Joint Legislative Public Hearing on 2016-2017 Executive Budget Proposal: Topic "Local Government Officials/ General Government" - Testimonies

budget

Hearing Event Notice:
http://www.nysenate.gov/newsroom/articles/catharine-young/joint-legislative-public-hearing-2016-2017-executive-budget-1

Archived Video:
https://www.youtube.com/watch?v=kwTpiO6zMWI

_______________________

Hearing Transcript:

                                                                 1
 
    BEFORE THE NEW YORK STATE SENATE FINANCE
    AND ASSEMBLY WAYS AND MEANS COMMITTEES
    ----------------------------------------------------
 
            JOINT LEGISLATIVE HEARING
 
               In the Matter of the
            2016-2017 EXECUTIVE BUDGET
          ON LOCAL GOVERNMENT OFFICIALS/
                GENERAL GOVERNMENT
    
    ----------------------------------------------------
 
    
                             Hearing Room B                                                    
                             Legislative Office Building
                             Albany, New York
    
                             January 26, 2016
                             10:10 a.m.
    
 
    PRESIDING:
 
             Senator Catharine M. Young 
             Chair, Senate Finance Committee
    
             Assemblyman Herman D. Farrell, Jr.
             Chair, Assembly Ways & Means Committee
    
    PRESENT:
 
             Senator Liz Krueger 
             Senate Finance Committee (RM)
    
             Assemblyman Robert Oaks
             Assembly Ways & Means Committee (RM)
    
             Assemblyman Michael Benedetto
             Chair, Assembly Cities Committee
    
             Senator Kathleen A. Marchione
             Chair, Senate Committee on Local Government
    
             Assemblyman William Magnarelli 
             Chair, Assembly Local Governments Committee
    
    
 
                                                                2
 
 1  2016-2017 Executive Budget
    Local Government Officials/
 2  General Government
    1-26-16
 3  
    
 4  PRESENT:  (Continued)
    
 5           Assemblyman Michael J. Cusick
    
 6           Senator Andrew J. Lanza
    
 7           Senator Tony Avella
    
 8           Senator Diane Savino
    
 9           Assemblyman David Weprin
    
10           Assemblywoman Catherine T. Nolan
    
11           Assemblyman Jeffrion L. Aubry
    
12           Senator Gustavo Rivera
    
13           Senator Martin Golden
    
14           Assemblyman James F. Brennan
    
15           Senator Adriano Espaillat
    
16           Assemblywoman Rebecca Seawright
    
17           Assemblywoman Latrice Walker
    
18           Senator Ruben Diaz 
    
19           Assemblywoman Nily Rozic
    
20           Assemblyman Felix Ortiz
    
21           Senator Brad Hoylman
    
22           Assemblyman Luis Sepulveda
    
23           Senator Timothy Kennedy
    
24           Assemblywoman Rodneyse Bichotte
    
 
                                                                3
 
 1  2016-2017 Executive Budget
    Local Government Officials/
 2  General Government
    1-26-16
 3  
    
 4  PRESENT:  (Continued)
    
 5           Senator Andrea Stewart-Cousins
    
 6           Assemblyman Keith L. Wright
    
 7           Assemblyman David F. Gantt
    
 8           Senator Bill Perkins
    
 9           Senator Daniel Squadron
    
10           Assemblyman Christopher S. Friend
    
11           Assemblyman John T. McDonald, III
    
12           Senator Roxanne J. Persaud
    
13           Assemblywoman Shelley Mayer
    
14           Assemblywoman Patricia Fahy  
    
15           Assemblyman Joseph D. Morelle
    
16           Senator Jesse Hamilton
    
17           Assemblyman Steven Otis
    
18           Assemblyman William Colton
    
19           Assemblywoman Jo Anne Simon
    
20           Senator Phil Boyle
    
21           Assemblywoman Nicole Malliotakis
    
22           Assemblywoman Diana C. Richardson
    
23           Assemblyman Joseph S. Saladino
    
24           Assemblywoman Annette Robinson
    
 
                                                              4
 
 1  2016-2017 Executive Budget
    Local Government Officials/
 2  General Government
    1-26-16
 3  
    
 4  PRESENT:  (Continued)
    
 5           Senator John A. DeFrancisco
    
 6           Assemblywoman Jane L. Corwin
    
 7           Assemblyman David Buchwald
    
 8           Assemblyman J. Gary Pretlow
    
 9           Assemblyman Matthew Titone
    
10           Assemblyman Charles Barron
    
11           Assemblyman James Skoufis
    
12           Assemblyman Mark Gjonaj
    
13           Assemblywoman Crystal D. Peoples-Stokes
    
14  
    
15  
    
16                   LIST OF SPEAKERS
    
17                                   STATEMENT QUESTIONS
    
18  Honorable Bill de Blasio 
    Mayor 
19  City of New York                       9         40
    
20  Scott M. Stringer 
    Comptroller 
21  City of New York                     284        299
    
22  Honorable Byron W. Brown
    Mayor 
23  City of Buffalo                      351        363
    
24  
    
 
                                                                 5
 
 1  2016-2017 Executive Budget
    Local Government Officials/
 2  General Government
    1-26-16
 3  
    
 4                     LIST OF SPEAKERS, Cont. 
    
 5                                  STATEMENT  QUESTIONS
    
 6  
    Honorable Kathy M. Sheehan
 7  Mayor
    City of Albany                       394       408
 8  
    Honorable Lovely A. Warren
 9  Mayor 
    City of Rochester                    437       443
10  
    Honorable Mike Spano
11  Mayor
    City of Yonkers                      463       473
12  
    Honorable Stephanie A. Miner
13  Mayor
    City of Syracuse                     493       502
14  
    Honorable Patrick Madden
15  Mayor
    City of Troy                         511       518
16  
    Stephen J. Acquario
17  Executive Director
    New York State Association
18   of Counties                         525       539
    
19  Peter A. Baynes
    Executive Director
20  NYS Conference of Mayors
     and Municipal Officials             554       564
21  
    Gerry Geist
22  Executive Director
    Andrea Nilon, President 
23  Bill Moehle, Exec. Committee
    Association of Towns of
24   the State of New York               574
    
 
                                                                  6
 
 1                 CHAIRMAN FARRELL:  Good morning.  
 
 2          Today we begin the third in a series of 
 
 3          hearings conducted by the joint fiscal 
 
 4          committees of the Legislature regarding the 
 
 5          Governor's proposed budget for the fiscal 
 
 6          year 2016-2017.  The hearings are conducted 
 
 7          pursuant to Article 7, Section 3 of the 
 
 8          Constitution, and Article 2, Section 31 and 
 
 9          32A of the Legislative Law.
 
10                 Today the Assembly Ways and Means 
 
11          Committee and the Senate Finance Committee 
 
12          will hear testimony concerning the budget 
 
13          proposal for local government officials and 
 
14          general government.
 
15                 I will now introduce members from the 
 
16          Assembly.  Senator Young, chair of Senate 
 
17          Finance, will introduce members from the 
 
18          Senate.
 
19                 We've been joined by Assemblyman 
 
20          Weprin, Assemblywoman Bichotte, Assemblyman 
 
21          Aubry, Assemblyman Cusick, Assemblywoman 
 
22          Nolan, Assemblyman Colton, Assemblyman Otis, 
 
23          Assemblyman McDonald, Assemblyman Wright, 
 
24          Assemblywoman Richardson, Assemblywoman 
 
 
                                                                  7
 
 1          Robinson, Assemblyman Brennan, Assemblyman 
 
 2          Magnarelli, Assemblyman Benedetto, and 
 
 3          Assemblyman Sepulveda.
 
 4                 Senator?  
 
 5                 CHAIRWOMAN YOUNG:  Thank you, and good 
 
 6          morning.  And I appreciate your comments, 
 
 7          Assemblyman.
 
 8                 I'd like to introduce our members from 
 
 9          the New York State Senate who have joined us 
 
10          today, and it's great to see so many 
 
11          colleagues interested in the topic area.  
 
12                 First I'd like to introduce -- we're 
 
13          joined by Senator Liz Krueger, ranking member 
 
14          on Senate Finance, and also joined by Andrew 
 
15          Lanza, Kathy Marchione, Senator Marty Golden, 
 
16          Senator Tony Avella, Senator Adriano 
 
17          Espaillat, Senator Diane Savino.  And did I 
 
18          miss anyone?  Oh, okay.  Sorry.  Senator 
 
19          Ruben Diaz -- how could I forget about 
 
20          Senator Ruben Diaz -- Senator Gustavo Rivera.  
 
21          Oh, I'm sorry -- oh, he's hiding down there, 
 
22          Senator Brad Hoylman.  
 
23                 So welcome.  Thank you.  
 
24                 CHAIRMAN FARRELL:  And I also have 
 
 
                                                                  8
 
 1          with us Assemblyman Oaks.
 
 2                 ASSEMBLYMAN OAKS:  And we have 
 
 3          Assemblywomen Corwin and Malliotakis.
 
 4                 CHAIRMAN FARRELL:  Before we introduce 
 
 5          the first witness, I would like to remind all 
 
 6          of the witnesses testifying today to keep 
 
 7          your statement within your allotted time 
 
 8          limit so that everyone can afford the 
 
 9          opportunity to speak.  Last night we finished 
 
10          at 7:30.  
 
11                 I will now call our first witness.  
 
12          City of New York, the Honorable Bill de 
 
13          Blasio, mayor.
 
14                 MAYOR DE BLASIO:  Thank you, 
 
15          Mr. Chair.  Chair Farrell, I want to thank 
 
16          you, Chair Young, thank you as well, and the 
 
17          ranking minority members, Senator Krueger, 
 
18          Assemblyman Oaks, thank you so much for 
 
19          giving me this opportunity to appear before 
 
20          you.  
 
21                 I also want to thank our legislative 
 
22          leaders, Assembly Speaker Heastie; Majority 
 
23          Leader Flanagan; Senate Democratic Conference 
 
24          Leader Stewart-Cousins; IDC Leader Jeff 
 
 
                                                                  9
 
 1          Klein; and Assembly Minority Leader Brian 
 
 2          Kolb.  Thanks to all, and to all of the 
 
 3          members of the Legislature here today.  
 
 4                 I'm joined by two key members of my 
 
 5          team well known to you, our director of OMB, 
 
 6          Dean Fuleihan, and the city's director of 
 
 7          state legislative affairs, Sherif Soliman.  
 
 8                 I want to thank everyone here and all 
 
 9          the members of the Legislature for your hard 
 
10          work and for your support for the people of 
 
11          New York City and all the work that we do in 
 
12          New York City together.  We have accomplished 
 
13          a great deal over the last few years, and I'm 
 
14          very grateful for your support as we move 
 
15          forward on education, on affordable housing, 
 
16          and on a number of other issues.  
 
17                 We come here today looking forward to 
 
18          building on that partnership.  I look forward 
 
19          to discussing the building of that spirit.  
 
20          After two years, we're proud to say that 
 
21          New York City is seeing real results from our 
 
22          disciplined fiscal stewardship, our strategic 
 
23          vision, and all that we have done to support 
 
24          the success and hard work of New Yorkers.  
 
 
                                                                  10
 
 1                 It's our task this year to deepen 
 
 2          those efforts and to extend that work through 
 
 3          a budget that is progressive, that is 
 
 4          fiscally responsible, and that is honest.  
 
 5                 And we recognize at the same time that 
 
 6          despite some very good results and despite 
 
 7          our devotion to continued fiscal discipline, 
 
 8          New York City faces some major challenges 
 
 9          that did not exist the last time I was here 
 
10          before you, and those include challenges 
 
11          within our pension system, our public 
 
12          hospital system, and in the proposed state 
 
13          budget.  
 
