Archive for February, 2010

Fiscal Policy Institute Update – February 2010

NEW YORK STATE BUDGET

In early February, in both Albany and New York City, the Fiscal Policy Institute (FPI) presented a detailed briefing on New York State’s Economic and Fiscal Outlook for 2010-11.

In cooperation with New Yorkers for Fiscal Fairness, FPI will be presenting budget briefings in Rochester on March 1, Elmira on March 2, and Poughkeepsie on March 3. For details on these and other upcoming presentations, check the FPI events page.

FPI also worked with New Yorkers for Fiscal Fairness and the other members of the Better Choice Budget Campaign to develop a menu of revenue-raising and cost-cutting options for the Governor and the Legislature to consider as they work to adopt a balanced budget for 2010-2011.

The Fiscal Policy Institute’s Deputy Director and Chief Economist James Parrott and FPI Senior Fiscal Policy Analyst Carolyn Boldiston both testified at the joint legislative hearings on the Governor’s 2010-2011 Executive Budget proposal. James testified at the Economic Development budget hearing and Carolyn presented testimony at the Human Services budget hearing.

NEW YORK CITY BUDGET

With support from New York Community Trust, FPI is now monitoring and analyzing the New York City budget. On February 9, as part of this effort, FPI presented a briefing on the mayor’s preliminary budget for FY 2011. The briefing examined the Mayor’s proposed budget cuts for this year and next year, his contingency cuts related to reductions in the Governor’s proposed state budget, and options for a more balanced approach to dealing with City budget pressures.

THE GREAT RECESSION IN NEW YORK

In November, FPI released A Tale of Two Recessions: While Wall Street recovers, New York City’s Main Street economy remains mired in the Great Recession and followed up in December with a report that analyzed unemployment by neighborhood, race, and ethnicity in New York City. That report’s estimates were used by both the Wall Street Journal and the New York Times as the basis for interactive maps that are posted on their websites.

FPI Research Associate Michele Mattingly will discuss the urgent need for job creation at two town hall meetings convened by Representative Carolyn Maloney in New York City on March 6 and 7. For details, check the FPI events page.

IMMIGRATION AND THE ECONOMY

FPI analyzed the contribution of immigrants to the economies of the nation’s 25 largest metropolitan areas in Immigrants and the Economy, released this past November. This was the second major report by FPI’s Immigration Research Initiative, directed by senior fellow David Dyssegaard Kallick. Funding was provided by the Carnegie Corporation of New York and 32BJ SEIU. The report was prominently cited in a New York Daily News editorial, The Boon of Immigration, and garnered attention in news outlets across the country. News coverage can be found on FPI’s immigration web page.

STIMULUS FUNDS: GOOD FOR STATES, LOCAL GOVERNMENTS AND FAMILIES

Several components of the American Recovery and Reinvestment Act (ARRA) have been critical in addressing state budget gaps and in providing assistance to the unemployed and other vulnerable populations. FPI has sought to quantify ARRA benefits for New York State and New York City and for individual New Yorkers in its State of Working New York 2009 report, in a column in the Gotham Gazette, and its recent state and city budget briefing books. Together with the Center on Budget and Policy Priorities, FPI released data in December showing that the ARRA helped keep more than 400,000 New Yorkers out of poverty in 2009.

HUMAN SERVICES

In testimony presented to the joint legislative hearing on the Human Services proposals in the Governor’s 2010-2011 Executive Budget proposal, FPI senior fiscal policy analyst Carolyn Boldiston examined Temporary Assistance to Needed Families (TANF) funding and spending in New York as well as issues relating to child care subsidies. Last summer, Carolyn was the lead author on a series of briefs that looked into the rules governing the new TANF Emergency Contingency Fund (ECF) that was created by the ARRA, reviewed New York’s experience with the pre-ARRA TANF Contingency Fund, and explored the situations under which New York may qualify for ECF funds.

LABOR PRACTICES

Building on FPI’s earlier research regarding the increasing tendency for unscrupulous employers to employ workers off the books or as so-called independent contractors, James Parrott testified before the labor committees of both the Assembly and Senate in January on the fiscal costs to the state of unlawful labor practices.

