BALCONY Issues in the News

We must repay our debt: NY Dem, GOP reps say stories of heroes should inspire passage of 9/11 bill

By Carolyn Maloney, Jerrold Nadler and Peter King

Last month, after years of effort, we finally secured a vote by the full House of Representatives on our legislation, which would provide medical monitoring, treatment and economic compensation for those injured or made sick by the toxic cloud that lingered for weeks following the collapse of the World Trade Center towers.

Emotions ran high during the debate, and we were deeply disappointed that the bill did not achieve the two-thirds majority required for passage under “suspension of the rules,” the parliamentary procedure that was used to bring the bill before the House.

However, the battle to provide help to the heroes, heroines and survivors of Sept. 11 isn’t over – not by a long shot. The 255 votes in favor of the Zadroga Act show that it would have more than enough support to pass the House if it is reconsidered under normal rules, which require only a simple majority, or 218 votes, for passage. That is precisely what we intend to do soon after Congress reconvenes on Sept. 14.

Many of our colleagues who voted “no” last month did so because they objected to the way the bill was funded, but have told us they would otherwise support helping those who were harmed by the toxins at Ground Zero. But others who opposed the bill simply don’t understand the severity of this health crisis – and that it affects Americans from all 50 states.

That is a real shame.

For too many Americans, 9/11 is not simply an historical event but an ongoing nightmare that is slowly robbing them of their health, their strength and, in the worst cases, their lives. We would like to share a few stories about the responders and survivors at the heart of this struggle.

Martin Fullam

A New York City Fire Officer, Lt. Martin Fullam braved the chaos and destruction at Ground Zero to aid in the 9/11 rescue and recovery effort, helping evacuate the towers. In the years following the attacks, however, Fullam began to experience debilitating health problems as a result of his service on 9/11, which forced him to retire from the job he loved. He has polymyocitis, an autoimmune disease that caused him to lose 60 pounds and steadily diminished his lung capacity until he required a double lung transplant, which he received in March 2009.

Long experiencing physical weakness and compromised lung capacity, Fullam has paid a heavy financial, physical and personal toll as a result of his work at Ground Zero.

Recently, when the Senate held its first hearing on the Zadroga Act, such was his commitment to the issue that he traveled to Washington to take part and became even sicker as a result. He has since been confined to a hospital.

The Zadroga Act would provide FDNY heroes like Fullam with federally-funded health care and economic relief.

Margrily Garcia

Margrily Garcia worked near the World Trade Center site. Like many others, she evacuated lower Manhattan covered in toxic dust on 9/11. She returned to work shortly after the attacks, relying on the EPA’s assurances that the air was safe to breathe. We now know, however, that Garcia was inhaling toxins that lingered in the air for weeks after the attacks.

In 2006, after battling breathing problems and fatigue, she was diagnosed with chronic sinus inflammation, asthma and sarcoidosis, a disease that causes scarring of the heart, lungs and other vital organs. Margrily’s heart was so damaged that she had to receive a pacemaker. Since she became ill, her diseases have been mentally and physically exhausting, requiring constant doctor visits and treatment.

Garcia says that “it’s a constant battle to remain alive, but I’m very grateful to still be here fighting with the support of the elite doctors and staff in the survivors program at the WTC Environmental Health Center. I cannot imagine how things would be without them.”

The Zadroga Act would make permanent the health care program for survivors like Garcia and expand its funding.

Alex Sanchez and Manuel Checo

After 9/11, hundreds of buildings in lower Manhattan were coated inside and out with toxic dust. Though they played a less visible role in the recovery effort than firefighters and rescue workers, Alex Sanchez and Manuel Checo, proud U.S. citizens both, were among the thousands of workers who cleaned the buildings of lower Manhattan and helped get our city back on its feet.

They often did this work with nothing more than a pail and mop – with no protective gear other than flimsy paper masks.

After working together in toxic conditions for months, the two developed a wide range of illnesses, including asthma, lung nodules and chronic post-traumatic stress disorder. Both men were unable to return to their jobs due to their debilitating health problems. Lost wages and poor health have had a devastating impact on their lives, and Checo has had to sell valued possessions for income.

Today, the two men are barely managing to survive on workers’ compensation. But even when their health is at its worst, Sanchez and Checo, along with Sanchez’s son Jack, can always be counted on to show their support for the Zadroga Act, which would give both men guaranteed health care and reopen the federal Victim Compensation Fund. That would make a huge difference in their lives.

Frank Fraone

Frank Fraone, division chief of the Menlo Park Fire Department in California, was thousands of miles away from New York City on 9/11, fighting wildfires. Along with thousands of other brave men and women from around the country, Chief Fraone traveled to New York to aid local rescue workers at Ground Zero. Fraone had seen his fair share of destruction during his career, but nothing prepared him for what he saw here.

