Andrew M.

Cuomo
Governor

STATE OF NEW YORK
EXECUTIVE DEPARTMENT
DIVISION OF THE BUDGET
STATE CAPITOL
ALBANY, NEW YORK 12224



Robert L. Megna
Director of the Budget


October 1, 2014



Dear Agency Commissioners,

New Yorks fiscal standing has dramatically improved over the past four years.
Thanks to the Governors leadership, budgets are now consistently on-time and we are
holding spending growth below two percent for the fourth consecutive year, continuing a
record of fiscal discipline that has reversed decades where State spending increased at
a higher rate than inflation and personal income growth.

The results for New Yorkers have been tremendous: the number of private sector
jobs is at an all-time high after 21 consecutive months of job growth, the States longest
streak on record since at least 1990. Unemployment is at the lowest level since
November 2008, and through the Governors START UP NY program, businesses have
an opportunity to begin or expand operations in the State tax free. Taxes are down
across the board. State support for schools is at record levels and accountability has
been brought to the forefront. We continue to restructure our health care delivery
system to improve health outcomes at significantly lower costs.

The progress weve made prompted all three major credit rating agencies to
upgrade New York, and now each have the State one notch from their highest ratings.

The path we are on has been an irrefutable success and the Governors
commitment to fiscal responsibility, lowering taxes, and keeping spending growth to two
percent or less while making critical investments remains steadfast. With these goals in
mind, it is time for State agencies to start planning for the upcoming budget.

We expect that the current fiscal year will end with a record surplus due to four
years of responsible fiscal management and a series of unbudgeted financial
settlements reached with banks and insurance companies. These one-time revenues
cannot be responsibly used for recurring expenses. The Executive is developing options
for using the surplus prudently in ways that will improve the States financial standing
and not increase expectations for future State spending.

As you manage your budgets and plan for next year, please remain cognizant of
the Governors vision for a smarter, more effective government. Agencies are working
together with great success across functional areas to adopt more efficient practices in
the achievement of their core missions. Your efforts are vital to improving services while
reaching budgetary goals and your agencies should continue to seek enterprise shared
service opportunities.
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Agencies are directed to submit budget requests for 2015-16 State Operations
and Aid to Localities that assume zero growth from 2014-15 cash ceilings (excluding
School Aid and Medicaid, which are subject to different caps, and federal funds).
Planning for the out-years should not include an expectation of expense growth.

The 2015-16 Capital Budget will continue to expedite priority infrastructure
projects and focus on job creation while maintaining the Governors commitment to debt
affordability. The State will continue to abide by the debt limitations imposed by the
States Debt Reform Act, and agency capital requests should be consistent with what is
already part of the States first-ever ten year capital plan.

We ask that you submit your agencys budget request no later than October 21,
2014. 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. My staff is always available to
discuss your questions and talk through ideas.

New York is moving forward with confidence and a determination to keep tackling
long-ignored, difficult issues. The budget can be a tool to accomplish important reforms,
and I value your partnership in this process.

Working together under the Governors leadership, we have put our fiscal house
in order while cutting taxes and improving opportunities for all New Yorkers. I look
forward to working with you in the coming months towards another fiscally responsible
budget.

Sincerely,



Robert L. Megna