14                 We're also watching with great 
 
15          concern, and I know everyone here today is, 
 
16          both the national and the global economic 
 
17          landscape.  And that landscape looks in many 
 
18          ways increasingly uncertain, and could 
 
19          significantly negatively affect our city and 
 
20          state economy going forward.  
 
21                 We also know within that economic 
 
22          landscape is not only uncertainty, but 
 
23          unfortunately a continuing trend towards 
 
24          deepening inequality and a growing chasm 
 
 
                                                                  11
 
 1          between those with wealth and those who are 
 
 2          working hard just to get by.  
 
 3                 I'd like to call your attention to an 
 
 4          absolutely striking report that got worldwide 
 
 5          attention released last week by Oxfam, which 
 
 6          found that 1 percent of the globe's 
 
 7          population have as much wealth as the other 
 
 8          99 percent, specifically also finding that 
 
 9          the richest 62 people worldwide have as much 
 
10          wealth as the poorest half of the worldís 
 
11          population, 3.5 billion people.  
 
12                 We feel this inequality reality deeply 
 
13          in New York City, where for every 
 
14          multi-million-dollar condo that hits the 
 
15          market, hundreds of hardworking families are 
 
16          struggling to afford their rent.  And we 
 
17          simply cannot be the city we are meant to be 
 
18          unless we confront this challenge.  
 
19                 Our work in fiscal year 2017 will 
 
20          build on the investments we've made in the 
 
21          past two years, focused on our goal of 
 
22          creating One City, Rising Together.  These 
 
23          investments include:  
 
24                 Nearly 2,000 new cops on the beat, 
 
 
                                                                  12
 
 1          between the addition of new officers to the 
 
 2          force and our civilianization effort to bring 
 
 3          officers from desk jobs to the beat.  So 
 
 4          patrol strength will increase by nearly 2,000 
 
 5          officers by the end of this year, the highest 
 
 6          patrol strength we will have in New York City 
 
 7          since 2001; 
 
 8                 We're funding our plan for 200,000 
 
 9          units of affordable housing, enough to house 
 
10          a half-million people; 
 
11                 We're developing a pioneering, 
 
12          comprehensive plan to address the mental 
 
13          health needs of New Yorkers; 
 
14                 We're implementing our Equity and 
 
15          Excellence agenda to lift up all of our 
 
16          public schools, and launching an aggressive 
 
17          new effort to tackle homelessness.  
 
18                 As we make these key investments, we 
 
19          never lose sight of the vital importance of 
 
20          fiscal responsibility.  Itís part of 
 
21          everything we do.  New Yorkers have seen just 
 
22          how quickly and painfully the economy can 
 
23          turn, wiping out government budgets, forcing 
 
24          cuts to vital services, and even at times 
 
 
                                                                  13
 
 1          necessitating tax hikes.  That's something we 
 
 2          want to work hard to avoid.  Thatís why when 
 
 3          we took office, my administration immediately 
 
 4          began the work of prudent budgeting so that 
 
 5          we can be prepared for potential economic 
 
 6          downturns.
 
 7                 We are, one, building substantial 
 
 8          reserves into our budget, just as the state 
 
 9          does; two, removing uncertainty in our budget 
 
10          by securing agreements with our workforce.  
 
11          I'm proud to say just in the last 24 hours 
 
12          we've reached another important labor 
 
13          agreement; we now have agreements with 95 
 
14          percent of the city workforce, compared to 
 
15          literally zero percent at this point two 
 
16          years ago.  
 
17                 And this is a good moment just to 
 
18          pause and say I'm so appreciative to all of 
 
19          our city workers for the extraordinary job 
 
20          they did over the last few days confronting 
 
21          what was the second largest snowstorm in New 
 
22          York City history, going back 150 years since 
 
23          those storms have been tracked.  As I 
 
24          mentioned to some of our colleagues here, if 
 
 
                                                                  14
 
 1          it had been .2 inches bigger, it would have 
 
 2          literally been the biggest snowfall in New 
 
 3          York City history.  Our city workers, led by 
 
 4          our sanitation workers, but all our first 
 
 5          responders, all our departments, responded I 
 
 6          thought with great ability and energy and 
 
 7          helped get the city back and running.
 
 8                 I also want to thank the state.  I 
 
 9          worked closely with Governor Cuomo and his 
 
10          team during the course of the storm.  I think 
 
11          the state and the MTA responded very, very 
 
12          well.  I think a great team effort all 
 
13          around.  
 
14                 The third point I want to make in 
 
15          terms of fiscal prudence, we're making 
 
16          targeted investments.  And this is because we 
 
17          believe fundamentally that we have to keep 
 
18          building our economy.  I'm very proud of the 
 
19          fact that we have 4.2 million jobs now in New 
 
20          York City, the highest number of jobs that 
 
21          have ever been in New York City, in all our 
 
22          history.  In the last two years we've added 
 
23          213,000 jobs.  That is the most ever gained 
 
24          in a two-year period in the history of the 
 
 
                                                                  15
 
 1          city.  
 
 2                 But we have to keep investing to 
 
 3          assure that economic growth, because that's 
 
 4          the only way we can ensure that it is 
 
 5          dependable despite what will obviously be 
 
 6          economic tough times up ahead.  So we're 
 
 7          making targeted investments, of course, in 
 
 8          public safety, first and foremost, affordable 
 
 9          housing, education -- all of the things that 
 
10          we know allow for the fiscal vitality of the 
 
11          city and our ability to weather the storms.  
 
12                 I want to turn now to the proposed 
 
13          state budget unveiled last week.  The budget 
 
14          presented us with some very positive news, 
 
15          which I'll discuss first, and some real 
 
16          uncertainties, which I'll also outline.  The 
 
17          good news here is very good; I want to 
 
18          emphasize that.  We are very pleased, 
 
19          especially by two of the policies the 
 
20          Governor proposed, the $15 minimum wage and 
 
21          the paid family leave policy.  We believe 
 
22          these would be profoundly important to the 
 
23          people of New York.  We strongly agree with 
 
24          so many here today that no New Yorker should 
 
 
                                                                  16
 
 1          have to choose between their family and their 
 
 2          paycheck, and that is why a paid leave policy 
 
 3          is so important.  
 
 4                 In New York City we've taken every 
 
 5          action we can to relieve our hardworking 
 
 6          families of having to make these difficult 
 
 7          choices.  We've extended paid sick leave to 
 
 8          half a million more New Yorkers, and paid 
 
 9          parental leave to more than 20,000 city 
 
10          employees.  And we look forward, with our 
 
11          labor union partners, to extending paid 
 
12          parental leave to more and more of the city 
 
13          workforce in the coming months.  
 
14                 And I'm heartened to see paid family 
 
15          leave in the state budget because it means 
 
16          healthier and more financially stable 
 
17          households, more effective workplaces, and a 
 
18          stronger and more just city and state.  I 
 
19          particularly want to acknowledge and thank 
 
20          the champions and prime sponsors of paid 
 
21          family leave in the Legislature:  
 
22          Assemblymember Cathy Nolan, thank you; 
 
23          Senators Jeff Klein and Joe Addabbo, thank 
 
24          you; and to so many of the cosponsors here, 
 
 
                                                                  17
 
 1          thank you for focusing on this crucial issue.  
 
 2                 Now, I've said before when it comes to 
 
 3          the wage issue, nothing does more to lift up 
 
 4          working families and move our economy forward 
 
 5          than raising wages.  I've been a proud 
 
 6          participant in the Fight for $15 for many 
 
 7          years.  And I can safely say that if we're 
 
 8          going to fundamentally change the trajectory 
 
 9          of families and lift people out of poverty, 
 
10          one of the things we're focused on in the 
 
11          city, our goal and our One NYC plan of 
 
12          lifting 800,000 New Yorkers out of poverty 
 
13          over the next 10 years, that hinges, first 
 
14          and foremost, on the $15 minimum wage.  
 
15                 Now, we are acting on our own to reach 
 
16          our own city employees and human services 
 
17          contracted workers.  We're investing $115 
 
18          million in our budget to extend the $15 
 
19          minimum wage to 50,000 workers -- again, city 
 
20          employees and contracted workers alike.  
 
21          Fifty thousand more people will get to that 
 
22          $15 minimum wage, and so many thousands of 
 
23          their family members will benefit.  
 
24                 We look forward to the passage and 
 
 
                                                                  18
 
 1          signing of a state law that will change the 
 
 2          lives of an estimated 1 million workers in 
 
 3          our city by guaranteeing $15 an hour to every 
 
 4          New Yorker.  
 
 5                 Another very positive aspect of the 
 
 6          Governor's proposed budget is the commitment 
 
 7          to build 20,000 units of supportive housing.  
 
 8          And this will complement perfectly the cityís 
 
 9          announcement in November of our intentions to 
 
10          secure 15,000 units over the next 15 years.  
 
11          These two actions together will have a 
 
12          profound impact on addressing homelessness 
 
13          and mental health issues and will 
 
14          fundamentally change the reality for the 
 
15          better in our city.  
 
16                 Supportive housing is a proven method 
 
17          of bringing safety, stability and a renewed 
 
18          sense of hope to some of our most vulnerable 
 
19          neighbors.  These are people dealing with 
 
20          seemingly intractable problems, but that 
 
21          means they need much more than a roof over 
 
22          their heads.  They need specific services, 
 
23          like substance abuse programs, to help them 
 
24          address underlying problems and ultimately to 
 
 
                                                                  19
 
 1          build healthier and happier lives.  
 
 2                 I want to thank Senator Marty Golden 
 
 3          and Assemblyman Andrew Hevesi for galvanizing 
 
 4          the support for this critical progress.  I 
 
 5          really appreciate deeply your efforts.  
 
 6                 Let me also mention two additional 
 
 7          positives in the budget that would make 
 
 8          New York a fairer and more just state.
 
 9                 First, we're very gratified to see 
 
10          continued support for the DREAM Act.  Passage 
 
11          of the DREAM Act is a simple statement of 
 
12          morality and compassion.  I must acknowledge 
 
13          the billís prime sponsors, who are leading 
 
14          the charge here for fairness:  Assemblyman 
 
15          Francisco Moya and Senator JosÈ Peralta.  We 
 
16          thank them.  
 
17                 Second, another important and 
 
18          meaningful step towards justice in our city 
 
19          and our state would be raising the age.  And 
 
20          we supported Raise the Age last year, and we 
 
21          support it again this year.  In New York 
 
22          City, we've already reduced unnecessary 
 
23          arrests and incarcerations.  We've ended 
 
24          punitive solitary confinement for 16- and 
 
 
                                                                  20
 
 1          17-year-olds.  And we've applied resources to 
 
 2          help young people out of the criminal justice 
 
 3          system and onto the right path in life.  
 
 4                 New York State should not be one of 
 
 5          just two states in this country that 
 
 6          prosecute 16- and 17-year-old kids as adults.  
 
 7          I'd like to particularly thank Speaker 
 
 8          Heastie for his leadership on this issue, as 
 
 9          well as the members of the Assembly 
 
10          Democratic Conference.  
 
11                 Now, those are a number of very good 
 
12          things in this budget for which we are 
 
13          profoundly grateful, but it is also my 
 
14          obligation to talk about some of the 
 
15          challenges in this budget that we think could 
 
16          have a negative impact.  
 