He worked 16-hour days with fellow rescue workers, inhaling toxic dust that later left him with lower respiratory airway disease. Now living across the country from New York City, he still feels the effects of working at Ground Zero, which he says limited his ability to respond to other disasters, including Hurricane Katrina.

Fraone has had difficulty getting health care in California for his ailments and says that “living out here in California, I cannot get confirmation or talk face-to-face with anyone affiliated with [9/11] health care issues. I do not know to this date if I am going to be covered for my health concerns. What happens when this health issue disables me and I can no longer work or care for my family?”

The Zadroga Act would fully fund programs to provide health care to 9/11 responders and survivors who live outside the New York metropolitan area and give them access to economic compensation.

Joseph Picurro

At a time when most people were running away from lower Manhattan, Joseph Picurro rushed to the World Trade Center site to volunteer his expertise as an ironworker for the rescue effort.

For 28 days, he helped cut steel beams on the Pile to find survivors and clear debris, often sleeping on the floor of a nearby office building rather than returning to his home in New Jersey at night.

In the years after, Picurro was diagnosed with sarcoidosis, which makes breathing painful, as well as with reactive airway dysfunction syndrome and severe acid reflux. He suffers from constant joint pain, seizures and blackouts and relies on dozens of different medications. He is currently in hospice care and has had to fight to get workers’ compensation for his illnesses.

“Our financial situation is bad – I mean bad. For 6 years I’ve had to beg for help, borrow from family and I just can’t do it anymore and shouldn’t have to. We need to reopen the Victim Compensation Fund. My husband did serve his country and now it’s time for the country to serve him, before he dies,” says Picurro’s wife, Laura.

Leon Heyward

Following the attacks, Leon Heyward was directed by his supervisor at the New York City Department of Consumer Affairs to pick up coworkers at Ground Zero and drop them off at their homes. By doing his job and helping others, Heyward was enveloped by the toxic dust that engulfed lower Manhattan. One year later, he was diagnosed with sarcoidosis of the brain, lungs and eyes, which required frequent hospital visits. By 2003, seizures sustained at work due to his sarcoidosis forced Heyward to stop working. After leaving the workforce, Heyward was initially denied workers’ compensation and he had to ask his friends and family for help paying his health care and living expenses.

While he eventually won some Social Security disability benefits, the toll on his finances and health was irreversible.

Heyward died in October 2008 from lymphoma-complicating sarcoidosis after fighting for seven years to get proper care and workers’ compensation and to have doctors and the government recognize that his illness was caused by 9/11.

Stories like these – and hundreds of people whose names may never be publicized – are why we will never stop fighting to provide proper medical care and economic relief for those who were harmed by the attacks on the United States.

We have a moral responsibility to help those who came to the aid of our nation in one of America’s darkest hours. Nine long years after the attacks, the living victims of 9/11 are still suffering. We must pass this bill. It is the least we can do as a grateful nation.

Maloney (D-Manhattan, Queens), is chair of the U.S. Congress Joint Economic Committee. Nadler (D-Manhattan, Brooklyn), is chair of the House Judiciary Subcommittee on the Constitution, Civil Rights and Civil Liberties. King (R-Long Island), is the ranking member of the House Homeland Security Committee.

Remarks of President Barack Obama on Social Security

Remarks of President Barack Obama
As Prepared for Delivery
August 14, 2010
Washington, DC

Seventy-five years ago today, in the midst of the Great Depression, Franklin Roosevelt signed Social Security into law, laying a cornerstone in the foundation of America’s middle class, and assuring generations of America’s seniors that after a lifetime of hard work, they’d have a chance to retire with dignity. We have an obligation to keep that promise; to safeguard Social Security for our seniors, people with disabilities, and all Americans – today, tomorrow, and forever.

Now, we’ve been talking for a long time about how to do that; about how to make sure Social Security is healthy enough to cover the higher costs that are kicking in now that baby boomers are retiring. And I’m committed to working with anyone, Democrat or Republican, who wants to strengthen Social Security. I’m also encouraged by the reports of serious bipartisan work being done on this and other issues in the fiscal commission that I set up several months ago.

One thing we can’t afford to do though is privatize Social Security – an ill-conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market.

A few years ago, we had a debate about privatizing Social Security. And I’d have thought that debate would’ve been put to rest once and for all by the financial crisis we’ve just experienced. I’d have thought, after being reminded how quickly the stock market can tumble, after seeing the wealth people worked a lifetime to earn wiped out in a matter of days, that no one would want to place bets with Social Security on Wall Street; that everyone would understand why we need to be prudent about investing the retirement money of tens of millions of Americans.

