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From the Desk of Senator Craig Johnson: December 11, 2009

Deficit Reduction; Pension Reform Legislation Passed During Special Senate Session

This week, the State Senate tackled New York’s budget deficit without tax-hiking mid-year school cuts, enacted much-needed reforms to its pension system, and brought much-needed accountability and transparency to this state’s public authorities.

These actions not only dealt with some of the immediate issues surrounding the state’s finances, but also enacted some much-needed structural changes to New York’s government. I fought hard to ensure that our deficit reduction plan included no mid-year school aid cuts and I am glad that we gained bipartisan support for preventing Long Island taxpayers from bearing the brunt of this proposal.

However, now is no time for celebration.

These actions are only the first of many steps that are needed to prepare New York State for the stark fiscal realities that are to come with next year’s budget, as well as when federal stimulus funds run out in 2011.

The nearly $3 billion deficit reduction plan contained no new taxes and fees, and – unlike the governor’s proposal — reduced healthcare spending in a way that prevented the loss of approximately $750 million in federal funding for medical services and saved more than 12,000 jobs that would have cut vital services.

The Senate also eliminated the plan to delay $60 million worth of rebasing payments to nursing homes and hospitals. The governor’s proposal would have had a particularly negative impact on  suburban providers and the communities they serve.

More than 40 percent of the DRP is comprised of reoccurring spending reductions that will result in savings during future years.

The State Senate also passed legislation that would:

• Create a “Tier V” for public employees that would help combat skyrocketing pension costs. This move is expected to save taxpayers $48.5 billion over the next 30 years; and

• Reduce the state’s addiction on costly outside consultants by keeping Information Technology jobs in-house. This is expected to save the state $70 million per fiscal year.

Also passed was landmark legislation that will bring unprecedented accountability and transparency to the state’s 1,000-plus authorities. New Yorkers are paying for years of secrecy, lack of oversight, and fiscal recklessness due to prior unwillingness to challenge the way public authorities do business.

As a result of past practices, more than $5 billion in debt-service payments on more than $43 billion of authority debt is paid annually, according to a 2008 report by the Hugh L. Carey Center for Government Reform at Wagner College.

This legislation will:

• Empower the State Comptroller with the authority to review and investigate sole-source contracts for more than $1 million;

• Mandate Senate approval for the appointment of CEOs of major authorities, including the New York Power Authority, Long Island Power Authority, the Thruway Authority, the Urban Development Corporation and the Dormitory Authority;

• Strengthen whistleblower provisions;

• Require the Authority Budget office to consult with the Attorney General to conform to Public Authorities Law Section 2824, which establishes the role and responsibilities of board members; and

• Provide for the transfer of budget appropriations from the Office of Authority Oversight to the Independent Authorities Budget Office.

This legislative package follows a mandate relief package for local governments and stiff new anti-drinking and driving laws that were passed earlier in this extraordinary session.  

While much was accomplished, there is still much more that needs to be done. I am looking forward to building upon these measures, as well as grappling with the many other issues facing New York State in the 2010 legislative session.