Archive for December, 2009

Paterson Sued Over School Payments

by Nicolas Confessore

Alan Lubin

ALBANY — A coalition of teachers’ unions and local school officials mounted a legal battle on Wednesday against Gov. David A. Paterson, arguing that his decision to unilaterally withhold hundreds of millions of dollars in scheduled payments to school districts violated New York’s Constitution.

The educators asserted in a lawsuit filed in State Supreme Court in Albany County that Mr. Paterson had no power to withhold money after its expenditure had been authorized by the Legislature.

“This is a terrible day in New York’s history,” said Alan B. Lubin, vice president of the New York State United Teachers, one of the groups that helped draft the lawsuit. “For this coalition to stand back and watch the governor take the money that was allocated by the State Legislature for schools, for programs, for children, and pull it back, is really a terrible thing to have witnessed.”

Mr. Paterson announced Sunday that he would withhold the money after weeks of failed negotiations with the Legislature over how to close a $3.2 billion deficit. He also said that if the economy did not improve and if state revenues did not rise next year, the money being withheld could become the basis for cuts in next year’s budget.

At a news conference at the Capitol minutes after the lawsuit was filed, Mr. Paterson reiterated that the payments being withheld were part of the roughly $750 million in local aid that he was not distributing because the state was projected to run out of money before the end of the year.

“I am being sued for trying to keep New York State’s finances solvent,” Mr. Paterson said. “This is a desperate attempt by special interests to put their needs ahead of the people of the State of New York. This lawsuit does nothing to help us solve a severe cash crisis that threatens our ability to pay our obligations at the end of the month.”

The lawsuit was filed by the state teachers’ union and groups representing school district superintendents, school board members and administrators.

Leaders of the groups suggested, in a news conference on the steps of the Capitol, that children would suffer if the money, about $582 million in school aid and property tax reimbursements, was not restored. School district officials also suggested that they should not have to dip further into their own reserve funds — which total $1.1 billion statewide — before Mr. Paterson had exhausted the state’s own emergency fund.

L. Oliver Robinson, president of the New York State Council of School Superintendents and superintendent of the Shenendehowa School District outside Albany, said Mr. Paterson’s decision would force cuts in critical services.

“When I go back to my school district,” he said, “and meet with the kids in classrooms, the questions they’re asking me are, ‘Dr. Robinson, will we still have this? Will we still have sports? Will we still have music? Will we still have robotics?’ ”

A spokesman for Mr. Paterson said that the governor’s order meant that $120,000 was being withheld from Mr. Robinson’s district and that the school system had about $3.8 million in reserve funds.

Mr. Lubin proposed options to avoid the loss of school aid. Mr. Paterson, he said, should consider buying prescription drugs for state health plans from Canada, cooperative purchasing of school supplies or higher income taxes on the wealthy — a move that would raise taxes on high earners for the second time in less than a year.

“I would have him look at the revenue sources available in New York State, and some of the programs that he’s refused to look at for the past 16 months,” Mr. Lubin said.

Mr. Paterson singled out school officials and advocates for criticism, noting that while he had tried to delay payments equally across the board, those who filed the lawsuit were in essence arguing that their funding was sacrosanct, even amid the worst state fiscal crisis in a generation.

“What these school districts and unions and otherwise have done is said: ‘We aren’t the special interests — we’re extra special,’ ” Mr. Paterson said. “ ‘We’re supposed to get all the money and everybody else can just divide up the crumbs.’ ”

Education groups file lawsuit to block withholding of school aid

ALBANY, N.Y. December 16, 2009 — A broad coalition of education advocates and citizen taxpayers, seeking to protect school programs from elimination, stop employee layoffs and prevent dramatic property tax increases, today filed suit against Gov. David Paterson, saying he acted illegally and unconstitutionally by withholding state funds allocated by the state Legislature for school districts.

The lawsuit was filed in state Supreme Court in Albany County by New York State United Teachers; New York State School Boards Association; New York State Council of School Superintendents; and the School Administrators Association of New York State. Other education partners, including the Campaign for Fiscal Equity, the New York State Association of School Business Officials and the state PTA, signaled their strong support.

The suit states the governor is violating the separation of powers doctrine of the state Constitution — and the constitutional guarantee of “a sound, basic education” for students — by ordering the withholding of millions of dollars in state aid payments to school districts when the Legislature not only approved those payments, but specifically rejected proposed education cuts by not enacting a bill submitted by Paterson on Nov. 25 as part of his deficit reduction plan.

