Regular Session - January 19, 2011

                                                            124



         1                 NEW YORK STATE SENATE

         2

         3

         4                THE STENOGRAPHIC RECORD

         5

         6

         7

         8

         9                   ALBANY, NEW YORK

        10                   January 19, 2011

        11                      11:17 a.m.

        12

        13

        14                    REGULAR SESSION

        15

        16

        17

        18  LIEUTENANT GOVERNOR ROBERT J. DUFFY, President

        19  FRANCIS W. PATIENCE, Secretary

        20

        21

        22

        23

        24

        25



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         1                 P R O C E E D I N G S

         2                  THE PRESIDENT:    The Senate will

         3       now come to order.

         4                  Please stand for the Pledge of

         5       Allegiance.

         6                  (Whereupon, the assemblage recited

         7       the Pledge of Allegiance to the Flag.)

         8                  THE PRESIDENT:    We're proud to be

         9       joined again by the Reverend Peter G. Young,

        10       from the Mother Teresa Community of Albany.

        11                  Father Young.

        12                  FATHER YOUNG:    Thank you,

        13       Governor.  Let us pray.

        14                  Having survived the sleet, the

        15       snow, and the inclement weather, let us

        16       remember that all of our Senators are here

        17       today and they will guide our government for

        18       just and caring societies.

        19                  May God strengthen them, lead them,

        20       and give them wisdom and understanding as they

        21       work for our good and for the good of all of

        22       our New York State citizens.

        23                  Amen.

        24                  THE PRESIDENT:    Thank you,

        25       Father.



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         1                  Next, the reading of the Journal.

         2                  The Secretary will read.

         3                  THE SECRETARY:    In Senate,

         4       Tuesday, January 18, the Senate met pursuant

         5       to adjournment.  The Journal of Monday,

         6       January 17, was read and approved.  On motion,

         7       Senate adjourned.

         8                  THE PRESIDENT:    Without

         9       objection, the Journal stands approved as

        10       read.

        11                  Presentation of petitions.

        12                  Any messages from the Assembly?

        13                  The Secretary will read.

        14                  THE SECRETARY:    On page 1,

        15       Senator Golden moves to discharge, from the

        16       Committee on Finance, Assembly Bill Number 851

        17       and substitute it for the identical Senate

        18       Bill Number 1198, Third Reading Calendar 1.

        19                  THE PRESIDENT:    Substitution

        20       ordered.

        21                  Messages from the Governor.

        22                  Reports of standing committees.

        23                  Reports of select committees.

        24                  Communications and reports from

        25       state officers.



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         1                  Motions and resolutions.

         2                  Senator Libous.

         3                  SENATOR LIBOUS:    Thank you,

         4       Mr. President.

         5                  Mr. President, may we please adopt

         6       the Resolution Calendar, with the exception of

         7       the following resolutions:  Number 98, 240,

         8       and 241.

         9                  THE PRESIDENT:    All in favor of

        10       adopting the Resolution Calendar with the

        11       exceptions of Resolutions Number 98, 240, and

        12       241, signify by saying aye.

        13                  (Response of "Aye.")

        14                  THE PRESIDENT:    Opposed, nay.

        15                  (No response.)

        16                  THE PRESIDENT:    The Resolution

        17       Calendar is adopted.

        18                  Senator Libous.

        19                  SENATOR LIBOUS:    Thank you,

        20       Mr. President.

        21                  Mr. President, I believe there's a

        22       privileged resolution at the desk by Senator

        23       Larkin.  May we please have the title read and

        24       move for its immediate adoption.

        25                  THE PRESIDENT:    The Secretary



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         1       will read.

         2                  THE SECRETARY:    By Senator

         3       Larkin, Legislative Resolution Number 261,

         4       commemorating the 30th anniversary of the

         5       ending of the Iranian hostage crisis on

         6       January 20, 2011.

         7                  THE PRESIDENT:    Senator Larkin.

         8                  SENATOR LARKIN:    Thank you,

         9       Mr. President.

        10                  It's hard to believe that Tom

        11       Libous was a young man with lots of hair on

        12       his head 30 years ago when this country

        13       suffered one of the most damaging blows to our

        14       history and our honor.

        15                  On that day, the 20th of January,

        16       1981, we saw a complete turnaround of that

        17       incident.  But we have to take a look at what

        18       happened.  On November the 4th of 1979,

        19       thousands of Iranians took to the streets, not

        20       only with words but with weapons.  They took

        21       into custody 90 members of the embassies and

        22       of the military assigned to the embassy and

        23       put them in captivity.

        24                  There was efforts to try to help

        25       them.  Back in 1980, we lost 8 U.S. Army



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         1       personnel that were killed when helicopters

         2       crashed in the desert.

         3                  The period between '79 and when

         4       they were released was a hardship on many of

         5       them.  Some family members had died.  Some

         6       people just gave up hope.  But if you recall,

         7       there was a drive in our country of yellow

         8       ribbons.  The song is out there someplace,

         9       John; I know Skelos wrote it.  But what we had

        10       here was a statement from the American people

        11       that this is our country, and we're not going

        12       to be thrown around.

        13                  Fifty-two hostages, 444 days.  One

        14       person whose name is not mentioned anymore,

        15       and I apologize, a charge d'affaires of the

        16       Canadian Embassy, took Americans and hid them.

        17       These were Americans that the Iranians wanted

        18       because they were the shakers and movers of

        19       policy of the United States government in Iran

        20       at the time.

        21                  On January 20, 1981, a new

        22       president was sworn in and the hostages were

        23       released.  You can't forget President Carter;

        24       he did everything he could.  But the Iranian

        25       government were waiting for somebody to really



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         1       pitch in.  The Iranian government said, We

         2       will return your Americans if you give us

         3       $34 million.  President Reagan says,

         4       8 million, take it or leave it, and our

         5       aircraft are ready.

         6                  Right after being sworn in, the

         7       Swiss Embassy informed the Secretary of State

         8       designee, 1981, that the hostages were

         9       released.

        10                  Now, you know, the biggest thing

        11       was first debriefing, healthcare.  They were

        12       flown from Iran to Wiesbaden, Germany, to the

        13       U.S. Air Force Hospital.  Two days later they

        14       were flown to Stewart Airport in Orange

        15       County.  There's a spot on the ground that

        16       marks where the aircraft landed.  One of the

        17       hostages, from Texas, got off the aircraft and

        18       kissed the ground.  And then he looked up, and

        19       I was wondering what was going on when he was

        20       looking up.  And he said, "Lord, you did not

        21       desert us."  A very powerful statement and

        22       something that we ought to be sure that we do

        23       not forget.

        24                  On this Saturday there will be a

        25       reunion of these individuals in Highland



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         1       Falls, New York, and at West Point itself

         2       honoring those individuals.  You start to

         3       think about it, for 444 days they didn't

         4       break, turn against their country, or those

         5       Canadians or others from Australia didn't turn

         6       against their countries and say "whatever you

         7       want, we'll do."  The message from President

         8       Reagan was you're not going to get no

         9       34 million, here's $8 million in frozen

        10       assets, no cost to the U.S. government.

        11                  But we need to take and think about

        12       it.  Thirty years ago, just think about where

        13       you were when they were released.  And also

        14       take a moment and think about the 444 days

        15       that these men and women were in captivity and

        16       were subject to restraints that we don't

        17       always know what happened.

        18                  So when we meet on Saturday, I'm

        19       very happy.  I understand my good friend

        20       Senator Ball will join us there.  Anybody in

        21       the area, come join us.  We have one from

        22       Brooklyn, John, Mr. Rosen.  He was a high

        23       school classmate of Stanley Fink's.  And

        24       Stanley's got the whole book of pictures, by

        25       the way.



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         1                  Mr. President, I thank you.  I

         2       think it's a day that we should not forget.

         3       We should always remember, this is the

         4       greatest country, America is the greatest

         5       country in the world.  And when we live up to

         6       the honors and respect that we should have, we

         7       will be a greater country.

         8                  Thank you very much.

         9                  THE PRESIDENT:    Thank you,

        10       Senator Larkin.

        11                  The question is on the resolution.

        12       All in favor signify by saying aye.

        13                  (Response of "Aye.")

        14                  THE PRESIDENT:    Opposed, nay.

        15                  (No response.)

        16                  THE PRESIDENT:    Senator.

        17                  SENATOR LARKIN:    I would like to

        18       ask that it be open for all members who would

        19       like to be on the resolution.

        20                  THE PRESIDENT:    So ordered.

        21                  The resolution is adopted.

        22                  Senator Libous.

        23                  SENATOR LIBOUS:    Thank you,

        24       Mr. President.

        25                  I also believe that Senator Huntley



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         1       has a resolution at the desk.  I would ask

         2       that you read the resolution in its entirety

         3       and then call on Senator Huntley, please.

         4                  THE PRESIDENT:    The Secretary

         5       will read the resolution in its entirety.

         6                  THE SECRETARY:    By Senator

         7       Huntley, Legislative Resolution Number 98,

         8       mourning the death of Chief Arthur B. Hill,

         9       distinguished citizen and devoted member of

        10       his community.

        11                  "WHEREAS, It is the custom of this

        12       Legislative Body to pay tribute to citizens of

        13       the State of New York whose lifework and civic

        14       endeavor serve to enhance the quality of life

        15       in their communities and the great State of

        16       New York; and

        17                  "WHEREAS, Chief of the New York

        18       Police Department Arthur (Artie) B. Hill, of

        19       St. Albans, New York, died on Thursday,

        20       July 22, 2010, at the age of 88; and

        21                  "WHEREAS, Arthur B. Hill was born

        22       in New York in 1922 and grew up in Harlem.  He

        23       graduated from DeWitt Clinton High School, the

        24       Bronx, in 1940, and proudly served in the

        25       United States Army during World War II from



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         1       1942 to 1946; and

         2                  "WHEREAS, Upon an honorary

         3       discharge from military service, Arthur B.

         4       Hill took civil service exams and was called

         5       to join the New York City Police Department in

         6       1946.  He was assigned to the 28th Precinct

         7       and rose through the ranks; and

         8                  "WHEREAS, An exemplary leader,

         9       Arthur B. Hill was promoted to the rank of

        10       sergeant in 1959 while serving in the 42nd and

        11       49th Precincts.  He was then advanced to the

        12       esteemed position of lieutenant in 1961 and

        13       received a variety of assignments to work in

        14       the 20th Precinct, as well as the 5th

        15       Division, the 40th Precinct and in the

        16       Planning Bureau, where he worked as a system

        17       analyst.  He had the honor of serving as

        18       commanding officer of the Malcolm X funeral

        19       detail in February, 1965; and

        20                  "WHEREAS, Arthur B. Hill was

        21       promoted to the rank of captain in 1965 and

        22       worked in the 5th and 6th Divisions of the

        23       NYPD before he was appointed the second

        24       African-American commanding officer of the

        25       28th Precinct; and



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         1                  "WHEREAS, While studying for

         2       promotions, Arthur B. Hill attended John Jay

         3       College of Criminal Justice/CUNY where he

         4       earned a bachelor's degree in political

         5       science and a master's degree in police

         6       administration; and

         7                  "WHEREAS, His extraordinary

         8       trailblazing career continued when Arthur B.

         9       Hill was appointed to the rank of deputy

        10       inspector in 1967 and was assigned to the 6th

        11       Division in Harlem.  On September 16, 1969,

        12       Arthur B. Hill was promoted to the rank of

        13       deputy chief inspector and transferred to the

        14       13th Division, Brooklyn; and

        15                  "WHEREAS, Chief Hill became the

        16       first African-American commander of the

        17       Support Service Unit, which was formerly known

        18       as the Special Operations Division.  He

        19       oversaw NYPD Tactical Patrol Force, Aviation,

        20       Emergency Service and Harbor Patrol Units; and

        21                  "WHEREAS, Respected by his fellow

        22       officers, Arthur B. Hill was promoted to the

        23       rank of assistant chief in September 1971 and

        24       retired in January 1973.  During his

        25       illustrious career, Chief Hill received two



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         1       Commendations, three Meritorious and three

         2       Excellent Police Duty Awards, along with

         3       numerous citations for outstanding community

         4       service; and

         5                  "WHEREAS, Arthur B. Hill

         6       distinguished himself in his profession and by

         7       his sincere dedication and substantial

         8       contribution to the welfare of his community;

         9       and

        10                  "WHEREAS, Arthur B. Hill's

        11       commitment to excellence, and his spirit of

        12       humanity, carried over into all fields of

        13       enterprise, including charitable and civic

        14       endeavors; and

        15                  "WHEREAS, In retirement, Chief Hill

        16       joined several civic organizations.  He served

        17       on several boards of directors for charitable

        18       organizations, including the Apollo Theater.

        19       He was the long-time executive secretary of

        20       the Guy R. Brewer Club.  Chief Hill also

        21       enjoyed a second career as an executive for

        22       the United Parcel Service; and

        23                  "WHEREAS, Arthur B. Hill is

        24       survived by his beloved wife, Patricia, and

        25       his children, Arthur, Jr., Ernest, Victoria



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         1       and Joanne; and

         2                  "WHEREAS, Armed with a humanistic

         3       spirit, imbued with a sense of compassion, and

         4       comforted by a loving family, Arthur B. Hill

         5       leaves behind a legacy which will long endure

         6       the passage of time and will remain as a

         7       comforting memory to all he served and

         8       befriended; now, therefore, be it

         9                  "RESOLVED, That this Legislative

        10       Body pause in its deliberations to mourn the

        11       death of Chief Arthur B. Hill, distinguished

        12       citizen and devoted member of his community;

        13       and be it further

        14                  "RESOLVED, That a copy of this

        15       resolution, suitably engrossed, be transmitted

        16       to the family of Arthur B. Hill."

        17                  THE PRESIDENT:    Senator Huntley.

        18                  SENATOR HUNTLEY:    Yes,

        19       Mr. President.

        20                  Arthur B. Hill, who we

        21       affectionately called "Artie," was a member of

        22       the St. Albans community.  He was a member of

        23       one of the greatest political clubs in

        24       Southeast Queens, Guy R. Brewer.  He was a man

        25       of many, many talents.



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         1                  And I asked for the resolution to

         2       be read in its entirety because I really

         3       wanted people to listen, to hear about Artie

         4       and to hear how he worked very hard to achieve

         5       his goals.  And I wanted you to hear what a

         6       great family he had.

         7                  And he was a person who cared about

         8       his community.  He cared about his career, but

         9       his community was also very important to him.

        10       And at 88, he was still active before he

        11       passed away.  He was still active the year

        12       before.  I used to meet him in places, meet

        13       him at the club, meet him at the dances, and

        14       him and his wife were always there.

        15                  And when we lost Artie Hill in that

        16       community, it was a great loss.  And I just

        17       want his family to know that I deeply

        18       appreciated Artie for all the things that he

        19       had done for people -- for young people, for

        20       old people, for everyone.  Because that's the

        21       kind of person Artie was.

        22                  Thank you.

        23                  THE PRESIDENT:    Thank you,

        24       Senator.

        25                  The question is on the resolution.



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         1       All in favor signify by saying aye.

         2                  (Response of "Aye.")

         3                  THE PRESIDENT:    Opposed, nay.

         4                  (No response.)

         5                  THE PRESIDENT:    The resolution is

         6       adopted.

         7                  Senator Libous.

         8                  SENATOR LIBOUS:    Thank you,

         9       Mr. President.

        10                  I believe there's a resolution,

        11       Number 240, at the desk by Senator Peralta.

        12       May we have the resolution's title read and

        13       move for its immediate adoption, please.