The Fiscal Policy Institute is an independent, nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all New Yorkers. Founded in 1991, FPI works to create a strong economy in which prosperity is broadly shared.

Unions, contractors nail down cost cuts

The two sides are back at the table, trying to figure out ways to lower costs

by Theresa Agovino

Last year’s groundbreaking agreement between contractors and unions to bring down construction costs in the city reduced overall expenses by between 10% and 20%, slightly below the 15% to 21% originally projected.

With the deal due to expire at the end of March, the two sides are back at the table trying to figure out ways to lower costs further through a new agreement, says Louis Coletti, president of the Building Trades Employers’ Association, which represents contractors that use union labor.

The initial agreement, which included provisions for union work rule changes and slimmer contractor profit margins, is credited with stimulating more than $7.4 billion in construction activity and saving 25,000 jobs. Mr. Coletti says that the two sides are looking for more permanent changes this time, because it looks like it will be years before the city will see a construction boom matching the one that flourished earlier this decade.

The unions and contractors gathered in Florida last week at the industry’s annual meeting, and the mood was very different than it was in 2009, Mr. Coletti notes.

Last year, the recession was just beginning to have an impact on the construction industry, and there was more acrimony between the two sides.

“There is now a recognition that we are in a new economic cycle and there will have to be shared sacrifice,” says Mr. Coletti.

He declines to say what new measures the two sides are discussing, but he says he is confident that there’ll be a new agreement.

Rep. Chris Lee: Fed growing too big, too fast

Tom Gillett, Chris Lee, Lou Gordon

Health Care Panel

By Jim Stinson

A forum on small business became a place to discuss big government and possibly bigger health care plans.

Speaking to the Business and Labor Coalition of New York at Colgate Rochester Crozer Divinity School, U.S. Rep. Chris Lee said the federal government is growing too big and expanding its payroll, and that even during the recession Washington, D.C., saw growth in its gross metropolitan product while many other regional economies were contracting.

“The federal government cannot employ all the people in this country,” said Lee, R-Clarence, Erie County, as he ticked off examples of government growth. For that reason, he said, he voted recently against extending the federal debt ceiling by $1.9 trillion.

But not everyone at Friday’s forum agreed that shrinking all government programs would benefit small business.

Some speakers expressed solidarity with President Barack Obama’s plan for health care reform, which seeks to extend insurance coverage to most Americans.

Lee said after his speech that he supports health care reform, and thinks the Democrats and Republicans should pass a bill they can agree on, leaving out parts on which they differ.

Jim Bertolone, Rochester local president of the American Postal Workers Union, noted that health care costs rose through the past decade, from 15 percent of U.S. gross domestic product to 17 percent of GDP.

To combat rising costs, Bertolone suggested applying a program like Medicare to all citizens. He also said that worrying about budget deficits during a time of unprecedented recession was like conserving water during a house fire.

Businesspeople also received advice from banking officials such as Jeffrey Barker, vice president of commercial services at Canandaigua National Bank & Trust.

He advised the approximately 50 people in the audience to maintain good communication with lending officers and not to surprise them by using a line of credit for reasons other than stated on the application.

Many attendees noted the economy, especially credit conditions, was still sour.

“It is a very difficult time for startups,” Barker acknowledged.

DiNAPOLI: WALL STREET BONUSES ROSE SHARPLY IN 2009

Wall Street bonuses paid to New York City securities industry employees rose by 17 percent to $20.3 billion in 2009, according to an estimate released today by State Comptroller Thomas P. DiNapoli. Total compensation at the largest securities firms grew even faster and industry profits could exceed an unprecedented $55 billion in 2009, nearly three times greater than the previous all-time record. In 2008, the industry lost a record $42.6 billion.

“Wall Street is vital to New York’s economy, and the dollars generated by the industry help the state’s bottom line,” DiNapoli said. “But for most Americans, these huge bonuses are a bitter pill and hard to comprehend. There’s a lot of resentment against the industry over its role in the global economic meltdown. Taxpayers bailed them out, and now they’re back making money while many New York families are still struggling to make ends meet.

“We cannot see a repeat of the risky behavior that crippled our economy. Tying compensation to long-term sustainable profits is a step in the right direction. We also need the right level of regulatory protections to make sure the securities industry thrives without driving the rest of us out on a fragile economic limb.”

