Legislative Updates
| The Riddell Group, LLC 119 Washington Ave., 2nd Flr. Albany, N.Y. 12210 Phone: (518) 434-7400/Fax: 434-0558 |
Memo
| To: | All Clients |
| From: | Glenn T. Riddell |
| Date: | March 15, 2012 |
| Re: | Client Report |
The 4 Seasons (JERSEY BOYS) had a hit called “Oh What a Night” which aptly describes what took place yesterday in our state capitol. Governor Andrew “I am Government” Cuomo continually fascinates those of us who have watched Albany operate over the years. The Governor continues to hit the ball out of the park on everything he wants to accomplish in Albany. As of today, no one has been able to throw the ball past him or lay a glove on him as he masterfully works the Senate and Assembly majorities into coming to agreements on some very difficult issues. Yesterday, all budget negotiations came to a halt until an agreement was agreed to on pension reform followed by an expanded DNA law, teacher evaluation legislation, redistricting lines and constitutional amendment s on redistricting and casino gambling. All were passed by 7:30 Thursday morning. The only thing left to accomplish in the next two weeks is an on time budget which is all but certain after the passage of the above legislation. See chart below followed by a detailed analysis:
Winners Losers
Pension Reform |
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DNA database expansion |
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Casino Gambling Amendment |
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Redistricting Lines |
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Redistricting Amendment |
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Teacher Evaluations |
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Tier VI (5.5)
Voting in the Assembly on the Tier VI pension reform plan started at about 5 :30 a.m. and ended almost two hours later, with the measure passing 93-45. Majority counsel Jim Yates roamed the Assembly floor seeking additional yeses from weary members. Calls reportedly came from the Governor’s office asking select lawmakers to change their “no” votes. The Republican conference held out casting their votes until late in the process, as they were reluctant to hand the Democrats a victory.
The Cuomo administration estimates the pension deal will save state and local governments $80 billion over three decades – down from the $113 billion estimated savings in his original proposal, this because NYPD and NYFD were exempted. It includes a scaled- back version of the 401(k)-style option. That would now only affect new, non-union, “higher income” earners with salaries $75,000 and above. The Governor lost on his effort to increase the current 10-year vesting period before state workers become eligible for benefits to 12 years. He gave a little on increasing the retirement age from 62 to 65, settling instead on 63. In addition, the 3 percent employee contribution rate will rise to as much as 6 percent for new hires that are in specialized plans i.e. teachers and uniform court officers (30/55).
The legislation puts in place a new Tier VI pension plan that includes:
- New Employee Contribution Rates: The new tier increases employee contribution rates in a progressive fashion to ensure lower paid state and local workers are not seriously affected. Employee contribution rates vary depending on salary These rates remain substantially lower than the large majority of similar state systems around the country. The new tier impacts only newly hired employees. Existing employees and retirees retain all benefits:
- $0 – $45,000: 3%
- $45,000 – $55,000: 3.5%
- $55,000 – $75,000: 4.5%
- $75,000 – $100,000: 5.75%
- $100,000+: 6%
Increase of the Retirement Age: The pension reform includes an increase in the retirement age from 62 to 63 and includes provisions allowing early retirement with penalties. For each year of retirement prior to 63, employee pension allowances will be permanently reduced by 6.5%.
Readjustment of Pension Multiplier: Under Tier VI, the new pension multiplier will be 1.75% for the first 20 years of service, and 2% starting in the 21st year. For an employee who works 30 years, their pension will be 55% of final average salary under Tier VI, instead of 60% under Tier V. This readjustment brings New York more in line with most other states and will save billions of dollars for taxpayers and local governments.
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Vesting: Under Tier VI, employees will vest after 10 years of service.
Protect Local Governments From State Pension Sweeteners: The agreement requires the state to pre-fund any pension enhancers, ensuring that these costs are no longer passed to local governments.
Adjustments to Final Average Salary Calculation to Help Reducing Pension Padding: The agreement changes the time period for final average salary calculation from 3 years to 5 years. To limit how much overtime can be used to determine an employee’s pension, pensionable overtime for civilian and non-uniformed employees will be capped at $15,000 plus inflation, and for uniformed employees outside of New York City capped at 15% of base pay.
