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: | 8/9/10 |
| Re: | Client Update |
2010-'11 Budget – 58 Days Late and Counting
Yes, that's right, the budget is 58 days late with budget negotiations almost non-existent and as such, the process has stalled with major differences between the Senate and the Assembly still remaining unresolved. Indications are that lawmakers remain about $2.5 billion short of closing the $9.2 billion budget deficit, a figure they have been stuck on for several weeks. Speaker Sheldon Silver and Senate Democratic Leader John Sampson indicated that their conferences have each already identified more than $5 billion overall in State spending cuts and additional revenue to help close the deficit. Governor Paterson confirmed that they will need to knock another $2.5 billion out of this year's $134 billion budget to balance it. All three Democrats, as well as Republican Minority Leader Dean Skelos and Assemblyman Brian Kolb agreed at a public session this week to have staff identify broad areas for further trims. They indicated that this would be followed by joint conference committees by rank-and-file lawmakers trying to make additional cuts to craft a final budget. However, there are a number of other major issues that are also unresolved and have to be dealt with before an agreement can be reached. They are as follows:
State Workforce – Furloughs
No-Furloughs Order Upheld By Judge
JudgeLawrence Kahn preliminary injunction upheld his previous Temporary Restraining Order (TRO) blocking the Paterson Administration from enacting furloughs as well as any additional delays to the 4% raises which went into effect for State workers on April 1st. Although the injunction is far from the final decision in the case, many of Kahn's observations suggest that Governor Paterson's legal team face a significant challenge as they argue that the furlough plan is a "reasonable and necessary" tactic in a time of grave fiscal peril which justified the impairment of a previously negotiated contract. Judge Kahn suggested that the Senate's decision to pass a resolution objecting to the furlough plan, which it was forced to vote for in Governor Paterson's 5th budget extender or force a government shutdown, indicated that the plan failed to meet the "reasonable and necessary" threshold. Kahn further stated that the court observes both a complete repudiation of such a judgment and an argument by the Paterson Administration that fails to show sufficient consideration and analysis of the kind required by the contract clause of the U.S. Constitution, the ruling states. The judge found that Governor Paterson's citation of the budget crisis and his other attempts to alleviate it do not in and of themselves justify breaking a contract and said to allow such an impairment, the defendants would have to demonstrate a greater effort to find less harmful alternatives. In a statement, Governor Paterson expressed disappointment at the ruling, but continued to make his case for concessions by the unions. In his Executive Budget proposal submitted in January, Paterson booked $250 million in to-be-negotiated workforce savings which unions have so far refused to grant. "Today's ruling was determined in part by evidence submitted by the Legislature in opposition to the extraordinary action I took in proposing furloughs and withholding pay increases," the Governor said. "However, both Houses of the Legislature agree with my assertion that NY's Public Employee unions must contribute along with all other New Yorkers, to solving this extraordinary fiscal crisis."CSEA President Danny Donahue, one of the plaintiff's in the suit, called the ruling "a victory for the rule of law."