DiNapoli’s office annually releases its estimate of bonuses paid to securities industry employees who work in New York City. Bonuses paid by New York City-based firms to their employees outside of the City (whether in domestic or international locations) are not included. DiNapoli’s estimate is based on tax collections and reflects cash bonus payments and deferred compensation for which taxes have been prepaid. The estimate does not include stock options that have not yet been realized or other forms of deferred compensation. This year’s estimated bonus pool is a third less than the amount paid two years ago, the previous most profitable year.

DiNapoli noted that estimating the size of the bonus pool was made more difficult this year by unprecedented changes in compensation practices. Many financial firms delayed payments and paid a greater share in stock or other forms of deferred compensation. The industry also paid higher base salaries, deferred cash payments, and implemented clawback provisions, which will enable firms to recoup bonuses for excessive risk-taking. The industry also devoted a much lower share of net revenue to compensation compared with past years.

DiNapoli also reported that:

• Broker-dealer operations of New York Stock Exchange member firms earned a record $49.9 billion through the first three-quarters of 2009. DiNapoli forecasts that profits could exceed $55 billion in 2009, nearly three times greater than the previous record. In 2008, the industry lost a record $42.6 billion.
• Compensation at Goldman Sachs, Morgan Stanley, and JPMorgan Chase Investment Bank, which are more diversified than traditional broker-dealers, increased by 31 percent in 2009. Average compensation rose by 27 percent to more than $340,000. (Data is not currently available on the securities operations at Citibank and Bank of America.)
• In a departure from past practice, most of the largest financial firms have reported that their top executives will not receive any cash bonuses in 2009, but will receive stock options and other forms of deferred compensation.
• The industry devoted a much lower share of net revenue to compensation in 2009 compared with the period before the financial crisis. Historically, industry compensation (salaries and bonuses) has averaged about half of net revenue, but compensation declined to about 40 percent of net revenue in 2009.
• Employment in the securities industry in New York City declined by 31,500 jobs (seasonally adjusted) between November 2007 and August 2009, a decline of 16.7 percent. Since then, the industry has added 3,900 jobs through December, which could spur job gains in other sectors. Previous reports by the State Comptroller found that for every job created in the securities industry, three jobs are created elsewhere in the state’s economy.
• Wall Street accounted for 24 percent of the wages paid to workers in New York City in 2008 even though it accounted for only 5 percent of the jobs.
• The average taxable bonus rose to $123,850. Average compensation rose even faster because firms reportedly paid a larger share of bonuses in the form of deferred compensation than in the past.

Click here for a chart showing bonuses paid from 1985-2009 or visit http://www.osc.state.ny.us/press/releases/feb10/bonus_chart_2009.pdf.

PEF President sets record straight at hearing on work force issues

Albany – The president of the New York State Public Employees Federation (PEF) testified today before the state Assembly Ways and Means and Senate Finance Committees on work force issues setting the record straight on the size of the state work force and how it affects state spending. PEF President Kenneth Brynien also laid out a detailed plan for how the state can save hundreds of millions of dollars without eliminating jobs and services.

“There has been no growth in the size of the state work force, yet the proposed budget is striking, once again, at the public servants who deliver vital services,” Brynien said. “If the proposed budget is enacted, the state work force will be the same size it was 10 years ago and more than 15,000 positions fewer than in 1994, despite an increased need for state services,” Brynien said.

Brynien pointed out the budget proposal includes a $250 million cut in the salary and benefits of state employees while agencies continue to increase spending on private consultants that already cost more than state employees.

“New York State continues to pay thousands of consultants performing professional services an average of $160,719 annually. That’s 62 percent more than it cost to have state employees do similar work, including the cost of their benefits,” Brynien testified.

Brynien also said the proposal to eliminate salary increases and to lag pay violate negotiated labor agreements, noting contracts negotiated in good faith must be honored.

PEF proposed ways to achieve the work force savings identified in the Executive Budget proposal, but without the negative effects that would come from cutting state services, and still honoring the state’s contractual commitments to its employees.

“This can be achieved by: instituting a consultant-reduction plan to save $656 million over the next three years; expanding the voluntary severance program; instituting a Workplace Injury Reduction Program to reduce workers compensation costs; and reducing overtime costs by 60 percent by hiring entry-level state employees for a savings of $33.5 million annually,” Brynien said.

