Government Affairs - Issues

State Archives

March 26, 2007 - On March 12, both the New York State Assembly and Senate unveiled their budgets for the 2007/2008 fiscal year.  Governor Eliot Spitzer had submitted his budget request on January 31st.  Unlike the Assembly, which provided full legislative language and budget numbers, the Senate passed only a budget report, so many of the details are not yet known.

The Governor’s budget had cut close to $1billion in state support for hospitals and nursing homes.  This lead to a rather intense public debate between the Governor and those opposed to the planned cuts, most notably the Greater New York Hospital Association and Local 1199, the hospital workers union, as well as several members of the Legislature and other elected officials.

The Assembly plan restores $427 million of the proposed cuts and adds an additional $55 million for Medicaid and other public health initiative.  The Senate claims that their bill, again details are still not known, restores $544 million for hospitals and nursing homes.

On the research front, neither house adopted Governor Spitzer’s plan to fund stem cell research, but both houses did include support for biomedical research in their budget.  Governor Spitzer had proposed spending $2.1 billion over ten years on stem cell research and other emerging technologies.  The Assembly plan is to spend $500 million over ten years for just stem cell research, but funding would not start until next year.  The Senate proposes spending $1 billion over ten years, starting this year, for all biomedical research.  The Senate plan does not limit funding to stem cell research but funding can be used for that purpose, even research involving human embryonic stem cells.

Between now and the end of March, the Governor and both Houses will need to hash out their differences on these and all other issues.  The state fiscal year begins April 1st and all parties want to get the budget completed by then. 

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January 18, 2007 - Governor Eliot Spitzer, Senate Majority Leader Joseph Bruno (R-Brunswick), and Assembly Speaker Sheldon Silver (D-Manhattan) announced agreement on a series of budget reform measures aimed at ensuring a timely and open budget process.  Under the agreement:

- The State Legislature will be required to enact a balanced budget; currently, this is required only of the Executive’s proposed budget.  It is not clear if the reform package addresses any actions to be taken in the event a Legislative budget is not balanced.

- The budget will disclose all spending, ending the practice of lump-sum appropriations historically set aside for individual legislator interests (member items).  Discretionary spending for state agencies will be continued, but will also need to be specified.

- The Legislature will be required to assign fiscal impacts to any of the changes made to the Executive budget.

- The Governor and the Legislature will be required to reach a revenue consensus by March 1st; otherwise the State Comptroller will set a figure by March 5th that will be binding.

- The Governor will have twenty-one days, rather than thirty, to submit budget amendments after the budget is initially proposed.

- The Legislature and Governor will hold quarterly budget meetings.

- Multi-year financial plans will be required, detailing the long-term impact of the budget on local governments.

- Going forward 5%, as opposed to 2%, of the general fund will be set aside for the state’s “rainy day” fund in case of economic troubles or a disaster.

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Governor Eliot Spitzer Delivers First State of the State Address

January 12, 2007 - Just two days after being sworn in as New York State’s fifty fourth Governor, Eliot Spitzer delivered his first State of the State address.  Before a packed Assembly Chamber that included Members of the Legislature, the Judiciary, state and local government leaders, the press, and hundreds of others, Governor Spitzer laid out his agenda for the first year of his term.  The State of the State serves as a vision or blueprint with many of the details of how the Governor plans to pursue his agenda revealed when the Governor releases his budget request for the next fiscal year.  The budget is normally unveiled on January 18th but the deadline has been pushed back two weeks this year as it is whenever any new Governor takes office.

Most of the speech focused on ethics and reforming the way business is done in Albany.  The Governor outlined several steps that he has already taken, which include refusing to appear in state sponsored advertising and limiting donations to his campaign well below the $50,000 maximum currently allowed.  He also noted that the Legislature has already agreed to list the recipients of so called “member items” in the budget.  Perhaps his most controversial proposed reform was the creation of a non partisan redistricting commission to set lines for both congressional and state legislative seats.

Much of the rest of the speech was devoted to economic development with a focus on helping upstate New York.  His plans include $2 billion bond act to create an innovation fund to promote high tech research and business opportunities.  This would include a substantial component devoted to stem cell and other biomedical research.  He also mentioned several other health care related items, including support of Berger Commission recommendations and a pledge to fight Medicaid fraud. 

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Berger Commission Recommends the Closure of Nine Hospitals, Restructuring of Many Others

December 28, 2006 - The Commission on Health Care Facilities in the 21st Century, often referred to as the “Berger Commission” after is Chairman Stephen Berger, is a body created by the New York State Legislature and Governor George Pataki to conduct an overview of New York’s health care facilities and to make recommendations for closing, rightsizing, and reorganizing hospitals, nursing homes, and other health care facilities across the State.  Under the terms of the authorizing legislation, the Commission’s recommendation would go before the Legislature who would have to accept or reject them in total.  If they did not act, all the recommendations would be put into effect.

The Berger Commission final report recommended closing nine hospitals, five in New City – Parkway Hospital in Queens, Westchester Square Hospital in the Bronx, Cabrini Hospital in Manhattan, St. Vincent’s midtown in Manhattan, and Victory Memorial Hospital in Brooklyn.  Westchester Square is part of the New York Presbyterian system as is New York Methodist Hospital in Brooklyn, which the Commission recommended merge with New York Community Hospital.  The other hospitals slated for closure are Community Hospital in Westchester County, Bellevue Hospital in Schenectady, and Millard Fillmore and Saint Joseph’s Hospital in the Buffalo area.  The Commission also recommended that an additional fifty health care facilities be downsized, restructured, or merged.

