This is the first segment of a five-part series summarizing and explaining the New York State 2003-04 adopted budget.

The Legislature recently addressed the biggest fiscal challenge the state has ever faced. In a show of leadership and a spirit of compromise, we passed a budget that is balanced and fair. Restorations in the areas of additional school district aid, support for higher education, health care funding and mental health aid were designed to continue vital programs and services, while keeping local property taxes under control.

For example, the adopted budget restores: $782 million to health care providers, including hospitals, nursing homes, visiting nurses and personal care workers; $24 million in funding to the State's EPIC program which allows low income senior citizens the ability to afford lifesaving prescription medications; $555 million to hospitals and $32 million in public health funding to counties; $394 million to nursing homes to prevent closures; $170 million to higher education, primarily reflecting a restoration to the Tuition Assistance Program (TAP), etc.

Recognizing the need to fund restorations in a manner which would not continue to place the state's out-year financial plan in jeopardy, the legislature funded these restorations by mandating the enforcement of current tax law. Furthermore, loopholes sought out and used by corporate taxpayers are eliminated saving the state $250 million a year; the adopted budget recommends the collection of sales and gas taxes by Native Americans in their retail stores, saving the state almost $500 million next year; and legislation ensuring the installation of video lottery terminals at race tracks was also included to bring to reality the revenue stream authorized by the legislature in the prior fiscal year.

Note: the personal income tax and sales tax revenue actions are temporary measures. The sales tax increase is slated to expire in two years; and the surcharge in the personal income tax will begin to phase out in January 2004 and will be completely eliminated by January 2006. To offset the revenue loss, the legislature has authorized New York State to participate in multi-state discussions currently under way to enforce sales tax collections on retail sales over the Internet. These multi-state discussions, under way for a number of years without New York's participation, will result in a streamlined sales tax law for New York and the collection of approximately $1 billion in revenues currently mandated by law but not collected.

Upcoming segments will focus on School Aid/STAR, Higher Education; Health Care; Assistance to Our Local Government and Tax Cuts and Revenue.