“The governor may not agree with the Legislature’s spending priorities and may indeed have profound concerns about the results, but once he signed the state budget in April and approved the deficit reduction plan, he is constitutionally and legally bound to follow the law,” said NYSUT President Richard C. Iannuzzi. “The governor is overstepping his bounds. He clearly lacks any legislative, statutory or constitutional basis to withhold funds from school districts and, by doing so, he is harming children and their schools.”

“School districts cannot provide educational programs to students in an unpredictable and chaotic funding environment,” said NYSSBA Executive Director Timothy G. Kremer. “The governor’s unilateral midyear cut to schools has already created havoc and uncertainty in many districts, as they study their options – all of which have adverse consequences for taxpayers. We are deeply concerned about the governor’s action to withhold or delay payments to schools in the future.”

Kremer added, “School boards are bracing themselves for the tough fiscal challenges that lie ahead, when federal stimulus funds expire and costs continue to skyrocket. What we expect of our leaders is long-term financial planning and greater fiscal certainty, not chaos and doubt.”

“The law is the law,” said Dr. L. Oliver Robinson, president of the New York State Council of School Superintendents. “In seeking to delay school aid and STAR payments, Governor Paterson is choosing to ignore laws which require the state to pay certain amounts of aid to schools by certain dates. We are taking legal action today in part to prevent any governor from ever ignoring those same laws to permanently withhold aid.”

Robinson added, “As it is, Governor Paterson threatens that he may seek to turn these delays into permanent cuts. This puts school leaders in an impossible position. We cannot tell students, ‘Potentially, we will keep your teacher on the job,’ or ‘Potentially, we will continue the extra help you receive.’ We cannot tell employees or suppliers, ‘Potentially, we will pay you what we owe.’”

Kevin Casey, executive director of the School Administrators Association of New York State, added, “The governor’s action will deprive children of educational programming that many will not have the opportunity to make up. It also eviscerates the school district budget approval process, rendering meaningless the district budgets approved by district taxpayers.”

“The opportunity for a sound, basic education is a state constitutional right that ensures that our children are given the tools to thrive and drive the economy. Despite a court order and a legislative agreement to honor this commitment, the governor continues make proposals that turn back the clock on providing adequate school funding to achieve this goal. This delay will necessitate layoffs, as well as program and resource cuts,” said Geri D. Palast, executive director of the Campaign for Fiscal Equity, the education advocacy organization that led the successful constitutional challenge to New York state’s school finance system. “The governor’s decision to withhold education aid ignores a clear constitutional mandate, and it will have a profoundly negative impact on this state’s most valuable asset, its children.”

“If the governor’s actions are allowed to stand, and this aid payment guessing game is allowed to continue, school districts will have no choice but to make management decisions that are counterproductive to sound financial practices,” said Deedrick Bertholf, NYSASBO’s executive director.

New York State Congress of Parents and Teachers President Susan Lipman added that the governor’s decision “presents serious fiscal implications on the ability of local school districts to continue to provide necessary educational services to children. Lipman said the state PTA “supports the efforts of NYSSBA, NYSUT and other education advocates in seeking injunctive relief to stop the governor from taking these steps.”

NYSUT Executive Vice President Alan B. Lubin agreed that the withholding of school aid would likely mean larger classes and the inability of districts to fund programs — such as speech therapy and extracurricular activities for children — and pay teachers and staff.

“Schools rely on state education funding and local property taxes to provide New York’s children with the sound, basic education they are guaranteed under our Constitution,” Lubin said. “The governor’s decision to withhold school aid has already led to layoff notices and worries that school districts will not be able to fund important programs, make payments to vendors and, in some cases, even meet payroll.”

The lawsuit seeks to stop the governor from usurping the constitutional policy-making authority of the Legislature, and asks the court to order the governor to release the appropriated funds immediately. The suit notes that, if the court does not stop the governor’s actions, “He will only be emboldened to take other … unilateral action, further unbalancing the three coordinate branches of government (and) silencing the voice of the people.”

“The governor is well-aware that his actions violate the Constitution but he seems intent on carrying through with them regardless of his constitutional obligations,” the suit states.

Among the suit’s plaintiffs are NYSUT through its President Iannuzzi; NYSSBA through its President Wayne Schlifke; NYSCOSS through its President Robinson; and SAANYS through its President Peter Kruszynski. CFE, NYSASBO and the state PTA are strongly backing the groups’ lawsuit.

