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

[Livyjr]

NY POST

"SAVE N.Y. BANKS: CUT PORK INSTEAD"

By DARRYL C. TOWNS

March 26, 2007 -- NOBODY likes taxes, but we all agree that everybody should pay his fair share.

The state Assembly this month passed a budget that included proposals to close "tax loopholes" - tax-law provisions that, according to Gov. Spitzer and legislative leaders, have allowed some banks and businesses to get unintended tax breaks and cheat the state treasury.

Some of those loophole closers make sense, but others - which come down especially hard on banks - need a second look.

If our aim is to collect more tax dollars, it's natural to focus on banks.

After all, as bankrobber Willie Sutton said, that's where the money is.

But let's face it: The banking industry is the foundation of New York's economy.

According to the Partnership for New York City, banks and other financial-services firms are responsible for almost a quarter of the economic activity in our state - providing 700,000 jobs statewide and almost $90 billion a year in wages.

We don't want to kill the goose that lays the golden egg.

And that doesn't mean rejecting fiscal fairness.

Digging deeper into the list of supposed loopholes, I've found some that were clearly deliberate provisions of tax law - written to ensure that New York City would remain the financial capital of the world.

For example, one proposal would impose a unitary tax system on New York-headquartered companies, including banks.

That reverses the centerpiece of a long-held economic-development policy under which out-of-state affiliates are not required to file New York returns as long as they deal with their New York affiliates on fair-market terms.

This change would have the unintended result of discouraging U.S. banks from putting their headquarters operations here - and of discouraging foreign banks from locating subsidiaries in New York.

With London, Sydney, Hong Kong and Shanghai nipping at our heels, the old policy may be even more important for New York in the future than it was when first enacted.

Perhaps we should look elsewhere for real loopholes.

For example, consider some things we learned just this month, after a court ordered the state Department of Economic Development to turn over records of how tax breaks are being allocated under its Empire Zone program.

Under Empire Zones, taxes and regulations are loosed in particular communities across the state to encourage economic development.

Thanks to the court order, we now know that in 2007 an estimated $558 million in tax breaks will go to businesses in these zones.

That adds up to far more lost revenue than the state is estimated to pick up from closing all the bank-tax "loopholes."

In all, less than 2 percent of the state's 504,000 businesses benefit from Empire Zone treatment, leaving the rest of us to pay the full tax bill.

What businesses get these huge Empire Zone tax advantages?

They include a New Jersey power company, politically connected law firms, real-estate developers, and big-box stores like Lowe's and Home Depot.

In fact, it's reported that multimillion-dollar tax breaks have gone to firms that failed to create even a single job.

There is mounting evidence that Empire Zones, intended to encourage start-up businesses and job creation in distressed areas, may be generating whale-size tax loopholes for favored companies without contributing much of anything back to the state economy.

My conclusion: Instead of hastily ending a long list of bank tax breaks, many of which may make economic sense, Albany must stop the budget clock, count to 10 and reconsider.

We still have time to get this right.

Banks, like everyone else, must pay their fair share.

But let's make sure we look at the whole picture and do what is both fair and smart.

Darryl C. Towns (D-Brooklyn) chairs the state Assembly's Committee on Banks.

http://www.nypost.com/seven/03262007/posto...owns.htm?page=1

This post has been edited by Livyjr: Mar 26 2007, 05:38 PM

[Livyjr]

FROM THE WEB-EDITION OF THE ALBANY, NEW YORK TIMES UNION

ITEM: On the eve of the possible long-awaited confirmation of Assemblyman Alexander “Pete” Grannis, D-Manhattan, as DEC commissioner by the Senate, Spitzer said the agency will be more “proactive” during his administration.

Comment by John Galt — March 27, 2007 @ 9:24 am

To be very truthful, this “government by press release” that we are continually getting from this “STEAMROLLER” is wearing quite thin, out here in the countryside, anyway, where we are a bit more “substance oriented” …..

And after too many years of George Pataki playing “presidential politics” with the Office of NY Governor, which office has very limited powers given to it by WE, THE PEOPLE in OUR Constitution, we are just completely “out of tolerance” for this “STEAMROLLER” doing some more of the same ….

Pursuant to section 3 of Article 4 of OUR Constitution, the job of governor of NY is to “communicate by message to the legislature at every session the condition of the state, and recommend such matters to it as he or she shall judge expedient” and “the governor shall expedite all such measures as may be resolved upon by the legislature, and shall take care that the laws are faithfully executed ….”

And that is just about it, outside of having “the power to grant reprieves, commutations and pardons after conviction, for all offenses except treason and cases of impeachment, upon such conditions and with such restrictions and limitations, as he or she may think proper, subject to such regulations as may be provided by law relative to the manner of applying for pardons” …..

Which constitutional language makes it clear that this “STEAMROLLER” in bound by the law, as it comes from OUR Legislature, as imperfect as it may or may not be, even in the case of granting reprieves and pardons after conviction ….

And not by his personal whims as to how things “should be”, in his “STEAMROLLER’S” view of life here in upstate NY, where one of the biggest threats to OUR health, safety and well-being is the NYSDEC ….

And with respect to the NYS Department of Environmental Conservation, that state agency, which we would say, based on evidence, has been corrupt and inept since DAY ONE, was created by WE, THE PEOPLE, through OUR Constitution back in 1969, when this “STEAMROLLER” was still just a pup in short pants …

And that “creation” is to be found in CHAPTER 664 of OUR laws, which thoroughly bind this “STEAMROLLER”, as follows:

An ACT to repeal and reenact chapter forty-three-B of the consolidated laws, to amend the public health law, and to repeal certain articles, titles, parts and sections of the conservation law, the public health law, the agriculture and markets law, the executive law, and chapter seven hundred one of the laws of nineteen hundred fifty-two, entitled “An act providing for joint action by the states of Delaware, New Jersey and New York and the commonwealth of Pennsylvania in developing, utilizing, controlling, and conserving the water resources of the Delaware river basin in order to assure an adequate water supply; authorizing the governor, for these purposes, to enter into a compact on behalf of the state of New York with the states of Delaware and New Jersey and the commonwealth of Pennsylvania and to apply on behalf of the state of New York to the congress of the United States for its consent thereto; creating the Delaware River basin water commission and specifying the powers and duties thereof, including the power to finance projects by the issuance of bonds; providing for the appointment of the state of New York members of the said commission; approving an integrated water project; requiring the commission to prepare and report plans and specifications for specific projects; and requiring certain prior approvals by the legislature of the compacting states,” in relation to environmental conservation generally; Became a law May 31, 1972, with the approval of the Governor. Passed by a majority vote, three-fifths being present The People of the State of New York, represented in Senate and Assembly, do enact as follows:

With respect to the Commissioner of Environmental Conservation, section 3-0103 of the NYSECL provides as follows:

Commissioner of environmental conservation - The head of the department shall be the Commissioner of Environmental Conservation, who shall be appointed by the Governor, by and with the advice and consent of the Senate, and hold office at the pleasure of the Governor by whom he was appointed and until his successor is appointed and has qualified …..

There is all the power and authority that WE, THE PEOPLE granted to this “STEAMROLLER” with respect to OUR state DEC; he can appoint a commissioner, and that really is that …..

Once that commissioner is in office, HIS or HER job is defined by section 3-0301 of the NYSECL as follows:

General functions, powers and duties of the department and the commissioner.

1. It shall be the responsibility of the department, in accordance with such existing provisions and limitations as may be elsewhere set forth in law, by and through the commissioner to carry out the environmental policy of the state set forth in section 1-0101 of this chapter.

http://caselaw.lp.findlaw.com/nycodes/c37/a7.html

If one studies that law, one finds that the DEC is required by us, WE, THE PEOPLE, to be pro-active, and if one considers the law, which came to the “STEAMROLLER” from OUR Legislature, one finds that it is indeed well-written, and it is quite comprehensive, and all-inclusive ….

And if one then studies the actual history of this seemingly corrupt and inept state agency as it has developed over time, by referring to court decisions against the DEC, of which John Galt has many, and such lengthy documents as the transcripts from the Dailey Mine hearings up in Hoosick, NY, and the Lane Mine hearings from Nassau, NY, one finds that it is politics that interferes with what this agency is supposed to be doing ….

And since OUR law does not allow for politics to interfere with that agency, we start to get concerned with what this very political “STEAMROLLER” is stating above here, AS IF IT WERE SOMEHOW HIS CHOICE as to what the DEC does on a daily basis, when it is not at all ….

We did not give him this power, in the first place ….

And we are certainly not giving it to him now, at least while the NY Constitution and NYSECL remain written as they presently are ….

TO SECURE FOR US THE BLESSINGS OF FREEDOM ….

And so …

http://blogs.timesunion.com/capitol/?p=4204#comments

[Livyjr]

NY TIMES EMPIRE ZONE

March 27th, 2007 6:27 pm

A point which seems to be getting completely overlooked here is the fact that within the State of New York, our right to freedom of speech is guaranteed to us, not by the United States Constitution, but by section 8 of the BILL OF RIGHTS of OUR NYS Constitution, wherein is stated:

“We The People of the State of New York, grateful to Almighty God for our Freedom, in order to secure its blessings, DO ESTABLISH THIS CONSTITUTION.

§ 8. Every citizen may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of that right; and no law shall be passed to restrain or abridge the liberty of speech or of the press.”

Now, it appears that what the NYPD has done in the case of this secret spying on us is to have made a unilateral decision on its own that WE, THE PEOPLE of the State of New York cannot actually “freely speak, write and publish his or her sentiments on all subjects” ….

To the contrary, and this is buttressed by these following comments of this G. Ollie Koppel, there are “certain unknowable to us” areas where we are really prohibited to speak, or write, or publish, because:

“It is necessary, unfortunately, for us to know what people are doing who engage in vigorous advocacy, let’s put it that way, because vigorous advocacy can turn into violent acts.”

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0.../#comment-59831

NY TIMES EMPIRE ZONE

8. March 27th, 2007 11:50 pm

speak freely, openly and loudly; just don’t get your nose bent out of shape when people, including the NYPD listen, if you don’t want folks to listen, whisper behind closed doors.

— Posted by dougk

10. March 28th, 2007 6:44 am

“If you don’t want folks to listen, whisper behind closed doors ….”

There it is, America …

THE SLOGAN FOR OUR TIMES, which should be posted on large billboards from one end of this state to the other …

And you read it first in the pages of the NY TIMES, although not as a policy the NY TIMES endorses, which has the editors of NY POST bent so far out of shape, the wags up here say they now look like fancy pretzels!

And it is true, this SLOGAN FOR OUR TIMES …

As was the case in Communist China when the madman Mao ruled, and also in Russia when Beria’s goons were everywhere, “LISTENING IN” on what people were saying to determine who next to “remove from society” to keep a dictator in power, people in upstate NY DO WHISPER BEHIND CLOSED DOORS in fear when they are talking about CORRUPT GOVERNMENT up here, because of what happened to that engineer, where before, when there was law, and contitutional rights in NYS, these same people would have been putting their words in writing in the form of an Article 78 lawsuit against these same CORRUPT public officials, and then pursuant to section 6 of the BILL OF RIGHTS of the NYS Constitution, these same citizens who are now in hiding, whispering in fear behind closed doors, would have been bringing the results of these Article 78’s before a grand jury for further action ….

And with that said, it is worth taking a look at that specific constitutional language in the BILL OF RIGHTS of OUR NYS Constitution:

§ 6. No person shall be subject to be twice put in jeopardy for the same offense; nor shall he or she be compelled in any criminal case to be a witness against himself or herself, providing, that any public officer who, upon being called before a grand jury to testify concerning the conduct of his or her present office or of any public office held by him or her within five years prior to such grand jury call to testify, or the performance of his or her official duties in any such present or prior offices, refuses to sign a waiver of immunity against subsequent criminal prosecution, or to answer any relevant question concerning such matters before such grand jury, shall by virtue of such refusal, be disqualified from holding any other public office or public employment for a period of five years from the date of such refusal to sign a waiver of immunity against subsequent prosecution, or to answer any relevant question concerning such matters before such grand jury, and shall be removed from his or her present office by the appropriate authority or shall forfeit his or her present office at the suit of the attorney-general.

