NYSAC Weekly Wire

Re-caps the week's events, legislative action, and other news that impact county government.

December 2 , 2009

Extraordinary Legislative Session Edition

Deficit Reduction Program Makes Wide-Ranging Cuts but Avoids Cost-shifting
According to Governor David Paterson and State Comptroller Thomas DiNapoli, New York State faces a $3 to $4 billion mid-year structural budget deficit for the state fiscal year between April 1, 2009 and March 31, 2010.

In an effort to address this deficit, the New York State Legislature today passed a $2.7 billion deficit reduction plan (DRP) that provides a range of cuts and includes two major one-shot revenue measures—accelerating stimulus funds and a sales tax amnesty program for the state and localities. The DRP, thanks to your advocacy efforts, avoids changing funding formulas that would have shifted the costs for major state mandated programs and services provided at the county level.

The DRP covers five months of the state’s fiscal year and reduces undispersed appropriated funds for categorical and grant programs by 12.5 percent effective November 1, 2009 through March 31, 2010. The impact of the DRP will vary by county depending on executed contracts, claims and expenses submitted, and state reimbursement.

A complete analysis of the actions detailed in the DRP will be provided by NYSAC in the near future. In the meantime, areas of concern to county leaders include:

• Public health and human service programs,
• Community college operating assistance,
• Mental hygiene programs, and
• Children and family services.

According to an analysis by the Division of Budget, the Legislature’s DRP achieves $550 million in savings through a combination of a 12.5 percent across-the-board reduction to remaining 2009-10 fiscal year spending in certain programs ($390 million) and other targeted actions ($160 million).

The 12.5 percent across-the-board cuts to certain local assistance programs ($390 million) will have the following fiscal impacts by policy area:

• A $18.1 million reduction to social services programs;
• A $36.9 million reduction to education and arts programs outside of School Aid;
• A $41.2 million reduction to health care and aging programs outside of Medicaid;
• A $112.5 million reduction to mental hygiene programs;
• A $17.4 million reduction to higher education programs;
• A $156.8 million reduction to transit programs; and
• A total of $7 million in other reductions.

Among the $160 million in targeted local assistance savings include the following actions:

• Reducing Aid and Incentives to Municipalities (AIM) funding for non-calendar year cities through a sliding scale (between 1 and 8 percent) based on the city’s overall reliance on that aid.
• Eliminating the 2010 trend (inflation) factor for hospital, nursing home, home care, and personal care providers during the first quarter of the calendar year ($11.5 million State savings).
• Lowering the State General Fund subsidies for the cost associated with mental health parity coverage by 30 percent ($10 million State savings).
• Reducing funding for managed care quality incentives ($5.4 million); cervical vaccines ($1.7 million); emergency contraception ($200,000); teacher centers ($4.0 million); mortgage foreclosure assistance ($3.1 million); a disease management demonstration program ($2.8 million); pay-for-performance incentives to health care providers ($3.6 million); and new shared services efficiency grants ($500,000).

In our conversations with the Governor and Legislature, all parties have maintained a commitment to prevent cost shifting to counties. NYSAC is tracking a minimal impact to counties under the current plan. However, the Governor is assessing the impact of the legislative action that has been taken, and has cautioned that he may need to take administrative action in order to close the budget gap if necessary. NYSAC is working to minimize the impact on counties, which deliver state services locally.

Further communication will follow as more detailed measures and cuts are put into place.

New Public Employee Pension System Tier V Enacted by Both Houses
Both houses of the legislature passed a bill containing amendments to the retirement & social security law to create a new pension Tier V and the civil service law to extend injunctive relief in unfair labor practice cases.

Civil Service Law amendments – language was inserted into the bill to extend the provisions providing for injunction relief in unfair labor practice cases under the Taylor Law for 4 years until 2013, with subsequent renewals for 4 year increments. This provision has been extended for 2 years 18 times since its original enactment in 1977.