17                 The state initially proposed budget 
 
18          cuts that would have cost the City of 
 
19          New York nearly $1 billion in fiscal 2017, 
 
20          with the costs growing in each succeeding 
 
21          year.  These proposed cuts included 
 
22          $485 million tied to CUNY in fiscal 2017, and 
 
23          having the city take on $209 million in state 
 
24          Medicaid payments in 2017, a figure which 
 
 
                                                                  21
 
 1          alone would grow close to $1 billion per year 
 
 2          by fiscal 2021.  
 
 3                 Later, the Governor clarified that the 
 
 4          CUNY and Medicaid proposals would be achieved 
 
 5          through reforms and efficiencies done in a 
 
 6          collaborative process, and ultimately would 
 
 7          not cost the city a penny.  I very much 
 
 8          appreciate the Governor's pledge and I've 
 
 9          made clear, on behalf of my constituents, 
 
10          that I will hold him to it.
 
11                 We look forward to working with the 
 
12          Governor and the Legislature to find reforms 
 
13          and efficiencies that are workable for the 
 
14          long run, and we also will work energetically 
 
15          to make certain that these cuts do not appear 
 
16          in the final budget in April.  
 
17                 The Governor has also proposed to take 
 
18          the cityís sales tax revenue for three years 
 
19          in order to offset refinancing savings on 
 
20          debt the state agreed to assume.  There is no 
 
21          justification for this action, which would do 
 
22          a real disservice to city taxpayers, costing 
 
23          them $600 million over three years, starting 
 
24          in the current fiscal year.  
 
 
                                                                  22
 
 1                 I want to note that these cuts are 
 
 2          particularly onerous because New York City is 
 
 3          the only municipality in New York State that 
 
 4          doesn't receive direct municipal aid. Our 
 
 5          entire allocation of $302 million a year was 
 
 6          cut beginning in 2010.  
 
 7                 Now I would like to outline some of 
 
 8          the ways the proposed state budget affects 
 
 9          New Yorkers' lives across four important 
 
10          areas:  housing, homelessness, education, and 
 
11          transportation.  I'll begin with housing, 
 
12          which is certainly the number-one issue that 
 
13          I hear about from my constituents all over 
 
14          the five boroughs.  
 
15                 New Yorkers from all walks of life are 
 
16          tremendously concerned about the cost of 
 
17          housing and about whether they're going to be 
 
18          able to continue to be able to afford our 
 
19          city.  Their concerns are justified, because 
 
20          the city is clearly confronting a crisis when 
 
21          it comes to affordable housing.  And to 
 
22          contend with this crisis, we've created and 
 
23          launched the most ambitious municipal 
 
24          affordable housing program in the nationís 
 
 
                                                                  23
 
 1          history:  building or preserving 200,000 
 
 2          affordable units over 10 years.  
 
 3                 Now, we certainly commend the Governor 
 
 4          for the inclusion of an affordable housing 
 
 5          plan in the state budget, and we'll be 
 
 6          working to make sure the city receives a fair 
 
 7          and proportionate share of the funding under 
 
 8          that affordable housing initiative.  When the 
 
 9          Governor releases the details of his housing 
 
10          plan, they should include a continued 
 
11          commitment of federal tax credits and 
 
12          tax-exempt private activity bonds at levels 
 
13          that are at least commensurate with those 
 
14          that have been historically received by the 
 
15          city.  
 
16                 We also have serious concerns about 
 
17          two important procedural changes the Governor 
 
18          has proposed to the rules for the allocation 
 
19          of tax-exempt private activity bonds.  This 
 
20          bond cap allocation is a vital resource for 
 
21          the city.  Over the last two years, the city 
 
22          has financed more than 16,700 affordable 
 
23          apartments across all five boroughs using our 
 
24          bond cap allocations.  These projects have 
 
 
                                                                  24
 
 1          ranged from a 60-unit building in Upper 
 
 2          Manhattan serving formerly homeless families 
 
 3          and youths aging out of foster care, to a 
 
 4          256-unit mixed-income development in the 
 
 5          Tremont neighborhood of the Bronx.  
 
 6                 The stateís proposal would add two 
 
 7          layers of bureaucracy to the process of 
 
 8          receiving and using these allocations.  Two 
 
 9          more layers of bureaucracy would be very 
 
10          costly to the people of New York City.  The 
 
11          first layer is a required approval by the 
 
12          Empire State Development Corporation for New 
 
13          York City to be able to use the bond cap for 
 
14          housing.  The second layer is a different 
 
15          required approval by the Public Authorities 
 
16          Control Board for each individual project 
 
17          that the city seeks to build with these 
 
18          dollars.  
 
19                 Last year, the cityís Housing 
 
20          Development Corporation efficiently used all 
 
21          of its state bond cap allocation to fund its 
 
22          projects.  And HDC couldn't even get started 
 
23          on almost 1,200 affordable apartments across 
 
24          the five boroughs simply because it did not 
 
 
                                                                  25
 
 1          receive enough in bond cap allocations from 
 
 2          the state.  
 
 3                 Imagine the situation if these 
 
 4          additional regulatory obstacles were to go 
 
 5          into effect.  They would produce uncertainty 
 
 6          in financing and unnecessarily add difficulty 
 
 7          and delay to the process of building the 
 
 8          affordable housing struggling New Yorkers 
 
 9          need.  
 
10                 Another essential component of 
 
11          affordable housing in the five boroughs is 
 
12          the New York City Housing Authority, or 
 
13          NYCHA, which is home to 400,000-plus 
 
14          New Yorkers.  Today, we need NYCHA more than 
 
15          ever, but the authority has suffered decades 
 
16          of neglect and disinvestment, resulting in a 
 
17          dangerous financial situation and an 
 
18          unacceptable quality of life for too many of 
 
19          its residents.  
 
20                 Last year we unveiled NextGeneration 
 
21          NYCHA, our plan to get NYCHA back on solid 
 
22          fiscal ground and to reinvent itself for the 
 
23          21st century.  As part of that process, we 
 
24          are honoring our commitment to add 
 
 
                                                                  26
 
 1          $100 million in capital funding each year for 
 
 2          the next three years.  We ask the state to 
 
 3          fully come through on its commitment of $100 
 
 4          million in capital funding for the current 
 
 5          fiscal year and another $100 million in 
 
 6          capital funding for each of the next two 
 
 7          fiscal years.  That's how to do right by 
 
 8          NYCHAís hundreds of thousands of residents.  
 
 9                 Now I want to turn to homelessness, 
 
10          which is a deep and persistent challenge that 
 
11          the city has been struggling with for 
 
12          decades.  Today we're using every tool, 
 
13          committing every resource, and summoning 
 
14          every ally to confront that challenge.  To 
 
15          maximize our efforts, the City of New York 
 
16          needs a serious, consistent, lasting 
 
17          partnership with the state government, and 
 
18          added funds for prevention and rental 
 
19          assistance programs.  Our work begins with 
 
20          prevention -- keeping families off the street 
 
21          in the first place, keeping families in their 
 
22          apartments and not in shelter.  
 
23                 To that end, we ask that the state 
 
24          modify the criteria it uses to determine the 
 
 
                                                                  27
 
 1          Family Eviction Prevention Supplement, or 
 
 2          FEPS.  FEPS can be a life-changer for 
 
 3          families who are facing the immediate threat 
 
 4          of being thrown out of their homes. But today 
 
 5          the levels of financial support under FEPS 
 
 6          are simply too low to be as effective as they 
 
 7          could be.  We urge you to raise the state 
 
 8          level of assistance to what the U.S. 
 
 9          Department of Housing and Urban Development 
 
10          has determined is appropriate for the New 
 
11          York City rental market.  That would increase 
 
12          rental assistance by 50 percent, giving the 
 
13          typical family approximately $1,500 a month.  
 
14          Thatís fundamental in a city where an average 
 
15          one-bedroom apartment now rents for $3,100 a 
 
16          month.
 
17                 In addition, we must make FEPS 
 
18          available to victims of domestic violence, 
 
19          who often are effectively evicted from their 
 
20          homes when they flee to safety.  Let's think 
 
21          about that for a moment.  Often a woman doing 
 
22          what she must do to protect herself and her 
 
23          children, fleeing the only home she has for 
 
24          someplace safe -- we need to make sure that 
 
 
                                                                  28
 
 1          these victims have support to get into other 
 
 2          forms of available housing and not end up in 
 
 3          shelter.  And that's what we can do if we 
 
 4          increase this FEPS allotment and make it 
 
 5          available to those who have already suffered 
 
 6          so much because of domestic violence.  
 
 7                 If we raised the FEPS levels as I 
 
 8          described and made it available to victims of 
 
 9          domestic violence, it would cost 
 
10          $63.5 million this year, of which 
 
11          $19.7 million is city funding and 
 
12          $35.6 million is federal funding.  We urge 
 
13          the state to contribute its portion of this 
 
14          funding, estimated to be $8.3 million. I 
 
15          would also ask you to revisit the underlying 
 
16          shelter allowance, which FEPS is added on top 
 
17          of and which hasn't been increased since 
 
18          2003.  
 
19                 Another aspect of the cityís 
 
20          homelessness challenge has to do with people 
 
21          struggling with health issues like AIDS.  As 
 
22          part of the cityís plan to end the epidemic 
 
23          of AIDS, we have committed to extending 
 
24          HIV/AIDS Services Administration benefits, or 
 
 
                                                                  29
 
 1          HASA, to people who have the HIV virus but 
 
 2          are not showing symptoms.  We've budgeted $41 
 
 3          million for the cityís share, when fully 
 
 4          phased in, to extend HASA.  We believe that 
 
 5          New Yorkers living with HIV or AIDS should 
 
 6          not have to choose between medicine and rent, 
 
 7          or medicine and food.  
 
 8                 We understand the state has made a 
 
 9          multiyear commitment to ending the AIDS 
 
10          epidemic -- and we commend the Governor for 
 
11          that -- and we look forward to seeing the 
 
12          details of their plan.  
 
13                 At this point, I want to turn to 
 
14          several education issues.  We all remember 
 
15          what the situation was in New York City 
 
16          before mayoral control of education:  the 
 
17          school system was fragmented and inefficient, 
 
18          and there was much too much corruption.  The 
 
19          city did not have the authority it needed to 
 
20          ensure that schools were functioning properly 
 
21          and to bring about needed reforms.  
 
22                 The Legislature recognized the 
 
23          benefits of extended periods of mayoral 
 
24          control, both in 2002 and again in 2009. And 
 
 
                                                                  30
 
 1          over time, we've all seen that mayoral 
 
 2          control works.  Look at our administrationís 
 
 3          implementation of universal pre-K.  And thank 
 
 4          you again to all the members here for your 
 
 5          support of that initiative which made it 
 
 6          possible.  Within a matter of months, we 
 
 7          marshaled multiple agencies and the necessary 
 
 8          funds to launch hundreds of programs across 
 
 9          the five boroughs.  Today, two years after we 
 
10          started, more than 68,500 of our 4-year-olds 
 
11          are enrolled in full-day pre-K and are on the 
 
12          path to lifelong learning.  Again,  thank you 
 
13          to the Legislature, thank you to the Governor 
 
14          for that support.  But we would never have 
 
15          been able to implement such a crucial program 
 
16          in two years' time if it were not for mayoral 
 
17          control of education.  
 
18                 I'd also like to draw your attention 
 
19          to the fact that for the first time ever, New 
 
20          York City's high school graduation rate is 
 
21          now over 70 percent, while our dropout rates 
 
22          have hit an all-time low of 9 percent.  
 