The power of grand juries to inquire into the wilful misconduct in office of public officers, and to find indictments or to direct the filing of informations in connection with such inquiries, shall never be suspended or impaired by law.

THE POWER OF GRAND JURIES IN NYS TO INQUIRE INTO THE WILFUL MISCONDUCT IN OFFICE OF PUBLIC OFFICERS IN NYS SHALL NEVER BE SUSPENDED ...

EXCEPT …

IT HAS BEEN ….

THROUGH FEAR …

BY “STEAMROLLER” SPITZER and the NYS POLICE STATE ….

Because where there are no witnesses, well, hey, you do the math ….

And at least one person is cheering for that right here in the pages of the NY TIMES ….

And his cheers are being echoed by a whole host of corrupt public officials in NYS who never need fear being hauled before a grand jury themselves, BECAUSE RETALIATION AGAINST POTENTIAL WITNESSES AGAINST THEM IS THEIR WEAPON, against us, as this case with the engineer is evidence of, and so long as the maws of the GULAGS beckon, to us, if we dare speak above a whisper, down in our basements, as if we were Russians, or Chinese, or ordinary Germans in the time of Hitler, these corrupt politicians will be safe ….

Which is what POLICE STATES generally exist for, to protect POWER, and not people …

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...lance/#comments

[Livyjr]

Crains New York Business.com

"Spitzer's approval ratings beginning to wane"

By: Catherine Tymkiw

Published: March 27, 2007 - 5:58 pm

Gov. Eliot Spitzer isn't winning any popularity contests.

His approval ratings are beginning to wane as New Yorkers signal disappointment with his health care stance as they mull over his first few months in office, according to two polls released this week.

Nearly one in five registered state voters are unsure about how to rate the job Mr. Spitzer is doing, according to a WNBC/Marist poll released late Tuesday.

Among those respondents who voiced an opinion, 43% give the new governor high marks, while 38% rate the job he is doing as fair or poor.

He received the worst marks from African-American voters - only 39% of those surveyed think he is a good leader, compared with 63% of white voters and 66% of Latino voters.

The WNBC/Marist results mirror findings from a poll released Monday by the Siena Research Institute.

That survey showed Mr. Spitzer's favorable rating slipping 12 points in the past month to 62%.

Health care and the budget are the main drivers behind his sliding numbers.

Only 45% of voters statewide think the governor can be trusted to do the right thing on health care, according to the WNBC/Marist poll.

The budget battle is also taking a toll on his job performance, with only 47% of voters saying he's doing an excellent or good job, down 11 points from February.

On the flip side, the number of poll respondents who think he's doing a fair or poor job rose 15 points to 39%.

"Clearly over the last month there have been millions of dollar spent supporting and opposing various proposals in the governor's budget," said Siena spokesman Steven Greenberg.

While 90% of voters believe an on-time budget is important, 80% of those surveyed say it's more important to have a "good" budget rather than an on-time budget.

On the upside, the WNBC/Marist poll revealed that, for the first time since 2002, more voters think the state is moving in the right direction by a margin of 49% to 43%.

That contrasts with the Siena poll, which showed respondents evenly split, 37% to 37%.

Siena polled 622 registered New York state voters from March 19 to 22, with a margin of error of +/-3.9 percentage points.

WNBC/Marist surveyed 641 registered New York voters from March 20 to 22, with a margin of error of +/-4%.

David Jones contributed

http://www.newyorkbusiness.com/apps/pbcs.d...E/70327016/1097

[Livyjr]

NY TIMES EMPIRE ZONE

8. March 27th, 2007 11:50 pm

speak freely, openly and loudly; just don’t get your nose bent out of shape when people, including the NYPD listen, if you don’t want folks to listen, whisper behind closed doors.

— Posted by dougk

10. March 28th, 2007 6:44 am

THE POWER OF GRAND JURIES IN NYS TO INQUIRE INTO THE WILFUL MISCONDUCT IN OFFICE OF PUBLIC OFFICERS IN NYS SHALL NEVER BE SUSPENDED ...

EXCEPT …

IT HAS BEEN ….

THROUGH FEAR …

BY “STEAMROLLER” SPITZER and the NYS POLICE STATE ….

Because where there are no witnesses, well, hey, you do the math ….

And at least one person is cheering for that right here in the pages of the NY TIMES ….

And his cheers are being echoed by a whole host of corrupt public officials in NYS who never need fear being hauled before a grand jury themselves, BECAUSE RETALIATION AGAINST POTENTIAL WITNESSES AGAINST THEM IS THEIR WEAPON, against us, as this case with the engineer is evidence of, and so long as the maws of the GULAGS beckon, to us, if we dare speak above a whisper, down in our basements, as if we were Russians, or Chinese, or ordinary Germans in the time of Hitler, these corrupt politicians will be safe ….

Which is what POLICE STATES generally exist for, to protect POWER, and not people …

And so …

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...lance/#comments

NY TIMES EMPIRE ZONE

March 28th, 2007 7:29 am:

Paranoia strikes deep ….

Into your heart it will creep …

Starts when you are always afraid ….

Step out of line, the “STEAMROLLER” and G. Ollie Koppel and Dougk and the NYPD will come and haul you away ....

LONG LIVE PUBLIC CORRUPTION IN NYS!

— Posted by Livyjr

http://empirezone.blogs.nytimes.com/2007/0...lance/#comments

[Livyjr]

Village Voice - Runnin' Scared

"Roman Holiday - New York's ambassador lives high, large, and loose"

by Tom Robbins

March 27th, 2007 11:59 AM

With just two months to go in his job as the state's economic development czar, Charles Gargano hopped on an Alitalia Airlines flight last October 20 and flew to Rome.

His ticket included an open return, from Rome's Da Vinci airport to JFK.

The cost, $3,579, was billed to Gargano's state-supplied corporate American Express card.

But the purpose of the trip—one of at least six that Gargano made to Italy on the public's dime while overseeing state economic development activities—is unknown.

Gargano, the dapper former ambassador to Trinidad and Tobago during the Reagan administration who helped former governor George Pataki raise much of his campaign cash, never bothered with the required paperwork.

Under rules in place at the Empire State Development Corporation, where Gargano served as chairman from 1995 to 2006, he was supposed to submit a "Pre-Trip Authorization" memo and another detailing what he spent and why.

He did neither.

The only explanation offered was a one-line entry from his secretary to the accounting department:

"This charge is for airfare to Italy for last minute request for Chairman to speak at an event."

What event?

Whose request?

Officials say they don't have a clue.

"We have no information on it, no backup that we've been able to find," says agency spokesman A.J. Carter.

Gargano, who was born in Italy and is reportedly building a home there, also isn't saying.

He failed to respond to messages left for him at the Port Authority of New York and New Jersey, where he remains a powerful commissioner thanks to a new six-year reappointment Pataki bestowed on him during the former governor's final weeks in office.

As state development honcho, Gargano was a controversial figure, often criticized for his favorable treatment of political allies.

Last month, the Voice reported that Gargano's nephew had lobbied his uncle's offices on behalf of a client seeking a long-term state lease ("The Magician's Nephew," February 14–20).

"As far as I know, all of his expenses were related to state government business," says Vanessa Cuti, a former state economic development aide.

But a Voice review of Gargano's expenses found that the impromptu and costly jaunt to Rome was one of several cases in which Gargano had the public pay his fare and ignored his own agency's stiff standards on expense reimbursement.

Last July, Gargano socked the state with a $410 bill for a flight from Nantucket to New York for what his secretary described as "a last-minute interview request with Brian Williams of the NBC Nightly News."

(The interview didn't air until September 11, 2006, when Gargano was part of a story commemorating the fifth anniversary of the attacks.)

In June, the ambassador billed the state for a flight to Quebec, at a cost of $487.

Although his secretary told the accounting department that the trip was personal and would be reimbursed, Gargano never paid back the funds, officials say.

In September 2005, while Gargano was traveling with Pataki on a trade mission to China, he took a side jaunt to Helsinki to visit real estate tycoon Earle Mack, a major Pataki campaign contributor who had recently been named ambassador to Finland by President Bush.

The $1,496 cost was justified, his secretary wrote, since Gargano was "addressing potential investors in New York State."

Back in New York, Gargano liberally used his corporate AmEx card to pay for meals at many of the city's poshest dining establishments—rarely explaining why.

While the state's economic development chief was expected to rub elbows with top business leaders—the kind of people who don't normally lunch at Papaya King—he was also obligated under agency rules to name his dining companions and the business subject discussed.

But the filings show that Gargano spent $16,000 from 2001 to 2006 at top restaurants, listing expenses as meals shared with unidentified "business executives."

At San Pietro's, a pricey midtown Italian restaurant where Gargano is a regular, the ambassador has charged more than $4,000 for 15 lunches since 2001, only twice disclosing his fellow diners:

One event was a 2003 lunch with Pataki aide Lou Tomson; at the other he gallantly let the state pay for a $139 lunch in June 2004 with CNN talking head Margaret Carlson.

On July 11, 2005, he signed for a $673 meal there—with parties unknown.

Last summer, Gargano had the state pay for a $308 lunch at prestigious Le Cirque with other unnamed guests.

A week later he used the card to pay for a $415 dinner at Campagnola, a swank Upper East Side bistro, again with anonymous "executives."

Gargano had the state pay for a half-dozen meals at Bobby Van's, a chic steakhouse in Bridgehampton, Long Island, which happens to be around the corner from a sprawling beachfront villa Gargano owns there.

He enjoyed a $134 lunch at the restaurant last June, and a $109 lunch in October—both with unnamed execs.

It's not as though Gargano lacks his own funds.

Financial disclosure filings he made with the state's ethics board show that his holdings in stocks and real estate, mostly with Long Island projects he co-owns with his son Lawrence, soared during his years in office (actual dollar amounts are not disclosed to the public).

And in his last year as chairman of the state's development corporation, Gargano's salary was $160,760.

He is also still owed $28,854.42 in unused vacation pay, according to agency officials.

But the ambassador shouldn't count on collecting it all.

"Before he gets that money, we will deduct whatever he owes in outstanding expenses," says Carter, the agency's spokesman.

tom robbins

http://www.villagevoice.com/nyclife/0713,r...s,76188,15.html

[Livyjr]

"State of confusion over this split - Economic development agency divides Capital Region between upstate, downstate"

By CHRIS CHURCHILL, Business writer, Albany, New York Times Union

First published: Wednesday, March 28, 2007

ALBANY -- New York has two economic "czars" -- the co-chairmen of Empire State Development Corp.

Daniel Gundersen, based in Buffalo, is working to grow the economy in upstate New York, while Manhattan-based Patrick Foye is handling downstate initiatives.

But neither will handle the entire Capital Region.

That's because the agency considers Albany and Rensselaer counties part of downstate New York, while Schenectady and Saratoga counties are upstate.

The division, in part, fulfills a campaign promise by Gov. Eliot Spitzer to focus attention on New York's struggling economy upstate, where cities such as Buffalo and Rochester have been plagued by disinvestment and job losses.

But in the Capital Region, the division has confused some and amused others.

To Gundersen, the distinction is not particularly relevant.

Interviewed Tuesday at Small Business Day, an annual event sponsored by The Business Council of New York State Inc., Gundersen said he and Foye are both concerned with growing the entire state economy.

"Anywhere you draw the line, you're going to have that issue," he said.

There's general consensus locally that the Capital Region economy is in better shape than many parts of upstate New York.

Still, to some, it sounds strange to consider Albany downstate.

Bill Hooton, president of Capital District Trade Strategies in Albany, which runs the Capital District World Trade Center, said Albany just feels upstate, though he noted New York City is an economic lifeline for the Capital Region.

In Schenectady, Charles Steiner, president of The Chamber of Schenectady County, conceded he would prefer his area wasn't divorced from the rest of the Capital Region, especially as his group is stressing its connections to Tech Valley -- an 18-county region stretching through the Hudson River valley north to Canada.