PEF is the state’s second-largest state-employee union, representing 58,000 professional, scientific and technical employees.

Feb 19th Rochester Forum Will Help Small Business Owners Survive the Times

Feb 19th
Rochester Forum Will Help Small Business Owners Survive the Times

Rochester, NY – BALCONY (Business and Labor Coalition of New York) www.balconynewyork.com will host its second Access for Small Business Forum with the goal of helping small business owners in the Rochester area. The forum will feature timely and informative workshop discussions with experts, advocates and government officials on how small businesses can survive during the current, uncertain economic times. There will be a focus on access to health care, technology solutions, and business development and capital. Congressman Chris Lee will be the keynote speaker, with presentations by local business leaders. BALCONY representatives and forum sponsors will be available for interviews.

Participating Sponsors include Excellus, Verizon, Entre Computers, Citizens Bank, Canandaigua Bank, NYS Small Business Development, Pulse Marketing Group, American Cancer Society, the Rochester & Genesee Valley Area Labor Federation, Small Business Administration, NYSUT, the Small Business Majority and the NYS Health Foundation.

Jim Nofziger is Rochester BALCONY Coordinator for the Forum and Tom Gillett of NYSUT is the Rochester BALCONY coordinator.

For more information about the February 19th Forum visit BALCONY web site www.balconynewyork.com

What: BALCONY Access for Small Business Forum
When: February 19, 2010
8 a.m. to Noon
Where: Colgate Rochester Crozer Divinity School
1100 S. Goodman St. Rochester NY

Cost: $25 (optional)

Register by Feb. 16 by calling 212-219-7777, or e-mail: loug@balconynewyork.com

Paterson Gives St. Vincent’s Hospital Another Loan

By Anemona Hartocollis

Gov. David A. Paterson provided the second cash infusion in a week Sunday to St. Vincent’s Hospital Manhattan in Greenwich Village, but said concessions from unions and physicians would be needed to keep the hospital open.

The governor said Sunday that after “hours of intensive discussions and calls between all parties” the state had agreed to put up $3 million and creditors another $3 million to keep the hospital going temporarily.

It was not clear how long the cash would last, and Mr. Paterson challenged other stakeholders to help as well.

The 160-year-old hospital is $700 million in debt and has stopped accepting new outpatients to its well-known H.I.V. and community health programs because it may be forced to close.

The governor said in a statement that saving St. Vincent’s would require “shared sacrifice,” adding: “We believe this assistance, if combined with assistance from the sponsors, concessions from the unions, management and physicians, cost-cutting actions and aggressive cash management will allow St. Vincent’s Medical Center the time needed to develop short-term and long-term plans for the future.”

The loan came on the heels of an $8 million loan from the state and the hospital’s main creditors, GE Capital and TD Bank, that was announced last Tuesday. The first loan was used for payroll and supplies and was exhausted almost immediately, in part because vendors are now demanding cash in advance or on delivery, hospital officials said.

City Council Speaker Christine C. Quinn, state and federal elected officials, and union leaders have become part of a group working with the governor and the state health department to save the hospital.

But so far, neither the city, the federal government nor the unions have proposed to contribute to the state’s efforts to keep the hospital going until a more permanent solution can be found. A spokeswoman for the hospital workers’ union, Local 1199 of the S.E.I.U., declined to comment Sunday evening.

As a political matter, wage concessions are sometimes more damaging to unions than layoffs, because laid-off workers do not vote in union elections while those whose salaries have been cut do.

Mayor Michael R. Bloomberg has taken a neutral, almost philosophical approach to the hospital’s plight. On Friday, he said in his weekly radio program that he doubted the hospital could stay open longer than six months, but he did not offer any help.

“People want to keep it open; that would be great if you could find a way to do it,” Mr. Bloomberg said. “I will say I find it hard to see how you can do that. You might be able to get it through another six months or something. The governor’s giving them a loan to pay their employees for another month, but unless you can really come up with a business model that works, which is difficult in the best of times for the best of hospitals, it’s a really tough proposition to come up with.”