But some Republican leaders in Congress don’t seem to have learned any lessons from the past few years. They’re pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall. It’s right up there on their to-do list with repealing some of the Medicare benefits and reforms that are adding at least a dozen years to the fiscal health of Medicare – the single longest extension in history.

That agenda is wrong for seniors, it’s wrong for America, and I won’t let it happen. Not while I’m President. I’ll fight with everything I’ve got to stop those who would gamble your Social Security on Wall Street. Because you shouldn’t be worried that a sudden downturn in the stock market will put all you’ve worked so hard for – all you’ve earned – at risk. You should have the peace of mind of knowing that after meeting your responsibilities and paying into the system all your lives, you’ll get the benefits you deserve.

Seventy-five years ago today, Franklin Roosevelt made a promise. He promised that from that day forward, we’d offer – quote – “some measure of protection to the average citizen and to his family against poverty-stricken old age.” That’s a promise each generation of Americans has kept. And it’s a promise America will continue to keep so long as I have the honor of serving as President. Thanks for listening. Thanks for watching. And have a nice weekend.

by Paul Krugman

Social Security turned 75 last week. It should have been a joyous occasion, a time to celebrate a program that has brought dignity and decency to the lives of older Americans.

But the program is under attack, with some Democrats as well as nearly all Republicans joining the assault. Rumor has it that President Obama’s deficit commission may call for deep benefit cuts, in particular a sharp rise in the retirement age.

Social Security’s attackers claim that they’re concerned about the program’s financial future. But their math doesn’t add up, and their hostility isn’t really about dollars and cents. Instead, it’s about ideology and posturing. And underneath it all is ignorance of or indifference to the realities of life for many Americans.

About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.

But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.

Meanwhile, an aging population will eventually (over the course of the next 20 years) cause the cost of paying Social Security benefits to rise from its current 4.8 percent of G.D.P. to about 6 percent of G.D.P. To give you some perspective, that’s a significantly smaller increase than the rise in defense spending since 2001, which Washington certainly didn’t consider a crisis, or even a reason to rethink some of the Bush tax cuts.

So where do claims of crisis come from? To a large extent they rely on bad-faith accounting. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own.

It would be easy to dismiss this bait-and-switch as obvious nonsense, except for one thing: many influential people — including Alan Simpson, co-chairman of the president’s deficit commission — are peddling this nonsense.

And having invented a crisis, what do Social Security’s attackers want to do? They don’t propose cutting benefits to current retirees; invariably the plan is, instead, to cut benefits many years in the future. So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K.

What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic.

And neither wing of the anti-Social-Security coalition seems to know or care about the hardship its favorite proposals would cause.
The currently fashionable idea of raising the retirement age even more than it will rise under existing law — it has already gone from 65 to 66, it’s scheduled to rise to 67, but now some are proposing that it go to 70 — is usually justified with assertions that life expectancy has risen, so people can easily work later into life. But that’s only true for affluent, white-collar workers — the people who need Social Security least.

I’m not just talking about the fact that it’s a lot easier to imagine working until you’re 70 if you have a comfortable office job than if you’re engaged in manual labor. America is becoming an increasingly unequal society — and the growing disparities extend to matters of life and death. Life expectancy at age 65 has risen a lot at the top of the income distribution, but much less for lower-income workers. And remember, the retirement age is already scheduled to rise under current law.

So let’s beat back this unnecessary, unfair and — let’s not mince words — cruel attack on working Americans. Big cuts in Social Security should not be on the table.

Report: 1.2M fewer uninsured in state

NEW YORK — About 1.2 million New Yorkers will get health insurance under the federal health reform approved this year by Congress.

About 1.4 million will remain uninsured, including 400,000 illegal immigrants, according to the report by the New York State Health Foundation. The report analyzes how health reform will affect New York and looks at the challenges of setting up health insurance exchanges and increasing primary care services to serve more people. The report also explores new payment methods the state could use to lower health care costs.

Copies of the report are available at http://www.nyshealthfoundation.org.

– Cathleen F. Crowley

125 Days Late, a State Budget with New Taxes

by Danny Hakim

ALBANY — Lawmakers completed one of the latest budgets in New York State history on Tuesday night, passing a last piece of legislation that will raise an additional $1 billion — in part by increasing taxes on the sale of clothing and on a variety of businesses.

The state will increase its share of revenue from video gambling machines and will allow a number of casinos to stay open later. Lawmakers also voted to reduce charitable deductions for those who make $10 million or more.

But lawmakers rejected a plan to enact a tax change on earnings by hedge fund managers who work in New York but live outside the state. Much of their compensation comes in performance incentives that are considered capital gains and are taxed federally at 15 percent. The change would have made these earnings “ordinary” income, subject to New York State taxes.

The move came as hedge funds were being wooed to move out of the state.

