* 1999-00 through 2001-02 reflect enacted appropriations.
* 2002-03 and 2003-04 reflect Executive recommended appropriations.

The State University of New York (SUNY) was created in 1948. It consists of sixty-four campuses including four university centers, thirteen university colleges, two independent health centers, four specialized colleges of technology, five statutory colleges, six colleges of technology and thirty community colleges.

The State University of New York is included within the Education, Labor and Family Assistance appropriation bill.

State Operations

The Executive recommends a General Fund appropriation of $1,028,530,000 for State Fiscal Year (SFY) 2003-04. This represents a $183,469,000 net reduction in General Fund Support for State Operated campuses from SFY 2002-03 funding levels. This is comprised of a $198,236,000 reduction in General Fund support for SUNY campus operations, offset by an increase of $14,767,000 in costs associated with the voluntary retirement plan system offered to SUNY employees.

The Executive proposes Special Revenue Fund-Other appropriations totaling $3,034,251,000, an increase of $267,670,000 above SFY 2002-03 levels. Included within this increase is a $281,410,000 increase to the General Revenue Offset Account. This increase will provide SUNY with an additional $196,900,000 in spending authority necessary to utilize increased revenues derived from an increase in tuition of up to $1,200 from $3,400 to $4,600. Additional adjustments to the General Revenue Offset Account include the following:

• An increase of $84,000,000 to account for tuition revenues that have been historically spent utilizing the State University Tuition Reimbursable Account;

• An increase of $17,400,000 to account for increased revenues resulting from the removal of previous waivers on fringe benefit costs for employees funded through Special Revenue Fund-Other appropriations;

• A reduction of $16,900,000 resulting from non-recurring revenues that were realized in SFY 2002-03 through a transfer of funds from the Insurance Premium Payments Account.

The Executive proposal recommends an appropriation of $90,000,000 for the State University Tuition Reimbursable Account. This represents a $50,000,000 reduction from SFY 2002-03 levels to reflect offsetting increases to the General Revenue Offset Account.

The Executive provides $8,200,000 in support for the Educational Opportunity Program reflecting a 50 percent reduction from the 2002-03 Academic Year funding levels. This reflects the proposal to eliminate supplemental student financial aid to economically disadvantaged students participating in the Program.

The Executive proposal maintains support for childcare centers for students attending State-operated campuses at $1,498,000, consistent with the levels provided in the 2002-03 academic year.

The Executive recommends $13,620,000 to support SUNY central administrative programs, reflecting a decrease of $1,772,000 below the 2002-03 Academic Year.

SUNY Health Science Centers

The Executive proposal continues the appropriation structure first enacted in SFY 2001-02 for the SUNY Health Science Centers (HSC's). In addition, the HSC's continue to be responsible for funding for fringe benefits and debt service.

In an effort to recognize the hospitals' costs of operating as a State agency, the Executive continues to provide the HSC's with a direct State subsidy of $92,600,000 to support their operations. This represents a $500,000 increase from SFY 2002-03 levels and is based on continuing a previously used methodology for determining the costs of the HSC's to operate as a State agency.

In addition, the Executive proposes to restructure the SUNY HSC's as private not-for-profit corporations and would provide $350,000,000 in bonding authority to address the immediate capital needs of the SUNY HSC's as part of a new multi-year capital investment program.

Finally, the Executive would provide for the transfer of $10,534,000 from the General Fund to the State University Income Offset Account for the third payment in the State's multi-year plan to retire the accumulated short-term investment pool (STIP) loan to the hospitals.

Aid to Localities

The Executive provides $317,456,000 in aid to community colleges reflecting a decrease of $26,549,000 or 7.72 percent from SFY 2002-03 levels. This includes a net reduction of $19,970,000 in support resulting from the Governor's proposal to reduce funding of Community College Base Aid by $345 per Full-time Equivalent (FTE) from $2,300 per FTE to a proposed $1,955 per FTE for SFY 2003-04. In addition, the Executive eliminates $5,552,000 in support for rental aid for leased space and $1,000,000 in support for contract courses.

