Legislative Updates
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Memo
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| From: | Glenn T. Riddell |
| Date: | 3/24/11 |
| Re: | Client Update Report |
Budget Update, Conceptual Agreement? One could only hope:
The legislative leaders are pushing to have a deal on the 2010-2011 budget before the end of the day tomorrow in hopes that the bills will be printed and ready to vote on by early next week.
Budget negotiations continue to move along. In an effort to do that Governor Andrew Cuomo released a video Wednesday morning, saying he was prepared to do whatever is necessary to make sure the state budget is passed on his terms -- without raising taxes and bridging a $10 billion deficit -- because that's the message sent by voters who elected him in November.
"The Legislature will either pass, or fail to pass, the budget that I have proposed. ... I will not back down from my promise to the people of this state," Cuomo said in the video. "Even if the Legislature causes a shutdown of government, it will only be temporary, and it will only delay, not derail, our budget's final passage."
If a budget is not in place by the April 1 deadline, Cuomo has said he will submit a spending extender that includes his full fiscal plan -- essentially forcing lawmakers into a take-it-or-leave-it vote between Cuomo's agenda and a government shutdown.
Assembly and Senate leaders said they were "disappointed" and "don't understand" what motivated Cuomo to so conspicuously wave his stick. Capitol observers offered several explanations: perhaps the governor is trying to strengthen his position in the face of growing calls by a coalition of unions to renew an income tax surcharge on high-income New Yorkers. Labor groups are targeting Republican senators with radio advertisements and mailed fliers, hoping to enlist legislators whose districts would be hurt by Cuomo's proposed $1.5 billion in school cuts. Thirty-three people organized by a union representing City University of New York faculty were arrested Wednesday demonstrating for the tax outside Cuomo's office.
Others speculated that Cuomo is trying to make it difficult for lawmakers to ignore his wishes, reminding them that he is viewed favorably by 77 percent of voters and can use his bully pulpit at will on issues -- such as a property tax cap -- that will come up when the budget is complete.
"I think the governor realizes the process is moving along very well, and if the budget is done on time -- if that happens, and I'm quite confident (it will) -- he can claim credit because he said what he said and browbeat us to give him an agreement," said Assembly Majority Leader Ron Canestrari, D-Cohoes.
Sen. Liz Krueger, D-Manhattan, suggested that Cuomo could be "like we all do, getting antsy. ... Everybody gets anxious this time of year every year."
Canestrari and Krueger spoke Wednesday evening after three joint conference committees -- covering mental health, housing, environmental conservation, agriculture as well as local governments -- reported consensus positions between the Republican-controlled Senate and Democrat-dominated Assembly.
"I think the Senate, Assembly and governor are on target to have a timely budget. The discussion should be on that," said Assembly Speaker Sheldon Silver, D-Manhattan.
There is still no agreement about how to pare 3,500 beds from the state prison system, a goal that will almost certainly involve facility closures; whether to restore $200 million to $280 million in school funding cuts; and whether medical malpractice payments should be capped. Senate Majority Leader Dean Skelos said his fellow Republicans would present Cuomo with a plan for closing "five or six" prisons around the state soon.
But he offered a warning about Cuomo's tough talk.
"If you have power, I don't think you have to flaunt it," he said Wednesday morning, about an hour after Cuomo's video was released. "We all understand that the governor has a tremendous amount of power. ... The idea is to use your power to govern and to effect a compromise and get results."
While Cuomo has the power to essentially impose his budget plans, he'll have to deal with the same set of legislators next year.
Budget Items in Play
These are some of the major issues outstanding to resolve a timely budget. Please keep in mind these issues can be removed at a moment’s notice in the next couple of days.
Rent Regulations:
Tenant advocates are pushing for the Legislature to not only extend the rent regulations but strengthen them by raising the rent at which apartments can be deregulated. Speaker Sheldon Silver has introduced a bill that would make it more difficult for landlords to raise rents, lower the allowable increases following renovations and increase the rent ceiling for stabilized apartments and has pushed to make the bill a part of the budget negotiations.
Although Democrats have discussed, over the last few days, potentially holding up the budget process unless an extension of rent regulations is part of the deal, several key backers seemed hesitant to make any ultimatums, especially with the budget deadline a little more than a week away.
