March 19, 2012
Vol. 1, No. 8
Mayor Michael Bloomberg, the king of coalitions. Page 4
Whatâ€™s next after pension reform? Page 16
School districts are feeling the budget pinch worse than most. Page 10
David Jones wonders why nothing is being done for the poor. Page 23
His Mind Is Made Up
frank discussions about how best to run New York City. And the less he’s willing to debate New Yorkers who don’t agree with him, the more they’ll find a voice in City Council members who disagree with him and candidates who want to succeed him. The sad thing is, Bloomberg knows better. He trotted out one of his favorite jokes at his Johns Hopkins speech: “As former Mayor Ed Koch of New York City once said, ‘If you agree with me on 9 of 12 issues, vote for me. If you agree with me on 12 of 12, go see a psychiatrist.’ ” Bloomberg still makes that joke. He doesn’t realize he’s at risk of becoming the punchline. firstname.lastname@example.org
Forget for a minute whether you think easily swayed by other people’s concerns. the NYPD is right to monitor Muslims. Or Just ask the people who work with him. whether the Health Department grades Yet while his stubborn resistance to other restaurants fairly. Or whether the rise in people’s doubts made him a billionaire pension costs is really all the fault of unions. and a mayor, he thrived on the back-andInstead, look at what forth that helped him hone his views. “Listen to others,” he said two years ago Mayor Michael Bloomberg has contributed to those in his commencement address at his alma mater, Johns Hopkins University. “Ask debates in recent weeks. Police-spying critics? the hard questions. Evaluate issues on the “It’s a made-for-television merits.” Yet increasingly Bloomberg seems fascithing. It gets you publicity.” Health-inspection critics? nated by new technology and national and “Their complaints are going global issues—and closed to new ideas and Adam Lisberg to fall on deaf ears.” EDITOR Jan. 2012 Pension-reform BY T H E N U M B E R S U n e m p l oy m e n t 10% critics? “They try to blame others.” Bloomberg isn’t saying reason- 10% able people can disagree. He’s 9% saying he’s right and they’re wrong. Ask yourself what that means for 8% keeping New York City moving 7% New York has recovered more jobs lost during forward while the rest of his term Jan. 2012 6% the recession than most states, but the city runs out. 9.20% and state unemployment rate remains above In his first State of the City 5% the national average of 8.3 percent. speech a decade ago, Bloom4% berg talked about “a new attitude of cooperation and collabora- 3% tion.” But 10 years is a long time 2% for anyone to maintain an open2008 2009 2010 2011 minded curiosity about doing the 1% same job day after day. SOURCE: NYS LABOR DEPT. Granted, Bloomberg is not
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The best items from The Notebook, City & State’s political blog City & State’s political blog The Notebook blog is your key source for political and campaign developments in New York. Stay on top of the news with items like these at www.cityandstateny.com/thenotebook.
WESTERN NEW YORK New congressional lines for Western NewYork Congresswoman Kathy Hochul make her district quite favorable to Republicans—and have raised the hopes of some prominent Republicans who are eyeing higher office. David Bellavia, an Iraq veteran who ran in the special election for the seat in 2011 and has been running for it again for months, is definitely in. Bellavia’s campaign consultant Michael Caputo also points out that all the various iterations of “Gallivan for Congress” have been bought up online by an unknown source. Could Erie County State Sen. Patrick Gallivan be considering a run? “It’s way too coincidental, and defies logic, that of all the names of people who could run for Congress, those were bought,” said Caputo, who also described the new district lines for Hochul’s seat as having the same level of attractiveness to “career politicians” (re: not his client) as a “really hot woman.” Caputo says he’s hearing that other big names are interested in running, including former Erie County Executive Chris Collins (who previously has not ruled it out), Assembly Minority Leader Brian Kolb and former AG Dennis Vacco.
ALBANY A memo being circulated by Todd Breitbart, a Democratic redistricting expert who has worked closely with the Senate Democrats, states that the redistricting constitutional amendment passed by the Legislature would bring back prison-based gerrymandering. In 2010 the practice, which had counted prison inmates in the largely upstate communities where they were held, rather than in the downstate communities where many of those inmates hailed from, was ended through legislation passed by the Democratic-controlled Senate.The Senate Republicans, who have since regained the majority, sued to overturn the law, but eventually dropped the litigation. But Breitbart says the constitutional amendment gets rid of the 2010 law abolishing prison-based gerrymandering, writing: “The amendment abolishes LATFOR, but does not impose the prisoner subtraction-and-reallocation rule upon the new commission or the Legislature. It thus repeals the rule, and brings back prison-based gerrymandering.” MARCH 19, 2012
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AROUND NEW YORK
EDITORIAL Editor: Adam Lisberg firstname.lastname@example.org Managing Editor: Andrew J. Hawkins email@example.com Reporters: Chris Bragg firstname.lastname@example.org Laura Nahmias email@example.com Jon Lentz firstname.lastname@example.org Copy Editor: Helen Eisenbach Photography Editor: Andrew Schwartz Interns: Eliza Ronalds-Hannon, Michael Mandelkern
A number of lawmakers have groused about being drawn out of their current districts by Judge Roanne Mann—and then there’s the curious case of Brooklyn Congresswoman Nydia Velázquez. Mann’s new lines put Velázquez in what would be Congressman Jerry Nadler’s new congressional district, but a source tells us that Velázquez had actually been living in Nadler’s district for the past year—in a luxury waterfront apartment on the Red Hook pier. Strangely, members of Congress do not have live in the districts they represent, just within the state. Still, a spokesperson assured Velázquez would be living in her own district as she faces a tough primary challenge from Councilman Erik Martin Dilan. “The district lines are being redrawn and, when they are final, the Congresswoman fully expects to be living in the district she intends to represent,” said a spokesperson. Velásquez’s building is also home to the popular supermarket Fairway, as well as some notable names like Boardwalk Empire star Michael Shannon.
QUEENS It’s clear that newly minted U.S. Senate candidate/Congressman Bob Turner will be having some real issues in trying to lock up Row C. Conservative Party chairman Mike Long made clear in an interview that chairs are enamored with another candidate, Wendy Long (no relation), and thatTurner faces an uphill battle winning the Conservative Party nomination at its nominating convention. He noted Wendy Long’s résumé clerking for Supreme Court Justice Clarence Thomas, along with other strong conservative credentials—and believesTurner waited too long before himself getting into the race. Mike Long admitted that on paper Turner, a congressman who ran a nationally watched race this year, might look stronger. Long also lives relatively close toTurner in Brooklyn— and is a friend of the congressman—making the situation even more awkward. “That makes life very uncomfortable for me,” Long said. “But in politics you have to look to the future, and have to look out for the good of the future of New York State.”
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YOU SAY YOU WANT A COALITION? Who says Mayor Michael Bloomberg doesn’t work well with others? In the past six years, he has launched a half-dozen coalitions to achieve his goals on a national scale—with varying degrees of success. Here’s a scorecard: MAYORS AGAINST ILLEGAL GUNS Date Started: April 25, 2006 Mission: Uniting local governments to push for national gun reforms Results: Blocked congressional attempts to stop federal agents from probing gun crime; stopped NRA-backed plan to allow concealed weapons nationwide; agitated for better background checks at gun shows; ran Super Bowl ad with Bloomberg and Boston MayorThomas Menino.
BUILDING AMERICA’S FUTURE Date Started: Jan. 19, 2008 Mission: Pushing for more investment in U.S. infrastructure Results: Bloomberg, former Pennsylvania Gov. Ed Rendell and former California Gov. Arnold Schwarzenegger tried pressuring Congress for more robust spending on roads, bridges, trains and other infrastructure. They don’t have it yet.
CITIES FOR FINANCIAL EMPOWERMENT COALITION Date Started: March 18, 2008 Mission: To help poor residents become financially self-sufficient Results: New York City’s initiatives are being copied in dozens of other cities, and the coalition is advising the new federal Consumer Financial Protection Bureau.
CITIES OF SERVICE Date Started: Sept. 10, 2009 Mission: Recruiting more people to volunteer for their communities Results: After New York City appointed a chief service officer, 34 others did as well.
PARTNERSHIP FOR A NEW AMERICAN ECONOMY Date Started: July 2, 2010 Mission: Opening doors for more skilled immigrants to America Results: Produced many reports, testified at many committees, rounded up many major corporate executives. Actual legislative changes? Zero.
NEW YORK LEADERS FOR PENSION REFORM Date Started: Feb. 22, 2012 Mission: Organizing local and county officials to reduce New York pension costs Results: Albany approved pension reforms, including Tier VI and a 401(k)-style plan for high-income state workers.
THE FOOTNOTE: A real press release, annotated Sent 10:10 p.m. Wednesday, March 14, from Gov. Andrew Cuomo’s press office. New York’s constitution bans gambling but exempts everything except commercial casinos and betting on sports, dog racing and jai alai.
For Immediate Release: March 14, 2012 The New York Gaming Association, a coalition of racetrack casinos, expects 17,000 new construction jobs and 5,780 full-time and parttime casino positions.
The Associated Press Stylebook prefers the term gambling, not gaming.
OS, AND SPEAKER SILVER GOVERNOR CUOMO, MAJORITY LEADER SKEL PROCESS OF AMENDING STATE ANNOUNCE LANDMARK AGREEMENT TO BEGIN NG IN NEW YORK GAMI O CASIN W CONSTITUTION TO ALLO
The NYGA estimates the state would get an extra $317 million in the first year of legalized gambling.
