THE "PORK" IN NEW YORK, Thoughts of an older American on Constitutional Government in the USA Options

[Livyjr]

"Poll: Spitzer `turning corner' just in time for budget proposal"

By MICHAEL GORMLEY, Associated Press

Last updated: 10:22 a.m., Monday, January 21, 2008

ALBANY -- Democratic Gov. Eliot Spitzer is reclaiming some popularity with New Yorkers after a dramatic slide in the last half of 2007, according to a poll released Monday.

The Siena College poll showed Spitzer was viewed favorably by 44 percent of New Yorkers, compared to 41 percent with an unfavorable view.

That's up from 36 percent in December and was the first time since a Siena poll in October that a majority of those polled had a favorable view of Spitzer.

But 64 percent still consider his job performance as fair or poor, a slight improvement from December's poll.

And Monday's poll finds just 27 percent would vote to re-elect Spitzer, compared to 46 percent who would prefer someone else.

"For the moment, Gov. Spitzer's meteoric fall with voters has stopped," said Siena poll spokesman Steven Greenberg.

"It would be an overstatement to say he has turned the ugly poll numbers around, however, it may be fair to say he is turning a corner."

After winning the governor's office in 2006 with a historic share of the vote -- 69 percent -- Spitzer started a slide in popularity during the late spring as a political scandal and conflicts with the Legislature over spending dogged him the last half of his freshman year.

Two Spitzer aides have been accused of misusing state police to compile embarrassing records of Senate Republican leader Joseph's Bruno's use of state aircraft to attend GOP fundraisers.

Investigations continue, but the state attorney general and the Albany County district attorney said no crimes were committed.

The uptick in popularity comes as Spitzer needs it.

He will present his state budget proposal to the Legislature on Tuesday.

The poll released Monday shows strong support for his unconventional proposal to cap local property taxes, which is already drawing opposition in the Legislature.

Spitzer's tax cap proposal comes as he determined $5 billion a year in state subsidies to reduce local school taxes -- most sent directly to school districts -- have failed to stem average annual increases of about 7 percent in the tax bills.

Spitzer, who opposed a cap while running for governor, said taxpayers can't sustain the continued spending by schools.

He created a commission to study ways to make school spending more efficient and affordable, including reducing unfunded state mandates.

A state-imposed cap has long been opposed in Albany, where teachers' unions and other school interest groups wield considerable power through lobbying and campaign contributions.

The Senate's Republican majority came closest with its measure to allow local voters to force a cap on their district if they organize and pass a referendum.

Siena called 625 registered voters from January 14-17 for the poll, which has a margin of error of plus or minus 3.9 percentage points.

[Livyjr]

"Spitzer details $1 billion plan for upstate revival"

By CAROLYN THOMPSON, Associated Press

Last updated: 5:22 p.m., Wednesday, January 16, 2008

BUFFALO, N.Y. -- Gov. Eliot Spitzer pledged $1 billion Wednesday toward restoring upstate by getting land ready for development, helping universities cash in on research, pushing farmers' goods to market and cleaning up parks.

"While I realize that this is a large amount of money in tough fiscal times, I also know that it's at these very moments when investment matters most, when the urgency is so great that we simply cannot afford to wait," Spitzer told an audience of mayors, business leaders and elected officials at Buffalo State College.

The upstate economy has struggled for most of the past two decades against manufacturing and population losses despite gains in service sectors like health care and hospitality and a new focus on high-tech.

The $1 billion Upstate Revitalization Fund to be included in Spitzer's budget next week offers point-by-point solutions to the region's ills -- a dearth of shovel-ready sites, aging infrastructure, high energy costs and lack of broadband access in rural areas.

Dan Gundersen, Spitzer's upstate development chief, said the governor's plan is all about fundamentals.

"So often, economic development has been about projects, it's been about the silver bullet, it's been about the scramble for resources," Gundersen said, "and what we are saying, what the governor has said today that is so very different, is that if we focus on the fundamentals and we create those programs that are going to address real needs, then we're going to see change."

As a candidate for governor, Spitzer compared upstate west of Albany to Buffalo as similar to Appalachia.

He used Wednesday's speech to explain to potential downstate detractors his focus on the region.

"The truth is that we will never grow again, we will never prosper again, we will never become a beacon of hope and opportunity again if part of our state is thriving and another part is falling behind," he said.

"So we must come together and channel all of the passion, energy and determination that is within us toward one goal: restoring growth and prosperity to upstate New York."

SURE, ELIOT ....

WHATEVER YOU SAY ....

YOU ARE ONE OF THE BEST MINDS IN THE WORLD, ELIOT ....

Sooooooo .....

HOW DO YOU "FUNDAMENTAL" YOUR WAY AROUND THIS REALITY, EH?

THINK A BILLION DOLLARS WILL DO IT?

And so ....

"Lake-effect snowstorm buries Oswego County in 3 feet of snow"

Associated Press

Last updated: 3:02 p.m., Monday, January 21, 2008

FULTON, N.Y. -- A state of emergency was declared in this central New York city after lake-effect storms dumped up to 3 feet of snow on the region and collapsed the roof of the public works garage early Monday.

Fulton officials said none of the four city workers inside the building were injured when the roof came down shortly before 5:30 a.m. Several pieces of snow-removal equipment remained inside the building, officials said.

Mayor Ron Woodward said the city was working out arrangements for mutual aid with the Oswego County Highway Department.

Motorists were advised to stay off the roads in Fulton.

The storms that began Sunday dumped 2 to 3 feet of snow across the county on Lake Ontario's eastern end.

The snow was expected to taper off Monday evening, National Weather Service meteorologist Mike Pukajlo said.

The weather service reported 37 inches in Fulton, 36 in the town of Mexico and 34 in the lakeside city of Oswego.

"We're digging out," said Sgt. Edwin Croucher, a state police trooper in Fulton who reported multiple accidents caused by the storm but no serious injuries.

Schools, government offices and some businesses were closed because of the Martin Luther King Day holiday.

"It's not as bad as it would have been with a regular business day," Croucher said of the traffic conditions.

Interstate 81 north of Syracuse was open on Monday, a day after being shut down for 9 hours because of whiteouts caused by blowing snow.

Meteorologists said parts of Oswego County would get another 3 to 6 inches before the lake-effect bands moved north into neighboring Jefferson County during the afternoon.

In western New York, Buffalo and other areas east of Lake Erie could get about 2 inches of snowfall through Monday night.

[Livyjr]

THE NEW YORK DAILY NEWS DAILY POLITICS BLOG:

And it's my bet that neither this PORKMEISTER dude Gunderson nor "SHOWBOAT" Spitzer have a clue about snow ....

And what havoc it can raise for someone trying to run a competitive business ....

Because neither of them have that kind of real-world experience ....

And so ....

I used to have to travel out to Buffalo for work in the winter, as well as traveling through the Mohawk Valley ...

And based on that experience, I wouldn't live or work in Buffalo or Oswego for any kind of money, myself ...

I was in Oswego one time when there was over six feet of snow on the ground, and the wind was howling and the temperature was way down below zero, during the day ....

Nobody could get their car started ....

It was too cold outside to try and walk anywhere ....

Finally, I put a bunch of blankets on the hood of my car, and I put a Bernz-O-Matic camp stove under the oil pan of the car to heat up the engine oil ...

And even then, I barely got started ....

And when the engine was running, I left that God-forsaken place and never went back ....

And so ....

But Gunderson and Spitzer are going to change all of that with their "FUNDAMENTALS" .....

Why, I bet it will be just like Burbank, California when they get done with the place ....

Sunny all the time ....

Balmy temperatures ....

No snow ....

Hang out at the beach all year round ...

Young professionals will be flocking there in droves ...

And so ...

Posted by John Galt on January 22, 2008 7:41 PM

http://www.nydailynews.com/blogs/dailypoli...d-ends-170.html

[Livyjr]

And if there was a genesis for this thread on the "PORK" in New York ....

This AMD story would certainly be a part of it ....

From the CORPORATE WELFARE side of it, anyway ....

The MODERN STATE has a DUTY to help out the needy corporations in America ....

To ensure that their stockholders will continue to rake in the fruits of the profits ...

Which is what "STEAMROLLER" Spitzer's new PORKOLOGIST, or PORKMEISTER, or PORK DISPENSER ...

Up from Pennsylvania at $190,000 per year is here to do ...

Keep that money flowing into the shareholder's pockets ....

By taking it out of OUR pockets to do so ...

Which the MODERN STATE sees as being "fair" ....

Since CORPORATIONS are the ones who put the BIG BUCKS back in the pockets of the politicians ...

