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:	Weekly Client Update

2010-'11 Budget Update – 72 Days Late & Counting

Tough Talk Rises About State Budget, Possible No Vote & Shut Down

Will State government come to a grinding halt next week? It depends on how much this week's budget, brinkmanship and the blame game plays out. The contest was in full gear this Wednesday at a leaders' meeting as Governor Paterson and lawmakers argued, threatened and cajoled each other regarding a bill that must be approved this coming Monday to keep the State operating for yet another week in lieu of a final 2010-11 budget. With Governor Paterson and lawmakers struggling to close the $9.2 billion deficit, the Governor has offered weekly extenders to authorize spending for basic functions such as payroll and jobless checks. The bills have passed during the last two months with just enough support in the Legislature by Democrats. In fact, all 32 Senate Democrats have voted for them thus providing the minimum number needed for passage. In terms of the Republicans, they have provided 30 NO votes. However, this week two Democratic Senators who have strayed from the Party's agenda in the past, Pedro Espada and Ruben Diaz, Sr., are waffling on how they would vote on next week's extender. Then this morning, Senator Ruben Diaz, Sr. told the Associated Press "I'm voting no on Monday." "So one of three things will happen Monday: they will have to do something and have a budget, Republicans are going to eat their pride and vote yes, or the government will shut down." If either New York City–based lawmaker voted against next week's extender, that could mean a shutdown of State government – at least temporarily – unless one or more of the 30 Republicans supported it. Republican Minority Leader Dean Skelos from Nassau County said GOP lawmakers might vote for the bill after arguing with Governor Paterson earlier in the day, Skelos said the Governor agreed to consider some of the suggestions the GOP has for $400 million in Medicaid savings. "If our recommendations are in there, you will have a number of "yes" votes," Skelos said after the Governor and he had what he described as a friendlier, brief meeting later in the day. However, there are no guarantees that the suggested cuts will be embraced by Governor Paterson. Fearful of a shutdown, the Governor released plans yesterday to offer a $1.00-a-pack cigarette tax increase as part of next Monday's extender. However, Republicans have said they will vote against any tax hikes. But if Paterson embraces the $400 million in Medicaid savings suggested by the GOP, negotiators are that much closer to a balanced budget. However, exactly what would happen if lawmakers fail to pass another weekly extender this coming Monday? Technically, the State would not be authorized to spend money, including State employee paychecks for approximately 153,000 who work in the "administrative" phase of State government. Paychecks for those in the "institutional" phase, such as those who work as prison guards or in direct patient care would also be greatly affected. There is speculation that if the checks do not go out that the unions would go to Court, since the checks would be for work that has already been performed, and not to pay would be a violation of contracts. Governor Paterson is planning to send the Legislature an emergency bill with perhaps $300 million in cuts to Mental Hygiene and Human Services Programs along with appropriations to keep government running for another week. "I'm committed to not finding out what a shutdown of government is. I think Senator Sampson is likewise," said Silver, a Manhattan Democrat. I think cooler heads will prevail and I think we're having good conversations on an overall budget," Silver said. "I'm hopeful that within the next few days we can resolve all of this."

This Week's Extender Passes – Shut Down Avoided

Even though one Assemblyman called it "gubernatorial blackmail" the Legislature this past Monday reluctantly agreed to Governor Paterson's one week extender bill which includes approximately $385 million in cuts to healthcare spending, which critics say would hurt hospitals and could result in the loss of jobs. The bill also contained what supporters hailed as a consumer friendly move: the re-institution of rate regulations for HMO's that had been dropped. Governor Paterson's budget extender included a rule that forces HMO's to once again get permission from the State Insurance Department before raising their rates. Including a year's worth of healthcare cuts for the 2010-11 budget represented a new approach by Governor Paterson who has been struggling to get lawmakers to complete a spending plan which is more than two months overdue. To date, all 32 Democrats have voted for the extenders, but if one decided not to, they wouldn't have the needed majority of votes and the extender might not pass. That is why the suggestion by Senator Pedro Espada that he might not vote for the extender next week raises the possibility of a real deadlock and a potential shutdown. In addition to the cuts, Governor Paterson's budget plan assumes an additional $300 million in revenue from tougher performance of Medicaid fraud laws. All told, the budget plan carries $775 million in reductions. There was negative response from the healthcare industry, including State Hospital Association President; Daniel Sisto who bitterly attacked the reduced spending which he said would actually cut $775 million from healthcare. There was also criticism from the State's Nurses Association. In addition to the $385 million that was slashed from healthcare spending, Medicaid was trimmed by 1.5%, $26 million was cut from homecare, $72 million was axed from nursing homes, $61 million was removed from managed care services, $110 million from hospitals and $100 million from public health programs. Earlier in the week, a spokesman for Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Democratic Conference Leader John Sampson of Brooklyn had indicated that no effort would be made to block the Governor's proposal since most of these cuts had been agreed to.

Despite the above, a number of lawmakers suggested that a budget deal with Governor Paterson could be finalized by the end of the month and that there could be voting on budget bills next week before they adjourn for the summer.

