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State Budget & Reform Plan Presented to Local Community

Reform plan includes major focus on mandate relief and the “education crisis”

N.Y.S. Governor Cuomo recently proposed his 2012-2013 Executive Budget & Reform Plan, with four main points of reform focusing on economic development, re-imagining government, mandate relief, and education. To create a dialogue with communities across the state, Governor Cuomo has been sending state representatives to various locations to speak on his behalf about the proposed budget and reform plan.

Rose Harvey, commissioner of the state’s Parks, Recreation & Historic Preservation Department, visited the Port Washington Public Library on Thursday, Jan. 19 to begin this conversation with local community leaders. This event was co-hosted by Nassau County Legislator Wayne Wink (D-Roslyn), Town of North Hempstead Supervisor Jon Kaiman, and the Port Washington Public Library.

Wink opened the presentation by saying, “I thought it was a great opportunity for all of us to get up to speed on a budget that is in many respects re-imagining government.” Giving the introduction for Commissioner Harvey, Supervisor Kaiman said, “Communities across New York State are eager to learn what is going on with the state budget and government.” He added, “We need to be engaged and part of what is going on and we are being invited by Governor Cuomo to be a part of that dialogue.”

Introducing and providing an overview of the presentation, Harvey noted that it is also being referred to as the “New N.Y. Transformation Plan.” She said, “Last year, we reduced the deficit and made very big cuts – we closed a $10 billion gap. It wasn’t easy, and it is not over.” This year, Harvey said that there would be a 4 percent growth in education and Medicaid, a 2.2 percent increase for SUNY/CUNY and a 2 percent self-imposed spending cap of government spending, which leaves a $2 billion deficit. She added that there would be no sale of state assets, no one-shots, no new fees, and no new taxes to close this budget gap.

Harvey next explained that the two biggest budgetary impacts are Medicaid and education, which make up 50 percent of the total state budget. She said that this is partly caused by inflators that were passed into state law and are embedded in the budget for the future, although the state did eliminate some of these inflators last year. Harvey said that the state is planning to eliminate more inflators, which will add up to $2 billion in savings, therefore fixing the deficit.

Commissioner Harvey introduced the topic of economic development as part of the reform plan by asking the question, “How does government spur private sector job creation in a down economy while limiting spending and maintaining fiscal discipline?” She said that the answer is creative public/private sector partnerships that leverage state resources and assets to generate billions in economic growth.

The governor has created the NY Works Fund/Infrastructure investment, Harvey said, noting that it will improve more than 100 bridges, repair 2,000 miles of roads, finance upgrades to 90 municipal water systems, improve 48 state parks and historic sites, and repair 114 flood control projects. She explained that the state would put about $1.3 billion into this fund in order to leverage $15 billion from the private sector. “It is a small amount of government money to leverage large results, economic development and jobs that come from construction,” she said.

Some other examples of the public/private sector partnerships to spur economic development include a project called “Energy Highways,” in which the way that power is accessed across the state would be improved. This plan includes upgrading existing infrastructure and private companies would make a $2 billion investment while the state would pay nothing. The state is also looking towards passing a constitutional amendment to legalize casino gambling, and the state would not pay anything while possibly earning $1 billion in projected revenue.

Harvey then moved onto the next part of the reform plan, which was titled Re-imagining Government. “For the past few decades, our government hasn’t been designed, it has just evolved,” she said, showing an organizational chart of the state government from 1927 comparing it to today’s organization chart. It was clear that much has been added on over time, and Harvey said, “It has just grown and it is all over the place…. Rather than just adding more, we are going to think about reorganizing.” She added that there are also thousands of programs, and dozens are passed every year with no rhyme or reason. Harvey explained that the idea is to reevaluate the functions of government across agencies and a plan to eliminate hundreds of redundant and obsolete programs will be submitted to the legislature this year.

Moving onto Mandate Relief, Harvey noted that Medicaid is a major cost driver for counties. She announced that the state plans to phase in a takeover of Medicaid costs over the next three years. Medicaid costs are currently capped at 3 percent for counties, meaning that all growth over 3 percent is covered by the state. It will remain at 3 percent for 2012-13, but will then be lowered to 2 percent for 2013-14, then 1 percent for 2014-15, and will be down to zero by 2015-16.