In addition to Indian casinos r Dean Skelos, and Assembly Speaker Governor Andrew M. Cuomo, Senate Majority Leade and racetrack casinos, New the ding amen of ss proce the ment to begin Yorkers can also legally buy Sheldon Silver today announced a landmark agree to tial York. Legalized casinos have the poten lottery tickets, play charitable state constitution to allow casino gaming in New pany accom that ue reven and m ng the touris bingo and bet on horse races. create thousands of good-paying jobs while keepi gaming here in New York State. reality the nting Insiders said Silver had confro nally ﬁ are casinos we “By taking these important ﬁrst steps to legalize reservations about a casino regulate and The governor has said y in the gaming business, we need a real plan to alread is York New while that in New York City, particularly ultimately put will that ss proce a is legalization could create “This said. o Cuom nor Gover try,” capitalize on the indus by in Manhattan, and wanted to $1 billion or more in economic our economy, and help keep billions of dollars spent drive work, to rs Yorke New of ands thous specify the casino locations activity, but most states that ” state. the in g New Yorkers on gamin in the amendment. But to ment agree an ed legalized gambling in the past reach have we ed pleas am “I Senate Majority Leader Dean Skelos said, geography will wait until 2013. decade have failed to live up to Yorkers a say on whether we New give will that t dmen amen al itution const a move forward with rship, and initial economic projections. leade his for ic Bonac John or Senat thank I expand casino gaming in New York State. ation prior to putting it out to the legisl ng menti imple the of s detail the iating look forward to negot Bonacic is a longtime voters in 2013.” Bonacic not only chairs the proponent of bringing a casino current system, gaming revenue is pouring Assembly Speaker Sheldon Silver said, “Under the Racing, Gaming and Wagering to the economically depressed . We need states boring neigh in s dollar nt ainme entert Committee but also plays a key out of the state as New Yorkers spend their Catskills area in his district. of ge passa rst ﬁ the ents repres Today’s vote role in approving a constitutional the ability to keep that revenue here in New York. .” issue ng legislation to further deﬁne this amendment efforts as chair of this amendment and we will work on accompanyi said, ittee Comm ring Wage and g g, Gamin Gov. George Pataki the Judiciary Committee. Senator John Bonacic, Chairman of the Senate Racin , before road m. While we have been down this pushed to legalize “This is about creating jobs and enhancing touris we have learned is when the Governor says gambling in the late 1990s, this time we have a much better driver. One thing e Racing, Gaming and Wagering Committee, I Senat but Donald Trump and the Efforts to build a casino something, he means it. As Chairman of ation necessary to create the thousands of others lobbied successfully resort in the Catskills have look forward to working with him to implement legisl which , tment to block the effort. of millions of dollars in direct inves stalled repeatedly, and the direct and indirect jobs, along with the hundreds here.” current plan is subject to a casino gaming can bring to the Catskills and elsew New in os privately owned commercial casin lawsuit by a rival developer. Today’s agreement calls for no more than seven New York has nine racetrack York. New York State. Native Americans have ﬁve casinos, meaning at least two Casino gaming already plays a signiﬁcant role in New Jersey has Atlantic at race tracks across the state. New York also will not be allowed to become casinos in New York and nine racinos are located City, Massachusetts last in the state any than more and City ic Atlant than more full-scale casinos. has 29,000 electronic gaming machines, year became the 16th state to ces provin ian Canad and states unded by legalize commercial gambling, Northeast or Midwest. Additionally, New York is surro lize on capita to steps taken not has York New now, until and Pennsylvania now brings with legalized casino gaming. However, Cuomo is backing a plan for impact of gaming. in the second-highest amount mic econo the ding amen a massive privately funded that begins the process of of gambling revenue. The Assembly and Senate must now pass legislation the by ed ratiﬁ then convention center next to Genting’s and ature legisl which will then be voted on by the next , itution const state the racino at Aqueduct in Queens, to is 2013. people. The earliest a public referendum can be held replace Manhattan’s Javits Center. In return Genting wants exclusive gambling rights in the city.
MARCH 19, 2012
A compact with the state let the Seneca Nation of Indians open three casinos in western New York in exchange for payments to the state, though those have stalled amid a legal dispute over racinos in the Senecas’ exclusivity zone. The Senecas, who are leery of the amendment, have touted the local economic boost from their casinos.
A Siena College poll found New Yorkers are evenly split on the issue, a slight decline from the 52 percent support for a constitutional amendment last month.
One year later. Nearly one year ago, we all were shocked and saddened by media images of the massive earthquake and destructive tsunami that occurred at Fukushima. The U.S. and the nuclear industry pledged to do what it could to help our friends in Japan cope and recover. Even with the earthquake and tsunami, as the industry watched events in Japan unfold, it fully expected the plants in Fukushima to remain safely shut down, as nuclear plants are designed to do. To better understand what had happened in Japan, public officials, regulators, scientists, engineers and those of us who own and operate nuclear power plants in the U.S. promised to do a rigorous review and capture lessons learned. And, as nothing is more important than the safety of our neighbors and communities, Entergy pledged to take further steps to ensure our safety equipment is protected and we always remain in a state of preparedness. At Indian Point Energy Center, we did just that. We verified our procedures for dealing with severe weather and unforeseen natural events. We reviewed our emergency backup systems and added diesel-powered equipment and training to ensure that our multiple layers of safety systems can respond effectively even after severe events. And we are participating in ongoing NRC and industry efforts to further confirm that our safety related structures and components are seismically robust and will perform their function under postulated seismic events. The result of this in-depth and ongoing examination confirmed that our plants are safe, will remain safe, and are prepared for the unexpected.
Well before Fukushima, our plants had vigorous and advanced safety systems in place. We have multiple and various back-up power systems and equipment located in high elevation areas well above potential flooding, some of which are even bunkered for protection, to keep power flowing to the plants under circumstances far worse than the area has seen. Indian Point is designed to withstand floods twice the level of those seen in the surrounding region and earthquakes 100 times more severe than the worst previously recorded in the area. Fukushima had no such safety margin. And with direction from the NRC’s recent report on Fukushima, we’ll be enhancing our state of preparedness and “defense in depth” even more. These are just some of the facts that you don’t often read or hear about. But it matters to us that you, our neighbors and communities, know the truth about our operations and preparedness at Indian Point. We believe in transparency, and that’s why we are encouraging an ongoing dialogue with the public about New York’s energy future and the future of nuclear power. We strongly disagree with opponents who try to use the crisis in Japan to heighten unwarranted fears to further their longstanding goal of closing Indian Point. All of us at Entergy are committed to safely providing a lower-cost, reliable supply of clean electricity. And we are committed to providing you with the information you need to make an informed judgment regarding New York’s electric future. We encourage you to visit our website, www.rightfornewyork.com, to see for yourself what we do and how we do it. We are your neighbors. We attend the same schools and support many of the same causes. As one of America’s leading nuclear power plant operators, we are committed to constantly reviewing and strengthening our operations to ensure we are prepared. That’s because safety comes first at Entergy.
J. Wayne Leonard, Chairman and CEO, Entergy Corporation, and the 1,200 employees at the Indian Point Energy Center
Indian Point Energy Center
WE’RE RIGHT FOR NEW YORK
march 19, 2012
HOW MUCH CAN THIS MAN CHANGE ALBANY?
By LAURA NAHMIAS and ANDREW J. HAWKINS
MARCH 19, 2012
t was a Senate Rules Committee meeting like most others: about a dozen Republican senators well past middle age, sitting around a conference table in suits and ties, ready to bring a bill to the Senate floor. But it was 3 a.m., Wednesday had bled into Thursday, and they were working because Gov. Andrew Cuomo had put their continued survival in the majority on the line. If they stayed awake long enough to pass several massive pieces of legislation, Cuomo would sign a bill entrenching their gerrymandered districts for another decade. Republican Sen. Owen Johnson, age 82, had been on the phone all day after his son-in-law was in a car accident. No one was seriously injured, though, so Johnson stayed at the Capitol into the wee hours. “It’s going to be a long, long night,” he said. What made the night even stranger is what those lawmakers weren’t doing: fighting over the budget. Allnight sessions are not unheard-of in Albany, but usually they involve cutting deals over how to spend billions of dollars. This year, with much of the budget gap closed in last December’s tax deal, the big financial decisions were already over by the time the Legislature gaveled into session. In the late-night madness of last week’s “big ugly,” the budget never came up. Instead, lawmakers are now tussling with Cuomo over language. His proposed budget is marbled with language to expand executive powers, repeating this phrase hundreds of times: “[T]he amounts appropriated herein may be (i) interchanged without limit, (ii) transferred between any other state operations… and/or (iii) suballocated to any state department.” Cuomo spokesman Josh Vlasto insists it is not as far-reaching as it sounds, and said the governor’s negotiators are committed to putting it in the final budget. “This is a minor change that would apply only to back-office functions, and would allow the governor to move forward with his effort to make government more efficient and cost-effective for taxpayers,” Vlasto said. Lawmakers don’t think it’s that simple. They say the “interchanged without limit” phrasing would usurp their power over state spending, and stripped that wording from the budgets they passed in the Senate and Assembly. After a year in which both Democratic and Republican conferences compromised their principles on issues from gay marriage to drastic budget cuts, lawmakers say they have reached their breaking points. There are some things they won’t do, even for Cuomo.
Yet the “interchanged without limit” budget language rankled him. “What did the governor really mean by this?” Ortiz said, climbing the stairs to the Assembly chamber. “I’m the chair
“The amounts appropriated herein may be interchanged without limit, transferred between any other state operations and/or suballocated to any state department.” of the Mental Health and Disabilities committees. What could this do to those agencies? “So we just reject the governor’s recommendation on this,” he said. “When you don’t have details, you cannot just go with the flow.”
he Legislature saluted Cuomo last week for strong leadership in wrapping up major accomplishments in a single package. But since the governor’s first year in office, lawmakers seem to have grown a stronger backbone. Senate Majority Leader Dean Skelos stood next to Assembly Speaker Sheldon Silver last week and said Cuomo’s budget language was a step too far. “The speaker and I both agree that the Legislature, we are part of the governing process,” Skelos said. If the governor wants to “come back with recommendations to change our appropriations, we would be open to it.” “The ability to take large sums of money in the budget and move them around from program to program and department to department, without the
approval of the Legislature, undermines our traditional checks and balances,” said Assemblyman Jack McEneny. “We need that second set of eyes, and need to convince people that that’s a good idea.” “Why even have a Legislature?” asked Dan Feldman, a former member of the Assembly and coauthor of the book Tales From the Sausage Factory. “How do you justify this? Efficiency? Come on. We’re supposed to be avoiding dictatorships here.” The power move rankles even those who would fall in line otherwise. Assemblyman Félix Ortiz, for instance, likes Cuomo’s budget because it consolidates human services agencies instead of just cutting them. “It’s efficient,” he said. “Cuomo has managed to get every commissioner to work in partnership.”