Hospital Network Withdraws Proposal to Take Over St. Vincent’s

By Anemona Hartocollis

A large hospital network that had offered to take over the nearly bankrupt St. Vincent’s Hospital Manhattan in Greenwich Village has formally withdrawn its offer, further clouding the hospital’s prospects for survival.

Stan Brezenoff, president of Continuum Health Partners, a consortium of five hospitals in Manhattan and Brooklyn, said in a letter to Henry J. Amoroso, the president and chief executive of St. Vincent’s, that he was withdrawing the offer because of what he said had been a negative reaction to it from both the State Health Department and St. Vincent’s own board. The letter was sent last Friday but not released until Thursday. But Mr. Brezenoff left open the possibility that St. Vincent’s could return to talks with Continuum.

The uncertainty over St. Vincent’s future has led some doctors — especially star doctors — to begin making plans beyond their affiliation with St. Vincent’s. Several St. Vincent’s physicians have approached Continuum about securing admitting privileges at its hospitals, which would give them the right to work in those hospitals, Jim Mandler, a spokesman for the network, confirmed Thursday. Mr. Mandler said Continuum was talking to those doctors, “because we are very much aware of the recruitment efforts of other hospitals for these physicians.”

In its offer submitted to St. Vincent’s on Jan. 22, Continuum proposed to continue running outpatient facilities for the hospital, on 12th Street and Seventh Avenue, while funneling those who need inpatient care to its own hospitals, St. Luke’s Roosevelt on West 58th Street and Beth Israel, across town on the East Side. Most emergency room and inpatient services would have been eliminated.

St. Vincent’s, the last remaining Catholic general hospital in New York City, is $700 million in debt and needed a state loan this week to make its payroll.

The Continuum plan created an immediate uproar at St. Vincent’s and among local politicians, who said the neighborhood could not be without an emergency room or inpatient services and who accused Continuum of being more interested in shutting down competition and improving its own finances than in saving neighborhood health care.

In his letter, Mr. Brezenoff expressed pique that St. Vincent’s was considering looking for other offers, hinting that he believed that this would turn Continuum’s offer into a bargaining chip. He made it clear that his offer had been a take-it-or-leave-it one.

“On reflection,” Mr. Brezenoff said, “I feel constrained to take the formal step of withdrawing the proposal that we sent to you on January 22, 2010.”

Mr. Brezenoff declined to comment Thursday, but his swift withdrawal of the offer seven days after submitting it reflected his reputation as a skilled player of political hardball, skills honed as a former president of the New York City Health and Hospitals Corporation, executive director of the Port Authority of New York and New Jersey and a deputy mayor in the administration of Mayor Edward I. Koch.

His letter indicated that the door was still open to negotiation if St. Vincent’s came back to him on his terms. “Needless to say, I hope, we stand ready to resume discussions and negotiations at any time if it appears that this would be productive,” the letter said.

Sister Jane Iannucelli, the vice chairwoman of St. Vincent’s board, declined on Thursday to comment on Mr. Brezenoff’s letter.

Council Speaker Christine C. Quinn put a positive spin on Mr. Brezenoff’s decision, saying it could be good for the hospital, because it indicated “a growing recognition of all the parties involved in this process that the community is not going to accept a proposal that doesn’t sustain a full-service hospital.”

Continuum was absent from a meeting Wednesday with Gov. David A. Paterson, Mr. Amoroso, local elected officials, union leaders and hospital creditors to discuss a long-term solution for the hospital’s financial problems. The governor said after the meeting that the state had agreed to keep St. Vincent’s afloat for at least a month while it looked for partners.

Mr. Brezenoff suggested in his letter that the state had been critical of Continuum’s plan to eliminate the hospital’s inpatient beds and close its emergency room. Diane Mathis, a spokeswoman for the state Health Department, said the department had taken a neutral position on it. “This process has really just begun,” she said.

The Decline of St. Vincent’s Hospital

By Anemona Hartocollis

For more than 150 years, St. Vincent’s Hospital Manhattan has been a beacon in Greenwich Village, serving poets, writers, artists, winos, the poor and the working-class, and gay people.

It has treated victims of calamities: the cholera epidemic of 1849, the sinking of the Titanic in 1912, the 9/11 attack and, just last year, the Hudson River landing of US Airways Flight 1549. The poet Edna St. Vincent Millay got her middle name from the hospital, where her uncle’s life was saved in 1892 after he was accidentally locked in the hold of a ship for several days without food or water.

