budget

Parents, do your back-to-school shopping now.

Starting in October, under the 123-day-late budget passed by the Senate last night, clothing priced at under $110 will once again be assessed a 4-percent sales tax.

That's one of the provisions to increase revenue.

Even so, Associated Press reports that budget isn't balanced and Republicans complain that it both raises taxes and increases spending (Gothamist).

The revenue package is expected to generate $1.5 billion dollars and was approved by the Senate on a 32-28 vote.

A soda tax was not included in the bill.

The total budget: $136 billion.

Buffalo News: New financing provision for UB not included in budget.

New York Times: With Connecticut trying to woo hedge funds, the budget doesn't include a change in state law that would have taxed bonuses as ordinary income.

Albany Times-Union: Statement from Gov. Paterson's office.

LoHud.com: Senate is planning property tax cap.

With a state budget five weeks late and a $9.5 billion budget gap, Assemblyman Steve Hawley found a debate on seahorse protection legislation just a bit ridiculous.

Hawley voted no on the bill just as a matter of protest.

“The dysfunction in Albany has reached a breaking point, and today’s debate on seahorse legislation is a prime example of that," Hawley said in a news release. "Despite the fact I want to save my seahorse friends, I voted no on this bill in protest because of the sheer lunacy of its timing during this fiscal crisis. Over the last four weeks, the Assembly Majority has introduced trivial legislation, while continuing to send the rank-and-file members home after only a couple days of work.”

WGRB out of Albany spoke to the bill's sponsor:

The sponsor of the seahorse bill, Steve Englebright of Long Island, says this is important legislation to protect seahorses off Long Island that are collected for the aquarium industry, and that it would be malpractice for the Assembly not to work on other bills while waiting for a budget deal.

Hawley said he's frustrated with the lack of progress on a budget.

"Since April 1, four emergency budget extenders have been put in place, and there are no concrete plans for a budget to be passed anytime soon," Hawley said.

It's called a "sweep." Imagine if all the money for the state's various special funds were on a big table, and Gov. David Paterson reached out his arm and dragged it across the top of those stack of bills and pushed the greenbacks into a giant gunny sack labeled, "General Fund."

New York has been doing it for years -- taking money earmarked for dozens of special programs, collected from dedicated fees, and using the funds to make up budget imbalances.

"Much of it is money that would be expended but the time has not come up yet for it to be spent," said County Clerk Don Read. "In (sweeping), they tend to make liars out of us who have to collect that money and tell people (what it’s used for)."

Two examples out of the County Clerk's Office: document fees and snowmobile license fees. The state has taken more than $500,000 from that fund over the past three years, Read said.

The first fee is used to fund grants for cities, schools, libraries and other smaller agencies to store, maintain and retain important records, and to modernize old systems.The snowmobile fee -- $90 for a non-snowmobile club member, $45 for members -- is used to maintain trails and facilities for snowmobilers.

Paterson's office is planning a $1 million sweep from the snowmobile fund this year.

"By sweeping out that money, there’s less to distribute to the grants, so a number of grants just don’t get funded," Read said. "Yet, we still have to tell the people that’s what we collect the money for."

The New York Post recently ran a story about Albany sweeping $8.5 million from a fund dedicated to building a veteran's retirement home.

Photo: Don Read from a previous story about license plates.

Gov. David Paterson plans to withhold funding for union raises in his next emergency budget act, which effectively suspends a 4-percent raise for the state's union workers.

The raise was part of a contract negotiated in 2007, but with a $9 billion budget deficit, Paterson says the state can't afford the extra expense.

“I am just shocked and amazed that every time you ask the special interests or the unions for some kind of sacrifice that the answer is either ‘no’ or ‘I’m going to sue you,’” Paterson said Thursday after a private meeting with Assembly Speaker Sheldon Silver. “The state has run out of money twice, for the first time in its history, in the last four months. We’re doing everything to keep the ship afloat. And some people are just very reticent or unable to recognize the gravity of the crisis.”

