Cuomo-tion: Priorities Move to the Fore as New Governor Seeks Public Confidence

The first time the younger Cuomo ran, he did not get the Democratic Party’s support. So he went to work at a law firm, then went to HUD and became a favorite son of former President Bill Clinton, followed by a lucrative stint at a real estate investment firm. But Andrew’s political life was still in the making. He ran hard—and won—the office of Attorney General of New York. New Yorkers watched first a candidate, then a General in perpetual motion. Four years is a long time, and Andrew strategized as only a seasoned field marshal could. He has made courtly gestures to several Republican senators, one example is the College Loan Scandal. His relationship with Assembly members has been somewhat tepid, and there is not much in the public record that provides a glimpse into his modus operandi.

However, what has been accomplished is a primary focus to restore the public’s faith in honest government and to promote transparency throughout the state. The AG’s office went after the pay-to-play investment firms in connection with the Public Pension Fund Scandal. Cuomo made some good scores here, but so far has been bested by one of the players, Steve Rattner, who agreed to pay the SEC $6 million for his part in the scandal.

However, General Cuomo wants to extract $26 million from Rattner, and filed two law suits. Rattner responded with a vitriolic assessment of the Governor-Elect.

Cuomo also won an agreement with Verizon, Time-Warner, Sprint and AT&T to shut down major sources of online child pornography. “I will work to set a State spending cap that will constitutionally require the Governor to propose and the Legislature to enact a budget that limits the budget’s growth to the rate of inflation, literally forcing us to live within our means. And from ending double-dipping of the State pension system to cracking down on Medicaid fraud, we will root out expensive abuses of public programs,” said the Governor-Elect.

According to Cuomo in his NY Works Agenda book, he dedicated an entire chapter to transportation infrastructure, citing this as “a critical part of our economic success and a key to our future.” Now it’s all about high speed rail. Outgoing Lieutenant Governor Richard Ravitch warns that New York State lacks adequate revenues to keep its transportation system in good repair. He explicitly pointed out two heavily-trafficked bridges, the Tappan Zee and the Kosciuszko, which, he said, “are at the end of their useful lives.”

Governor-elect Cuomo recently viewed the underbelly of the Tappan Zee Bridge from a tugboat, and said, “we do not have the resources we need to make these bridge investments.”

While some might say it is only a matter of time before a tragedy occurs on either one of the bridges, or on any of hundreds of other bridges in New York State in critically poor condition, the emphasis in still on high speed rail in the Cuomo program.

Cuomo has contacted Washington officials and New York members of Congress, including Congresswoman Louise Slaughter (D-Rochester), to inquire if the Governors of Ohio and Wisconsin are willing to relinquish some of the $1.2 billion in federal funds which have been earmarked for high speed rails. New York State already has received $150 million in a stimulus package, according to Assemblyman David Gantt (D-Rochester), chair of the Assembly Transportation Committee. However, this money has already been spent in order to bolster the much needed repairs to the transportation infrastructure.

Cuomo, the thinking man, said, “our work will focus on keeping travelers safe, making investments that support our economic growth and that we can afford, and taking full advantage of federal and private revenue sources. Among our chief priorities,” he emphasized, “is high speed rail. The system has the potential to revitalize the Upstate economy with construction jobs and permanent jobs created by the links to New York City, to Toronto and to Montreal.”

One wonders if anyone has asked the cost of laying new rails. How about the cost of retrofitting the trains that will run on these new rails? How much will all of this cost? Billions? Cuomo has said, “High speed rail could be the 21st Century Erie Canal for New York State.”

The Governor’s first priority certainly will be the budget. Because the Special Session of the Legislature failed to pass Governor Paterson’s legislation for $315 million in cuts, this will be one more added problem for Cuomo to face in January. While $315 million may be small compared with the anticipated 2011-12 estimate of a $10 billion shortfall (ComptrollerThomas DiNapoli thinks it will be closer to $13 billion), it is the failure of the Legislature to act that has Cuomo upset. “For them to come back and do nothing is very distressing. The Governor (Paterson) was right to call them back. Then you get into the blame game. Frankly, to me it is unimportant who is to blame. But they failed. They failed the people of New York State once again.