Other individual plaintiffs include Doug Becker, a math teacher in Churchville-Chili; Brian Boyd, a fourth-grade teacher from Yonkers; George Heidcamp, president of the board of education in Saugerties; Paul Hetland, a social studies teacher from Rochester; Florence D. Johnson, a member of the board of education in Buffalo and president-elect of NYSSBA; Kimberly Petramale, a math teacher in Saugerties; and Harry B. Reeder, a member of the board of education in Herkimer.

In addition to Paterson, the suit names as defendants the state Division of Budget and Budget Director Robert L. Megna, as well as state Comptroller Thomas DiNapoli.

Read the full legal filing here:  LEGAL

Voting 45-1, Council Rejects $310 Million Plan for Mall at Bronx Armory

by Sam Dolnick

Bronx advocates said that the City Council vote on Monday to reject a $310 million project to build a mall inside the Kingsbridge Armory provided an opportunity to come up with a more community-oriented plan for the massive red-brick castle.

City Council members who voted down the project 45 to 1, with one abstention, said that the plan, proposed by the Related Companies, would have created hundreds of jobs that would have paid at or around the state’s minimum wage of $7.25 an hour, pay that they called too low to support local families.

They wanted Related to pledge that every job at the mall would pay at least $10 an hour, arguing that the company was set to receive more than $50 million in tax credits and exemptions. Many cities across the country have similar requirements for projects built using public money.

But Related said that any requirement to pay above minimum wage would make it impossible to attract tenants or secure financing.

The two sides negotiated through Sunday night, but with neither willing to bend, the Council voted to kill project, quashing plans that the developer said would have created 1,000 construction jobs and about 1,200 permanent ones.

The Kingsbridge Armory Redevelopment Alliance, a coalition of labor, religious and community leaders, said it would seek to work with a developer that would turn the building into a community resource that offers space for recreation, cultural and educational activities.

“We want development that will improve the community but not at the expense of pushing poor people out,” said Desiree Pilgrim-Hunter, a longtime Bronx advocate.

The vote was a surprising defeat for the Bloomberg administration, which championed the project as a valuable investment that would spur much-needed economic development in the city’s poorest borough.

But to many in the Bronx, the Kingsbridge Armory project and the prospect of so many low-wage jobs crystallized what opponents regarded as Mayor Michael R. Bloomberg’s disregard for working-class families. The fight for a “living wage” became a populist battle against “profits for barons,” in the words of Bronx Borough President Rubén Díaz Jr., and an opportunity to hold developers that use public funds accountable.

“I am against any irresponsible project that would bring negative impacts to the community,” said Councilwoman Annabel Palma, the leader of the Bronx delegation. She cited traffic problems and parking concerns, along with the low wages, as the project’s biggest problems.

Mr. Bloomberg called the vote “disappointing and irrational.” In a statement, he said, “As a result of today’s vote, we can say one thing for sure: There will be no wages paid at all at the Kingsbridge Armory for the foreseeable future.”

Related, which has built projects across the city, including several in the Bronx, blamed the collapse of the plan on “outside groups imposing artificial wage demands that do not exist anywhere else in New York City or New York State.”

The armory, a federal, state and city landmark on Kingsbridge Road at Jerome Avenue, was built by the city between 1912 and 1917 and was used to store arms and ammunition and to train troops. Since then, it has been used as a shelter for homeless women and a concert space, among many other incarnations, but it has sat vacant for more than a decade.

On Monday, council members played down the importance of the wage issue and maintained that land-use problems were the main reason for the outcome of the vote, part of the Uniform Land Use Review Procedure. But for months, the wage dispute has drowned out other concerns.

Advocates praised the Council’s vote, and members of the alliance gathered Monday at City Hall with signs saying, “Bloomberg to Bronx: Drop dead.”

Mr. Bloomberg’s office said he would veto the Council’s decision. But the Council speaker, Christine C. Quinn, said she had the two-thirds majority vote needed to override him.

The armory vote, originally scheduled for last week, was postponed to allow for further negotiation. One potential compromise was a city fund to pay retail employees at the armory extra wages on top of what employers paid, or to provide them with MetroCards and other benefits. The fund would have been financed partly with the $5 million that Related offered to pay for the building. That idea collapsed when the city lawyers said aspects of it would run afoul of the State Constitution, Councilman Joel Rivera said.

The Council’s demand for higher paying wages was not unprecedented. Nearly 200 cities already require developers using public money to pay more than the minimum wage, according to Peter Dreier, a politics and urban policy professor at Occidental College in Los Angeles who has studied wage issues.