Meanwhile, Albany has yet to approve a new budget. Assemblyman Steve Hawley issued the following statement on the situation:

After another week of inaction, and seven days past the due date, the 2010-2011 State Budget has not passed. Instead, the Majority continues to meet behind closed doors, which will likely lead to new taxes, increased government spending, and worst of all, more state borrowing, while sending the rank-and-file members of the Assembly trivial legislation to vote on. With New York State nearly bankrupt, this kind of inaction is unacceptable. We should have been in session last week, and not passing the budget this week only wasted more taxpayer money at a cost of more than $100,000. I am willing to stay in Albany until the budget crisis is solved. Unfortunately, it appears that my colleagues in the Majority are not, and despite the ensuing fiscal crisis, would rather put the budget off until next week, if not next month. Clearly, this year’s budget process shows how broken New York state government really is.

Some members of public employees unions in New York are bucking their union bosses and saying they should give back their 4-percent raises, according to Associated Press.

"I talked to my friends and neighbors who are losing their jobs and taking pay cuts and for me to get a raise, I functionally have to ask them to pay for it," Regan said in an interview with The Associated Press. He said he hasn't heard from anyone who opposes his view.

In other budget news, a group calling itself Better Choice for Budgeting Campaign, is calling on higher taxes and closing tax loopholes for Wall Street financiers and hedge fund managers.

“When you look at hedge fund managers making millions and millions of dollars and Wall Street having caused a great deal of the economic turmoil we find ourselves in, they should really help pay for it,” said Sen. Neil Breslin.

And while New York's budget is a week late today, Albany's Democrats and Republics are squabbling over procedure, according to the Times-Union.

Senate Democrats gathered on Wednesday to roll out an ambitious set of reforms to New York's budget process. Republicans shot back that the majority would do better to devote their time to the work at hand, and lambasted Democrats for failing to follow budget reforms that are already on the books.

The official deficit number is $9 billion, but years of accounting tricks aimed at hiding deficit spending masks New York's true fiscal picture, according to Comptroller Thomas DiNapoli.

For years, governors and legislators used a grab bag of fiscal gimmicks to cover up the growing gaps between revenue and expenditures. Those gimmicks are now so widespread and so embedded in Albany budgeting, DiNapoli said, that they have essentially rendered the state’s balance sheet immaterial.

One common device is the “sweep,” where the state grabs a surplus from an another entity — say, the Battery Park City Authority — to cover recurring expenses in the general fund, the state’s main bank account and the one that is required to be kept in balance.

Officials have also moved many day-to-day operating expenses out of the general fund and into other funds, hiding spending growth and hiding the true cost of running the government. For example, Governor Paterson’s proposed budget uses $40 million from the state’s Environmental Protection Fund, which is supposed to pay for parkland acquisitions, to pay salaries and other expenses of the state’s environmental and parks agencies.

Read the whole story.

At a time when New York is struggling to close a $9.2 billion budget deficit, the state's workers represented by labor unions received a 4-percent pay increase April 1.

The wage hike will saddle taxpayers with another $400 million in annual expenses to cover.

The contracts with the Civil Service Employees Association and the Public Employee Federation were negotiated by former Gov. Eliot Spitzer in 2007.

Gov. David Paterson thinks the unions should turn down the raises, according to Business First.

"All public employees are a critical part of our state government. They deliver essential public services and, for that, they deserve our respect," he said Thursday. "But New York remains mired in a fiscal crisis of nearly unprecedented magnitude that will require real sacrifices. In agreeing to forego these scheduled 4-percent salary increases, the leaders of New York’s public employee unions have a real and concrete opportunity to demonstrate they understand the dire nature of this fiscal and economic crisis, and that they are willing to become a serious partner in addressing it.”

Unions flatly stated they will not budge. They say their contracts were fairly negotiated and must be honored.

“PEF will not reopen its contract with the state of New York,” said Kenneth Brynien, president of the Latham-based union that represents 58,000 white-collar state workers.