Parks – Assembly Passes Bill – Sends to Senate
State lawmakers were scrambling to reopen dozens of parks and historic sites in time for Memorial Day weekend. The Assembly worked through the night and this morning passed a bill that would keep parks open through the Memorial Day Holiday and beyond. The Senate has yet to act but was scheduled to take up the matter today. Legislators appeared to have cut a deal with Governor Paterson to find the $6 million needed to reopen 41 State parks and 14 historic sites closed because of the State's budget crisis. While lawmakers rebuffed Governor Paterson's earlier plan this week for keeping all 178 State parks open for Memorial Day weekend, both sides said the parks remain important and agreed to find a solution to keep the parks operating and to reduce the State deficit. The Governor earlier this week had proposed taking $5 to $6 million from the State's Environmental Protection Fund as a way of solving the parks issue but legislators would not agree to that plan. The Assembly passed a bill today which enacts the Environmental Protection Fund, provides funds to operate State parks and historic sites, and establishes the Electronic Equipment Reuse and Recycling Act. It enacts the 2010-'11 Environmental Protection Fund and provides funds to operate State parks and historic sites. It provides $11 million to continue to operate State parks and historic sites at the same hours of operation and service levels as the 2009-10 State fiscal year. This will be accomplished through funds raised by the Electronic Equipment Recycling and Reuse ACT. It would require manufacturers to accept, for recycling and reuse, electronic waste for which it is the manufacturers to consumers within the State and would also accept one product return for every product of the same type which it sells beginning April 1, 2011.It would also take $5 million from the General Fund and general state charges to provide a $5million payment for public forest lands and $200,000 from the General fund to operate camp grounds owned and operated by DEC. It is a top priority for the Majority Conference in the Assembly", said Assembly Speaker Sheldon Silver (D) Manhattan. Parks that have been closed or reduced in hours include Bays Water Point State Park in Queens and Riverbank in Manhattan.
55/25 Retirement Plan Gains Support
Senate Panel to Weigh Early Retirement Incentive for Public Work Force After the Assembly Passes the Measure
The budget may be stalled, but public employees may soon be able to take early retirement. The 55/25 bill would allow State workers as well as local public employees to retire at age 55 after 25 years of service without penalty. Most public employees need to serve 30 years by the time they are 55 to get a full pension. The measure passed in the Assembly this past Monday and is scheduled to be reviewed by a key Senate committee this week. The whole idea is to save costs by downsizing State and local governments. "We are hopeful that it will pass the Senate too", said a spokesperson for Governor David Paterson who proposed the plan to save money by cutting the State workforce. "This bill will enable many State and local government workers to retire, and leave the public payroll, at a time when we can use the savings," said Assemblymember Peter Abbate, (D) Brooklyn, who carried the Governor's bill in the Assembly where it passed on Monday. Members of the Senate Civil Service and Pensions Committee are reviewing the measure which is sponsored in the Senate by Diane Savino, (D) Brooklyn/Staten Island. Indications are that the bill will pass in the Senate, too, especially considering that it is a potential cost saver. Administration officials say they were not yet sure how many people might apply for the early retirements or precisely how much it would save. The window for the early retirement plan would be closed at the end of this September which means that State workers contemplating taking it would have to file papers before that date. Indications are that the Senate could act on the bill today.
New York Racing Association (NYRA) to Get $25 Million Loan Legislature Signs Off on Lending Cash-Strapped NYRA $25 Million
The State Legislature passed legislation this past Monday allowing for a $25 million loan to the New York Racing Association aimed at ensuring that the State's major thoroughbred racetracks will continue offering horse racing for the rest of this year. Governor David Paterson gave lawmakers a bill to provide a "working capital loan" for NYRA as part of a budget extender bill needed to avoid shutting down State government. Governor Paterson had planned to submit a stand-alone bill. The budget extender was an alternative route to getting NYRA the funds, and it was needed when a union representing employees with the N.Y.C. Off-Track-Betting Corporation complained that NYRA was getting a bail-out but OTB was not. A read of the likelihood of difficult sledding in the Senate for the stand-alone bill caused Governor Paterson and the Legislature to agree to put the NYRA bill in the budget measure. The bill is written so NYRA would have to pay the money back from its cut of video lottery terminal revenues from a $4,500 machine Racino at Aqueduct Racetrack, even though it is unclear when the VLT parlor will be built. The vendor of the Racino, still yet to be picked, would lend NYRA the funds if necessary and get paid back either by NYRA or by redirection of NYRA/VLT revenues. The vendor stands to receive $250 million in bond proceeds to help build the Racino, but the sum would be $225 million initially until the $25 million is repaid. The loan must be repaid by March 31st or 30 days after the State signs a deal with the VLT vendor. The Empire State Development Corporation would sell bonds for the racino project funds. Governor Paterson has said he hopes to choose a vendor for the Aqueduct Racino this August. NYRA has been complaining about the lack of funds to run racing at Belmont and Saratoga this year and has urged the State to come up with the funds.