Who CONTROL the MODERN STATE ...

To ENRICH themselves ...

At OUR expense ...

And so ...

"Money woes muddy plan for Malta site"

By JORDAN ROBERTSON, Associated Press

First published: Saturday, March 10, 2007

SAN JOSE, Calif. -- The high-flying Advanced Micro Devices Inc. of 2006 has given way to a company in financial peril, saddled with debt and bleeding from a brutal price battle with its larger and suddenly resurgent Silicon Valley archrival, Intel Corp.

AMD -- which is planning a $3.2 billion computer chip factory for Saratoga County -- finds itself the subject of rumors of a possible takeover or private-equity cash infusion.

While it wasn't long ago that AMD was stealing a big slice of the microprocessor market and emerging as a long-term threat to Intel, those very gains may have left AMD's well running dry.

Industry analysts said both companies are suffering from the need to balance the near-term goals of shareholders and the huge expenditures required to stay competitive.

AMD officials say they are still on track to make a decision about whether to build a 1.2 million-square-foot "chip fab" at the Luther Forest Technology Campus in Malta.

New York state has offered the company $1.2 billion in financial incentives, including $650 million in cash, and AMD has between now and July 2009 to make its decision.

Company executives were in the Capital Region in January talking to community and business groups, political leaders and news organizations and sounded extremely upbeat about the company's chances of building here.

Though the price competition has cut into both chip makers' profits, Wall Street has punished AMD's stock particularly hard.

Its shares have plunged more than 60 percent over the past year on fears about the company's ability to continue gaining share without hurting profit margins.

AMD is currently undergoing a 12-week initial design review of the Luther Forest project to create a rough draft of what the fab will look like.

The company is also undergoing its biannual long-range forecasting process.

Executives will take information from those reviews to make a formal recommendation to the company's board of directors on whether to move ahead with the project this year or to table the decision for a later date.

"DEC weighs bid to build water line - Saratoga County Water Authority seeks transfer of permit to run project"

Albany, New York Times Union

First published: Friday, January 18, 2008

SARATOGA SPRINGS -- The Saratoga County Water Authority is one step closer to gaining control of a project to build a water pipeline from Moreau to Malta.

The authority has completed its application and is awaiting state approval to transfer a permit already issued to the Saratoga County Board of Supervisors that would let them build the 28-mile pipeline.

As part of the request, regulators from the state Department of Environmental Conservation had asked for an updated list of potential customers for the project.

Previously, the only listed customers were the towns of Wilton and Ballston and the Luther Forest Technology Campus Economic Development Corporation, which is hoping to attract chip-manufacturer Advanced Micro Devices to its Malta Site.

All have signed contracts to buy water.

Since then, Clifton Park, Stillwater, Saratoga Springs and Moreau all have expressed an interest in having a connection installed in their community, but none has offered to sign a contract for water.

Yancey Roy, a spokesman for the DEC, said a notice saying the application is complete was sent Wednesday, and the DEC will make a decision within 45 days whether to approve the switch.

Without DEC approval, the authority is unable to borrow the money it needs to finish the pipeline, eight miles of which has already been laid.

-- Jimmy Vielkind

[Livyjr]

"PRIVATE ENTITY WITH A PUBLIC PURPOSE: Governance of the New York Stock Exchange - AN OVERVIEW"

The Council of Institutional Investors

©July 2003

BACKGROUND

The New York Stock Exchange (NYSE) is reviewing its own governance.

Enron and other corporate fiascos started a chain of governance dominoes that have, perhaps inevitably, reached the Exchange.

First reformers focused on changing companies themselves, then their professional service providers — accountants and lawyers, then companies’ bankers, and then the various quasi-governmental or self-regulatory bodies that were supposed to be market safety nets.

The sheer number and size of the corporate frauds demonstrated that self-regulatory bodies failed to be good safety nets.

Federal legislation attempted to improve some of these bodies.

Lawyers were given new rules, one accounting body was given more independent funding, and a second was created.

New rules for rating agencies are under consideration.

The New York Stock Exchange could hardly expect to escape re-evaluation in this climate.

Analysts, who are employed by the major investment banks that sit on the Exchange’s board, were shown to be conflicted.

These same investment banks provided services that seemed to enable bad behavior at Enron and elsewhere.

The frauds made the listing standards that the Exchange imposed on companies seem badly out of date.

These facts alone probably would have provoked a review.

But other events, which the Exchange arguably helped bring on itself, seemingly made governance review a certainty.

Another round of allegations of front-running-like behavior at the Exchange, including allegations of insufficient Exchange oversight, surfaced.

Individuals who were on, or had been on, the NYSE board, such as Martha Stewart, Linda Wachner, and Vivendi’s ousted CEO Jean-Marie Messier, suffered negative publicity in ways that threw their suitability as NYSE board members into question.

To top it off, the Exchange announced its intention to select a board candidate, Citigroup’s Sandy Weill, who was deemed by New York attorney general Eliot Spitzer and many investors to be extremely unsuitable.

Thus, it was no surprise that Securities and Exchange Commission (SEC) chairman William Donaldson asked the Exchange to undertake a governance review.

And it began.

The Council of Institutional Investors received a letter dated June 16, 2003, from the NYSE asking for comments as part of this review.

The letter indicated that the Exchange has formed a special committee to review its governance.

This monograph provides some background information on the Exchange and its governance.

It also offers opinions.

It is designed to assist members in formulating their comments to the Exchange.

The Council gave a draft of this monograph to the New York Stock Exchange for review.

It, most helpfully, offered many pages of feedback, some of which is incorporated here.

Since views legitimately differ, the Exchange’s entire response to the Council is posted on the Council’s web site.

When the Council’s board approves a letter to the Exchange on this subject, that letter will be similarly posted.

Self-regulation

The Exchange’s White Paper explains that the Exchange’s self-regulation works because of four factors: its professional staff, its political accountability, its market sensitivity, and its broker dealers’ interdependence.

This interdependence, it explains, means that all broker dealers are likely to be hurt if some of them behave badly—if brokers did not self-police, all
reputations would suffer.

Governance experts are skeptical about these suggestions.

The interdependence of broker dealers, like the interdependence of investment banks, has not provided much protection against bad behavior in the past.

Indeed, one might argue that interdependence makes it easier for poor behavior to go undetected and for unhealthy group dynamics to result.

It is certainly as easy to picture group collusion as group policing.

And there have, indeed, been somewhat regular allegations of improper conduct about these very broker dealers.

Commercial banks are fairly interdependent, and they do not argue that bank regulators are therefore unnecessary.

Looking at Wall Street’s recent record does not offer any reason to believe that interdependence among brokers removes the need for accountability or oversight from those whose money they handle and regulators whose job it is to protect the public.

Just as important, the possibility that broker dealers may have a self-interest in watching each other does not suggest that they have a self interest in protecting investors.

Indeed, they have a collective interest in profiting from investors.

The Exchange’s public purpose is to protect investors—but it is owned and operated by a profession that has its own needs to tend to.

The argument that political oversight justifies self-regulation is puzzling—after all, political oversight is oversight by an external body.

Saying that oversight is important, whether political or of some other type, makes the case against, rather than for self-regulation.

One could debate the merits of political (congressional) oversight, since broker dealers are better able to protect their interests politically than individual investors are, but that is different than a debate over the need for oversight.

It is reasonable to guess that the NYSE, like the Securities Industry Association (SIA), expends considerable energy lobbying in some form or other.

It would be useful for the special committee to insist on full public disclosure of Exchange lobbying expenses and charitable contributions.

The argument that the existence of professional staff justifies self-regulation is equally puzzling.

Presumably, most bodies believe they have professional staffs, but most people are wise enough to recognize that staffs are made up of human beings, and human beings tend to act in their self-interest and are therefore affected by pressures and conflicts of interest.

A body that suggests it can self-regulate because its staff, unlike all others, is immune to conflicts and pressures, is a body that seems to be begging for wiser oversight.

Market sensitivity may have some moderating effect on Exchange governance—after all, if investors lose confidence in corporations due to scandals and frauds, they will stop investing.

But that is a slow and drastic check on the system.

More important, this safeguard creates incentives for minimal standards not optimal ones: Market sensitivity ultimately means the Exchange will do what it needs to protect itself, but not necessarily what it needs to optimally protect investors.

Thus, none of the four reasons the Exchange offers for why it should be self-regulating seems sufficient to reach that conclusion.

The Exchange notes, quite rightly, that “self-regulation is an integral part of the federal statutory scheme for regulation of U.S. financial markets.”

The Exchange adds that self-regulation is just one layer of many for investors, and that the SEC plays an important oversight role.