But today the hospital is struggling, and last week, in what could mean the death knell of the last Roman Catholic general hospital in New York City, a chain of hospitals proposed to take over St. Vincent’s, shut down its inpatient beds and most of its emergency room services, and convert it into an outpatient center tied to hospitals uptown and on the East Side.

Gov. David A. Paterson’s office said on Tuesday the state was extending a $6 million emergency loan to help St. Vincent’s meet its payroll, an indication of how dire its finances had become.

How St. Vincent’s went from a cherished neighborhood institution to one threatened with extinction is a chronicle of increasingly troubled management whose problems were made worse by the economics of the health care industry, changes in the fabric of a historic neighborhood and the low profit potential in religious work.

It was once part of the Roman Catholic Church’s social and political network in New York City, a cradle-to-grave embrace of parishioners who were born in Catholic hospitals, educated in parochial schools, married in the church and given last rites by a priest.

Last week, a day after the announcement of the proposed takeover, members of the Sisters of Charity, the Catholic order of nuns that founded the hospital in 1849, gathered for a noon Mass at St. Vincent’s second-floor chapel and vowed to fight. “We are not going away,” said Sister Jane Iannucelli, vice chairwoman of the hospital board, standing in the light of stained glass windows.

“One of the things that’s so crucial to the Sisters of Charity is serving the poor,” she said.

It was that very calling, some industry executives suggested, that may have helped make the hospital obsolete.

“Helping the poor is indeed the mission and the cause célèbre,” said Kenneth E. Raske, president of the Greater New York Hospitals Association, a trade group. “Therein lies the dilemma.”

Other hospitals emphasize high-tech care and rush to invest in the fancy equipment and celebrity doctors that attract patients with the means to pay for them; St. Vincent’s sticks to its motto of “compassionate care,” rooted in its origins as a place that trained nurses and that was under the auspices of nuns.

As the Village changed, becoming home to more middle-class families, by many accounts St. Vincent’s failed to change with it. In 2007, several years after an ill-fated merger with other Catholic hospitals, St. Vincent’s management proposed selling off its maze of outdated buildings around Seventh Avenue and 12th Street to build a state-of-the-art high-rise building across the street, to be designed by Pei Cobb Freed & Partners Architects, famous for cutting-edge projects like the glass pyramid expansion of the Louvre museum in Paris and the John Hancock Tower in Boston.

But some said it was too late. In an indication of how St. Vincent’s reputation had fallen in the neighborhood, during a fierce debate over whether to demolish a low-rise Modernist building to make way for the new hospital, the actors Susan Sarandon and Tim Robbins suggested that St. Vincent’s no longer served the neighborhood well.

“I would not want to bring my children there,” Ms. Sarandon declared at a landmarks preservation hearing.

At the height of the AIDS epidemic in the 1980s, St. Vincent’s ministered to those affected, and was bursting at the seams. But by the 1990s, drugs and public awareness helped bring AIDS under control, and the Village’s wealthy newcomers were choosing other hospitals.

From 1996 to 2007, the most recent year for which figures are available, the number of patients the hospital admitted went down by 10 percent, while the rate for hospitals citywide was flat, state records show.

And its emergency room volume has been growing faster than the citywide rate, suggesting that it has the worst of both worlds — more emergency room patients and fewer inpatient admissions, which are where the money is.

St. Vincent’s is a major city contractor for homeless services, and hospital administrators said that homeless people from all over the city find their way there for treatment.

In short, many of the patients who frequent St. Vincent’s are part of the old Village rather than the new Village, as was clear from a tour of the emergency room last week. It was electric with activity, every bed filled. Many of the patients were elderly, from Chinatown, or grizzled remnants of the Village’s old working class. Nuns from Mother Theresa’s order hovered about.

The room, like other parts of the hospital, had a homey feeling, more like a place television’s kindly Dr. Marcus Welby would have taken his patients rather than the overly caffeinated environment of “House.”

“There’s a sense we’re here for the mission, and it truly permeates,” said Dr. Eric Legome, the chairman of emergency medicine.

