe benefits of state employees, excluding health care and pensions.

Source: New York State 2010-2011 Executive Budget

Department of Law: Cut 8.7%

Cuts to state law enforcement, including Attorney General Andrew Cuomo's office.

Source: New York State 2010-2011 Executive Budget

Enhanced Federal Medical Aid (FMAP): Cut 8.6%

Reduction on federal aid to state medical programs.

Source: New York State 2010-2011 Executive Budget

So how did we get to this situation, and what's the real plan?

New York's Debt Is A Product Of Avoiding Pay As You Go Approach

2010-2011 Pay As You Go Spending: 46%

2010-2011 Bond Spending: 54%

Source: New York State 2010-2011 Executive Budget

Five Year Fiscal Plans

Lieutenant Governor Richard Ravitch is pushing for New York to adopt a five year budget strategy which would have the state in budget balance by year five.

It requires the state to stick to the plan and achieve balance in five years, maintaining it thereafter. It would make this the responsibility of the Governor's office to stick to this plan. It does not stipulate what actions would be taken if the Governor would fail to achieve these goals.

Source: Five Year Fiscal Plan

Creation Of An Independent Financial Review Board To Settle Budget Disputes

The board will be made up of five members who have no connection to state government or state business.

They will be charged with approving the five year fiscal plan and charged with making sure its course is maintained.

Source: Five Year Fiscal Plan

Governor Has Independent Spending Cut Power

If the independent oversight board finds that the budget is not in line with the five year plan, the Governor and legislature will be given 15 days to settle the dispute.

If that fails, the Governor will be given the power to cut the budget to maintain those guidelines, independent of legislative oversight.

Source: Five Year Fiscal Plan

$7.4 Billion In Cuts And Tax Increases To Fight The Gap

Now Check Out California's Coming War On Banks And Pre-Crisis Swaps

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