The current regulations are not set to expire until June 15th, but tenant rights advocates said the bill must be included in the budget in order to avoid a fight with Senate Republicans, who oppose the measure.
“The fact remains that we need affordable housing in the city, and its downstate suburbs, and that’s what we’re pushing for,” Speaker Silver said yesterday. “I’ve put out a bill to do so. I’ve spoken to the Governor. I’ve put it together with some other issues. It’s important to get it done. If we get it done now, or we get it done later, it’s important to get it done.”
“I think both rent control and even the property tax caps should be discussed after the budget,” Senate Majority Leader Dean Skelos said Monday. “Certainly rent control is not expiring until June 15th, so I don’t see the urgency of having that in the budget.”
As for the Governor, just five days after he said he wanted to include the extension of rent regulation laws in the state budget, said on Tuesday that the issue turned out to be too complicated and was not likely to be part of a budget deal after all.
“As a realist, I don’t think it will happen,” he said at a news conference at the Capitol. “It’s complicated, and some people feel it’s too complicated to add into the budget at this time.”
We believe the Governor is still trying to slip this into the budget with some changes.
After today’s leaders meeting Senator Dean Skelos has declared rent regulations will not be negotiated as part of the budget. We are waiting on confirmation from the Governor and Speaker Silver.
Property Tax Cap:
Gov. Andrew Cuomo said he doesn’t think the final state budget will include a plan to limit the growth of New York’s notoriously high property taxes. Last week Cuomo linked the tax with rent regulations, stating that he’d like to see both included in the budget. However, with the budget deadline just around the corner, and no agreement on these issues, this no longer appears to be the case.
The Republican-led Senate has passed Cuomo’s property tax cap which would be at two percent or the rate of inflation, whichever is lower. The Democratic-led Assembly has not. Some legislators say they are concerned that the state must relieve costly mandates on local governments and school districts before a property tax cap goes forward.
Assembly Speaker Sheldon Silver and Assembly Majority Leader Ron Canestrari recently said that property tax relief is not an immediate priority, and indicated that the issue should be addressed after the state budget is enacted.
“Millionaires Tax”:
The tax surcharge on the wealthiest New Yorkers known as the “Millionaires Tax” set to expire Dec.31st, was included in the Assembly’s resolution. Speaker Silver wants to extend the surcharge and also boost the threshold for paying the elevated rate to an actual $1 million in annual income, up from $200,000 under the current tax. The Senate and Governor Cuomo have indicated their opposition to the proposal.
Senator Skelos emerged from today’s leaders meeting and declared that the “Millionaires tax is dead. The Governor said it is dead. The senate conference said it is dead. No tax. That is not going to happen.”
Speaker Silver was cautiously optimistic that a budget agreement is imminent and government will not shut down.
Medical Malpractice Cap:
Governor Cuomo has proposed a $250,000 Medical Malpractice cap on non-economic damages and a medical indemnity fund that repays Medicaid liens and provides for the future medical care of impaired infants. The Senate has accepted this proposal, while the Assembly rejects the cap on non-economic damages and modifies the medical indemnity fund to offset certain hospital medical malpractice costs (does not reimburse Medicaid liens or medical care to impaired infants).
This will really test the Governor if he can get the Assembly to agree, this was a major part of the Medicaid Redesign Team’s Report and is probably how he was able to convince the hospitals to accept the report!
Education:
Governor Cuomo has proposed $1.5 billion in cuts to schools, the Senate’s budget plan restores $280 million of that proposal, focusing on rural, upstate districts that Republicans say were "disproportionately" affected by the cuts. It gains the revenue by cancelling $500 million of programs Cuomo included in this year's budget to incentivize educational performance and school district management.
Nearly 70 Assembly Democrats have signed on in opposition to Gov. Cuomo's plans to slash $1.5 billion in school aid. Assembly Education Committee Chairwoman Catherine Nolan (D-Queens) said the state must seek alternatives to budget cuts, especially a restoration of the state's so-called millionaire's tax - which Silver supports. They're calling for a renewed tax on the wealthy to fill the funding gap.