Push On To Open Casino's Upstate

The head of the Senate Committee on Gambling Laws introduced a measure Wednesday to change the State Constitution to allow four Upstate horse tracks – possibly those in Saratoga Springs – to open casinos with all the games of Las Vegas. The Resolution would allow for table games such as craps and card games such as poker and black jack, roulette and slot machines and any electronic versions of the gambling games. Either of the tracks in Saratoga Springs would be eligible although the harness track is already outfitted as a video lottery terminal casino and is a more likely site Racing & Wagering Committee Chairman Eric Adams (D-Brooklyn) said. Harness tracks at three other regions would also be eligible – Vernon Downs in Oneida County, Tioga Downs in Tioga County and Monticello Raceway in Sullivan County. Senator Adam's measure would allow County governments to opt out based on a countywide referendum. The casinos would be allowed at tracks in communities with fewer than 500,000 residents which exclude Aqueduct and Belmont thoroughbred tracks and the harness track at Yonkers in the New York City metropolitan area. Tracks near Indian nations operating casinos with non-compete clauses in their State gaming compacts would be ineligible. That would eliminate three tracks in close proximity to Western New York's Seneca Indian Nation territory – Buffalo and Batavia and the Finger Lakes Racetrack. Senator Adams said it was time to amend the Constitution since the State is surrounded by gambling destinations that attract New Yorkers such as Foxwoods and Mohegan Sun in Connecticut and casinos in Atlantic City. The Senator's proposal calls for a resolution that would have to be passed by two separately elected legislatures. First passage of the measure could be done by the current group of State lawmakers before the Session's end this month or at a Special Session later in the year. The second passage would be next year when a new Legislature takes over. While there is support for the measure, there is no guarantee that it can pass both Houses. Assembly Speaker Sheldon Silver indicated that he had not seen the measure but that "we'll look at it" adding that he would want to make sure it does not violate gaming compacts with Indian nations. Senator Frank Padavan, (R-Queens) who has voted against gambling measures consistently in the past, said he cannot support this latest proposal. Casino lobbyists say they do not see momentum for the measure at this time although there is a push by legislative leaders searching for revenue raising ideas. The Governor's signature is not needed on the Constitutional Amendment.

Autism Insurance Mandate Gains

Mandatory Coverage Clears Senate; Assembly to Weigh Action Soon

The Senate voted unanimously this past Wednesday to require insurance companies to cover screening, diagnosis and treatment of autism. The bill had broad bi-partisan support which included Senator Neil Breslin, a Democrat who worked the draft of the legislation as Chairman of the Insurance Committee and Senator Roy McDonald, a Republican, who has long drawn attention to the disorder. Currently, advocates of the measure said families receiving treatment plans from the doctors – including speech therapy – are surprised to hear they are not covered by health insurance. In fact, indications are that families have taken out second mortgages on their homes to finance autism treatments. The bill had been revised over time to meet the concerns of various groups; including County governments who were concerned insurers wouldn't have to cover treatments provided in schools or county facilities. Senator Breslin said the loophole was closed. The Autism Society of America backed a different bill which specified which treatments would be covered, while the bill the Senate passed Wednesday says only that treatments must be clinically proven and evidenced-based. There is not currently a consensus in the medical field about the best treatment for autism the Center for disease Control and Prevention estimates that the bill would affect an estimated 17,000 New Yorkers between the ages of 4 and 21. Assemblyman Joe Morelle (D-Rochester) is sponsoring the bill in his Chamber. He said he expects it to be considered next week.

Push Is On for Road Projects

Some Lawmakers Want the State to Shell Out $1 Billion for Construction Work

Lawmakers are trying to compel the State to cough up more than $1 billion for 2332 construction projects around New York State that are due to start later this year. Assemblymember Richard Brodsky (D-Rochester) and Senator Martin Dilan (D-Brooklyn) introduced a measure this past Wednesday that would allow State agencies to start funding the projects in which more than 80 construction firms had been identified as the lowest bidders. The concern by the lawmakers is that some projects set to break ground this summer won't have the necessary funding in place to start on time. Final approval of the contracts has been delayed by the lack of a State budget, now more than two months late. "We've got over $1.1 billion in new construction projects that are just in limbo," said a spokesman for the Associated General Contractors, an Albany-based trade group. "We're missing the entire construction season. There are some projects for July and August that won't be able to start," he said. The proposal has received a cool reception from Governor Paterson's office. "The best way to restart construction projects in New York State is for the Legislature to pass a responsible State budget," said a spokesperson in the Governor's office. This past Monday lawmakers approved an estimated $200 million in State funds owed to contractors for road and bridge construction projects already in place, but for work performed after April 1st, the start of the current fiscal year. However, many companies are still waiting for the checks to arrive in the mail.

Politics New York

Cuomo Talks, Hints at a Successor

Attorney General Cuomo, who is the gubernatorial favorite, says he will make his preference for the next Attorney General known before the Primary. Cuomo has shown little hesitation about flexing his muscle in the political landscape so a remark he made this past Monday about the five Democrats vying to be the next Attorney General was being well scrutinized. Cuomo said he would most likely make a public preference known before the September Primary. "There are a number of quality candidates in the race, I am looking at Kathleen Rice, I'm looking at Sean Coffey, I'm looking at Eric DiNallo and I'll have a decision down the road." Interestingly, he didn't mention the other two candidates, Senator Eric Schneiderman and Assemblymember Richard Brodsky. As sitting legislators, the men crossed a point of no return on Wednesday, when they locked into a spot on the Primary ballot for Attorney General, rather than seek a reasonably assured course to re-election. Cuomo has done nothing to quell the belief among Democratic officials that the Nassau County District Attorney Kathleen Rice is his favorite successor. Despite this both Senator Schneiderman and Assemblymember Brodsky insist they are pressing forward and that their campaigns are going well.