Soon after the report was released, both Governor Pataki and then Governor-elect Eliot Spitzer endorsed the Berger Commission’s recommendations and neither the Greater New York Hospital Association, the Health Care Association of New York State, nor Local 1199, the hospitals workers union came out strongly opposed.  The federal government had also promised $1.5 billion to help implement the report’s recommendations.  Although the State Legislature did come back for a special session in December, the Berger Commission report was not on their agenda, so as the New Year came and went, the proposals became effective.  Not all were prepared to accept this outcome, and already two of the hospitals slated for closure, St. Joseph and Cabrini, have filed a lawsuit seeking to block the Berger Commission’s recommendations from being implemented.

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HHS to Provide $1.5 Billion for Health Care Restructuring in New York

October 10, 2006 - Governor George Pataki and United States Department of Health and Human Services (HHS) Secretary Michael Leavitt announced a final agreement on the Federal-State Health Reform Partnership (F-SHRP) at an October 3rd  press conference. This agreement will provide up to $1.5 billion over the next five years for health care restructuring in New York.  In addition to committing funds, the agreement lays out a broad reform agenda that includes “rightsizing” activities, investments in information technology, covering the uninsured, expansion of primary care, and implementation of pay-for-performance activities.

The Health Care Association of New York State (HANYS) welcomed the Federal government’s commitment to making investments to help New York rationally right-size its hospital system without hurting patient care.  However, the F-SHRP agreement comes with strict requirements.  Chief among these are a requirement that would significantly penalize the State if the Legislature rejects the forthcoming determinations of the Commission on Health Care Facilities in the 21st Century.  In addition, substantial penalties are included should the State fail to meet Medicaid fraud, waste, and abuse savings thresholds.

Highlights of the agreement include:

- $1.5 billion in federal funding over five years in annual $300 million increments; the State will be able to claim a federal match on existing State spending to collect the money.

- Funds will be spent on consolidation, restructuring, and rightsizing of hospital and nursing home systems; implementation of information technology that enhances efficiency and quality; long-term care system reforms; and increased use of ambulatory, primary, and community care as alternatives to institutional care.

- The program must generate savings to offset the federal investment.

- The State must substantially increase cash collections from anti-fraud and abuse activities.  There will be progressively higher annual targets between now and 2011 such that the annual amount of recoveries by 2011 equals 1.5% percent of the gross Medicaid expenditures in 2005.

- The State must do the following or lose federal F-SHRP funding:

a) Implement a Medicaid preferred drug list;

b) Increase the number of people covered by employer-sponsored health insurance;

c) Implement Medicaid cost containment measures as enacted in the 2005-2006 State budget;

d) Implement one new unspecified Medicaid cost containment initiative in 2007;

e) Implement a long-term care point of entry program in at least one region of the State; and

f) Show there are no statutory impediments to implementing the recommendations of the Commission.

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2006 State Legislative Session Comes to a Close

August 20, 2006 - The official “end of session” for 2006 was capped off by a frenzied week of horse trading as Governor George E. Pataki, in his final year in office, battled lawmakers over state spending, tax cuts and education.  Notwithstanding public pronouncements of harmony by Senate Majority Leader Joseph Bruno, a series of nasty skirmishes caused tempers to flair among Governor Pataki, Bruno and Assembly Speaker Sheldon Silver.  Still, when both houses concluded their work, a host of measures were passed by both houses including an early retirement incentive for public employees and a budget clean-up package which will add more than $1 billion to the state budget.  The added spending is expected to balloon the size of the state’s budget to $113.4 billion. 

While the Governor previously vowed to hold the line on budget spending, using his veto powers to eliminate large parts of the Legislature’s budget in April, he did ultimately agree to restore much of the spending and add some of his own.  As a result, lawmakers, who are all seeking re-election this November, were generally in a buoyant mood as they did achieve several of their objectives, including their plan to send out school property tax rebate checks to their constituents, collectively worth $1.6 billion over two years, prior to this year’s election.  Hospitals and nursing homes also had $490 million worth of budget cuts made by the Governor restored as part of the end-of-session deals.  Last minute agreements also resulted in increased financing for environmental programs and aid to cities. 

Not all contentious issues between the Governor and lawmakers were resolved, however.   The legislature balked at the Governor’s plan to more than double the number of charter schools in the state.  Legislation to reform the state’s Public Authorities Board also faltered during the closing days of session. 

With a number of items left on the table, it appears that there is a good possibility that both houses of the Legislature will return prior to the end of the year.  Senator Bruno has said that his chamber will be called back in September to address a number of the aforementioned outstanding issues including the consideration of various other gubernatorial appointments.   Speaker Silver was less committal saying that his chamber may return prior to the end of the year to consider legislation related to services and programs for welfare recipients.

          For the second straight year, the State Legislature was able to produce an on time budget.  In 2005, after twenty years in a row of late budgets the Legislature completed it work by the April 1st deadline, which is the beginning of the new fiscal year for state government.  In 2006, they did so once again.

          The Legislature’s $112.4 billion budget restored many of the cuts Governor George Pataki had proposed to health and higher education funding.  It also included a multibillion capital plan for New York City public schools.  It did not include any funding for biomedical or stem cell research.  Both the Assembly and Senate had research funding plans in their earlier versions of the budget but disagreement over funding sources and the role of stem cell research prevented an agreement from being reach and so nothing was included.