The presentation also focused on Pension Reform, providing a graph that showed the annual growth of pension costs for local governments and schools would increase by 185 percent from 2009 to 2015. Harvey said that the state is going to look at a new Tier 6, which would be 50 percent cheaper than Tier 3 and Tier 4. “It will allow state employees to sign-up for a 401K type of plan. It vests in one year as opposed to 10 under the state plan. It is portable and voluntary.” She added, “The most important point here is this is not about current union employees, this is about the employees of the future who have not yet joined the state.”

The last part of the Reform Plan dealt with education and was specifically titled “Education Crisis.” Harvey said, “We are the number one state in the country in education spending, but rank 38th in the graduation rate. We are going to focus on performance of the student for the benefit of the student… we are going to focus on school accountability.”

The presentation noted that in 2010, the federal government ran President Obama’s Race to the Top program, which required real teacher evaluations and New York State won $700 million. Harvey said that there are no teacher evaluation systems in place, which means that the state could lose the $700 million in federal funding. “If we cannot come to accord and agree to the evaluation by Jan. 17, 2013, then the governor is going to make those districts ineligible for state aid,” she said.

At the end of the presentation, Harvey said that this is a pro-economic growth strategy based on fiscal discipline, real reform, and entrepreneurial government to lead us to a “New N.Y.” She said that everyone should visit the website NYgetinvolved.com for more information. At this point, community leaders who attended the meeting had the opportunity to provide comments and ask questions, which Commissioner Harvey would take back to Albany to the governor.

Larry Greenstein, member of the Port Washington Board of Education, said, “New York is a varied state – if Long Island was its own state, we would have the best education outcomes in the country… We are the best, and yet what you are doing is this one size fits all process.” As for teacher evaluations, Greenstein explained that school districts are going to have problems stemming from the state’s requirement of principals receiving 10 days of training. “This takes all of our principals out of the schools for 10 days, denying them service to observe teachers and run their buildings, and denying us of their talents, costing us more money than we saved in mandate relief, all so that they can know what they already know… basically, we are selling out our kids for this state aid.”

Greenstein also noted extra costs being pushed onto school districts by the state, such as preschool special education, which is especially arduous under the 2 percent tax cap. “You just put millions of dollars of costs and not care that we have to come up with that somewhere, so we have to take away programs from the students because you haven’t actually given us any mandate relief,” he said. He also spoke about the state’s required testing, which will be an increase in cost to school districts next year. “You make 8-year-olds sit through four hours of tests in some cases, which is educationally inappropriate,” he said.

In speaking about how school districts receive state aid, Greenstein said that it is based upon the mean income in the area. “Our mean income is quite high, yet our median income is not very high. Our needs profile is based upon our median income, but our funding is based upon our mean income, so districts like Port Washington and Glen Cove and certain other districts that pride themselves on diversity are putting an unfair burden onto the local taxpayers as opposed to other districts where the median income and the mean income are much closer,” he said.

A retired teacher from Port Washington noted that the figure of New York State being 38th in the graduation rate might be incorrect and that this should be looked into. She was also concerned about the emphasis on public/private sector partnerships. “I don’t want to see a lot of private companies dictating what’s going on in New York State,” she said.

Judy Bode, trustee of the Village of Plandome, said that the infrastructure in her village, particularly the utilities, have not been updated in several decades. “It is not just our village, it is Long Island’s infrastructure,” she said. Harvey responded that the Energy Highways plan aims to improve and update existing infrastructure.

Myron Blumenfeld, who wears many hats in Port Washington, spoke as a park advocate at this meeting. He added his thanks to the governor for not reducing the EPA fund, which he said has been used very well in the Town of North Hempstead. Blumenfeld also encouraged Harvey to get involved with the “Friends” of each park.

In closing, Wink said, “This is not the end of the beginning, this is not the beginning of the end, this is the beginning of the beginning when it comes to the budget process in New York State.” Noting the April 1 state budget deadline, he added, “A lot can happen from now until April 1.”