Despite 62,000 emergency visits, nearly 1,800 births, almost 22,000 hospital admissions and 263,000 outpatient visits a year, according to St. Vincent’s officials, the hospital is bleeding red ink, and has been for years.

Hospital officials, who asked not to be named because of the sensitivity of negotiations with Continuum Health Partners, the chain that has offered to take over the hospital, said the hospital was close to having to declare bankruptcy for the second time since 2005. It is about $700 million in debt.

Officials blamed a high rate of poor and uninsured patients as well as cuts in Medicare and Medicaid and the hospital’s inability to negotiate favorable contracts with health insurance companies, claiming their fees were 30 percent below the market rate.

Catholic hospitals in some parts of the country continue to thrive, but the New York City hospital field is much different from what it was 100 years ago; New Yorkers with health insurance now can choose from a number of prestigious hospitals.

To remain competitive, in 2000 St. Vincent’s merged with several other Catholic hospitals to form St. Vincent Catholic Medical Centers.

Along with the flagship hospital in the Village, it ran seven other hospitals: Bayley Seton and St. Vincent’s on Staten Island; Mary Immaculate, St. John’s and St. Joseph’s in Queens; St. Mary’s in Brooklyn; and St. Vincent’s Westchester, in Harrison, N.Y. It was also affiliated with St. Vincent’s Midtown, formerly St. Clare’s, in Midtown Manhattan.

The merger was conceived as a way to streamline management and give the hospitals pricing leverage, but it was troubled from the beginning. After closings and sales, the network was left with just one New York City hospital, the flagship; a psychiatric and substance abuse treatment hospital in Westchester; and several nursing homes and other outpatient facilities. Some of St. Vincent’s debt was inherited from the closed hospitals.

Over the last few years, St. Vincent’s has tried to polish its image, recruiting the Giants quarterback Eli Manning and former Mayor Rudolph W. Giuliani to raise money and attract customers.

It has traditionally been one of the beneficiaries of the Alfred E. Smith Foundation Dinner, an annual charity roast at the Waldorf-Astoria, where John McCain and Barack Obama traded jabs just before the 2008 election. The hospital’s chairman is Alfred E. Smith IV, a prominent Wall Street investment banker and the great-grandson of the New York governor who ran for president in 1928. Mr. Smith did not respond to a request for an interview.

In 2004, St. Vincent’s turned over management to Speltz & Weis, the first in a series of turnaround consultants. It paid the firms millions of dollars a year to run the hospital and hired their officials as hospital executives. The system filed for Chapter 11 bankruptcy protection in early July 2005, when it appeared, according to court papers filed by hospital creditors, that it would be unable to make its payroll.

In a lawsuit filed in 2007, some of the hospital’s creditors painted a picture of a hospital system trapped between unscrupulous consultants and a passive or gullible board. The lawsuit accused David E. Speltz and Timothy C. Weis, the hospital system’s former chief executive and chief financial officer, of delaying the bankruptcy organization while they and their consulting firm collected millions of dollars in fees.

The lawsuit accused them of hiring high-priced contractors and padding their fees, instead of using hospital employees to do work. And it says they leveraged their positions with the hospital to negotiate the sale of their consulting company to Huron Consulting Group, in Chicago, also a defendant in the case.

From 2004 until the lawsuit was filed, St. Vincent’s paid Speltz & Weis, which was based in New Hampshire, $30.8 million and Huron $1.2 million in fees and expenses, according to court papers.

The expenses included a personal membership in a private university club; trips to New York for spouses; hundreds of dinners in Manhattan restaurants’ opera tickets; groceries, dry cleaning and laundry bills; and travel and housing fees for consultants from outside New York, according to court papers.

Lawyers for Mr. Speltz and Mr. Weis did not return calls for comment. But they said in court papers that the creditors had written a “revisionist” history of events that unfairly blamed their clients for a bankruptcy that was actually caused by a $60 million shortfall in accounts receivable that had not been detected by auditors. Their firm had to bring in contractors for important jobs because previous St. Vincent’s managers had unwisely eliminated key positions, the lawyers said. The lawsuit is headed for mediation.

The current chief executive, Henry J. Amoroso, is its fourth since 2004. He did not respond to requests for comment. St. Vincent’s board announced last weekend that it had retained another crisis management firm, Grant Thornton.