The Executive provides $2,863,000 in support of the Cornell Cooperative Extension, reflecting a reduction of $1,000,000 from SFY 2002-03 levels.

The Executive recommends maintaining support for childcare centers for students attending SUNY community colleges at $1,065,000, consistent with the levels provided in the 2002-03 academic year.

Capital Projects

The Executive proposes new Capital Projects appropriations totaling $2,561,000,000. This represents a proposal for a new multi-year capital investment program for SUNY and provides for State-operated and community college facility and infrastructure improvements. In addition to new capital projects appropriations, the Executive proposes using $224,000,000 in re-appropriation authority as an additional component of the newly proposed multi-year plan. Within this multi-year plan, the Governor makes recommendations for the following:

• Provides appropriation authority for up to $1,640,000,000 in capital projects relating to maintenance and improvements to academic facilities at State-operated campuses. This includes $115,000,000 in hard dollar capital funding and $1,525,000,000 in bonding authorization for such purposes;

• Provides bonding authorization of $350,000,000 for various strategic initiatives at the SUNY Health Science Centers;

• Provides appropriation authority for up to $210,000,000 in capital projects relating to maintenance and improvements to SUNY community colleges. This includes $35,000,000 in hard dollar capital support and $175,000,000 in bonding authorization for such purposes; and

• Provides appropriation authority for up to $335,000,000 in capital projects for the renovation and improvement of residence halls at state operated campuses. This includes $100,000,000 in hard dollar support and $235,000,000 in bonding authorization for such purposes. In both instances, capital projects funding will be supported by revenues generated from dormitory and residence hall fees.

In addition, the Executive proposal would include appropriation authority for $100,000,000 in State Support for Capital Projects occurring on campuses on a matching basis with external resources. The Executive proposal would also include appropriation authority for $250,000,000 within the multi-year plan that would support campus capital projects that are funded through external resources.

The Executive proposal provides approximately $500,000,000 to support the first year of the multi-year capital plan.

The Executive recommends altering the manner in which the State University finances its multi-year capital plan by converting to disbursement based bonding. As a result, the State University Construction Fund will be authorized to utilize bond proceeds from previous bond offerings to fund a significant portion of planned bondable capital projects for SFY 2003-04.

The Executive also includes a deficiency request to make a technical correction to transfer New York State Office of Science, Technology and Academic Research (NYSTAR) Research Facilities Program re-appropriations to SUNY where such appropriations were originally enacted in 1998-99, but erroneously transferred to NYSTAR in 1999-00.

Article VII

The Executive proposes legislation that would provide the SUNY Board of Trustees with the ability to establish differential tuition rates for graduate and professional degree programs. In addition, the Executive proposal would remove the current statutory prohibition against the SUNY Board of Trustees from adopting a tuition increase prior to enactment of the annual State budget.

Finally, the Executive proposes language that would authorize the SUNY Board of Trustees to transfer the operations of the SUNY Health Science Centers to one or more private not-for-profit corporations and directs the SUNY Board of Trustees to develop a plan for such a transfer to be submitted to the Governor and the Legislature on or before October 1, 2003. This process would include the following:

• Authorizing the SUNY Board of Trustees to establish or contract with one or more not-for-profit corporations pursuant to a plan approved by the Commissioner of Health, for the transfer of the three SUNY hospitals at Brooklyn, Stony Brook and Syracuse;

• Directing the SUNY Board of Trustees to develop a plan for the transfer of the operations of the SUNY Health Science Centers to private not-for-profit corporations and to consider the following in developing such plan: continuity of employment of hospital staff, access to capital, revenue maximization, alternative governance structures, the teaching and research missions of the hospitals and an implementation process; and

• Directing the SUNY Board of Trustees to submit a plan to the Governor and the Legislature on or before October 1, 2003.