“All they did was kick the can down the road. Now,” Cuomo continued, “whatever deficit we had this year is going to be added to next year’s deficit. You are just making a bad situation worse. My basic point is hard decisions, tough choices don’t go away just because you don’t make them. Denial is not a life strategy. That is what needs to change next year,” he concluded.

It will be a very difficult task for the new Governor, not only because of the present economic situation, but also because there have been so many contracts made with various unions which appear to be iron clad. For example, the 898 layoffs may never take place because of contracts with the Civil Service Employees Association. “The pursuit of layoffs by any administration is a sign of failure,” said CSEA President Danny Donohue. “There are always better choices if an administration is prepared to act in good faith. Whether in the public or the private sector, layoffs make a challenging economic environment by taking away paychecks that would be spent in the community and undermining taxes that would otherwise be paid and eliminating work that could be done to generate revenues, services and products. Politicians cannot talk about creating jobs while eliminating them,” Donohue said.

Public Employees Federation President Kenneth Brynien, in commenting on the current situation, said that hundreds of PEF members are being targeted to be laid off on December 31st, “as directed by outgoing Governor Paterson. These layoffs are an outrage and completely unnecessary, and the Governor is ignoring the responsibility of providing state services. The state has 11,500 fewer employees today than in 2008, and the Governor insists on deeper cuts.”

“The fact is,” Brynien continued, “the quality services on which the taxpayers depend have never been more at risk than they are today. It’s time for our state leaders to ask themselves which state services they are willing to tell taxpayers they will have to do without. Will it be fewer bridge inspections or fewer inspections of the food we eat? Are our leaders ready to roll the dice on whether our water supply is thoroughly inspected?”

“This has never been about saving money. If it was, Governor Paterson would have offered the early retirement incentive much earlier to allow for more savings,” he charged, “and would have broadened the incentive and would have extended the offer to allow more state employees to leave state service. More than 600 PEF members have reached out to us indicating they would have liked to have taken the early retirement incentive, but were denied. Our members, who were ready and willing to leave state service, should have been allowed to take the ERI before anyone was forced to lose their job through layoff.”

On moving forward with the new administration, Brynien said that PEF “remains hopeful and optimistic we can help Governor-Elect Cuomo achieve much needed savings by an aggressive approach to reducing the state’s reliance on high priced consultants. We will strongly encourage the Governor-Elect to support a bill to require state agencies to conduct cost-benefit analyses before any work is contracted out to consultants. The state, more than ever before, simply can’t afford to pay for services at a higher cost when state employees can do the work for less. We will be providing the new administration with several studies that prove the state pays thousands of consultants performing professional services an average of $160,719 annually. That’s 62% more than it costs to have state employees do similar work, including the costs of their benefits.”

“Finally,” Brynien concluded, “taxpayers should be reminded that the total cost of state employee compensation makes up only 13% of the state budget, and is the only portion of the state budget that has been flat lined for the past two years. State employees did not cause the budget deficit problem and should not be targeted to try to fix the problem.”

Philip H. Smith, United University Professions President, said he would like to “open a dialogue with the Governor-Elect and his administration. We believe that by working together, we can find common ground,” explained Smith. “We’d like to show the Governor-Elect how SUNY is a major contributor to the economic well-being of this state and to deliver the message that further cuts to an already decimated SUNY would be counter-productive. Instead, we should be investing in our public higher education system. An investment in SUNY represents an investment toward a healthier economic future for this state.”

When questioned about Cuomo’s announcement of “no new taxes,” Smith said he understood the message that former Governor Hugh L. Carey delivered in 1975 when he assumed office: “The days of wine and roses are over.” Smith suggested, “this is weighing on the mind of Andrew Cuomo as he prepares to become the next Governor of New York. Our more than 35,000 members are taxpayers, too. No one likes to raise taxes, but you cannot simply cut your way out of a deficit. We would also like to remind Mr. Cuomo that SUNY has been stung by $585 million in budget cuts over the last two years, including the recent $23 million mid-year reduction. Eight out of every ten SUNY graduates stay in New York after graduation. That’s why the state ought to invest in SUNY rather than reduce its support. The state has the ability to provide SUNY with additional resources,” Smith continued, “which could be in the form of a rational tuition increase. In regard to the deficit, investments in SUNY will lead to a healthier economy that will generate additional revenue for New York while cutting down the deficit.”