Sister Jane, the vice chairwoman, acknowledged that the hospital was on the precipice. “We have had enough money to pay our salaries,” she said, but added, “The cash flow has gotten tighter and tighter, and yes, we are in a very vulnerable position.”

Last Thursday night, more than 500 people crowded into a basement meeting room at Our Lady of Pompeii Church on Carmine Street to protest the proposed takeover. One man, Mark Leonard, spoke of how a nurse offered to come to his house and baby-sit after he took home his very fragile twins from the St. Vincent’s intensive care unit.

“You guys must be exhausted,” he remembered the nurse calling to say. “You need a night out with your wife.”

Nancy Spannbauer, a program director for the Penn South senior citizens’ program in Chelsea, told of how she had been in the home of a 91-year-old woman a few days earlier while a doctor tried to get the woman to go to the hospital.

“Eventually she gave in,” Ms. Spannbauer said. “And she said, ‘Well, I suppose if I have to, I’ll only go to St. Vincent’s.’ ”

St. Vincent’s Gets Loans for a Four-Week Reprieve

By Anemona Hartocollis

The financially ailing St. Vincent’s Hospital Manhattan in Greenwich Village got a month’s reprieve on Wednesday, as Gov. David A. Paterson met with hospital officials, elected officials and others to try to keep the hospital from closing.

After the 90-minute meeting in his Manhattan office, the governor said that he expected to be able to keep the hospital afloat for the next four weeks through a combination of state loans and help from its creditors. On Tuesday, St. Vincent’s received an $8 million loan — $6 million from the state and $2 million from a creditor — just to meet its current payroll.

But Governor Paterson was guarded about the hospital’s long-term prospects, saying only that he was forming a task force to look at how to run the hospital more efficiently and to examine the health care needs of the surrounding community and how they might best be delivered.

“We are trying to give it every chance to survive,” Governor Paterson said of St. Vincent’s. But he said the hospital had lost $80 million last year, and made it clear that the state’s offer of help was not open-ended, saying, “We don’t want to put supplies on a sinking ship.”

One person who was at the meeting, who asked not to be named because the meeting was private, said St. Vincent’s newly hired restructuring consultant, Mark E. Toney, had suggested that as much as $20 million might be needed to stabilize the hospital.

St. Vincent’s, which is carrying $700 million in debt, revealed last week that it had been looking for a partner to help keep the hospital from going bankrupt for the second time in five years or being forced to close. Continuum Health Partners, which operates St. Luke’s Roosevelt and Beth Israel hospitals in Manhattan, among others, is the only potential partner to have stepped forward.

But Continuum’s plan to close down the hospital’s inpatient beds and emergency room, turning it into an outpatient operation, generated immediate opposition from the neighborhood.

The hospital, founded by the Sisters of Charity, has been serving Greenwich Village since 1849, and is the last remaining Roman Catholic general hospital in New York City.

The governor said that the Continuum plan had not specifically been discussed at the meeting, but that “when you have a hospital teetering on the verge of insolvency, there isn’t any relief you won’t consider.”

Among others at the meeting were City Council Speaker Christine C. Quinn; Alfred E. Smith IV, the chairman of St. Vincent’s board; hospital creditors and the state health commissioner, Dr. Richard F. Daines.

“We seem to have bought the hospital another four weeks, so that’s a good thing,” Ms. Quinn said. “We’re not in as much of a panic mode.”

Kenneth E. Raske, president of the Greater New York Hospital Association, who was also at the meeting, said there seemed to be a willingness on the part of both the state and private creditors to extend credit to St. Vincent’s while it tried to restructure. “The prognosis here is not a good one, but it’s probably the best thing that can be done at this point in time,” Mr. Raske said.

St. Vincent’s merged with several other Catholic hospitals in 2000, but many of those hospitals were in poor neighborhoods, and the merger seemed to only deepen its financial problems. It filed for bankruptcy protection in 2005 and divested itself of most of the other hospitals, which were sold or closed.

But St. Vincent’s officials said the main hospital had been hobbled by mortgage debt and pension obligations from the divested facilities, as well as the recession, Medicare and Medicaid cuts and a high proportion of poor patients.