Prescriber Prevail Clause & Managed Care:
The Governor has proposed to restructure the Preferred Drug List to eliminate “Prescriber Prevails” provisions allowing the State Medicaid Director to make final determinations regarding prior authorizations of non preferred drug brands and eliminate the Medicare Part D coverage wrap for dual eligibles for the same drugs. The Senate has rejected this proposal and we believe the Assembly is moving toward the Senate’s position in their conference committees.
Prison Closures:
Governor Cuomo has asked the legislature to approve cutting roughly 3,500 prison beds in the system, without specifying which facilities would close. The state is also offering up to a $100 million to help prison towns recover if their facilities are closed.
Republicans worry that most of the closures could come in Upstate communities, including towns here in the North Country so they have created a “Task Force on Prison efficiency” which has the task identifying opportunities for savings as well as targeting facilities for closure and requires unanimous approval of members. They seek an additional $48 million in savings about the 10 % cut.
The Assembly has also created a prison closure task force which adds new criteria for the task force to consider, including the existence of special programs and the proximity of the facility to where inmates are likely to return.
Although a hot topic, this is likely to stay out of the budget negotiations.
UB 2020:
Senator Dean Skelos said a plan to give the University at Buffalo, and perhaps three other state university centers, more fiscal autonomy will be a top priority in his talks with the Democratic governor and Assembly leader in the coming weeks.
"We're committed to it," Senate Majority Leader Dean Skelos said of the stalled UB 2020 plan that calls for new public-private partnerships, a tuition hike and more revenues to help the campus with its ambitious downtown development plans.
The UB 2020 plan, which the Senate overwhelmingly passed two weeks ago in a narrower bill, has been opposed by unions, some student groups and a number of Assembly members who say it will hurt students by allowing expensive tuition hikes and give too much fiscal freedom to a public entity.
Although the Senate passed the UB 2020 bill, it is not part of the budget, which it must be to become reality. Gov. Andrew M. Cuomo supported the concept during the campaign, but his budget plan includes only some of the proposal's components. The sides say they believe they are close on a deal to let all SUNY campuses more easily enter into procurement deals for the purchase of various goods; colleges say the current system is too slow and cumbersome.
Redistricting:
Senate Majority Leader Dean Skelos, R-Nassau County, responded to Gov. Andrew Cuomo’s independent redistricting proposal saying it’s important but not the top priority right now.
Skelos has been under fire from Democrats for wavering recently on redistricting reform after Senate Republicans boastfully signed Ed Koch’s pledge last year to agree to independent redistricting.
“The issue of redistricting reform is an important one and I have said repeatedly that we will act on reform legislation. A number of proposals have been advanced and we have to take a close look at what makes the most sense to ensure a fair, open and truly nonpartisan process,” Skelos said in a statement.
Discussions between Governor and Unions intensifies as Cuomo seeks cuts:
Gov. Andrew Cuomo is trying to negotiate away scheduled step increases that take effect in April for 50,000 state workers. "It's part of the discussion," Cuomo said Tuesday, before adding, "We're not going to have contract negotiations in the press."
Current contracts with the Public Employees Federation and Civil Service Employees Association expire April 1, the same day a new state budget is due. Cuomo's budget proposal books $450 million in work force savings; the governor has in the past called for a salary freeze for state employees.
Away from the negotiating table, unions have been pushing back on a second front by asking the governor to continue an income tax surcharge on New Yorkers earning more than $200,000 a year -- an argument pushed by PEF President Kenneth Brynien and numerous other union leaders at a Tuesday rally outside the Capitol designed to highlight cuts to education.
As a "last resort," the state could lay off as many as 9,800 employees if it cannot negotiate the $450 million in savings. "We're working very hard to that goal with both PEF and CSEA," Cuomo said last week.
Negotiators met Monday and Tuesday with CSEA, according to its spokesman Stephen Madarasz. A negotiating team from PEF sat down last Wednesday with Gary Johnson, director of the Governor's Office of Employee Relations, as well as consultants Joseph Bress and Todd Snyder.
A Cuomo spokesman said there have been "multiple sessions" with both unions, and the governor has spoken with Brynien and CSEA President Danny Donohue by phone several times since February. Director of State Operations Howard Glaser said during a legislative hearing March 1 that planning for layoffs would begin April 1 if agreements were not reached with the unions.
In a statement, Donohue said "Our expectation is to reach an agreement with the state that treats those rank and file workers with fairness and respect."