At the Kingsbridge Barber Shop, across the street from the hulking armory, barbers and customers alike said the community did not need a mall, or more low-wage work.

“People need jobs, but they don’t need chump change,” Jose Nuñez said as he cut a customer’s hair on a recent afternoon. “This building belongs to the people in this area.”

From the barber’s chair, Courtney Brooks agreed. “We’re not suckers in the Bronx,” he said. “We’re not going to take whatever somebody is offering.”

Pallotta Elected NYSUT Executive Vice President

ALBANY, N.Y., Dec. 7, 2009 – Andrew Pallotta, a veteran New York City public school educator and United Federation of Teachers leader, has been elected executive vice president of New York State United Teachers by the union’s Board of Directors.

Pallotta, who as a UFT district representative in the Bronx represented 57 local school chapters, will head NYSUT’s legislative and political action department. He succeeds Alan Lubin, who will retire in January after serving more than 16 years in the post.

NYSUT President Richard C. Iannuzzi said he is confident that, under Pallotta‘s leadership, NYSUT will continue to build upon the record of success achieved during Lubin’s tenure.

“Andy is the right choice for these tough times, and his experience, dedication and temperament will be an asset to the union,” Iannuzzi said. “He will be a strong and clear voice for our members as we continue our work in protecting and defending public education, vital programs and services, and the professions which NYSUT represents.”

“The challenges are many,” said Pallotta. “But we have a great organization at NYSUT with high ideals and values. With the involvement of our engaged members, I’m confident we will move our agenda of public education and health care forward. I’ve always believed in hard work and going that extra mile, and I want to accomplish great things for NYSUT members and the communities they serve.”

Pallotta, an art and physical education teacher at PS 32 in the Fordham section of the Bronx, has spent 24 years in the classroom. As the UFT’s District 10 representative since September 2006, Pallotta served extensively in a wide range of negotiating, lobbying, political outreach and community-relations roles. He also has served as a delegate to NYSUT, UFT and American Federation of Teachers conventions and as a member of the UFT Executive Board.

Lubin’s retirement will cap a distinguished career that spanned more than four decades as a teacher and union leader with both the UFT and NYSUT.

“Alan has been instrumental in making NYSUT the positive force that it is today for public education and health care,” Iannuzzi said. “While his success in the legislative and political action arena speaks for itself, it should also be noted that Alan has been a tireless champion throughout his career for social justice and civil rights – values that our members not only hold dear, but that also guide the work to which NYSUT is committed.”

NYSUT, the state’s largest union, represents more than 600,000 classroom teachers and other school employees; faculty and other professionals at the state’s community colleges; State University of New York and City University of New York; and other education and health professionals. NYSUT is affiliated with the American Federation of Teachers, National Education Association and AFL-CIO.

BALCONY report on highly successful Small Business Forum

Small businesses are the cornerstone of the New York State economy,
accounting for 98% of all businesses and employing 52% of the non-farm, private sector workforce.

Even in the best of economic times, New York Small Businesses are facing insurmountable challenges due to excessively high taxes, high regulatory costs, and burdensome processes. And, now those issues have become compounded during this time of recession. Small Businesses need to know where to turn for some answers, which is why BALCONY has taken on this challenge.

Featured Speaker
Adam Bradley
White Plains Mayor-elect and
NYS Assemblyman of the 89th Assembly District

On Friday, November 20, 2009, the Access for Small Business Forum – a four-panel discussion organized by BALCONY, the Business and Labor Coalition of New York and co-hosted with The Greater New York Chamber of Commerce – addressed these key small business concerns.

ACCESS TO TECHNOLOGY SOLUTIONS FOR SMALL BUSINESS

(Chris Levendos, Michael Ridley, Heather O’Donnell,
Chris Zawacki, Ron Koff, Lou Gordon)

ACCESS TO SMALL BUSINESS DEVELOPMENT

(Christine Serrano Glassner, William Grinker, Rosemarie Klotz,
Jim Malski, Brian Moran, Barbara Weltman)

ACCESS TO CAPITAL FOR SMALL BUSINESS

(Bruce Ventimiglia, Pravina Raghavan, David J. Conrad,
David Kornfeld, Paul Quintero, Louis Scamardella)

ACCESS TO HEALTH CARE FOR SMALL BUSINESS

(Lou Gordon, Troy Oechsner, Ben Geyerhahn, Vince Ashton,
Peter Slocum, Ernie Vitolo)

Read the full report from this BALCONY forum
and watch the presentation videos by clicking here: REPORT

GOV SENDS $EIZIN’S GREETINGS

by Sally Goldenberg

Gov. Paterson yesterday ordered his budget staff to withhold $750 million in payments to municipalities for school aid, property-tax exemptions and other services to keep the state afloat for the rest of December.