he roots of the tug-of-war between the governor and the Legislature go back almost a century. Before Gov. Al Smith took office, New York had no such thing as an executive budget proposal. The budget was written by a cabal of legislative staff who were among the few who understood its complicated inner workings—and kept a tight grip on them. Gov. Franklin Delano Roosevelt fought the Legislature for more power, as did governors Hugh Carey and Mario Cuomo and George Pataki. Tension between branches of government is practically ingrained in the Romanesque architecture of the state Capitol building. “The governor is pushing in accord with a long, unfolding trend,” said Gerald Benjamin, a political science professor at SUNY New Paltz. “But I think the Legislature fairly considers this beyond what’s reasonable.” But Cuomo has informal, as well as formal, advantages that put the odds in his favor. “The governor is acclaimed all over New York,” Benjamin said. “He’s a very high-status and highly visible person. He’s a potential president, so he draws power from that. Right now he’s very popular, so he draws power from that. He’s head of his political party. We’re not just talking about the formal powers, but the informal powers as well.” Former Lt. Gov. Richard Ravitch, who knows as much about writing a New York budget as anyone, said he hadn’t seen Cuomo’s “interchanged without limit” language, but suspected it would pass legal muster. “I’m too much of a half-assed lawyer to comment without seeing the language,” he said. “To the extent that a governor wants to move money from one agency to another within limits march 19, 2012
set by the budget, I don’t see anything wrong about that.”
et Cuomo has already succeeded in persuading the Legislature to bolster his executive power in other ways. It granted his health commissioner authority to cut Medicaid dollars. It gave him more control over the reorganization of state agencies. And
“We just reject the governor’s recommendation on this. When you don’t have details, you cannot just go with the flow.” it has declined to challenge his ultimate trump card, in which he could cram controversial legislation into the budget and dare the Legislature to veto it. The state Court of Appeals enshrined that authority in the 2004 Pataki v. Silver decision, tilting the playing field in Cuomo’s favor. The Legislature does not seem ready to take the issue back to court—yet. Richard Brodsky, the former Assemblyman and regular City & State columnist, hinted that may change. He said Pataki v. Silver is a terrible blow to the Legislature as an independent
march 19, 2012
branch of government. “There are still many uncertainties about Pataki v. Silver, but the legal pathway to remedy this is complicated,” Brodsky said. “Many people are [working to revisit that case]. And they will come forward when they want.” The opposition to Cuomo’s budget language seems rooted in a general fear of what Cuomo could do with it, rather than any sense of a particular threat. McEneny said lawmakers have been leery of growing executive power for almost a decade, but never acted to curb it—and should have. “When Spitzer was in office, we had legislation that would have negated Silver v. Pataki, which would not allow nonlegislative things to go into the budget,” he said. “But Spitzer said he would never do that, and he never did.” Former Gov. David Paterson “came in, and Paterson did do it, and he put us in a position of closing all the parks or else cutting the unions, the workers, or else. He used the Newt Gingrich approach, ‘My way or the highway—I’ll shut you down if you don’t do it.’ ” McEneny added, “Where we were foolish is we should have gone ahead and addressed the structure, and not the personality.”
here was more evidence on display last week that the Legislature might be newly willing
to stand up to the governor. During Cuomo’s honeymoon a year ago, the first round of progress on long-stalled legislation prompted congratulatory “we’re not dysfunctional” backslapping among lawmakers. This year, as the Legislature passed
policies he tries to pass. Already this year, Senate Republicans removed Cuomo’s proposed tenant protection unit and health insurance exchange from their one-house budget. They also permanently tabled the Reproductive Health Act, which Cuomo had
“Spitzer said he would never do that, and he never did. We should have gone ahead and addressed the structure, and not the personality.” a massive package of bills on gambling, pension reforms, DNA databanks and redistricting, there was little selfcongratulation. Senate Democrats walked out of a vote on the redistricting bill, in a symbolic gesture of their anger. A handful of members of the Assembly minority caucuses, including Assemblyman Karim Camara, voted against the redistricting bill and an amendment to change the redistricting process. “This is the wrong way to go,” Assemblywoman Crystal Peoples-Stokes said as she voted “No.” While Cuomo can claim victory on the measures passed before the budget this year, it’s unclear how much more leverage he can use once the budget is finished. His signature on new district lines almost ensures the return of a Senate Republican majority that could frustrate progressive
promised to push for this session. A spokesman for Cuomo said the creation of the tenant protection unit can be done outside of the budget process and that negotiations between the executive and the legislature over the health exchange were ongoing. But Cuomo may also have used up his goodwill with Senate Democrats, who resisted criticizing him on issues like redistricting until he reneged on his promise to veto partisan district lines. Last week Sen. Michael Gianaris, bleary-eyed with frustration, sat hunched over in the lobby outside the Senate chamber. He was asked if he was depressed. “Yeah,” he said, throwing his hands up. “So much for change coming to Albany.” email@example.com
The Waiting Game For health exchange, all eyes are on the Supreme Court By Laura Nahmias
ew York’s proposed healthinsurance exchange, the virtual marketplace where consumers can shop for insurance, is falling prey to bad timing. An exchange, originally a conservative idea with overwhelming support from small businesses across the state, is part of Gov. Andrew Cuomo’s budget this year. But the bill’s fate hangs in the balance of two challenges to President Barack Obama’s healthcare reform law that will not be decided until long after the state’s April 1 budget deadline. The Supreme Court is expected to rule on a constitutional challenge to the law in June. The presidential contest, in which Republican challengers have promised to repeal “Obamacare” on their first day in
estimate in August, long after the year’s legislative session has ended, he said—but even if the cost is near the administration’s projections, Senate Republicans won’t commit to approving health exchanges. He said 20 other states are still studying the cost of health exchanges, compared with the 14 that have set them up: “The approach I’m suggesting is not the least bit unusual.”
The Albany stalemate is a far cry from a year ago, when health exchanges passed the Assembly and seemed poised to pass the Senate, despite some Republican reservations. Cuomo suggested a special session might be necessary to approve them that summer, but Republican opposition hardened. Cuomo now regrets the inaction—and
still claims to hold out hope for health exchanges now. “I think we made a mistake last year not passing it,” Cuomo said at a press conference in March. “I think it would be a terrible mistake this year if we didn’t pass it, and I’m going to do everything I can to make sure it passes.” firstname.lastname@example.org
“We’re taking the attitude, with this legislation, that we want to look before we leap.” office, will last until November. So while Cuomo insisted this month that “I’m going to do everything I can to make sure it passes,” his Department of Financial Services is pursuing an alternate bill to make comparison-shopping for health insurance easier. “Look, the health-insurance exchange is a huge priority for this administration,” Superintendent Ben Lawsky explained. “Once the health-insurance exchange is fully established it will be easier for consumers to comparison-shop, which is one of the problems I think we identified, so that could help with that.” The governor and legislative leaders did not include health exchanges in their talks to bundle new district lines, pension reform and an expanded DNA data bank into a single deal. The Republican-led Senate did not include health exchanges in its budget proposal. Instead Republican Sen. James Seward sponsored a bill to study what the health-exchange bill would cost. The state Health and Financial Services departments are working on cost estimates for setting up health exchanges, and have received $87 million in federal grants to start the programs. “We’re taking the attitude, with this legislation, that we want to look before we leap,” said Seward, chairman of the Senate Insurance Committee. “It’s been no secret that since last June when the healthexchange legislation was developed and negotiated, there has been a sentiment in our conference in the Senate that there are concerns about going forward.” Seward’s bill would report its cost
march 19, 2012
NYS Governer’s office
School Daze As Cuomo pushes competitive grants, school districts come to terms with a permanent recession By Andrew J. Hawkins
s budget negotiations entered their final stages last week, teachers and students crammed the halls of the Capitol, carrying signs and shouting slogans for increased school aid. Given that Gov. Andrew Cuomo’s proposal this year raises education spending by 4 percent, an $805 million bump over last year, all the activity seemed a bit superfluous. But a brief glance at the fiscal woes of school districts across the state suggests otherwise. Take the Haverstraw–Stony Point school district in northern Rockland County. It has lost $10 million in state aid over the last three years. It has laid off 118 staff members, and will lose another 17 teachers this year. Two of the five elementary schools have closed, as well as one middle school. Ninth graders are being pushed from middle school into high school to save money. And $11.6 million of the district’s annual budget is tied up in an ongoing court settlement with a local utility company. Students there can expect fewer sports programs, advanced-placement classes and music classes—and ongoing struggles to educate high-needs children.