However, as this monograph notes elsewhere, self-regulation is falling from favor (for example, both at the NASD and in the accounting profession) as its apparent failures have seemingly been highlighted by recent frauds and other disasters.

Thus, this may be the appropriate time for the Exchange’s special committee to revisit this principle in light of the recent changes in analogous regulatory settings.

Finally, the White Paper offers an analogy to democracy as a justification for self-regulation.

It quotes Churchill to the effect that democracies may not be perfect but they are better than anything else that has been tried.

It implies that this is the same conclusion one must draw concerning self-regulation.

But one could easily conclude precisely the opposite.

While experiences with democracy generally do turn out better for citizens than other forms of government, almost every experience with self-regulation in the U.S. has been a big disappointment — protection occurs, but not for the intended constituency.

(See the the Council’s June 2003 editorial on how many self-regulatory, quasi-governmental bodies have failed.)

Saying one is like Jack Kennedy doesn’t make it so, to quote a famous debate.

http://members.cii.org/dcwascii/web.nsf/fi...20Monograph.pdf

THE NEW YORK POST

"SPITZ SUSPECTED GRASSO AFFAIR"

November 6, 2007 -- FORMER New York Stock Exchange Chairman Dick Grasso was secretly grilled by investigators about whether he'd had an extramarital affair and fathered a love child, a new book reveals.

In "King of the Club - Richard Grasso and the Survival of the New York Stock Exchange," out today from Collins, CNBC correspondent Charles Gasparino writes that the questions were posed last year during a grueling deposition as part of a 2004 lawsuit filed by then-State Attorney General Eliot Spitzer.

The suit, which is still unresolved, seeks the return of more than half of the $190 million compensation given Grasso during his eight-year tenure as chairman on the grounds that it violated state laws governing not-for-profit organizations.

While much of the testimony was eventually made public, some was not - including a tense back-and-forth in which Avi Schick, then Spitzer's head of nonprofit investigations, suddenly got personal.

Gasparino writes that Schick asked the long-married Grasso about his relationship with "a woman named Karen Ross, the sister of someone Grasso described as his 'best friend growing up.'"

Ross had sent Grasso . . . e-mails that made Schick believe that she and Grasso were more than childhood friends, that they'd had an affair, according to Grasso's attorneys and others involved in the case.

"Adding to Schick's suspicion about their relationship were documents that Spitzer's investigators discovered showing that Grasso had paid part of the college tuition of Ross' daughter," the book says.

Schick then asked Grasso "point-blank whether Ross' daughter was related to him 'in any way' - in other words, whether she was a love child.

Grasso's attorney exploded:

"'I just don't think it's an appropriate subject of examination.'"

"'It has nothing to do with the case.'"

"'And it's private information!' "

Gasparino writes, "Schick asked again."

"This time, Grasso looked at his attorney, who nodded that he should answer."

"Grasso then flashed Schick that famous Grasso death stare and answered, 'No.'"

"Grasso was exhausted but happy that he had survived the ordeal."

Grasso's lawyer, Gerson Zweifach, did not return our call for comment.

http://www.nypost.com/seven/11062007/gossi...six/pagesix.htm

[Livyjr]

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

“The fact of the matter is that New York’s current regulations are out of date."

"Furthermore, my experience has demonstrated to me that proper regulations will have a positive impact on the financial market."

"We have brought together many of the best minds in the State to accomplish this task.”

After the meeting, Governor Spitzer was joined by Herbert M. Allison, Chairman, President and Chief Executive Officer, TIAA-CREF, Laurence D. Fink, Chairman and Chief Executive Officer, BlackRock, John J. Mack, Chairman and Chief Executive Officer, Morgan Stanley and Martin J. Sullivan, President and Chief Executive Officer, AIG at a press conference to discuss the work of the commission and how principles-guided regulation will lead to a focus on outcomes rather than process.

The commission will consider:

Developing “principles-guided” regulation as a unique alternative to the principles-based approach being instituted in the United Kingdom.

The new method provides the benefits of a principles-based approach, while preserving the positive elements of current regulation.

Under the principles-guided approach, the principles act as guidance for interpreting existing regulations and statutes, and as key objectives for developing any future regulation.

The principles guide the regulator to focus on outcomes, rather than the rules in and of themselves.

http://www.ny.gov/governor/press/0118081.html

The principles guide the regulator to focus on outcomes, rather than the rules in and of themselves.

"Court refuses Enron investor's appeal"

By PETE YOST, Associated Press

Last updated: 7:24 a.m., Wednesday, January 23, 2008

WASHINGTON -- The Supreme Court dealt a probable fatal blow Tuesday to Enron Corp. investors' efforts to recover $40 billion from Wall Street banks in the 2001 collapse of the Texas energy company.

Without comment, the justices refused to hear arguments in the Enron case.

Attorneys for shareholders immediately vowed to return to federal court in Houston in an attempt to prove that the investment banks misled the public and helped conceal Enron's true financial condition.

"It's an uphill battle and we'll keep fighting," Patrick Coughlin, the lead lawyer for the stockholders, said.

Attorney Greg Markel, a lawyer not connected with the case who represents corporate clients in securities fraud lawsuits, said shareholders' "chances of succeeding ... are nearly zero."

Enron's demise wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans at what had been the seventh-largest company in the country.

The Supreme Court's refusal to hear the Enron appeal was anticipated following last week's ruling in another securities fraud case in which the justices ruled that a company's investors must show they relied on deceptive acts committed by third parties before they can be sued.

In the case a week ago, the third parties were suppliers to one of the nation's largest cable TV companies.

In the case of Enron, the third parties are Merrill Lynch & Co., Credit Suisse First Boston and Barclays Bank PLC.

In the Enron lawsuit, the 5th U.S. Circuit Court of Appeals in New Orleans already has ruled that the banks did not act directly in the market for Enron securities.

Coughlin says the legal team for Enron investors has evidence that "the analysts knew what was going on" and that the lawyers for the Enron investors can show that the banks "buoyed the market for Enron securities."

In an earlier ruling, the federal judge in the Enron case threw out the glowing statements of the research analysts praising Enron, saying lawyers for the investors had not alleged that the analysts knew their statements about the company's financial health were misleading.

To date, Enron plaintiffs have settled for $7.3 billion with several financial institutions, including JPMorgan Chase & Co., Citigroup and Canadian Imperial Bank of Commerce.

Under the settlements, the payout to investors would be $6.79 per share of common stock and $168.50 per share of Enron's stock-like preferred shares, according to a mailing sent to Enron investors, who have until April 30 to decide whether they want to participate in the settlement.

Coughlin said lawyers for the investors spent $127 million in time and $50 million in out-of-pocket expenses on behalf of Enron investors.

The judge in the Enron case had said Enron shareholders could sue as a class, but the appeals court reversed that and Enron investors now will have to overcome that.

The issue of certifying a class is a critical one.

Once the courts allow huge numbers of investors to pursue a securities fraud lawsuit, the defendants almost always settle rather than exposing their corporations to potentially catastrophic liability.

The appeals court decision in the Enron case meant that shareholders and investors could not pool their resources to sue as a group.

Lawyers for Enron investors estimate the class size at more than 1 million shareholders.

------

On the Net:

Supreme Court: http://www.supremecourtus.gov

[Livyjr]

"Spending up 5 percent in Spitzer budget"

By JAMES M. ODATO, Capitol bureau, Albany, New York Times Union

Last updated: 12:50 p.m., Tuesday, January 22, 2008

ALBANY -- Gov. Eliot Spitzer laid out a plan for $124.3 billion in spending in the upcoming fiscal year, up 5.1 percent from this year's $118.3 billion budget.

The governor said he had to shave $2.3 billion in projected spending and dipped into reserves by $337 million to cover for potential union contracts, but found ways to raise $2.2 billion in extra funds.

He would spare the treasury $169 million, he said, by scaling back a promised 17 percent increase in the STAR property tax rebate program.

He said spending for STAR, which targets relief to the middle class, will total $1.25 billion.

Senior citizens will get a 40 percent increase under the STAR program.

Spitzer would rake in one-time revenues of $1.1 billion.

One way would be by capturing $250 million by selling development rights to a video lottery terminal franchise holder for Belmont Park, which has not been approved.

Another gambling plan involves permanent long-term funding from easing restrictions on the keno-like lottery game Quick Draw.

He would eliminate tax loopholes to bring in $434 million, part of $1.9 billion in revenue changes.

On the long list of these loophole closures is a plan to subject out-of-state credit card companies to bank taxes on the revenues collected on New York consumers, adding $95 million.

In all, he cleared a $4.4 billion budget gap at a time when a weakened economy has resulted in lower than projected tax revenues.