Charter Schools – Race Against the Clock for Federal Funds
It's a race against the clock for meeting the June 1st deadline to apply for Federal Race to the Top funds. Assembly Democrats passed charter school legislation in the wee small hours of the morning today. This action raises the cap on the number of charter schools in the State of New York and will help win the State up to $700 million in Federal funds. The Senate has already passed legislation that would increase the number of charter schools permitted in the State from 200 to 460, but with additions by the Assembly in the bill that was passed today, the Senate will have to re-pass the Assembly version of the bill. Earlier in the week, Assembly Speaker Sheldon Silver (D) Manhattan indicated that "we are discussing with all of the advocates, all sides of the issue to see if we can put something together," which the Assembly did. Key elements of the charter school bill passed by Assembly Democrats in addition to raising the cap would require charters to enroll more special-ed and English-as second language students, set up advisory board to look at the issue of putting charter and traditional public schools in the same building, limit the number of charters run by for-profit companies and lastly, allow the State Comptroller to audit charter schools. One of the key issues that was resolved as part of the bill dealt with the location or co-location of a charter school in an existing public school building. There the applicant must demonstrate that the location/co-location is acceptable to the parents or guardians of students that are enrolled in the existing school building. The Assembly unanimously approved a key component of the Race to the Top applications for Federal money includes student performance and teacher evaluations. The additional 250 charters will be issued through a competitive request for proposals process (RFP) with the issuing of charters being spread out over four years with each entity being allowed a maximum of 32 or 33, depending on the year; however, if fewer charters are issued within a given year, the number of unissued charters may be carried over to the following year. Speaker Silver had suggested that the charter school issue would be resolved before the June 1st deadline to submit its application for the additional Federal cash, and it was.
Other Issues
NYPD Opposes "Minimum Force" Legislation
The NYPD are livid over a legislative proposal that would handcuff police officers involved in life and death confrontations by requiring them to shoot gun-wielding suspects in the arm or the leg rather than shooting to kill. The "minimum force" bill, which surfaced in the Assembly last week, seeks to amend the State Penal Codes' "justification" clause that allows an officer the right to kill a person if he feels his life or someone else's is in imminent danger. The bill, drafted in the wake of Sean Bell's controversial police shooting death, would force officers to use their weapons "with the intent to stop, rather than kill" a suspect. They would be mandated to "shoot a suspect in the arm or the leg". "These are split second, spontaneous events and officers have to make a full assessment in a fraction of a second" said Michael Palladino, President of the Detectives Endowment Association. "It is not realistic, it's moronic and would create two sets of rules in the streets if there is a gunfight. "The legislators have their heads buried in the sand, and we would not be able to fully protect the public or ourselves." Palladino, whose association represents 5,100 investigators said he showed the bill to Vice President Joe Biden who scoffed and suggested it should be dubbed "the John Wayne bill" because it demands sharp-shooting skills of the kind only seen in movies. Sponsored by Brooklyn Assemblymembers Annette Robinson (D) Bedford-Stuyvesant and Darryl Towns (D) East New York, the bill came up at the Assembly Codes Committee but was held for further consideration rather than killed or put to vote before the full Assembly.