"We are with the Capital Region, as far as I'm concerned," he said.

Steiner, however, credited Spitzer with recognizing that the upstate economy is fundamentally different from the economy in the New York City area, and said he hoped Schenectady County could benefit from initiatives developed from that recognition.

There has been confusion about where, exactly, the line between upstate and downstate has been drawn.

A spokesman for Empire State Development said in February that the entire Capital Region would be considered downstate; other reports have placed Saratoga County downstate and Schenectady County upstate.

But Gundersen said officials decided to place Albany and Rensselaer counties with the Hudson Valley, declaring points north and west upstate.

Christine Pritchard, a spokeswoman for Spitzer, said it's not as if a sharp line has been been drawn.

Instead, she said, Gundersen and Foye are sharing Capital Region economic development efforts.

Linda Hillman, president of the Rensselaer County Regional Chamber of Commerce in Troy, doubted that it all mattered.

"It's just kind of an artificial border," she said.

"We're all in New York state."

Indeed, during a panel discussion Tuesday at Small Business Day, Gundersen and Foye -- joined by state Labor Commissioner M. Patricia Smith -- said they are planning changes to the development corporation that would benefit all of New York.

The men, speaking to a crowd of small-business owners and their Chamber of Commerce representatives, said they will make the agency more accessible, open, friendly and efficient.

And they said they'll work together to make the changes happen -- both upstate and down.

Chris Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com.

[Livyjr]

"Rensselaer County faces tax hike - 25.9% increase would cover expected gap in $278M spending plan"

By KATE PERRY, Staff writer, Albany, New York Times Union

First published: Saturday, October 21, 2006

TROY -- Rensselaer County Executive Kathleen Jimino said Friday the county faces a harsh financial reality and a 25.9 percent tax increase is part of it.

For five years, Jimino and the county Legislature used millions from the county's reserve fund balance to close budget gaps and create palatable tax increases.

But the well is dry: The fund balance is projected to disappear by the end of the year, and mandated costs like Medicaid, heath insurance and retirement continue to rise, Jimino said as she presented her version of the 2007 county budget.

The increase would cover an $11 million budget gap in the $278 million spending plan.

"The day has come when we must use today's property tax dollars to pay for the mandated programs as well as the non-mandated programs and services that our constituents have come to rely on," Jimino said from a lectern in the gymnasium of the Troy Boys and Girls Club.

The proposed increase, Jimino said, means a resident with a home assessed at $100,000 would pay $639.27, an increase of $131.06 over last year.

The increase is $4.23 per $1,000 of assessed value.

During her presentation Jimino never stated the actual 25.9 percent tax increase number.

Those in attendance had to do their own math or ask her after the presentation for the figure.

The budget will be reviewed and likely changed by the county Legislature in November and adopted in early December.

Jimino also suggested eliminating 37 positions, which she said will come from various departments including social services and the county attorney's office.

Those positions likely would be eliminated by attrition, Jimino said, rather than layoffs.

Six factors have a major impact on 2007's budget, Jimino told the crowd of politicians, students and press gathered for her presentation.

She projected the county will lose $1.2 million in sales tax revenue in 2007 from shoes and clothing, a change made in March to encourage shopping in Rensselaer County.

Medicaid costs, which have climbed $10 million since 2001, are projected to increase by $1 million in 2007.

The county's share of health insurance is estimated to grow by $2.2 million in 2007.

While the county will pay less into the retirement system in 2007 than it did this year, Jimino still counts it as a drain on taxpayers, noting it has risen close to $6 million in the last five years.

Lastly, Jimino said, the county's debt service is expected to reach $9.5 million in 2007, up about $1.5 million from this year.

She noted that for the first time the county's budget includes the sales tax revenue it distributes to municipalities on behalf of the state, an accounting change required by the state comptroller's office.

Jimino's budget increased by $5 million over 2006, but with the accounting change in place, it increased a total of $23 million, according to Jimino spokesman Chris Meyer.

Democratic and Republican legislators proposed budget cuts to lessen the tax increase.

But Democrats, who want the county to implement long-range plans to save money and gain revenue, were eager to criticize Jimino and the Republican majority.

Democratic Minority Leader Ginny O'Brien said Rensselaer County's proposed increase stands out dramatically from its neighbors.

Earlier this month, Albany County Executive Mike Breslin proposed cutting taxes by 2.3 percent and officials in Schenectady County projected a 2 percent tax increase.

Saratoga County won't present its tentative budget until Nov. 1, but County Treasurer Samuel Pitcheralle said the county could reduce taxes.

"These counties have to contend with Medicaid, just as we do," O'Brien said.

"The difference is management and how the county's resources are being administered."

While Rensselaer County may be putting up big numbers this year, all four counties have increased the amount of money they collect from residents in recent years.

The New York State Association of Counties reports from 2002-05 the following increase in tax levies: Albany County, 70.1 percent; Rensselaer County, 45.2 percent; Saratoga County, 30.5 percent; and Schenectady County, 27.6 percent.

O'Brien charged county Republicans only consider tax increases and new fees to close budget gaps.

But the Republican Majority Leader Bob Mirch said he wants the Legislature to consider major cuts.

"The changes I want to look at are eliminating the (sheriff's) road patrol, that's several million dollars," he said.

He's also interested in eliminating the health department and if all else fails, the entire county government with the exception of the jail and sheriff's department.

Perry can be reached at 454-5092 or by e-mail at kperry@timesunion.com.

Manhattan Institute For Policy Research

Civic Report - No. 5 January 1998

"Debt & New York’s Public Authorities: Borrowing Like There’s No Tomorrow"

William J. Stern is a Contributing Editor of City Journal and former head of the New York State Urban Development Corporation under Governor Mario Cuomo.

Edwin Rubenstein is the Research Director of the Hudson Institute.

In 1975 the Urban Development Corporation (UDC), a public authority created in the late 1960s by the New York State Legislature, achieved a dubious distinction: it became the first major issuer of municipal bonds since the Great Depression to default on its obligations.

The results were catastrophic.

Private capital markets shut the door on the state virtually overnight, and New York City was thrown into a fiscal crisis whose destructive effects can still be seen today.

Unfortunately, when it comes to debt, New York has a dangerously short memory.

Just two decades after the UDC fiasco, no other state can begin to match our borrowing.

According to 1995 figures (the latest available), New York’s debt burden of $68.5 billion outstrips that of (much more populous) California by 50 percent; as a percentage of overall personal income, it exceeds the debt burden of Texas by 400 percent.

Worse, New York’s appetite for borrowing shows every sign of growing.

Since 1985 the state’s debt burden has shot up an astounding 241 percent, a fact that goes a long way toward explaining why the respected Moody’s Investor Services gives New York’s bonds the second-lowest investment rating in the nation, only a notch above that of Louisiana.*

Who is to blame for this staggering load of debt and the threat that it poses to the state’s economic health?

The chief culprits are all-too-familiar: New York’s ever-expanding public authorities and the politicians and interest groups in Albany who benefit from their profligate ways.

Not All Debt Is Bad

Getting to the root of the problem requires that we first make some distinctions, because not every part of New York’s $68.5 billion in debt is equally troubling.

In the first place, there are general-obligation bonds, the most traditional—and restricted—form of state debt.

Such bonds are issued only upon the approval of the state’s voters.

Moreover, under the state constitution, only one general-obligation debt question may appear on the ballot each year.

To their credit, New Yorkers have been fairly skeptical of these measures.

Between 1974 and 1996, they approved only six out of eleven of them, with the environmental bond issue of 1996 being the first to win their endorsement since 1988.

Over the last decade, debt in this form has constituted a declining percentage of the state total; today it amounts to a manageable $5.2 billion.

The state also sells long-term bonds to finance the Local Government Assistance Corporation (LGAC), which was created in 1991 to help localities fund their operations when, as is increasingly the case, the Legislature fails to pass the state budget on time.

Debt service for the LGAC is covered by one percent of the proceeds from the state sales tax.

Admittedly, the LGAC is a regrettable expedient, made necessary by the irresponsibility of leaders in Albany.

But given political reality in New York, such borrowing is a reasonable way to ensure that the state’s residents are not forced to endure regular interruptions in basic services.

Moreover, like general-obligation bonds, LGAC bonds account for a small fraction of overall state indebtedness—just $4.3 billion.

Even when we arrive at the state’s public authorities, there is a certain amount of fairly innocent borrowing.

Under the state constitution, New York may guarantee, with its full faith and credit, the bonds of only three of its public authorities—the Thruway Authority, the Job Development Authority, and the Port Authority.

Such guaranteed debt, unlike debt issued by other authorities, is subject to voter-approved caps and other restrictions.

As a result, it has never gotten out of hand and today amounts to a mere $400 million.

Too Much of the Wrong Kind of Debt Is a Serious Problem

So-called “moral-obligation” debt issued by the public authorities has a more colorful history, but it, too, does not pose a problem today.

Such bonds are secured not by the state’s full faith and credit but by its non-binding promise—or moral obligation—to use state revenue to make up any shortfalls in debt service.

During the 1960s and 1970s, this pledge enabled the authorities to overcome Wall Street’s reluctance to buy non-guaranteed revenue bonds.

After the state was forced to assume responsibility for the UDC’s debts in 1975, however, the Legislature put an end to this practice.

Accordingly, New York’s moral-obligation bonds, $8.2 billion of which are still outstanding, have long been shrinking as a share of total state debt.

Taken together, the sorts of borrowing described thus far comprise slightly more than 25 percent of New York’s total indebtedness.

All the rest of the debt burden—and here we reach the heart of the problem—comes from just two other forms of borrowing by the state’s public authorities.

The largest category by far, today accounting for $32.4 billion, consists of revenue bonds.

Generally speaking, an authority issues such bonds in order to finance a specific project and then uses the proceeds generated by that project to cover the debt service.

Toll revenue, for example, pays off bonds for the Thruway Authority, just as payments to hospitals take care of bonds issued by the Medical Care Facilities Agency.

In principle, of course, using revenue bonds to link debt to particular projects is an economically sound idea; it means that those who benefit are the ones who pay.

In addition, because revenue bonds do not rely on the state itself for repayment, they do not directly affect the state’s fiscal affairs.

Regrettably, however, even a sensible financial instrument can be abused.

Because revenue bonds do not even require the approval of the Legislature, they escape all forms of popular scrutiny.

New Yorkers, in short, never get a chance to vote down revenue bonds, as they often choose to do with general-obligation debt.

To understand what this means in practice, consider that Albany may soon allow the state’s Long Island Power Authority to issue $7 billion in revenue bonds in order to buy a portion of LILCO and retire debt acquired by the company’s Shoreham nuclear plant.

If approved, it will be the largest single-debt offering by any state or municipality in U.S. history—and the citizens of New York will have had no real say in the matter.

At the same time, the public authorities that are accumulating this debt receive very little oversight from Albany.

The Public Authority Control Commission ostensibly does this job, but it has few investigative or disciplinary powers.

Nor do the responsible committees of the Legislature do any better, almost never holding hearings or issuing reports.

With so little supervision, the day may well come when one of the authorities can no longer meet its obligations with its revenues alone, at which point the Legislature, despite having no legal responsibility for this debt, would have to step in.

This, in fact, is exactly what finally happened with the UDC in 1975.

Though the agency was supposed to be self-supporting (through the rents collected on its projects), when its bonds failed the Legislature realized that the credibility of all state debt was at stake.

Public authorities may be financially independent on paper, but the state always has responsibility for them in the end.

The Most Dangerous Form of Debt Is Also the Fastest Growing

If there is nothing especially objectionable about revenue bonds in themselves, the same cannot be said of the fastest-growing form of borrowing by the state’s public authorities: lease-purchase agreements.

Under these deals, which now total some $18 billion, authorities issue debt in order to purchase or construct facilities or purchase equipment that is, in turn, leased back to the state at a price that can cover debt service.

Unsurprisingly, such arrangements are often little more than a fiscal shell game.