          Governor Pataki was not happy with the Legislature’s budget, arguing it totaled $114 to $115 billion, well above the $112.4 billion Legislative leaders had estimated and far beyond his proposed $110.6 billion Executive Budget plan.  Last year’s budget amounted to $106.2 billion.  In New York State the Governor has the power of the line item veto and the Governor used it freely, vetoing 208 separate items from the Legislature’s budget.  But the Democratic Assembly and Republican Senate overrode all but one of the Governor’s vetoes.  While many of the Governor’s vetoes were based on his belief that the Legislature added too much spending to the budget, he also argued that many other provisions the Legislature added, those that would actually change the law as opposed to just affecting spending amounts, were beyond the Legislature’s power and thus unconstitutional.  He is saying that he will not recognize veto overrides of those provisions since it was improper for the Legislature to pass them in the first place.  Thus many parts of this year’s budget may bend up being settled in court.

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Senate and Assembly Move Forward with Budget

On March 13th both the New York State Assembly and Senate passed their own versions of the FY 06/07 budget. Governor George Pataki had submitted his $111 billion budget request back in January and the Legislature has until April 1st, the beginning of the new fiscal year, to act upon it. Both houses added about $1 billion in spending to the Governor’s plan and both plans restored funds for education and health care that the Governor had proposed cutting. Both houses also touted their efforts to reduce taxes.

The Assembly and Senate each put forth a different plan to fund research in New York State. The Assembly’s budget includes $300 million for stem cell research while the Senate plan, which mirrors the Governor’s proposal, includes $160 for biomedical research in general and is silent on weather the money can be used for stem cell research. The Senate plan funds the research from the proceeds of the charitable asset created by the 2002 conversion of the Blue Cross/Blue Shield insurance company from a not for profit to a for profit company. This has caused some controversy as some argue that these funds were intended to help provide access to health insurance for low and middle income New Yorkers, not for research. The Assembly funds stem cell research from general Health Care Reform Act funds.

Both houses and the Governor will try to work out their differences on this and other issues and pass a final budget. Last year, for the first time in twenty years, the Legislature delivered an on time budget to the Governor. In some years completion of the budget had taken until as late as August. Every indication is that once again this year the Legislature will meet or come close to meeting the April 1st deadline.

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Governor Delivers his Last State of the State Address

January 4, 2006 - Governor George E. Pataki today delivered his twelfth and last annual Message to the Legislature. The Governor has announced his intention not to run for reelection. The speech was shorter than in past years, coming in at under an hour, and only dealt with a limited number of subjects, among them taxes, energy, and education. Included in the speech was the announcement of a new biotech research challenge grant research initiative, which the Governor says will leverage up to $600 million to fuel innovation, job growth, and economic development within the State. The Governor specifically mentioned Columbia as one to the institutions that could benefit from this program.

One issue which the Governor did not mention was funding for stem cell research in New York State. Research institutions, patient advocates, and the business community had been pushing for a program that will help New York compete with other states which are supporting stem cell research. While the Governor did not specifically mention stem cell research, advocates are still hopeful he will include funding for it in his budget request for FY 06/07. The State Assembly did however pass a bill which will provide for $300 million for stem cell research in New York. The focus now shifts to the Republican controlled Senate where Senator Nick Spano has also introduced a stem cell funding bill.

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Tedisco Replaces Nesbitt as Assembly Minority Leader

Republican Assemblyman James Tedisco of Schenectady replaced Charles Nesbitt of Albion as the Assembly Minority Leader. Assemblyman Nesbitt, who had held the leadership post since 2002, recently resigned to become President and Commissioner of the New York State Tax Appeals Tribunal. Republicans hold just forty five of the 150 Assembly seats and Assemblyman Nesbitt had been under pressure to leave the leadership post, surviving an abortive coup attempt in April. Assembly Republicans have lost eleven seats in the last four years as upstate New York continued to depopulate and Democrats gained support from voters statewide. Assemblyman Tedisco has been in office since 1982 and has had unusual success in recent years on several bills in a Legislature where measures sponsored by minority party lawmakers are generally ignored. His district overlaps with portions of Senate Majority Leader Joseph Bruno's Senate District in the same Troy-Saratoga region of upstate that has proven to be one of the state's most potent centers of Republican power in the past decade.

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Assembly and Senate Hold Hearings on Medicaid Fraud

Prompted by a series of articles on Medicaid fraud that ran in the New York Times over the summer, the State Senate and Assembly held hearings to look into the matter. Although the witness lineup was very similar, the two Houses chose to hold separate hearings. The State of New York now spends $44.5 billion annually on Medicaid, a joint federal/state program designed to provide health care insurance to low income Americans. Estimates are that as much as 10% of the program costs care lost each year to fraud and the New York Times articles certainly brought attention to this tremendous waste of taxpayer resources. While both Senate Republicans and Assembly Democrats agreed that more needed to be done to combat fraud, they of course differed as to who was at fault, with the Senate grilling a representative of Democratic Attorney General Elliot Spitzer and the Assembly treating the Deputy Commissioner of Health in much the same way. All agreed that more resources were needed to deal with the problem.

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State Legislature Completes its Business for the Year

Both houses of the state legislature departed Albany last Friday, one day after its scheduled adjournment of June 23rd. While leaders in both houses of the legislature and Governor George Pataki were proclaiming this past legislative session an overwhelming success, a number of major issues were not addressed when session concluded. Among the unresolved issues were:

• An agreement to settle Indian land claims and a related proposal to expand the number of tribal casinos,
  
  
• An agreement to a methodology to share a multi-million dollar pot of money to help pay nursing home wages and benefits; and
  
  
• A deal to expand Megan’s Law, a statute aimed at protecting people from sexual predators.
  
  

There were deals, however, to set up a $75 million grant for a new Met stadium in Queens, create a number of new judgeships, enact the Public Authori-ties Accountability Act of 2005 and create a four-member committee which will take control of the New York Racing Association oversight.