“What people don’t seem to grasp is, if you break a contract, you’re setting a terrible precedent. It ignores that you have legally binding documents,” said Stephen Madarasz, spokesman for CSEA.

There are 196,375 workers on the state payroll, and 94 percent of them are represented by a union.

Assembly Democrats want to cut state aid to schools by only $800 million, not the $1.4 billion proposed by Senate Democrats and Gov. David Paterson.

The Assembly proposal also includes $2 billion in borrowing.

According to the New York Times, Assembly leader Sheldon Silver says,

“With this plan,” Mr. Silver said, “we close the deficit, we make responsible cuts, we hold the line on spending, we preserve vital programs and services, we reject a number of taxes and fees, and dramatically reform the budget process.”

The Assembly budget does not include Paterson's tax on soda, nor does it propose closing all 81 state parks, which Paterson asked for.

The Assembly budget cuts $4.3 billion in spending. Paterson's proposal cut $4.9 billion, but without borrowing.

Assemblyman Steve Hawley's office released this statement about the budget:

Earlier tonight, the Assembly Majority introduced, and passed, their 2010-2011 State Budget resolution. While it did eliminate the proposed tax on sugared beverages and the closure of state parks throughout the state, it still looks to solve the projected budget shortfalls by increasing state borrowing by $2 billion. With the state already on the brink of insolvency, we cannot afford anymore debt or borrowing. I voted against this resolution and hope that as the budget deadline approaches my colleagues in the Majority will not plan on voting for this in the final budget.

For more on the Assembly budget, here's the Albany Times-Union story.

Senate Democrats have approved a budget proposal that increases state spending by $1 billion, even as it cuts $1.4 billion in school spending, according to the Albany Business Journal.

The Senate budget -- which Republicans say they did not get time to review thoroughly, therefore voted against -- does not include a tax on soft drinks proposed by Gov. David Paterson, nor authorization for grocery stores to sell wine.

The proposed budget, which will need to be reconciled with an as-yet-unannounced Assembly budget, passed the Senate 32-29.

The two houses have until April 1 to agree on a budget.

Democrats say the increase in spending is still below the rate of inflation.

Sen. Mike Ranzenhofer released the following statement:

The Senate Democrats drafted their final budget resolution in secret, without any input from Republicans. They then released the resolution less than an hour before it was voted on. Only a budget resolution crafted in secret would produce such a bad deal for New Yorkers.

The Budget Resolution increases spending by $1.5 billion, expands welfare programs, and fails to restore the STAR rebate check program for all homeowners. Even worse, the resolution does nothing to help create private sector jobs. Instead, it only adds more government jobs by expanding welfare eligibility and increases public assistance payments again this year.

I will only support a budget which does not increase taxes and spending, delivers property tax relief to homeowners and enables the private sector to create jobs. This is the budget the people want. It’s a budget they deserve and the budget we must achieve.

It's now official -- city property owners can expect a 1.5-percent rate increase in property taxes.

On a 7-2 vote last night, the Batavia City Council approved the 2010/11 budget, which comes in at $21.7 million in expenditures.

The no votes came from Councilman Sam Barone and Councilwoman Rose Mary Christian.

"If this budget passes, the only thing we will be doing is squeezing and choking off the middle class," Christian said.

Christian's areas of concern, she said during the meeting, were legal fees, community celebrations, a drop in sales tax last month, the high cost of youth services and she called $527,000 for parks "outrageous." She also objected to the transfer of water funds to the general fund and said the contingency fund is much too low, especially since it's likely that police officers will win an arbitration case granting them retroactive pay raises.

Christian also complained that constituents in the Sixth Ward have reported high reassessments, from $7,000 to $11,000 more, for their homes.

"This is really going to hurt these people," Christian said.

During the public comments section of the meeting, before the budget vote, city resident Daniel Del Plato spoke vehemently against the proposed budget, saying city taxpayers couldn't handle any further tax increases.

"You're trying to get blood from stones," Del Plato said.