During the Cuomo administration, when this outrageous practice peaked, Albany “sold” Attica Prison and a portion of Interstate 287 to the UDC.

The state got a quick $200 million, which helped balance the budget.

And New York taxpayers?

They found themselves saddled with a serious long-term liability: a commitment to pay $600 million over the life of the 30-year bonds issued by the UDC.

Short of outright malfeasance, it is hard to imagine a more flagrant misuse of capital funding.

A Self-Serving Elite Blocks Solutions

Can anything be done to end such reckless borrowing?

Many have suggested amending the New York State constitution in order to make all debt subject to approval by the voters and to impose a cap on debt based on some percentage of either the state’s overall personal income or its gross domestic product.

Such amendments would have to come through a state constitutional convention or the Legislature, and would then need to be ratified by the voters.

Both these ideas, taken on their merits, have much to recommend them.

Politically, however, they are nonstarters.

In the first place, New Yorkers are uninterested in calling a constitutional convention, as they showed at the ballot box this past November.

More fundamentally, even if such a convention were held, it is unlikely that it would do anything about the state’s borrowing problems.

The fact is, any constitutional convention would be controlled by the very same political insiders in Albany who ran up the state’s debt in the first place.

Needless to say, these insiders are the reason too that no meaningful constitutional amendment related to debt is likely to come from the Legislature.

Why are New York’s political leaders so determined to protect the borrowing powers of the authorities?

The answer lies with the state’s “nomenklatura,” a term first used to describe the small class of politically connected individuals who benefited personally from the centrally controlled economies of the Communist bloc.

In much the same way, New York’s public authorities, with their virtually unlimited ability to spend, offer extraordinary benefits to those with the necessary political access.

Our nomenklatura consists of a long list of prominent consulting, accounting, public-relations, and law firms, all of whom take in millions of dollars in revenue from the various debt-financed projects of the authorities.

What’s in it for the state’s politicians?

All the rewards at the disposal of the nomenklatura, from campaign contributions and favorable press coverage to lucrative jobs once they leave office.

With the public largely indifferent to the uncontrolled borrowing of the state’s authorities, it is not surprising that leaders in Albany have been unwilling to antagonize such attentive friends.

A Federal Flat Tax May Be The Only Answer

That leaves the possibility of getting at New York’s debt problem from the federal level.

Here one idea is key: doing away with the tax-free status of interest on municipal bonds.

Simple though it may sound, this would instantly impose discipline on the state’s borrowing.

Faced with having to pay a much higher rate of interest to attract investors, Albany would have no choice but to restrain itself.

Otherwise, debt service would skyrocket both for the state and the authorities themselves, making necessary either higher taxes or increased fees for authority services—alternatives unattractive to the state’s political class.

The trick here, as with proposals at the state level, is how to achieve such a reform politically.

Getting rid of the preferential treatment for municipal bonds could succeed on its own and would certainly be worth trying.

Unfortunately, the few who would be hurt by such a change are far more likely to exert political pressure than the many who would benefit from it.

Its best chance of success would be as part of a broader movement, one with widespread popular support.

Here, the brightest star to which it might be hitched is the growing movement for a flat federal income tax.

If such a plan were to pass, income from municipal bonds would be treated just like income from any other source.

It is, of course, a sad commentary on political life in New York that our best hope for reform lies outside the state.

But unless New York experiences another crisis in borrowing—what is known as an “event” in the lingo of the bond market—it is unlikely that the Legislature will rein in the authorities any time soon.

Only the immediate prospect of economic chaos seems capable of shaking Albany from its self-interested slumber.

* New York City and other localities, it should be noted, share the state’s bad borrowing habits and have accumulated some $50 billion in debt on their own—but that’s a subject for another day.

http://www.manhattan-institute.org/html/cr_5.htm

[Livyjr]

"Rensselaer County faces tax hike - 25.9% increase would cover expected gap in $278M spending plan"

By KATE PERRY, Staff writer, Albany, New York Times Union

First published: Saturday, October 21, 2006

TROY -- Rensselaer County Executive Kathleen Jimino said Friday the county faces a harsh financial reality and a 25.9 percent tax increase is part of it.

Lastly, Jimino said, the county's debt service is expected to reach $9.5 million in 2007, up about $1.5 million from this year.

With the public largely indifferent to the uncontrolled borrowing of the state’s authorities, it is not surprising that leaders in Albany have been unwilling to antagonize such attentive friends.

http://www.manhattan-institute.org/html/cr_5.htm

"Home sale prices dip in February - Realtors say 7 percent slide not too alarming given national trends"

By CHRIS CHURCHILL, Business writer, Albany, New York Times Union

First published: Tuesday, March 27, 2007

The median sale price for single-family homes in the Capital Region last month fell 7 percent from a year ago, the latest sign that the area's real estate market is cooling.

According to the Greater Capital Association of Realtors Inc., the median sale price fell to $175,000 last month from $188,000 in February 2006.

The drop came as the overall number of sales remained roughly the same.

Officials with the association said the price drop did not suggest trouble for the regional real estate market so long as it does not continue.

"We were coming off record years locally," said Doug Engels, the association's president and a broker and co-owner at Weichert Realtors Northeast Group.

"To be off a little bit, given what's going on nationally, I'm not sure is reason for concern."

The statistics are based on closed, or completed, sales and include Albany, Montgomery, Rensselaer, Saratoga, Schenectady and Schoharie counties.

Prices in the most populated counties for the most part were stable for the month, while some outlying counties saw a drop.

Median sales prices in Montgomery County, for example, fell 32 percent, from $91,250 to $62,000.

Those numbers, however, represent a small statistical sample, as Montgomery County only had 14 sales close during the month.

The February numbers -- mostly representing sales activity from December, as it typically takes about two months for a sale to close -- come from one of the slowest months of the year for real estate agents, and represent a small percentage of the overall homes sold each year.

While the early part of the winter was unusually warm and therefore conducive to home shopping, the region's overall sales for the month increased just slightly, from 802 to 806.

Still, it's important to note that overall for the first two months of 2007, sale prices in the Capital Region are even with where they were a year ago, at $185,000.

"The market is still very active, but the appreciation has leveled off," said James Ader, the Realtor association's chief executive.

"And we knew that it would level off."

"Because if it didn't, no one who lives here would be able to afford to live here."

Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com.

[Livyjr]

NY Post

"MAKING APRIL FOOL OF SPITZ - GOV. SPITZER Headed for late budget."

March 26, 2007 --

'GOV. Steamroller" is on the brink of suffering his second major defeat - and this one will be his biggest yet.

"The steamroller went up against the boxer, and the boxer punched back hard," said a source close to Spitzer, referring to Bruno's success as a champion pugilist in the Army.

http://www.nypost.com/seven/03262007/news/...c_u__dicker.htm

NY POST

"GOV. STEAMROLLED INTO A BIG SOFTEE"

March 29, 2007 --

ALBANY - Gov. Steamroller has become Mister Softee this week as plunging poll numbers, Republican recalcitrance, and the approaching April 1 budget deadline forced Eliot Spitzer to change himself into George Pataki.

That was the widespread view at the Capitol yesterday as lawmakers, lobbyists and good-government activists agreed that Gov. Spitzer - who had vowed to change everything in Albany on Day 1 - voluntarily enlisted in Albany's hyper-secret, special-interest-dominated, business-as-usual culture that defined his predecessor - and for no good reason.

The big winner in the new budget accord was the supposedly weakened Senate Majority Leader, Joseph Bruno (R-Rensselaer), insiders agreed.

Bruno, despite a shrinking majority and a criminal probe of his private business dealings, relied on his instinctive sense that Spitzer was a bully who would blink rather than fight beyond the budget deadline.

And he parlayed that into a nearly $1 billion windfall for Long Island schools and his leftist allies in the totally self-centered hospital workers union.

The record-high, $123 billion budget deal neither reforms nor reshapes New York's notoriously special-interest-driven spending plan, other than at the edges.

And it doesn't do anything about the state's perennially dysfunctional government - which remained embarrassingly on display at the Capitol yesterday.

Those who know Albany well know legislative leaders wouldn't be crowing about a "good budget deal" if Spitzer had, in fact, achieved major reforms.

To their credit, Spitzer's long-time allies in the "good-government" community didn't pull punches in their assessment of the governor's sellout.

"New York has yet to see the fresh face of Albany described by then-candidate Spitzer: in fact, this budget process takes us backward in the journey to a more transparent, open state government," said League of Women Voters legislative director Barbara Bartoletti.

Citizens Union Public Policy Director Doug Israel, noting that Spitzer is expected to use the Pataki-favored technique of employing "messages of necessity" to rush massive budget bills through the Legislature, said the practice "prevents not only the public but legislators as well from reviewing the most important legislation they will pass all year.

"There is no compelling excuse, it is bad government," Israel continued.

Late in the day, Common Cause and the New York Public Interest Group also expressed their "disappointment" with the budget process.

fredric.dicker@nypost.com

http://www.nypost.com/seven/03292007/news/...c_u__dicker.htm

[Livyjr]

ALBANY - Gov. Steamroller has become Mister Softee this week as plunging poll numbers, Republican recalcitrance, and the approaching April 1 budget deadline forced Eliot Spitzer to change himself into George Pataki.

That was the widespread view at the Capitol yesterday as lawmakers, lobbyists and good-government activists agreed that Gov. Spitzer - who had vowed to change everything in Albany on Day 1 - voluntarily enlisted in Albany's hyper-secret, special-interest-dominated, business-as-usual culture that defined his predecessor - and for no good reason.

http://www.nypost.com/seven/03292007/news/...c_u__dicker.htm

NY TIMES

News Analysis

"'Steamroller' in Albany Learns How to Concede"

By MICHAEL COOPER and DANNY HAKIM

Published: March 29, 2007

ALBANY, March 28 — Gov. Eliot Spitzer brought a hard-charging style to Albany, taking on adversaries personally and directly, even lambasting lawmakers in their home districts.

But the State Legislature knows how to play hardball too, and the rookie governor is having to meet them halfway on his first budget.

So after Governor Spitzer waged a lonely, bruising political battle to try to reduce Medicaid costs — and was attacked in millions of dollars of television ads paid for by the health care union and a hospitals association — he ended up agreeing to restore many proposed cuts as part of the budget deal he is hammering out.

In a news conference Wednesday afternoon, Mr. Spitzer claimed a victory of sorts, saying that the agreements he and legislative leaders had reached so far had given him much of what he wanted.

But he acknowledged that he had had to alter many of his key proposals to win the support of lawmakers.

“The overall level of spending, obviously, it is a bit higher than I had initially wanted,” Governor Spitzer said.

“As I’ve said to a number of you over the course of today, you do not turn a battleship inside a bathtub."

"It takes a bit more than one budget cycle to get us down to the spending levels we want.”

Talks are still under way as the governor and the Legislature struggle to meet the April 1 budget dealine.

But both sides say the Legislature has succeeded in increasing Mr. Spitzer’s proposed budget by nearly $1 billion — about the amount it usually adds to a governor’s budget.

And now lawmakers in both parties are questioning privately whether the governor’s alpha-dog style has been all that effective.

State Senator Joseph L. Bruno, the Republican majority leader, who led the main opposition to the governor’s budget and sometimes found himself at the business end of the governor’s public tongue-lashings, seemed pleased.

“You know, I’ve stated before and others have stated, when you want to talk about numbers — depends on how you count,” Mr. Bruno said at a hearing, to much laughter.

“You understand that, I understand that, this governor’s learned it quickly.”

The counting was still not done on Wednesday night.

While there were many areas still to be agreed on, the agreements drove total spending for next year up to more than $121.6 billion — making it the ninth-largest increase of state-financed spending in the last 40 years, according to the Empire Center for New York State Policy, a conservative policy group.

Civic groups — which have been largely supportive of Governor Spitzer so far — were decidedly cool to the few details that emerged from the budget negotiations.

The Citizens Budget Commission, which praised many of the governor’s proposals, called the agreed-on Medicaid cuts “modest,” and said the price for achieving them was high in terms of increased spending overall.