A vote in the State Senate took place just before 8:30 p.m., ending months of contentious negotiations, with the budget 125 days late. The Assembly had earlier approved the budget, which is projected to be $136.5 billion. Spending will increase by 2.4 percent over the previous budget.

Lawmakers had been passing the budget in pieces for several months, amid a stalemate with Gov. David A. Paterson.

Democrats, who control the Legislature, feared the indignity of passing the latest budget ever in an election year. The record was set in 2004, when the budget passed on Aug. 11.

The last piece of the budget passed on a party-line vote, 32 to 28, with the Senate’s tenuous Democratic majority holding together and no Republicans voting in favor of the measure. Although the Legislature passed a spending plan several weeks ago, it had been at loggerheads with the governor on devising a way to pay for the final part of the budget.

“Today the Senate completed the final stages of a fair and responsible budget that works for New Yorkers,” Austin Shafran, a spokesman for the Senate Democrats, said in a statement.

Surprisingly, there was almost no debate on the measure, but Senator Dean G. Skelos, the Republican leader, signaled what are sure to be campaign themes for his party in the fall.

“Today, Senate Democrats finished voting on a budget that raises taxes by nearly $4 billion,” Mr. Skelos said in a statement, referring to his tally of the total amount of taxes approved in the last few months. “Today’s action also completes one of the latest budgets in state history. What did taxpayers get as a result? They got higher spending and more taxes, but not a single initiative to create any new jobs or improve New York’s economy.”

The legislation will eliminate a sales tax exemption on clothing and footwear purchases of less than $110 starting on Oct. 1. That was by far the largest piece of the bill passed Tuesday night; it is expected to raise about $330 million.

The legislation also expands tax breaks for film production companies and requires online travel companies to collect sales taxes on hotel rooms.

The governor, through a spokesman, hailed the passage of the budget.

“Today the state finalized a budget that closes a $9.2 billion budget gap,” said Morgan Hook, Mr. Paterson’s communications director. “This was done primarily through spending cuts and with no borrowing.”

“A fiscally responsible budget,” Mr. Hook added, “will help our state turn the corner on this economic crisis and put us on a path to recovery.”

A number of other significant measures passed on Tuesday. Lawmakers approved a plan to raise more than $1 billion through uniform, across-the-board cuts to state programs, should Congress fail to approve an increase in Medicaid financing this year. Legislators had long resisted approving the plan, but the governor had insisted on it as it became increasingly uncertain that Congress would increase the financing.

Lawmakers also passed a controversial measure requiring that prisoners be counted as residents not of the mostly upstate prisons where they reside, but of the areas where they lived before they were incarcerated. This effort had been fiercely resisted by Republicans, because of the implications the move could have as legislative districts are redrawn by the Legislature.

Democrats had championed the measure. “This is an issue of fundamental fairness, and it will empower poor communities because their population will reflect those prisoners,” said Senator Eric T. Schneiderman, a Manhattan Democrat running for attorney general. “If other states follow us, it would represent a major shift of political power back to these poor urban communities.”

One notable measure that failed to pass was a bill that would have given the state university system far more autonomy to set its own tuition rates. The plan was being pushed by the chancellor, Nancy L. Zimpher, as a way to help turn around the ailing system.

But Democratic leaders pulled the bill twice after it was clear both times that it would not pass.

Veto puts big hole in school budget

Forces Buffalo system to pay $11 million more

By Tom Precious
News Albany Bureau
Published: July 09, 2010

ALBANY — Gov. David A. Paterson issued yet another veto Thursday to prevent what he called a legislative end run to increase state spending on public schools.

But the fiscal fallout from the governor’s action includes blowing a $11 million hole in the Buffalo Public Schools budget, which could force another 200 layoffs in the system.

The governor previously vetoed $419 million in state funding for 700 school districts. But, the administration said Thursday, a separate bill approved by the Legislature contained a one- sentence provision that, in effect, would undermine the school aid veto.

Paterson called the provision a “poison pill,” saying legislators tried to “achieve through the back door” what they could not get through the vetoed bill.

The governor added that he felt legally compelled to veto the entire 45-page bill, not just the single, objectionable provision.

The result? While he claims his action saves money for the state, it sharply increases expenses for some schools systems — especially Buffalo.

For Buffalo Public Schools, the issue involves how much, per pupil, the school system must pay charter schools attended by youngsters from the system. Last year, the state froze those payments to help systems like Buffalo, and the freeze was to remain in effect this year.

But by vetoing the entire bill, Paterson undid that agreement.

As a result, Buffalo schools face an additional $11 million in expenses for the coming school year. Statewide, school districts will have to pay charters an additional $70 million.

“This is problematic,” Buffalo School Superintendent James A. Williams said.