The governor blamed the cash-flow problem — which affects the city to the tune of about $84 million — on the Legislature’s failure to close the budget gap.

A teachers union has threatened legal action to stop him.

“We’re disappointed in the tack that the governor has taken, especially after the Legislature expressly chose not to reduce school aid, and we are reviewing our legal options,” said Carl Korn, spokesman for the New York State United Teachers.

A grim Paterson said he was confident his action would hold up in court.

“This is tragic that we’re put in this situation, but we did not get the resources from the special [legislative] session that I have been saying for the last three months that we actually need,” the governor said at a press conference.

“If the Legislature won’t act, then I will. I will not let this state run out of money on my watch.”

He said New York is $1 billion short of cash this month and will make up the remaining $250 million with anticipated revenues and a rainy-day fund.

During the special session, the Legislature agreed to only $2.7 billion worth of cuts to plug a $3.2 billion budget hole for the fiscal year, which ends in March.

The delayed payments announced yesterday will hit the city especially hard, with a loss of nearly $24 million in municipal aid payments and about $60 million in school aid from checks that were to arrive tomorrow.

Mayor Bloomberg declined comment, saying he was awaiting more information, but state lawmakers panned the move.

“From the governor’s own statements, he already knows that any attempt to singlehandedly impound money that has been allocated by the Legislature is unconstitutional,” said Senate Finance Chairman Carl Kruger (D-Brooklyn).

Austin Shafran, spokesman for the Senate Democrats, said, “Constantly attacking the Legislature is easy, but it doesn’t solve people’s problems. New Yorkers don’t want political rancor or self-indulgent theatrics. They want their leaders to get things done.”

Paterson is directing the state to withhold 10 percent of payments for a slew of services, and said he would re-evaluate the fiscal situation next month to determine when municipalities will actually get the cash they are counting on.

A state budget official said it was unclear whether the state must make these payments by the end of its fiscal year.

Paterson Trims Aid to Schools and Localities

by Kareem Fahim

Gov. David A. Paterson announced on Sunday that he would unilaterally withhold $750 million in scheduled payments to schools and local governments, saying that strong action was necessary to protect New York State from insolvency.

The reductions of 10 to 19 percent in aid will affect schools and social service providers, health insurance payments, cities and counties. Mr. Paterson said the withheld funds were not “a cut” or an “impoundment” — perhaps drawing a legal distinction because only the Legislature is empowered to make permanent budget cuts.

Some lawmakers called the move illegal, but the governor said “we are well within the bounds of legal authority.”

The governor did not indicate when he would restore the funds, except to say, “as sufficient revenues become available.”

The reductions mean that New York City will not get approximately $84 million in municipal aid and school payments scheduled for Tuesday; an additional $107 million will be withheld across the state. Later this month, $560 million more in scheduled payments will be withheld.

A spokesman for Mayor Michael R. Bloomberg said the city was still studying the governor’s proposal. The mayor has said he would probably not object to a plan for spending cuts, as long as they did not disproportionately affect the city.

In announcing the withholding, Mr. Paterson made good on a threat he issued late last month to act on his own if the Legislature did not make enough cuts to address a $3.2 billion state budget deficit. The governor acknowledged that the move was only a “temporary fix.” He said it was needed because of Albany’s legislators’ inaction.

“The reason that we don’t have a permanent fix is because the Legislature walked away and ran back to their districts and told their constituents, ‘Look, I saved the school district from the big bad governor,’ ” he said. “But the reality is that they only temporarily delayed the day of reckoning.”

Mr. Paterson’s cuts to school funds were a direct challenge to state lawmakers, who have regarded such state aid as sacrosanct. After the governor’s announcement, school districts sought to determine the move’s impact.

It was also uncertain when the state’s fiscal health would improve enough so that the withheld money could be restored; the state’s revenue picture is expected to brighten somewhat next month, after bonuses are paid to Wall Street executives and as tax revenue starts to trickle in.

Mr. Paterson is scheduled to present his executive budget next month, and he may propose that some of the withheld payments be cut permanently.

Austin Shafran, the spokesman for the Democratic majority in the Senate, called Mr. Paterson’s actions “self-indulgent theatrics,” and said that New Yorkers “want their leaders to work together to get things done.”