        14                  THE PRESIDENT:    The Secretary

        15       will read.

        16                  THE SECRETARY:    By Senator

        17       Peralta, Legislative Resolution Number 240,

        18       mourning the death of legendary New York

        19       Yankees owner George Steinbrenner.

        20                  THE PRESIDENT:    The question is

        21       on the resolution.  All in favor signify by

        22       saying aye.

        23                  (Response of "Aye.")

        24                  THE PRESIDENT:    Opposed, nay.

        25                  (No response.)



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         1                  THE PRESIDENT:    The resolution is

         2       adopted.

         3                  Senator Libous.

         4                  SENATOR LIBOUS:    Thank you,

         5       Mr. President.

         6                  I believe Senator Peralta would

         7       like the resolution open for all member.  And

         8       in custom, if you don't want your name on the

         9       resolution, please let the desk know.

        10       Otherwise, it will go on.

        11                  THE PRESIDENT:    The resolution is

        12       open for cosponsorship.  If you don't wish to

        13       cosponsor, please notify the desk.

        14                  Senator Libous.

        15                  SENATOR LIBOUS:    Thank you,

        16       Mr. President.

        17                  There's another resolution at the

        18       desk, by Senator Perkins.  May we please have

        19       the title read and move for its immediate

        20       adoption.

        21                  THE PRESIDENT:    The Secretary

        22       will read the title of the resolution.

        23                  THE SECRETARY:    By Senator

        24       Perkins, Legislative Resolution Number 241,

        25       mourning the death of legendary jazz pianist



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         1       Dr. William Taylor.

         2                  THE PRESIDENT:    Senator Perkins.

         3                  SENATOR PERKINS:    Thank you very

         4       much.  I wanted to take an opportunity to read

         5       into the record a letter to the family.

         6                  "Dear Mrs. Taylor and

         7       Ms. Thompson-Taylor:

         8                  "On behalf of a broad and diverse

         9       constituency of music lovers, extending

        10       profound, heartfelt condolences for the loss

        11       of your husband and father, the great

        12       musician, composer and jazz ambassador

        13       Dr. Billy Taylor, I write to you as the

        14       Senator representing the 30th District of the

        15       New York State Senate.  Widely associated with

        16       historic Harlem, my district also comprises

        17       significant portions of East Harlem's

        18       El Barrio, Washington Heights, Morningside

        19       Heights, and the Upper West Side.

        20                  "It's serving Harlem, with our

        21       incomparable connection to jazz history, that

        22       makes it particularly important to praise

        23       Dr. Billy Taylor, who through a career

        24       spanning decades liltingly played piano with

        25       other legends such as Charlie Parker, Ella



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         1       Fitzgerald, Dizzy Gillespie and Miles Davis.

         2       Whatever he undertook, he was an innovator,

         3       whether hosting jazz shows on WLIB and

         4       National Public Radio, doing spots on CBS's

         5       Sunday Morning, or playing his hit "C A G" and

         6       "Capricious" on Marian McPartland's first

         7       segment of Piano Jazz.  Foremost, helping to

         8       found Jazzmobile, which gives mobile

         9       neighborhood concerts on a parade float,

        10       Dr. Taylor was the ultimate explainer of

        11       America's unique art form, jazz!

        12                  "All of this is exceptional, but

        13       more importantly and personally, I write to

        14       you as a friend of your talented son and

        15       brother Duane.  Reflecting on the life and

        16       significance of Duane's father reminds me of

        17       what a deep impact Dr. Taylor had on my

        18       development and life and those of our

        19       classmates.  Writing 'I wish I knew how it

        20       would feel to be free,' Dr. Taylor composed an

        21       anthem that expressed the anger, anxiety and

        22       aspirations of my community and generation.

        23                  "In an era when black excellence

        24       was excluded from most history books,

        25       Dr. Taylor came to Collegiate School each year



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         1       to teach about the artistic achievement of

         2       African-Americans in music.  Positive black

         3       role models were not as visible then as today,

         4       so Dr. Taylor had as valuable an influence on

         5       the 50 white students he would address as he

         6       did on the five black students in attendance.

         7                  "Defying stereotypes, his gentility

         8       was disarming.  Mild-mannered, he was always

         9       quietly but distinctively dressed, wearing

        10       definitive enormous dark-rimmed eyeglasses.

        11       Impeccably reasoned, Dr. Taylor's scholarship

        12       was an articulate activism, as affecting and

        13       radical as any expressed by Stokely Carmichael

        14       or Malcolm X.

        15                  "So if the riches of possibility,

        16       the potential to transform a formerly

        17       apathetic and passive pupil like me was the

        18       one great gift of a first-rate education,

        19       exposure to a brilliant and committed man like

        20       Dr. Taylor was equally imperative.

        21       Invaluably, his example of success underscored

        22       my potential to be productive as well.

        23                  Hearing him speak and play, one

        24       easily appreciated an art not merely for art's

        25       sake.  Nor were the intellectual pursuits he



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         1       espoused only about academic concerns.

         2       Instead, Dr. Taylor employed our music as a

         3       synthesis of eclectic sounds and traditions to

         4       articulate and focus the meaning of a movement

         5       fighting for freedom and inclusion.

         6                  "I epitomize the effectiveness of

         7       Dr. Taylor's pioneering efforts to enlighten

         8       our youth.  Appreciative of his influence,

         9       working to perpetuate his example, one hopes

        10       to similarly teach young people today about

        11       our extraordinary heritage and to suggest to

        12       them the limitless possibility of all they

        13       have to offer.

        14                  "Inevitably, whenever someone takes

        15       on a selfless mission, their family has to

        16       sacrifice for that cause too.  The world,

        17       especially our world, is greatly indebted to

        18       the work and wisdom of Dr. Billy Taylor.

        19       Because you, his loved ones, drove, sustained,

        20       inspired and fulfilled him, we are indebted to

        21       you as well.  For myself, my family and all

        22       New Yorkers, I say thank you.  Dr. Taylor was

        23       an heroic figure.  He and you are in our

        24       prayers.

        25                  "Sincerely, Senator Bill Perkins,



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         1       30th District."

         2                  THE PRESIDENT:    Thank you,

         3       Senator.

         4                  SENATOR PERKINS:    And I ask my

         5       colleagues to join me in signing onto the

         6       resolution.  Thank you.

         7                  THE PRESIDENT:    Senator Libous,

         8       Senator Perkins asked that the resolution be

         9       reopened for cosponsorship.

        10                  SENATOR LIBOUS:    Again, if

        11       someone doesn't want to be on the resolution,

        12       they should let the desk know.

        13                  Senator Perkins, otherwise, that

        14       you have opened up the sponsorship to all

        15       members?

        16                  SENATOR PERKINS:    Yes.  Thank

        17       you.

        18                  SENATOR LIBOUS:    Can we move the

        19       resolution, please.

        20                  THE PRESIDENT:    The question is

        21       on the resolution.  All in favor signify by

        22       saying aye.

        23                  (Response of "Aye.")

        24                  THE PRESIDENT:    Opposed, nay.

        25                  (No response.)



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         1                  THE PRESIDENT:    The resolution is

         2       adopted.

         3                  Senator Libous.

         4                  SENATOR LIBOUS:    Mr. President,

         5       before we go to the noncontroversial calendar,

         6       there was a resolution that was adopted

         7       already on the calendar today by Senator

         8       Larkin.  It's Number 231.  Senator Larkin

         9       would like to open that up to all members of

        10       the Senate.

        11                  And again, as our policy, if you

        12       wish not to be on Resolution 231, please let

        13       the desk know.  But it had already passed.

        14                  Mr. President, may we please have

        15       the reading of the noncontroversial calendar.

        16                  THE PRESIDENT:    The Secretary

        17       will read.

        18                  THE SECRETARY:    Calendar Number

        19       1, substituted earlier today by Member of the

        20       Assembly Weinstein, Assembly Print Number 851,

        21       an act to amend the Civil Practice Law and

        22       Rules.

        23                  THE PRESIDENT:    Read the last

        24       section.

        25                  THE SECRETARY:    Section 2.  This



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         1       act shall take effect on the same date and in

         2       the same manner as Chapter 568 of the Laws of

         3       2010.

         4                  THE PRESIDENT:    Call the roll.

         5                  (The Secretary called the roll.)

         6                  THE SECRETARY:    Ayes, 60.

         7                  THE PRESIDENT:    The bill is

         8       passed.

         9                  THE SECRETARY:    Calendar Number

        10       2, by Senator Alesi, Senate Print 1891, an act

        11       to amend the Tax Law.

        12                  SENATOR BRESLIN:    Lay it aside.

        13                  THE PRESIDENT:    The bill is laid

        14       aside.

        15                  THE SECRETARY:    Calendar Number

        16       3, by Senator Ranzenhofer, Senate Print --

        17                  SENATOR BRESLIN:    Lay it aside.

        18                  THE PRESIDENT:    The resolution is

        19       laid aside.

        20                  THE SECRETARY:    Calendar Number

        21       4, by Senator Zeldin --

        22                  SENATOR BRESLIN:    Lay it aside.

        23                  THE PRESIDENT:    The resolution is

        24       laid aside.

        25                  That completes the reading of the



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         1       noncontroversial aspects of the calendar.

         2                  Senator Libous.

         3                  SENATOR LIBOUS:    May we go to the

         4       controversial calendar, Mr. President.

         5                  THE PRESIDENT:    The Secretary

         6       will ring the bell.

         7                  The Secretary will read Calendar

         8       Number 2.

         9                  THE SECRETARY:    Calendar Number

        10       2, by Senator Alesi, Senate Print 1891, an act

        11       to amend the Tax Law.

        12                  SENATOR LIZ KRUEGER:

        13       Explanation.

        14                  THE PRESIDENT:    Senator Alesi, an

        15       explanation has been asked for by Senator

        16       Krueger.

        17                  SENATOR ALESI:    Thank you,

        18       Mr. President and my colleagues.  I'm very

        19       proud, for the second time in a year or so, to

        20       introduce this bill; happier still that the

        21       bill has made it to the floor.  It is called

        22       the 2011 Job Creation and Retention Package.

        23                  The underpinnings of this bill have

        24       three major components:  First of all, a job

        25       tax credit for new jobs that are created in



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         1       this state; secondly, what is called the Small

         2       Business Tax Freedom Plan; and finally, the

         3       Red Tape Moratorium Plan.

         4                  This is a comprehensive approach

         5       toward creating new jobs in New York State.

         6       And there isn't anybody in this chamber, I

         7       believe, that would argue that we don't need

         8       new jobs to improve our economy.

         9                  The first component, job creation

        10       tax credit, provides a payroll tax credit to

        11       any small business that creates a new job.  So

        12       for example, if there is no employee working,

        13       there is no withholding tax against a

        14       nonexistent employee.  If the new small

        15       business hires a new employee, they are given

        16       a tax credit against the withholding tax.

        17       There's no cost to the state because there was

        18       no employee paying that withholding tax in the

        19       first place.  It's totally neutral.

        20                  But more significantly, it's a very

        21       large incentive for small businesses who many

        22       of them right now, in this economy, are on the

        23       threshold of emerging into a hiring mode but

        24       are holding back just because they need that

        25       little extra.



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         1                  This is that little extra that will

         2       help those companies survive, that will help

         3       them move into the future.  And equally

         4       important, it is that little extra at no cost

         5       to the state that will get people back to

         6       work.

         7                  The second component of this is the

         8       Small Business Tax Freedom Plan that

         9       eliminates the corporate franchise tax for

        10       small businesses, cutting it in half this year

        11       and reducing it entirely into the future.

        12                  And then finally, we all know and

        13       we've heard many times that red tape is one of

        14       the biggest killers of small businesses.  It

        15       keeps them from thriving, it keeps them from

        16       growing, it keeps them from succeeding, it

        17       keeps them from staying in New York or even

        18       wanting to locate in New York.

        19                  Those are the three components of

        20       the 2011 Job Creation and Retention Plan,

        21       similar to a plan that was, I believe,

        22       fashioned after this plan that Senator Schumer

        23       introduced and had implemented in the United

        24       States Congress about three months after we

        25       proposed it.



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         1                  Thank you, Mr. President.

         2                  THE PRESIDENT:    Thank you,

         3       Senator.

         4                  Senator Krueger, why do you rise?

         5                  SENATOR LIZ KRUEGER:    I rise to

         6       request that the sponsor yield to some

         7       questions, Mr. President.

         8                  THE PRESIDENT:    Senator Alesi, do

         9       you yield to questions?

        10                  SENATOR ALESI:    Mr. President, it

        11       would be my pleasure.

        12                  THE PRESIDENT:    The Senator

        13       yields.

        14                  SENATOR LIZ KRUEGER:    Thank you,

        15       Mr. President.  Through you, if the sponsor

        16       could explain to me how this is a cost-neutral

        17       proposal to the state as opposed to a loss of

        18       tax revenue to the State of New York of

        19       hundreds of millions of dollars.

        20                  SENATOR ALESI:    Mr. President and

        21       my colleagues, there's a simple answer to

        22       that, as I stated in my opening remarks.  If

        23       there is a withholding tax against an existing

        24       employee and you take that withholding tax

        25       away, that would be a cost to the state



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         1       because that withholding tax is being taken in

         2       as revenue.

         3                  If an employee does not exist today

         4       but is hired this afternoon, a new employee

         5       against which -- whose payroll against which

         6       there was never any withholding, is hired and

         7       the employer has a tax credit -- in other

         8       words, doesn't have to pay that withholding

         9       tax up to the limit -- there's no lot of

        10       revenue because there was never any revenue in

        11       the first place.

        12                  The benefit to that is you have

        13       someone working and you have a business

        14       growing and starting to thrive because they

        15       have additional help and talent.

        16                  SENATOR LIZ KRUEGER:    Mr.

        17       President, if through you the sponsor would

        18       continue to yield.

        19                  THE PRESIDENT:    Senator, will you

        20       continue to yield?

        21                  SENATOR ALESI:    Thank you for the

        22       opportunity, Mr. President.

        23                  THE PRESIDENT:    The Senator

        24       yields.

        25                  SENATOR LIZ KRUEGER:    Thank you.



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         1                  Well, I suppose first a statement.

         2       On that logic, then, assuming that jobs

         3       continue to be created -- which we hope in the

         4       state -- and then people also move from job to

         5       job, and we were continuing to withhold the

         6       money from the employee, which is what this

         7       does, the employee has the tax taken out of

         8       their paycheck but never moved over to the

         9       state, you would actually have a transfer from

        10       employees to businesses without ever seeing

        11       new tax revenue for the state forever.  But

        12       that's not actually my question.

        13                  The bill also allows the

        14       bifurcation for small business income between

        15       the taxpayer's personal income tax bill to the

        16       state and the business tax bill to the state,

        17       which as we know some small businesses

        18       currently choose to pay their taxes through

        19       their PIT.

        20                  Can you just explain a little more

        21       how this bifurcation would work?  Let's say I

        22       was a fairly successful business owner but I

        23       had 10 small businesses.  So now there's a

        24       bifurcation where I can have a different tax

        25       rate, I, the wealthy business owner, under



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         1       your model.

         2                  SENATOR ALESI:    Mr. President, I

         3       think I heard two questions there.  If not,

         4       the first part was at least a comment which

         5       deserves a comment in response.

         6                  I can't imagine in today's

         7       environment, when people are struggling to

         8       find jobs and businesses are struggling to

         9       find a way to employ people, that people would

        10       take a job, move on to another just to take

        11       advantage of what we're trying to do here.