The governor committed $1.46 billion to education, which allows him to meet a commitment of raising funds for schools to $21 billion, although the composition of the spending is redefined and could be considered a cut.

The school cut is primarily from reducing his plan to pump $1.25 billion into extra aid for all districts, particularly those having the toughest time improving test scores, through the "foundation aid formula'' he developed last year.

That stream of funding will be about $900 million, or $350 million lighter than planned.

[Livyjr]

"Spitzer budget banks on $250 million from Belmont video lottery"

By RICHARD RICHTMYER, Associated Press

Last updated: 4:43 p.m., Tuesday, January 22, 2008

ALBANY -- Gov. Eliot Spitzer has proposed raising $250 million by selling the rights to operate video lottery machines at Belmont Park as he and lawmakers continue closed-door negotiations over who will run thoroughbred horse racing in the state.

The proposal -- included in a $124.3 billion state budget proposal Tuesday -- is the latest turn in the drawn out process of selecting a contractor to operate the Belmont, Aqueduct and Saratoga tracks for as long as the next 30 years.

Senate Majority Leader Joseph Bruno favors adding the slot machine-like devices at Belmont, with the revenue helping to support the state's schools.

But Assembly Speaker Sheldon Silver has publicly opposed video lottery at Belmont, a position he repeated Tuesday.

The New York Racing Association has held the franchise since 1955.

Its deal expired Dec. 31, and Spitzer and legislative leaders haven't been able to agree on whether to keep NYRA or choose a successor.

Spitzer has a tentative agreement with NYRA to operate racing for the next 30 years, but the Legislature hasn't approved it.

On Monday, the state extended NYRA's temporary operation until Feb. 13.

The video lottery issue has been one of the sticking points in the negotiations, although the machines are already scheduled for Aqueduct race track in Queens.

Bruno said he was glad to see the proposal in Spitzer's budget, but he's not sure if it will spur an overall agreement.

The deal with NYRA that Spitzer laid out in September included $75 million of state money to bail NYRA out of bankruptcy court and pay off local taxes and agreement to forgive $136 million in debt NYRA owes the state.

In exchange, NYRA would abandon its claim that it owns the tracks, which are worth as much as $2 billion.

"His original proposal calls for a $200 million bailout for NYRA, and I don't know where that shows in the budget," Bruno said Tuesday.

"It doesn't show, does it?"

"I don't know how that happens."

Silver said Tuesday the video lottery machines should be limited to Aqueduct.

"I am concerned by the social role that expansion of gambling brings," Silver said.

"Working men and women have a hard enough time making ends meet."

The Belmont deal would make up more than one-fifth of the $1.1 billion in "one-shot" revenues in Spitzer's budget, items that aren't expected to be available in future years.

------

Associated Press Writer Valerie Bauman contributed to this report from Albany.

[Livyjr]

"New effort against illegal Adirondack subdivisions"

By MICHAEL VIRTANEN, Associated Press

Last updated: 2:53 p.m., Tuesday, January 22, 2008

ALBANY -- The Adirondack Park Agency has launched a new computerized enforcement initiative against illegal subdivisions that identified 55 probable violators last year, the agency said.

Charged with regulating development of the 6 million acre park, about half of it privately owned, the APA added two officers and an attorney in 2007 for an enforcement staff of eight, more than double its manpower less than a decade earlier.

The computer program checks real-estate transaction data, required to show new subdivisions, against land-use restrictions to determine whether an APA permit was required and issued.

Enforcement officers plan to check property transactions monthly.

"This approach allows staff to identify potential subdivision violations before any inappropriate development is undertaken," APA Chairman Curtis Stiles said.

The agency said it will promptly pursue potential violators to prevent environmental harm.

A settlement typically will require the land buyer and seller to undo the subdivision by merging the new lots back into one, according to a memo from APA enforcement staff.

The program showed 173 new subdivisions in the park last year, 55 with potential violations ranging from lot size to wetlands encroachment, the agency said.

All 55 landowners are getting letters.

In the past, APA staff often learned about problems only when an innocent buyer queried them before trying to resell.

At that point, the previous owner and violator was gone.

The agency said it has about 600 older cases, including 400 closed administratively and now inactive.

Roughly half the private land in the Adirondacks, 1.54 million acres, is classified "resource management" by the APA, where most development requires a permit, an average lot size of 42.7 acres and only 15 principal buildings within a square mile.

"Rural use" accounts for another 1 million acres, requiring average lot size of 8.5 acres.

Only 53,730 acres are classified as hamlet, another 12,567 acres industrial, both without APA restrictions on lot size or building density.

In between is land categorized moderate and low intensity use, 371,558 acres requiring average lots of 1.3 or 3.2 acres.

Municipal zoning rules also apply.

The state holds conservation easements generally prohibiting development on another 553,166 acres of the privately owned land in the park, much of it timberlands.

The Department of Environmental Conservation is working to complete easements on another 89,891 acres, agency spokeswoman Maureen Wren said.

[Livyjr]

"Spitzer proposes trim $124 billion budget in hard times"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:02 p.m., Tuesday, January 22, 2008

ALBANY -- Gov. Eliot Spitzer proposed a $124.3 billion budget to the Legislature on Tuesday that would hold spending growth to about 5 percent, the lowest increase since the mid-1990s.

The proposal would close a $4.4 billion deficit and address declining growth in revenues caused by a slowing economy.

Spitzer's address came on a day Wall Street and world markets were taking hard hits amid growing fear of a national recession.

"These challenging economic times require us to make tough, but necessary choices and set clear priorities for state spending," Spitzer said.

He said that if the state can stick to increases of about 5.3 percent in spending long term, the revenues from good times will pay for the deficits in the bad times.

To do it, Spitzer proposes a combination of reducing spending increases for education, $1 billion in health care cuts, delaying part of promised property tax relief, and increasing various fees.

He also proposed unconventional measures such as redefining "little cigars" and malt liquor to generate more tax revenue and creating a "tax stamp" on illegal drugs, to be paid after convictions.

Spitzer, however, insists actions like these and a proposal to force Internet giants like Amazon.com to collect state sales taxes on purchases aren't tax increases.

Instead, he called them loophole closers and fee increases because they don't touch "broad-based taxes" like those on income and retail sales.

His spending increases would include $400 million more to pay for upstate economic programs and to provide health care for 400,000 uninsured children; free public college tuition for combat veterans returning from Iraq and Afghanistan; statewide broadband Internet service; and affordable housing credits in the New York City area.

"We will be more efficient," Spitzer said in proposing $2.3 billion in savings.

"We will examine our own house, the way businesses do."

Spitzer's proposed 2008-09 budget would include $81.8 billion in state spending alone, before federal aid is included.

The current budget increased spending nearly 8 percent over the 2006-07 budget and recent years' budgets, by the time they were adopted by the Legislature, swelled to about 10 percent annually.

For New York City, Spitzer proposes a 7.3 percent increase in school aid worth $547 million; a 1.4 percent decrease in property tax aid worth $18.7 million; a huge increase in municipal aid to $143 million; and $40 million to improve and repair parks.

The city will also get millions less than the $1.25 billion promised in a multiyear plan.

Spitzer says the shortfall will be made up in subsequent years.

Statewide, school districts would receive an average increase of 7.5 percent as part of a $1.46 billion increase statewide, to $21 billion in school aid.

Long Island schools, most represented by members of the Senate's Republican majority, will see an annual increase in aid of about 8 percent, less than the 12 percent they expected.

The school aid and reduced spending proposals are expected to set up fights this election year with the Senate and the Democrat-controlled Assembly.

Spitzer said he told lawmakers he expects them to balance any additional spending with equal cuts or revenue, but the he won't draw "a line in the sand" by threatening vetoes now.

"It's kind of a disappointment, generally, that we don't see major changes," Senate Republican leader Joseph Bruno said of Spitzer's overall plan.

"I believe the governor has missed addressing the real priorities of the people of New York state."

"The overburdened taxpayer wants relief."

"The governor doesn't address that."

"We have clearly concerns about the executive budget," said Democratic Assembly Speaker Sheldon Silver.

He said he is concerned about Spitzer's plan to delay some promised increases in school aid and for public universities.

In most years, the Legislature adds about $1 billion to the governor's proposal.

The deadline for the Legislature's adoption of a budget is the April 1 start of the fiscal year.

Lawmakers will have support from the powerful public employees unions.

"In tough economic times, there's an understandable inclination to cut back on investment," said New York State United Teachers union President Richard C. Iannuzzi.

"But that's precisely when we need to move steadily forward, investing in education as the engine to the state's economy and our children's future."