“The first thing that should be done is to work with the Legislature to mitigate any potential cash-flow problem,” Mr. Shafran said. “Taking away money from schoolchildren should not be under consideration.”

Assemblyman Richard L. Brodsky, a Westchester Democrat, said of Mr. Paterson, “He doesn’t have the legal authority to impound; he may have the legal authority to delay.” Mr. Brodsky said that Mr. Paterson was trying to create the “political environment” for permanent budget cuts.

“If he’ s trying to force a broad recognition that we’ve run out of money, fine,” Mr. Brodsky said. But he warned that “there will be human consequences.”

Other lawmakers, including State Senator Carl Kruger of Brooklyn, a Democrat, pointed out that a 1980 Court of Appeals decision characterized a governor’s attempts to impound money allocated by the Legislature as unconstitutional.

For several weeks this fall, as state revenues continued to drop, lawmakers haggled over how to cut more than $3 billion from the state budget, with Mr. Paterson urging legislators to consider politically unpopular cuts to schools and health care.

The Legislature finally passed a $2.7 billion deficit-reduction plan this month, cutting pensions for many new government workers and overhauling public authorities, but the action was criticized by financial watchdogs who said it did not go far enough and relied too heavily on nonrecurring savings. His aides said that Mr. Paterson cut the state’s largest expenditures remaining in December. In doing so, school districts took the brunt of the pain.

Mr. Paterson’s plan calls for cutting 10 percent of payments due on Tuesday and 19 percent of payments due later in the month.

Elizabeth Lynam, the deputy research director of the Citizens Budget Commission, a nonprofit group that analyzes government spending, called the move “the right course of action.”

“If the funds are not available to make these payments right now, then they should not be made,” she said.

The cuts in school payments drew the strongest resistance. Though Mr. Paterson said that most school districts had reserve funds that would allow them to absorb the reductions, he acknowledged that poorer school districts were “going to be a problem.”

But Stephen Allinger, legislative director of the New York State United Teachers union, said many districts had already used up their reserves for the year. Mr. Paterson’s reductions could affect after-school and sports programs, and result in staff reductions, Mr. Allinger said.

And he asked a question about the cuts that seemed to be on many people’s minds: “What does this mean? Is it just late, or are they going to cut it altogether?”

Mr. Paterson asserted that state law gives him the authority to order his budget director to stop certification of payments in order to preserve the economic stability of the state. Otherwise, Mr. Paterson reasoned, the state would be writing checks it could not back. Yet even as he acknowledged that his legal authority to withhold the payments might be challenged, he said that “this is as far as I can expand the powers of the executive branch within the legal limit.”

CMA Announces Bruno Resignation

Felony conviction of former state senator threatened looming $159 million contract for Medicaid data

By JAMES M. ODATO, Capitol bureau

ALBANY — With a pending $159 million Department of Health contract at stake and tens of millions of dollars in other state business on the line, CMA Consulting Services on Tuesday bid goodbye to ex-Sen. Joseph L. Bruno. His exit came less than 24 hours after his conviction on two felony fraud counts.

CMA, with 61 current state contracts worth more than $53 million, cut Bruno from the chief executive officer post he took 18 months ago after abruptly ending his 32-year career in the Senate amid an FBI probe.

Chairwoman and President Kay Stafford assumed the CEO post and notified state agencies of the decision. She also kept three former Senate aides of Bruno who moved with him to CMA: Kris Thompson, Amy Leitch and Maston Sansom. Thompson said the three will stay with CMA: “Our plans are to continue assisting one of the fastest growing IT firms in the industry and one of the largest employers in the Capital Region,” he said.

He said there was no connection to the pending DOH contract to develop a Medicaid data warehouse, which is under protest from competing bidders or the risk of losing business going forward, and Bruno’s departure.

It was clear that state contracts — on which CMA relies heavily — may have been in peril because of Bruno’s conviction. Vendor questionnaires specifically ask about criminal histories of corporate officers although companies associated with criminals are not automatically disqualified.

Stafford is required to amend numerous documents to declare Bruno’s felonies, said Jennifer Freeman, spokeswoman for Comptroller Thomas DiNapoli.

The felonies could have hurt CMA’s chances in New York and in other jurisdictions, according to people familiar with CMA’s consulting contracts, which involve information technology and other computer services. The state Office of Comptroller’s Web site shows the firm holding $53 million in contracts at agencies ranging from the State Police to the Division of Parole.