        12       That's like finding a Coca-Cola machine that

        13       is working for free.  There's only so much

        14       Coca-Cola you can drink.

        15                  And I don't think anybody would do

        16       that.  There may be some, but I don't think

        17       enough to make any impact on this bill or the

        18       benefits this bill can provide to businesses,

        19       working people in this state.

        20                  Secondly, I'm not entirely sure

        21       that you can look at businesses that have

        22       subsidiaries -- wholly owned subsidiaries,

        23       LLCs, other corporations -- that are part of

        24       an overall enterprise and say that the single

        25       or collective owners of those businesses would



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         1       benefit unfairly because of this program.

         2       Because the simple answer is this program is

         3       designed to put people to work.

         4                  And if the program puts people to

         5       work because it incentivizes employers to

         6       offer jobs that they can't offer now because

         7       they can't afford it, then that's the end

         8       goal.

         9                  And if in fact a company owns or a

        10       business owner owns more than one company,

        11       it's the company that benefits and it's the

        12       people that are employed by that company or

        13       companies that benefit.

        14                  The net result of that is that

        15       New York State benefits, because we have

        16       people out of work and when people go to work,

        17       there isn't anybody in this room that would

        18       argue the fact that the more people that are

        19       working, the more robust our economy is; the

        20       more robust our economy is, the better off we

        21       are with tax revenues, et cetera.

        22                  Mr. President and my colleagues,

        23       this is a good bill.  It was, I believe, if

        24       not copied, at least it was imitated on the

        25       federal level with the federal HIRES Act,



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         1       which expired at the end of this year but is

         2       scheduled to be reinstated because it has

         3       proven to be so effective as a tool to hire

         4       new people, put people to work, not only in

         5       America but now here in New York State.

         6                  In fact, coupled with that, my

         7       colleagues, this bill leverages the federal

         8       bill because it provides even more tax

         9       incentives for those businesses that want to

        10       put people to work.

        11                  THE PRESIDENT:    Senator Krueger.

        12                  SENATOR LIZ KRUEGER:    Thank you,

        13       Mr. President.  On the bill.

        14                  THE PRESIDENT:    Senator Krueger,

        15       on the bill.

        16                  SENATOR LIZ KRUEGER:    Thank you.

        17                  Thank you, Senator Alesi, for your

        18       explanation of the bill.

        19                  I think I will get to my points

        20       better if I just articulate some of my

        21       concerns.

        22                  I am certainly not opposed to a tax

        23       credit model that puts more New Yorkers to

        24       work.  Senator Alesi is right, there's no one

        25       in this chamber who doesn't want to see more



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         1       New Yorkers working.  But as is often said,

         2       God is in the details, especially on tax

         3       expenditure and tax credit bills.

         4                  So the reason I raise the concern

         5       about it being a withholding bill from

         6       employees' paychecks is you have to ask the

         7       question what actions are you incentivizing.

         8       Are you incentivizing the creation of new

         9       jobs, or are you actually incentivizing the

        10       creation of rapid turnover in jobs?

        11                  Because we know, in a bad economy,

        12       there are endless numbers of people all

        13       competing for the same jobs.  But if you set

        14       up a tax credit for business where they get

        15       additional money off of their taxes for every

        16       new person who comes in without any obligation

        17       to keep that person, they have a reason to

        18       keep moving people in and out, in and out, in

        19       and out, because you get more money the more

        20       people you put on payroll, not necessarily

        21       keep on payroll.

        22                  So you have to be very careful in

        23       business tax incentives not to be encouraging

        24       simply the rotation of people rapidly off of

        25       jobs that have been incentivized.  And that



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         1       actually is the history of any number of

         2       programs, state and federal, that went wrong.

         3       And I don't want the state to go wrong again.

         4       And that is one of the big ways that this bill

         5       is very different than the bills being

         6       proposed by the Obama administration.

         7                  Second, the issue of bifurcating

         8       the business tax from the personal tax when a

         9       person is trying to pay both as a small

        10       business owner through their personal income

        11       tax, rather than filing as a corporate tax, is

        12       we can in fact, at no benefit to the State of

        13       New York, dramatically lower the tax rate of

        14       wealthier successful business owners.

        15                  I want business owners to be

        16       successful.  I want them to hire more people

        17       into their companies.  I want them to increase

        18       economic activity.  But I don't want us to,

        19       under the rubric of saying we have a job

        20       creation program, actually shift to a more

        21       regressive personal income tax for

        22       higher-income New Yorkers.  And I'm very

        23       concerned that that is a big piece of this

        24       bill and perhaps the most costly piece of the

        25       bill to the State of New York.



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         1                  So that section of the bill

         2       wouldn't create jobs but would reduce tax

         3       revenue at a time where we have a $10 billion

         4       deficit and none of us know how the heck we're

         5       going to meet that responsibility in the next

         6       few months.

         7                  Third, this bill also provides for

         8       a reduction by 50 percent of the corporate

         9       franchise tax for small businesses in the

        10       first year and then a zeroing out of the

        11       corporate franchise tax afterwards.  It's not

        12       clear from the language of the bill whether,

        13       if you got to be -- let's all hope that every

        14       small business becomes the next IBM, the next

        15       Google, the next fill-in-the-blank.  It's not

        16       clear here where they would ever be obligated

        17       to pay business taxes again, even though they

        18       had been successful, incentivized and went on

        19       to become large corporations in New York.

        20                  So the concept that within a bill

        21       we might actually be zeroing out corporate

        22       franchise taxes for everybody over time, when

        23       you think about the cost impact for the State

        24       of New York and the tax policy ramifications,

        25       I have to urge people to think carefully.



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         1                  In addition, particularly because

         2       there's another section of the bill that set a

         3       moratorium on any tax or fee increase on

         4       businesses until June 2015, meaning you might

         5       have your taxes zeroed out, being a small

         6       business, using the incentives to do the right

         7       things and hire people, and then shift your

         8       entire business model, but there would be no

         9       way for New York State to get taxes out of you

        10       at least till June 30, 2015.  And if some of

        11       the other bills we're going to discuss soon --

        12       about supermajority rules for taxes -- became

        13       law, we probably would never increase or

        14       revisit a zeroed-out tax again for anyone.

        15                  So I have to say, watch the details

        16       carefully.  There have been successful tax

        17       credits to create and incentivize small

        18       businesses hiring people, and there have been

        19       some real doozies of failures right here in

        20       our state.  And we don't want to replicate the

        21       mistakes of the past as we move forward.

        22                  Finally, it's an expense bill two

        23       weeks before the new Governor Cuomo is giving

        24       us his budget.  I don't understand why we are

        25       making a one-house decision at this moment in



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         1       history to cost the State of New York a

         2       minimum of $500 million when we are awaiting

         3       the Governor's budget with a $10 billion

         4       deficit to fill.

         5                  I think there are any number of

         6       reasons today for members on both sides of the

         7       aisle to vote no on this bill.  I'll be voting

         8       no.

         9                  Thank you, Mr. President.

        10                  THE PRESIDENT:    Thank you,

        11       Senator Krueger.

        12                  Senator Alesi.

        13                  SENATOR ALESI:    On the bill,

        14       Mr. President.

        15                  Thank you, my colleagues.  Thank

        16       you, Senator Krueger.

        17                  I'll be brief.  I think that it's

        18       easy to see that we disagree.  So I'm urging

        19       my colleagues to supporter this bill because

        20       this bill is an intelligent way to give

        21       businesses who desperately need to grow and

        22       thrive in New York State the incentives to

        23       hire new employees.

        24                  And with regard to Senator

        25       Krueger's concerns about an employer hiring



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         1       someone and then firing them and then hiring

         2       them again and firing them to take advantage

         3       of multiple credits, I can't imagine that that

         4       would occur in any business atmosphere,

         5       because the credit is against the paycheck.

         6       So if you hire and fire somebody, you're not

         7       gaining anything.  The tax credit goes against

         8       the paycheck, not multiple persons.

         9                  But we could get into the smaller

        10       details of someone's objections to this and do

        11       this all day long.  The fact of the matter is

        12       this is an intelligent approach.  The federal

        13       government has adopted it and shown that it

        14       has worked.  It is successful enough that

        15       Senator Schumer himself is going to renew this

        16       bill, effective January 1 retroactively.

        17                  So I encourage my colleagues to

        18       understand that we need to help businesses

        19       grow and thrive.  And equally important, we

        20       need to give them the opportunity to put

        21       people to work.  Because at the end of the

        22       day, if we're not putting people to work in

        23       New York State, we've failed in our

        24       responsibility.

        25                  I urge a yes vote.  Thank you,



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         1       Mr. President.

         2                  THE PRESIDENT:    Thank you,

         3       Senator Alesi.

         4                  Is there any other Senator wishing

         5       to be heard on this bill?

         6                  (No response.)

         7                  THE PRESIDENT:    The debate is

         8       closed.  The Secretary will ring the bell.

         9                  (Pause.)

        10                  THE PRESIDENT:    The Secretary

        11       will read the last section.

        12                  THE SECRETARY:    Section 3.  This

        13       act shall take effect immediately.

        14                  THE PRESIDENT:    Call the roll.

        15                  (The Secretary called the roll.)

        16                  THE PRESIDENT:    Senator Klein, to

        17       explain his vote.

        18                  SENATOR KLEIN:    Mr. President, to

        19       explain my vote.

        20                  I want to praise the sponsor of

        21       this legislation.  I think it's a commonsense

        22       approach to protecting and enhancing small

        23       businesses and creating jobs.

        24                  One of the things that we see as

        25       far as our national recovery is not enough



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         1       being done for small businesses.  We bailed

         2       out the banks, we bailed out the automobile

         3       industry, but we still haven't done anything

         4       for small businesses who generate jobs.

         5                  If we're really serious about

         6       reducing unemployment, we're going to do tax

         7       credits, as is contained in this bill, we'll

         8       put a moratorium on red tape and other

         9       regulations.

        10                  So I think this is really a smart,

        11       commonsense approach to get our economy moving

        12       again and once again getting back to basics

        13       and helping small businesses.

        14                  I vote yes, Mr. President.

        15                  THE PRESIDENT:    Senator Klein in

        16       the affirmative.

        17                  Announce the results.

        18                  THE SECRETARY:    Those recorded in

        19       the negative on Calendar Number 2 are Senators

        20       Adams, Hassell-Thompson, Huntley, L. Krueger,

        21       Montgomery, Parker, Peralta, Perkins and

        22       Rivera.

        23                  Ayes, 51.  Nays, 9.

        24                  THE PRESIDENT:    The bill is

        25       passed.



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         1                  Senator Libous.

         2                  SENATOR LIBOUS:    Mr. President,

         3       before we go on to the next bill I'd like to

         4       suggest to all of my colleagues, in the

         5       cooperation and spirit of the new year, when

         6       we are on the noncontroversial calendar if

         7       members would please, on both sides of the

         8       aisle, stay close to the chamber.  We have a

         9       responsibility to be in here and vote.  It is

        10       not fair to the members who are in here if

        11       other members are out milling around.  We have

        12       a lot of work to do.

        13                  And I know that, with the inclement

        14       weather.  That people want to speak, they want

        15       to be on the road and get home at a reasonable

        16       hour.

        17                  So let's be fair to ourselves this

        18       year so that when we're on the

        19       noncontroversial calendar that we will stay

        20       close by so that we can get through business

        21       rapidly.

        22                  Thank you, Mr. President.

        23                  THE PRESIDENT:    Thank you,

        24       Senator Libous.

        25                  The Secretary will read now read



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         1       Calendar Number 3.

         2                  THE SECRETARY:    Calendar Number

         3       3, by Senator Ranzenhofer, Senate Print 1892,

         4       concurrent resolution of the Senate and

         5       Assembly proposing an amendment to Article 7

         6       of the Constitution.

         7                  SENATOR BRESLIN:    Explanation.

         8                  THE PRESIDENT:    Senator

         9       Ranzenhofer, an explanation has been

        10       requested.

        11                  SENATOR RANZENHOFER:    Mr.

        12       President, who asked for the explanation?

        13                  THE PRESIDENT:    Who asked for the

        14       clarification?

        15                  SENATOR BRESLIN:    I did.

        16                  THE PRESIDENT:    Senator Breslin

        17       asked for the explanation, Senator

        18       Ranzenhofer.

        19                  SENATOR RANZENHOFER:    Mr.

        20       President, this is a constitutional state

        21       spending cap which will be put in place --

        22                  MULTIPLE MEMBERS:    We can't hear

        23       you.  We can't hear.

        24                  SENATOR RANZENHOFER:    The

        25       microphone is not working.  If you can't hear



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         1       me, I'll speak a little louder.

         2                  This is a constitutional state

         3       spending cap -- is this better?  I won't break

         4       into song, I can tell you that.

         5                  This would have a 2 percent cap or

         6       120 percent of the CPI, whichever is less.

         7       Right now that would be a little less than

         8       2 percent.  There's also a provision in the

         9       bill where, if there are excess revenues,

        10       50 percent of those would go into a tax

        11       stabilization fund, the other 50 percent would

        12       be returned to the taxpayers.

        13                  There's also a provision that if

        14       there is an emergency declared by the Governor

        15       and certified by the Comptroller, that the tax

        16       cap could be exceeded.  There's also no

        17       requirement that you have to go to a tax cap;

        18       you could also have less spending than the

        19       2 percent that's provided in the bill.

        20                  As a constitutional amendment, it

        21       would require passage by this legislature, it

        22       would require passage by the next legislature,

        23       in 2013, and then the voters of the State of

        24       New York would have a right to decide on the

        25       constitutional amendment.



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         1                  THE PRESIDENT:    Thank you,

         2       Senator.

         3                  Senator Krueger, why do you rise?

         4                  SENATOR LIZ KRUEGER:    We're

         5       seeing whether the microphones work.  Can you

         6       hear me, Mr. President?

         7                  THE PRESIDENT:    We can hear you,

         8       Senator.  And we're getting you a microphone.

         9                  SENATOR LIZ KRUEGER:    All right.

        10       I'll speak loudly.

        11                  Mr. President, through you, if the

        12       sponsor would yield to some questions.

        13                  THE PRESIDENT:    Senator

        14       Ranzenhofer, would you yield?

        15                  SENATOR RANZENHOFER:    Yes,

        16       Mr. President, I yield.

        17                  THE PRESIDENT:    The Senator

        18       yields.

        19                  SENATOR LIZ KRUEGER:    Thank you.

        20       If you can't hear me, I'll try to speak even

        21       louder.

        22                  SENATOR LIBOUS:    No, no, Senator,

        23       we want to hear you.

        24                  SENATOR LIZ KRUEGER:    Oh, we each

        25       have one.  Thank you so much.



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         1                  SENATOR LIBOUS:    We want to hear

         2       you.

         3                  SENATOR LIZ KRUEGER:    Thank you.

         4                  UNIDENTIFIED SENATOR:    Just like

         5       Oprah.

         6                  SENATOR LIZ KRUEGER:    Not exactly

         7       like Oprah.

         8                  Thank you very much for your

         9       explanation, Senator Ranzenhofer.

        10                  Senator Ranzenhofer, do you know

        11       how many times a bill like this or identical

        12       to this has passed here on the floor of the

        13       Senate?

        14                  SENATOR RANZENHOFER:    I've been

        15       here a few years.  It didn't pass during my

        16       tenure.  But I believe on two other occasions

        17       prior to me coming to the Senate.

        18                  SENATOR LIZ KRUEGER:    Thank you.

        19                  Through you, Mr. President, if the

        20       sponsor would continue to yield.

        21                  SENATOR RANZENHOFER:    Yes, of

        22       course.  Yes.

        23                  THE PRESIDENT:    The Senator

        24       yields.