Numerous civic groups complained about the secrecy of the budget talks, saying that it looked as if, in the rush to make the April 1 deadline, the governor would have to waive the constitutional requirement that gives lawmakers three days to study laws before voting on them.

There were many contentious issues left to be resolved — any one of which could derail the chances of passing a budget by Sunday.

These included whether to allow more charter schools in the state, whether to add a nickel deposit to cans and bottles of non-carbonated beverages, whether to give a tax break to people who send their children to private and parochial schools, and whether to give pay raises to judges.

But in a number of areas, Mr. Spitzer argued that the agreements he won would yield dividends in the future, even if they did not look significant at first.

His plan to create a new school spending formula to send more money to New York City and other high-needs districts survived, with some significant changes.

But the Republican-led State Senate got him to double the amount of operating aid being sent to Long Island’s school districts, and to increase aid to other wealthy districts.

This allows the governor to boast that he has boiled the state’s many arcane formulas down to one understandable, predictable formula, and that he has broken the historic system of dividing school aid by shares — a system that always gave New York City close to 39 percent of new school aid and Long Island between 12 and 13 percent.

Senate Republicans lost their fight to change the new formula to enshrine the current share system, but were nonetheless able to win an agreement to add $420 million outside the formula to make sure Long Island gets its traditional share next year.

“In terms of operating aid, what we call above the line, I believe our share will be at least what it was in the past” said Senator Dean G. Skelos, a Long Island Republican.

“Maybe a little more.”

Still, even if shares survive in some form next year, analysts argue that the new formula is significant.

“I think if you succeed in changing the formula through the statute — putting in place a new aid formula that actually breaks shares — that is significant,” said Edmund J. McMahon, the director of the Empire Center.

And when it came to the fight over health care spending — the biggest public battle of the budget — the governor said that he was restoring about $350 million out of his $1.3 billion in proposed cuts.

Details were sketchy, but people with knowledge of the deal said the largest components involved restoring most of an annual inflation adjustment to Medicaid payments made to hospitals and nursing homes, and allowing the expiration of a tax on hospitals that he had proposed extending.

During the budget battle, the leaders of two powerful health care groups, 1199 United Healthcare Workers East and the Greater New York Hospital Association, were singled out for criticism by Governor Spitzer in front of hundreds of business and civic leaders at a power breakfast early this month.

On Wednesday they gleefully sent out a news release claiming that the governor’s concessions would amount to the restoration of nearly 70 percent of his proposed cuts to hospitals and nursing homes.

But Mr. Spitzer said that “their 70 percent is just way off.”

“The hospital reductions are over 50 percent of what we had initially proposed, over 50 percent, and that is an important number,” Mr. Spitzer said.

But the governor won changes to how health care spending is distributed that he argues will yield benefits in time, and he got the State Senate to agree to pass a False Claims Act that he says will help Albany significantly recoup losses from Medicaid fraud.

The governor agreed to the Senate’s demand that property tax relief be sent directly to homeowners in the form of rebate checks.

And while he held firm to his demand that it be focused on the middle class, he agreed to extend the relief to more high earners at the request of the Senate.

In the end Mr. Spitzer, who referred to himself earlier this year as a “steamroller,” did not flatten out everything in his path.

He gave ground in some areas and won ground in others.

“There’s no steam in the roller,” State Senator Martin J. Golden, a Brooklyn Republican, said.

“You can’t do it on your own."

"I think he’s learning that.”

Nicholas Confessore contributed reporting.

http://www.nytimes.com/2007/03/29/nyregion...amp;oref=slogin

[Livyjr]

"Don't rush the budget"

Albany, New York Times Union

First published: Thursday, March 29, 2007

As an advocate of reform, Gov. Spitzer is naturally anxious to have an on-time state budget in his freshman year in office.

But Mr. Spitzer should recall what he was saying only a few days ago, when meeting with editorial writers from around the state at the Rockefeller Institute in Albany -- namely, that getting the budget right is more important than getting it on time.

Ideally, Mr. Spitzer and legislative leaders should be able to do both.

But in practice, that's not always attainable.

Thus, while there are some signs that the tentative budget agreement reached on Tuesday may represent a sound and timely budget, there are too many unanswered questions to say for sure.

For that reason alone, Mr. Spitzer should avoid issuing so-called messages of necessity, which governors can use to bypass a three-day waiting period before the Legislature begins to vote on budget bills.

Instead, lawmakers and the public should be given the opportunity to study the budget details and voice their opinions before the voting begins.

Mr. Spitzer's first budget includes three major changes in two major funding areas.

There's no reason to rush when the stakes are so high.

One major change involves New York's expensive Medicaid program, which Mr. Spitzer proposed to cut by $1.3 billion, largely by shifting the emphasis away from hospitals and nursing homes toward community centers and home care.

The compromise worked out Tuesday among the governor, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno restores $350 million in those cuts, but at what cost to Mr. Spitzer's priorities?

A second change would, if enacted, be historic.

It would collapse the state's complex school aid formulas into a single one that would direct more aid to high-needs districts, while leaving affluent suburban districts with a lesser share of the aid package.

The goal is to help high-needs districts close the achievement gap with suburban districts by providing them with the funds to improve classroom performance.

Yet the compromise reached Tuesday increases funds for the suburbs, and raises the total increase in school aid to $1.9 billion.

How will that help to close the gap?

The third change is a bold, new approach to accountability for school districts with high needs but low test results.

In exchange for a higher than average share of new school aid, these districts would be subject to contracts of excellence that place school boards and district administrators at risk of losing their jobs unless student performance improves.

But now that suburban districts are also getting more aid, largely because of pressure from Republican senators who represent districts on Long Island, where is the accountability for them?

Three big changes, three big questions.

Now it's time for answers.

[Livyjr]

Rochester Democrat & Chronicle

"Budget's too fat - Our reform governor cut a deal but gave back too much."

(March 29, 2007) — Gov. Eliot Spitzer was elected by millions of New Yorkers tired of Albany excess and special-interest politics overwhelming the common good.

They saw him as an agent of real change.

They might have to take another look following release Tuesday of a budget "framework'' that raises spending nearly $1 billion over the governor's already too-padded budget.

Simply put, this isn't the reform New York voters demanded.

Spending in this tentative budget, parts of which will now be reviewed by legislative panels, is far too high.

The governor's proposed budget, even before legislators and special-interest lobbies got hold of it, was excessive, more than 6 percent over last year's, which itself was rightly assailed as a spending spree in then-Gov. George Pataki's last year.

The concern now, justified by history, is that legislators charged with examining the deal will find many more ways to spend than places to cut.

That must not occur.

Not only should this budget be done by the statutory deadline of April 1, but it must come in no higher than Spitzer's original $120 billion figure.

To do otherwise will, as the state comptroller has suggested, worsen both the deficit and the debt, deepen the budget problems next year and inhibit long-term efforts to improve the lives and prospects of all New Yorkers.

Does getting spending under control mean that Rochester-region hospitals have to absorb all the cuts Spitzer put forth in his budget?

No, local hospitals made a strong case that the governor was using a bludgeon where a laser was called for.

But it does mean that, across a wide spectrum, Spitzer gave back too much to the howling special interests.

The cuts to Medicaid that did make it into the "framework'' are only a start on reform of this bloated program.

The governor wanted wealthier school districts to take an aid hit so urban schools could get more.

He compromised on that.

He wanted to close loopholes in business taxes.

He compromised on that.

It was horse-trading done the usual, closed-door Albany way.

But when the doors opened, spending had increased yet again.

That's not reform!

http://www.democratandchronicle.com/apps/p...40/1041/OPINION

[Livyjr]

NY POST

"NOTHING'S CHANGED"

March 29, 2007 --

Well, that didn't take long.

Eighty-seven days, to be exact.

The governor who swept into office on a pledge to "change everything" about Albany - most especially its backroom-brokered, special-interest driven budgeting - has managed to change . . . virtually nothing.

The fine print in Eliot Spitzer's inaugural spending plan - a $122-billion, three-times-inflation behemoth - was being negotiated last night.

And while there are no compelling reasons to believe a final budget will be adopted by the April 1 deadline, the broad brushstrokes made public yesterday make one thing clear:

Gov. Steamroller got squashed.

The plan is a spending riot.

There is no real tax relief for anyone.

Schools will be bathed in cash, getting an extra $7 billion over four years - even as New York already spends far more per student than almost every other state.

Future-year budgets get thrown out of whack: The Citizens Budget Commission says that, at this rate, Albany will be $4.5 billion short of cash in just 18 months.

Spitzer's vows to jumpstart the anemic upstate economy are also fated to fall by the wayside.

Without tax relief, the region will continue to see a dearth of private-sector, job-creating investment.

Worst of all, Spitzer wholly failed to fix Albany's broken culture.

Was the "health care" cartel finally brought to heel?

Has the distribution of local school aid been rendered unambiguously free of partisan politics?

Emphatically no - on both counts.

But in the rookie governor's own words, those were to be the touchstone accomplishments of his first budget.

In the end, Spitzer was left muttering about how difficult it is to turn a battleship in a bathtub - as state Senate Majority Leader Joe Bruno, in particular, parlayed grossly irresponsible negotiating positions into yet another payday.

Stay tuned next year for Round 2, when lawmakers set out to reverse whatever modest gains Spitzer might have wrung from them in his first outing.

Case in point: Spitzer managed a modest win over the "health care" workers by cutting a $73 million union slush-fund contribution negotiated five years ago by former Gov. Pataki.

The hope was that the cut would kick-start big savings down the road - but will anyone bet it won't be back in the budget in 2008, a legislative election year?

Spitzer might; no one else is likely to.

In any event, where are the tectonic policy shifts Spitzer promised time and again during his campaign?

The campaign theme was "Day One, Everything Changes."

Well, it's Day 88.

We had high hopes.

They are fading.

http://www.nypost.com/seven/03292007/posto...editorials_.htm

[Livyjr]

And while there are no compelling reasons to believe a final budget will be adopted by the April 1 deadline, the broad brushstrokes made public yesterday make one thing clear:

Gov. Steamroller got squashed.

http://www.nypost.com/seven/03292007/posto...editorials_.htm

Newsday

Editorials

"Thumbs up for budget - Spitzer won key reforms, but NY must pay a price for higher state spending"

March 29, 2007

At least it's a start - a reasonable start.

True, the tentative state budget deal is more than the state can afford.

It was cobbled together behind closed doors, so it's hard to tell just how much it will add to future deficits.

And most of the new money added to Gov. Eliot Spitzer's initial plan was a sop - as usual - to the state's wealthiest and most powerful special interests.

But New Yorkers should hold their nose with one hand and give the deal a thumbs-up with the other.

Why?

Because, for all its flaws, the agreement moves the state forward toward long-sought reforms that were Spitzer's top priorities.

And because, given the strength of the opposition he gamely fought, Spitzer made as much progress as possible in one year.

The budget also may be on time as well.

But the costly compromises with the Republican State Senate and Democratic Assembly demand that Spitzer, the legislature and local agencies prepare immediately for deeper cuts in the future.

If not, the record property-tax cuts and school-aid increases could disappear next year in a wave of red ink.

For now, many districts and homeowners - especially those with relatively lower property values and incomes - can enjoy the largesse.

As a result of legislative pressure, particularly by Senate Republicans, $500 million will be added to Spitzer's $1.2-billion school-aid plan.

Much of this ensures that more Long Island districts will exceed the 3 percent minimum increase.

The boost for Long Island is mostly fair.

Nassau-Suffolk is not as rich as many in Albany think.

But what's most important, overall, is that Spitzer finally achieved something that has eluded at least three governors - a formula for distributing aid that is based on educational and economic need, not political power.

The same can be said for property-tax relief and Medicaid reform.

Long Island's GOP delegation successfully lobbied for direct property-tax rebate checks to homeowners, but Spitzer won on the larger principle of basing relief on income.

And while Spitzer's health-care cuts largely reflect medical industry wishes, he won broader reforms that will pay off down the road.