Several agencies contacted by the Times Union said they had to investigate CMA’s status. The comptroller’s office had already started looking into the issue after Bruno was indicted at the beginning of the year, said Freeman, because of protest letters from competing bidders on the Health Department’s contract — Thompson Reuters’ health care division and a company called Integris doing business as Ingenix. The two firms complained the Department of Health selected CMA for a $159 million Medicaid data warehouse job. The firms cited Bruno’s indictment in their protests and also questioned the health department’s evaluation of CMA’s expertise.

DiNapoli’s office has held up the contract and it was under review even as Bruno was convicted. “While DOH has awarded it, this office has not approved it,” Freeman said.

She said vendors and contract awards are considered on a case by case basis, but state law requires the state deal only with “responsible” vendors. Those ruled not responsible can appeal the decision. “To be considered responsible, the vendor, including senior management, must have the requisite integrity to carry out the contract,” Freeman said. “Criminal investigations, indictments, convictions factor into integrity.”

Although the $159 million contract was awarded during Bruno’s career with CMA, CMA officials told the comptroller’s office that the former Senate majority leader had no role in the agreement and was not going to be involved with the contract.
“The vast majority of state contracts with CMA pre-date Mr. Bruno’s tenure and are for standard business enterprise services,” said Morgan Hook, a spokesman for Gov. David Paterson. “Individual agencies will review their current contracts with the company as soon as possible and report back with any potential issues. Going forward — and as with any vendor — we will continue to evaluate our relationship with CMA in order to ensure that expected services are provided in the most effective and cost-efficient manner for taxpayers.”

Officials with Attorney General Andrew Cuomo’s office and with Albany County District Attorney David Soares’ office had no comment on the Bruno conviction other than to say it would not be appropriate to discuss what, if any, interest they would have in pursuing investigations while the federal case is still pending. Bruno must still be sentenced and is proposing to appeal his conviction.

Officials in other states also were planning to scrutinize CMA, according to interviews. Laura Oxley, of the Arizona Department of Health, said her agency is a client and found out about the conviction. She couldn’t say how that would affect the company’s eligibility for new business but that agencies are consulting on what steps might be necessary. CMA has offices in Washington, D.C.; Texas and Arizona and does business in several regions of the country with public and private clients. State officials say it has provided good service.

Wall Street and the New York Economy: One Year After — Report by Bill Hohlfeld          

BALCONY BREAKFAST DECEMBER 4TH

NYS Comptroller DiNapoli & NYC Comptroller-Elect Liu

Wall Street and the New York Economy: One Year After

Special Report by

Bill Hohlfeld, Coordinator Local 46 LMCT

NYS Comptroller Thomas DiNapoli                    NYC Comptroller-Elect  John Liu

BALCONY Co-Chair Bruce Vengimiglia                               BALCONY Co-Chair Alan Lubin

On Friday, December 4th, an impressive array of speakers gathered at the Hard Rock Cafe on 43rd St. and Broadway in New York City, not to sip cocktails or gaze at the instruments of rock n roll’s famous, late and great, but rather to discuss over bagels and coffee, the topic that is on every New Yorker’s mind today — the state of the economy.

Despite everyone’s legitimate anxiety about the economy, it was to everyone’s credit that the breakfast began by addressing the hunger of those far less fortunate than anyone in the room. Bill Ayres, Executive Director for WHY HUNGER (World Hunger Year) made an appeal for support because as he quoted John Lennon, “Hunger in America is an obscenity.” His organization, co-founded by Ayres and the late singer Harry Chapin, dedicated to helping people find the means to help themselves, is determined to fight poverty and hunger not only here but also all over the world. It was a somber reminder to all present that in the land of the blind, the one eyed man is king.

Next to take the podium was Bruce Ventimiglia, co-chair of BALCONY, the Business and Labor Coalition of New York. In his brief but very pointed introduction of Keynote speaker, New York State Comptroller Tom DiNapoli, he reminded the audience that a year ago Comptroller DiNapoli had spoken at a very similar Wall Street Balcony Breakfast and, at that time, when we were all still reeling from shock at the then recent economic debacle, made some economic forecasts of the year to come. Bruce reviewed those comments by pointing out that our comptroller had been, in a word, right.

Comptroller DiNapoli, on his part was happy to report that the NYS pension fund had rebounded well and that as of September 2009 it showed an 18% profit. He was quick to admit however that the lesson learned from all we have been through is one of diversification, with the state realizing that it had become too reliant on tax revenue from “Wall Street” for a healthy economy.