Spitzer's budget would:

--Delay some of the subsidy to relieve local property taxes.

Spitzer and the Legislature had promised to provide $1.8 billion in subsidies to schools, local governments and in rebate checks to taxpayers.

But on Tuesday, Spitzer proposed $1.25 billion, with 40 percent more directed to senior citizens.

The state now subsidizes local school and government taxes with about $5 billion a year, but Spitzer is calling for a cap on local taxes because he's dissatisfied with local efforts to curb spending.

--Exact a 2.5 percent cut in the growth of funding for state agencies, the State University of New York and the City University of New York.

The reduction isn't a true cut, but a lower rate of increase.

--Close facilities such as underused prisons, and reduce energy costs.

--Save $980 million in health care by encouraging more preventive care and primary care through the state reimbursement system, and reducing reimbursement for avoidable treatment now done in hospital emergency rooms.

--Raise $304.5 million by increasing 46 fees, including those on insurance policies to help pay for state police.

--Close $434 million worth of corporate tax loopholes, including requiring big Internet firms like Amazon.com to withhold sales tax on purchases by customers who are now on the honor system to pay state sales tax.

------

Associated Press writers Richard Richtmyer and Valerie Bauman contributed to this report from Albany.

------

On the Net:

http://www.budget.state.ny.us

[Livyjr]

"State budget highlights"

Associated Press

Last updated: 6:42 p.m., Tuesday, January 22, 2008

The 2008-09 state budget proposed Tuesday by Gov. Eliot Spitzer included:

OVERALL SIZE:

--$124.3 billion is the estimate from Spitzer's budget division.

STATE SPENDING ALONE:

--The "state operating funds," which some analysts consider a better measure of state spending, is estimated to be $81.8 billion -- a 5 percent increase from $77.9 billion in the 2007-08 fiscal year.

ADDED SPENDING:

Spitzer proposed spending an additional $1.46 billion in schools, tying large portions of funding to "Contracts for Excellence" to ensure the resources improve academic achievement.

Spitzer also calls for a $1.2 billion increase in Medicaid spending and a $1 billion investment in the state economy.

SAVINGS:

--Spitzer says his plan would save New York $2.3 billion, including $1.35 billion through streamlining government efficiency.

This would include closing underused facilities, cutting 5 percent of non-personnel services and lowering energy costs, among other changes.

Another change would find $980 million in health care savings by changing methods of reimbursing health care providers.

It's part of an initiative to promote primary and preventive care over long-term and emergency room care.

INCREASED REVENUES:

--Spitzer plans to increase the state's recurring revenues by $1.1 billion by eliminating tax loopholes.

He also plans to bring in another $1.1 million through one-shot deals.

One idea would be to sell the development rights for video slot machines at the Belmont Park racetrack.

HEALTH CARE:

--Spitzer wants to expand health care to the 400,000 children in New York who aren't covered, which will add $37 million to the budget.

Medicaid spending will increase 2.7 percent to $46.3 billion under his plan.

Spitzer wants to generate savings by hiring 75 additional employees to help prevent fraud.

Combined with new technologies, Spitzer expects this to save the state $590 million -- $160 million more than was anticipated in last year's budget.

The governor is also eyeing $172 million in savings by controlling the cost of prescription drugs.

Altogether, he wants $980 million in health savings.

TAX CUTS:

--The governor wants to create a commission to come up with a property tax cap proposal.

New Yorkers will also get $4.8 billion in tax rebates through the state's School Tax Relief program, with more than $1 billion of that directed to middle class homeowners.

Seniors will get a 40 percent increase in their rebate, increasing their average property tax relief to $1,700.

Spitzer delayed a 17 percent increase in the basic middle class STAR rebate for at least a year to save money.

Eligible homeowners would have received an extra $65 if the increase went through.

A New York City resident with income more than $250,000 won't qualify for a STAR credit.

SCHOOLS:

--Spitzer proposes increasing spending on school aid by about 7.5 percent to $21 billion.

School aid is now distributed on a "foundation" formula based on school districts' need, rather than broken down under a longtime political deal based on the share of state enrollment in different regions.

New York City schools and other districts will get less than they expected, particularly on Long Island, where schools will see an annual increase in aid of about 8 percent rather than the 12 percent they expected.

HIGHER ED:

--Spitzer proposed a higher education endowment fund to help pay for state colleges and universities.

He wants to leverage the state lottery system to pay for it.

Tuition at the State University of New York and the City University of New York would not increase this year.

SUNY and CUNY would have to improve efficiency and cut spending, which should achieve $50.9 million in savings for the state.

Under Spitzer's plan, SUNY would receive $3.41 billion for its operating budget, an increase of 1.2 percent.

CUNY would get $1.7 billion, a 3.2 percent increase.

The executive budget would also cut base operating aid for community colleges by $50 per student -- to $2,625 from $2,675.

State aid for SUNY's 30 community colleges will total $451.1 million -- a $77,000 net decrease.

CUNY's six community colleges would get $174.5 million -- a $1.7 million increase.

The budget proposal would also reduce state aid to private colleges and universities by 2.5 percent, or $1.05 million.

That would leave the so-called Bundy Aid program with $41 million in the 2008-2009 school year.

NEW DEFINITIONS:

--The budget proposal would also reclassify certain malt liquor drinks so they would be taxed at the "low liquor" rate instead of the beer rate.

Spitzer expects the change to generate $15 million in 2008-2009.

Little cigars would also be shifted into a new category.

The little cigars would be taxed as cigarettes, which is expected to generate $3.6 million more.

PARKS AND RECREATION:

--The executive budget will add $110 million to the budget to support state parks, campgrounds, fairgrounds, historic sites and other facilities.

That will include $8 million for the "Walkway over the Hudson River."

[Livyjr]

"How New York's state budget has grown"

Associated Press

Last updated: 10:12 a.m., Tuesday, January 22, 2008

A look at the growth of the New York state budget since Democrat Mario Cuomo took office in 1983 as governor, Republican George Pataki took over in 1995 and Democrat Eliot Spitzer became governor in 2007:

Fiscal Year - Total Budget - Increase

1982-83 -- $25.9 billion --

1983-84 -- $28.4 billion -- 9.5 percent.

1984-85 -- $31.6 billion -- 11.3 percent.

1985-86 -- $34.7 billion -- 10.0 percent.

1986-87 -- $37.4 billion -- 7.8 percent.

1987-88 -- $39.9 billion -- 6.6 percent.

1988-89 -- $43.4 billion -- 8.9 percent.

1989-90 -- $46.4 billion -- 6.7 percent.

1990-91 -- $48.9 billion -- 5.5 percent.

1991-92 -- $52.3 billion -- 7.0 percent.

1992-93 -- $54.8 billion -- 4.8 percent.

1993-94 -- $57.91 billion -- 5.7 percent.

1994-95 -- $61.90 billion -- 6.9 percent.

1995-96 -- $63.23 billion -- 2.2 percent.

1996-97 -- $62.95 billion -- (minus 0.4 percent).

1997-98 -- $66.16 billion -- 5.1 percent.

1998-99 -- $70.70 billion -- 6.9 percent.

1999-00 -- $73.27 billion -- 3.6 percent.

2000-01 -- $79.75 billion -- 8.9 percent.

2001-02 -- $85.04 billion -- 6.6 percent.

2002-03 -- $89.12 billion -- 4.8 percent.

2003-04 -- $97.33 billion -- 9.2 percent.

2004-05 -- $100.67 billion -- 3.4 percent.

2005-06 -- $104.34 billion -- 3.6 percent.

2006-07 -- $112.8 billion -- 8.1 percent

2007-08 -- $118.3 billion -- 4.9 percent (projected)

2008-09 -- $124.3 billion -- 5 percent (proposed)

Fiscal Year - State Funds - Increase

1982-83 -- $19.2 billion --

1983-84 -- $21.0 billion -- 9.6 percent.

1984-85 -- $23.6 billion -- 12.2 percent.

1985-86 -- $25.9 billion -- 9.7 percent.

1986-87 -- $28.1 billion -- 8.7 percent.

1987-88 -- $30.4 billion -- 8.4 percent.

1988-89 -- $33.3 billion -- 9.4 percent.

1989-90 -- $35.4 billion -- 6.2 percent.

1990-91 -- $36.2 billion -- 2.5 percent.

1991-92 -- $37.1 billion -- 2.5 percent.

1992-93 -- $38.1 billion -- 2.7 percent.

1993-94 -- $39.65 billion -- 4.2 percent.

1994-95 -- $42.56 billion -- 7.3 percent.

1995-96 -- $42.74 billion -- 0.4 percent.