With all the spending this year, they'd better.

http://www.newsday.com/news/opinion/ny-vpa...rials-headlines

[Livyjr]

The New York Observer Politicker

"Mike Long, No Longer a Fan of Spitzer"

Conservative Party Chair Mike Long, you'll recall, took the extraordinary step not too long ago of championing Spitzer's tough bargaining position against the Republican-controlled but fiscally profligate state Senate during the budget negotiations.

But now, in light of this week's big compromise, Long is taking it all back.

"Nothing changed," Long told me.

"Clearly."

"I mean, the governor had promised everything was going to change on Day 1."

"It was still negotiations behind closed doors."

"I think it comes out that Eliot got rolled."

Was there something wrong with Spitzer's bargaining strategy?

"The strategy should have come in with some of the promises he talked about and come in low with the budget and we might have come out of this a little bit better."

-- Azi Paybarah

http://thepoliticker.observer.com/2007/03/...of-spitzer.html

[Livyjr]

"Budget forged in back room - Spitzer assures on-time passage after marathon deal-making session"

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

First published: Friday, March 30, 2007

ALBANY -- Legislative leaders and Gov. Eliot Spitzer cut a number of back-room deals in a marathon negotiating session Thursday as they stitched together a roughly $122 billion budget.

Spitzer said it would pass by the start of the fiscal year Sunday.

Ditching his pledge of greater transparency and openness, Spitzer met for more than six hours with top lawmakers behind closed doors.

The governor said later he felt obliged to take steps to assure a budget is delivered by the April 1 deadline.

"Do we all wish there had been more public articulation?"

"You bet," Spitzer said.

But he said a "wide chasm" between his plan and the Legislature's had to be bridged somehow.

The talks gave the group the chance to discuss $170 million in pork barrel spending for legislators.

Also, outside public view, they talked about why judicial pay raises won't occur without legislative pay raises.

According to participants and people briefed, Assembly Speaker Sheldon Silver, D-Manhattan, was holding up judicial raises by calling for a pay commission that would also deal with lawmakers' compensation.

Silver denied the matter came up in the private talks and said he did not have an agenda for the meeting.

However, Spitzer, Silver, Senate Majority Leader Joseph L. Bruno, R-Brunswick, Assembly Minority Leader James Tedisco, R-Schenectady, and Senate Minority Leader Malcolm Smith, D-Queens, worked through a three-page list of big-ticket items that could be included in next year's budget, including judges' pay.

According to other sources willing to discuss the private talks, including some who produced agendas, several deals were nailed down, such as adding 100 new charter schools and postponing debate on an expanded bottle bill.

The group agreed to fund $100 million on stem cell research for another five or six years, Silver said.

But instead of a controversial embryonic stem cell program, participants in the talks said, the leaders agreed to fund "emerging technology," which could include all sorts of stem cell work.

Continued funding of the stem cell program hinges on the conversion of HIP, a health care insurer in New York City, into a publicly traded company.

Budget planners assume the state would collect hundreds of millions of dollars in stock by allowing the conversion.

The behind-the-scenes deals included some wins for Bruno and Tedisco, who pushed for corporate tax cuts.

They got three tax breaks worth $150 million, including across-the-board cuts for all businesses worth $75 million, a $25 million cut in corporate franchise taxes for manufacturers and $50 million by taxing corporations only on sales.

Spitzer won the closure of three corporate tax avoidance loopholes.

The moves would kill the deduction for some dividends from real estate investment trusts and regulated investment companies.

The combined filing loophole will be closed so that big companies can no longer make it appear their New York units are unprofitable.

The leaders pushed aside doing a bottle bill now, Spitzer said, because an agreement was not within reach on requiring deposits on water and sports-drink containers.

Spitzer counted on $25 million from the expansion in the new fiscal year and $100 million in future years to help pay for a $250 million environmental protection fund.

Environmental activists were dejected at the news, saying the best chance for the "bigger, better bottle bill" was within a budget.

A capital projects agreement also was not reached.

Spitzer seeks $300 million to fund an R&D computer chip center for Sematech, potentially in the Capital Region, two sources close to the talks said.

Another deal struck behind closed doors involves the new rebate program that will result in $1.3 billion in checks going out during the fiscal year to property owners.

Such taxpayers will get 60 percent of their STAR savings in a rebate check if their household income is $90,000 or less upstate or $120,000 or less downstate.

The rebate check will be about twice the size of this year's check for those in those income brackets.

The percentage of STAR savings phases downward as income levels rise.

But checks will go out to households with up to $250,000 in income, a win for Senate Republicans who wanted a broader reach than Spitzer's "middle class" tax break vision.

An unusual pact was also struck in Spitzer's office -- essentially a truce that will allow both Spitzer and Bruno to publicly declare victory in the fight over the governor's proposed $1.3 billion in health care cuts.

In the end, $355 million of the cuts were restored, largely because of Bruno's efforts.

Asked if the deals would have come together if the talks were in the open, Spitzer, looking tired, paused, then said:

"You know, I wish I knew the answer to that."

Representatives of government reform groups were upset with the governor's private dealings with lawmakers.

"We are saddened," said Barbara Bartoletti, legislative director of the League of Women Voters.

Tedisco, who entered the session bemoaning the secretive nature, said it turned out to be very productive.

"I think you saw some history today," he said.

"I think he found a formula that works."

"The next step is to take it public."

M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.

2 days to the April 1 budget deadline

Making deals

Private talks among Gov. Eliot Spitzer and legislative leaders yielded new budget deals, including:

100 more charter schools, half selected by the Regents and half by SUNY

$22 million in extra funds for districts with charter schools

$100 million for "emerging technology" (stem cell) research

No expanded bottle bill

A property tax rebate program for households with up to $250,000 in income

Closure of three key corporate tax avoidance schemes for $450 million in new revenues

$150 million in new corporate tax breaks

[Livyjr]

"Medicaid fraud protection act would end senseless era"

Fred LeBrun, poltical analyst, Albany, New York Times Union

First published: Friday, March 30, 2007

While much can happen between now and a final budget and everything can blow up, New York will probably become the 17th state to have a whistle-blower law designed to expose Medicaid fraud.

It's overdue.

New York's $45 billion Medicaid program is by far the largest in the country, $10 billion bigger than second-place California.

Congressional estimates put fraud at as much as 10 percent of a state's program, so the need for better tools to dismantle this gravy train are obvious.

The statute, which would include profit and protection for whistle-blowers, is called a False Claims Act.

The state's version presumably would mirror the federal model.

The feds have been pushing states hard to adopt it for obvious reasons: Half of New York's Medicaid funding comes from the federal government.

But the feds also are offering a sweetener -- allowing the states to keep 20 percent more of what's recovered if they have their own law.

They now can keep 50 percent.

So passing this law will mean more recovered money will stay in New York's pocket.

Still, Taxpayers Against Fraud, a national nonprofit watchdog group, cautions that pursuing a false claim is a long and complicated process.

The whistle-blower basically is suing on behalf of the government.

A special lawyer is needed; the lawyer works on contingency, usually 35 percent of the whistle-blower's share.

But since we're talking about claims that average in the millions at settlement, the rewards fit the complications.

Eliot Spitzer, both as state attorney general and now as governor, has pounded home the need for such a statute.

It's a key to breaking down major Medicaid fraud, which we know is going on but we can't get at because it provides protection and reward for those on the inside who are most likely to know intimately about misdoings.

Oddly enough, Senate Majority Leader Joe Bruno and his conference have been the major impediment to the state passing a false claims act in the past, claiming all sorts of cockamamy reasons why it shouldn't happen.

Such as, that it's nothing more than a windfall for lawyers.

Good heavens, I mean, what isn't?

In addition, this year the Senate claimed that since there's already a federal False Claims Act, we don't need a state one.

While it is true that in a handful of cases a year, New York benefits from fraud being successfully prosecuted nationally, suggesting a state law would be redundant is absurd.

A New York false claims act means cheating New York hospitals and providers, insurance companies and pharmaceuticals, will be scrutinized from inside New York's health care industry, by workers who know exactly what they are looking at.

Stuff that even auditors might not recognize.

President Reagan put contemporary teeth to a false claims law first enacted by Abraham Lincoln to hold unscrupulous suppliers to the Union Army accountable.

Which is what makes the state Senate's resistance to a false claims act bizarre; nationally, such a statute has been hallmark legislation for conservative Republicans, a banner they proudly wave.

But not in New York.

At any rate, it does appear Senate opposition has been beaten down finally and appropriately.

This is a major coup for Spitzer's Medicaid reform plan.

The other piece the governor was adamant about was funding an enhanced Medicaid inspector general's office with more fraud investigators.

Bruno's Senate dropped the funding for more staff from its budget bills, although this probably was just a bargaining chip.

With so much at stake, it would be mind-boggling for the Senate to put roadblocks in front of fraud recovery.

Jim Moorman, president of Taxpayers Against Fraud, says that every reason raised across the country to deny a healthcare false claims act falls apart under scrutiny.

In Missouri, for example, some physicians have claimed such a law would chase doctors out of the state.

"We're optimistic about New York this year," said Moorman.

"But over time, we're confident every state will have a false claims act because it is so clearly in their best interest."

"New York is important because it is the largest state in the country not to have one, and with a Medicaid program the largest by far."

A dubious distinction we would love to whistle blow back to second or third place.

LeBrun can be reached at 454-5453 or by e-mail at flebrun@timesunion.com.

[Livyjr]

Comment by John Galt — March 30, 2007 @ 7:09 pm

Not to purposefully jump in here “off-topic”, but in following this unraveling, continuing story of this rush to pass this budget before anyone even knows what is really contained deep in its bowels, I am reminded of another budget bill from circa 1991, that is directly linked to a TU editorial or story entitled “State DEC undermines home rule”, first published Friday, March 3, 2006, wherein is stated in relevant part:

“New York prides itself as a home-rule state.”

“It’s in our constitution.”

“Effectively that means that when a state law or governmental action is going to affect a locality, a home-rule message of support is sought from the grass-roots entity, usually a town or city.”

“Not that this has done Nassau, or East Nassau, any good at all.”

“Nobody’s asked them if they want another mine in town, or any mine at all.”

“Worse, the DEC has relied for years on a self-generated technical memo from the early 1990s that states the DEC will process mining applications regardless of local zoning objections.”

“That memo needs to be discarded, and the conservation law rewritten.”

And how on point the TU was with that last statement!

And it all goes back to the cover sheet of an exultant PROCLAMATION published all over the State of New York on or about June 17, 1991 by ESCAPA, the “Empire State Concrete and Aggregate Producers Association, Inc.”, to trumpet its coup of burying an amended version of the New York State Mined Land Reclamation Law deep in the bowels of a lengthy “budget bill” that was before the New York State Legislature that year so that ESCAPA could have the law changed to suit its whims and needs, despite the NY Constitution:

WE DID IT! MINED LAND RECLAMATION BILL PASSED WITH STATE BUDGET!

A typical “BACK-ROOM DEAL” between LOBBYISTS, GOVERNMENT LAWYERS and POLITICIANS ON THE MAKE up here that then became the basis for how the “law” would be “interpreted” subsequently in the State of New York, which brings us to that TU editorial above …..

In a memorandum to ALL MEMBERS attached to that cover sheet above dated June 17, 1991, David S. Hamling, the then-Managing Director of ESCAPA stated as follows with respect to how “business” is really done in the State of New York, DESPITE THE NEW YORK STATE CONSTITUTION AND ANY LAWS TO THE CONTRARY:

“The Governor has signed the negotiated Mined Land Reclamation Law amendments into law as part of the State Budget!”

“This is a major piece of legislation which will dramatically improve conditions for the aggregate industry.”

“After many years of trying, the bill has finally passed and its provisions will become effective on September 1, 1991!”

“A fact sheet describing the major changes in the law is enclosed.”

“ESCAPA expects implementation of the Mined Land Reclamation law will SUFFER SOME ‘GROWING PAINS’, so we have developed a strategy to smooth the transition.”