23          Successes like these occur when thereís 
 
24          bipartisan consensus on mayoral control, and 
 
 
                                                                  31
 
 1          that is why educators, business leaders, and 
 
 2          civic leaders alike want it renewed.  It 
 
 3          would build predictability into the system, 
 
 4          which is important for the deep, long-range 
 
 5          change that is needed for our schools.
 
 6                 As you know, I believe fundamentally, 
 
 7          as a matter of philosophy, that mayoral 
 
 8          control should be made permanent.  I don't 
 
 9          believe there is another system that works.  
 
10          Short of that, it should be renewed for seven 
 
11          years, the same amount of time as its 
 
12          original authorization.  
 
13                 And to return for just a moment to 
 
14          pre-K, the success of pre-K should also be 
 
15          evidence enough that we don't need to change 
 
16          how we administer it by creating a pre-K 
 
17          grant board that would supplant the State 
 
18          Education Department.  We were able to 
 
19          achieve this huge progress on pre-K under the 
 
20          existing system.  We think it works and 
 
21          should be continued.  
 
22                 Now, our schools certainly need 
 
23          additional aid and we are in favor, of 
 
24          course, of funding all schools fairly.  Which 
 
 
                                                                  32
 
 1          is why we must get to a proposal that 
 
 2          actually supports all of our schools in an 
 
 3          equitable way.  It is imperative that the 
 
 4          state add more money for Foundation Aid so 
 
 5          the state can close its $2 billion shortfall 
 
 6          for New York City pursuant to the Campaign 
 
 7          for Fiscal Equity decision by the Court of 
 
 8          Appeals.  
 
 9                 We're pleased thereís support for 
 
10          Community Schools in the budget.  The 
 
11          students of New York Cityís 130 Community 
 
12          Schools deserve a proportionate and fair 
 
13          share of those state funds.  The Community 
 
14          Schools in New York City include all of our 
 
15          94 Renewal Schools -- the cityís 
 
16          lowest-performing schools, which have 
 
17          historically suffered from both a lack of 
 
18          attention and resources.  We are investing 
 
19          $187 million a year in their turnaround. 
 
20          We've moved ineffective teachers and 
 
21          principals out over the past year and moved 
 
22          talented and hardworking educators in as part 
 
23          of the changes needed in our Renewal Schools.  
 
24          And support for that initiative and for the 
 
 
                                                                  33
 
 1          Community Schools is crucial to our continued 
 
 2          success.  
 
 3                 Now, we hold a basic belief that every 
 
 4          single child in our city and every child in 
 
 5          our state is equally important, and we 
 
 6          certainly can't support initiatives that take 
 
 7          from one group of children to give to another 
 
 8          group.  So we're concerned about the 
 
 9          Governorís proposal to raise the per-pupil 
 
10          tuition rate for charter schools, which would 
 
11          cost New York City and only New York City 
 
12          $30.3 million in fiscal 2017 alone.  No other 
 
13          municipality in the state is being asked to 
 
14          shoulder this particular cost.  
 
15                 If the state wants to provide 
 
16          additional aid for charter school tuition, we 
 
17          would certainly welcome it.  But the state 
 
18          should not take away from other urgent needs 
 
19          to fund it.  
 
20                 Finally, I'd like to talk to you about 
 
21          critical infrastructure and transportation 
 
22          issues.  Breaking with decades of tradition, 
 
23          New York City made a contribution of $2.5 
 
24          billion in capital funds last year to allow 
 
 
                                                                  34
 
 1          the MTA to invest in a more reliable, 
 
 2          effective and safe mass transportation system 
 
 3          for our future.  We request the approval of a 
 
 4          fully funded capital plan by the Capital 
 
 5          Program Review Board, and adding it to the 
 
 6          adoption of the state budget to solidify 
 
 7          financial support for MTA capital 
 
 8          investments.  This will help grow the economy 
 
 9          of our entire region and the state as a 
 
10          whole.  
 
11                 We're also pleased to see that the 
 
12          State Budget has committed $22 billion to 
 
13          roads and bridges.  Take just two examples of 
 
14          why these funds are so necessary:  The 
 
15          Brooklyn Queens Expressway Triple Cantilever 
 
16          Bridge and the Belt Parkway Bridge are facing 
 
17          shortfalls of $646 million and $297 million 
 
18          respectively.  Thatís almost $1 billion in 
 
19          total just for those two projects.  Together, 
 
20          these shortfalls represent 38 percent of the 
 
21          two projects' costs, the historical state 
 
22          share that has gone unfunded in recent years.  
 
23          We obviously look forward to fair and 
 
24          proportional funding as part of these new 
 
 
                                                                  35
 
 1          resources.  
 
 2                 Before I conclude, I want to raise two 
 
 3          new fiscal challenges that New York City is 
 
 4          confronting ourselves this year.  And again, 
 
 5          these are two challenges that we did not face 
 
 6          when I sat before you just a year ago.  As 
 
 7          part of a regular review process, the city 
 
 8          actuary is adjusting life expectancy 
 
 9          assumptions for our retirees, and this will 
 
10          increase the cityís pension costs by $600 
 
11          million annually.  I should note that that 
 
12          charge was incurred starting in the current 
 
13          fiscal year -- so there's $600 million in 
 
14          this fiscal of the budget that we did not 
 
15          anticipate and there was no way to anticipate 
 
16          at the beginning of the building process for 
 
17          this fiscal year -- $600 million for next 
 
18          fiscal year, 2017, and every fiscal year 
 
19          thereafter added to the budget.  
 
20                 In addition, our public hospital 
 
21          system is facing new challenges.  New York 
 
22          City Health and Hospitals is the largest 
 
23          municipal hospital system in the nation.  In 
 
24          2014, its 11 hospitals, 70-plus 
 
 
                                                                  36
 
 1          community-based clinics, and other facilities 
 
 2          were visited nearly 5 million times.  Almost 
 
 3          1 in 6 New Yorkers was treated.  
 
 4                 But today, the patients who go to 
 
 5          Health and Hospitals are mostly covered by 
 
 6          Medicaid or are entirely uninsured.  At the 
 
 7          same time, the federal government is cutting 
 
 8          reimbursements for the care of these 
 
 9          uninsured patients, and Medicaid doesn't 
 
10          cover the costs of care even for those who 
 
11          have Medicaid, leaving Health and Hospitals 
 
12          to pick up millions of dollars in costs.  
 
13                 This is forcing Health and Hospitals 
 
14          to transform how they do business, because 
 
15          this current operating model is no longer 
 
16          fiscally sustainable, given the changes that 
 
17          have occurred in federal and state rules and 
 
18          laws and the changing healthcare economy.  
 
19          We're working to reform this system 
 
20          immediately, and as a first step I have 
 
21          provided $337 million in immediate relief for 
 
22          Health and Hospitals for this fiscal year 
 
23          that we are in now.  
 
24                 Within the next three weeks, the city 
 
 
                                                                  37
 
 1          will be coming to you to identify areas where 
 
 2          the state can provide assistance and help us 
 
 3          address this growing problem.  
 
 4                 To conclude, as the Governor rightly 
 
 5          said in his State of the State speech, "We 
 
 6          are upstate and we are downstate, but we are 
 
 7          one state."  I couldn't agree more.  We are 
 
 8          ALL New York, and we are all New Yorkers.  It 
 
 9          is my privilege and honor to represent 43 
 
10          percent of the citizens of this wonderful 
 
11          state, 8.5 million people -- by the way, our 
 
12          highest population ever in the City of New 
 
13          York, and moving rapidly towards 9 million 
 
14          people in the coming years -- 8.5 million 
 
15          people who are hardworking, who are 
 
16          innovative, who are creative, who represent 
 
17          every corner of the earth but come together 
 
18          to make our city and state great.  The 
 
19          overwhelming majority of them are doing 
 
20          everything right.  They're raising their 
 
21          families, they're paying their fair share in 
 
22          taxes, they're getting up each day, and 
 
23          they're working hard.  The choices that you 
 
24          will make in this legislative session will 
 
 
                                                                  38
 
 1          have a great effect on their lives.  
 
 2                 Thank you for inviting me to speak 
 
 3          with you today.  And I look forward to 
 
 4          working with you, and my entire 
 
 5          administration looks forward to working with 
 
 6          you, in the days ahead on a budget that will 
 
 7          meet the needs of every New Yorker, wherever 
 
 8          they may live.
 
 9                 Thank you very much.
 
10                 CHAIRMAN FARRELL:  Thank you, 
 
11          Mr. Mayor.
 
12                 First to question will be 
 
13          Mr. Benedetto.  But before that, I would like 
 
14          to introduce with us Assemblyman Ortiz, 
 
15          Assemblywoman Rozic, Assemblywoman Seawright, 
 
16          Assemblywoman Simon, and Assemblywoman 
 
17          Walker.
 
18                 CHAIRWOMAN YOUNG:  Also, Assemblyman, 
 
19          we have other Senators who have joined us who 
 
20          Senator Liz Krueger will introduce.
 
21                 SENATOR KRUEGER:  Thank you.  We are 
 
22          joined by Senator Dan Squadron, Senator 
 
23          Roxanne Persuad, Senator Bill Perkins, and 
 
24          Senator Tim Kennedy.
 
 
                                                                  39
 
 1                 CHAIRWOMAN YOUNG:  Thank you.
 
 2                 ASSEMBLYMAN BENEDETTO:  Thank you, 
 
 3          Mr. Farrell.
 
 4                 And Mr. Mayor, welcome.  We always 
 
 5          like to see you here up in Albany and 
 
 6          appreciate you taking the time to come up, 
 
 7          especially when there's so much going on in 
 
 8          the city.  And my congratulations to all that 
 
 9          you did, and I know there are still some 
 
10          problems out there.  But for the size of that 
 
11          snow, you guys did a tremendous job.  And the 
 
12          city workers in New York, they're the best, 
 
13          they really are.
 
14                 MAYOR DE BLASIO:  Amen.  Thank you.
 
15                 ASSEMBLYMAN BENEDETTO:  Listen, you 
 
16          have identified over the years housing, 
 
17          affordable housing, as a major priority.  
 
18          Where do we stand on that?  How many units to 
 
19          date have we produced?
 
20                 MAYOR DE BLASIO:  Assemblyman, we're 
 
21          very proud to say our plan, because it's 
 
22          200,000 units preserved or built over 10 
 
23          years, basically the average we hope for each 
 
24          year is 20,000 per year.  We now have 
 
 
                                                                  40
 
 1          41,000-plus units that have either been 
 
 2          already preserved or built, or at least the 
 
 3          financing has been secured formally and those 
 
 4          are under contract.  So 41,000 units now 
 
 5          having been achieved over the first two 
 
 6          years.
 
 7                 ASSEMBLYMAN BENEDETTO:  We had the 
 
 8          expiration of the 421a, okay.  Any views on 
 
 9          how that is going to affect your housing 
 
10          plan?
 
11                 MAYOR DE BLASIO:  Well, first I want 
 
12          to say we believe fundamentally that 421a 
 
13          needed change.  It had to be a program that 
 
14          was more fair to the taxpayers, it had to be 
 
15          a program that did not focus so many 
 
16          resources on luxury housing.  In fact the 
 
17          reason for 421a, in my view, now has to be 
 
18          the creation of affordable housing on a much 
 
19          greater level.  So it was profoundly 
 
20          important to get a different approach.
 
21                 Obviously I'm very disappointed that a 
 
22          plan was not agreed upon in recent days.  I 
 
23          think we have to get to work, all of us 
 
24          together, in finding a way to move forward 
 
 
                                                                  41
 
 1          quickly that recognizes these key criteria.  
 