        25                  SENATOR LIZ KRUEGER:    Thank you.



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         1       And it's true you haven't been here that long,

         2       but do you know how many times this chamber,

         3       say over the last 25 years, has called for a

         4       spending cap?

         5                  SENATOR RANZENHOFER:    Same answer

         6       as I just gave you.

         7                  SENATOR LIZ KRUEGER:    I think

         8       it's about 24 times that there have been

         9       bills -- excuse me.  Mr. President, if through

        10       you the sponsor would continue to yield.

        11                  SENATOR RANZENHOFER:    Yes.

        12                  THE PRESIDENT:    The Senator will

        13       yield.

        14                  SENATOR LIZ KRUEGER:    Thank you.

        15       I was advised actually it was many, many times

        16       where we then violated the intention or the

        17       outline of the bill and actually increased the

        18       budget by hundreds of millions, if not

        19       billions of dollars, in years where we all

        20       said no, we're not going to increase the level

        21       of spending.  That's not my question, though.

        22       It's my editorial comment.

        23                  In your bill it's my understanding

        24       that it would be a constitutional amendment

        25       that there could be no increase above the



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         1       2 percent, or 120 percent or more of the

         2       Consumer Price Index per year, and it would

         3       cover general funds, special revenue funds,

         4       capital project funds, and debt relief.  Is

         5       there any portion of the budget that would not

         6       be included in this cap?

         7                  SENATOR RANZENHOFER:    You

         8       correctly identified the four funds that are

         9       outlined in the bill.

        10                  SENATOR LIZ KRUEGER:    Mr.

        11       President, if through you the sponsor would

        12       continue to yield.

        13                  THE PRESIDENT:    Senator

        14       Ranzenhofer, will you yield?

        15                  SENATOR RANZENHOFER:    Of course.

        16                  THE PRESIDENT:    The Senator

        17       yields.

        18                  SENATOR LIZ KRUEGER:    How would

        19       this constitutional amendment apply to

        20       authorities spending or raising fees and the

        21       equivalent of taxes, quote, unquote, off

        22       budget?

        23                  SENATOR RANZENHOFER:    This

        24       applies to the four funds that are outlined in

        25       the bill.



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         1                  SENATOR LIZ KRUEGER:    Mr.

         2       President, through you, may I ask another

         3       question, please, of the sponsor.

         4                  THE PRESIDENT:    Senator

         5       Ranzenhofer, do you yield?

         6                  SENATOR RANZENHOFER:    Yes.

         7                  THE PRESIDENT:    The Senator

         8       yields.

         9                  SENATOR LIZ KRUEGER:    So I want

        10       to make sure I understand your bill correctly.

        11       You could continue to raise funds through

        12       outside authorities even if this bill became

        13       the law?

        14                  SENATOR RANZENHOFER:    Same answer

        15       as I just gave you, yes.

        16                  SENATOR LIZ KRUEGER:    I'm not

        17       sure -- thank you, Senator Ranzenhofer.

        18                  If, through you, Mr. President, the

        19       Senator would continue to yield.

        20                  THE PRESIDENT:    Senator

        21       Ranzenhofer, do you continue to yield?

        22                  SENATOR RANZENHOFER:    Yes,

        23       Mr. President.

        24                  THE PRESIDENT:    The Senator

        25       yields.



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         1                  SENATOR LIZ KRUEGER:    Senator,

         2       how did you determine what the growth

         3       benchmark should be for determining the cap?

         4       There is no other state in the nation that

         5       uses an inflation-only rate to calculate the

         6       cap.  So I'm curious why you went down that

         7       road with your proposal.

         8                  SENATOR RANZENHOFER:    The reason

         9       I went down that road is because over the last

        10       10 years spending has increased 5.54 percent;

        11       over the last 20 years, 4.54 percent; over the

        12       last 27 years, 5.75 percent.

        13                  I thought it was important to have

        14       a number which was less than that.  I thought

        15       2 percent was the appropriate number.  I know

        16       the Governor has talked very specifically that

        17       we must immediately impose a state spending

        18       cap.  So I thought 2 percent was the proper

        19       number and was also -- right now it just so

        20       happens to be that that number is very closely

        21       tied to what the 120 percent of the CPI would

        22       be right now.  Right now the 120 percent of

        23       the CPI would be just under 2 percent.  So the

        24       2 percent right now matches very closely what

        25       the CPI is.



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         1                  SENATOR LIZ KRUEGER:    Mr.

         2       President, if through you the sponsor would

         3       continue to yield.

         4                  THE PRESIDENT:    Senator, do you

         5       continue to yield?

         6                  SENATOR RANZENHOFER:    Yes.

         7                  THE PRESIDENT:    The Senator

         8       continues to yield.

         9                  SENATOR LIZ KRUEGER:    Thank you.

        10                  We are going through a period of

        11       relatively low inflation, although we

        12       historically have had periods of high

        13       inflation.  But there are also facts that we

        14       know from the history of our budget and other

        15       states' budgets that costs of some services,

        16       like education and healthcare, historically

        17       growth at rates that exceed inflation.

        18                  And then you have a complicating

        19       factor -- let's say you had a population

        20       burst.  Now, we know that in the new Census

        21       data we're going to lose Congressional seats

        22       because we haven't been growing as fast as

        23       other states.  I believe we all agree New York

        24       State wants to grow our population and not be

        25       continually losing a national range war to



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         1       other states.

         2                  In your bill, where it's a

         3       constitutional amendment -- and again, that

         4       means there's almost no way to undo it once

         5       we've done it.  If we have your model of an

         6       inflation-only rate cap but we had a huge

         7       population burst or we had a major capital

         8       expenditure requirement suddenly one year, a

         9       major bridge and highway collapse, we might

        10       find ourselves not able at all to just keep up

        11       with a minimal continuing level of other

        12       services because of the cap.

        13                  So did you think about what happens

        14       if the inflation rate changes, what happens if

        15       the population changes, or what happens if

        16       something else happens such as a major capital

        17       cost that might drain any other part of the

        18       budget, actually forcing a major reduction

        19       rather than any increase at all?

        20                  SENATOR RANZENHOFER:    Yes, I

        21       have.  I'm sure there's a question, many

        22       questions in there, so let me try to address

        23       that as best as I can remember your questions.

        24                  First of all, one of the things

        25       that you point out, very correctly, is that



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         1       New York is losing or should be losing this

         2       year two Congressional representatives.

         3       That's a trend that has continued over the

         4       last 50 years.  In my judgment, and I think

         5       it's pretty well documented, that one of the

         6       problems that this state is having is that we

         7       are continuing to lose population to other

         8       states that have better controls over their

         9       taxes and spending.

        10                  So as a result, what's happened in

        11       this state is that the spending has gone up,

        12       the number of people that are left behind to

        13       pay for that spending decreases -- to, as I

        14       said, other states which have lower taxes

        15       because their spending levels are not quite as

        16       high.

        17                  One of the things -- you had

        18       mentioned two examples.  One is a population

        19       burst.  And again, based on the last 50 or

        20       even 100 years, I don't anticipate a

        21       population burst at this point in time.  As a

        22       matter of fact, exactly the exact opposite is

        23       happening.

        24                  With respect to your example of a

        25       bridge collapse, that's covered in the bill.



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         1       It does talk about an emergency.  And I had

         2       mentioned earlier if there is an emergency

         3       such as the one that you've just described,

         4       the Governor can declare an emergency, that

         5       can be certified by the Comptroller, and that

         6       can certainly be considered.

         7                  So the bill provides for that

         8       particular hypothetical example which you just

         9       gave.  It does not address, for good reason,

        10       the possible population burst that this state

        11       might at some point have, in light of the last

        12       100-year history, certainly 50-year history,

        13       where this state continually, based upon

        14       comparison with other states, continues to

        15       lose population year after year, decade after

        16       decade.

        17                  So in order to address -- that was

        18       one of the primary motivating factors behind

        19       this bill, is to get spending under control so

        20       we can therefore control taxes so we still

        21       have people here before everybody that is able

        22       to decides to leave for states that are less

        23       expensive than New York State.

        24                  SENATOR LIZ KRUEGER:    Mr.

        25       President, if through you the sponsor would



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         1       continue to yield.

         2                  THE PRESIDENT:    Senator?

         3                  SENATOR RANZENHOFER:    Yes, I

         4       will.

         5                  THE PRESIDENT:    The Senator

         6       yields.

         7                  SENATOR LIZ KRUEGER:    Thank you.

         8                  And there is a question, but I want

         9       to provide some data before getting to the

        10       question.

        11                  I've looked at what happened in

        12       some other states that have passed this kind

        13       of spending cap or variations on spending cap.

        14       Although really no one goes as far as your

        15       proposal as far as covering all different

        16       types of revenue sources, a 2 percent or

        17       the -- or less than 120 percent of the

        18       Consumer Price Index.  But the state that

        19       seems to have gone closest to the model you're

        20       proposing is the State of Colorado.  And they

        21       passed their TABOR bill, Taxpayer Bill of

        22       Rights, which effectively capped state

        23       spending, and then had to at a later date be

        24       completely overhauled in a referendum bill by

        25       the people when many Republican legislators,



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         1       Republican governor and their business

         2       leaders, highlighted all the negative impacts

         3       that were found on the State of Colorado.

         4                  At the time they made the decision

         5       to pull back on TABOR -- and again, they have

         6       I&R in their state, so they had the ability

         7       to.  We don't have initiative and referendum,

         8       so we wouldn't have the ability to go back the

         9       way they did.

        10                  Between 1992 and 2001, Colorado

        11       declined from 35th to 49th in the nation for

        12       spending on education.  As of 2006, the state

        13       maintained its low rank among the states to

        14       48th in education.  Colorado's average

        15       per-pupil funding fell by $600 relative to the

        16       national average.  Their funding for public

        17       health programs plummeted from 23rd to 48th in

        18       national stating rankings.

        19                  Their services for children

        20       plummeted in the rankings.  The share of

        21       low-income children lacking health insurance

        22       doubled in Colorado and is now ranked 47th

        23       among the 50 states on child health measures.

        24       It also affected low-income adults.  Colorado

        25       fell from 20th to 48th for the percentage of



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         1       low-income non-elderly adults without health

         2       insurance.

         3                  The business community responded

         4       that Colorado was no longer a place where they

         5       could grow their businesses.  And so in fact

         6       Colorado realized that perhaps -- not perhaps,

         7       that they had gone too far.  They had

         8       unintended consequences of the TABOR Act.  And

         9       no state since then has gone as far as

        10       Colorado originally did and reversed itself

        11       upon in 2005.

        12                  Why now here in 2011 should

        13       New York assume there are no lessons to be

        14       learned from what some of the other states did

        15       and then reversed themselves on?  Why should

        16       we want to put ourselves in a position where

        17       these things can happen here but we won't have

        18       a go-backwards option or a do-over?

        19                  SENATOR RANZENHOFER:    The simple

        20       answer is that I believe that New York State's

        21       fiscal condition is so bad that if we do

        22       nothing, that it will continue to worsen.  And

        23       notwithstanding the speech or, you know,

        24       information that you just provided, people are

        25       leaving the state in droves.  And something



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         1       has to be done in order to keep them here.

         2       And I think limiting spending and limiting

         3       taxes and trying to create private-sector jobs

         4       is the correct method to go.  And that's why I

         5       introduced the bill.

         6                  SENATOR KRUEGER:    Mr. President,

         7       on the bill.

         8                  THE PRESIDENT:    Senator.

         9                  SENATOR LIZ KRUEGER:    Thank you.

        10       Thank you very much, Senator Ranzenhofer, for

        11       giving me the time and explanation for your

        12       legislation.

        13                  Again, I stand here saying no

        14       disagreement, New York State has a spending in

        15       relationship to revenue issue.  No

        16       disagreement we're facing a $10 billion

        17       deficit and we must do the right things for

        18       the people of the State of New York.  And

        19       there are right ways to handle this and I

        20       believe wrong ways to handle this.

        21                  I think a constitutional amendment

        22       mandating a specific unchangeable formula for

        23       revenue and spending -- this bill is

        24       specifically spending -- for spending in the

        25       State of New York is a terrible, terrible road



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         1       to go down.  We have seen, from other states

         2       who tried it, it wasn't the right answer.

         3                  And specifically the way this

         4       amendment is targeted I believe is not the

         5       right answer.  It doesn't address the concerns

         6       about a population spurt.  It doesn't address

         7       the possibilities of the need to ratchet down

         8       the effect when you're moving out of bad

         9       economies into better economies.  It doesn't

        10       let you smooth over economic changes when

        11       looking at a year-by-year basis.

        12                  There are huge unintended

        13       consequences for local government.  When you

        14       look at the findings specifically from

        15       Colorado and other states, what they found

        16       when they stopped themselves from being able

        17       to increase their spending at the state level

        18       was that they created endless numbers of new

        19       government, new governments at the local

        20       level.  Counties, towns, cities were creating

        21       new districts, new categories that could in

        22       fact increase their revenue because they knew

        23       they weren't going to get any more from the

        24       state as population grew, as the economy

        25       changed, as there was standard inflation.  So



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         1       that what Colorado found was that they created

         2       a monster of endless small local government

         3       units.

         4                  Well, the irony is that we know in

         5       New York State, we're already the poster child

         6       of states who are having that problem.  We

         7       have too many IDAs, we have too many public

         8       authorities, we have too many subdistricts and

         9       subsubdistricts within counties and townships.

        10       Colorado found that it walked into this

        11       problem after they passed their spending cap;

        12       we already have to solve that problem without

        13       dealing with the spending cap.

        14                  So I could go on.  There's an

        15       enormous body of research.  This is a

        16       fundamental, tough, complicated issue of

        17       government.  We got this bill yesterday in the

        18       Finance Committee.  Many of us said no notice,

        19       need more time.  Even if some of my colleagues

        20       might end up saying, after they did the

        21       homework, maybe there's a right way to do

        22       this, maybe they can completely agree with

        23       Senator Ranzenhofer, you should not be rushing

        24       this kind of bill to the floor for a vote

        25       without a very broad public discussion, I



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         1       would argue public hearings, I would argue

         2       bringing in the experts from throughout the

         3       nation.  A lot has been written, a lot has

         4       been tried, and much has failed.

         5                  So for so many reasons -- not one

         6       of which is I don't believe we need to get

         7       spending under control.  I do.  But for many,

         8       many reasons, I have to urge my colleagues to

         9       vote no on this bill.  We should not take an

        10       amendment to the Constitution of the State of

        11       New York so lightly.

        12                  Thank you very much, Mr. President.

        13                  THE PRESIDENT:    Thank you,

        14       Senator.

        15                  Senator Robach, on the resolution.

        16                  SENATOR ROBACH:    Yes,

        17       Mr. President.  Through you, on the bill.

        18                  I rise to support this measure.

        19       And, you know, we're leaving some things out

        20       of this dialogue.  This is really in direct

        21       response to what people want.  They're asking

        22       for it all across this state.  And if

        23       anything, we're going to have to actually do

        24       this without this legislation in this upcoming

        25       budget year.



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         1                  We've all heard the Governor loud

         2       and clear.  We know what the dollar amounts

         3       are.  We know what the challenge is of the

         4       fiscal situation.  And certainly we're coming

         5       off an election where many people talked about

         6       I'm going to do my part when I get to Albany

         7       to control spending.  This is clearly just a

         8       measure in addition to the short-term measures

         9       we're going to have to do to be responsive to

        10       people and the public in a long-term way.

        11                  I listened very intently to Senator

        12       Krueger.  We tried the other way.  We taxed

        13       seven times the rate of inflation over the

        14       last two years, and the public was outraged at

        15       each and every one of us, and it didn't help

        16       the economy one bit.