“OUR BOARD OF DIRECTORS WILL ACT ON THE STRATEGY ON JUNE 18, 1001, AND WE WILL KEEP YOU ABREAST OF PROGRESS.”

“AS THE IMPACT OF THIS NEW STATUTE UNFOLDS, OUR RELATIONSHIPS WITH BOTH STATE AND LOCAL GOVERNMENTS WILL CHANGE, SO WE ARE URGING DISCRETION IN THE EARLY STAGES OF IMPLEMENTATION.”

“YOU MAY BE ASSURED, HOWEVER, THAT ESCAPA WILL AGGRESSIVELY PROTECT YOUR INTERESTS IN THIS PROCESS.”

“The regulatory climate for OUR industries is improving!”

“THIS IS AN IMPORTANT VICTORY, AND ONE THAT WAS ONLY POSSIBLE BY THE COMBINED EFFORTS OF OUR MEMBERSHIP.”

“CONGRATULATIONS!”

And that is how easy we get screwed here in NYS, despite our Constitution, which really has become a joke, with these latest budget goings-on right now ….

I wonder how much more we are getting screwed right now …

http://blogs.timesunion.com/capitol/?p=4266#comments

[Livyjr]

Comment by John Galt — March 30, 2007 @ 7:09 pm

And that is how easy we get screwed here in NYS, despite our Constitution, which really has become a joke, with these latest budget goings-on right now ….

I wonder how much more we are getting screwed right now …

http://blogs.timesunion.com/capitol/?p=4266#comments

NEW YORK STATE CONSTITUTION - ARTICLE VII - State Finances

Section 1. For the preparation of the budget, the head of each department of state government, except the legislature and judiciary, shall furnish the governor such estimates and information in such form and at such times as the governor may require, copies of which shall forthwith be furnished to the appropriate committees of the legislature.

The governor shall hold hearings thereon at which the governor may require the attendance of heads of departments and their subordinates.

Designated representatives of such committees shall be entitled to attend the hearings thereon and to make inquiry concerning any part thereof.

Itemized estimates of the financial needs of the legislature, certified by the presiding officer of each house, and of the judiciary, approved by the court of appeals and certified by the chief judge of the court of appeals, shall be transmitted to the governor not later than the first day of December in each year for inclusion in the budget without revision but with such recommendations as the governor may deem proper.

Copies of the itemized estimates of the financial needs of the judiciary also shall forthwith be transmitted to the appropriate committees of the legislature.

§ 2. Annually, on or before the first day of February in each year following the year fixed by the constitution for the election of governor and lieutenant governor, and on or before the second Tuesday following the first day of the annual meeting of the legislature, in all other years, the governor shall submit to the legislature a budget containing a complete plan of expenditures proposed to be made before the close of the ensuing fiscal year and all moneys and revenues estimated to be available therefor, together with an explanation of the basis of such estimates and recommendations as to proposed legislation, if any, which the governor may deem necessary to provide moneys and revenues sufficient to meet such proposed expenditures.

It shall also contain such other recommendations and information as the governor may deem proper and such additional information as may be required by law.

§ 3. At the time of submitting the budget to the legislature the governor shall submit a bill or bills containing all the proposed appropriations and reappropriations included in the budget and the proposed legislation, if any, recommended therein.

The governor may at any time within thirty days thereafter and, with the consent of the legislature, at any time before the adjournment thereof, amend or supplement the budget and submit amendments to any bills submitted by him or her or submit supplemental bills.

The governor and the heads of departments shall have the right, and it shall be the duty of the heads of departments when requested by either house of the legislature or an appropriate committee thereof, to appear and be heard in respect to the budget during the consideration thereof, and to answer inquiries relevant thereto.

The procedure for such appearances and inquiries shall be provided by law.

§ 4. The legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose.

None of the restrictions of this section, however, shall apply to appropriations for the legislature or judiciary.

Such an appropriation bill shall when passed by both houses be a law immediately without further action by the governor, except that appropriations for the legislature and judiciary and separate items added to the governor's bills by the legislature shall be subject to approval of the governor as provided in section 7 of article IV.

§ 5. Neither house of the legislature shall consider any other bill making an appropriation until all the appropriation bills submitted by the governor shall have been finally acted on by both houses, except on message from the governor certifying to the necessity of the immediate passage of such a bill.

§ 6. Except for appropriations contained in the bills submitted by the governor and in a supplemental appropriation bill for the support of government, no appropriations shall be made except by separate bills each for a single object or purpose.

All such bills and such supplemental appropriation bill shall be subject to the governor's approval as provided in section 7 of article IV.

No provision shall be embraced in any appropriation bill submitted by the governor or in such supplemental appropriation bill unless it relates specifically to some particular appropriation in the bill, and any such provision shall be limited in its operation to such appropriation.

§ 7. No money shall ever be paid out of the state treasury or any of its funds, or any of the funds under its management, except in pursuance of an appropriation by law; nor unless such payment be made within two years next after the passage of such appropriation act; and every such law making a new appropriation or continuing or reviving an appropriation, shall distinctly specify the sum appropriated, and the object or purpose to which it is to be applied; and it shall not be sufficient for such law to refer to any other law to fix such sum.

§ 8. 1. The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational, mental health or mental retardation purposes.

2. Subject to the limitations on indebtedness and taxation, nothing in this constitution contained shall prevent the legislature from providing for the aid, care and support of the needy directly or through subdivisions of the state; or for the protection by insurance or otherwise, against the hazards of unemployment, sickness and old age; or for the education and support of the blind, the deaf, the dumb, the physically handicapped, the mentally ill, the emotionally disturbed, the mentally retarded or juvenile delinquents as it may deem proper; or for health and welfare services for all children, either directly or through subdivisions of the state, including school districts; or for the aid, care and support of neglected and dependent children and of the needy sick, through agencies and institutions authorized by the state board of social welfare or other state department having the power of inspection thereof, by payments made on a per capita basis directly or through the subdivisions of the state; or for the increase in the amount of pensions of any member of a retirement system of the state, or of a subdivision of the state; or for an increase in the amount of pension benefits of any widow or widower of a retired member of a retirement system of the state or of a subdivision of the state to whom payable as beneficiary under an optional settlement in connection with the pension of such member.

The enumeration of legislative powers in this paragraph shall not be taken to diminish any power of the legislature hitherto existing.

3. Nothing in this constitution contained shall prevent the legislature from authorizing the loan of the money of the state to a public corporation to be organized for the purpose of making loans to non-profit corporations or for the purpose of guaranteeing loans made by banking organizations, as that term shall be defined by the legislature, to finance the construction of new industrial or manufacturing plants, the construction of new buildings to be used for research and development, the construction of other eligible business facilities, and for the purchase of machinery and equipment related to such new industrial or manufacturing plants, research and development buildings, and other eligible business facilities in this state or the acquisition, rehabilitation or improvement of former or existing industrial or manufacturing plants, buildings to be used for research and development, other eligible business facilities, and machinery and equipment in this state, including the acquisition of real property therefor, and the use of such money by such public corporation for such purposes, to improve employment opportunities in any area of the state, provided, however, that any such plants, buildings or facilities or machinery and equipment therefor shall not be (i) primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain such goods or services or (ii) used primarily as a hotel, apartment house or other place of business which furnishes dwelling space or accommodations to either residents or transients, and provided further that any loan by such public corporation shall not exceed sixty per centum of the cost of any such project and the repayment of which shall be secured by a mortgage thereon which shall not be a junior encumbrance thereon by more than fifty per centum of such cost or by a security interest if personalty, and that the amount of any guarantee of a loan made by a banking organization shall not exceed eighty per centum of the cost of any such project.

§ 9. The state may contract debts in anticipation of the receipt of taxes and revenues, direct or indirect, for the purposes and within the amounts of appropriations theretofore made.

Notes or other obligations for the moneys so borrowed shall be issued as may be provided by law, and shall with the interest thereon be paid from such taxes and revenues within one year from the date of issue.

The state may also contract debts in anticipation of the receipt of the proceeds of the sale of bonds theretofore authorized, for the purpose and within the amounts of the bonds so authorized.

Notes or obligations for the money so borrowed shall be issued as may be provided by law, and shall with the interest thereon be paid from the proceeds of the sale of such bonds within two years from the date of issue, except as to bonds issued or to be issued for any of the purposes authorized by article eighteen of this constitution, in which event the notes or obligations shall with the interest thereon be paid from the proceeds of the sale of such bonds within five years from the date of issue.

§ 10. In addition to the above limited power to contract debts, the state may contract debts to repel invasion, suppress insurrection, or defend the state in war, or to suppress forest fires; but the money arising from the contracting of such debts shall be applied for the purpose for which it was raised, or to repay such debts, and to no other purpose whatever.

§ 11. Except the debts or refunding debts specified in sections 9, 10 and 13 of this article, no debt shall be hereafter contracted by or in behalf of the state, unless such debt shall be authorized by law, for some single work or purpose, to be distinctly specified therein.

No such law shall take effect until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it at such election nor shall it be submitted to be voted on within three months after its passage nor at any general election when any other law or any bill shall be submitted to be voted for or against.

The legislature may, at any time after the approval of such law by the people, if no debt shall have been contracted in pursuance thereof, repeal the same; and may at any time, by law, forbid the contracting of any further debt or liability under such law.

§ 12. Except the debts or refunding debts specified in sections 9, 10 and 13 of this article, all debts contracted by the state and each portion of any such debt from time to time so contracted shall be subject to the following rules:

1. The principal of each debt or any portion thereof shall either be paid in equal annual installments or in installments that result in substantially level or declining debt service payments such as shall be authorized by law, or, in the alternative, contributions of principal in the amount that would otherwise be required to be paid annually shall be made to a sinking fund.

2. When some portions of the same debt are payable annually while other portions require contributions to a sinking fund, the entire debt shall be structured so that the combined amount of annual installments of principal paid and/or annual contributions of principal made in each year shall be equal to the amount that would be required to be paid if the entire debt were payable in annual installments.

3. When interest on state obligations is not paid at least annually, there shall also be contributed to a sinking fund at least annually, the amount necessary to bring the balance thereof, including income earned on contributions, to the accreted value of the obligations to be paid therefrom on the date such contribution is made, less the sum of all required future contributions of principal, in the case of sinking fund obligations, or payments of principal, in the case of serial obligations.

Notwithstanding the foregoing, nothing contained in this subdivision shall be deemed to require contributions for interest to sinking funds if total debt service due on the debt or portion thereof in the year such interest is due will be substantially the same as the total debt service due on such debt or portion thereof in each other year or if the total amount of debt service due in each subsequent year on such debt or portion thereof shall be less than the total debt service due in each prior year.

4. The first annual installment on such debt shall be paid, or the first annual contribution shall be made to a sinking fund, not more than one year, and the last installment shall be paid, or contribution made not more than forty years, after such debt or portion thereof shall have been contracted, provided, however, that in contracting any such debt the privilege of paying all or any part of such debt prior to the date on which the same shall be due may be reserved to the state in such manner as may be provided by law.

5. No such debt shall be contracted for a period longer than that of the probable life of the work or purpose for which the debt is to be contracted, or in the alternative, the weighted average period of probable life of the works or purposes for which such indebtedness is to be contracted.

The probable lives of such works or purposes shall be determined by general laws, which determination shall be conclusive.

6. The money arising from any loan creating such debt or liability shall be applied only to the work or purpose specified in the act authorizing such debt or liability, or for the payment of such debt or liability, including any notes or obligations issued in anticipation of the sale of bonds evidencing such debt or liability.

7. Any sinking funds created pursuant to this section shall be maintained and managed by the state comptroller or an agent or trustee designated by the state comptroller, and amounts in sinking funds created pursuant to this section, and earnings thereon, shall be used solely for the purpose of retiring the obligations secured thereby except that amounts in excess of the required balance on any contribution date and amounts remaining in such funds after all of the obligations secured thereby have been retired shall be deposited in the general fund.