With his budget already adopted and 400 layoffs planned, Williams said the additional charter school payments could cost another 200 jobs.

“And it’s July, and we’ve got to open school in August,” he added. “We can’t operate public schools with all these uncertainties.”

In his latest veto, issued a day after the delivery of nearly 6,700 other vetoes totaling about $700 million in spending, Paterson acknowledged spiking a number of “worthwhile” programs, including a number that had been in the budget he proposed in January. These included continuing the freeze on charter school payments.

But the governor, a Democrat, said the Legislature, controlled by his own party, had forced his hand.

“In essence, the Legislature has presented me with a Hobson’s choice: veto this legislation despite the positive aspects it contains or accept the irresponsible spending it compels, and agree thereby that New York State have a budget that is out of balance from the outset.”

Austin Shafran, a spokesman for Democrats who control the Senate, said the veto “jeopardizes jobs and our school children with the typical Albany power play.”

Assembly Speaker Sheldon Silver, a Manhattan Democrat, declined to comment.

David Albert, a spokesman for the New York State School Boards Association, said Paterson’s earlier veto of $419 million in school spending already prevented those funds from going out the door.

“I think you can make the argument that the veto is unnecessary because the money is not there,” he said. But he said a number of programs will face “serious ramifications.”

While the governor sought to sound fiscally tough, the veto will provide more spending for some schools. It cancels a freeze that had prevented districts from updating certain data — such as enrollment — on which state funding is based. As a result, the state will have to pay out $100 million more than anticipated.

Though he insists otherwise, the governor appears to be setting the stage for more budget talks, along with resolution of some nonfiscal matters that were not resolved at the end of session. These include including a new financing arrangement being pushed by the University at Buffalo.

The Senate is considering a return next week to adopt the last budget bill — a $1.5 billion revenue-raising measure.

tprecious@buffnews.com

Nurses press for a contract

Demonstration held to put pressure on Ellis Medicine administration

By CATHLEEN F. CROWLEY, Staff writer
First published in print: Thursday, July 8, 2010

SCHENECTADY — Nurses from Ellis Medicine demonstrated Wednesday in front of the Nott Street hospital, saying the administration is not meeting their demands for a new contract.

For the first time, nurses from the former St. Clare’s Hospital participated in the informational picketing and are part of the bargaining unit. After the hospitals merged in 2008, nurses from the St. Clare’s campus voted to join New York State Nurses Association, the union that represents Ellis nurses.

“I’ve had enough of things changing, and through all of those changes, we had no control over any of it,” said Fred Durocher, a St. Clare’s nurse who moved to the Nott Street emergency room. “Now I’m part of a union and I have a little bit of a say.”

The main points of disagreement are wages, health care benefits and nursing ratios.

The hospital administration has proposed freezing wages in 2010 and giving 2.8 percent increases in the following three years. Senior nurses at the top of the pay scale would not receive raises, but would get lump sum bonuses.

The union said the proposed pay increases are step payments for nurses who reach higher experience levels but are not cost of living increases.

“No increases for three years is not going to attract nurses,” said Teresa Jewett, a 34-year veteran nurse at Ellis.

In comparison, Ellis nurses received 5.5 percent annual increases on average in their last contract.

Hospital leaders said Ellis nurses are among the highest paid in the region with the most senior nurses making $75,000 a year and new nurses making $50,000. The hospital also said it has no trouble filling vacancies.

In negotiations for health care, the union says hospital leaders are trying to penalize nurses who seek medical care outside the Ellis health system. For example, nurses would pay nothing for an inpatient care at Ellis Hospital, but would have a $250 copay if they went to another hospital.

We are “trying to encourage employees to stay in this community and use our services,” said Cece Lynch, vice president, chief nursing officer.

The nurses’ union wants the hospital’s 2009 staffing guidelines written into the new contract. The guidelines set minimum nurse-to-patient ratios for every unit. On average, the ratio is one nurse for every five patients. Several downstate unions have contractual ratios and it has given unions the ability to challenge staffing changes in court.

“We want to continue the quality and quantity of staffing that we’ve been doing without worrying about what is going to happen in the future,” Suzanne Dailey, a nurse and vice chair of the bargaining unit.

Hospital leaders do not support ratios in the contract.

“Staffing is more than just having black and white numbers written into a contract,” Lynch said. Staffing needs to be adjusted based on the sickness of patients, patient volume, and the skill level of the nurses, she said.

Democrat Susan Savage, the Schenectady County Legislature chairwoman, walked the picket line with the nurses. The nurses’ previous contract ended in February. The hospital extended it to June 21 but has let it expire.

Lynch said Ellis has not frozen wages, hasn’t reduced time off and hasn’t laid off workers, despite a difficult economy.

“We are very committed to patient care and to maintaining the strong workforce we’ve had for many years,” Lynch said.