 2          Whatever is done going forward must do more 
 
 3          to support the creation of affordable 
 
 4          housing, must be more fair to the taxpayers, 
 
 5          and should not reward luxury housing in the 
 
 6          way the previous plan did.
 
 7                 ASSEMBLYMAN BENEDETTO:  Thank you.  
 
 8                 Design/build has been used for several 
 
 9          projects throughout the State of New York -- 
 
10          the Tappan Zee Bridge, I know the MTA has 
 
11          been using it for their projects in Penn 
 
12          Station and Javits Center.  I've been 
 
13          speaking over the past year and a half or so 
 
14          with Commissioner Trottenberg, who is an 
 
15          ardent advocate of the design/build in some 
 
16          of the projects that the Department of 
 
17          Transportation is producing.  
 
18                 Where are we standing with that, and 
 
19          how are we -- how are we going to come to an 
 
20          agreement with maybe some of the union sector 
 
21          here to make them, you know, jump on board 
 
22          with this?
 
23                 MAYOR DE BLASIO:  Well, Assemblyman, 
 
24          first of all, I appreciate your focus on it.  
 
 
                                                                  42
 
 1          It's not what we'd call a sexy issue, but it 
 
 2          is an issue that really matters in terms of 
 
 3          what we do every day in the city.  You're 
 
 4          right that Commissioner Trottenberg is an 
 
 5          ardent advocate for this improvement.  She is 
 
 6          matched in that ardent feeling by Sherif 
 
 7          Soliman, so I'm going to ask him to speak to 
 
 8          the specifics of this issue.
 
 9                 DIRECTOR SOLIMAN:  Sure.  Thank you 
 
10          for your leadership on that issue, of course; 
 
11          we've worked closely on that.  We would like 
 
12          to have that procurement method extended to 
 
13          New York City, as you know. 
 
14                 The mayor mentioned two major projects 
 
15          in New York City that could really benefit 
 
16          from design/build:  We have the BQE project, 
 
17          and we have the Belt Parkway, just to give 
 
18          two examples.  
 
19                 In the city we've done great work to 
 
20          get the building trades on board and also to 
 
21          get DC-37 on board.  So we have labor support 
 
22          in New York City.  We look forward to working 
 
23          with you and your colleagues to have it 
 
24          adopted this year.
 
 
                                                                  43
 
 1                 ASSEMBLYMAN BENEDETTO:  It would be 
 
 2          quite helpful if we would get some memos of 
 
 3          support from the unions you mention.  I have 
 
 4          never seen them.  I would like to see them 
 
 5          and to show my colleagues that we do have 
 
 6          union support for this; right now many of 
 
 7          them are doubtful.  And I really would be 
 
 8          remiss if I didn't mention my colleague 
 
 9          Robert Rodriguez, who's very interested in 
 
10          this and chairs our subcommittee on 
 
11          infrastructure.  Okay?  So we can join in and 
 
12          maybe move ahead on this.
 
13                 DIRECTOR SOLIMAN:  Be happy to get you 
 
14          those.
 
15                 ASSEMBLYMAN BENEDETTO:  Good.  Thank 
 
16          you very much.  Thank you, Mr. Mayor.  
 
17          Mr. Chairman.
 
18                 MAYOR DE BLASIO:  Thank you.
 
19                 CHAIRMAN FARRELL:  Thank you.
 
20                 Senator?
 
21                 CHAIRWOMAN YOUNG:  Thank you very 
 
22          much.  
 
23                 And I'd like to welcome the mayor to 
 
24          Albany.  It's good to see you.  And I do have 
 
 
                                                                  44
 
 1          a series of information and questions for 
 
 2          you.
 
 3                 So you went through your testimony and 
 
 4          I listened to it very carefully.  And you did 
 
 5          point out there's some good things in the 
 
 6          budget that you agreed with, but you also 
 
 7          brought in a litany of complaints -- things 
 
 8          like Medicaid, CUNY, charter schools, 
 
 9          transportation, capital, and the list goes 
 
10          on.  And basically what you're saying is that 
 
11          you're demanding more money from the state's 
 
12          taxpayers, that you want more money.
 
13                 This year's budget proposal is a $322 
 
14          million net positive for New York City, 
 
15          including $364 million in growth for school 
 
16          aid, and other investments also being made 
 
17          under this proposal, including in the areas 
 
18          of housing -- which you know I have 
 
19          particular interest in -- homeless programs, 
 
20          economic development and transportation.
 
21                 So I'd like to go through some of the 
 
22          areas that you covered in your testimony, and 
 
23          I'd like to start with Medicaid.  The state 
 
24          actually spends, total, $18.5 billion on the 
 
 
                                                                  45
 
 1          Medicaid program, and almost $12 billion of 
 
 2          those funds go to New York City.  We, as the 
 
 3          Legislature, and the Governor have capped the 
 
 4          growth of Medicaid to help local governments 
 
 5          around the state, and they have to live 
 
 6          within the constraints of the property tax 
 
 7          cap, but the property tax cap does not apply 
 
 8          to New York City.  That's correct, right?
 
 9                 So this year New York City is 
 
10          collecting $3.5 billion more in property 
 
11          taxes than if it had the 2 percent property 
 
12          tax cap.  So the mandate relief is going, I 
 
13          believe, in the wrong place, and the city 
 
14          clearly has the resources to pay a share of 
 
15          Medicaid annual growth.  And here are the 
 
16          numbers over the long term.  Medicaid is 
 
17          expected to grow about 4.5 percent.  We take 
 
18          actions to control costs and get the growth 
 
19          down to within our own Medicaid spending 
 
20          cap -- this year it's about 3.5 percent.  And 
 
21          I think what the budget is asking is for the 
 
22          city to share in a little bit of the growth, 
 
23          but still not as much as what we pay in our 
 
24          counties around the state.  The state is 
 
 
                                                                  46
 
 1          capping New York City's growth at 2 percent, 
 
 2          and the state will continue to pay any growth 
 
 3          above 2 percent.  And, by the way, not 
 
 4          coincidentally, 2 percent is the limit of the 
 
 5          property tax cap.
 
 6                 So we're living under the constraint 
 
 7          of the property tax cap upstate.  You don't 
 
 8          have that constraint.  As a result, some of 
 
 9          the poorest counties would be subsidizing 
 
10          people on Medicaid in New York City.  And we 
 
11          have very poor counties upstate.  So that's 
 
12          just wrong.
 
13                 So even after these proposals, the 
 
14          budget will still provide $631 million in 
 
15          mandate relief from the Medicaid program to 
 
16          New York City, and that, I may point out, is 
 
17          still more than last year.  So I assume that 
 
18          you would prefer this year's budget over last 
 
19          year's budget because of $631 million in 
 
20          mandate relief.
 
21                 MAYOR DE BLASIO:  Well, first of all, 
 
22          Chair, I want to thank you for that.  We've 
 
23          obviously been in a close working partnership 
 
24          with you on housing issues.  I know it is 
 
 
                                                                  47
 
 1          your passion, and want to thank you for the 
 
 2          work we've done together.
 
 3                 CHAIRWOMAN YOUNG:  Thank you.
 
 4                 MAYOR DE BLASIO:  On the questions 
 
 5          you're raising now, I think it's important to 
 
 6          start by saying I've had perhaps a different 
 
 7          experience than some people who have held 
 
 8          this particular role, in that I spent a part 
 
 9          of my career working on the concerns of 
 
10          upstate as well, and different parts of the 
 
11          state, when I was the HUD regional director.  
 
12          And all of New York State was part of the 
 
13          area that I worked on during the Clinton 
 
14          administration, so I spent a lot of time in 
 
15          big cities and smaller cities and towns all 
 
16          over this state.  And I absolutely understand 
 
17          that many parts of our state are struggling 
 
18          economically, just like the other 46 percent 
 
19          of New York City residents who are at or near 
 
20          the poverty level.  So we have challenges all 
 
21          around.
 
22                 I would argue that it would be very 
 
23          good, in all of our discussion about this 
 
24          state, of course to think like one state, to 
 
 
                                                                  48
 
 1          think about the needs of every type of New 
 
 2          Yorker, and what we can do to maximize 
 
 3          economic growth for all of us, for the good 
 
 4          of all.  I do think it's fair to say that New 
 
 5          York City right now is providing a very 
 
 6          positive impact on the rest of the state, 
 
 7          economically and in terms of revenue.  We're 
 
 8          proud of that fact.  What I'm trying to do in 
 
 9          my budget is keep that going for all of us, 
 
10          to keep building our economy for the good of 
 
11          all residents of New York State.  
 
12                 To do that, we have to have fiscal 
 
13          stability.  The investments we're making -- 
 
14          in more police, for example, in improving our 
 
15          schools, and in keeping the housing 
 
16          affordable -- is also about our economic 
 
17          viability for the long haul. 
 
18                 So I do think we're all interrelated 
 
19          deeply, and our ability to succeed affects 
 
20          everyone else and everyone else's reality 
 
21          affects us.
 
22                 Now, what I would argue here is 
 
23          because of what's happened in recent decades, 
 
24          we all know that if there is a downturn, God 
 
 
                                                                  49
 
 1          forbid -- but we all know enough about 
 
 2          economics to say it's not a question of if, 
 
 3          it's a question of when -- in the context of 
 
 4          any downturn, there will be a very severe 
 
 5          impact on our budgetary impact because it 
 
 6          will start above us at the federal and state 
 
 7          level.  In a downturn, your revenues will be 
 
 8          reduced, federal revenues will be reduced, 
 
 9          and of course there will be less for New York 
 
10          City, and then our own revenues go down.
 
11                 The reason I say this:  In these 
 
12          scenarios there is no safety net for us, 
 
13          there is no ability to turn to you and say, 
 
14          Can you help us out of a jam?  We'll know 
 
15          that you're not in a position to do that.  So 
 
16          we have to have reserves, and we have to have 
 
17          fiscal stability.  What I mentioned to you 
 
18          just between the change from our actuary and 
 
19          the immediate cost that we have to pay 
 
20          directly to address the problem of Health and 
 
21          Hospitals, that's a billion dollars more in 
 
22          the current fiscal year's budget that was 
 
23          absolutely unforeseen a year ago.
 
24                 So I would argue to you that fairness 
 
 
                                                                  50
 
 1          from our point of view is to continue the 
 
 2          state taking on responsibility as it has 
 
 3          vis-a-vis Medicaid, to help us ensure our 
 
 4          fiscal stability, for the good of all, but 
 
 5          also with the recognition that in the event 
 
 6          that there is major financial challenge 
 
 7          ahead, that we are in a position to handle 
 
 8          it.
 
 9                 CHAIRWOMAN YOUNG:  Thank you, Mayor, 
 
10          for that answer.  But as I pointed out, 
 
11          there's still $631 million in mandate relief 
 
12          savings under Medicaid for New York City, and 
 
13          that's more than last year.
 
14                 I'd like to switch to CUNY, because as 
 
15          we know, CUNY stands for the City University 
 
16          of New York.  And 71 percent of the students 
 
17          who go to CUNY are from the city, but the 
 
18          entire bill for the CUNY system is picked up 
 
19          by the taxpayers of New York State.  That was 
 
20          a temporary arrangement and dates back to a 
 
21          time when New York City was in fiscal crisis 
 
22          and they could not afford CUNY, the state 
 
23          stepped in and saved the CUNY system.  Now 
 
24          the city has the resources -- and we'll go 
 
 
                                                                  51
 
 1          over that in a few minutes, about what your 
 
 2          surplus is -- to resume the support of CUNY, 
 
 3          and the real question is at what level.  
 