Tier VI puts in place new anti-spiking measures which cap growth in salary used to determine pension allowances at 10% for all employees statewide. These reforms will take major steps toward addressing instances of abuse and pension padding.
Tier VI also eliminates lump sum payments of unused sick and vacation time from the calculation of final average salary.
Voluntary and Portable Defined Contribution Option: The legislation includes an optional defined contribution plan for new non-union employees with salaries $75,000 and above (401K)
Limiting Number of Sick and Leave Days that Can Pad Pensions: Tier VI reduces by half- from 200 to 100- the number of sick and leave days that can be used for retirement service credit.
Salary Reform: Previous tiers allowed salaries from an unlimited amount of employers for calculating retirement benefits. Tier VI allows only two salaries for the calculation.
Limiting Pension Benefit of High Paid Employees: For new higher paid employees, the amount earned above the Governor’s salary (currently $179,000) will not be eligible for pension calculation under Tier VI.
Legislature Passes Redistricting Bill & Constitutional Amendment:
Governor Andrew Cuomo and the Senate and Assembly majorities agreed Wednesday to enact the Legislature's redistricting proposal as part of a long-term reform effort. The Senate Republican and Assembly Democratic majorities passed the plan Wednesday night, despite condemnation from some good-government groups that the district lines were gerrymandered to protect the majorities' political power and perks for the next 10 years. The legislature has agreed to accept the Judge’s decision of Congressional lines.
Governor Cuomo is expected to sign the measure, withdrawing his promised veto of any "hyper-partisan lines." Governor Cuomo ultimately traded his veto for a long-term overhaul through a constitutional amendment which the Senate and the Assembly each agreed upon. Accordingly, they introduced a resolution and passed a bill that will amend the state Constitution to establish a new redistricting process for both state legislative and congressional district lines. The separate statute requires the amendment to be passed a second time by both houses no later than January 30, 2013, at which point it will be placed on the ballot statewide for approval by the voters. The constitutional amendment will reform the redistricting process permanently beginning in the next cycle in 2020-22.
Critics have denounced Cuomo's decision. As candidates in 2010, Governor Cuomo and lawmakers promised independent redistricting.
Governor Cuomo is scheduled to sign the proposal before a federal judge takes up the issue Thursday. A judge can decide to order lines to be drawn by an independent court appointee.
The Senate plan maintains 13 districts with racial minorities accounting for more than half of the voters and created the chamber's first district with a majority of Asian voters. The plan also adds a 63rd seat through Republican suburbs upstate, but it, too, has more enrolled Democrats.
The constitutional amendment would make some use of an independent panel in 2022. It would have to be approved this year and next year by lawmakers, and then in a referendum by voters. Governor Cuomo and the Senate and Assembly majorities say the constitutional amendment is worth the political deal that includes the lines to be used for the next 10 years, but not everyone agrees.
Senate Democrats 'walked out' of the chamber to protest the redistricting debate, stating they were not given enough time to debate it. They never returned and the Republicans were able to pass, very quickly, all the bills 36-0 with the support of the Independent Democratic Conference, except the pension reform bill which passed 32-4.
DNA Database Deal Reached in Albany:
State lawmakers passed a bill to make New York’s DNA database among the most expansive in the country, requiring people convicted of any crime to give DNA samples. The New York Civil Liberties Union has criticized the database expansion, saying that it could lead to errors in overburdened police crime laboratories.
The legislation includes provisions sought by defense lawyers and Assembly Democrats that would give defendants easier access to evidence. It allows defendants who have been convicted of a crime to petition a judge to order prosecutors to turn over evidence. Currently, New York has no law requiring prosecutors to give the defense evidence unless the evidence suggests the defendant might be not guilty. The bill also allows judges, at the request of the defense, to order evidence in a case to be tested against the DNA database.
“It’s a monumental change as far as discovery is concerned,” said Assemblyman Lentol, who pushed for the added measures.
The limited DNA database was created in the mid-1990s, and its expansion received almost unanimous support from the law enforcement community. Each of the state’s 62 district attorneys and 58 sheriffs, as well as 400 police chiefs supported it.
“This legislation is a major step forward in eliminating wrongful convictions in New York,” said Jonathan Lippman, New York’s chief judge, who convened a task force to study the issue of wrongful convictions. “The legislation takes an even-handed, balanced approach to this problem, particularly by expanding the access of convicted offenders — not only those convicted after trial, but also those who pleaded guilty — to DNA testing.”
