STATE OF NEW YORK

EXECUTIVE DEPARTMENT
DIVISION OF THE BUDGET STATE CAPITOL ALBANY, NEW YORK 12224
Andrew M. Cuomo Governor Robert L. Megna Director of the Budget

September 24, 2013

Dear Agency Commissioners, For the first time in almost thirty years, New York State has passed three on-time budgets in a row. Once again, the Enacted Budget is fiscally responsible and includes no new taxes, fees or gimmicks. This accomplishment represents another installment in the transformation plan for a new New York. With your help, Governor Cuomo is creating jobs and investing in the economy of tomorrow. New York is already seeing the benefits: unemployment has dropped to the lowest rate since 2009, over 300,000 new private sector jobs have been created, and middle class tax rates are at the lowest levels in 60 years. The path we are on is unequivocally working. At the Governors direction, State government is thinking longer-term and more strategically. This includes two-year budgeting for our largest expense categories, coordinated capital planning, and the broadest reorganization of government functions since Governor Alfred E. Smith. In that spirit, now is the time for agencies to start planning for the 2014-15 budget. The Governor is committed to keeping overall spending growth to two percent or less over the course of his Administration. Investments exceeding two percent are being made in education to fully prepare all of New Yorks students to compete in the 21st Century economy, and in our Medicaid program to restructure our health delivery system and improve health outcomes. In both cases, increases are linked to measures of economic affordability. To remain within the two percent constraint, and to assure the achievement of structural balance, State agencies are directed to submit budget requests for 2014-15 State Operations and Aid to Localities that assume zero growth from 2013-14 cash ceilings (excluding School Aid and Medicaid, which are subject to different caps, and federal funds). In 2015-16 and beyond, agencies should expect flat budgets, reflecting Governor Cuomos steadfast commitment to controlling spending and reducing the States tax burden.

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The 2014-15 Capital Budget will focus on targeted investments that strengthen the States infrastructure and create jobs, while maintaining a level of affordability. In his commitment to an affordable capital plan, Governor Cuomo will continue to abide by the debt limitations imposed by the States Debt Reform Act. As a result, bond-financed projects will be closely scrutinized and new capital requests will be limited to the most critical. Agencies should submit 2014-15 capital requests for spending and commitments that are consistent with (or do not exceed) the estimates contained in the 2013-14 Enacted Budget Five-Year Capital Plan. Throughout the State, Enterprise Shared Services initiatives are resulting in savings through greater efficiencies and economies of scale. These include the Business Services Center, strategic sourcing procurement reform, consolidation of information technology services, and the restacking of our real estate assets. Agencies are encouraged to continue working together across functional areas so that our limited resources are focused on core missions. As you manage your budgets and begin to plan for next year, decisions are to be made in the interests of our customers the people of New York who have entrusted us with the responsibility of public service. We ask that you submit your agencys budget request no later than October 15, 2013. Your staff can contact an examiner from the Division of the Budget with any questions or concerns. You should also involve your respective Deputy Secretary within the Executive Chamber as soon as possible to ensure all requests are consistent with broader programmatic and policy objectives. I value your input as we work towards the Governors budget objectives we could not have accomplished three on-time, fiscally responsible budgets without your partnership, bold thinking and careful management of your agencies. My staff is always available to field questions and talk through ideas. 2014-15 is right around the corner, and the Division of the Budgets planning is already underway. Thank you for your continued partnership and we look forward to working closely with you in the coming months to achieve Governor Cuomos goal of making State government work smarter and more efficiently. Sincerely,

Robert L. Megna