“We have in a year’s time undergone an entire transformation,” said Deborah Gatti, president of the North Rockland Central School District. “We’re operating under an austerity system.” And North Rockland isn’t alone. Dick Weisz, president of the Guilderland school board in Albany County, said his district has eliminated 40 teachers and 40 staff positions over the last two years, and they are still looking at a $2.6 million budget deficit. “It’s a sobering time,” he said. “Fewer adults means less education.” Many school districts are chafing under the 2 percent property tax cap Cuomo signed into law last year, as well as a host of mandates they say drive up costs for localities and force layoffs and other cutbacks. Much of that anger boiled up during a meeting between school board representatives and Budget Director Robert Megna in early March. Board members complained it would be “political suicide” to submit budgets that exceeded the 2 percent cap. Megna encouraged them to negotiate concessions with their local unions. Tim Kremer, executive director of the New York School Boards Association, said he apologized to Megna after the meeting. “I just don’t think he was in his
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Budget Director Robert Megna
element,” Kremer said. “They were not appreciating his responses.” The message, though, was loud and clear, Kremer said: “Now we’re in deep. And it does not appear anything will change for us in the near future. In fact, a lot of districts talk as if this is a permanent feeling, this particular recession. It feels like we’re not going to recover from it. As some of these smaller, poorer, rural school districts say, ‘There’s just no way out of this hole.’ ” In a statement, Megna acknowledged that times were tough for schools around the state. “The last few fiscal years have been difficult for all levels of government, and we are pleased to have offered a long term sustainable solution to school finance by pegging aid increases to personal income growth,” Megna said. “This will result in a School Aid increase of $805 million next year and more than $1.5 billion over the next two years, in
addition to significant relief through pension reform. Working together, we can direct more resources to where they are most needed – the classroom.” Cuomo is pushing a $250 million competitive grant program as a way to spur cash-strapped school districts to explore cost savings and shared services as a way to reduce expenditures. But school boards are urging the Legislature to scale back the performance grants, arguing many of the hardesthit school districts lack the skills and staffers—like grant writers—to compete for that pot of money. But other groups say the grants are the only way to encourage districts to take the necessary steps to consolidate backoffice operations and save real money. “There’s a status quo out there that’s done things traditionally the old way. This is a more innovative and newer program that, quite frankly, awards school districts based on merit,” said Elizabeth Ling, New York State director of Democrats for Education Reform. “That can be threatening to the status quo,” she said. “Even though the amount is relatively small, it’s easy to focus on that, rather than making the system better.” Both the Senate and the Assembly stripped the grant program from their onehouse budget bills. But Ling said she is confident that the governor can convince lawmakers to restore the funding. “There’s a lot of moving parts right now,” she said. “We’ll look to see how it works out.” email@example.com
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march 19, 2012
www.cityandstateny.com Job: 03_05_12_OGCA_2031_City and State Publication: City and State
Pork Resurrection Member items, once thought slain, are still being spent By Laura Nahmias
ember items, like zombies in a horror film, have risen from the dead. Despite Gov. Andrew Cuomo’s promise before he was elected to end the practice, more than $17 million worth of new memberitem contracts have been approved since he took office, and the Legislature is set to spend $105 million on pork over the next year. Cuomo promised to eradicate member items when he was elected, and while he was able to stop the Legislature from adding more than $85 million for new member items to last year’s budget, he wasn’t able to end them entirely. In fact, he even plans to give school districts $10 million in similar funds himself. Since Cuomo took office, the Legislature has steadily continued spending more than $136 million it had allocated to its members in prior budget years, placed into something called the “Community Projects Fund.” During his term as attorney general and his campaign for governor, Cuomo promised to make several changes to the member-items process. In his 2010 campaign platform he said one of his priorities was “[i]mposing tough standards and procedures that mandate transparency and fairness, and ban[ning] the kinds of conflicts of interest that have resulted in so much abuse. If the Legislature ignores the process, those member items will be vetoed.” During the Cuomo administration there have been no new deposits from the general fund into the community projects fund, and the legislature has not been given any new appropriation authority, said Morris Peters, a spokesman for the Division of Budget. But the governor does not have the ability to abrogate the spending power the Legislature granted itself in prior years, Peters said, so he can’t stop newer grants from being spent. As long as lawmakers have money in the community projects fund, he said, they can continue to make good on the commitments they made. The Senate and Assembly majorities each have about $40 million left to spend, and each minority party has $10 million. Even the executive office has an allocation, and for this budget year Cuomo has requested to spend $10 million, all of it on school districts throughout the state. After the Cuomo administration initially failed to end the process of member items altogether, it said the leftover money would only go toward the fulfillment of existing grant obligations. But records from Comptroller Thomas DiNapoli’s office show that 127 brand-new grants have been approved since January 1, 2011, including $152,000 for the Ridge-
wood Seniors Community Corporation; $20,000 for Gan Yisroel, a summer camp for Orthodox Jewish children; $20,000 to the Society for the Preservation of Long Island Antiquities; $225,000 to Vaad Haakol Crown Heights; $50,000 to the Metropolitan New York Coordinating Council on Jewish Poverty; $19,780 to the Ridgewood Local Development Company and $20,000 to the Sweet Pilgrim Missionary Baptist Church. Member items have long been controversial. Under Gov. George Pataki’s administration the amount of money the Legislature appropriated to fund the items swelled, and by 2006 the Legislature was appropriating itself $200 million to fund pork projects, distributed through an opaque “memorandum of understanding” between the governor, Assembly speaker and Senate majority leader. Good-government groups decried the practice, both because there was no way to know which lawmaker requested which grant, and because the money was distributed unevenly based on the whims of the legislative leaders. Many lawmakers, including Assembly Speaker Sheldon Silver, defend pork projects, because they fund small, worthy causes that might otherwise be overlooked. Silver called for funding for member items to be renewed this year, too. “The speaker believes individual Assembly members know their districts best, and there are many organizations which are doing the work of government that have been cut in recent years,” said Assembly majority spokesman Michael Whyland. But after Assemblyman Brian McLaughlin was indicted and jailed for embezzling $95,000 in member items he granted to a Little League team, the furor over the practice peaked. In 2007 Cuomo, then the attorney general, partnered with the New York Public Interest Research Group’s then-Legislative Director Blair Horner to create Project Sunlight, a database of information on the items. The database listed member items by their sponsor, and the exposure of potential conflicts of interest decreased the number of grants being funneled to groups or projects employing the friends and relatives of sitting lawmakers. But in the 14 months since Cuomo became governor, Project Sunlight has lain dormant, even as spending continues—marking a return to opacity. That too is about to change. Attorney General Eric Schneiderman is planning to relaunch Project Sunlight under a new name, said a source close to the project. What is uncertain is whether member items will ever return to their former prominence in the Legislature. Though Cuomo has not funded them, the Community Projects Fund still exists—and when the money runs out, a new governor may see fit to fill the fund’s coffers again. Whyland would not say whether Silver would seek reinstatement of pork projects when the money runs out entirely. firstname.lastname@example.org
Our Perspective NYC Car Washes: A Dirty Business By Stuart Appelbaum, President, Retail, Wholesale and Department Store Union, RWDSU, UFCW
n March 6, the Workers Aligned for a Sustainable and Healthy New York (WASH NY) coalition released an eye-opening report, showing that the car wash industry in New York City has severely mistreated its workers, many of whom are immigrants. The report details workplaces where workers are subjected to extreme weather, and pay that is often so low that it violates wage and hour laws. In fact, in-depth interviews with 89 car wash employees at 29 different car washes found that the majority work at least 60 hours a week, and earn less than $400 a week. Workers’ schedules are a nightmare, and subject to the whims of management and swings in the weather, and paid time off, health care, or other benefits are virtually non-existent. Car wash workers Health and safety regulations are routinely ignored, and employees often have to supply their own protective equipment, and are on their own when it comes to the chronic health problems that come with the territory of working at a car wash.
are driving the WASH NY campaign, courageously speaking out about their treatment.
That's why WASH NY – community groups Make the Road NY and New York Communities for Change, with the help of the Retail, Wholesale and Department Store Union (RWDSU), UFCW – are fighting for change in the car wash industry. In recent years, these three organizations have each fought wage theft in local retail and grocery stores and stopped other forms of mistreatment and workplace abuse experienced by immigrant workers who are particularly vulnerable to harm – people much like the thousands of car wash workers in New York City. The report – which can be seen at www.washnewyork.org – provides compelling evidence that city and state officials should increase the enforcement of wage and hour laws, and all applicable workplace health and safety regulations, and perform yearly city and state inspections of car washes. Car wash workers are driving the WASH NY campaign, courageously speaking out about their treatment. Together, they are fighting to transform their industry and turn car wash work into jobs that can help create better lives for themselves and their families. They deserve to win, and we plan to help them achieve a lasting victory not only for themselves but also for the labor movement in New York and indeed this country.
Visit us on the web at
march 19, 2012
Build a Better
Projected FY2013 deficits, actual FY2012 deficits, and proposed or planned cuts, as of March 2010 New York is in good company as it tries to close this year’s budget gap. Other states are cutting healthcare and education spending and some are mulling tax cuts to balance their budgets. In many states, though, the size of the deficit is starting to shrink. —Jon Lentz email@example.com
An Agenda for Fiscal Responsibility and a Stronger New York: n Capital
investment that meets New York’s growing infrastructure needs—for bridges, tunnels, energy, roads, transit, airports and water systems
creation through mandate relief measures and pension cost reductions that will free up funds for public works projects and put thousands of New Yorkers back to work
of Qualifications-Based Selection (QBS) requirements to public authorities and public benefit corporations for higher quality design
of alternative project delivery methods such as design-build and public-private partnerships to accelerate infrastructure projects, decrease costs and leverage private equity
delivery of engineering services through greater use of private design firms
2013: $8.4 billion deficit 2012: $23 billion deficit
2013: $371 million deficit 2012: $780 million deficit
California Gov. Jerry Brown’s budget banks on a ballot measure to boost the sales tax and raise income taxes for residents earning more than $250,000 a year. The taxes would eliminate about half of the deficit, and the governor has called for a similar level of spending cuts. If voters don’t approve the taxes, spending cuts for schools would automatically go into effect.
Gov. Steve Beshear’s budget would cut state agency spending by 8.4 percent, lower funding for state universities by 6.4 percent, and reduce spending for the state police and public safety agencies by 2.2 percent. The state House has proposed restoring more money for services for the elderly, youth centers and county attorneys, while reducing spending on university capital projects.
2013: $598 million deficit 2012: $450 million deficit
2013: $895 million deficit 2012: $1.6 billion deficit
Gov. John Hickenlooper targeted education, including a $97 million cut for public school spending and a cut of $76 million for colleges and universities. Hickenlooper, who also called for less spending on road repairs, has joined Democratic lawmakers in a push to suspend a property tax break for senior citizens to save the state about $100 million a year, though Republicans oppose it.
Cutting 6,400 jobs and privatizing some prisons and healthcare centers are two key components of Gov. Bobby Jindal’s budget proposal. His pension plan, which is projected to save about $155 million, would raise the retirement age to 67, enroll new employees in a 401(k)-style plan and require workers to contribute more of their paychecks toward retirement. He would keep higher-education funding level.
that ensures engineers are responsible for only the work they perform
Leaders in the business of engineering
2013: $2 billion deficit 2012: $3.7 billion deficit Gov. Rick Scott proposed the elimination of 2,800 state jobs and lower healthcare spending, especially for Medicaid. Scott has also identified savings from reduced prison spending as the inmate population declines. Scott, who proposed $2 billion in tax cuts last year, wants more modest cuts this year to benefit small business and manufacturers.
Maryland: 2013: $1 billion deficit 2012: $1.4 billion deficit Gov. Martin O’Malley targeted public education for cuts in his budget, though lawmakers have pushed for higher income taxes to ease the burden on schools. O’Malley has called for changes that would raise taxes for only the top 20 percent of earners, but lawmakers would put in the higher tax rates for more people.
(SOURCES: CENTER ON BUDGET AND POLICY PRIORITIES, SUNSHINE REVIEW AND LOCAL MEDIA)
MARCH 19, 2012
2013: $1.3 billion deficit 2012: $1.8 billion deficit
2013: $75 million deficit 2012: $176 million deficit
2013: $641 million deficit 2012: $2.5 billion deficit
2013: $143 million deficit 2012: $1.6 billion deficit
Gov. Deval Patrick’s budget would raise $73 million from higher cigarette taxes and $61.5 million from lifting a sales-tax exemption on candy and soda. The governor also wants to change the medical payment system, replacing the fee-for-service model with a system that encourages doctors to coordinate care. Legislative leaders are opposed to any new taxes or fees.