She also objected to a pay raise for non-union employees, which did pass in a separate motion on a 5-4 vote. Voting no were Christian, Barone and council members Bill Cox and Bob Bialkowski.

The council also approved plans to raise water rates and seek bonds to fund the start of a five-year or longer process of water infrastructure upgrades. Barone voted no on both resolutions.

The audience was quite small for tonight's public hearings on the proposed 2010/2011 City of Batavia budget and a proposed water rate increase.

Between the two hearings, one person -- John Roach -- made a statement.

City Council President Marianne Clattenburg said she wasn't surprised.

"It (the lack of turnout) tells me that they've probably contacted us personally," Clattenburg said. "They've been following things in the media and understand the position we're in and realize we're trying to work through some difficult times. As always we're open to listening to constituents and if they can't make it to the meeting -- lots of people do get their information from other sources -- and they let us know."

There was no vote taken tonight (that will come at the next council meeting), but this was the chance for the public to weigh in on a proposed 1.5-percent property tax increase and the first in a series of planned, gradual water rate increases aimed at raising money to fix infrastructure.

Clattenburg said the council has gotten ample feedback from members of the public prior to tonight's meeting.

"People have come forward," Clattenburg said. "They realize the reasoning behind the tax increase and what we're trying to do with the infrastructure improvements and I think they just support what we're trying to do."

After State Sen. Mike Ranzenhofer's press conference today on his jobs bill, I spoke with him for a minute about his position on the governor's budget.

My question was, with all of the proposed spending cuts from Gov. David Paterson, why aren't Republicans falling more in line with supporting the governor's proposed budget. Here's what he said:

I certainly support the cuts the governor has talked about and I don't think there's been a lot of push back from Republicans. But what Republicans are concerned about is that...(if) you actually take a look at the budget -- last year it was $131 billion, this year it's $134 billion -- spending goes up this year. Not withstanding all the comments about cuts, cuts, cuts, he's actually spending $3 billion more this year in his proposed budget than what happened last year.

So that's where the criticism is, that you can't say one thing and then introduce a budget that actually increases spending by $3 billion. When you look at the fine print, that's what what it actually does. If there's been any opposition, that's where the opposition has been.

The criticism and the push back is not from the Democratic Party or the Republican Party. When you talk about his low poll numbers, these are the residents our our state who are saying this -- that's their reaction to what he has done because they've seen what he said and compared it to what he did. I mean last year, he introduced a budget that was not that bad to start off, but at the end of the day, the budget he finally adopted was $12 billion in new spending. So people are very leery about what he actually says and what actually gets enacted at the end of the budget session.

The governor is out of line, according to Assemblyman Steve Hawley, in planning to shift $1 million from New York's snowmobile program to the state's general fund.

Hawley today issued a statement asking Gov. David Paterson to strike that provision from his proposed 2010-2011 executive budget.

“This proposal to take $1 million away from the Snowmobile Fund is unacceptable and serves as just another example of the State trying to take every penny it can to cover its own fiscal mismanagement,” said Hawley. “This fund is entirely financed and supported by the fees New Yorkers pay to register their snowmobiles. For this reason, the fund should be used solely to maintain and develop snowmobile trails throughout the state.”

Full press release after the jump:

Press release:

Assemblyman Steve Hawley (R, I, C – Batavia) today called on Governor David Paterson to remove a proposal from his 2010-2011 Executive Budget aimed at removing $1 million from the Snowmobile Trail Development and Maintenance Fund and transferring it into the State’s General Fund.

“This proposal to take $1 million away from the Snowmobile Fund is unacceptable and serves as just another example of the State trying to take every penny it can to cover its own fiscal mismanagement,” said Hawley.“This fund is entirely financed and supported by the fees New Yorkers pay to register their snowmobiles.  For this reason, the fund should be used solely to maintain and develop snowmobile trails throughout the state.”