New York State Home Sales on the Rise
New York State home sales are on the rise as buyers take advantage of Federal tax credit. The New York State housing market continued to approve as April, 2010 sales jumped nearly 20% compared to April, 2009 according to data accumulated by the N.Y.S. Association of Realtors. The statewide median sales price also rose by more than 8% compared to April, 2009. "The April data indicate two positive sales trends for the Empire State's housing market" said Duncan Mackenzie, NYSAR Chief Executive Officer. "The Federal tax credit, along with low mortgage rates and a good selection of available inventory continued to drive market activity in April." He added that while the Statewide median sales price has fluctuated on a month to month basis, it has consistently shown growth compared to one year ago medians. Mackenzie noted that the Federal home buyer tax credit deadline is extended for members of the Armed Services and certain other federal employees who served outside of the United States for at least 90 days after December 31, 2008 and through May 1, 2010. New York realtors sold 6,145 existing single family homes in NYS during April, 2010, a 19.7% increase compared to the April, 2009 sales total of 5,133. The April, 2010 median sales price in NYS of $197,000 represents an increase of 8.2% compared to the April, 2009 median of $182,000, that fell off by 3.4% for the March, 2010 median of $204,000.
Politics New York
Andy Cuomo Announces – Vows Changing Albany and How It Operates
It was quite a week for the Democratic party which held its State Convention in Rye, New York on Tuesday and Wednesday of this week. The week started with Andrew Cuomo, son of former Governor Mario Cuomo, announcing his candidacy for Governor, and vowing to change Albany by cleaning up the corruption that cripples the State. He then chose his running mate, Robert Duffy, the Mayor of Rochester, New York and on Thursday, accepted the Democratic nomination from his Party by praising the Party's history and philosophy even as his campaign challenges incumbents and aspirants to sign on to his agenda as the prescription to cure government dysfunction. While this was going on, incumbent State Comptroller Thomas DiNapoli, running un-opposed was crowned anew, while all five candidates for Attorney General were placed on the ballot as part of a larger peace-pact between Upstate and Downstate Democratic leaders. Party members had been expected to trim the field for the Attorney General's post to two or maybe three at the Convention but Democratic Party Chief, Jay Jacobs decided that all announced hopefuls can claim a measure of party support, and as such, all five will be let on to the ballot to duke it out in the Primary. These five candidates include: Nassau County District Attorney, Kathleen Rice; Westchester Assemblymember Richard Brodsky; former State Insurance Superintendent, Eric DiNallo of Manhattan; former Westchester Prosecutor Sean Coffey; and, Manhattan State Senator Eric Schneiderman. The winner of this five-way show-down is expected to face GOP candidate Dan Donovan, the Staten Island District Attorney in November.
Cuomo: Do More With Deeds Than Words
"When society is in a crisis, it is the Democratic Party that stands up and makes a challenge," he said in his address this past Thursday when accepting the Party's nomination. "My friends, New York State is in a crisis and it is time that the Democratic Party steps up and makes New York State the empire state once again." "Today's approach requires fiscal prudence, Cuomo said. It requires competence and performance in government. The government must work once again." He described the ethical rot effecting Albany and said he understood the "betrayal people feel toward the government." "You're not going to talk them into trusting the State government. We're going to do more with deeds than with words, he said. At the same time he emphasized that his campaign wouldn't turn its back on progressive causes such as the fight against educational inequality, which he called the civil rights struggle of this generation. He hoped New York remains "the laboratory of the American experiment of Democracy," and affirmed his support for abortion rights and same-sex marriage. The Cuomo platform laid out in material released after he announced his gubernatorial bid, includes a harsh critique of dysfunction and corruption and a sharp break from the direction of recent fiscal decisions made by a Democratic-led government. Cuomo pledged to cap State spending and local property taxes, while freezing State income and corporate taxes and salary increases for State employees. He also vowed to eliminate at least 20% of State agencies, and said he opposes additional State borrowing to fix the budget. He also promised comprehensive reform requiring full disclosure of outside income, independent ethics watchdogs and campaign finance reform. Cuomo has already amassed $16 million in campaign funds to face one of three Republicans: Upstate business man Carl Palladino, former GOP Senate hopeful Rick Lazio or Suffolk County Executive Steve Levy. Given the cloud of scandal surrounding the Capitol, Cuomo is walking a thin line: he must embrace the endorsement of a political establishment that he is attempting to oppose as a candidate.
All of us at The Riddell Group wish all of you a happy and safe Memorial Day Weekend.