Gov. Peter Shumlin’s budget, which includes no new income or sales taxes, will bring in more than $10 million from higher fees for everything from driver’s licenses to solid-waste disposal. The state has also sought additional federal funding in the wake of Hurricane Irene.
Gov. Chris Gregoire proposed a 17 percent cut to higher education and a temporary sales-tax increase. Some Democratic lawmakers have pushed to delay payments to schools, postponing the cost into the next budget cycle. Gregoire has also called for a new oil tax for the state’s highways, roads and bridges.
A national mortgage settlement will lower the state’s deficit by about $25 million, though Gov. Scott Walker is still facing lower than expected tax revenues. The state has targeted the University of Wisconsin system, the Department of Health Services and the Department of Children and Families for cuts.
Missouri: 2013: $800 million deficit 2012: $704 million deficit Gov. Jay Nixon proposed cuts of $191 million from Medicaid, $89 million from higher education, and the elimination of 816 jobs. A tax amnesty plan is also projected to bring in $52 million, while additional revenue could come from a transfer of money from a state health and educational facilities authority.
To The PARENTS of New York CiTY:
Thank You FOR YOUR SUPPORT
2013: $746 million deficit 2012: $3.7 billion deficit Gov. Tom Corbett would slightly reduce state spending in his budget without raising taxes. Corbett called for 30 percent spending cuts for state-related universities like Penn State, and 20 percent cuts to state-owned universities. Prekindergarten and Head Start also would get less funding, while the state would get rid of 1,200 vehicles in its fleet.
Despite attacks by Mayor Bloomberg and his allies, tens of thousands of New York City public school teachers go to work every day to make their students’ lives better. Thank you for your continuing support for the work our teachers do.
Michael Mulgrew President United Federation of Teachers
MARCH 19, 2012
BE CAREFUL WHAT YOU WISH FOR, GERRYMANDERERS
he debate over drawing his district in 2002 with the Republican as the congressional lines put forward by new district lines for New York town of Eastchester from his fellow Repub- Magistrate Roanne Mann? For Senate Republicans, the key is lican Sen. Nick Spano’s district. politicians is ignoring It was a decision that not what they added but what they didn’t an important law—the law of miscalculated the tremen- add. They created a 63rd seat upstate unintended consequences. dous minority-voter growth in to protect their majority, but missed It has received little attenYonkers, the heart of Spano’s an opportunity to create a Long Island tion as reformers like Ed Koch district. Spano won reelection district tailored for an ethnic or racial and Sean Coffey rail against by fewer than 20 votes in 2004 minority. Doing so might have craftily partisan gerrymandering, while against Democrat Andrea confounded their reform critics, while LATFOR chairs Assemblyman Stewart-Cousins, who beat protecting Republican incumbents. John McEneny and Sen. Bruce Gyory How? The aggregate minority populahim in a rematch two years Michael Nozzolio make their tion on Long Island rose to 31 percent in later. case for legislative prerogative. Ironically, after Velella pleaded guilty the 2010 Census. By 2020 40 percent of But history shows past reapportionments have always generated unintended in a corruption case, Democrat Jeff Klein the population—and one-quarter of its consequences, as crafty line drawers end won the seat comfortably in a 2005 three- vote—will likely be minority. up outsmarting themselves. If partisan gerrymandering doesn’t account for When Senate Republicans worried about demographic changes, it’s ripe for mid-decade surprises. growing Democratic voter registrations in Furthermore, by 2020 at least two Long Onondaga County in 1982, they fortified way special election when Republican Sen. Tarky Lombardi with solid Republican and Conservative candidates split their Island Senate districts will probably have Westchester and Bronx bases. So one minority registration bases at or above a bastions from the county’s suburbs. That reduced the registration advan- stab at partisan gerrymandering cost two 30 percent share, two more at or above 20 percent, and several more popping up to tage in Republican Sen. Martin Auer’s Republican seats. The lesson is that good candidates double digits. adjoining district, but the party didn’t These are the very thresholds that in worry, figuring the rural area would sustain can overcome bad gerrymandering— him. Two years later, though, Democrat and that lines have to stay relevant for a recent years led to the election of DemoNancy Larraine Hoffman defeated Auer full decade. If partisan gerrymandering cratic senators Klein, Stewart-Cousins, by outworking him in the hinterlands and doesn’t account for demographic changes, Neil Breslin, Joseph Addabbo, Tony Avella, and Brian Foley in 2008, before he taking advantage of a gender gap in what it’s ripe for mid-decade surprises. So what surprises might be lurking in lost to Lee Zeldin in 2010. remained in Onondaga. The Republicans feel so secure on Just a fluke? Consider the late Bronx the lines the Senate and Assembly majoriRepublican Sen. Guy Velella, who fortified ties have drawn for themselves, as well Long Island that they are willing to
gamble. They may win their bet. But what happens if Republican senators on Long Island face Democratic candidates with strong attachments to their districts’ white Catholic majorities, in a high-turnout year for minority voters, while the gender gap cuts the Democrats’ way? Will there be no such elections over the next decade? The potential surprise in Mann’s proposal for the Brooklyn seat currently held by Congressman Ed Towns is even bigger: City Councilman Charles Barron transforms from a gadfly into a serious contender. The magistrate’s original lines left out Hasidic Jews allied with Towns, as well as the Brownstone Belt voters who admire his leading challenger, Assemblyman Hakeem Jeffries. They added a smattering of Russian immigrants who are traditionally low-turnout primary voters. The magistrate’s revised lines restored almost all of Jeffries’ current Assembly district, but leave Towns no better off. The result: Barron could be elected to Congress. Unintended consequences are not inherently good or bad. We don’t know what the final lines will look like. But if past is prologue, the surprises from reapportionment will unfurl as the decade unfolds. Bruce Gyory is a political consultant at Corning Place Communications in Albany, and an adjunct professor of political science at SUNY Albany. Read more of his columns at www.cityandstateny.com
MENTAL TOUGHNESS, EXTRA EFFORT
Granted, not all teacher performance y seventh-grade music teacher, Mr. Lewinsohn, an can be measured using test scores. Music accomplished jazz trumpeter, and art educators—and those punchlines known as gym teachers— tried his level best to teach have effects on the academic me to play the French horn. success of students that As I struggled to play a cannot be easily quantified or single recognizable note, assessed. sweat would gush from his But the recently released forehead. With each effort, teacher-evaluation data for he’d swipe his brow and say, public and charter school“No, no.” To show me proper technique and breathing, he’d Michael Benjamin teachers are a great public service to parents and inflate his cheeks to what seemed to be the size of cantaloupes as he taxpayers. Despite the flaws, we have to blew into his horn. He tried. He really tried. start somewhere. The evaluations are supposed to be a I tried very hard to accomplish a nearimpossible feat, fearing that a pitiful blend of 40 percent student learning and music grade counted in my GPA. Today 60 percent teacher classroom perforI wince at the idea of his pay, his reputa- mance. Critics point out that state tests tion and his public standing hanging on have been marred by “rampant test score inflation” and teacher data reports based how well I did. Yet accountability matters. It mattered on them are worthless. The United Federation of Teachers and then as well as today. Parents probably don’t get quite as upset their allies want us to believe that poverty over low music grades as they do over failing and race explain why their students don’t math and reading scores. Musically chal- perform well on state and federal assesslenged high school graduates can probably ment tests. Therefore, they say, it’s unfair find employment much more easily than to include student test results in teacher evaluations. But the job of teachers their functionally illiterate peers.
MARCH 19, 2012
should be to reach all students and to get the best performance from them. Critics say posting overall school ratings and ranks should be enough. They ask why individual teachers should be singled out when, for instance, individual cops and firefighters are not singled out and held responsible for neighborhood crime statistics or emergency response times. It’s tough to hang the performance of a precinct or a firehouse on any one uniformed worker—although I’d favor making their disciplinary records public, because those matter much more for any one person’s performance—but despite all the legitimate caveats the UFT raises, it is undeniable that each teacher is a compelling influence on any student. Grades, scores and personal assessments are diagnostic snapshots indicating either smooth performance or a larger problem. A yearly series of these snapshots allows for diagnostic patterns to emerge. I’d rather have an inferior teacher identified after three or four years than 10 or 20 years. Former Wichita State basketball coach Gene Smithson had the letters “MTXE” stenciled onto his players’ shorts to rein-
force his philosophy of “mental toughness and extra effort” for success on and off the court. The same is true for students, teachers and school administrators. The UFT should emblazon “MTXE” on their letterhead, newsletter and union logo as a message to their membership. Parents should purchase “MTXE” refrigerator magnets, book covers, backpacks and cellphone covers to drive home this message to their children. Teachers and union officials must realize the best job protection is superior performance, mental toughness and extra effort. If they can’t commit to that, they should look for work elsewhere. Mr. Lewinsohn was undeterred by his tone-deaf students. He gave us his best effort each day. Teacher evaluations don’t denigrate great teachers. Bad teachers denigrate great teachers. Retired Assemblyman Michael Benjamin represented the Bronx for eight years. Read more of his columns at www.cityandstateny.com
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S P OT L I G H T : P E N S I O N S
ALL OVER BUT THE SHOUTING Pension-reform battle ends with bad blood but a Cuomo victory By ADAM LISBERG and LAURA NAHMIAS
ov. Andrew Cuomo campaigned on it. Mayor Michael Bloomberg beat the drum for it. Editorial boards championed it. Polls showed New York voters supported it. Yet by the time a pension reform bill hit the Assembly floor at 5 a.m. one day last week, its fate was still uncertain. It would reduce pension benefits for new state employees, start a 401(k)-style plan for the highest-paid among them and enrage the unions that help many Albany lawmakers get elected. It was the culmination of years of effort to rein in exploding pension costs for New York’s state and local governments. And when it finally passed, after an extraordinary two hours of arm-twisting from the dead of night into dawn, both sides agreed on one thing: The vote was so difficult, no one will be able to touch state pensions again anytime soon.