        17                  I think clearly the history and the

        18       outcomes would dictate that we have to move in

        19       a different direction.  These series of bills

        20       are exactly that, following up on promises

        21       made during campaigns of knowing, even though

        22       it's challenging and no one necessarily enjoys

        23       it, that we're going to do the tough things to

        24       get our fiscal house in order and move in a

        25       different direction, keeping an eye on



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         1       overburdened taxpayers, working men and women

         2       and people on a fixed income.

         3                  But the beauty about this bill is

         4       there will be ample time to discuss it.  And

         5       at the end of the day, the most important

         6       people get to make the decision, the voters of

         7       New York State, through this.  The frustrating

         8       part is it does take a couple of years.  But

         9       the wonderful part is everybody in your

        10       district and my district will get to vote on

        11       this bill if this is the direction we want to

        12       go to and think that this is the vehicle to

        13       get our fiscal house in order.

        14                  We are at a time when people are

        15       challenging decisions everywhere.  Amplifying

        16       the voice of the people and letting them in

        17       can only be good.  And I strongly encourage a

        18       yes vote on this important bill,

        19       Mr. President.

        20                  THE PRESIDENT:    Thank you,

        21       Senator.

        22                  Are any other Senators wishing to

        23       be heard on this resolution?

        24                  Senator Kruger.

        25                  SENATOR CARL KRUGER:    Thank you,



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         1       Mr. President.  Would Senator Ranzenhofer

         2       yield for a few questions?

         3                  THE PRESIDENT:    Senator

         4       Ranzenhofer, do you yield?

         5                  SENATOR RANZENHOFER:    Yes.

         6                  SENATOR CARL KRUGER:    I guess,

         7       you know, confusion reigns here in the chamber

         8       today.  You pointed out that our population in

         9       this state continues to decrease and we keep

        10       on losing Congressional seats.  How come we

        11       increase Senate seats?  That's a question.

        12                  SENATOR RANZENHOFER:    Are you

        13       talking about New York Senate?

        14                  SENATOR CARL KRUGER:    New York

        15       State Senate seats continue to increase while

        16       you're saying our population decreases and

        17       we're losing Congressional seats.  How is the

        18       Republican majority able to increase Senate

        19       seats?

        20                  SENATOR RANZENHOFER:    I'm not

        21       really sure what you're talking about.  When I

        22       came in in 2009 --

        23                  SENATOR CARL KRUGER:    I'm sure

        24       you don't.  That's part of the confusion.

        25                  SENATOR RANZENHOFER:    -- there



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         1       were 61 seats, and there are still 61 seats.

         2       Sixty-two.

         3                  SENATOR CARL KRUGER:    Well, okay.

         4       That was just a rhetorical point.

         5                  On your bill.

         6                  SENATOR RANZENHOFER:    Is this a

         7       real question or a rhetorical question?

         8                  SENATOR CARL KRUGER:    Yes, this

         9       is an on-the-bill question.

        10                  THE PRESIDENT:    Senator, you want

        11       to ask the Senator to yield?

        12                  SENATOR CARL KRUGER:    When we

        13       want to engage some dialogue --

        14                  THE PRESIDENT:    Senator --

        15       Senator Kruger, you want to ask Senator

        16       Ranzenhofer to yield?

        17                  SENATOR CARL KRUGER:    Yes, I do.

        18                  Do you yield for a question?

        19                  THE PRESIDENT:    Senator, do you

        20       yield?

        21                  SENATOR RANZENHOFER:    Yes.

        22                  THE PRESIDENT:    The Senator

        23       yields.

        24                  SENATOR CARL KRUGER:    Thank you,

        25       Senator.  When we want to talk about dialogue



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         1       in terms of spending, and we were to look at,

         2       you know, benchmark years -- let's start from

         3       1982 to the year '09.  And we could pick out

         4       years:  12 percent increase in spending,

         5       7 percent increase in spending, 10.9 percent

         6       increase in spending, and the list goes on and

         7       on.

         8                  How come during those years, in

         9       your judgment, we increased spending?

        10                  SENATOR RANZENHOFER:    First of

        11       all, I wasn't here serving with you during

        12       that time, Senator Kruger.  But the point I

        13       was making is, and the numbers that I gave

        14       before, is that whether you look at the last

        15       10-year period, whether you look at the last

        16       20-year period, whether you look at the last

        17       27-year period, whether there was a Republican

        18       governor or a Democratic governor, whether

        19       there was a Republican Senate or a Democratic

        20       Senate, spending has gone up too much.

        21                  And as a result of that, as you

        22       pointed out in your verbal comments earlier,

        23       we continue to lose population.  I think that

        24       needs to change.  I'm not looking here to

        25       place blame on the majority from last year.



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         1       I'm not looking to place blame on anywhere

         2       else.  What I'm saying is that the citizens of

         3       this state want something done about excessive

         4       spending.  This bill addresses that concern.

         5       Plain and simple.

         6                  SENATOR CARL KRUGER:    Thank you,

         7       Senator.

         8                  Firstly, we should not be able to

         9       address last year's spending, because the

        10       spending cap last year we spent 0.5 percent.

        11                  THE PRESIDENT:    Senator Kruger,

        12       is this on the bill?

        13                  SENATOR CARL KRUGER:    Does

        14       Senator Ranzenhofer continue to yield?

        15                  THE PRESIDENT:    Senator Kruger,

        16       is this on the resolution?

        17                  SENATOR CARL KRUGER:    On the

        18       resolution.

        19                  THE PRESIDENT:    You asked if the

        20       Senator would yield?

        21                  SENATOR RANZENHOFER:    I'd be

        22       happy to yield.

        23                  SENATOR CARL KRUGER:    Thank you

        24       very much.

        25                  Senator Ranzenhofer, when you talk



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         1       about a 2 percent cap, are you talking about a

         2       2 percent aggregate cap on all state spending?

         3                  SENATOR RANZENHOFER:    As I

         4       answered the question in response to Senator

         5       Krueger, in the bill in Section 2 -- I'm

         6       sorry, 3 -- total state spending, which means

         7       all state funds, which will include general

         8       funds, special revenue funds, capital project

         9       funds, and debt service funds.

        10                  So all state spending is all state

        11       spending.

        12                  SENATOR CARL KRUGER:    Two percent

        13       cap?

        14                  SENATOR RANZENHOFER:    Yes.

        15                  SENATOR CARL KRUGER:    Now, this

        16       bill would not -- again, through you,

        17       Mr. President.

        18                  THE PRESIDENT:    Are you asking --

        19                  SENATOR CARL KRUGER:    If the

        20       Senator will continue to yield.

        21                  THE PRESIDENT:    Senator, will you

        22       yield?

        23                  SENATOR RANZENHOFER:    I'd be

        24       happy to continue to yield.

        25                  THE PRESIDENT:    The Senator



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         1       continues to yield to Senator Kruger.

         2                  SENATOR CARL KRUGER:    Thank you

         3       again.  Thank you again, Senator Ranzenhofer.

         4                  So if we're to look at this

         5       2 percent cap and we're to say that's the

         6       aggregate spending cap on all state

         7       categories, let's now try to put a face on

         8       that spending cap, with your permission.

         9       Two percent spending cap, Senator Ranzenhofer,

        10       would that apply to the aggregate amount for

        11       health?

        12                  THE PRESIDENT:    Senator?

        13                  SENATOR RANZENHOFER:    Yes.  As I

        14       said, Senator Kruger, it's all state spending.

        15                  SENATOR CARL KRUGER:    Again,

        16       through you, Mr. President, if the Senator

        17       will continue to yield.

        18                  SENATOR RANZENHOFER:    Yes.

        19                  THE PRESIDENT:    The Senator

        20       yields.

        21                  SENATOR CARL KRUGER:    So when we

        22       talk about education, you are advocating that

        23       we put a cap of 2 percent based upon a budget

        24       that we are already going to decimate -- let's

        25       pretend it's this year of taking $10 billion



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         1       out of the current budget.  You're suggesting

         2       that in future years, as we continue this road

         3       to austerity, that we continue to limit our

         4       ability to cap expenditures at 2 percent.  Am

         5       I correct?

         6                  SENATOR RANZENHOFER:    As I said,

         7       first of all, when you're talking about what's

         8       going to happen this year, I think -- and as

         9       Governor Cuomo has already said -- without a

        10       spending cap, there is going to be significant

        11       reductions in spending this year.

        12                  What I'm looking to do is to make

        13       those spending reductions which need to be

        14       made, and the public is asking us to make,

        15       permanent by way of a constitutional

        16       amendment.  After it passes this Legislature,

        17       after it passes the Legislature in 2013, and

        18       then the voters will have an opportunity.

        19                  If the voters agree with you,

        20       Senator Kruger, that there should not be

        21       reductions in spending and there should not be

        22       a spending cap, then I imagine that they would

        23       vote in favor of the position that you're

        24       espousing.  If the voters feel that there

        25       should be a spending cap and that the state



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         1       needs to get its spending under control and

         2       that 2 percent or 120 percent of the CPI is a

         3       better direction, I believe that they would

         4       choose that path.

         5                  But I think it's an important step

         6       that this Legislature passes to give the

         7       voters of this state the opportunity to amend

         8       the Constitution so they have some control and

         9       they have some say over the type of spending

        10       that they want.  Because they haven't had any

        11       control over the last number of years.  And

        12       their way of expressing themselves has been to

        13       leave the state to go to other states that

        14       don't spend as much and don't tax as much.

        15                  That's the reality of the

        16       situation, and that's the problem which we now

        17       face and the problem that I think needs to be

        18       fixed.  And we'll see, if it passes the

        19       legislature and it passes a successive

        20       legislature and the voters have an opportunity

        21       to make that decision, what they feel on the

        22       subject.

        23                  SENATOR CARL KRUGER:    Thank you.

        24                  Once again, through you,

        25       Mr. President, would the Senator continue to



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         1       yield?

         2                  THE PRESIDENT:    Senator, will you

         3       yield?

         4                  SENATOR RANZENHOFER:    I'd be

         5       happy to.

         6                  THE PRESIDENT:    The Senator

         7       yields.

         8                  SENATOR CARL KRUGER:    Thank you

         9       again, Senator.

        10                  So for a moment, if we're to use

        11       the model that Senator Krueger spoke about,

        12       and that's California --

        13                  SENATOR RANZENHOFER:    I believe

        14       she spoke about Colorado.

        15                  SENATOR CARL KRUGER:    Colorado as

        16       well as California.

        17                  In both cases, can you in your

        18       judgment, and based upon your own personal

        19       knowledge, do you feel that the economies have

        20       flourished under the spending cap both in

        21       Colorado and California?

        22                  SENATOR RANZENHOFER:    Through

        23       you, Mr. President, let me just read you a

        24       little bit of literature about what happened

        25       in Colorado after they passed their spending



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         1       cap.

         2                  It says "Colorado's early

         3       experience with TABOR included very rapid

         4       demographic and economic growth because of

         5       substantial migration, a 30 percent population

         6       growth from 1990 to 2000, and the rapid

         7       expansion of the electronics and

         8       telecommunications industries in the state.

         9       Taxpayers saw substantial TABOR refund checks

        10       as revenues above the limit were returned to

        11       them.  The general assembly subsequently

        12       reduced personal income and sales tax rates to

        13       reduce surplus returnable revenues."

        14                  So at least the experience in

        15       Colorado when it was passed, and for the

        16       decade following that, actually produced some

        17       pretty significant change which I imagine the

        18       legislature was trying to accomplish.  They

        19       were trying to revive a dormant business

        20       industry, which they did.  They were trying to

        21       limit their spending, which they did.  They

        22       were trying to lessen their tax burden, which

        23       they did.

        24                  I don't have -- I don't think that

        25       Senator Krueger talked about California, so



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         1       I'm not going to comment on that.  But on the

         2       specific example that you reference, and what

         3       she referenced, at least for the first

         4       10 years after it passed, it was a pretty

         5       successful program.

         6                  And more importantly, Senator, I

         7       believe it did what the -- you know, what the

         8       residents of that state wanted, through their

         9       legislature.  It reduced spending and reduced

        10       taxes.  And at least the sense that I have,

        11       and I know the Governor has spoken very

        12       forcefully about that, the Governor also wants

        13       to reduce spending and reduce taxes.  I think

        14       in his State of the State message he indicated

        15       that over the last decade we've lost 2 million

        16       people.

        17                  And that's a real problem.  When

        18       the spending goes up and there are fewer

        19       people left behind to pay it, it just creates

        20       a continuing problem which I think this

        21       Legislature needs to address.  It hasn't been

        22       addressed properly.  And this is the first

        23       step to do that.

        24                  SENATOR CARL KRUGER:    Thank you,

        25       Senator.



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         1                  Again, through you, Mr. President,

         2       does the Senator continue to yield?

         3                  THE PRESIDENT:    Senator, will you

         4       continue to yield?

         5                  SENATOR RANZENHOFER:    Yes, I'd be

         6       happy to.

         7                  THE PRESIDENT:    The Senator

         8       yields.

         9                  SENATOR CARL KRUGER:    Firstly, I

        10       guess, this is a two-part question.

        11                  Number one, since we're awaiting

        12       the Governor's budget and what his spending

        13       program would lay out, is this legislation

        14       ill-timed?

        15                  And secondly, if we want to look at

        16       Colorado again, notwithstanding the fact that

        17       there may have been one particular bump in

        18       terms of telecommunications, can you explain

        19       why Colorado, because the spending cap

        20       virtually destroyed state government, that

        21       they had to repeal it?

        22                  SENATOR RANZENHOFER:    What was

        23       your first question again?

        24                  SENATOR CARL KRUGER:    My first

        25       question was the Governor, how come we're not



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         1       waiting for him.

         2                  SENATOR RANZENHOFER:    Well, first

         3       of all, this -- as I said, we are going to, as

         4       you well know, as ranker on Finance and as

         5       chairman of Finance last year, that there are

         6       going to be some great challenges that we're

         7       facing right now.  And the Governor is going

         8       to propose a budget and this Legislature is

         9       going to have to deal with some very, very

        10       difficult choices.  And that's with whether

        11       you have a spending cap or not, that's just

        12       the reality that we are going to have to deal

        13       with over the next couple of months.

        14                  My feeling is that we really can't

        15       afford to wait any longer.  In the statistics

        16       that I'd given you earlier, over the last

        17       27 years -- again, regardless of who's in

        18       charge -- spending has increased well above

        19       the rate of inflation, with the results, as I

        20       also indicated, that people are just leaving

        21       the state.

        22                  So I think this is long overdue,

        23       not too early.  And I think it's important to

        24       send a very important message to this state

        25       that we as a body are serious about getting



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         1       our fiscal house in order.  That's what

         2       residents in your district and my district are

         3       doing in their own homes.  That's what

         4       businesses in your district and my district

         5       are doing in their businesses.  They have to

         6       control their spending to survive.  And I

         7       think the state also needs to take that

         8       approach as well.

         9                  SENATOR CARL KRUGER:    Okay.  And

        10       since you raise the issue of Colorado, how

        11       come they rescinded their cap?

        12                  SENATOR RANZENHOFER:    As I said,

        13       you know, I'm not -- I've only been in the

        14       Senate for two years.  I don't know why the

        15       legislators in Colorado decided to do what

        16       they did.

        17                  We are at a point in our history in

        18       the State of New York that we need a cap.  We

        19       can't continue to push the spending problem

        20       that we have down the road and hope that

        21       people will not continue to leave, hope that

        22       businesses won't continue to leave.  We need

        23       to take some action today.  And that's why the

        24       bill was introduced.