The legislature failed to pass legislation to promote stem cell research in New York State; however Senator Nick Spano (R-Yonkers) did introduce pro re-search legislation in the Senate. Having a bill, which did include funding, intro-duced in the Republican controlled Senate was a big step forward. Also, the Court of Appeals ruled that the plan to convert Empire Blue Cross/Blue Shield to a private company could go forward. The conversion of not for profit insurance companies to for profit status is a potential source of funding for stem cell re-search.

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New York State Passes on Time Budget

The cicadas have come and gone, but for the first time in twenty years, the New York State Legislature passed an on time budget. Every January the Governor submits a proposed budget and theoretically the Governor and the Legislature are supposed to have agreed on a final budget by April 1st, the beginning of the State fiscal year, but since 1984, the final budget has been late. In some years, the Governor and the Legislature were not able to reach an agreement until August, four months past due.

This year however, the Legislature made a commitment to get the budget done on time. The normally complicated process, both substantively and politically, was made even more so by a recent court decision which limited the Legislature’s role in the budget process. Nonetheless, negotiations took place throughout March, and on the last day of the month, the Legislature sent the Governor a budget for the 2005/06 fiscal year.

Governor George Pataki threatened to veto several parts of the bill. Unlike the President of the United States, the Governor of New York has a line item veto. Ten days of frantic negotiations brought the all sides closer together and late in the evening on April 12th, the last day the Governor had to veto bills, all parties came to a budget agreement.

The $105 billion plus budget does not include the cuts that Governor Pataki had proposed for higher education assistance nor the Medicaid program. It does however include a .35% bed tax, less than the .7% the Governor had proposed, but significant nonetheless. The budget also includes $150 million for capital projects for the State’s institutions of higher learning and $250 million for the Healthcare Efficiency and Affordability Law for New Yorkers (HEAL-NY) to allow hospitals to pay off debt and support information technology and other health care projects.

One area which the budget did not address was the conversion of the Health Insurance Plan of New York (HIP) from a not for profit to a for profit company. Funding from this conversion could go to fund programs under the Health Care Reform Act (HCRA) and possibly to promote stem cell research in New York. The legislature hopes to address this issue and the rest of HCRA before adjourning in June.

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Governor Presents Budget to Legislature

On January 18th Governor George E. Pataki unveiled his 2005-06 Executive Budget proposal which contained a number of initiatives designed to curb Medicaid and stabilize property taxes in the state. In presenting his $105.5 billion spending plan, the Governor called for $526 million more in educational aid along with $1 billion in fee increases, substantial new assessments, and a continuation of clothing sales taxes that were supposed to end after this year. The Governor’s budget raises spending by 5.4% and attempts to undertake the task of closing a $4.2 billion shortfall to balance next year’s budget. Governor Pataki is aiming to fill the gap mostly by reducing spending and using money the State gained from the conversion of Empire Blue Cross/Blue Shield into a stock company. He is also proposing a one time adjustment of pushing pension costs into the future to save local governments $621 million and the state $321 million. This plan does not have the endorsement of the State Comptroller, Alan Hevesi, the sole trustee of the pension fund. The Executive Budget also includes a $36.6 billion five-year transportation plan which would be financed partly by an added 1% real estate recording tax for twelve counties in the New York City area. The recording tax is expected to raise $100 million. A host of Department of Motor Vehicle increases are also on the table including a 33% hike in registration fees for most vehicles, and an increase of 75% more for heavy trucks. The registration increase would add $29 million this year and nearly four times that figure in future years. In reacting to the Executive Budget, Senator Majority Leader Joseph Bruno, along with Assembly Speaker Sheldon Silver said that they both dislike the tax and fee plans and suggested that the Governor’s education budget is inadequate.

Under the Governor’s budget, the State’s school aid commitment would rise to $15.9 billion. That growth is smaller than the Senate and Assembly proposed last year in separate packages which attempted to deal with a Court of Appeals order to provide more money for New York City public schools. The Governor is also proposing $201 million more in traditional school aid and $325 million from the state’s video lottery casinos from a special “sound, basic, education” fund for 270 needy school districts. The Court panel however, has recommended a $1.4 billion increase just for New York City for next year.

The Governor’s plan to cap county Medicaid expenses would save local governments $7 billion over five years, but the Health Care Association of New York reacted strongly to what it calculated as $1.3 billion in taxes and cuts, “If enacted, these taxes and cuts would devastate the health care system.” Given that Speaker Silver and Senator Bruno both have problems with the taxes proposed on hospitals and nursing homes, many are already predicting lengthy budget negotiations with the possibility of the state missing the April 1st deadline for the 21st year in a row.

The budget negotiations are complicated even further this year but the issuance of a Court of Appeals decision in December. The decision limited the Legislature’s ability to influence the outcome of the budget process.

Not included in the budget, or in the State of the State for that matter, was any reference to Stem Cell research. Many in the biomedical research community and patient advocates had hoped that the Governor would announce a New York Stem Cell initiative. Also among those calling for such action was New York City Mayor Michael Bloomberg.

The Assembly and Senate have begun holding hearings on the budget. The Governor has until February 17th to introduce any amendments.

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Governor Pataki Delivers State of the State. How Many More?

On January 5th, Governor George E. Pataki delivered his 11th State of the State address. His address to a joint session of the state legislature was reminiscent of his first address in 1995. The similarity in themes can be attributed to the fact that the State, at that time, was facing a $5 billion budget deficit, or roughly the same as today’s gap.

In addition to the usual cast of political dignitaries on hand to listen to the Governor’s speech, Olympic swimmer Janet Evans and retired professional football player, Jim Kelly were on hand to lend their support for the Governor’s proposals to advance a series of health care initiatives aimed at helping the state’s children.