GOVERNOR CUOMO’S OFFICE
“This is a difficult issue as a matter of politics,” Cuomo said. “I don’t anticipate any additional legislation in the near future.” “I’ve listened to some people carp and say, ‘Well, the governor didn’t get everything he asked for,’ ” Bloomberg said. “If the governor got everything he asked for,
he wasn’t asking for enough. It’s time that we sit back and take a quick victory lap, and then get back to work.” The governor and the mayor were happy to have achieved a law they say will generate $80 billion in savings over 30 years. Unions, however, are furious— and are threatening to use their political
clout in response. “Before we go into primaries and endorsements and elections, we want to take a look at who are our friends,” said Danny Donohue, president of CSEA, the largest state workers’ union, which is suspending all endorsements and contributions.
IT’S ALL IN
tay plugged into New York politics all day long with The Notebook, the new political blog from City & State. Led by political writer Chris Bragg with contributions from the entire City & State staff, The Notebook is City & State’s new online home for breaking news and sharp analysis of the shifting sands of campaigns and elections in New York.
www.cityandstateny.com/thenotebook 16 19, 2012 CITYMARCH &STATE
&STATE JANUARYCITY 23, 2012 21
S P OT L I G H T : p e n s i o n s “People have told us they voted in tears for this. We would have preferred that they did not vote in tears but instead did what was right,” Donohue said. “A lot of people are going to have to answer for what they did.” Norman Seabrook, president of the New York City Corrections Officers’ Benevolent Association, said neither Cuomo nor his staff had consulted with him as the pension deal was crafted— which he said was tantamount to circumventing democracy. “Governing is making a collective body for people to come together on what’s going to move the state forward, and I think that by his doing it this way, he is showing more of a dictatorship than being a responsible leader,” Seabrook
“Before we go into primaries and endorsements and elections, we want to take a look at who are our friends. A lot of people are going to have to answer for what they did.” said. “In my opinion, that is not the way to govern.” While the Republican-led Senate passed the reforms relatively easily, the Assembly’s Democratic majority had a difficult time delivering the votes of its members, which Speaker Sheldon Silver had promised in exchange for passing other bills including a redistricting plan. As darkness turned into dawn and a half-dozen members dozed in leather chairs, the vote totals on the big board in the Assembly chamber fluctuated for two hours. Jim Yates, the counsel to Assembly Speaker Sheldon Silver, worked in person to win support; the governor’s office did so with phone calls. The room was mostly silent. Almost no one was reading the legislation. “I would think that a Democratic governor, with all the power he has, could get the 76 votes he needs to get the bill passed from his Democratic conference,” Republican Assemblyman James Tedisco said, drawing out the words as he stared up at the board. Assembly Republicans, angered about being shut out of the process, voted against the amendment, although many of them supported it in principle. Some who planned to vote “Yes” waited hours to cast votes—reluctant to be the ones to give the bill its final passage; for political reasons; and in some cases, out of anger. “Yesterday they called me a flunky of the unions in the New York Post,” Assemblyman Joe Lentol said after voting for
the reforms. “Tomorrow I’ll be a tool of the governor.” By the time the bill finally passed, Assemblywomen Nicole Malliotakis and Aileen Gunther had changed their early “No” votes to “Yes.” Labor leaders remain angry and say the governor—who kept them in line during his first year of budget cuts and a round of tough new contracts for state workers—has finally worn out
his welcome with them. “This is a principled issue for us, and I’m proud of the unity and solidarity we showed,” said Mario Cilento, president of the New York State AFL-CIO. And if unions are suddenly unwilling to work with Cuomo anymore—much less support a governor who has enjoyed wide popularity—the picture has shifted even more win New York City, where unions whose contracts have expired are
unlikely to cut any new deals with Bloomberg and will wait until his successor takes office in 2014. “I don’t know if things will be better,” said Stephen Cassidy, president of the Uniformed Firefighters Association of Greater New York. “I don’t have a crystal ball. I do hear the same things, that people are not willing to negotiate with the mayor’s team.” email@example.com
political deal has serious consequences. By Danny Donohue
CSEA will immediately suspend all state political endorsements and contributions. This unprecedented action is a direct result of the political deal between Gov. Andrew Cuomo and the state legislative leadership, Senate Republicans and Assembly Democrats, trading the future retirement security of working New Yorkers for legislative redistricting lines. This action is necessary to give our union the opportunity to re-evaluate our political relationships and make judgments about the criteria we use in determining who has earned and deserves our support. It is also important to consider how our support is valued.
Danny Donohue is president of the nearly 300,000 member CSEA – New York’s Leading Union – representing workers doing every kind of job, in every part of New York.
CSEA will also use this time to consult with our brother and sister unions and other allied community organizations about how we can collectively address the disrespect and disenfranchisement of working people by our state’s elected officials. New Yorkers should understand that lawmakers’ actions did not result from meaningful debate and good judgment – it resulted from political expediency – and it will have harmful consequences to people and communities now and for a long time to come. CSEA will seek better ways to hold elected officials accountable and ensure that the voices of working people will be heard and addressed in New York state.
LOCAL 1000 AFSCME, AFL-CIO DA N N Y D O N O H U E , P R E S I D E N T
march 19, 2012
S P OT L I G H T : P E N S I O N S
Gov. Andrew Cuomo, Mayor Michael Bloomberg and budget watchdogs say New York’s local and state governments would have gone bankrupt paying for pension costs without reforms. Union leaders, progressive think tanks and some politicians say rank-and-file workers shouldn’t face cutbacks caused by a stock market collapse. Both sides use statistics to back up their arguments:
Key statistics from both sides of the pension debate AVERAGE PENSION PAYMENT
NEW RETIREES GET MORE
The average pensions for retired state workers in 2011 varied widely:
NYS state and local government employees: $19,151 NYS teachers: $39,679 NYS police and firefighters: $40,932
In 2007, the last year for easy comparisons, newly retired New York City workers received higher average pensions:
NYC government employees: $31,358 NYC teachers: $48,935 NYC police: $59,455 NYC firefighters: $77,832
ANNUAL PENSION CONTRIBUTIONS
Government contributions to pension funds have skyrocketed in the last decade:
NYS teachers: $51.8 million in 2002, $1.4
billion in 2011 NYS state and local government employees: $214.6 million in 2002, $3.6 billion in 2011 NYS police and firefighters: $49.3 million in 2002, $541.9 million in 2011 NYC employees: $1.3 billion in 2002, $8 billion in 2011
…but… PENSION COSTS WERE ONCE MUCH HIGHER Retirement system contribution rates for New York State and local government employers have risen to 1970s and 1980s levels due to investment losses from the financial sector meltdown. 40%
POLICE AND FIRE RETIREMENT SYSTEM
CITY PENSION COSTS AS % OF BUDGET (1986–2010)
8% 7% 6%
EMPLOYEES RETIREMENT SYSTEM
SOURCE: NEW YORK STATE AND LOCAL RETIREMENT SYSTEM.
Employer contribution rate as percentage of salary
Pension funds were flush from a stock market boom in 2002, making it an artificially low point from which to start measuring growth:
FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
…but… New York local and state government employees: $156.6
billion to $110.9 billion, a 29% drop New York City government employees: $42.5 billion to $31.9 billion, a 25% drop New York State teachers: $104.9 billion to $72.5 billion, a 31% drop New York City teachers: $37.1 billion to $23.1 billion, a 38% drop New York City police: $21.9 billion to $17.4 billion, a 20% drop New York City firefighters: $7.2 billion to $5.6 billion, a 23% drop New York City nonteacher school employees: $2.2 billion to $1.5 billion, a 29% drop … but
THINGS ARE TOUGH ALL OVER
Costs were also driven higher by “pension sweeteners”—increased benefits approved by lawmakers, often at the urging of unions, when the pension funds were performing well:
In the three years after the economy collapsed, 43 states reduced their pension costs by making employees pay more or cutting benefits or both—some more than once.
New York City pension fund cost increases, 2001–2010:
2009: 10 states
$15.2 billion due to lower investment returns
2010: 21 states
$13.7 billion due to increased benefits
2011: 32 states
MARCH 19, 2012
SOURCES: NYS TEACHERS RETIREMENT SYSTEM, NYS EMPLOYEES RETIREMENT SYSTEM, NEW YORK LEADERS FOR PENSION REFORM, FISCAL POLICY INSTITUTE, NYC COMPTROLLER JOHN LIU, NATIONAL CONFERENCE OF STATE LEGISLATURES
S P OT L I G H T : p e n s i o n s Expert Roundtable
Q: On balance, did all sides split the loaf equally in the pension reform deal? MG: I don’t think that any union’s going to say that. The people across the city and state of New York ought to take a look at it and judge it on their own. I believe it’s a balance that’s going to give the towns, villages, counties, the City of New York the relief, not short-term but in the long-term.
Q: How radical a change does New York City need in order to bend the cost curve for retirement? RS: This is a challenge that has been building up over decades. It’s going to take some time for big savings to come through but, having said that, we believe that this could allow for costs to begin to go down in fiscal year 2015. But the key is, every year we delay is another year in which the effects of compounding make this a more challenging issue. The longer you delay, the problem grows. Sometimes in life, problems shrink over time. This is one where the arithmetic is clear that the problem will continue to grow. We’ve said, and the mayor has said, that there are two aspects to this. There’s the issue of the liabilities, which are a function of the benefits and they’re a function of the performance on the extant assets, which is a function of the returns available and how well we manage our money. The more important issue, in terms of size, is unquestionably the issue of trying to get under control this challenge of the liabilities, which are benefit-related. That doesn’t mean we shouldn’t work on the asset management, but the larger problem, when you look at the analytics, is the issue of the growth in liabilities.