        25                  SENATOR CARL KRUGER:    Thank you,



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         1       Senator.

         2                  SENATOR RANZENHOFER:    You're

         3       welcome.

         4                  SENATOR CARL KRUGER:    Mr.

         5       President, on the bill.

         6                  THE PRESIDENT:    Senator Kruger,

         7       on the resolution.

         8                  SENATOR CARL KRUGER:    On the

         9       resolution.

        10                  Firstly, when we want to talk about

        11       a spending cap and we want to talk about

        12       spending and we want to talk about cuts, it's

        13       important for us as a Legislature to not look

        14       at this as just amorphous numbers, but rather

        15       to treat this as cuts and caps that affect

        16       people's lives -- affect children and their

        17       education, affect poor people and social

        18       service needs, that affect senior citizens and

        19       people that are sick, that are in hospitals

        20       across this state.

        21                  And if we want to take and put

        22       faces on those cuts and those caps, we have to

        23       look at them both in good years and in bad

        24       years as well.  And if we're going to put our

        25       fiscal house in order, we can never ignore the



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         1       human side of the equation.

         2                  The human side of the equation says

         3       that we have a responsibility not to try to

         4       hide behind constitutional amendments that in

         5       this state are virtually impossible to undo.

         6       If we're going to talk about a critical crisis

         7       that faces us today, we can't talk about a

         8       plan of action that can only be implemented

         9       five years from now.

        10                  If we're going to talk about cuts

        11       and what cuts mean, if we're going to take

        12       direction from our newly elected Governor,

        13       then we have to stop kicking the can down the

        14       road and stop the dramatics of looking for

        15       quick 30-second sound bites.  What we have to

        16       look for is a bill, we have to look for a

        17       budget, we have to look for a plan of action,

        18       and we have to look for a sense of commitment,

        19       a commitment that we are here as legislators,

        20       on both sides of the aisle, dedicated to speak

        21       for the people that necessarily can't speak

        22       for themselves:  the poor, the sick, the

        23       elderly, the infant child.

        24                  If we put that into the equation,

        25       then we can't put a numerical number of



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         1       2 percent for virtually the rest of their life

         2       on how government is going to treat them -- 2

         3       percent of the aggregate number, 2 percent of

         4       the number that will affect education,

         5       healthcare, social services and every other

         6       aspect of human life in this state.

         7                  So today I say that in the period

         8       of 24 hours this resolution has been put

         9       before our house.  It's been put before our

        10       house to digest, to evaluate and to vote on.

        11       I think that that's a little bit putting the

        12       cart in front of the horse.  It's giving us

        13       not enough time to have honest and clear

        14       debate on the issue.  But more importantly, it

        15       prevents us from dealing with our immediate

        16       concerns and our needs as legislators.

        17                  Caps and spending cuts and a budget

        18       in balance is our obligation.  And we meet

        19       that obligation not by taking constitutional

        20       amendments and hoping to hide behind them, but

        21       rather taking the real facts of the day,

        22       putting a face on those facts, and moving

        23       forward with a budget, with the support of the

        24       Assembly and the Governor, that makes sense

        25       for all New Yorkers.



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         1                  Thank you.

         2                  THE PRESIDENT:    Thank you,

         3       Senator Kruger.

         4                  Are there any other Senators

         5       wishing to speak or be heard on this

         6       resolution?

         7                  Senator Saland.

         8                  SENATOR SALAND:    Thank you,

         9       Mr. President.  I'll be brief.  I probably

        10       won't need the microphone.

        11                  I think the reference to Colorado

        12       and TABOR is totally inapt.  I recall at the

        13       time I was actively involved in the National

        14       Conference of State Legislatures, which was

        15       headquartered in Colorado.  I was an officer

        16       of that organization.  TABOR was the product

        17       of I believe a referendum adopted by the

        18       people of Colorado, among other things.  Not

        19       only does it differ in terms of manner in

        20       which it presents itself, but in the case of

        21       TABOR, it made no provision for a rainy day

        22       fund.

        23                  This particular measure does

        24       require that anything that exceeds the amount

        25       of the cap be divided both by way of returning



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         1       one-half to the taxpayers and one-half to a

         2       sustained rainy day fund.

         3                  There was something that to

         4       appearances might have appeared to be a rainy

         5       day fund, but in effect it was a cash flow

         6       mechanism.  It was not sustainable.  And it

         7       did not produce the accumulation of funds to

         8       be used in times of need.

         9                  So I would just rise clearly to

        10       clear the record and to say that the use of

        11       TABOR in some way, shape or form to discredit

        12       Senator Ranzenhofer's resolution simply does

        13       not apply.

        14                  Thank you, Mr. President.

        15                  THE PRESIDENT:    Thank you,

        16       Senator Saland.

        17                  Any other Senators wishing to be

        18       heard?

        19                  (No response.)

        20                  THE PRESIDENT:    Hearing none, the

        21       debate is closed.

        22                  The Secretary will ring the bell.

        23                  (Pause.)

        24                  THE PRESIDENT:    The Secretary

        25       will call the roll on the resolution.



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         1                  (The Secretary called the roll.)

         2                  THE PRESIDENT:    The Secretary

         3       will record the negatives and announce the

         4       results.

         5                  Announce the results.

         6                  THE SECRETARY:    Those recorded in

         7       the negative on Calendar Number 3 are Senators

         8       Adams, Diaz, Espaillat, Gianaris,

         9       Hassell-Thompson, Huntley, L. Krueger,

        10       C. Kruger, Montgomery, Oppenheimer, Parker,

        11       Peralta, Perkins, Rivera, Savino, Serrano,

        12       Squadron, Stavisky and Stewart-Cousins.

        13                  Ayes, 41.  Nays, 19.

        14                  THE PRESIDENT:    The resolution is

        15       adopted.

        16                  The Secretary will now read

        17       Calendar Number 4.

        18                  THE SECRETARY:    Calendar Number

        19       4, by Senator Zeldin, Senate Print 1919,

        20       Concurrent Resolution of the Senate and

        21       Assembly proposing an amendment to Section 14

        22       of Article 3 of the Constitution.

        23                  SENATOR BRESLIN:    Explanation.

        24                  THE PRESIDENT:    Senator Zeldin,

        25       an explanation has been requested.



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         1                  SENATOR ZELDIN:    Thank you,

         2       Mr. President.

         3                  My colleagues, today we are taking

         4       the first steps in a desperately needed

         5       process to put the citizens back in control of

         6       our state's economic future.  No matter what

         7       your party, no matter what part of the state

         8       you come from, the message we have all heard

         9       from the voters are the same:  Taxes are too

        10       high.  Spending is too high.  Not all

        11       taxpayers have a voice in their government.

        12                  New York has lost its way.  The

        13       voters sent us here to represent them with the

        14       hope that we will work together to create a

        15       better direction for our state.  It's time to

        16       reestablish their confidence in us.

        17                  This concurrent resolution would

        18       amend the Constitution to institute a

        19       requirement of a two-thirds vote of the

        20       members elected to each branch of the State

        21       Legislature in order to pass any bill which

        22       increases, extends, imposes or revives any

        23       tax, fee, assessment, surcharge or any other

        24       such levy or collection.  Passage of this

        25       resolution will constitute first passage of



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         1       this amendment.  Whereafter, it will require

         2       passage by both houses in the next legislative

         3       session, and thereafter would be submitted to

         4       the voters.  If such amendment is approved and

         5       enacted, the result will be that any attempt

         6       to impose, increase, extend or revive a tax,

         7       fee, assessment, surcharge, or any other such

         8       tax levy or tax collection change will require

         9       a two-thirds vote in each house of the

        10       Legislature to pass.

        11                  The purpose of this amendment is

        12       clear.  In a state with some of the highest

        13       taxes in the country and the worst business

        14       climate in the country, this will reduce the

        15       growth in government spending.

        16                  Limiting the amount of revenue that

        17       government can collect will reduce the amount

        18       of money that government can spend.  It will

        19       compel us to do the difficult but necessary

        20       work of focusing on the most essential

        21       programs and services our citizens need and

        22       developing a tax system that generates

        23       adequate revenues for these needs without

        24       harming our economy.

        25                  I'm proud that this is a bipartisan



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         1       effort.  The amendment is sponsored in the

         2       other house by Democratic Assemblywoman RoAnn

         3       Destito, and I pledge to work with her to see

         4       that this two-thirds requirement is enacted.

         5                  Thomas Jefferson once said that a

         6       government that's big enough to give you

         7       everything you want is big enough to take away

         8       everything you have.  I believe our action in

         9       this Legislature today demonstrates to the

        10       public that we are serious about reducing the

        11       burdens on our taxpayers and are serious about

        12       both challenging and changing the way New York

        13       State operates.  I urge all my colleagues to

        14       join me in support of this measure.

        15                  Thank you, Mr. President.

        16                  THE PRESIDENT:    Senator Krueger.

        17                  SENATOR LIZ KRUEGER:    Thank you,

        18       Mr. President.  If through you the sponsor

        19       would yield to some questions.

        20                  THE PRESIDENT:    Will the Senator

        21       yield?

        22                  SENATOR ZELDIN:    I'd be happy to.

        23                  THE PRESIDENT:    The Senator

        24       yields.

        25                  SENATOR LIZ KRUEGER:    Thank you



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         1       so much, Mr. President.

         2                  Good morning, Senator Zeldin.  We

         3       haven't had a chance to meet yet, so welcome

         4       to the New York State Senate.  I suspect we're

         5       going to have many fun debates on the floor in

         6       the next session.

         7                  I'll start with a couple of

         8       questions about this bill.  Is it your

         9       understanding that this constitutional

        10       amendment would require that all budget bills,

        11       which almost always have increases,

        12       extensions, changes or revisions in

        13       revenue-raising provisions, that this

        14       constitutional amendment would apply to budget

        15       bills?

        16                  SENATOR ZELDIN:    Mr. President,

        17       yes.

        18                  SENATOR LIZ KRUEGER:    Thank you,

        19       Mr. President.  If through you the sponsor

        20       would continue to yield.

        21                  THE PRESIDENT:    Senator, will you

        22       yield?

        23                  SENATOR ZELDIN:    Be happy to.

        24                  THE PRESIDENT:    The Senator

        25       yields.



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         1                  SENATOR LIZ KRUEGER:    Thank you.

         2                  And again, it's a different

         3       constitutional amendment than the last debate

         4       we just had on the floor.  But again, I've

         5       done some checking out how it worked in other

         6       states when they went down this road.  Again,

         7       through constitutional amendment, just to

         8       emphasize, once we make this decision and we

         9       put it in our Constitution, we don't really

        10       get to reverse it.  Or not unless through an

        11       extraordinarily complex multiyear process.

        12                  So under this situation, if your

        13       constitutional amendment became the law of the

        14       land, and there would continue to be, I

        15       believe, good economic times and bad economic

        16       times, cycles where there were upticks and

        17       downturns, how would we adjust for that in the

        18       context of a supermajority, 41 out of 62

        19       Senators voting for some specific tax

        20       increase, potentially being mathematically

        21       impossible to accomplish in this chamber?  How

        22       would we adjust for the bad times?

        23                  SENATOR ZELDIN:    Mr. President, I

        24       believe that if there is a tax increase or fee

        25       that is that important, that we -- the



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         1       requirement of two-thirds of this body would

         2       be obtainable.  This isn't a requirement

         3       imposing a four-thirds requirement, it's a

         4       two-thirds requirement.  That leaves the power

         5       in this body to increase taxes if it wants to.

         6       It just makes it more difficult to just tax

         7       and spend freely, at will, in the ways that

         8       hurt the state.

         9                  SENATOR LIZ KRUEGER:    Thank you.

        10                  Through you, Mr. President, if the

        11       Senator would continue to yield.

        12                  THE PRESIDENT:    Senator, will you

        13       continue to yield?

        14                  SENATOR ZELDIN:    Yes,

        15       Mr. President.

        16                  THE PRESIDENT:    The Senator

        17       yields.

        18                  SENATOR LIZ KRUEGER:    Now, this

        19       question is a bit of an assumption that your

        20       constitutional amendment passed, as well as

        21       Senator Ranzenhofer's constitutional amendment

        22       on spending cap.

        23                  So to follow up with the question I

        24       asked about good economic times, bad economic

        25       times, and the need for government to be more



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         1       responsive in bad economic times, have greater

         2       ability to raise revenue in good economic

         3       times and be a smoother for the people of

         4       economic cycle realities.  So in the

         5       Ranzenhofer constitutional amendment, there's

         6       a limit of how much the state could actually

         7       keep for a rainy day fund.  We would have a

         8       constitutional obligation to return at least

         9       50 percent, in any given year, of unspent

        10       monies to the taxpayer, limiting our ability

        11       to save for the rainy day of bad economic

        12       times.

        13                  Now we layer that with, you're

        14       right, a supermajority, two-thirds.  So that

        15       would, under the current size of the Senate,

        16       require 41, I believe, of 62 Senators to vote

        17       for any specific bill.

        18                  Do you not see that there

        19       potentially is a conflict in planning in

        20       government of these two constitutional

        21       amendments becoming law together?

        22                  SENATOR ZELDIN:    No.

        23                  SENATOR LIZ KRUEGER:    Thank you.

        24       For the record, I disagree with you.

        25                  Mr. President, if through you the



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         1       sponsor would continue to yield.

         2                  THE PRESIDENT:    Senator, will you

         3       yield?

         4                  SENATOR ZELDIN:    Be happy to.

         5                  SENATOR LIZ KRUEGER:    Thank you.

         6                  Going back to my point about if

         7       budget bills are supermajority bills -- and

         8       you answered yes, they would be -- and we look

         9       at some of the states that do have

        10       supermajority rules on tax and revenue --

        11       although, again, your amendment would go

        12       further than most other states, I believe,

        13       with the exception of California, for covering

        14       all possible new revenue sources.  Do you see

        15       us having a problem with timely budgets,

        16       getting it all done by April 1st?

        17                  SENATOR ZELDIN:    No.

        18                  SENATOR LIZ KRUEGER:    Thank you,

        19       Mr. President.  If through you the sponsor

        20       would continue to yield.

        21                  THE PRESIDENT:    Senator, will you

        22       continue to yield?

        23                  SENATOR ZELDIN:    I'd be happy to.

        24                  SENATOR LIZ KRUEGER:    I recently

        25       looked very carefully at the California model,



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         1       where they have had a supermajority law in

         2       effect.  And again, they realized after an

         3       extended period of time that their state had

         4       enormous problems, far, far worse than

         5       anything we see here in New York.  Never being

         6       able to get their budget done -- I wouldn't

         7       even say on time, never being able to get

         8       their budget done.  Finding themselves in a

         9       much, much more drastic deficit situation than

        10       here in our state, actually having cities and

        11       counties potentially on the verge of

        12       bankruptcy, talking about having to pay their

        13       state workers with IOUs.

        14                  I think most people would agree

        15       California is to some degree the example

        16       everyone in state government throughout the

        17       country wakes up and says, Please, never let

        18       me wake up and be a California elected

        19       official.

        20                  California had this model.  The

        21       people actually rose up this year -- again,

        22       through an initiative and referendum vote,

        23       which we don't have the option of.  So if we

        24       became a state that had a supermajority rule

        25       for revenue in our Constitution, we again,



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         1       like my issue with the last constitutional

         2       amendment, we couldn't go back.  California

         3       went back.  Their voters said no, we're not

         4       going to continue this model, it has brought

         5       California to ruin.

         6                  Given what just happened with

         7       California, given the amount of research that

         8       has been produced over literally the last

         9       year, when this was such a hot debate in

        10       California, why do you think it's the right

        11       answer for New York given what we have learned

        12       about California?