 4                 So under the current structure, the 
 
 5          city appoints 30 percent of the CUNY Board of 
 
 6          Trustees, and under the budget, 30 percent of 
 
 7          the cost, we believe, would be reasonable.  
 
 8          So even though 70 percent of the CUNY 
 
 9          students are from the city, state taxpayers 
 
10          will continue to pay for 70 percent of the 
 
11          operating costs.  And in addition, the state 
 
12          expects to spend about $2.5 billion over the 
 
13          next five years on CUNY capital projects, 
 
14          which I think is very good.  CUNY's capital 
 
15          program represents about 20 percent of all 
 
16          New York City construction today, so the 
 
17          state investment is huge for the New York 
 
18          City economy.  So, you know, under the CUNY 
 
19          part of the proposal, you still are making 
 
20          out. 
 
21                 Last year the city had such a big 
 
22          surplus that you prepaid $3.6 billion of this 
 
23          year's expenses and puts billions in 
 
24          reserves.  And you just talked about why you 
 
 
                                                                  52
 
 1          want to do that.  Each year the city 
 
 2          recognizes billions in additional revenue 
 
 3          over its four-year financial plan that you 
 
 4          did not include when the budget was first 
 
 5          adopted.  And last year, that number was $11 
 
 6          billion.  Right now the city's fiscal 
 
 7          watchdogs are predicting upwards of 
 
 8          $2.5 billion in additional revenues for the 
 
 9          city's upcoming budget.
 
10                 So you talked about the need to be 
 
11          fiscally prudent and squirrel away money, but 
 
12          the question is you have this enormous 
 
13          surplus.  And do you have a PEG program in 
 
14          place, which is a Program to Eliminate the 
 
15          Gap, where New York City agencies look for 
 
16          savings, look for cuts?  Do you have that in 
 
17          place?
 
18                 MAYOR DE BLASIO:  Okay.  Let me speak 
 
19          to you -- you raised several points.  If I 
 
20          may, I'll try and speak to each of them 
 
21          quickly.
 
22                 First of all, we do contribute 
 
23          substantially to CUNY, and we have.  And I 
 
24          want, in a moment, Dean Fuleihan to outline 
 
 
                                                                  53
 
 1          that to you.  Second, we believe that our 
 
 2          contribution is consistent with what is our 
 
 3          obligation in terms of the history.  And 
 
 4          certainly it compares favorably to what's 
 
 5          being done in other parts of the state.  
 
 6                 The fact is that we know -- and I'll 
 
 7          use a fact from the last economic downturn.  
 
 8          When the Great Recession hit, the combined 
 
 9          impact of lost federal and state aid and the 
 
10          cuts that were necessary in New York City and 
 
11          the tax increases that were necessary in New 
 
12          York City, totaled about $12 billion over two 
 
13          years.  Against that backdrop, we have laid 
 
14          in very heavy reserves -- again, knowing, 
 
15          with absolute respect, that neither the state 
 
16          nor federal government will be in a position 
 
17          to come to our aid in that kind of scenario.  
 
18                 I think it's a fair statement to say 
 
19          that New York City's ability to continue 
 
20          being an economic engine is of paramount 
 
21          strategic importance to the whole state, so 
 
22          we must maintain that stability.  I don't 
 
23          think anyone here wants to see New York City 
 
24          slip backwards economically.  And that's why 
 
 
                                                                  54
 
 1          we are so focused on these reserves.
 
 2                 Dean Fuleihan will give you a little 
 
 3          more of our view of why we think what we're 
 
 4          already contributing to CUNY is both 
 
 5          substantial and fair.
 
 6                 DIRECTOR FULEIHAN:  So the takeover by 
 
 7          the state of CUNY was actually a permanent 
 
 8          takeover.  It was similar to the senior 
 
 9          college operations of the State University.  
 
10          The community colleges, we do contribute a 
 
11          third of everything that goes into the 
 
12          operations, and half of the capital budget of 
 
13          the community colleges, which is actually the 
 
14          exact same model that is used throughout the 
 
15          state.  
 
16                 As a matter of fact, we are the only 
 
17          municipality that actually doesn't have a 
 
18          majority of the Board of Trustees of their 
 
19          local community college.  We have a third --
 
20                 CHAIRWOMAN YOUNG:  So that's community 
 
21          colleges versus the CUNY system; right?
 
22                 DIRECTOR FULEIHAN:  That's correct.  
 
23          The community college is the model that's 
 
24          used throughout the state.  It is the model 
 
 
                                                                  55
 
 1          that was adopted during the fiscal crisis in 
 
 2          1976, when the CUNY senior colleges were 
 
 3          taken over, and the Board of Trustees also, 
 
 4          the --
 
 5                 CHAIRWOMAN YOUNG:  Right.
 
 6                 DIRECTOR FULEIHAN:  -- of the Board of 
 
 7          Trustees also --
 
 8                 CHAIRWOMAN YOUNG:  And as you point 
 
 9          out, that's the same system that's across the 
 
10          entire state for community colleges.
 
11                 DIRECTOR FULEIHAN:  -- also controlled 
 
12          the community colleges, which does not exist 
 
13          in your county, where the majority is 
 
14          actually of the local part, even though they 
 
15          also pay the one-third part.
 
16                 I would just also like to go back 
 
17          quickly on the Medicaid part, just worth 
 
18          noting one more additional thing that the 
 
19          mayor pointed out, to emphasize that we 
 
20          actually have no -- between the 2005 reform 
 
21          on Medicaid and the 2012 action on Medicaid, 
 
22          the state has completely taken over the 
 
23          entire administration and rate setting of 
 
24          Medicaid, including, including additional 
 
 
                                                                  56
 
 1          powers to actually set and control the very 
 
 2          percentages that you are talking about.
 
 3                 So we have no role in this, other than 
 
 4          the $5 billion to $6 billion that you're 
 
 5          talking about that we contribute in.
 
 6                 CHAIRWOMAN YOUNG:  But you're still 
 
 7          getting substantial savings under this budget 
 
 8          in mandate relief, and you don't have the 
 
 9          constraints of the 2 percent property tax cap 
 
10          that all the other counties in the state have 
 
11          to live under; correct?
 
12                 ASSEMBLYWOMAN NOLAN:  We pay income 
 
13          tax too, though.
 
14                 CHAIRWOMAN YOUNG:  Right.
 
15                 So STAR-C MAC bonds, the state is 
 
16          committed to paying a hundred percent of the 
 
17          debt service related to the STAR-C bonds, and 
 
18          that's going forward.  And when the bonds 
 
19          were refinanced, there were savings.  And 
 
20          also I want to point out state taxpayers will 
 
21          pay 100 percent of the $4.8 billion for the 
 
22          city's MAC bonds.  And state taxpayers 
 
23          deserve every dollar of the savings, that 
 
24          should be obvious.  It's like if your uncle 
 
 
                                                                  57
 
 1          pays the mortgage on your house, when you 
 
 2          refinance your house, who deserves the 
 
 3          savings?
 
 4                 I do want to go back, though, because 
 
 5          we talked about you have nearly $5 billion in 
 
 6          reserves, including $3.4 billion in retiree 
 
 7          health benefits trust, $1 billion annually in 
 
 8          your general reserve, which is an 
 
 9          historically high level, $500 million new 
 
10          capital stabilization reserve.  You're 
 
11          benefiting from not having the property tax 
 
12          cap, you have upwards of $2.5 billion in 
 
13          potential additional revenues for the city's 
 
14          upcoming budget, so you're in a very, very 
 
15          good spot.  
 
16                 But I did want to point out with your 
 
17          spending, because you are outpacing the 
 
18          state's fiscal restraint.  As you know, we 
 
19          are under a voluntary 2 percent spending cap 
 
20          through the state budget.  However, the 
 
21          city's expenditures at an average annual rate 
 
22          of more than 6 percent.  And from 2011-2016, 
 
23          city-funded expenditures, adjusted for 
 
24          surplus transfers, have grown at an average 
 
 
                                                                  58
 
 1          annual rate of 6.33 percent, as a matter of 
 
 2          fact -- and you compare that to the state 
 
 3          spending of less than 2 percent.  
 
 4                 So you're in a great spot financially 
 
 5          because you have all these surplus dollars, 
 
 6          you're increasing spending over 6 percent.  
 
 7          And again, I wanted to ask -- because I asked 
 
 8          it previously, I'm not sure I got the answer 
 
 9          to it -- but are you looking at your 
 
10          spending?  Are you doing anything with the 
 
11          Program to Eliminate the Gap, called the PEG 
 
12          program, with your city agencies to try to 
 
13          restrain some of this spending and find some 
 
14          savings for the taxpayer of New York City?
 
15                 MAYOR DE BLASIO:  Okay, Senator, let 
 
16          me go over several points that you raise, if 
 
17          I may.
 
18                 First, on that point -- Mr. Fuleihan 
 
19          can outline the details -- we had over a 
 
20          billion dollars of savings that we identified 
 
21          in our preliminary budget proposal.  We also 
 
22          have said very clearly we are looking 
 
23          seriously at a specific PEG strategy for the 
 
24          executive budget proposal in May.  But it's 
 
 
                                                                  59
 
 1          not a minor matter that we've found a 
 
 2          billion dollars in savings already.  
 
 3                 Second, some of the growth -- a 
 
 4          substantial amount of the growth in the 
 
 5          budget is related to Hurricane Sandy matters, 
 
 6          meaning we are passing through federal 
 
 7          dollars from FEMA, from HUD, for Hurricane 
 
 8          Sandy relief efforts.  That is a temporary 
 
 9          condition.  When those federal dollars drop 
 
10          off, we anticipate that our budget will 
 
11          actually contract.
 
12                 We also, as you heard earlier, have 
 
13          brand-new obligations that came on very 
 
14          suddenly that we, by law, must abide by, 
 
15          obviously, in the case of the city actuary 
 
16          adding a $600 million charge for this year 
 
17          and every year thereafter.  We have an 
 
18          immediate challenge related to Health and 
 
19          Hospitals.
 
20                 So that budgetary growth is in large 
 
21          measure because of federal funds that are 
 
22          short term and because of new obligations 
 
23          that we have no choice but to meet.
 
24                 On the other points you made, on the 
 
 
                                                                  60
 
 1          way our tax system is oriented in the city, 
 
 2          obviously one of the few places in the state 
 
 3          with a personal income tax at the city level.  
 
 4          I would say my colleagues here from the city 
 
 5          would agree that our property tax rate plus 
 
 6          our city income tax is certainly substantial 
 
 7          for our taxpayers to have to handle.
 
 8                 Finally, on the question of the 
 
 9          $600 million on the MAC refinancing, this 
 
10          issue we believe fundamentally was settled in 
 
11          2004 by the New York State Court of Appeals, 
 
12          which made clear that the state had an 
 
13          obligation through 2034, I believe it was, to 
 
14          continue a regular payment of $170 million 
 
15          per year to the City of New York.  It was an 
 
16          agreement struck between the two levels of 
 
17          government; it was confirmed by the Court of 
 
18          Appeals.  So we believe that has to be 
 
19          honored for the long term.
 
20                 CHAIRWOMAN YOUNG:  Thank you, Mayor, 
 
21          for those answers.
 
22                 You know, the bottom line is that the 
 
23          city is awash in money right now, and 
 
24          localities around the state -- counties, 
 
 
                                                                  61
 
 1          cities, small cities, villages, towns -- 
 
 2          would only dream of having surpluses and have 
 
 3          to live under the property tax cap.
 