1996-97 -- $42.78 billion -- 0.1 percent.

1997-98 -- $44.40 billion -- 3.8 percent.

1998-99 -- $48.08 billion -- 8.3 percent.

1999-00 -- $49.80 billion -- 3.6 percent.

2000-01 -- $54.18 billion -- 8.8 percent.

2001-02 -- $56.98 billion -- 5.2 percent.

2002-03 -- $55.82 billion -- (minus 2.0 percent).

2003-04 -- $61.33 billion -- 9.9 percent.

2004-05 -- $63.97 billion -- 4.3 percent.

2005-06 -- $69.72 billion -- 9.0 percent.

2006-07 -- $73.5 billion -- 5.4 percent.

2007-08 -- $77.9 billion -- 6 percent. (projected)

2008-09 -- $81.8 billion -- 5 percent. (proposed)

------

Source: State Division of the Budget.

[Livyjr]

"Business leader blasts Spitzer budget"

By MICHAEL GORMLEY, Associated Press

Last updated: 6:05 p.m., Wednesday, January 23, 2008

ALBANY -- The head of the state's biggest business lobby said Gov. Eliot Spitzer's 2008-09 budget proposal cuts too little and adds too much in fees and taxes in uncertain economic times.

"It's almost as if they used a butter knife when they needed a chain saw," Kenneth Adams, president of The Business Council of New York State, said on Wednesday.

He criticized Spitzer's spending increase -- held to about 5 percent -- and his proposal to increase state revenue by $1.7 billion by raising fees and closing what the governor calls business tax loopholes.

Corporations call such closures tax increases.

Spitzer's $124.3 billion budget proposal reduces planned increases in education and other spending while filling a $4.4 billion deficit.

Spitzer says the budget cuts the growth in overall spending while continuing essential spending in education and elsewhere that will help the economy grow.

He said it includes no increases in "broad-based taxes."

Adams said the budget proposal doesn't do enough to cut companies' taxes and other costs of doing business in New York.

Senate Majority Leader Joseph Bruno said the Senate GOP majority will again try to pass into law its $1.1 billion Upstate Now package of bills with business tax cuts, a venture capital fund, and money to improve rail, roads and bridges as well as state parks.

Many of the issues are the same broad topics as Spitzer proposes in his $1 billion upstate economic package.

Bruno said agreement could be reached on some elements.

For example, the Senate GOP proposes a $50 million agribusiness fund, and Spitzer proposes a $50 million AG-Jobs NY initiative to serve farmers.

Adams' comment came the same day that Spitzer appointed academics, a former Republican county executive, a Democratic Assembly leader turned lobbyist, and a Wall Street financier to commission that will consider ways to cap local property taxes.

Spitzer said the fact that one member is a president of a public college dependent on state funding, another is on the Board of Regents that seeks increases in school aid each year, and another is a lobbyist with clients in Albany, won't hurt the commission's ability to find ways to reduce local school and government spending and taxes.

He said the diversity of the group will yield a thoughtful solution to a complex problem, which must not only serve taxpayers but ensure adequate funding for services such as education.

"We need to explore new approaches, including reducing unfunded mandates and placing a cap on the growth of school property taxes," Spitzer said.

"The creation of this commission is the first step."

Fourteen states have some type of cap on taxes, said the commission's head, Nassau County Executive Tom Suozzi.

There are no state lawmakers on the commission, but the Legislature would have to approve any proposed measures before they became law.

Although the commission isn't required to recommend a tax cap, Spitzer said he expects one.

Bruno said he wasn't bothered by the lack of lawmakers on Spitzer's commission.

He said if the commission's recommendations make sense, "That's the way to go."

The Senate has proposed allowing local residents to vote for a cap by referendum, but the measure didn't make it through the Democrat-led Assembly.

Later in his news conference, Bruno criticized Spitzer's call for study of the issue, which will delay any action for at last a year.

"What we need is not to study, but to get action," Bruno said.

The tax commission headed by Suozzi will include Stony Brook University President Shirley Strum Kenny; former Secretary of State Basil Paterson; former Onondaga County Executive Nicholas Pirro, a Republican; Michael Solomon of Merrill Lynch & Co.; state Regent Meryl Tisch of Manhattan, who has donated thousands of dollars to Democratic campaigns including $10,000 to the Spitzer 2010 campaign in May; and former Assembly Majority Leader Paul Tokasz, now a lobbyist with one of Albany's biggest firms.

Spitzer said all of Tokasz's clients weren't vetted before he was appointed.

A cap, subject to Legislature approval, wouldn't take effect until at least 2009.

Chosen to advise the commission were Lisa Donner of the Center for Working Families and former organizer for a major Albany union; and Karen Sharff of Citizens Action of New York and co-founder of the Alliance for Quality Education that has pushed the state to historic increases in school aid.

Also appointed as special advisers were Elizabeth Lynam of the nonpartisan Citizens Budget Commission and Robert B. Ward of the Rockefeller Institute of Government and author of books that dissect how state government has driven up taxes.

[Livyjr]

"Bloomberg criticizes federal stimulus package"

By DEVLIN BARRETT, Associated Press

Last updated: 3:54 p.m., Wednesday, January 23, 2008

WASHINGTON -- New York Mayor Michael Bloomberg castigated the White House and Congress on Wednesday for what he said was a shortsighted economic stimulus package and years of lousy financial management.

"We can't borrow our way out of this."

"The jig is up," Bloomberg said in prepared remarks to be delivered Wednesday evening before the U.S. Conference of Mayors, which is honoring his environmental efforts.

The billionaire mayor, who is said to be considering an independent presidential bid yet denies that he is a candidate, said the $150 billion stimulus package being hammered out between Democratic and Republican leaders won't be enough.

"There's just one problem: It's not going to make much of a difference because we've already been running huge deficits," Bloomberg said.

Some of those urging Bloomberg to run for president say his record as a CEO is his biggest selling point in a time of economic turmoil.

Despite his public denials, Bloomberg is conducting an analysis of voter data in all 50 states to better understand his chances as a third-party candidate.

Aides have said he would delay a decision until after the major parties produce clear front-runners.

The metropolitan mayor used a farming analogy to heap scorn on the current crop of Washington leaders.

"They spent most of this decade running up bills with reckless abandon and when the economy started heading for the ditch, the special interest giveaways got even bigger."

"They ate the seed corn without worrying about the next year's harvest."

"Well, the next year is here, and the seed corn is gone."

"All we've got is a barn full of IOU's," he said.

Details of the stimulus package are still being negotiated, but the centerpiece of the measure is expected to be a tax rebate similar to the $300-$600 checks sent out in the summer of 2001.

The emergency measure would more than double last year's deficit spending of $163 billion, according to new congressional budget estimates.

Bloomberg argued that the government's first goal should be to stop the bleeding in the housing sector.

"What good is a rebate going to do for a family who's about to lose their home?" he argued.

[Livyjr]

"Regulators meet banks on bond insurance plan"

Associated Press

Last updated: 5:43 p.m., Wednesday, January 23, 2008

ALBANY -- State officials met with large investment banks on Wednesday as part of a previously announced series of measures to prop up the bond insurance industry.

David Neustadt, a spokesman for the state Insurance Department, confirmed the meetings but he would not name the banks or provide details about what was discussed.

Bond insurers -- which pay principal and interest payments on debt when an issuer defaults -- have been under scrutiny amid concerns that securities backed by shaky mortgages would lead to a spike in insurance claims.

The Insurance Department -- which regulates bond insurers -- this week said it is working with the industry to increase the capital available to them, developing measures to stabilize the market and developing new rules and regulations to oversee the bond insurance market.

Bond insurance company stocks surged amid a broader stock market rally Wednesday.

Shares of Ambac ended 72 percent higher at $13.70.

MBIA closed up 33 percent at $16.61.

Security Capital Assurance shares finished 76 percent higher at $3.79.

[Livyjr]

"NY regulators say bond insurance plan will take time"

Associated Press

Last updated: 11:14 a.m., Thursday, January 24, 2008

ALBANY -- New York's top insurance regulator says it's going to take time to develop a series of measures to prop up the bond insurance industry and his agency won't comment on widely reported details of any plan.

"Clearly it is important to resolve issues related to the bond insurers as soon as possible," Insurance Superintendent Eric Dinallo said in a statement Thursday.

"However, it must be understood that these are complicated issues involving a number of parties and any effective plan will take some time to finalize."

State insurance regulators are working on a potential bailout for bond insurers amid concerns that the collapse of securities backed by shaky mortgages will lead to a spike in insurance claims.

On Wednesday, they met with major investment banks to discuss the potential for a bailout, but are declining to discuss the details.