Governor-Elect Cuomo said in mid- November that he had approximately $5 million left in his campaign coffers and would use that money to defend cuts if the unions fought back with extensive television advertising. Cuomo said he would seek funds from private industry, civic groups and other organizations doing business with the State, such as the Business Council of New York State, the Citizens Budget Commission and the Partnership for New York City. According to sources behind the private sector group, they have already laid the groundwork for such a campaign with Bill Cunningham, a public relations manager at DKC founded by Dan Klores.

“The most important issue facing the new Governor and the Legislature is the creation of private sector jobs to put New Yorkers back to work,” said Kenneth Adams, President and CEO of the Business Council of New York State. “Clearly, the State budget crisis must be fixed without raising taxes or fees. Albany must reduce spending and enact reforms, like the property tax cap and public employee pension reform, to enable New York to compete for new jobs and investment,” said Adams. “In addition, there are four steps unrelated to the budget that can be taken early in the New Year to spur economic growth.

“Adopt the “Energize NY” Bill (S.8065) that passed the Senate 59 to 2 with bi-partisan support. At no cost to the State, this legislation would increase the amount of low-cost electric power available to support job creation. “Reduce the cost of capital by adopting a refundable Investment Tax Credit (ITC) or accelerated depreciation of capital investments. New capital investments by New York employers will lead to new jobs. “Fix the new ‘Excelsior Jobs Program’ by basing the real property tax credit on the improved value of the property. This will encourage more investment and job creation. “Adopt the new jobs tax credit proposed by Governor-Elect Cuomo to reduce the cost of creating jobs in New York. This will be a useful tool in competing with other States,” Adams concluded.

Stating that he was working hard to reach out to all the parties to be adversely affected by the Budget, Cuomo said “the public sector unions will have to endure a reduction year just because it is a function of the numbers.”

“I hope they come to the table in good spirit. I hope they follow the example of the labor leaders in the 1975 New York City crisis. They came to the table and were very cooperative and they accepted wage roll backs. They did put pension funds on the table because they understood the problems that the City was in and the State was in,” Cuomo said. “We have a $9 billion deficit. We need to make cuts. I hope they’ll be cooperative in this venture. If they are not, and if they rebuke my offer and the opportunity to be cooperative, and instead they wage campaigns against us,” Cuomo warned, “then we will deal with that, and we are prepared to deal with that. This is not my first option, and I hope that does not happen. I expect it to happen, but if it does—and it has in the past—then we will be prepared,” he said.

Despite the fact that New York State is physically and mentally in what he calls “disrepair”, Governor-Elect Cuomo is optimistic that his plans will prevail. “I believe the State situation is so bad that no one can refute the problems. It does not pass the straight face test to come to say I don’t know why you have to cut my area. This is analogous of the 1975 Fiscal Crisis,” he stated. “You knew at the time the City was going bankrupt. Now we have a $9 billion deficit on the State side with projected future deficits just after we will have dealt with this one. The State is not going to be able to spend its way out of this situation. As I said repeatedly, I don’t believe you can raise taxes on businesses because I believe they will vote with their feet and leave, and make a bad situation worse. If you can’t raise taxes, then you are going to have to find efficiencies and economics of scale and that is what this is going to be all about.”

The day after Governor-Elect Cuomo expressed these ideas, the Urban Justice Center praised New York Chief Judge Jonathan Lippman for including in the Court System’s budget an increase of $100 million for attorneys who represent poor clients in civil cases.

Doug Laskon, Executive Director of the Urban Justice Center explained, “the recession has diminished funding for all nonprofits, but UJC has grown to meet the enlarged demand for legal services. A 20% growth in staff in recent years and more funding for the now almost $7 million budget have enabled UJC to increase our caseload. In 2006 UJC attorneys handled 5,586 cases, and in the 2009-10 fiscal year, they took on 9,179 cases.” Laskon estimates that the Center saves New York over $17 million annually, up from just under $5 million in savings in 2006.