Among the highlights included were:

• An announcement that IBM, SONY, Toshiba, Samsung and other companies have committed to investing $2.7 billion in Hudson Valley high-tech research and development ventures, including the Center for Excellence and Nanoelectronics in Albany.
  
  
• A proposal to move the planned phase-out of the 2003 income tax surcharge from 2006 to 2005.
  
  
• The announcement of an Executive Order requiring state agencies and authorities to use non-toxic cleaning products. The Governor also promised to submit legislation that would require school districts throughout the state to follow suit.
  
  
• A promise to include in his Executive Budget details of a plan to reduce the cost of Medicaid and to provide relief to taxpayers in New York City and the counties outside of the City. The Governor will present his Executive Budget to the legislature on January 18th.
  
  
• A promise to advance a plan to improve high-need school districts across the state, not just New York City schools. This promise was seen as a response to a court mandate that will more than likely provide more education funding for New York City.
  
  
• An announcement that the Governor will lead a delegation of executives to drum up new business for New York companies in Japan and China.
  
  
• A promise to propose legislation banning all gifts from lobbyists to state officials and implement a “smart and effective” ban on lobbying of agencies and authorities for state contracts.
  
  
• The elimination or consolidation of commissions, task forces, boards and authorities that have been created over time and appointment of a commission to establish “better openness and accountability” of public authorities.
  
  

The Governor also mentioned the ongoing work by the Syracuse Center of Excellence to establish two new ethanol facilities. One will be constructed at the old Miller brewery in Fulton, New York. It will become the largest producer of ethanol in the east, according to the Governor. He also claimed that many of the economic accomplishments that occurred over the last ten years were due, in part, to the success of the state’s high-tech and Center of Excellence programs along with the establishments of Empire Zones throughout the state.

The Governor also pointed to the success that the state has had in attracting investment from around the globe and transforming the state’s economy to meet the challenges of the 21st century. He also pledged that he will help fight to keep New York’s eleven military facilities operational and as vital assets to their local economies and the U.S. military. Pataki’s Executive Budget will also outline a seven-point plan that will marshal resources to SPUR communities. Operation SPUR, the Strategic Partnership for Upstate Revitalization, will be designed to target upstate communities where additional economic growth and job creation is needed. SPUR will also target those areas that rely heavily on farming and agri-business as an important component of their economy.

In addition to his new Executive Order mandating the use of non-toxic cleaning products, the Governor has also pledged to sign an Executive Order requiring that state agencies begin phasing in the use of biofuels to heat state buildings and power state trucks. He will also ask NYSERDA to work with the state’s transportation agencies to install hydrogen refueling stations from New York City to Buffalo over the next ten years.

The loudest ovation received during the almost 90-minute speech was in response to the Governor’s pledge to enact real budget reform. The promise to submit legislation that would open up the process and empower individual legislators and ensure balanced and on time budgets.

Already, people are speculating as to what the Governor’s plans are. Will he run in 2006? To date, the Governor has not given any indication which way he is leaning, but as could be expected, those who heard the speech were looking for clues as to what his plans are. Surely there will be more to follow.

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Legislature Returns for Special Session

Both houses of the New York State Legislature returned to Albany for a Special Session designed to address a number of issues left undone at the con-clusion of the 2004 regular legislative session. Included among the measures addressed this week were a decision by the state Senate to override Governor George Pataki’s veto of a measure to boost the state’s minimum wage, approval of a $1.4 billion expansion of the Jacob K. Javits Convention Center in New York City, consideration of a veto override which would overhaul the budget process that has yielded late budgets for twenty years in a row, and passage of legislation to soften the so-called Rockefeller Drug laws.

On Monday, December 6th the Senate approved an override of the Gov-ernor’s veto of a minimum wage hike surpassing the two-thirds vote necessary for such action. The wage hike will take place incrementally rising from $5.15 an hour to $6.00 on January 1st; $6.75 on January 1, 2006; and $7.15 on January 1, 2007. The state Assembly previously overrode the Governor during a special session in August.

On Tuesday, the legislature approved funding for the $1.2 billion expan-sion of the Javit’s Center which is expected to attract millions of dollars in reve-nue for the state and the city. Under the Javit’s bill, there is also a $350 million appropriation for projects outside of New York that will be divvied up by Governor Pataki, Senate Majority Leader Joseph Bruno and Assembly Speaker, Sheldon Silver.

Lawmakers were also expected to overhaul the notorious dysfunctional state budget process. In November, Governor George Pataki vetoed a proposal which previously passed both houses and included a new budget deadline of May 1st with the imposition of a contingency budget in the event that lawmakers fail to pass a new spending plan on time. State Senate leaders had vowed that, “as a last resort”, the upper house would move forward in overriding the Gover-nor’s veto, in the event that a three-way agreement was not reached. The two-day Special Session came and went with no action on either an agreement on the budget reform or a veto override.

The legislature, with the support of Governor Pataki, also passed meas-ures to reduce some of the mandatory sentences established in 1973 under Governor Nelson Rockefeller which require lengthy terms or life imprisonment for people convicted of possessing or selling relatively small amounts of drugs.

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Campaign for Fiscal Equity Panel Calls for Big Increase in School Aid

The three-member panel of court-appointed special masters in the Campaign for Fiscal Equity (CFE) case this week recommended that New York City schools receive an extra $23.4 billion over the next five years so that they can provide a "basic education." The panel's recommendations totaled $14.1 billion in new aid over four years and an additional $9.2 billion in capital spending for New York City school construction and renovation.