Cathleen F. Crowley can be reached at 454-5348 or ccrowley@timesunion.com.

Paterson takes out his veto stamp, nixes education $$

By Jimmy Vielkind

Making good on his threat yesterday, Gov. David Paterson vetoed additional education funding and other additions slid into a budget passed today by legislators.

“Rather than act in the interests of the people of New York state, they have engaged in legislation that is in self-interest and presented us with a series of bills that have the same gimmicks, chicanery and avoidant conduct that has characterized fiscal management in this state for far too long,” Paterson told journalists in the Red Room. He said legislators were sending a message to New Yorkers that they wanted “mediocrity” in higher education by not allowing SUNY campuses to charge more tuition and that their rejection of a property tax cap he proposed means “property tax relief will have to give way to an election year gimmick.”

Using a stamp and black ink, he vetoed a line in the budget that added $419 million in school aid this fiscal year (or some $600 million continued over the next school year.) Paterson said he will repeat the process 6,900 times — and his aides say he must personally initial each veto, so there could be some logistical headaches — to nix $80-100 million in restoration to the Tuition Assistance Program and other educational subsidies as well as $185-190 million in re-appropriated pork.

The legislature’s budget was about $400-500 million more than an omnibus extender bill unveiled Friday by Paterson, according to Budget Director Bob Megna.

Paterson said he was “disappointed, stunned, and frankly chagrined” that legislators did not create a contingency fund, in case some promised Medicaid assistance from the federal government fails to materialize. He said legislators are “fantasizing” that the monies will come through, and are engaging in “distraction and rumor-mongering” when they claim action in New York might push federal senators not act.

“If they’re restorations that involve additional spending, I’m going to have to veto them,” Paterson said. “I never get any joy in vetoing education money…it breaks my heart to do this. The only reason I’m doing this is I think that other wise we are, proverbially, kicking the can down the road and creating a greater problem.”

An override of the vetos is unlikely in the Senate, where Democrats control a narrow majority in the 32-30 house. All of the Republicans voted against the budget bills adopted today, and Minority Leader Dean Skelos cast serious doubts on the possibility of an override.

Austin Shafran, a spokesman for Senate Democrats said Paterson’s veto was a “typical Albany power play with school children and taxpayers caught in the middle. We passed a balanced budget that makes tough cuts and smart restorations to protect education and health services.”

He said a veto override is “under discussion.”

Dan Weiller, a spokesman for Assembly Speaker Sheldon Silver, said he will discuss an override with the 107 members of his conference. That’s more than the 2/3 threshold of 100 votes. Silver released this following statement:

The budget passed by the Legislature would dramatically reduce state spending, restore funding for our schools and maintain our fundamental commitment to ensuring that SUNY and CUNY remain affordable for all New Yorkers.

Our financial plan is consistent with the plan the Governor proposed in his latest emergency bill, and provides adequate revenue to fund these critical restorations.

The Governor’s decision to veto these bills will mean larger classes, higher property taxes and more expensive tuition for SUNY and CUNY students.

State’s emergency spending bill OK’d by Senate, 34-27

by Tom Precious

ALBANY — With just hours to go before a threatened shutdown of state government, three Senate Republicans broke with their colleagues Monday to join Democrats in approving an emergency spending bill to keep agencies open and funding available for everything from nonprofit programs to unemployment checks.

The game of chicken, however, could be repeated in just one week unless talks to resolve the much-delayed state budget for the current year gain more steam in coming days.

Behind closed doors, a tentative deal has been reached to close part of the projected $9.2 billion deficit by collecting taxes on cigarettes sold by Indian retailers. That decades-old conflict between the state and tribes, has been led largely by the Seneca Nation of Indians, the country’s biggest tax-free cigarette sellers.

Lawmakers face pressure to come up with new revenues to limit cuts to popular spending programs. Legislative leaders are trying incorporate as much as $100 million from collecting the tax on sales by reservation business to non- Indians, government officials told The Buffalo News. The current plan calls for issuing coupons to Indians to buy cigarettes tax-free, but requiring wholesalers to place tax stamps on all other cigarettes distributed to Indian retailers.

It would be at least the third attempt in the past 10 years or so to try to collect the taxes, which Seneca leaders say would be an illegal move because of centuries-old treaty rights.

Officials are eyeing starting collections as soon as Sept. 1, while imposing a broader $1-per-pack cigarette tax increase across the state to bring in another $200 million.

Passage of the $14 billion emergency spending bill averted the state government shutdown, which Gov. David A. Paterson had warned would have begun this morning. The measure largely covers human services and mental health programs.

Its fate became somewhat cloudy when two Democrats in the State Senate, where the party holds a 32-30 majority, threatened to vote “no,” depriving it of the 32 votes needed for passage. In the end, the bill passed 34-27, with three GOP lawmakers joining 31 Democratic senators.