News reports and analysts have said the plan could include investment banks providing as much as $15 billion to help struggling companies.

Dinallo said he won't respond to "rumors" about the measures being discussed.

[Livyjr]

"Fed data show NYC, Long Island stung most by subprime woes"

By RICHARD RICHTMYER, Associated Press

Last updated: 5:52 p.m., Friday, January 25, 2008

ALBANY -- The subprime mortgage meltdown is taking a toll in New York, with New York City and Long Island feeling the brunt, according to data released Friday.

Overall, the average rate of subprime mortgage foreclosures throughout the state is 9.7 percent, according to figures from the Federal Reserve Bank of New York.

That's about 2 percentage points above the national average, said Richard Deitz, a senior economist at the bank's Buffalo branch.

However, with the exception of certain pockets -- including the mid-Hudson Valley and the Capital District -- the foreclosure rate in upstate has generally been about 2 percentage points below the national average.

That includes the major metropolitan areas of Buffalo, Rochester and Syracuse, Deitz said.

"Upstate just didn't have much of a housing boom," Deitz said.

"It didn't catch much of the upside and probably isn't catching as much of the downside."

Subprime mortgages are a class of loans for borrowers with low credit ratings that became popular during the torrid housing market of the early 2000s.

They typically have higher interest rates or rates that start low and then adjust to a higher rate after a fixed period of time.

Lately there has been a growing number of subprime mortgage defaults amid a cooling market that is leaving some buyers stuck with balances exceeding the worth of their home and others who had low introductory interest rates now facing higher rates they can't afford.

The figures released Friday show that there are 141,934 subprime loans for owner occupied houses statewide.

The zip code with the highest number of subprime loans covers parts of Canarsie and Flatlands in Brooklyn.

Of the 1,930 subprime mortgages sold for homes there, 12.2 percent are in foreclosure, according to the bank's figures.

Brentwood on Long Island has the second highest number, with 1,782 loans and a 12.5 percent foreclosure rate.

Bay Shore is third, with 1,484 loans and a 13.4 percent foreclosure rate.

Walker Valley in Ulster County shows the highest foreclosure rate, 57.1 percent, but that only accounts for seven mortgages.

Other upstate communities show high foreclosure rates -- including Ashland in Greene County at 50 percent -- on relatively small numbers of loans.

Gene Tricozzi, president of the New York Association of Mortgage Brokers, said New York and Long Island have been harder hit because housing values there rose much more sharply than the rest of the state.

"We just didn't see that kind of appreciation in most other parts of the state," he said.

Lenders also have been tightening their standards, making it more difficult for borrowers who might be in over their heads to find buyers -- particularly on Long Island, where most lenders now require 10 percent down payments rather than the 5 percent they previously had accepted, Tricozzi said.

That's making it difficult for homeowners who want to get out of their mortgages to find buyers, he said.

The bank also released subprime mortgage default figures for New Jersey and Connecticut on Friday.

They show an average foreclosure rate of about 8 percent in New Jersey and about 7 percent in Connecticut.

------

Online:

Federal Reserve Bank of New York: http://www.newyorkfed.org

[Livyjr]

THE NEW YORK POST

"TO THE MOON, ELIOT SPITZER KEEPS SPENDING"

January 24, 2008 -- Ralph: "The bills will get bigger and bigger, and I'll get less to eat."

"I'll start losing weight."

"Then you know what I'll look like?"

Alice: "Yeah, a human being."

- "The Honeymooners"

THE officially announced spending growth rate of 5 per cent in Gov. Spitzer's latest state budget proposal was greeted in some quarters as evidence of belt-tightening by New York's second-year chief executive.

Eat more and shrink your waistline?

Sounds like the diet of Ralph Kramden's dreams.

Of course, Alice would have seen right through it.

In fact, Spitzer has not discovered a way to make New York state government slimmer while adding billions to its bottom line.

The increase proposed in his 2008-09 budget is modest only by comparison to the 7.8 percent hike he proposed last year in his first budget - which, in turn, justified the governor's claims of "spending control" only in the wake of an 11 percent hike in Gov. George Pataki's last year in office.

By any standard, the state's budget is growing faster than its economy - despite Wall Street jitters and what Spitzer himself called "a dramatic degree of uncertainty" about economic conditions in the near future.

Indeed, the core general fund would already be in the red if it weren't for reserve funds and one-shot revenues.

An historic four-year boom in compensation, real-estate values and corporate profits brought New York state an enormous surge in tax revenues.

But now it's experiencing what may be just the start of a prolonged and painful fiscal hangover.

So vast was the surge that Pataki, despite the massive spending hikes of his final term, still left a cash surplus of $1.2 billion.

Spitzer's long-term financial plan indicates that most of that will be spent by the end of the decade.

Meanwhile, the budget holds fresh news of how dependent the state has grown on taxes from the sort of wealthier households most likely to be directly affected by turmoil in the financial markets.

The share of all state income taxes paid by the highest-earning 1 percent of filers (whose incomes now begin just below $1 million) rose to 39 percent last year, up from 34 percent a decade earlier.

Thus, the economy could sidestep a recession - and the treasury would still be hit hard by a continuing decline in six- and seven-figure bonuses for corporate officers, fund managers and brokers, and by a softening in the real-estate market.

Spitzer's budget would cut the number of corrections officers to reflect a falling inmate population, but still plans to expand the state workforce by another 1,846 employees.

His Medicaid savings program is less ambitious than the one he proposed last year.

And even after trimming some promised increases, his $1.4 billion jump in school aid is the largest ever proposed by a New York governor.

While Spitzer largely spares any pain for state employee unions, urban public schools and health-care providers, he'd shift more costs to motorists (through higher fees and fuel taxes), homeowners (through an increase in mortgage-recording fees and postponement of a state-funded school-tax rebate) and the for-profit HMO industry (which he'd hit with a whopping $247 million tax hike).

The governor insists he wants to expand affordable health care, yet his budget also calls for a 16 percent jump in what already amounts to $850 million in state "assessments" on private health-insurance policies.

He also says he wants to lift the burden of state mandates on localities - yet the budget would also stick New York City and county governments with a bigger share of costs for both welfare and juvenile detention.

Even in an economic slowdown, state lawmakers in both parties will find plenty of ways to add more spending to the budget - while pushing another year down the road any effort to cope with the state's snowballing structural deficit.

And, judging from last year, Spitzer is not spoiling for the sort of prolonged budget fight that would be needed to resist in the Legislature's demands.

A permanent solution to the state's persistent fiscal problems and massive tax burden can't be put off indefinitely.

As Ralph Kramden's buddy Ed Norton once put it, "Like we say in the sewer, time and tide wait for no man."

E.J. McMahon is director of the Manhattan Institute's Empire Center for New York State Policy.

ejm@empirecenter.org

http://www.nypost.com/seven/01242008/posto...2316.htm?page=0

[Livyjr]

"Spitzer defends aide in line for $46,000 raise"

Associated Press

Last updated: 5:03 p.m., Wednesday, December 12, 2007

ALBANY -- Gov. Eliot Spitzer on Wednesday defended a former campaign aide who is married to his insurance superintendent, saying she is well qualified for the state job that has put her in line for a $46,000 raise.

Spitzer called Priscilla Almodovar a "spectacular talent," but wouldn't comment on whether she deserved a raise to $250,000 as head of several state affordable housing agencies.

Almodovar was a private sector lawyer and a top Spitzer campaign aide who's now president of the State of New York Mortgage Agency and other state housing agencies.

The Post reported the story on the morning Spitzer and Almodovar's husband, Insurance Superintendent Eric Dinallo, had scheduled a news conference to announce new ethical standards in the operation of the state pension fund.

Dinallo was a top official in the attorney general's office under Spitzer, but had left for a private sector job six years ago before returning to head the insurance department at $127,000 a year.

"State tightens oversight of pension fund"

By MICHAEL GORMLEY, Associated Press

Last updated: 4:54 p.m., Wednesday, December 12, 2007

ALBANY -- The state Insurance Department has tightened ethics controls over New York's massive public employees' pension fund and is expected to consider similar safeguards for the public pension funds supporting retired teachers and New York City public employees.

State Insurance Superintendent Eric Dinallo has bolstered regulations to make ethical standards more strict for all workers in the comptroller's office, ban campaign contributions by staff members, and create a permanent inspector general's position to investigate ethics complaints.

Fees paid by companies seeking investments by the fund -- and who received them -- will now be reported, Dinallo said.

"If you know whose being paid, you can ask the question, 'Why?'" Dinallo said.

Dinallo led many of the biggest cases in the Attorney General's office under Eliot Spitzer, including probes that ended several conflicts of interest on Wall Street.