Public Employee Pension Systems Tier V
The bill amends provisions relate to NYS Police and Fire Retirement System, New York State & Local Employee Retirement System, the New York City Pension Systems and the New York State Teachers Retirement System. The bill:

• affects all new enrollees in the various retirement systems as of January 1, 2010;
• requires a 3% employee contribution rate for the entire length of service;
• establishes a 10 year vesting period to receive benefits;
• establishes additional penalties for early retirement before the age of 62;
• eliminates the penalty waiver  for 30 years of service;
• establishes an overtime cap of 15% for police & fire. No compensation greater than 15% of base salary can be utilized in final average salary computation for pension benefit determination;
• establishes an overtime cap of $15,000 for all other systems in determining final average salary (the cap is subsequently  increased by 3% each year following the effective date); and
• makes permanent the ability of public employee unions and employers to negotiate additional pension benefits not requiring act of the legislature.

Fiscal Impact

• For fiscal year ending March 31, 2010 – new average contribution rate will be 5.7% for employees hired after January 1, 2010 down from current average of 7% for Tier IV employees.
• Long term projected ERS average contribution rate for employees under Tier V will be approximately 8.9%, down from project rate of 11% for existing Tier IV members.

 

Existing Pension Tiers
These changes do not affect existing employees because of State Constitutional prohibitions against reduction of benefits for existing pension system members.

Lawmakers Pass Public Authorities Reform
The State Senate today gave final passage to legislation that will amend the Public Authorities Law to create an independent public authorities budget office within the Department of State. The Authorities Budget Office will have wide ranging authority to oversee and monitor the affairs of public authorities established under New York State Law at both the state and local level.

Trumpeted as a victory for government transparency, the measure would create a new state agency that will require greater recordkeeping, reporting and overall administrative controls over the internal operations of all state-created public authorities and their subsidiaries, including authorities ranging in size from the Metropolitan Transit Authority to local IDAs, county sewer and water boards, county airports and port authorities.

The bill also requires the State Comptroller’s approval of authority transactions in excess of $1 million and contains whistle blower protection provisions to protect employees who disclose information concerning malfeasance, wrong doing or misconduct by authority personnel.

Under the bill’s provisions, the transfer of land held by an authority to non-governmental entities at a price less than full market value needs prior approval before the transfer can occur. For state authority projects, either the Governor, the senate, or the assembly would have individual veto power over proposed land transfers, unlike current state constitutional procedures requiring passage by both houses and approval by the Governor for most state actions. Local authority projects would require the approval of local legislative bodies prior to the proposed land transfer.

The bill also contains a “Labor Peace” provision which requires hotel and convention center projects assisted in whole or in part by authority financing to sign an agreement with a labor organization representing hotel workers for a term of 5 years. The provision, in effect, requires that any convention center or hotel receiving public authority financing operate as a union house.

While NYSAC firmly supports the full transparency of public authority actions, several provisions are troubling, including: the requirements placed on local authorities for record keeping; and the reporting and administrative controls are overburdening to local authorities with small staffs and will result in higher administrative costs to local authorities and the taxpayers who support them.

Legislative Conference Scheduled for February 8-10, 2010
ARRA financing opportunities, freedom of information laws, public safety, farming and dairy issues, road and bridge policy, public health concerns, economic revitalization. NYSAC is putting the finishing touches on plans for the conference, and these are just of sampling of the topics to be addressed during the 2010 Legislative Conference.

The conference will be held at the Desmond Hotel in Albany from February 8-10, 2010. We have crafted a comprehensive and timely workshop program in addition to plenary sessions and training opportunities for county officials. The program includes workshops on streamlining county government, understanding the 24/7 news cycle, the executive budget, the Marcellus Shale, and more. Look for our conference registration flyer as well as our agenda in the mail or on our website at www.nysac.org .

Call for articles for the Winter 2010 NYSAC News
The theme of the Winter 2010 issue of the NYSAC News magazine is Counties and Higher Education and will highlight how higher educational institutions--from our county-sponsored community colleges to SUNY and private colleges and universities--play a vital role in our communities. Submissions should be between 750 to 1,000 words and include a high resolution (300 dpi) photograph of the author. Articles should be sent to Mark LaVigne at mlavigne@nysac.org by December 21, 2009.