The call for added school spending comes as the state faces a $6 billion budget deficit next year. The New York Times' Al Baker reported that the confluence of CFE and the deficit may mean a "day of reckoning" is near for Governor George Pataki and state legislators who may have to impose spending cuts and tax increases. "All the ingredients are there for a really big mess," E. J. McMahon of the Manhattan Institute, a former top Pataki aide, told the Times. "I think it is easily building up to one of the worst situations we have seen in recent history. We're looking at a bad situation in a growing economy, which is really pathetic."

Assembly Democrats said tax increases could not be ruled out. "All options are on the table," Assembly Education Committee Chairman Steven Sanders (D-Manhattan) told the New York Post. Assembly Speaker Sheldon Silver (D-Manhattan), who has emphasized the need for more school spending regardless of where the money comes from, urged "an immediate education funding reform summit of the executive, legislative leaders, representatives from the state Board of Regents and Mayor of the City of New York."

Mayor Michael Bloomberg said he would oppose any attempt to make New York City pay the extra costs mandated by the court. He argued that the situation now faced was created by the fact city schools have been shortchanged by the state for decades. “We already have a projected $3 billion deficit for the next Fiscal Year as a result of uncontrollable, mandated expenses such as Medicaid, health care and pension costs," Mayor Bloomberg said in a press release. "For the City to fund even a portion of this $5.63 billion would require us to cut after-school programs, close libraries and make severe cuts to essential City services, even in the area of public safety. Such actions would harm the very children this lawsuit is designed to help."

Senate Republicans concerned about the impact on upstate and suburban school districts did not commit to any course of action. Majority Leader Joseph Bruno issued a brief statement that summarized the Senate's past actions. As for the special masters' call for $23 billion in new spending, "We will review it closely and continue to discuss the issue of school aid," Senator Bruno said without elaborating.

Governor Pataki did not issue a statement on the report and would not talk to reporters about it when questioned later in the week. His communications director Kevin Quinn issued a statement in his name saying that the Governor was concerned that the spending was not linked to school reforms. “We continue to believe a statewide solution is needed and that these decisions should not be left to the court, but should be made by elected representatives of the people, " Quinn said. "To that end, we continue to aggressively negotiate with all interested parties and we are confident that this approach is the only avenue to achieve true and timely reform.”

It was unclear how the situation would be resolved, but many here expect a final solution may only come after protracted litigation that would also address state aid to schools in the rest of the state and a revamping of the highly complex school aid formula now in place.

Tim Kremer of the New York State School Boards Associations said there was little doubt the CFE recommendations would have to be adopted. "The new funding that the masters recommend is significant, but they acknowledge the need for a phase-in. More importantly, our constitution’s mandate is unambiguous. In meeting that mandate, the masters note “…the importance of having the requisite financial resources cannot be overstated.” School boards agree completely … The Governor and the Legislature must begin today to plan for implementation of a court order along the lines of what has been recommended by the masters. To delay further would only compound the injustice to school children throughout the state."

CFE supporters framed the issue in constitutional terms. The sweeping recommendation for the state to spend a minimum of $23 million more is the "most quintessential of judicial functions – protecting the constitutional rights of the citizenry," CFE's Michael Rebell said. He said the right to a basic education that is now being denied to many poor children in New York City schools is guaranteed by the state Constitution and has been upheld by the Court of Appeals, so the Legislature has no alternative other than to act swiftly.

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Albany Update
Legislature Passes Budget, Governor Vetoes Much of It

Putting an end to the longest delay in passing a budget in State history, on August 11th, the New York State legislature passed its budget for the 2004/2005 fiscal year. The fiscal year began April 1st and theoretically the Assembly and Senate were supposed to have reached an agreement by then, but for the twentieth straight year, there was no budget in place. The Legislature adjourned in June but came back in August to finally finish work on this year’s budget.

The $101.6 billion dollar budget that the legislature agreed upon was $1.9 billion higher than the proposed budget that Governor Pataki introduced in January, and did not include several savings measures that the Governor had recommended. Among these were a plan to institute a bed tax on all hospital stays and plans to cut adult dental care from Child Health Plus and private adult dental care from Medicaid.

The New York State Constitution gives the Governor a line item veto which Governor Pataki used extensively, 195 times to be exact, cutting spending by $1.8 billion according to the State Division of the Budget. Among the items vetoed were a $250 million plan to fund capital improvements at hospitals and a $350 million plan to pay for capital projects at the State’s colleges and universities. The Governor did not veto the Legislature plan for economic development funding. Assembly Speaker Silver has promised to override many of the Governor’s vetoes, but as of yet, Senate Majority Leader Joe Bruno has not said whether he will follow suit.

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The 2004 session of the New York State Legislature ended in June as scheduled, despite legislators not having agreed upon a budget for the 2004/05 fiscal year (which began April 1st). Also left undone was passage of several important bills, among them anti-terrorism legislation, Rockefeller Drug Law reform, federally mandated changes to state election law, and home rule action needed to permit New York City to lower its property taxes. By law, Legislators and Senators have not been getting paid since the beginning of April.

The debate is being held against the backdrop of the Campaign for Fiscal Equity decision in which the courts have ordered the State to provide increased funding to New York City public schools and have given the Legislature until July 30th to devise a method to do so. Failing that, a Special Master will take over and develop a plan. Earlier this month, Governor George Pataki called the Legislature back to Albany for a special session to consider education reform legislation that his administration drafted. No progress was made, however, as the Senate simply amended the Governor’s language which the Assembly Education Committee then voted down.