Health Care for All New York (HCFANY), one of the largest health care consumer coalitions in the State, announced that the organization will urge that the new Federal health care standards, adopted in the spring, be adopted for New York consumers, and will support proposals by the Governor and legislators next year to implement the new law.

Jessica Wisneski, Director of Health Care for New York and chair of the Steering Committee for HCFANY, said the Legislature must pass a law next year that will set up an insurance exchange that works for New York’s working families. “These exchanges will act as government- sponsored marketplaces for individuals and small businesses to purchase health insurance coverage. For New York to comply with the Federal Law (The Patient Protections and Affordable Care Act), the Governor and the Legislature will need to submit and pass legislation that creates an insurance exchange in the 2011 session. “Under Federal Law,” Ms. Wisneski explained, “the exchange must begin operating by January 1, 2014.” The HCFANY supports standards for an exchange that does the following: is statewide and serves everyone throughout the state; provides for quality and affordable benefit packages; is easy for consumers to navigate and represents consumer interests; builds on the success of New York’s already existing public programs, including Family Health Plus, Child Health Plus and Medicaid; and incorporates principles of health equity, based on race, ethnicity, gender, disability, language, sexual orientation, gender identity and immigration status.

Requiring local government and school district employees to pay part of the cost of their health insurance coverage could save New York taxpayers more than $1 billion a year without diminishing essential services, according to a report from the Nelson A. Rockefeller Institute of Government’s Senior Fellow Carol O’Cleriracain. Her report is one of a series prepared in part by Lieutenant Governor Richard Ravitich’s initiative to develop proposal that would lead New York to structural budgetary balance.

Employees and retirees of New York State contribute an average of 18% for their health insurance premiums, according to the report. “But in most municipalities and many school districts, the employee contribution is none to minimal,” explained O’Cleriracain. Most of the several legislators and lobbyists contacted for this article are looking forward to working with Cuomo, and are breathing a sigh of relief after three years of the Spitzer “steamroller” with Governor Paterson being left to clean up the mistakes of the past.

One lawmaker said, “Before Cuomo was a person who was running, and now he is a person who has to rule. It is interesting, and I am a bit optimistic about the potential we have as a state if Cuomo can implement some of his plans, many of which we know little about. But if he is going to tackle State Government, the entire Government, including State agencies, will have to become more efficient and do more with less.

“With the legislators, he will have to build bridges to these folks. He can’t lambaste them. He has to have partnerships.

It’s good to be out there. Oh we are ‘terrible, terrible, and terrible’…but there is a point in time when we have to say, okay, how do we move this together, with no blame being bandied about. Just how do we make the decision better is what the people deserve. A fight with the unions could be seen as a tactic that is destined to fail,” he said. “Being Governor is a much bigger job than serving as Attorney General. He must use all of his implements, all of his skills and talents that are going to be brought to bear,” noted another member.

“This is a big jump,” said another legislator. “Other than his predecessor, he has unique things. First off, he was an executive in a major, very large institution. He is used to being an executive, while Spitzer was not. Cuomo is actually a person of significance, and worked with his father, Governor Mario M. Cuomo in an earlier administration. So he has intimate knowledge of how Albany works. He has spent a lot of time canvassing the State, and he issued some very detailed papers and opinions. He went out and spoke to the people and paid visits to various state agencies, and also meeting with public servants, private sector representatives, civic and union leaders and elected officials throughout New York State. He has said he will continue this practice. These are positive signs,” the legislator concluded.

“Almost everyone indicated that everything has to be cut back across the board, including education. This may be his most serious problem. As Governor, he has to make some difficult decisions, and he is not going to be able to avoid issues he doesn’t want to deal with. Cuomo has to pick his own people, people with whom he is comfortable, and as the new Governor, he is entitled to that. There is not one person that has a hold on intelligence or policy or anything,” noted another legislator.

Another member spoke of dealing with the unions and said, “you have to negotiate. Cuomo must go from running to ruling because it is two different skill sets. In order to deliver on what you ran on, you have to be skilled at ruling.”

One well-known lobbyist said he thought it was great for New York to have Andrew Cuomo as Governor. “He is very intelligent and prepared. No one works harder. He understands Albany, and will work with the Legislature and lobbyists for the betterment of New York State. He understands that unions have a role to play, and he will engage them.”