        13                  SENATOR ZELDIN:    Mr. President, I

        14       would blame, first and foremost, a

        15       dysfunctional legislature in California for

        16       the taxing and spending problems.  As we've

        17       seen here in our own state, we shouldn't be

        18       following the models of what's going wrong

        19       around the country but maybe what is going on

        20       right.

        21                  I don't think that California's

        22       problems is that they're not taxing their

        23       residents enough.  The tax-and-spend ways of

        24       California in many ways are contributing to

        25       the problems of that state.



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         1                  There are 16 other states that have

         2       this constitutional amendment, California

         3       being just one.  And it's important that as we

         4       look at California -- well, I would have to

         5       say in my opinion it's not that California

         6       needs to drastically raise their own taxes and

         7       more borrowing and more spending to fix that

         8       state's economy.

         9                  I am focused on helping fix the

        10       New York State economy, and I would look at

        11       the responsibility, first and foremost,

        12       amongst the people that are in this

        13       Legislature and giving the right to the people

        14       that are in our state.  If our voters in

        15       New York State believe that we shouldn't have

        16       this constitutional amendment, it is in their

        17       power to vote no.  I want to give them that

        18       opportunity, and that's why I proposed this

        19       bill.

        20                  SENATOR LIZ KRUEGER:    Thank you,

        21       Mr. President.  If through you the Senator

        22       would continue to yield.

        23                  THE PRESIDENT:    Senator, will you

        24       yield?

        25                  SENATOR ZELDIN:    Yes.



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         1                  THE PRESIDENT:    The Senator

         2       yields.

         3                  SENATOR LIZ KRUEGER:    Senator

         4       Zeldin, I think you and I share a mutual goal

         5       for the State of New York, I think we're just

         6       disagreeing on how we get there.

         7                  In your constitutional amendment --

         8       and you answered the question about having to

         9       have a supermajority for budget bills because

        10       a supermajority for all state revenue bills.

        11       Does your constitutional amendment also apply

        12       to the Legislature requiring supermajority

        13       votes on any local tax proposals that come to

        14       us?

        15                  As we know, other than the property

        16       tax, counties and municipalities have to come

        17       to us for a vote on every single revenue item

        18       for themselves.  Would the supermajority rule

        19       apply to these bills as well?

        20                  SENATOR ZELDIN:    Mr. President,

        21       we're only giving the locals the option.  And

        22       in that case, it's up to them.

        23                  SENATOR LIZ KRUEGER:    I'm sorry,

        24       I couldn't hear, Mr. President.  If the

        25       sponsor could repeat himself.



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         1                  THE PRESIDENT:    Would you repeat

         2       your answer, please.

         3                  SENATOR ZELDIN:    We are giving

         4       the local governments the option.  So as far

         5       as giving them the option, it's up to the

         6       local voters to decide whether or not to

         7       increase taxes.

         8                  SENATOR LIZ KRUEGER:    Mr.

         9       President, may I ask another question of the

        10       sponsor, please.

        11                  THE PRESIDENT:    Senator, will you

        12       yield?

        13                  SENATOR ZELDIN:    I'd be happy to.

        14                  THE PRESIDENT:    The Senator

        15       yields.

        16                  SENATOR LIZ KRUEGER:    Thank you.

        17                  Having heard the answer, I'm afraid

        18       I don't understand it.  We're giving them the

        19       option to say we're sending you a local tax

        20       bill, and we're saying do it by supermajority

        21       versus not supermajority?  Was that the

        22       answer?

        23                  SENATOR ZELDIN:    It will not

        24       apply to local governments.  We are only

        25       giving them the option, and it's the local



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         1       governments that are able to vote.

         2                  But if I understand your question

         3       correctly, you're asking whether or not it's a

         4       supermajority vote or a majority vote.  And

         5       it's a majority vote.  It's up to the voters

         6       of the local governments to decide whether or

         7       not to impose it.

         8                  SENATOR LIZ KRUEGER:    Mr.

         9       President, if through you I could continue to

        10       question the sponsor.

        11                  THE PRESIDENT:    Senator, will you

        12       yield again?

        13                  SENATOR ZELDIN:    Be happy to.

        14                  THE PRESIDENT:    The Senator

        15       yields.

        16                  SENATOR LIZ KRUEGER:    Thank you.

        17                  I'm sorry if I'm having trouble

        18       understanding.  Let's say a sales tax.  We

        19       have, almost yearly, a process where counties

        20       send us requests for a sales tax increase.

        21       They can't do it without coming to us.  They

        22       can't pass almost any kind of revenue-raiser

        23       for themselves without coming to us.  And I

        24       don't believe there was anything in this

        25       constitutional amendment that changed that.



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         1                  So the locality can decide they

         2       don't want to ask us to raise their sales tax

         3       or ask us not to raise something else they

         4       traditionally have come to us.  I understand

         5       that.  But if they want to raise their

         6       taxes -- let me rephrase.  Nobody ever wants

         7       to raise their taxes.  If they need to balance

         8       their budgets through a revenue increase, they

         9       do have to currently come to us.  I don't see

        10       anything in your constitutional amendment that

        11       would change that reality.

        12                  So where would the option come as

        13       to whether we treated their tax and revenue

        14       proposals as an option, a supermajority or

        15       not?

        16                  SENATOR ZELDIN:    This bill does

        17       not affect your hypothetical.  So I'm trying

        18       to answer your hypothetical.  And because it

        19       does not affect your hypothetical, it's still

        20       a majority vote.  We're giving the option to

        21       the local voters to vote on it.

        22                  SENATOR LIZ KRUEGER:    Mr.

        23       President, if through you I could continue to

        24       ask a question of the Senator.

        25                  THE PRESIDENT:    Senator, will you



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         1       yield?

         2                  SENATOR ZELDIN:    Yes, I will.

         3                  THE PRESIDENT:    The Senator

         4       yields.

         5                  SENATOR LIZ KRUEGER:    But just to

         6       continue my train of thought, let me just --

         7       not a question, first -- make a statement.

         8                  I actually don't think that is what

         9       the constitutional amendment's impact would

        10       be.  I believe, as I read it, it would require

        11       us to do local tax bills as supermajority.

        12                  So in light of our disagreement on

        13       that, which is okay, have you gotten an

        14       opinion from the Attorney General about what

        15       will this constitutional amendment would do,

        16       what the impact would be, and how broad its

        17       interpretation would be constitutionally?

        18       Because that is a role of the Attorney General

        19       on constitutional amendments.

        20                  SENATOR ZELDIN:    Mr. President,

        21       the Attorney General is aware of the bill.  As

        22       I'm sure you know, he has 20 days to offer an

        23       opinion.  He has not offered an opinion.  Due

        24       to the 1951 advisory opinion of the Attorney

        25       General at that time, this body is authorized



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         1       to act.  Our Attorney General has not provided

         2       an opinion, but our body is going forward with

         3       the proposal today.

         4                  SENATOR LIZ KRUEGER:    Mr.

         5       President, if through you the sponsor would

         6       continue to yield to one more question.

         7                  THE PRESIDENT:    Senator, would

         8       you yield to one more question?

         9                  SENATOR ZELDIN:    I'd be happy to.

        10                  SENATOR LIZ KRUEGER:    Thank you

        11       very much.  See, I told you this was fun.

        12                  I do politely argue that we should

        13       really wait for the Attorney General to give

        14       us his response before this august body

        15       decides to vote on something, again, so

        16       dramatic in its impact on the State of

        17       New York.  We have no rush to have to do this.

        18       Obviously, we know it requires votes in both

        19       houses in two different sessions of the Senate

        20       and Assembly.  We are only in our first couple

        21       of weeks of the beginning of this, the first

        22       of two sessions.  And of course starting in a

        23       week and a half, we delve into budget and need

        24       to deal with all these issues absent an actual

        25       passage or not passage of a constitutional



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         1       amendment.

         2                  So I would urge everyone, think

         3       about why we maybe want to wait to find out

         4       the Attorney General's opinion.  But that's

         5       not my question.

         6                  Would your constitutional amendment

         7       impact the passage of tax expenditure or

         8       credit bills which reduced revenue through the

         9       tax system to the State of New York, a la

        10       Senator Alesi's earlier bill that we debated

        11       on this floor?  Or does it apply to all

        12       revenue for the State of New York, including

        13       tax credits and expenditures, having to be

        14       passed through supermajority?

        15                  SENATOR ZELDIN:    First, to answer

        16       your question, the answer is no.

        17                  But to clarify one thing with

        18       regard to your statement involving the

        19       Attorney General, we have provided him with

        20       the bill.  He has declined to give us an

        21       opinion.  And I can only speak for myself.  I

        22       was elected to represent the people of the

        23       Third Senate District.  I work for them and

        24       not the New York State Attorney General.  And

        25       I'm not going to wait for him to come up with



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         1       an opinion at some hypothetical time in the

         2       future.

         3                  He was given the opportunity, he's

         4       declined to give us an opinion and we should

         5       go forward on our own independently,

         6       representing the voters of your districts as I

         7       want to do with mine.

         8                  SENATOR LIZ KRUEGER:    Mr.

         9       President, on the bill.

        10                  THE PRESIDENT:    Senator Krueger,

        11       on the resolution.

        12                  SENATOR LIZ KRUEGER:    Thank you

        13       very much.  I appreciate the sponsor's

        14       patience and back-and-forth dialogue.

        15                  I think he's right, none of us work

        16       for the Attorney General.  We are elected by

        17       our constituents to represent the interests of

        18       them and, I would argue, all 19 million

        19       New Yorkers.  We are also obligated to follow

        20       the Constitution of the State of New York and

        21       I hope take it very, very seriously when and

        22       if we make a decision to amend the

        23       Constitution of the great State of New York.

        24                  The Constitution actually gives the

        25       Attorney General the structure by which to



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         1       help us evaluate the constitutionality of any

         2       actions we take in the Legislature, and in

         3       fact is there to help guide us to understand

         4       what the intended and perhaps unintended

         5       consequences are of making dramatic changes in

         6       our Constitution.

         7                  So I'm not suggesting any of us

         8       work for the Attorney General.  But speaking

         9       only for myself, I'd very much like to make

        10       sure that if we're going to change our great

        11       Constitution for the great New York State,

        12       that we know we are in fact meeting

        13       constitutional responsibilities and not having

        14       bill language that may not in fact reflect the

        15       impact that it would actually have on our

        16       Constitution.

        17                  Because again, once you change the

        18       Constitution, you don't get a fix-it

        19       opportunity, as we do on the floor of the

        20       Legislature when we can amend bills over and

        21       over again.

        22                  I'm particularly concerned about

        23       the last answer to my last question.  This

        24       would apply to raising revenue and creating

        25       new streams of revenue, but this wouldn't



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         1       apply to tax expenditures and credits when we

         2       would be reducing revenue to the State of

         3       New York.  It particularly concerns me that we

         4       wouldn't have to meet the same obligation to

         5       not look at cutting revenue to the State of

         6       New York.

         7                  Because in light of the

         8       constitutional amendment on a spending cap,

         9       where the options for increasing revenue by

        10       definition would be now limited by a

        11       supermajority and by a maximum cap per year,

        12       the concept that we could continue to reduce

        13       revenue to the State of New York willy-nilly,

        14       so to speak, by creating additional tax

        15       expenditures and credits -- which historically

        16       have been the fodder of special-interest

        17       lobbyists to make sure they get their deals in

        18       through the Legislature, usually without a lot

        19       of attention paid, usually not within the

        20       context of a broader budget discussion.

        21                  And now, through these two

        22       constitutional amendments, if they became law,

        23       we would be tying our hands for revenue and

        24       spending but not for giving deals to special

        25       interests.  I think fundamentally, on that



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         1       issue alone, I would have a problem voting for

         2       this constitutional amendment.

         3                  But I don't need to stop there.

         4       Because again, it's nice to believe we're not

         5       as dysfunctional as California, we're not as

         6       likely to shift into gridlock, we're not as

         7       likely to fall into chaos with greater and

         8       greater deficits.  But our history here in

         9       New York isn't that good either.  We just

        10       haven't gone down the road that California

        11       went, because we don't have a two-thirds

        12       supermajority requirement on revenue.

        13                  And I would argue, especially given

        14       our history, the current realities, our

        15       bipartisan commitment to work with a new

        16       Governor to fix the problems and get things

        17       done the right way, this is absolutely,

        18       absolutely the wrong time in history for

        19       New York State to choose to voluntarily make

        20       the mistakes of other states.

        21                  I emphatically urge my colleagues

        22       for a no vote on this bill today.

        23                  Thank you, Mr. President.

        24                  THE PRESIDENT:    Thank you,

        25       Senator Krueger.



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         1                  Senator Bonacic.

         2                  SENATOR BONACIC:    Thank you,

         3       Mr. President.

         4                  I would just like to thank Senator

         5       Alesi and Senator Ranzenhofer and Senator

         6       Zeldin for delivering the message of the

         7       Republican Majority this year.

         8                  The past two years have been brutal

         9       in terms of excess spending and excess taxes

        10       when middle-class families were struggling

        11       with high unemployment and people were losing

        12       their houses.  The attitude towards small

        13       businesses was actually hostile, a hostile

        14       environment.

        15                  And our message today, by three

        16       Senators and my colleagues for the resolutions

        17       that they're putting forward, are very simple.

        18       Taxpayers need protection from what has

        19       happened these past two years.

        20                  Now, I don't fear a constitutional

        21       amendment because I respect the wisdom of the

        22       people.  They're going to vote.  If they think

        23       it's in their best interests, they'll vote for

        24       it.  If they made a mistake, there will be

        25       another constitutional amendment and they'll



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         1       change it.

         2                  But remember, we represent the

         3       people.  They are our bosses.  We're not

         4       smarter than them.  And we should always

         5       respect the wisdom of the people.  So all this

         6       fear about constitutional amendments and we're

         7       smarter than the people to do the right

         8       thing -- they're paying our salary.  They're

         9       paying for all these programs.  So believe me,

        10       we should trust them.  Because we're all still

        11       here, they trust you to keep being their voice

        12       for the next two years.

        13                  As to job creation, there is a

        14       philosophy that is going on in this country

        15       that is a clash.  Where are we going with

        16       America?  Are we going to be an entitlement

        17       culture?  Are we going tax and spend more and

        18       let government control our lives?  Or are we

        19       going empower individuals, empower people and

        20       small businesses to create wealth, make them

        21       our partners, be friendly with them and let

        22       them lead the way?

        23                  And I believe that's the way to go.

        24       That's the way our conference believes.  So we

        25       want to be more friendly to business.  We want



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         1       more tax credits.  We want to help our

         2       partners, unlike the attitude and the policies

         3       we've seen in the last two years.

         4                  Now, on Senator Alesi's resolution,

         5       there were many of my colleagues on the other

         6       side of the aisle that voted yes.  And I thank

         7       you for that, for learning from your mistakes

         8       and trying a different way.

         9                  I saw on Senator Ranzenhofer's

        10       resolution there were more nos, because of

        11       fear of the Constitution.  And I would hope,

        12       on Senator Zeldin's resolution, we all get

        13       behind him to support the taxpayers because we

        14       all trust the wisdom of the people.

        15                  We have tough challenges ahead of

        16       us, whether you're in the majority or whether

        17       we're in the majority.  We have challenges.

        18       We have to work together and take the best

        19       minds that we have here to get us out of this

        20       fiscal crisis.  I think our Governor is right

        21       on with this drastic talk, because we are at

        22       the cliff and there will be no tomorrow if we

        23       don't get our house in order.