Chairman, Senate Civil Service & Pensions Committee
Q: Will the new defined contribution option similar to the SUNY plan be the camel’s nose under the tent? MG: I don’t know. A person coming on at an early age—“I can manage my money better than they can,” you believe. That’s what [Assembly Speaker] Shelly Silver said a few weeks ago in the newspaper, that if he was that age, he would have chosen to do that. Well, some may have chosen to do that. Teachers are very supportive of this program, as you can see. About 70 percent of the universities do it. I think there’s about 70 percent of the teachers who would want to do it as well. For some unions it works, and for a whole host of unions it doesn’t work. Police and fire and other unions don’t believe it would be a good retirement system for them. It’s difficult for police and fire. Can you imagine pulling up on a fire and running into situation after situation as a police officer? Most of these people [who] take that job—when you get to be 45, you’re not out there rolling around on the streets trying to lock up people. And the older you get, the more difficult it becomes. There is a logic to their argument. I think that’s why Gov. Andrew Cuomo excluded those that have the [NYPD and FDNY] pension plans. Q: Given the trend lines on pension costs, was it inevitable that something had to happen? MG: That’s exactly right. I met with many of the unions. I told them this was a serious negotiation. I told them there would be enticements for the legislation to make sure that they passed these bills. I explained to them that you’re going to have to get your point out. Now, I think the governor listened in some cases. You know, he did exclude some unions because they did have their own pension plans, and they paid more money into the system, so therefore they don’t really fit into this new Tier VI bracket. And then there’s of course those across the state that didn’t have the ability to—they just got hit with it. They weren’t at the table. AFL-CIO, police and fire and NYSUT, the teachers in the state. So they were taken back by it. But something had to break. Everything’s breaking. There was a burden that had to be somehow addressed, and I think there isn’t anybody in the state, including the unions, that didn’t recognize that something was going to get done. It was inevitable. Some of the unions would have been happy if they were at the table to be able to discuss some of these issues. And some of the unions did all right. Q: How will everyone handle all these changes? MG: It’s something that had to be done, and would have been done. With all the pain, at the end of the day it’s about the new guys coming on the job. And we’ve just got to make sure we can keep the job enticing and strong enough for these people to want to stay and work in this city, and try to balance some of these needs going forward that may pop up [that] we may not have addressed appropriately here in this legislation. But I think all in all, the governor has got to be commended for his approach on this. He did work with [Senate Majority Leader] Dean Skelos and Shelly Silver. It was a tough negotiation and, as I said, not everybody here—I guess nobody’s really happy. That’s how the sausage is made here. At the end of the day it’s not a bad sausage, but for some it’s going to be. Some of the unions are going to be very upset.
New York City Deputy Mayor for Economic Development
Q: Are you at all encouraged by the growing public dialogue about this, or does that not matter and it all comes down to raw politics? RS: The way I think about it is: leadership by lots of people, including Governor Cuomo and Mayor Bloomberg and the coalition he’s put together. Momentum here is building. This is an issue people are aware of. The dialogue is much different today than it was a year or a month ago. This is something that citizens realize has to be addressed. The way they think about it sometimes is, “This is crowding out other things we’d like to do in our city, and that’s not what we wish.” We’d like to have more flexibility with our budget to do other things, and one of the reasons why we don’t is this increase—since the mayor came in this has had an annual compound increase, 18.8 percent per year. It’s extraordinary to have a cost side in your budget growing 18.8 percent a year compounded. We have to deliver secure retirement for our workforce, but it also has to be affordable for our taxpayers. That’s the balance we have to get just right. The mayor and the governor are really showing good leadership. Governor Cuomo’s out in front, and the mayor is doing his best to be supportive, and the coalition of mayors and county execs from across the state, this is all political parties, city mouse, country mouse. Everybody basically recognizes the urgency of this. Q: Yet still it’s difficult to get this through the legislature. RS: There’s no question. You know, a year and a half ago we wouldn’t have imagined we would have had this much momentum and this much discussion on the issue.
Energy Highway Needs to Benefit New Yorkers By Tom Klein
Governor Cuomo deserves praise for his proposal to upgrade New York's dramatically outdated high voltage electric transmission system. By making it a top issue, the governor is saying that improving our state's energy infrastructure is a priority for his administration. Building an energy highway can be a boon to the state's economy. It would fill a critical need for more affordable, clean and reliable electricity, create thousands of well- paying jobs in-state, and make New York more competitive in the race to attract new businesses and jobs. However, now the real work begins; sorting through the competing plans and determining what power will fill the energy superhighway. It's imperative that a New York energy highway carry electricity produced in New York State. There is already one proposal that would take power from Canada directly to New York City, bypassing all of our state's other existing power sources. This is problematic. New York needs an energy highway plan that will create jobs here, not in other states or another country. According to data released by the State Department of Labor on March 8, the construction industry suffered the second most job losses from January 2011-January 2012 in the six sectors it tracked, while unemployment in the construction trades has been in the double digits since the start of the recession in 2008. Yet another power line plan calls for importing power from New Jersey. Importing electricity, whether from another state or country, is not sound public policy for New York. When the economy eventually recovers and electricity demand increases, those out of state power producers may be mandated to put the needs of their host state first, before exporting energy to meet New York’s electricity shortfall. What New York cannot afford is a situation similar to what happened to California in 2000-2001, when power shortages led to rolling blackouts and a spike in electricity rates. That crisis was caused by factors including growing demand, the failure to build any new power plants, an over reliance on out-of-state generated electricity (25 percent from Oregon and Washington), and a lack of snow and rain which reduced the supply of hydro-electricity. In an eight month period, from April through December 2000, California saw wholesale electricity rates rise an astounding 800 percent. Given the facts, the idea of an energy highway is a good one and will benefit the state, if done right. Tom Klein is the Business Manager for Boilermakers Local No. 5 and a member of the New York Building and Construction Trades Council’s Executive Committee. He is an Advisory Board member of the New York Affordable Reliable Electricity Alliance. S P E C I A L
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New York AREA’s membership includes some of the state’s most vital business, labor and community organizations including the New York State AFL-CIO, Business Council of New York State, Partnership for New York City, New York Building Congress, National Federation of Independent Business and many more. W W W. A R E A - A L L I A N C E . O R G
march 19, 2012
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MARCH 19, 2012
S P OT L I G H T : p e n s i o n s Expert Roundtable
Robert Megna New York State Budget Director
Q: Is this one step down the road toward changing the cost curve, or is this a significant change? RM: It’s a significant change. When we did Tier V in 2009, we said it was $38 billion in savings, and this Tier VI is $80 billion in state and local savings. It’s more than double what we did before. It will bend the cost curve significantly. Q: Will it be enough? RM: I think so, because I think it does a few things that are important, that even go beyond what was in the original proposal, to a certain extent, as it got negotiated with the Legislature. You know, it was going to generate somewhere around $110 billion, and it’s down to $80 billion. We still think $80 billion over 30 years is still a really big number. It has all of the elements in one form or another that we proposed with the original Tier VI, so we think that’s good. It definitely reduces the risk to both the state and local governments and the city into the future, because there are higher employee contributions and there are reduced multipliers for new employees. There is a defined contribution plan. It’s not the defined contribution plan the governor wanted, but it’s a defined contribution plan we think over time will show to the rest of the workforce the advantages of being in a defined contribution plan. We think that’s a good thing. Q: From a union point of view, they would see that as the camel’s nose under the tent: you start with that and you can force it on all sorts of other workers. RM: They may, but I would ask them to look at what the experience will be. Remember, the plan that is going to be offered to [members] who are above the $75,000 threshold is essentially modeled on the plan that university professors in the state already have. The option to take, most of them take because it’s a pretty generous plan. There will be an employee contribution of somewhere in the neighborhood of 4 to 5 percent, but there will be a state contribution of 8 percent. When you look at that plan and how those plans have done over time, I think people will start to see how attractive a [defined contribution] plan, if properly structured, could be. Is it what the governor proposed originally, as expansive? No. But we think it’s good. It was a goal to get something, and we did. So, yes, what we wanted in the process of negotiation came down a little bit, but we also got this thing which we think is a real insurance policy for the future. Q: Does this mean we won’t revisit the issue for several years? RM: I would think so. I think the tiers as an issue gets revisited if you get a very, very successful defined contribution plan and people decide they want to have access to it. That may happen. We’ll have to see.
Peter Abbate Jr.
Chairman, Assembly Governmental Employees Committee
Q: Sunrise in Albany was 7:06 that morning, and it didn’t actually pass until about 7:30, so nobody can say it happened in the dead of night, right? PA: That’s right. We waited for the sun to come up. Q: In retrospect, was it inevitable that something had to happen? PA: The Senate in the three-way negotiations basically came out and said to the governor, “Listen, we’ll vote on anything you put out there as long as you sign the [redistricting] lines.” And it was left up to us, Shelly and the majority to get the best we could. Believe me, everything in that bill that was taken out which would have made it much worse was really the work of the majority in the Assembly to try to do the best for the working men and women. We were left against the wall. The Senate just deserted everyone. It’s amazing. They were going to vote for anything just to get the lines. They caved on everything. They were willing to do anything he wanted. So we were left in negotiations with how to make a bad situation a little bit better. The governor threatened us and threatened everyone that in the extenders it would be even worse than what he had in his original bill. Q: Given all that, do you think you got the best deal you could for workers? PA: I believe we got the best deal for them. With the threeway agreements, we’re the only ones there. How do you deal? It was an agonizing night for a lot of my colleagues, and thank God Shelly was there in our majority to get that, or they would have got nothing. It was amazing. And the governor was making side deals all over the place. Not on the floor, not with us. Q: What do you think will be the ultimate impact on average workers? PA: Thank God we got [the Tier VI retirement age] down to 63 and all. But future workers—and not only future workers, the workers now—the morale is really down the toilet. The morale of state workers is horrible. What this governor has done has really hurt the morale of the state workforce. Are they going to get good-caliber people in there in the future? Not to say they’re going to do a slowdown or anything, but the morale is down. People used to take pride being a state worker. We’re going backwards. I’ve been trying to stress to the people I’ve spoken to from that day on, not that they should be grateful, but thank God we got some of the bad stuff out of it. Q: Will we see pressure for a Tier VII next year or is this a settled issue for a while? PA: If you see a Tier VII, then you know it’s totally off-thewall. And no, I think the governor wanted to get it down this year, because he goes into reelection mode next year. So I don’t think you see anything for two years. He’s going to be going around with his hat out now to the unions trying to collect money and all—you know, the same people he said we were taking contributions from. Now he’ll be going around to them. So he’s not going to want to propose anything. Q: What should those unions tell him? PA: That’s up to them to tell him.