Prosecutors and police officials say the broader database will help them catch violent criminals, and also help some suspects prove they are innocent. This will be the fourth expansion of the DNA database, and each of the previous three has yielded greater rates of solving crimes, prosecutors have said.
Gambling Amendment Passed:
New York state lawmakers have agreed to legalize public casinos and will amend the state constitution to allow seven new casinos to operate. The location of the new casinos will be decided in 2013.
New York currently only allows table gambling in Native American resorts. The state also allows companies to open and run video lottery terminals at so-called racinos in the city of Yonkers and in the New York City borough of Queens.
"We are finally confronting the reality that while New York is already in the gaming business, we need a real plan to regulate and capitalize on the industry. This is a process that will ultimately put thousands of New Yorkers to work, drive our economy, and help keep billions of dollars spent by New Yorkers on gaming in the state," Governor Cuomo said.
New York can only legalize casinos if two successively elected legislatures enact bills. Voters would then have to approve a constitutional amendment legalizing this form of gambling. New casinos with table games could prove stiff competitors to counterparts in New Jersey's Atlantic City, Pennsylvania and Connecticut because the New Yorkers who now frequent those venues might prefer to gamble closer to home.
Agreement Reached on Historic Teacher Evaluation Law:
Governor Cuomo, Senate Majority Leader Skelos, and Assembly Speaker Sheldon Silver today announced an agreement on legislation to put the Governor's new groundbreaking teacher and principal evaluation system into law.
The new evaluation system will provide clear standards and significant guidance to local school districts for implementation of teacher evaluations based on multiple measures of performance including student achievement and rigorous classroom observations. The legislation follows through on New York’s commitment to establish a real and effective teacher evaluations as a condition of the $700 million granted through the federal Race to the Top program.
Senate Majority Leader Dean G. Skelos said, "This agreement on teacher evaluations will enhance accountability in school districts across New York and give our students the first-class education they deserve. I commend the Governor for working with the Legislature and labor on this important issue and look forward to doing much more to help our kids compete and succeed, so they can prepare themselves to be tomorrow's leaders in business, in education, and in each of our communities."
State Assembly Speaker Sheldon Silver said, "The teacher evaluation law we passed two years ago helped bring $700 million in federal Race-to-the-Top funding to New York’s schools. This will provide comprehensive standards for using multiple measures to evaluate teacher effectiveness and help struggling teachers grow and improve. I commend the Governor for his commitment to giving our students the best education system possible."
The evaluation system includes monitoring teacher performance and student achievement, as well as a rating system and a SED Commissioner final review of all evaluations.
Special Elections: Tuesday, March 20th:
Governor Cuomo has called special elections to fill one vacant seat in the Senate and four in the Assembly.
SD 27: The seat that was held by State Senator Carl Kruger since 1994 became vacant when Kruger resigned after pleading guilty to charges of corruption and bribery. Democratic City Councilman Lew Fidler has been selected to run against Republican attorney David Storobin.
AD 93: This seat became vacant after Assemblyman Mike Spano, a Democrat, successfully ran for Mayor of Yonkers. Former Chief Counsel to the Senate Democratic Conference Shelley Mayer will run against Donnamarie Nolan.
AD 100: Assemblyman Tom Kirwan, a Republican, passed away in November, he was first elected in 1994, lost his seat in 2008 to Frank Skartados and then won it back again in 2010. Skartados will run again this time against Ducthess County Legislator John Forman.
AD 103: Assemblyman Marc Molinaro, a Republican, ran successfully for Dutchess County Executive after serving in the Assembly since 2006. Rich Wager will run against Didi Barrett who ran unsuccessfully in 2010 against Senator Stephen Saland.
AD 145: Assemblyman Mark Schroeder, a Democrat, ran unopposed for Buffalo City Comptroller; he was first elected to the Assembly in 2004. Christopher Fahey, the Deputy Chief of Staff to Rep. Brian Higgins, will run against Buffalo Common Councilman Mike Kearns.
Now Back to the Budget!
The legislature will return next week and resume the joint budget conference committee hearing schedule. After this week’s session the budget is a slam dunk to be passed on time and possibly by the end of next week.