The 2010-2011 Executive Budget contains a proposal to sweep $1 million from the Snowmobile Trail Development and Maintenance Fund and transfer it into the State’s General Fund. In addition, the proposal would allow the General Fund to have access to 30% of the remaining Snowmobile Fund balance and expand the use of that money to include all recreational activities on State lands. When a similar proposal was raised in 2008, Assemblyman Hawley authored and introduced legislation, Assembly Bill 10732, which would prevent any transfer of funds from accounts that are specifically supported with a dedicated fee, such as the Snowmobile Trail Development and Maintenance Fund. 

According to the Office of Parks, Recreation and Historic Preservation, the Snowmobile industry contributes more than $875 million to the state economy each year. The removal of $1 million from the snowmobile fund, and the potential access to an additional 30% of that fund, could severely impact the Upstate economy. 

“Many small upstate communities rely heavily on the snowmobiling industry to generate local revenue and would be negatively impacted by this money grab by Albany. If Albany is serious about helping rebuild New York’s ailing economy, then this proposal should be taken out. I will continue to fight against this proposal to seize dedicated funds for some other use just as I did in 2008.”

A preliminary budget approved by the Batavia City Council cuts $376,000 in spending from a previous draft, allowing the proposed property-tax increase to be cut in half.

Instead of anticipating a 3-percent tax increase, city property owners can expect an increase of just under 1.5 percent if the budget gets final approval following a Feb. 8 public hearing.

A good portion of the cut in expenses comes from a $150,000 reduction in the contingency fund. That fund might be needed if the city's unions win its any arbitration cases.

"As I mentioned, it's (cutting the contingency fund) a moderate risk," City Manager Jason Molino said following the meeting. "There's the potential there that there could be retroactive awards that could exceed that, and the city's fund balance position isn't where it should be now, though we're building it. It could be very difficult. One thing that has to be understood is that wages and benefits aren't what they used to be -- all work forces and city employees and unions have to understand that, and this is really their opportunity to recognize that and react to that. The community doesn't have the ability fund these things and in the future we're not going to be able to, and that's just something we're all going to have to react to."

In 2009, the city was forced to pay out $235,000 to the Police Benevolent Association after the union won its arbitration against the city. The city and PBA have yet to resolve all contract issues and the city will be three years behind in potential police raises in March. Two additional union contracts for city workers expire at the end of March.

Both Molino and Council President Marianne Clattenburg agree that some large settlement is likely.

"Something the unions are going to need to realize is that the city does not have the ability to provide that level of benefits," Molino said.

Cutting the property-tax rate increase in half reduces revenue by only $84,000. The additional expense cuts in the budget come from an anticipated $322,000 drop in sales tax revenue.

The spending plan now stands at $5,441,630.

The revised budget also cuts $105,000 from equipment reserve funds for police, fire, public works and facilities.

"They (the Council) did not feel they could support anything more than what was adopted," Clattenburg said. "We're just going to have to continue to live within our means."

The howls of anger and indignation you heard last night echoing from the Bronx to Buffalo is the reaction from special interests throughout the state to Gov. David Paterson's proposed budget.

While raising taxes $1 billion, the plan also cuts spending $5.5 billion.

You don't cut spending that much without stepping on some toes.

Typical of the "cut everybody but us" reaction was captured by the Albany Times-Union:

"Gov. Paterson is to be commended for his leadership in making the tough choices necessary to address a significant budget gap for the upcoming state fiscal year," said Peter Baynes, executive director of the state Conference of Mayors and Municipal Officials. " ... NYCOM, however, strongly objects to proposed cuts in AIM funding, as this program is a key element to controlling municipal property taxes."

Paterson has proposed a series of cuts to local governments, including a 2 to 5 percent cut in Aid and Incentives for Municipalities payments (AIM).  Paterson wants to totally eliminate AIM for New York City.

Locally, Assemblyman Steve Hawley got into the act and spoke up for snowmobilers.

"I was pleased to hear the governor call for a moratorium on land acquisition," Hawley said in a statement. "Yet, raiding one million dollars from the snowmobile fund to balance the budget is an unacceptable infringement on upstate sportsmen.  It was unacceptable last year when the governor proposed it, and it's unacceptable this year."