When the budget is complete, the hope is that the Legislature will restore much of the cut in funding for the Tuition Assistance Plan that the Governor included in his budget proposal. The final budget is also likely to include some sort of capital funding for colleges and universities, both public and private, and may also include additional capital funding for clinical facilities and biotechnology related economic development projects.

In recent months, the Senate and Assembly have arguably made more news with resignations and scandals than with legislative accomplishments. In May, Senator Guy Vellela and Assemblyman Roger Greene, who plead guilty to accepting bribes and filing false travel reports, respectively, both resigned their seats. Assemblyman Greene intends to run again for his old seat in the fall, but Senator Vellela is now in prison. There were also reports of Assembly Speaker Sheldon Silver receiving large discounts at a hotel in Las Vegas and members of both Houses getting highly discounted rates on rental cars. The controversy was not limited to financial issues, as one member of the Assembly, Adam Clayton Powell, was accused of sexually assaulting a young female Assembly staff person. No charges have been filed, but the investigation is ongoing. Earlier this year, Speaker Silver’s former Counsel, J. Michael Boxley, plead guilty to sexual assault . This was his second brush with the law, and the accuser from the first case is now suing Speaker Silver.

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CUMC Professor Discusses Aging with Members of the Assembly

Dr. Steven Albert, Associate Professor of Clinical Sociomedical Sciences, presented recent research on the prevention of frailty in old age to the New York State Assembly Roundtable on "Preparing for the Future Elderly." This Roundtable was organized by Assemblywoman Joan Millman and Assemblyman Steve Englebright as part of New York State's effort to prepare for an increasingly older and more diverse elderly population. Researchers from Cornell University and the University of Rochester also presented. A follow-up meeting in Brooklyn, Assemblywoman Millman's home district, is currently being planned.

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Twenty Years and Counting

April 1st has come and gone, and yet again there was no state Budget. New York State’s fiscal year runs from April 1st through March 31st of the next year. For the twentieth straight year though, the Governor and the State Legislature have not been able to reach an agreement on time. There had been hopes that this year would be different and that the budget would be done on time, but alas it was not to be.

Governor George Pataki’s 2004/05 budget proposal sets spending at $99.8 billion. It includes a series of revenue enhancements and spending cuts needed to close an expected $6 billion gap. The main sticking point in the budget negotiation is how the State will fund elementary and secondary education in New York City, for which the State is under court order to increase support. The Governor, Assembly, and Senate also need to agree on exactly how much revenue is available. This dispute over the “avails” number is always a major problem in State budget negotiations. Although the budget was once again late, everybody hopes to be able to wrap up negotiations in late April or early May.

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Governor Delivers State of the State Address, Unveils Budget

In January, New York Governor George E. Pataki set forth his vision for the State for 2004 and detailed his spending plans for the upcoming fiscal year. On January 7th the Governor delivered his annual State of the State address to the Legislature, his tenth since he assumed office in 1995. In it he recounted many of the events of the past year and laid out his agenda for the coming year.

The speech touched on a number of topics from homeland security to education to the economy. The Governor did not go into great detail but he did make it clear that he is opposed to any new taxes. He also stated that he would like to see changes to the State’s Medicaid program, a program that has grown to over $40 billion annually and is putting a tremendous burden on county governments across the State.

The Governor reiterated his commitment to biotechnology development and announced that his budget would include funding for construction of laboratory facilities. He also announced the formation of a High Tech Council to advise his administration on issues related to technology development. Harold Varmus, President of Memorial Sloan Kettering Hospital, will chair this council. Of special note to the State higher education community was his announcement of a plan to provide $250 million in state support for capital projects at the over one hundred private colleges and universities in New York. Columbia is amongst this group eligible for funding.

Later that month, the Governor presented his 2004/05 budget. Total spending is set at $99.8 billion and in the budget the Governor outlined his plan to close the expected $6 billion gap. This will be done by a series of revenue enhancements and spending cuts. This includes imposing an .7% fee on all hospital stays, an idea that the Governor tried last year but the Legislature successfully resisted. Also included in the budget are plans to reinstate the sales tax on clothing purchases under $100 (creates four tax free weeks), cut funding for private practice adult dental Medicaid (institutional providers like Columbia are not directly affected), and cut the Tuition Assistance Program by one third.

Later in February, the Governor will submit his amended budget and the Legislature has already begun budget hearings. Although there is hope that the Legislature will complete its work by the April 1st beginning of the fiscal year, odds are that the budget will not be completed until some time in late spring or early summer.

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Governor Signs Dental Medicaid Managed Care Bill

On November 19th, Governor George Pataki signed Assembly bill 5582, a bill that will exclude academic dental centers like Columbia from Medicaid Managed Care. The onset of managed care in the Medicaid program has threatened to lead to a sharp decrease in the payment rate that Columbia's dental clinics receive from Medicaid and in many cases would cut off payment altogether. Originally introduced by Assembly Richard Gottfried, the bill passed both houses of the legislature in June thanks to a strong push from Assemblyman Herman "Denny" Farrell.

Enactment of the legislation was a top priority of the New York State Academic Dental Centers and the Columbia University School of Dental and Oral Surgery. It would not have been possible without the dedication of Dean Ira Lamster and other dental school staff who made several visits to Albany and lobbied very hard for the bill. President Lee Bollinger also played an important role by placing a well-timed call to the Governor asking him to sign the bill.

It is estimated that enactment of 5582 will save the dental school almost $2 million over the next eighteen months, but more importantly will the allow the school to continue to meet the oral health care needs of Northern Manhattan residents.

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Columbia Continues to Push for Enactment of Dental Medicaid Managed Care Legislation.