 4                 So I want to thank you for your 
 
 5          answers --
 
 6                 MAYOR DE BLASIO:  I'm sorry, Senator, 
 
 7          could we just do a quick response to that 
 
 8          last point, please?
 
 9                 CHAIRWOMAN YOUNG:  Sure.
 
10                 MAYOR DE BLASIO:  Thank you.
 
11                 DIRECTOR FULEIHAN:  I just want to 
 
12          quickly add, the mayor talked about over a 
 
13          billion dollars in the preliminary budget, 
 
14          with more savings to be found in the 
 
15          executive budget, and last year we did over a 
 
16          billion-four, also in savings. 
 
17                 PEG really is a Plan to Eliminate the 
 
18          Gap, which the city has.  And it's worth 
 
19          noting that in 2018 we are projecting a $2.2 
 
20          billion gap, and in 2019 a $2.9 billion gap, 
 
21          and in 2020 a $2.7 billion gap.  So we --
 
22                 CHAIRWOMAN YOUNG:  Thank you very 
 
23          much.
 
24                 DIRECTOR FULEIHAN:  -- also, and the 
 
 
                                                                  62
 
 1          prepayments happens to be under the 
 
 2          accounting methods that the city uses.  
 
 3          That's how we actually balanced.  And those 
 
 4          prepayments you talked about are exactly how 
 
 5          we proposed, in the preliminary budget, a 
 
 6          balanced budget for fiscal 2017.
 
 7                 MAYOR DE BLASIO:  And finally, the 
 
 8          Medicaid challenges that you raise, let's be 
 
 9          clear, our situation with our Health and 
 
10          Hospitals Corporation is only going to get 
 
11          more difficult because of larger things 
 
12          happening in federal and state policy.  We 
 
13          would very much like to work with the state 
 
14          and join with the state in going to 
 
15          Washington for some of the fundamental 
 
16          changes we'll need.  But in the meantime, the 
 
17          financial impact on the city will grow 
 
18          intensely.  And again, we don't have a safety 
 
19          net to turn to; we will simply have to take 
 
20          on those costs.  So I would just suggest that 
 
21          that's another challenge that will grow for 
 
22          us.
 
23                 CHAIRWOMAN YOUNG:  Thank you, Mayor.
 
24                 CHAIRMAN FARRELL:  Thank you very 
 
 
                                                                  63
 
 1          much.
 
 2                 We've been joined by Assemblyman 
 
 3          Buchwald and Assemblyman Skoufis.
 
 4                 ASSEMBLYMAN OAKS:  And Assemblyman 
 
 5          Friend.
 
 6                 CHAIRMAN FARRELL:  Next to question is 
 
 7          Assemblyman Cusick.
 
 8                 ASSEMBLYMAN CUSICK:  Thank you, 
 
 9          Mr. Chairman.  
 
10                 Thank you, Mr. Mayor, for being up 
 
11          here in Albany.  It's always good to see you.  
 
12          And it's good that you brought the guy -- 
 
13          both guys next to you, Dean Fuleihan and 
 
14          Sherif Soliman, both alums of the State 
 
15          Assembly.  It's good to see all of you.
 
16                 Mr. Mayor, I just wanted to follow up 
 
17          on some of the discussions that were 
 
18          happening before.  There was talk about the 
 
19          property tax cap and the reference that 
 
20          New York City does not have the property tax 
 
21          cap.  What is the feeling of the 
 
22          administration on that?  I know there is 
 
23          legislation out there to have a property tax 
 
24          cap.  We talked about affordable housing.  I 
 
 
                                                                  64
 
 1          come from an area that a majority of the 
 
 2          folks are homeowners, and taxes in general 
 
 3          are an issue.  
 
 4                 I know this topic has come up many 
 
 5          times.  Could you just give us --
 
 6                 MAYOR DE BLASIO:  Yes.  I'm a 
 
 7          homeowner myself, in Brooklyn, and the 
 
 8          district I represented in the City Council 
 
 9          was overwhelmingly an outer borough, 
 
10          homeowner district.  So I certainly can 
 
11          relate to the concerns that so many of my 
 
12          constituents have.
 
13                 We do not believe in a property tax 
 
14          cap.  And it gets right back to the point 
 
15          that there are three levels of government.  
 
16          And maybe in the 1970s when the sense of the 
 
17          relationship between those levels of 
 
18          government was different -- certainly when 
 
19          the federal government had a very different 
 
20          sense of its own obligations and its role -- 
 
21          we could assume that in any time of danger we 
 
22          could turn elsewhere.  We have no such 
 
23          illusion at this point in history.  So we 
 
24          can't put any artificial barrier in place 
 
 
                                                                  65
 
 1          that might undermine our ability to serve our 
 
 2          people and protect our economy and protect 
 
 3          the safety of our people.
 
 4                 I look at this in a very cold-eyed 
 
 5          way.  We have to protect the day-to-day life 
 
 6          of everyday New Yorkers, the quality of life, 
 
 7          the safety, and the investments we're making 
 
 8          are about protecting our long-term economic 
 
 9          health.  We certainly saw what happened in 
 
10          the 1960s and '70s when the city was not 
 
11          fiscally disciplined and did not make the 
 
12          right investments and became less 
 
13          economically viable; we saw the huge domino 
 
14          effect that occurred.  We're not going to let 
 
15          that happen.  And part of that revolves 
 
16          around making sure that we have the revenue 
 
17          we need to make the investments that will 
 
18          protect everyone's best interests.  So we do 
 
19          not believe in a cap.
 
20                 We also know, as I mentioned, the 
 
21          latest figures, again -- very sadly -- 
 
22          46 percent of New Yorkers at or near the 
 
23          poverty level.  It's an astounding figure.  
 
24          For us to be able to help people be viable 
 
 
                                                                  66
 
 1          and sustainable, we have to make sure that we 
 
 2          have resources available.  
 
 3                 So in the end, I think this is the 
 
 4          prudent, long-term path for our city.
 
 5                 ASSEMBLYMAN CUSICK:  Well, again -- 
 
 6          and I appreciate what you have to go through 
 
 7          in balancing a budget as large as New York 
 
 8          City's.  But I know in the outer boroughs, 
 
 9          particularly in Staten Island, taxes are a 
 
10          very big part of people's lives, and it's 
 
11          probably the number-one complaint that we get 
 
12          as elected officials.  And we need to address 
 
13          something when it comes to the property 
 
14          taxes.
 
15                 On the tax cap, my only suggestion is 
 
16          that the issue with a lot of residents is the 
 
17          predictability, and they know that there is 
 
18          not going to be an increase or anything like 
 
19          that, whereas right now there's no 
 
20          predictability, people have to wonder if 
 
21          there's going to be an increase.  And these 
 
22          are things that I think are very important to 
 
23          all residents of New York City.
 
24                 MAYOR DE BLASIO:  Well, I would argue 
 
 
                                                                  67
 
 1          -- I certainly understand the point.  I would 
 
 2          argue that we're doing even better for 
 
 3          homeowners by not only avoiding the cap, 
 
 4          which I think would be ultimately 
 
 5          counterproductive, but by not having property 
 
 6          tax increases.  Now, I understand what you 
 
 7          say in terms of predictability, whether we're 
 
 8          talking about five or 10 years ahead.  But 
 
 9          what I've said since I came in the door is 
 
10          we're going to avoid property tax increases.  
 
11          I think the number-one concern homeowners 
 
12          would have is no new increases.  We 
 
13          understand there are real challenges around; 
 
14          the assessed value and other considerations.  
 
15          But I think job one is to avoid a property 
 
16          tax increase.  
 
17                 We have done that by making a series 
 
18          of decisions that both are fiscally 
 
19          disciplined, like our labor contracts, like 
 
20          the healthcare savings that we're achieving, 
 
21          which are unprecedented, but also by laying 
 
22          in the reserves so, God forbid, when we do 
 
23          have a downturn -- and we know, again, it's 
 
24          not if but when -- that we can sustain a core 
 
 
                                                                  68
 
 1          level of services and be able to protect, in 
 
 2          particular, public safety while not resorting 
 
 3          to a property tax increase.  
 
 4                 So that is why I fully understand 
 
 5          anyone on this panel saying, Well, it looks 
 
 6          like you have substantial available reserves.  
 
 7          We argue those are necessary reserves because 
 
 8          they will sadly be eaten up very quickly when 
 
 9          the day comes that there's a downturn.  Some 
 
10          of them are being eaten up right now because 
 
11          of these new costs we talked about before.
 
12                 But I am adamant about guarding 
 
13          against any further property tax increases.  
 
14          And I don't want to do that via a fixed rule, 
 
15          I want to do that by smart budgeting and 
 
16          using our resources wisely.
 
17                 ASSEMBLYMAN CUSICK:  It's definitely a 
 
18          discussion I would love to continue with 
 
19          you --
 
20                 MAYOR DE BLASIO:  Please.
 
21                 ASSEMBLYMAN CUSICK:  -- because it 
 
22          certainly is the number-one topic in my area 
 
23          and most of the outer boroughs.
 
24                 But I'll move on.  Also I want to 
 
 
                                                                  69
 
 1          thank you and the administration for the 
 
 2          work -- another topic that is big all 
 
 3          throughout the state is the -- and 
 
 4          particularly in Staten Island -- is the 
 
 5          heroin and opioid epidemic.
 
 6                 MAYOR DE BLASIO:  Yes.
 
 7                 ASSEMBLYMAN CUSICK:  I know that you 
 
 8          have been out there working with us.  But 
 
 9          could you give us just an overview of what 
 
10          the city is budgeting this fiscal year to 
 
11          combat the heroin and opioid epidemic?
 
12                 MAYOR DE BLASIO:  I'll see if Dean 
 
13          Fuleihan or Sherif Soliman have the exact 
 
14          dollar figure, but I'll give you the 
 
15          overview.  We're very focused on this issue.  
 
16          It's a growing problem and -- you may have 
 
17          seen the map in one of the papers the other 
 
18          day of what's happening around the country -- 
 
19          even worse in many parts of the country.  
 
20          Which is astounding, because I know Staten 
 
21          Island in particular, very hard-hit, and many 
 
22          other parts of the five boroughs. 
 
23                 We are making this a priority in terms 
 
24          of NYPD, we're making it a priority in terms 
 
 
                                                                  70
 
 1          of Department of Education and efforts to get 
 
 2          young people to understand what these 
 
 3          challenges are before they end up in a 
 
 4          dangerous situation.  We are doing a lot to 
 
 5          work with grassroots organizations to reach 
 
 6          parents and help them.  We certainly have 
 
 7          done a lot working with pharmacies to make 
 
 8          the antidote drug available to avoid a fatal 
 
 9          overdose.  And there's a lot more that will 
 
10          be part of our package.  It very much 
 
11          connects with our overall new initiative, 
 
12          Thrive NYC, which is a comprehensive citywide 
 
13          mental health initiative.  But we consider 
 
14          the challenges of substance abuse to be 
 
15          absolutely interrelated to mental health 
 
16          challenges in many cases, so we have both of 
 
17          these strategies working together.  
 
18                 But what we can say is, particularly 
 
19          as we've applied more and more focus and more 
 
20          and more energy, we are seeing an impact.  
 
21          And I think NYPD has been a crucial partner.  
 
22          But much more to do, because we understand 
 
23          how pervasive this problem is.
 
24                 DIRECTOR FULEIHAN:  We'll get the 
 
 
                                                                  71
 
 1          exact number.
 
 2                 MAYOR DE BLASIO:  We'll come back to 
 
 3          you on those specific numbers.
 