“To not pass this extender would drive New York into a state of chaos,” said Sen. Hugh T. Farley, a Schenectady Republican who joined Democrats. Farley faces a serious contest for re-election in November in a district with tens of thousands of state workers.

Two other Republicans — State Sens. Roy J. McDonald of Saratoga County and Charles J. Fuschillo Jr. of Merrick on Long Island — also voted for the bill; all Republican senators from Western New York all opposed it.

Statewide, all Democrats in the State Senate — except Ruben Diaz Sr. of the Bronx — backed it.

To try to win Diaz’s support, negotiators had included $188 million in a program that provides an array of services to low-income people, an $18 million increase over what Paterson proposed.

Still, Diaz voted against it because it cuts social programs used extensively in his district heavily populated with poor people.

“Hey, listen to me ladies and gentlemen, I’m not voting for cuts today and not next week,” Diaz told his colleagues during a floor debate.

Diaz bristled at his fellow Democrats. “I’m only one vote, so don’t put that on me,” he said of suggestions by Democrats that he was abandoning them and forcing them to rely on Republicans or face a government shutdown.

The Assembly, where Democrats hold a wide margin, approved it, 87-49.

The measure was the 11th weekly emergency spending bill since the state’s fiscal year began April 1 without a annual budget. In all, those weekly bills already have included nearly $80 billion in spending for the current year — almost 60 percent of what officials believe will be a final budget amount of about $135 billion.

Senate Democrats say the emergency bills have closed $1.1 billion of the $9.2 billion spending gap, meaning an increasingly shrinking portion of the budget will have to deal with the remaining red ink.

With all members of the Legislature up for re-election, increasingly thorny issues remain undecided. They include funding for the state’s 700 public school districts and whether to raise taxes and and borrow extensively to offset cuts needed to close a $9.2 billion budget the deficit.

The new bill saves about $325 million in various mental health and human services programs. But it also will be expensive for local governments, mainly counties, because of what Senate Democratic aides described as about $100 million in various cost-shifts from the state to localities, such as payments for juvenile justice programs. That, Republicans say, will hit property taxpayers and local services.

To lure votes, Paterson backed down from including collection of the cigarette tax in the measure adopted Monday. Republicans had vowed to vote against any emergency bill with tax increases.

With Diaz and Farley threatening not to vote for another emergency bill next week, Paterson faces several choices: reach a full budget deal so an emergency bill is not needed, make the next “extender” bill non-controversial by avoiding cuts so Democrats can count on Diaz’s vote or shape it in a way to keep luring some Republicans to vote for it.

Legislative leaders insist a broader deal is close. , but Paterson told a handful of reporters in his office Sunday night that the sides are “very far” apart, and that lawmakers are boasting of progress to put pressure on him to propose emergency bills that are easier to pass.

Legislators cannot change the governor’s emergency measures; they can only vote them up or down.

If legislators fail to approve the emergency bills — which they cannot amend — the state cannot spend money.

“We are moving closer and closer on an overall budget plan,” said Assembly Speaker Sheldon Silver after emerging from a private meeting with Paterson and Senate Democratic Conference Leader John Sampson. Still, he said the sides were at least $1.3 billion apart in closing the $9.2 billion gap — a difference Paterson has put more at $2 billion apart.

Democrats portrayed Republicans as taking the government to the brink of closure. But Republicans noted the state — run by a Democratic governor and Democratic Legislature — has been without a budget since April 1, forcing the state to delay funding for schools, not-for-profits and road contractors.

“Government has been closed down, maybe not for everybody, but for a substantial number of people in the state of New York,” said Sen. John A. DeFrancisco, a Syracuse-area Republican.

Democrats in the Senate insisted they don’t like the emergency budget route, but have little choice with no broader budget deal at hand and the alternative being to close down the government.

“We are moving closer and closer on an overall budget plan,” said Assembly Speaker Sheldon Silver after emerging from a private meeting with Paterson and Senate Democratic Conference Leader John Sampson. Still, he said the sides were at least $1.3 billion apart in closing the $9.2 billion gap Ô a difference Paterson has put more at $2 billion apart.

Democrats portrayed Republicans as taking the government to the brink of closure. But Republicans noted the state … run by a Democratic governor and Democratic Legislature … has been without a budget since April 1, forcing the state to delay funding for schools, not-for-profits and road contractors.

“Government has been closed down, maybe not for everybody, but for a substantial number of people in the state of New York,” said Sen. John DeFrancisco, a Syracuse-area Republican.

Democrats in the Senate insisted they don’t like the emergency budget route, but have little choice with no broader budget deal at hand and the alternative being to close down the government.