On September 6th, Ira Lamster, Dean of the School of Dental and Oral Surgery, traveled to Albany to lobby on behalf of Assembly Bill 5582. This bill, which passed the State Legislature in June, would protect New York’s five academic dental centers from the effects of the onset of Medicaid Managed Care. The bill will now go to Governor George Pataki who must decide whether to sign or veto it. Joined by Associate Deans Stephen Marshall and Sara Patterson, as well as representatives from New York University and the New York State Academic Dental Centers, Dean Lamster met with officials from the Department of Health and the Division of the Budget and with staff from Assemblyman Richard Gottfried’s office. Assemblyman Gottfried was the original sponsor of A. 5582. Dean Lamster also had a chance to chat again with David Wollner, Governor Pataki’s chief health care advisor. The Governor has not yet determined how he will proceed on this bill.

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Legislature Passes Dental Medicaid Managed Care Bill

Just prior to adjourning, the State Legislature passed Assembly Bill 5582. This bill will allow Medicaid recipients who are members of a managed care plan to continue to receive their dental care from Columbia and other Academic Dental Centers. The bill now goes before the Governor who must decide whether to sign or veto it. Dean Ira Lamster recently wrote to Governor Pataki urging him to sign the bill.

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2003 Session of the State Legislature Comes to a Close

The New York State Legislature adjourned on Friday, June 20th, bringing an end to this year's session. As has happened for the past nineteen years, the budget was not completed by the April 1st start of the state fiscal year, but in May, the Legislature, overriding the Governor's veto, passed the budget for 2003/2004. With the budget out of the way, Members of the Assembly and Senate spent the last month working on a myriad of bills and trying to deal with such controversial issues as Rent Control and Repeal of the Rockefeller drug laws.

In January, the Governor submitted his Executive Budget for the fiscal year. The $90.8 billion budget contained deep cuts in a wide variety of State programs in order to close the $12.5 billion budget gap. Among the largest cuts were a decrease of $1.25 billion in State support for Elementary and Secondary Education. Higher Education and Medicaid were also hit hard.

After intense lobbying by students, hospital workers, and others, the Republican Senate and the Democratic Assembly came together to develop their own budget. Their package restored $1.9 billion in spending cuts recommended by the Governor. The Legislature paid for these restorations by increasing the sales tax and income tax on high earners. The package also authorized New York City to increase its sales tax. Restorations included $700 million for school aid, $170 million for higher education, $782 million for health care, $30 million for mental health, $27 million for employee benefits and $200 million for member items. In addition, the budget bills included a two-year extension of the Health Care Reform Act.

Of special note to Columbia was that the budget included full funding for the New York State Psychiatric Institute ("NYSPI"). Many NYSPI researchers hold Health Sciences faculty appointments, and the institution was facing a potential loss of up to eighty researchers and a possible merger with the Nathan Klein Institute in Rockland County.

Governor Pataki vetoed the Legislature's budget, but in a rare showing of Assembly/Senate cooperation, and a rift between the Governor and Senate Republicans, the Legislature overrode his veto. Senate Democrats joined with their Republican colleagues in a near unanimous vote. In the Assembly the vote was closer, but the Assembly is more than two thirds Democrat, so Assembly Speaker Sheldon Silver was able to get enough votes to pass the override. The last time that the State Legislature overrode a Governor's veto was over twenty years ago when Hugh Carey was Governor.

Before adjourning, the Legislature did pass a bill that would create a carve-out in Medicaid Managed Care for Academic Dental Centers. Under the State Medicaid Managed Care system, many patients continued to visit the Columbia Dental clinic, even though their managed care company directed them to another dentist, thus creating a large increase in the amount of uncompensated care the clinic was performing. The Governor has not determined whether or not he will sign this bill.

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State Budget: Deep Cuts in Medicaid, Higher Education and Aid for Public Schools for FY 2003/2004

On January 29th, as required by the New York State Constitution, Governor George E. Pataki introduced his Executive budget for FY 2003/2004 (April 1st, 2003 to March 31st, 2004). The $90.8 billion budget contains deep cuts in a wide variety of State programs in order to close the two-year budget gap of $20 billion. Among the largest cuts will be a decrease of $1.25 billion in State support for Elementary and Secondary Education. Higher and Education and Medicaid were also hit hard. Below is a summary of some of the budget cuts for higher education and Medicaid.

Tuition Assistance Program (TAP): The Governor is again proposing a restructuring of TAP. The proposal would postpone 1/3 of the recipient's award until degree completion.

Higher Education Opportunity Program (HEOP): The Governor proposes cutting the HEOP program by 50% -- eliminating the financial aid component of the program and funding only the support services (tutoring, mentoring etc).

Direct Institutional Bundy Aid: The Governor proposes to reduce Bundy aid by $18.7 million. Last year, Bundy was funded at approximately $44 million. Bundy funding is allocated based on the number of degrees conferred by an institution. The Governor proposes eliminating masters and doctoral degrees from the Bundy formula.

STEP and C-STEP: These programs, designed to encourage historically underrepresented populations to pursue careers in science and technology at the high school and post-secondary level, are eliminated in the Governors budget.

Graduate Medical Education: GME payments are to be restructured to be consistent with the scheduled decline in Medicare payments, saving $104 million in 2003 and $183 million in 2004.

Medicaid: Payment for Medicaid will be restructured; the Federal government will pay 50% and the State will pick up the remaining 50% for pharmaceutical costs. For inpatient and clinic costs the State will pay 13%, local governments will pay 37% and the Federal government will pay 50% of the costs.

For information on the State Budget, go to http://www.budget.state.ny.us.

 

State Current Issues

Last updated 1/8/ 2008