8. No appropriation shall be required for disbursement of money, or income earned thereon, from any sinking fund created pursuant to this section for the purpose of paying principal of and interest on the obligations for which such fund was created, except that interest shall be paid from any such fund only if, and to the extent that, it is not payable annually and contributions on account of such interest were made thereto.

9. The provisions of section 15 of this article shall not apply to sinking funds created pursuant to this section.

10. When state obligations are sold at a discount, the debt incurred for purposes of determining the amount of debt issued or outstanding pursuant to a voter approved bond referendum or other limitation on the amount of debt that may be issued or outstanding for a work or purpose shall be deemed to include only the amount of money actually received by the state notwithstanding the face amount of such obligations.

§ 13. The legislature may provide means and authority whereby any state debt or debts, or any portion or combination thereof, may be refunded in accordance with the following provisions:

1. State debts may be refunded at any time after they are incurred provided that the state will achieve a debt service savings on a present value basis as a result of the refunding transaction, and further provided that no maturity shall be called for redemption unless the privilege to pay prior to the maturity date was reserved to the state.

The legislature may provide for the method of computation of present value for such purpose.

2. In no event shall refunding obligations be issued in an amount exceeding that necessary to provide sufficient funds to accomplish the refunding of the obligations to be refunded including paying all costs and expenses related to the refunding transaction and, in no event, shall the proceeds of refunding obligations be applied to any purpose other than accomplishing the refunding of the debt to be refunded and paying costs and expenses related to the refunding.

3. Proceeds of refunding obligations shall be deposited in escrow funds which shall be maintained and managed by the state comptroller or by an agent or trustee designated by the state comptroller and no legislative appropriation shall be required for disbursement of money, or income earned thereon, from such escrow funds for the purposes enumerated in this section.

4. Refunding obligations may be refunded pursuant to this section.

5. Refunding obligations shall either be paid in annual installments or annual contributions shall be made to a sinking fund in amounts sufficient to retire the refunding obligations at their maturity.

No annual installments or contributions of principal need be made with respect to all or any portion of an issue of refunding obligations in years when debt service on such refunding obligations or portion thereof is paid or contributed entirely from an escrow fund created pursuant to subdivision 3 of this section or in years when no installments or contributions would have been due on the obligations to be refunded.

So long as any of the refunding obligations remain outstanding, installments or contributions shall be made in any years that installments or contributions would have been due on the obligations to be refunded.

6. In no event shall the last annual installment or contribution on any portion of refunding debt, including refunding obligations issued to refund other refunding obligations, be made after the termination of the period of probable life of the projects financed with the proceeds of the relevant portion of the debt to be refunded, or any debt previously refunded with the refunding obligations to be refunded, determined as of the date of issuance of the original obligations pursuant to section 12 of this article to finance such projects, or forty years from such date, if earlier; provided, however, that in lieu of the foregoing, an entire refunding issue or portion thereof may be structured to mature over the remaining weighted average useful life of all projects financed with the obligations being refunded.

7. Subject to the provisions of subdivision 5 of this section, each annual installment or contribution of principal of refunding obligations shall be equal to the amount that would be required by subdivision 1 of section 12 of this article if such installments or contributions were required to be made from the year that the next installment or contribution would have been due on the obligations to be refunded, if they had not been refunded, until the final maturity of the refunding obligations but excluding any year in which no installment or contribution would have been due on the obligations to be refunded or, in the alternative, the total payments of principal and interest on the refunding bonds shall be less in each year to their final maturity than the total payments of principal and interest on the bonds to be refunded in each such year.

8. The provisions of subdivision 3 and subdivisions 7 through 9 of section 12 of this article shall apply to sinking funds created pursuant to this section for the payment at maturity of refunding obligations.

§ 14. The legislature may authorize by law the creation of a debt or debts of the state, not exceeding in the aggregate three hundred million dollars, to provide moneys for the elimination, under state supervision, of railroad crossings at grade within the state, and for incidental improvements connected therewith as authorized by this section.

The provisions of this article, not inconsistent with this section, relating to the issuance of bonds for a debt or debts of the state and the maturity and payment thereof, shall apply to a state debt or debts created pursuant to this section; except that the law authorizing the contracting of such debt or debts shall take effect without submission to the people pursuant to section 11 of this article.

The aggregate amount of a state debt or debts which may be created pursuant to this section shall not exceed the difference between the amount of the debt or debts heretofore created or authorized by law, under the provisions of section 14 of article VII of the constitution in force on July first, nineteen hundred thirty-eight, and the sum of three hundred million dollars.

The expense of any grade crossing elimination the construction work for which was not commenced before January first, nineteen hundred thirty-nine, including incidental improvements connected therewith as authorized by this section, whether or not an order for such elimination shall theretofore have been made, shall be paid by the state in the first instance, but the state shall be entitled to recover from the railroad company or companies, by way of reimbursement:

(1) the entire amount of the railroad improvements not an essential part of elimination, and

(2) the amount of the net benefit to the company or companies from the elimination exclusive of such railroad improvements, the amount of such net benefit to be adjudicated after the completion of the work in the manner to be prescribed by law, and in no event to exceed fifteen per centum of the expense of the elimination, exclusive of all incidental improvements.

The reimbursement by the railroad companies shall be payable at such times, in such manner and with interest at such rate as the legislature may prescribe.

The expense of any grade crossing elimination the construction work for which was commenced before January first, nineteen hundred thirty-nine, shall be borne by the state, railroad companies, and the municipality or municipalities in the proportions formerly prescribed by section 14 of article VII of the constitution in force on July first, nineteen hundred thirty-eight, and the law or laws enacted pursuant to its provisions, applicable to such elimination, and subject to the provisions of such former section and law or laws, including advances in aid of any railroad company or municipality, although such elimination shall not be completed until after January first, nineteen hundred thirty-nine.

A grade crossing elimination the construction work for which shall be commenced after January first, nineteen hundred thirty-nine, shall include incidental improvements rendered necessary or desirable because of such elimination, and reasonably included in the engineering plans therefor.

Out of the balance of all moneys authorized to be expended under section 14 of article VII of the constitution in force on July first, nineteen hundred thirty-eight, and remaining unexpended and unobligated on such date, fifty million dollars shall be deemed segregated for grade crossing eliminations and incidental improvements in the city of New York and shall be available only for such purposes until such eliminations and improvements are completed and paid for.

Notwithstanding any of the foregoing provisions of this section the legislature is hereby authorized to appropriate, out of the proceeds of bonds now or hereafter sold to provide moneys for the elimination of railroad crossings at grade and incidental improvements pursuant to this section, sums not exceeding in the aggregate sixty million dollars for the construction and reconstruction of state highways and parkways.

§ 15. The sinking funds provided for the payment of interest and the extinguishment of the principal of the debts of the state heretofore contracted shall be continued; they shall be separately kept and safely invested, and neither of them shall be appropriated or used in any manner other than for such payment and extinguishment as hereinafter provided.

The comptroller shall each year appraise the securities held for investment in each of such funds at their fair market value not exceeding par.

The comptroller shall then determine and certify to the legislature the amount of each of such funds and the amounts which, if thereafter annually contributed to each such fund, would, with the fund and with the accumulations thereon and upon the contributions thereto, computed at the rate of three per centum per annum, produce at the date of maturity the amount of the debt to retire which such fund was created, and the legislature shall thereupon appropriate as the contribution to each such fund for such year at least the amount thus certified.

If the income of any such fund in any year is more than a sum which, if annually added to such fund would, with the fund and its accumulations as aforesaid, retire the debt at maturity, the excess income may be applied to the interest on the debt for which the fund was created.

After any sinking fund shall equal in amount the debt for which it was created no further contribution shall be made thereto except to make good any losses ascertained at the annual appraisals above mentioned, and the income thereof shall be applied to the payment of the interest on such debt.

Any excess in such income not required for the payment of interest may be applied to the general fund of the state.

§ 16. The legislature shall annually provide by appropriation for the payment of the interest upon and installments of principal of all debts or refunding debts created on behalf of the state except those contracted under section 9 of this article, as the same shall fall due, and for the contribution to all of the sinking funds created by law, of the amounts annually to be contributed under the provisions of section 12, 13 or 15 of this article.

If at any time the legislature shall fail to make any such appropriation, the comptroller shall set apart from the first revenues thereafter received, applicable to the general fund of the state, a sum sufficient to pay such interest, installments of principal, or contributions to such sinking fund, as the case may be, and shall so apply the moneys thus set apart.

The comptroller may be required to set aside and apply such revenues as aforesaid, at the suit of any holder of such bonds.

Notwithstanding the foregoing provisions of this section, the comptroller may covenant with the purchasers of any state obligations that they shall have no further rights against the state for payment of such obligations or any interest thereon after an amount or amounts determined in accordance with the provisions of such covenant is deposited in a described fund or with a named or described agency or trustee.

In such case, this section shall have no further application with respect to payment of such obligations or any interest thereon after the comptroller has complied with the prescribed conditions of such covenant.

§ 17. The legislature may establish a fund or funds to aid in the stabilization of the tax revenues of the state available for expenditure or distribution.

Any law creating such a fund shall specify the tax or taxes to which such fund relates, and shall prescribe the method of determining the amount of revenue from any such tax or taxes which shall constitute a norm of each fiscal year.

Such part as shall be prescribed by law of any revenue derived from such tax or taxes during a fiscal year in excess of such norm shall be paid into such fund.

No moneys shall at any time be withdrawn from such fund unless the revenue derived from such tax or taxes during a fiscal year shall fall below the norm for such year; in which event such amount as may be prescribed by law, but in no event an amount exceeding the difference between such revenue and such norm, shall be paid from such fund into the general fund.

No law changing the method of determining a norm or prescribing the amount to be paid into such a fund or to be paid from such a fund into the general fund may become effective until three years from the date of its enactment.

§ 18. The legislature may authorize by law the creation of a debt or debts of the state to provide for the payment of a bonus to each male and female member of the armed forces of the United States, still in the armed forces, or separated or discharged under honorable conditions, for service while on active duty with the armed forces at any time during the period from December seventh, nineteen hundred forty-one to and including September second, nineteen hundred forty-five, who was a resident of this state for a period of at least six months immediately prior to his or her enlistment, induction or call to active duty.

The law authorizing the creation of the debt shall provide for payment of such bonus to the next of kin of each male and female member of the armed forces who, having been a resident of this state for a period of six months immediately prior to his or her enlistment, induction or call to active duty, died while on active duty at any time during the period from December seventh, nineteen hundred forty-one to and including September second, nineteen hundred forty-five; or who died while on active duty subsequent to September second, nineteen hundred forty-five, or after his or her separation or discharge under honorable conditions, prior to receiving payment of such bonus.

An apportionment of the moneys on the basis of the periods and places of service of such members of the armed forces shall be provided by general laws.

The aggregate of the debts authorized by this section shall not exceed four hundred million dollars.

The provisions of this article, not inconsistent with this section, relating to the issuance of bonds for a debt or debts of the state and the maturity and payment thereof, shall apply to a debt or debts created pursuant to this section; except that the law authorizing the contracting of such debt or debts shall take effect without submission to the people pursuant to section eleven of this article.

Proceeds of bonds issued pursuant to law, as authorized by this section as in force prior to January first, nineteen hundred fifty shall be available and may be expended for the payment of such bonus to persons qualified therefor as now provided by this section.

§ 19. The legislature may authorize by law the creation of a debt or debts of the state, not exceeding in the aggregate two hundred fifty million dollars, to provide moneys for the construction, reconstruction, rehabilitation, improvement and equipment of facilities for the expansion and development of the program of higher education provided and to be provided at institutions now or hereafter comprised within the state university, for acquisition of real property therefor, and for payment of the state's share of the capital costs of locally sponsored institutions of higher education approved and regulated by the state university trustees.

The provisions of this article, not inconsistent with this section, relating to the issuance of bonds for a debt or debts of the state and the maturity and payment thereof, shall apply to a state debt or debts created pursuant to this section; except that the law authorizing the contracting of such debt or debts shall take effect without submission to the people pursuant to section eleven of this article.

http://www.senate.state.ny.us/lbdcinfo/senconstitution.html