“You can’t afford to shut government down,” said Sen. William T. Stachowski, a Lake View Democrat. “No matter what we have to deal with, it’s worse to shut it down.”

New York Seeks to Pay Pension Fund Using Borrowing

by Danny Hakim

ALBANY — Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

As word of the plan spread, some denounced it as a shell game and a blatant effort by state leaders to avoid making difficult decisions, like cutting government spending or reducing pension benefits.

“It’s a classic Albany example of kicking the can down the road,” said Harry Wilson, the Republican candidate for comptroller, who holds an M.B.A. from Harvard.

Pension costs for the state and municipalities are soaring, a result of enhanced retirement benefits for public employees and the decline in the stock market over the past two years. And, given declines in tax revenue and larger budget shortfalls, the governments are struggling to come up with the money to make the contributions.

Under the plan, the state and municipalities would borrow the money to reduce their pension contributions for the next three years, in exchange for higher payments over the following decade. They would begin repaying what they borrowed, with interest, in 2013.

But Mr. Paterson and other state officials hope the stock market will have rebounded to such a degree by that time that the state’s overall pension contribution burden will have been reduced.

The maneuver would cost the state and local governments about $1.85 billion in interest payments, according to an estimate by the State Senate, though a number of factors could drive interest payments up or down.

Another oddity of the plan is that the pension fund, which assumes its assets will earn 8 percent a year, would accept interest payments from the state that would probably be 4.5 percent to 5.5 percent.

This would be only the second time the state has borrowed money from its pension fund, and it would involve much more money than the previous time, which occurred in the aftermath of the Sept. 11 terrorist attacks. New York State faces a $9.2 billion deficit this fiscal year, which began on April 1, and the budget is already more than two months late. The governor and legislative leaders are under pressure to make structural changes that will bring new discipline to state spending, but few expect them to do so.

Instead, they are expected to rely heavily on borrowing, tax or fee increases and an array of one-time maneuvers, like tapping the coffers of public authorities.

The governor and Comptroller Thomas P. DiNapoli back borrowing against the pension system, and a tentative agreement to do so was reached after negotiations on Thursday among key lawmakers and the governor’s representatives. The plan excludes New York City, which has its own pension system.

The initial plan in the governor’s budget called for the borrowing of up to $9 billion over the next six years.

Under the agreed-upon plan, the state would be authorized to borrow $1.5 billion to $2 billion over the next three years, according to forecasts provided by the governor’s office and the Senate. Municipalities would be allowed to borrow nearly $4 billion, according to a Senate estimate.

Senator Diane J. Savino, a Staten Island Democrat who negotiated the agreement for the Senate, said she pushed for a limit.

“There’s a question as to whether or not we should do this,” she said, adding, “I didn’t want to leave it open-ended, because six years is too long. The temptation is too great to do it over and over again.”

As part of the plan, the state and municipalities will have to make higher minimum payments into the pension system during bull markets to mitigate the impact of market crashes.

The governor’s plan, which was included in his executive budget in January, only highlighted the savings that the plan would reap over the next few years and included no mention of the long-term costs.

The amount borrowed would depend on various factors, like the stock market’s performance, which has fallen sharply since the fiscal year ended in March. The plan also allows state and local governments to choose whether to borrow from the pension fund each year, so much depends on whether future leaders choose to do so.

But with pension-contribution rates expected to climb over the next few years, political pressure is likely to be high to defer payments in a climate in which budget problems are coming from many directions.

Those pushing the plan are taking pains to avoid describing it as “borrowing,” saying they are seeking to amortize or “smooth” pension contributions. That is in part because they have distanced themselves from a plan proposed by Lt. Gov. Richard Ravitch that would have the state borrow as much as $6 billion for general operating expenses over the next three years in exchange for budget reforms.

“We’re not borrowing,” said Robert Megna, the state budget director and one of the governor’s top advisers.

Mr. DiNapoli, the comptroller, said: “We would view it more as an extended-payment plan.”

Asked about the pension plan, Mr. Ravitch said, “Call it what you will, it’s taking money from future budgets to help solve this year’s budget.”

Mr. Megna, when reminded that the plan envisioned delaying an obligation today and eventually paying it back with interest, softened his view in the process of a lengthy interview.

“I’m not going to sit here and characterize it as not a borrowing,” he said. “But it is an annual, relatively small borrowing we’re doing this year that were doing to get a modest savings.”

In 2004 and 2005, the state borrowed $655 million from the pension fund; it still owes more than $400 million.

Budget negotiations are expected to continue through the weekend, as state leaders push to reach a broad budget deal. What has become clear is that substantial borrowing will be part of the budget, leaving only the question of the amount.

This week, Mr. Paterson called borrowing “a last resort,” but added, “I have never said I wouldn’t borrow.”