        24                  Thank you very much, Mr. President.

        25       I support Senator Zeldin's resolution, and I



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         1       thank him.

         2                  THE PRESIDENT:    Thank you,

         3       Senator.

         4                  Any other Senators wishing to be

         5       heard on this resolution?  Senator Kruger.

         6                  SENATOR CARL KRUGER:    Thank you,

         7       Mr. President.

         8                  Through you, Mr. President, would

         9       Senator Zeldin yield for a question?

        10                  THE PRESIDENT:    Senator, would

        11       you yield?

        12                  SENATOR ZELDIN:    Yes,

        13       Mr. President.

        14                  SENATOR CARL KRUGER:    Thank you

        15       so much.

        16                  The issue of the Attorney General

        17       having this resolution for study, review and

        18       comment, how long has he had it?

        19                  SENATOR ZELDIN:    Mr. President, I

        20       believe it was Friday.

        21                  SENATOR CARL KRUGER:    Friday.

        22       And today being Wednesday.  So he's had two

        23       working days to review it and to issue an

        24       opinion.  Is that -- through you,

        25       Mr. President.



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         1                  THE PRESIDENT:    Senator, do you

         2       yield for a question?

         3                  SENATOR ZELDIN:    I would yield.

         4                  SENATOR CARL KRUGER:    Thank you.

         5                  So then he's had two working days

         6       to review it and issue an opinion?  That's my

         7       question.  Is that correct?

         8                  SENATOR ZELDIN:    He's had it

         9       since Friday.  However you want to break it

        10       down with holidays and weekends, he's had it

        11       since Friday, Mr. President.

        12                  SENATOR CARL KRUGER:    So that's

        13       two working days, not including today, in

        14       order to have formed an opinion.

        15                  Now, through you, Mr. President,

        16       one other question.

        17                  THE PRESIDENT:    Senator, one more

        18       question, do you yield?

        19                  SENATOR ZELDIN:    I'm happy to

        20       yield.

        21                  THE PRESIDENT:    The Senator

        22       yields.

        23                  SENATOR CARL KRUGER:    Thank you

        24       again, Senator.

        25                  The Judiciary budget, does your



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         1       resolution include the Judiciary budget?

         2                  SENATOR ZELDIN:    Mr. President,

         3       I'm not aware of the Judiciary budget

         4       increasing taxes.  If the Judiciary budget was

         5       going to increase taxes, it would be my intent

         6       that it would be included.  But I'm not aware

         7       of the Judiciary budget increasing taxes.

         8                  SENATOR CARL KRUGER:    Thank you,

         9       Senator.

        10                  Through you again, Mr. President,

        11       Senator Zeldin, do you continue to yield?

        12                  THE PRESIDENT:    Senator?

        13                  SENATOR ZELDIN:    I'd be happy to.

        14                  THE PRESIDENT:    The Senator

        15       yields.

        16                  SENATOR CARL KRUGER:    Thank you.

        17                  The Judiciary budget includes a

        18       substantial list of fees.  Are fees included

        19       in your resolution?

        20                  SENATOR ZELDIN:    Yes.

        21                  SENATOR CARL KRUGER:    So

        22       consequently we would say that we would need a

        23       supermajority -- or, in the alternative, that

        24       the issue of fees to the court system could be

        25       virtually hijacked by twenty Senators in this



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         1       room.  Is that correct?

         2                  SENATOR ZELDIN:    Mr. President,

         3       it would apply to new fees.

         4                  SENATOR CARL KRUGER:    It would

         5       apply to new fees.

         6                  Again, through you, Mr. President.

         7       So what about increases in fees?

         8                  THE PRESIDENT:    Senator, do you

         9       yield?

        10                  SENATOR ZELDIN:    I'd be happy to

        11       yield.

        12                  SENATOR CARL KRUGER:    Thank you.

        13                  What about increases in fees?

        14                  SENATOR ZELDIN:    That would be

        15       included.

        16                  SENATOR CARL KRUGER:    Again, so

        17       that I can understand this, we can all

        18       understand it, through you, Mr. President, if

        19       the Senator would continue to yield.

        20                  THE PRESIDENT:    Senator, do you

        21       yield?

        22                  SENATOR ZELDIN:    I'm happy to

        23       yield.

        24                  THE PRESIDENT:    The Senator

        25       yields.



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         1                  SENATOR CARL KRUGER:    Thank you.

         2       So that I can understand this, in simple

         3       terms, your resolution applies to all branches

         4       of government, including the Judiciary?

         5                  SENATOR ZELDIN:    Mr. President,

         6       if -- as far as the budget goes -- and the

         7       language of the bill is very simple.  And

         8       regardless of how that new tax or that fee is

         9       packaged, where it's coming from, just to be

        10       very clear, the two-thirds requirement is

        11       going to apply to any tax, fee, assessment,

        12       surcharge or any other such levy or collection

        13       with regards to increasing, extending or

        14       reviving, as I said in the language.

        15                  So I could be asked dozens and

        16       dozens of more questions about hypothetical

        17       sources of new taxes and fees, and my answer

        18       to every question is going to be yes, if it

        19       fits inside this language, whether it comes

        20       from the Judiciary budget or some state

        21       agency, to answer all the other hypotheticals

        22       that may be out there, the answer very simply

        23       is yes.

        24                  SENATOR CARL KRUGER:    Thank you,

        25       Senator.



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         1                  Again, for the final question.

         2       Through you, Mr. President.

         3                  THE PRESIDENT:    Senator, do you

         4       yield for one more question?

         5                  SENATOR ZELDIN:    I'd be happy to.

         6                  SENATOR CARL KRUGER:    A big issue

         7       facing this state is the issue of

         8       hydrofracking.  Are you aware of that?

         9                  SENATOR ZELDIN:    Yes.

        10                  SENATOR CARL KRUGER:    And one of

        11       the issues in terms of that is the regulation

        12       and control by DEC of that process.  Are you

        13       aware of that?

        14                  SENATOR ZELDIN:    Yes.

        15                  SENATOR CARL KRUGER:    And again

        16       through you, Mr. President, if the Senator

        17       would continue to yield.

        18                  THE PRESIDENT:    Senator, will you

        19       yield again?

        20                  SENATOR ZELDIN:    I'd be happy to

        21       yield.

        22                  SENATOR CARL KRUGER:    So,

        23       Senator, one of the proposals -- in fact, the

        24       legislation calls for that those that would be

        25       doing the drilling would have to pay



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         1       substantial fees in order to fund a DEC

         2       special fund to control and to monitor

         3       hydrofracking.  Would this be included in your

         4       resolution?

         5                  SENATOR ZELDIN:    If it's going to

         6       be a statute that's going through this body,

         7       then the answer would be yes.  If it's a

         8       regulatory fee, the answer would be no.

         9                  SENATOR CARL KRUGER:    As a

        10       corollary to that question, again, through

        11       you, Mr. President, if the Senator would

        12       continue to yield.

        13                  THE PRESIDENT:    Senator?

        14                  SENATOR ZELDIN:    I'd be happy to

        15       yield.

        16                  THE PRESIDENT:    Senator Libous,

        17       why do you rise?

        18                  SENATOR LIBOUS:    Since I happen

        19       to know about a lot about hydrofracking

        20       because it's in my district, and I would like

        21       to be very fair, if Senator C. Kruger would

        22       like to address any of those any of those

        23       questions to me, I'd be happy to help out.

        24       Because hydrofracking is a very important

        25       issue that's facing the state, and I do know a



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         1       little bit about it.

         2                  SENATOR CARL KRUGER:    I

         3       appreciate that.  And I will offer the

         4       question up to you in a moment if I could just

         5       ask Senator Zeldin to respond.

         6                  SENATOR LIBOUS:    Thank you,

         7       Mr. President.

         8                  SENATOR CARL KRUGER:    The

         9       legislation that would in fact empower

        10       hydrofracking includes that provision.  Would

        11       your resolution interfere with that process?

        12                  SENATOR ZELDIN:    Respectfully,

        13       I'd like to yield to Senator Libous.  Two

        14       minutes.

        15                  SENATOR CARL KRUGER:    Okay, thank

        16       you.

        17                  THE PRESIDENT:    Senator Libous.

        18                  SENATOR LIBOUS:    Thank you,

        19       Mr. President.  Thank you, Senator Zeldin.

        20                  Senator Kruger, it wouldn't.  It

        21       all depends on what the Legislature decides to

        22       do when it comes to that issue.  The

        23       department, the department could impose,

        24       through regulation, fees that would address

        25       the companies that are going to do the



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         1       drilling or the fracking.

         2                  None of those issues have been

         3       established at this point in time because

         4       obviously we do not permit for hydrofracking

         5       because of a moratorium that was passed in

         6       this house and in the other house.

         7                  This resolution, this resolution

         8       would only affect those tax increases that the

         9       Senator had talked about.  It would not have a

        10       negative effect on any departmental fees or

        11       anything that the governor decides to put in

        12       the budget as a fee, just like they do now.

        13                  No, it wouldn't have an effect.

        14                  SENATOR CARL KRUGER:    Again,

        15       Mr. President, if the Senator would yield for

        16       a question.

        17                  THE PRESIDENT:    Senator Libous,

        18       would you yield.

        19                  SENATOR LIBOUS:    Mr. President, I

        20       would be honored to.

        21                  THE PRESIDENT:    The Senator

        22       yields.

        23                  SENATOR CARL KRUGER:    Without

        24       being the expert that you are on the issue,

        25       I'm just trying to understand --



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         1                  SENATOR LIBOUS:    I didn't say I

         2       was an expert, Senator.  I said I knew a

         3       little bit about it.

         4                  SENATOR CARL KRUGER:    Well, okay.

         5       That makes you an expert as far as I'm

         6       concerned.

         7                  Firstly, that bill was vetoed, am I

         8       correct?

         9                  SENATOR LIBOUS:    Yes, it was.

        10       But then there was an executive order by

        11       Governor Paterson, Mr. President, that put a

        12       moratorium on any fracking.  And I believe --

        13       and I don't want to speak for Governor

        14       Cuomo -- I believe he also carried out that

        15       order until he could take a look at the issue.

        16                  SENATOR CARL KRUGER:    Okay.

        17       Thank you very much, Senator.  Thank you.

        18                  THE PRESIDENT:    Thank you,

        19       Senator.

        20                  Any other Senators wishing to be

        21       heard on this resolution?

        22                  (No response.)

        23                  THE PRESIDENT:    The debate is

        24       closed, and the Secretary will now ring the

        25       bell that is not functioning today.



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         1                  (Pause.)

         2                  THE PRESIDENT:    If the Senators

         3       will take their seats, we'll get ready to

         4       vote.

         5                  The Secretary will now call the

         6       roll on the resolution.

         7                  (The Secretary called the roll.)

         8                  THE PRESIDENT:    Senator Young, to

         9       explain her vote.

        10                  SENATOR YOUNG:    Thank you,

        11       Mr. President.

        12                  Historically, New York State has

        13       prided itself on being a leader, a leader in

        14       innovation, a leader in technology, a leader

        15       in opportunity and prosperity.  We were number

        16       one.  We were the Empire State.

        17                  Unfortunately, right now, we are

        18       the leader for all the wrong reasons.  We are

        19       the leader in the country for having the

        20       heaviest tax burden.  We are the leader in

        21       spending.  We spend more on Medicaid, we spend

        22       more on education, and we get poor results

        23       despite all of that spending.  We are number

        24       one in people fleeing this state because of

        25       the heavy tax burden.  We are number one in



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         1       having the worst business climate in the

         2       country.  Right now we are number 50 out of

         3       50 states.

         4                  That has to change.  And now we do

         5       have that opportunity to change that.  So I

         6       want to thank my colleagues, Senator Zeldin,

         7       Senator Ranzenhofer, Senator Alesi, for having

         8       the foresight and the tenacity to put in this

         9       legislation, because we can lead the way as a

        10       state once again.

        11                  These are all things that our new

        12       Governor has spoken about.  These are things

        13       that he has prioritized.  And so now is the

        14       time to seize this moment.  Now is the time to

        15       change our business climate, to get people

        16       back to work, to have career opportunities so

        17       that our young people will not have to leave

        18       after they graduate just to find a job.

        19                  And by putting in place these types

        20       of measures -- a job growth program, putting

        21       in place a two-thirds majority in order to

        22       raise taxes, putting in place a constitutional

        23       spending cap -- then we can restore hope,

        24       opportunity and prosperity to the state again,

        25       to the people of this state.  That's our



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         1       responsibility.  We should be accountable to

         2       the people.  And I will be voting yes.

         3                  Thank you, Mr. President.

         4                  THE PRESIDENT:    Senator Young in

         5       the affirmative.

         6                  The Secretary will now announce the

         7       results.

         8                  THE SECRETARY:    Those recorded in

         9       the negative on Calendar Number 4 are Senators

        10       Adams, Diaz, Espaillat, Gianaris,

        11       Hassell-Thompson, Huntley, L. Krueger,

        12       C. Kruger, Montgomery, Oppenheimer, Parker,

        13       Peralta, Perkins, Rivera, Sampson, Serrano,

        14       Squadron, Stavisky and Stewart-Cousins.

        15                  Ayes, 41.  Nays, 19.

        16                  THE PRESIDENT:    The resolution is

        17       adopted.

        18                  (Applause.)

        19                  THE PRESIDENT:    Senator Libous,

        20       that completes the controversial reading of

        21       the calendar.

        22                  SENATOR LIBOUS:    Mr. President,

        23       thank you.

        24                  And Senator Zeldin,

        25       congratulations -- could we have some order?



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         1       Could we have some order in the chamber?

         2                  THE PRESIDENT:    (Gaveling.)

         3                  SENATOR LIBOUS:    Senator Zeldin,

         4       congratulations for passing your first bill.

         5       I'm sure there will be many more.

         6                  (Applause.)

         7                  SENATOR LIBOUS:    Is there any

         8       other business at the desk?

         9                  THE PRESIDENT:    There is none.

        10                  SENATOR LIBOUS:    Mr. President, I

        11       now hand up the following committee

        12       assignments and ask that such assignments be

        13       filed in the Journal.

        14                  THE PRESIDENT:    So ordered.

        15                  Senator Libous.

        16                  SENATOR LIBOUS:    Mr. President, I

        17       would also like to hand up the following

        18       committee assignments.  Senator Skelos, in

        19       consultation with Senator Sampson, has some

        20       additional assignments to hand up, and I ask

        21       that they be filed.

        22                  THE PRESIDENT:    So ordered.

        23                  Senator Libous.

        24                  SENATOR LIBOUS:    Mr. President, I

        25       believe Senator Hassell-Thompson would like to



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         1       be recognized.

         2                  THE PRESIDENT:    Senator

         3       Hassell-Thompson.

         4                  SENATOR HASSELL-THOMPSON:    Thank

         5       you, Mr. President.

         6                  I would just like to announce that

         7       immediately following session there will be a

         8       Democratic conference meeting, immediately.

         9                  Thank you.

        10                  THE PRESIDENT:    Immediately after

        11       session, there will be a Democratic

        12       conference.

        13                  Senator Libous.

        14                  SENATOR LIBOUS:    Mr. President,

        15       there being no further business, I move we

        16       adjourn until Monday, January 24th, at

        17       3:00 p.m., intervening days being legislative

        18       days.

        19                  THE PRESIDENT:    On motion, the

        20       Senate stands adjourned until Monday,

        21       January 24th, at 3:00 p.m., intervening days

        22       being legislative days.

        23                  (Whereupon, at 1:40 p.m., the

        24       Senate adjourned.)

        25



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