He went on to say that bonuses are now federally regulated. And, while that may assuage the populist rumblings amongst us, (my words, not his) that regulation does translate to a drop in revenue. Wall Street accounts for 24% of all wages paid in NYC and every securities job create two more jobs within the city and one more in a nearby suburb. Those are sobering statistics when out of the 35,000 jobs lost recently in New York, 1 of every five were in the securities industry.

Finally, Comptroller DiNapoli presented a realistic portrayal of our financial landscape by alluding to the 288,000 jobs lost in the state since the beginning of the recession. This has left the state with a budget gap of over $4 million. A deficit reduction plan has just been passed which includes $391 million of federal stimulus. But, we are not out of the woods yet, and close scrutiny of the budget is still the order of the day. The bottom line though does offer some small comfort – New York State, though low on cash is not broke. Actually, we can still expect to see three year budget gap in 2011 of over $27 billion. That of course means that some tough choices will have to be made to keep us on track. There are opportunities for further pension fund and green business investments and those opportunities are about growth in which New York can participate.

Following Mr. DiNapoli was NYC Comptroller-elect, John Liu, who was nothing if not positive about economic recovery in New York City. Using his personal story as a metaphor for the kind of success that is possible in this city, he drew upon his own experience of receiving a world class education in NYC and NYS public schools and universities. He also drew attention to Flushing, Queens the area he represented on the New York City Council. He held it up as a model of financial success based on a thriving immigrant community made up of a “perfect combination of human capital and entrepreneurial spirit.” That certainly is the essence of the BALCONY membership.

Adding to the morning were the comments of BALCONY  co-chair Alan Lubin who, now that he is retiring from his post as Executive Vice President of NYSUT, will be working harder than ever to promote BALCONY. He pointed to the impact we have made so far on social and fiscal policies governing health care and the insurance industry. Before introducing Tom Lee, he concluded by reminding everyone that joining BALCONY was about what you can do and what you can give, not what you can get.

Mr. Lee, who manages the New York State Teachers Retirement System funds, reported on the health of its portfolio and shared his personal formula for keeping it so. “It’s all about liquidity and alignment of interests.

It should be noted that not all the panelists were quite so optimistic. Economists and financial industry experts, Barry Weprin of the Milberg Law Firm, Gregg Hymowitz of Entrust and James Parrott of the Fiscal Policy Institute were all a bit gloomier in their forecasts for the future, if much more aggressive measures were not taken to bolster the economy. Issues still loom like pension relief, continued unemployment, lack of a national industrial policy, tax reform and the need for increased regulation in our financial sector, just to name a few.

The BALCONY Breakfast illustrated two undeniable facts. First, BALCONY still has much hard work to do, and second, it has the kind of talent in its ranks that could get that work done.

The BALCONY Wall Street breakfast at New York’s Hard Rock Café was sponsored by the Milberg Law Firm, Entrust Capital, BNYConvergEx, NYSUT, Saratoga Capital Management and WHY Hunger.

View the photos from the Forum by clicking here.

(Click here to view the Program from the Forum)

For more information about BALCONY visit our website www.balconynewyork.com | (212) 219-7777

This health insurance exchange works

By Anne Fisher

Lawmakers wrangling over health care reform could do a lot worse than to take a close look at Manhattan-based HealthPass, a nonprofit clearinghouse for small businesses (with two to 50 employees) looking to buy health coverage.

Started in 1999 with funding from health insurers, the city and the New York Business Group on Health, HealthPass is now self-supporting. About 3,600 employers, whose workers and their dependents number 31,100, get their health insurance through the exchange–a 50% jump in just the past year. “There has been a learning curve,” notes Executive Director Vince Ashton. “It took people a while to understand what we do.”

What HealthPass does is simplify comparing and choosing medical insurance. Member businesses can select from more than 30 plans, with help from Mr. Ashton and his team, then fill out one form, write one check and leave the rest to HealthPass. “Businesses can pick a plan that fits their budget,” says Mr. Ashton.

Could something like this work nationwide? Maybe, but only if other states change their rules. New York is the only state that allows “community rating,” where everyone in a geographic area pays the same rate–as opposed to “experience rating,” which lets insurers base their fees on medical histories and other risk factors.

“Community rating makes insurance more affordable,” Mr. Ashton observes. “The drawback is that healthy employees can opt out of having insurance, leaving only higher-risk people in the plan, which puts upward pressure on costs.” He adds: “The ‘individual mandate’ being talked about in Congress, requiring everyone to have insurance, would solve that. I think it’s key to making reform work.”