FOR IMMEDIATE RELEASE:

January 18, 2008

"GOVERNOR SPITZER LEADS FIRST MEETING OF COMMISSION TO MODERNIZE REGULATION OF FINANCIAL SERVICES - Commission Discusses Regulatory Reform to Help Maintain New York’s Status as World Financial Capital and Ensure the Highest Standards of Consumer Protection for New Yorkers"

Governor Eliot Spitzer today hosted the first formal meeting of the Commission to Modernize the Regulation of Financial Services, which includes heads of major financial services organizations, consumer advocates, the business community, legislators and regulators.

The commission discussed an innovative proposal to institute principles-guided regulation in New York along with other potential reforms.

New York’s financial services market has been burdened by current regulations – a litany of detailed rules that are ineffective at achieving consumer protection.

The United Kingdom and other international markets are moving to principle-based regulation, which focuses on broad guidelines.

Some companies and consumers are concerned this may mean diminished compliance with specific rules, but the new principles-guided approach preserves relevant rules, while asking regulators and companies to focus on achieving desired outcomes.

The result will be healthy markets and strong consumer protection without unneeded burdens.

By reforming burdensome and ineffective regulation, the commission's recommendations will help New York retain and enhance its status as the world's financial capital.

“Modernizing regulation of financial services is first and foremost about keeping New York the financial capital of the world,” said Governor Spitzer.

“The fact of the matter is that New York’s current regulations are out of date."

"We must have regulations that promote our essential goals: a healthy, creative competitive market for financial services, access for consumers and businesses to the services they need, and strong, effective consumer protection."

"Furthermore, my experience has demonstrated to me that proper regulations will have a positive impact on the financial market."

"We have brought together many of the best minds in the State to accomplish this task.”

After the meeting, Governor Spitzer was joined by Herbert M. Allison, Chairman, President and Chief Executive Officer, TIAA-CREF, Laurence D. Fink, Chairman and Chief Executive Officer, BlackRock, John J. Mack, Chairman and Chief Executive Officer, Morgan Stanley and Martin J. Sullivan, President and Chief Executive Officer, AIG at a press conference to discuss the work of the commission and how principles-guided regulation will lead to a focus on outcomes rather than process.

The principles guide the regulator to focus on outcomes, rather than the rules in and of themselves.

Examinations of financial services companies should focus on what is important and what really makes a difference.

Insurance Superintendent Eric Dinallo, the Chair of the Commission to Modernize the Regulation of Financial Services, said:

“The benefit of state regulation is that states can be the laboratory for developing best practices."

"We want to offer New York as a national model of how to regulate financial services.”

http://www.ny.gov/governor/press/0118081.html

"Bond insurer plan key to market calm"

By STEPHEN BERNARD, Associated Press

Last updated: 5:22 a.m., Saturday, January 26, 2008

NEW YORK -- If the struggling bond market is saved by a potential bailout, turbulence in the stock market could ease -- but without a bailout, cities across the country could have difficulty building everything from sewers to schools.

A string of gains in the stock market this week came in part from the Federal Reserve's cut of a key interest rate, but news of a potential bailout of the bond insurance industry also sparked hope that credit markets could return to a more normal environment.

Hope for a bailout has "kept the Titanic from going straight down, and now we have a listing ship that needs to be righted," said Joseph Battipaglia, a market strategist for the private client group at Stifel Nicolaus.

"The insurance iceberg was probably a sinker."

Over the past few months, ratings agencies have downgraded or threatened to downgrade bond insurers' vital financial strength ratings, saying the insurers do not have enough extra cash to cover a potential spike in claims.

Bond insurers pay principal and interest on bonds when the issuer is unable to make payments.

A downgrade from a "AAA" rating would likely end the insurer's ability to book new business.

That in turn reduces the options for municipalities looking for insurance.

"A lot of municipalities have good reason to go to market," said Donald Light, a senior analyst at Celent LLC, but he added it would be more expensive for to issue bonds without insurance.

Most municipalities do not have pristine "AAA" ratings, so they go to bond insurers and pay to use their ratings.

That in turns makes the interest rates on the bonds lower, saving the group money.

Those added costs are likely to lead some municipalities to delay or cancel certain projects, or at least scale them back, Light said.

A collapse of the bond insurance market could lead to a 10 percent to 25 percent decline in new issuance, he added.

A continued plunge in ratings for the bond insurers not only hurts municipalities, but it also puts already struggling banks in a precarious position.

Investment banks -- which are still trying to sort of the mess from the subprime mortgage market -- have already reduced portfolio values by nearly $140 billion during the second half of 2007 because of bad bets on troubled loans.

Now they could face a fresh round of losses tied to the bond insurers.

Investments held by banks and insured by companies like Ambac or Security Capital or insurance contracts banks hold on the bond insurers themselves would all likely lose value if bond insurers ratings continue to fall.

That means more uncertainty surrounding banks' future earnings, which could drag down the stock market further.

But bailing out the bond insurers is very complicated with trillions of dollars in insurance coverage at stake, Battipaglia said, echoing sentiments a deal might take a while to finalize.

On Wednesday, the New York State Insurance Department met with banks about trying to determine a plan to help the beleaguered insurers and essentially save a flailing industry.

The insurance superintendent cautioned that any plan could take some time to develop because of the number of groups working on the project.

Speculation is also growing that billionaire investor Wilbur Ross could be negotiating to acquire Ambac outright, providing another avenue to help the industry.

Since reports of a potential bailout were raised earlier this week, shares of bond insurers rose considerably, reversing a steady march to record lows in recent months.

Shares of Ambac Financial Group Inc. which fell as low as $4.50 in trading on Jan. 17, are now at $11.55.

MBIA Inc. shares, which bottomed out at $6.75, now trade at $13.80.

Even Security Capital Assurance Ltd., which fell as low as $1.50 on Jan. 17, is trading at $3.05.

[Livyjr]

"State tightens oversight of pension fund"

By MICHAEL GORMLEY, Associated Press

Last updated: 4:54 p.m., Wednesday, December 12, 2007

ALBANY -- The state Insurance Department has tightened ethics controls over New York's massive public employees' pension fund and is expected to consider similar safeguards for the public pension funds supporting retired teachers and New York City public employees.

The new measures announced Wednesday target conflicts of interest that led to scandal in the fund under the previous comptroller, Democrat Alan Hevesi, who resigned under pressure earlier this year.

State Insurance Superintendent Eric Dinallo has bolstered regulations to make ethical standards more strict for all workers in the comptroller's office, ban campaign contributions by staff members, and create a permanent inspector general's position to investigate ethics complaints.

DiNapoli, who took office in February, said Wednesday the pension fund, valued at more than $150 billion, hasn't been hurt by the scandals.

He said that fund, which pays the retirement checks of state, local and many public school workers, is funded at 104 percent of its future obligations.

That compares to a national average of 88 percent, DiNapoli said.

"The fund is sound and secure," he said.

His assessment comes as public and private pension funds have been raided or dissolved, leaving workers without their retirement benefits.

"Recent events have illustrated the importance of protecting the integrity of the state pension fund," Spitzer said in announcing the changes Wednesday.

"The new regulations increase reporting and transparency, create independent committees to oversee key areas, and strengthen supervision by the Insurance Department."

"NY expands suit against Countrywide"

Associated Press

Last updated: 6:13 p.m., Friday, January 25, 2008

NEW YORK -- New York authorities are suing 26 banks and two accounting firms that did business with Countrywide Financial Corp., saying the companies failed to ensure the beleaguered mortgage company was being honest with investors.

The banks and accounting firms were added as defendants Friday in a class action lawsuit already pending against Countrywide in California.

Two of the lead plaintiffs, New York State Comptroller Thomas P. DiNapoli and City Comptroller William C. Thompson Jr., oversee several huge government pension funds that invested in Countrywide securites.

The long list of new defendants in the case includes underwriters and accounting firms that participated in the marketing of Countrywide securities.

The suit claims that the company made misstatements about its lending practices, artificially inflating the price of its securities.

"Countrywide's underwriters had a duty to investigate whether Countrywide was acting honestly," DiNapoli said.

"Investors lost millions, and New Yorkers lost their homes."

"We can't sit idly by."

Thompson and DiNapoli said they had also filed new complaints against several Countrywide officers and directors who hadn't been named as defendants in the previous court action.

A spokesman for Countrywide did not immediately respond to a phone message and an e-mail Friday.

California-based Countrywide rose to become the nation's largest mortgage lender but has been struggling amid rising mortgage defaults, particularly subprime loans to borrowers with questionable credit histories.