The Buffalo News reports that legislators, especially Democrats, are reacting harshly to the proposed budget, saying it's already dead.

Assembly Speaker Sheldon Silver, who has been splitting more and more from fellow Democrat Paterson, rebuked the governor's cuts, saying they "go too far [and] make life more difficult" for New Yorkers, especially the "most vulnerable and least fortunate citizens."

...

"He's tried to politically pin everything that's wrong with government on us. I don't like it. I don't think any of my colleagues like it," said Assemblyman Jeffrion Aubry, D-Queens.

Besides local government and snowmobilers, the budget proposes cuts to education, health care and the environment.

Education spending would be cut from $21.6 billion to $20.5 billion.  The Times-Union got this reaction:

"This budget proposes the largest cut to our children's schools in the history of the state, and yet again asks our children to bear the unbearable burden of balancing the state budget," said Billy Easton, executive director of the Alliance for Quality Education.

Turn to any news site in New York this morning, and you will find unhappy people talking about protecting their own interests.

It will be interesting to see what alternative the Legislature puts forward.

It's that time of year again -- when the City of Batavia officials sit down to look reality in the face and try and figure out how to balance tougher-to-get revenue with ever increasing expenses.

Sales tax is expected to be down, some longtime employees are coming up on retirement, the city's infrastructure is aging and some key pieces of equipment haven't been replaced in decades.

So what about that proposed 3-percent increase in property taxes?

Councilman Frank Ferrando asked City Manager Jason Molino if there is any way to cut it back and Molino said that would be hard, especially if the city wants to start replacing old equipment and start planning for the future.

"Rather than my trying to take apart a budget that's pretty complicated, I look at it as best I can," Ferrando said. "You know the budget and the staff better than all of us. I would rather give you a charge and say, here's what I think our taxpayers would take and you make the adjustments as opposed to me telling you what you should and shouldn't be doing."

Molino explained that the city isn't looking at a tax increase just to raise revenue, but to put the city on a sounder financial footing.

"What we’re starting to look at is if we’re going to invest -- and I look at it as an investment -- you’re going to have to maintain certain levels of service," Molino said. "We're going to have to look at a marginal tax-rate increase. That’s what we’re starting to look at here. All right, if we’re going to have to increase the tax rate a marginal amount, what do we get in return?"

Council President Marianne Clattenburg, after noting how much more difficult the budget picture looks because of weaker-than-expected sales-tax projections, said making the cuts necessary to bring down the tax increase could be difficult.

"There’s always a possibility to cut things," Clattenburg said. "But this year we’re trying to bring back some equipment we’ve deferred and purchase things that we’re going to need if we’re going to fix the streets. We’ve really been budgeting conservatively for quite a number of years now, so when you get to the point we’re in now, with the economy the way it is and dropping revenues, it gets really tough to do."

About the only time the staff-council discussion became animated tonight was when Fire Chief Ralph Hyde tried to explain the need for his department to become ALS (Advanced Life Support) certified. It would allow firefighters to provide critical lifesaving care in those few instances when they are on scene before Mercy EMS. Fourteen firefighters are already trained as paramedics, in part because of current state firefighter hiring requirements.

"This will save a lot more lives than just fighting fires in a city this size," Hyde said, "because there are sometimes these four- and five- and six-minute gaps in response time."

The certification would allow trained and experienced paramedics on the Fire Department staff to provide lifesaving services that right now they cannot legally perform, even though they know how.

Some council members expressed concern about training costs and overtime, but Hyde and Molino said the process of getting and maintaining ALS certification can be cost neutral. That's because of state grants and how internal training programs can be set up --  using the City's on-staff trainer to train personnel from other fire companies.

The council also heard reports on the departments of finance, personnel, youth bureau, assessment, police, public works, and water and sewer.

The next budget workshop is at the Council's next regular Monday meeting.

Pictures: Top, Chief Hyde, left, and Molino. Middle, Police Chief Randy Baker with Molino. Bottom, full council at session.