Listen to What the Mayors Say By Lenny Caro
As the U.S. economy appears to be lifting out of the Great Recession, New York needs to do something to prime the jobs and economic pump. How about heeding energy advice from the last two Mayors of New York City? Currently New York State has the country’s third highest electricity rates, a major competitive disadvantage in keeping and attracting businesses here. The cost of energy hurts the bottom line for businesses we represent in the Bronx and the thousands of families they employ. Just a few weeks ago, in some corners of the city, the price of gasoline ranged from $4.50 to $5.00 per gallon. When gas prices spike in the middle of the winter as opposed to the summer, it’s a sign that there is likely a rougher road ahead. To be competitive, New York needs more clean, affordable and dependable energy. In a recent speech before 200 members of the Bronx Chamber of Commerce, former Mayor Rudolph Giuliani said that while serving as mayor, one of his biggest concerns was about the electric grid and the fear of a blackout, especially during the warmer months. The mayor pointed out that 25% of New York City’s power comes from Indian Point and has for many decades. He said that Indian Point is a safe, reliable, and clean source of power and asked why anyone would want to replace it. The Bloomberg Administration also commissioned experts to assess the effects of Indian Point's closure on New York City's business climate, electricity rates, and environment. The outcome was published in a study by Charles River Associates, with the input of ConEd, the New York Power Authority, the New York Independent System Operator and the City of New York. The report found that New Yorkers would pay an added $10 billion - $12 billion through 2030 in higher energy costs, plus $700 million to build replacement power plants. On the environmental side, it found that closing the plant would result in a 15% increase in carbon emissions and a 7-8% rise in nitrogen oxide emissions. Considering this, how can you replace the 2000MW of electricity generated by Indian Point without crippling our economy, causing power outages or increasing lung related ailments? Our economic and environmental cornerstone rests on this single important issue. Lenny Caro is a member of the New York Affordable Reliable Electricity Alliance and CEO of the Bronx Chamber of Commerce, representing over 600 Bronx employers. The Chamber promotes business and opportunity within the borough to enhance and stimulate the marketing of Bronx based employment, products and services. S P E C I A L
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The New York Affordable Reliable Electricity Alliance (New York AREA) is a diverse group of business, labor, environmental, and community leaders working together for clean, low-cost and reliable electricity solutions that foster prosperity and jobs for the Empire State. W W W. A R E A - A L L I A N C E . O R G
march 19, 2012
STATE OF OUR STATE WEDNESDAY, APRIL 25, 2012 ALBANY HOTEL
City & State is proud to present our first annual State of Our State half day forum. The morning will feature leaders in government and public policy discussing the issues driving the conversation in New York State, and around the country. SESSION 1 : Health Care and Medicaid (9:00 AM – 10:15 AM) Federal Health reform is coming to New York State, a key element is the required health exchange market place. In addition, Governor Cuomo’s Medicaid Redesign Task Force has taken extraordinary actions that are changing the shape and manner in which health care services are delivered to low-income populations.
Moderator: SUSAN ARBETTER Hon. RICHARD GOTTFRIED, NYS Assembly Health Committee Chairman Hon. KEMP HANNON, NYS Senate Health Committee Chairman JAMES TALLON, President of United Hospital Fund
SESSION 2 : Energy Exploration, Development and Infrastructure Opportunities (10:30 AM – 11:45 AM) Focus on intensity of the current discussions involving the exploration of natural gas in New York Southern Tier, this session should also explore opportunities presented for renewable energy development and the state’s opportunities to both harness and harvest energy and to develop state-of-the art technologies that will set the standard. Additional discussion would focus on Governor Cuomo’s call for additional public investment in energy infrastructure.
Moderator: LIZ BENJAMIN PANEL TO BE ANNOUNCED
SESSION 3 : Public-Private Partnerships (12:00 AM – 1:15 PM) Seeking opportunities to leverage private investment by using government assets (the tangible, financial, and regulatory) as a catalyst for growth. Are P3’s for real, and where are they already working?
Moderator: ADAM LISBERG PANEL TO BE ANNOUNCED
For more information or SPONSORSHIP opportunities please contact us at (212) 894-5422 www.cityandstateny.com
B AC K & F O R T H
What About The Poor?
mid the last-minute dealmaking of a budget cycle, it can be hard to remember that setting spending priorities for New York is about more than just pensions—but David Jones doesn’t forget. The longtime head of the Community Service Society of New York, which advocates to reduce poverty and improve the lives of the poor, Jones tries to remind city and state leaders of the human consequences of budget cuts, and the power they have to change them. We spoke with Jones about the process at work this year. What follows is an edited transcript.
City & State: With pension reform, the DNA database and redistricting wrapped into the state budget, it seems there is less discussion about what’s getting cut and what city and state priorities ought to be. David Jones: We agree. Obviously my issue is people at or near poverty. It is not a central focus of either the city or the state budget. There are some signs that they at least recognize that this is going to be an ongoing problem to the state and city. New York City, at least, has some of the highest concentrations of people who have been out of work for a very long time, from six months to three years. And that’s being confirmed by federal data. We are very concerned what that portends for the City of New York. But we think it’s being replicated throughout the state. And there is not too much research on this, but there is some research that if young people haven’t made the connection to the world of work by the age of 25, they probably never will. We’ve had a perpetual dropout rate among certain categories of young people approaching 50 percent in the city. Having said that, we have been urging the governor’s people—and they did pick up in this last budget—the New York State Youth Works program, which was a tax credit for businesses that were willing to hire certain categories of young people. And we see that as perhaps one of the ways that, if it’s expanded and scaled, might in fact have some impact across the state. The tax credit is $3,000 for six months of employment. We think that we could build on that and start to really institutionalize that kind of tax credit, and start to draw more and more young people who have been out of work for over six months. C&S: What can government do by throwing money at the problem, especially if it’s only incremental? DJ: A couple of things. I’m now into the question of what we describe as disconnected youth. When we looked at it years ago, we had 175,000 disconnected youth in New York City alone, ages 16 to 24. What I’m trying to look at is programs that give glimmers of hope to these populations, so people don’t disconnect entirely. I’m really getting concerned about in New York City an ultimate explosion in gang and other antisocial kind of stuff that will
go on if people are out of work for much too long. The programs I’m talking about are not what I would like, which is a major subsidized jobs program that would be available as jobs of last resort. But I don’t think I’m going to get it, because of the budget problems. I’m looking at ways we can at least show communities that there are conscious efforts to link a tax credit up to businesses offering to take young people who fit this criteria, and look at GED readiness and try to improve the tradition in terms of credentialing of young people without a high school diploma. This is on the margins. I’m not saying this is going to stop the progression of increasing numbers of long-term unemployed, but if I don’t have anything going here, I think I’m going to accelerate a feeling of total hopelessness in many of these communities. I never thought I’d be here, but that’s what I’m talking about. C&S: What else are you suggesting? DJ: Some of them would not require vastly greater sums of money. We have about 60,000 people incarcerated in the state of New York, and 20,000-plus on parole at any one time. When they get out, we have the fifth-highest recidivism rate in the country. So we’re spending billions on keeping large numbers of, basically, young black and Latino males incarcerated, essentially for relatively low-level crime. But what’s worse is they come through the system, and when they come out almost none of them have a credential that’s usable. So we have been talking to probation both in the city and the rest about coming back to the notion that we should start looking at incentivizing educational programs. If you can complete your GED, you could get six months off your sentence. If you get your college associate’s degree, you get a year off your sentence. The best preventative for people coming back from crime is a skill set they can use in the outside world that allows them to compete for a job. C&S: You’re starting to get a little traction on some issues, with the closing of the prisons upstate, with the city and the state working to try to get juvenile offenders in less restrictive settings and get them back in New York City.
DJ: For the governor and the rest of the Democrats, their right wing is protected on this, because in the closing days of the Bush administration they began coming up with programs focused on education for offenders while in prison to allow them to make a better reentry into society. So they won’t point at you and say it’s soft on crime. On the right wing, Newt Gingrich has become an exponent of education and reentry. Generally people who come back in who can’t find any means of support end up preying on the vulnerable and poor communities, adding all sorts of other costs. They clearly can’t support their own families. They can’t create intact families. They endanger small business through increased crime. There are a lot of benefits now that we’re over the ideological war that we want to hammer offenders into the ground. I don’t get the kind of resistance I would have even gotten on this two years ago. CS: You talk about getting people involved in innovation, but in the budget process it seems the government is throwing its hands up and saying, “What can we do?” DJ: I’ve worked at this 25 years. They paint the picture of all these hundreds of thousands in poverty, and people almost use it as an escape hatch and say it’s much too difficult to deal with until we have vast sums of money. What we have to do is get them conditioned. Yes, we have restrictions on the revenue. But there’s a lot of money [being put] into the parts of the system that are not necessarily being used as effectively as they might. I’m starting to sound like a social conservative. I ran youth services for the City of New York. You start doing something and you don’t even remember why it was started being done that way. So there’s a lot that we can do, particu-
larly in a state this large with a private sector this robust, that we just haven’t done effectively because we haven’t put the best minds into this and thought it through. It’s an afterthought. Let’s put a little model program to test. This state and the government, even without their coming up with huge investment, could make a significant difference in leading the nation in terms of innovation of this area. Now I’ve got to convince them. CS: That’s what politics is all about. DJ: Obviously we were helpful with the mayor, though it hasn’t led as far as I want, in getting him to put poverty on the map with his poverty commission, which my research actually helped kick off. They came up with some interesting models of ideas. I’m supposed to be going to some event at Gracie Mansion at the end of this month to talk about what of their projects succeeded. My interest is how we scale them. That becomes critical. I’ve seen so many projects that deal with 100 or 150 people, and each year I’m putting out tens of thousands of young people without a high school diploma. It’s like it may not even be a teaspoon we’re trying to bail this ocean out with. The problem is mounting much quicker than any of the kinds of interventions we see. CS: Why is poverty such a hard sell? DJ: Especially now, with the latest Supreme Court ruling on super PACs, what kind of money do the poor have to put out there? The not-for-profit sector used to be the primary advocate for the poor of the city. When the Giuliani and, to a lesser extent, the Bloomberg years came along, there was a significant change and chilling of not-for-profits being able to speak out on behalf of their constituents. We didn’t see it coming. Giuliani said, “You disagree with me and you receive city money, I’ll defund you.” And he did. It’s also the Reagan effort to picture the poor. They were able to get in the public mind that these were not deserving poor. When I was first starting out in government, we were still dealing with policymakers and people of wealth in the city who had some recollection of the Great Depression. When I met Mrs. [Brooke] Astor, she knew exactly what I was talking about when we served on the library board. When you met David Rockefeller Sr., he knew what you were talking about, and in some ways he knew it better than I did. Now we have a different generation of powerful political and economic leaders who have no recollection of what this is about or what the common cause is. We have to take on all the cultural attitudes that this is a personal failing as opposed to structural problems that have been building for a long time. —Adam Lisberg firstname.lastname@example.org march 19, 2012
Published on Mar 19, 2012
The March 19, 2012 issue of City and State . Targeting the politicians, lobbyists, unions, staffers and issues which shape New York City an...