 4                 ASSEMBLYMAN CUSICK:  Thank you.  Thank 
 
 5          you, Mr. Mayor.  
 
 6                 Just one more issue is you had 
 
 7          mentioned that in the city budget you're 
 
 8          providing $337 million in relief for New York 
 
 9          City Hospitals.  Just to be a little local 
 
10          and parochial here, Staten Island is the only 
 
11          borough that does not have a New York City 
 
12          hospital, full-service.  When you are going 
 
13          through the budgeting for New York City 
 
14          Hospitals, I would just request that we can 
 
15          have a conversation about money provided to 
 
16          the existing hospitals, to make up for the 
 
17          loss that we don't have a hospital.  
 
18                 Particularly after Sandy, we have 
 
19          found that there are certain hospitals that 
 
20          are in flood zones and some that are not.  
 
21          And if another disaster hits, the money is 
 
22          truly needed not only in Staten Island, but 
 
23          in other areas in New York City.
 
24                 MAYOR DE BLASIO:  Yes, thank you, 
 
 
                                                                  72
 
 1          Assemblyman.  And as you know, we've tried to 
 
 2          provide some additional support in terms of 
 
 3          preparing for any kind of natural disaster, 
 
 4          and that's been one of our focal points, on 
 
 5          Staten Island.  
 
 6                 Second, look, we're going to have to 
 
 7          make some very tough choices going forward on 
 
 8          Health and Hospitals.  We're going to have to 
 
 9          make a series of reforms.  To be optimistic 
 
10          in that process, we can also look at how we 
 
11          can address some of the long-standing equity 
 
12          issues.  There's no question that Staten 
 
13          Island has not been given what it deserves, 
 
14          and we want to see how we can fix that issue.  
 
15          But it will, unfortunately, be against a 
 
16          backdrop of some major changes and reforms 
 
17          that will be very tough to achieve.
 
18                 ASSEMBLYMAN CUSICK:  Thank you, 
 
19          Mr. Chairman.  Thank you, Mr. Mayor.
 
20                 MAYOR DE BLASIO:  Thank you.
 
21                 CHAIRMAN FARRELL:  Thank you very 
 
22          much.
 
23                 We've been joined by Assemblywoman 
 
24          Mayer and Assemblyman Barron.
 
 
                                                                  73
 
 1                 Senator?
 
 2                 CHAIRWOMAN YOUNG:  Yes.  Next will be 
 
 3          Senator Liz Krueger, who is the ranking 
 
 4          member on the Finance Committee.
 
 5                 SENATOR KRUEGER:  Thank you, 
 
 6          Mr. Mayor.  There are so many of us with so 
 
 7          many questions.  I'm going to try to do a 
 
 8          little lightning round, if it's okay with 
 
 9          you.
 
10                 MAYOR DE BLASIO:  All right.  Ready.
 
11                 SENATOR KRUEGER:  So Senator Young 
 
12          brought up the amount of Medicaid money 
 
13          New York City gets compared to the rest of 
 
14          the state.  Do we get special rules for 
 
15          New York City, or is it just a ratio of the 
 
16          number of poor people drawing down Medicaid 
 
17          throughout the state and the New York City 
 
18          share?
 
19                 MAYOR DE BLASIO:  I'd like to ask Dean 
 
20          Fuleihan to answer.
 
21                 DIRECTOR FULEIHAN:  Exactly.  That's 
 
22          the correct answer, we have no -- and we have 
 
23          no administrative or rate-setting powers over 
 
24          Medicaid.
 
 
                                                                  74
 
 1                 SENATOR KRUEGER:  Thank you.
 
 2                 And there was also reference to the 
 
 3          mandate relief available within this year's 
 
 4          budget based on changes in Medicaid law over 
 
 5          the last several years.  Again, is New York 
 
 6          City getting a disproportionate share of 
 
 7          mandate relief for Medicaid compared to the 
 
 8          rest of the state?
 
 9                 DIRECTOR FULEIHAN:  No.
 
10                 SENATOR KRUEGER:  Thank you.
 
11                 You raised in your testimony that New 
 
12          York City would be obligated to contribute 
 
13          more per student in charter schools out of 
 
14          your education budget under the Governor's 
 
15          proposal.  Is that across the board for all 
 
16          localities, or only New York City would be 
 
17          obligated to put more of its education money 
 
18          into the charter formula?
 
19                 DIRECTOR FULEIHAN:  Only New York 
 
20          City.
 
21                 SENATOR KRUEGER:  Only New York City, 
 
22          thank you.
 
23                 So yes, there's a CUNY system and a 
 
24          SUNY system.  But is it the City of 
 
 
                                                                  75
 
 1          New York's position that we should have one 
 
 2          higher education system for students who 
 
 3          aren't in the City of New York and a 
 
 4          different system with less funding for 
 
 5          students who happen to be from the City of 
 
 6          New York to go to higher education?
 
 7                 DIRECTOR FULEIHAN:  No.
 
 8                 SENATOR KRUEGER:  And in fact this 
 
 9          proposal that the Governor's making, what it 
 
10          does is shift a greater burden to the 
 
11          locality for CUNY students than for SUNY 
 
12          students?
 
13                 DIRECTOR FULEIHAN:  That's correct.
 
14                 SENATOR KRUEGER:  And is it true that 
 
15          CUNY students are already lower-income on 
 
16          average than SUNY students throughout the 
 
17          state?
 
18                 DIRECTOR FULEIHAN:  Correct.
 
19                 SENATOR KRUEGER:  So would it be an 
 
20          equity model to require every county to 
 
21          contribute the same ratio to its SUNY system 
 
22          if this is required of the City of New York 
 
23          for CUNY?
 
24                 DIRECTOR FULEIHAN:  As you know, we're 
 
 
                                                                  76
 
 1          asking that that proposal not go forward.  
 
 2          And as the mayor pointed out, we are taking 
 
 3          the Governor at his commitment, and we're 
 
 4          working through that.
 
 5                 SENATOR KRUEGER:  And in your 
 
 6          testimony you talked about increased costs 
 
 7          for the City of New York on Medicaid because 
 
 8          the Governor doesn't -- it lifts the state 
 
 9          cap on localities having to pick up growth in 
 
10          costs.  Is that being applied anywhere else 
 
11          in the state, or just in the City of New 
 
12          York?
 
13                 DIRECTOR FULEIHAN:  Just in the City 
 
14          of New York if it were to occur.
 
15                 SENATOR KRUEGER:  And then there was 
 
16          discussion about the fact that there's the 
 
17          $170 million per year from the old MAC bond 
 
18          deals, and the mayor discussed the fact that 
 
19          there was a court decision on this.  And it 
 
20          was raised that why should the state continue 
 
21          to pay this money even though the courts 
 
22          apparently decided we're obligated to and we 
 
23          should.
 
24                 How does that number compare to what 
 
 
                                                                  77
 
 1          New York City no longer gets in AIM funding?
 
 2                 DIRECTOR FULEIHAN:  It is below what 
 
 3          New York City normally gets.  It was a 
 
 4          commitment in 2005 for 30 years at 
 
 5          $170 million a year.  We used to receive over 
 
 6          $300 million in AIM funding every year, which 
 
 7          we are no longer getting.
 
 8                 SENATOR KRUEGER:  And do you happen to 
 
 9          remember what the state's argument was when 
 
10          it cut New York City's AIM or revenue-sharing 
 
11          and left every other locality whole, if even 
 
12          still too low?
 
13                 DIRECTOR FULEIHAN:  No.  Actually I 
 
14          remember the city opposing it at that time as 
 
15          being the only municipality that would not be 
 
16          receiving municipal aid.
 
17                 SENATOR KRUEGER:  And did we put that 
 
18          money back this year?
 
19                 DIRECTOR FULEIHAN:  You did not.
 
20                 SENATOR KRUEGER:  We did not, thank 
 
21          you.
 
22                 There's also a proposal to change the 
 
23          formula of who pays for expanded or continued 
 
24          services for the homeless through TANF and 
 
 
                                                                  78
 
 1          safety net.  Can you project, one, is that 
 
 2          only for New York City or other localities?  
 
 3          And, two, what that will mean for New York 
 
 4          City going forward?
 
 5                 DIRECTOR FULEIHAN:  Well, we actually 
 
 6          need more detail on this and more detail on 
 
 7          exactly what the homeless plan is, and we're 
 
 8          looking forward to those details.  
 
 9                 The provision you're talking about is 
 
10          a "may," and it allows that state actions in 
 
11          the city can be offset with other safety-net 
 
12          payments that the state makes, basically to 
 
13          single shelters.  So there could be an 
 
14          offset.  We have asked and we're waiting for 
 
15          the details on that, so I can't give you 
 
16          specific numbers at this point.
 
17                 SENATOR KRUEGER:  But there's reason 
 
18          for us to be concerned until we have those 
 
19          details?
 
20                 DIRECTOR FULEIHAN:  Yes.
 
21                 SENATOR KRUEGER:  Yes.
 
22                 There was a discussion about the city 
 
23          not being under a 2 percent property tax cap 
 
24          and the rest of the state doing so.  
 
 
                                                                  79
 
 1          Ironically, perhaps just since we're sitting 
 
 2          here in this conference room, I don't know 
 
 3          where the Senate is today on schedule with 
 
 4          its session, but a bill is being voted on in 
 
 5          the Senate today that would require a 2 
 
 6          percent cap in the New York City property 
 
 7          tax.  I, for the record, am voting no on that 
 
 8          -- yes, Senator Lanza is the sponsor, but 
 
 9          he's here with us.  But I think the bill is 
 
10          going forward in his absence.  Sometimes we 
 
11          get to debate his bill.
 
12                 But just for the record, if the Senate 
 
13          law were to go into effect, it would 
 
14          radically impact the budget projections for 
 
15          the City of New York; is that correct?
 
16                 DIRECTOR FULEIHAN:  Yes.  You're on a 
 
17          roll.
 
18                 SENATOR KRUEGER:  Yes, to have to be 
 
19          under a 2 percent cap.
 
20                 And just finally, do you know how much 
 
21          money the City of New York taxpayers send to 
 
22          Albany in comparison to what they get back 
 
23          from the state budget?
 
24                 DIRECTOR FULEIHAN:  The city 
 
 
                                                                  80
 
 1          contributes much more -- we'll get you the 
 
 2          exact figures, but the city contributes much 
 
 3          more than we receive back.
 
 4                 SENATOR KRUEGER:  There's a woman with 
 
 5          a piece of paper behind you that she's trying 
 
 6          to hand you.
 
 7                 DIRECTOR FULEIHAN:  Yes, we will get 
 
 8          it for you in a moment.
 
 9                 (Laughter.)
 
10                 SENATOR KRUEGER:  I'm sorry, it wasn't 
 
11          a trick, but it looked like --
 
12                 MAYOR DE BLASIO:  Senator, this 
 
13          lightning round is so fast we're trying to 
 
14          keep up with it.
 
15                 (Laughter.)
 
16                 SENATOR KRUEGER:  So, Mr. Mayor, you 
 
17          went through --
 
18                 DIRECTOR FULEIHAN:  Yes, I didn't want 
 
19          to give you the wrong number.  I started to 
 
20          say 60 percent; it's 57 percent.
 
21                 SENATOR KRUEGER:  Aha.
 
22                 MAYOR DE BLASIO:  Clarify it.  Clarify 
 
23          it.
 
24                 DIRECTOR FULEIHAN:  It's 57 percent 
 
 
                                                                  81
 
 1          that the taxpayers of New York City --
 
 2                 (Cross-talk.)
 
 3                 MAYOR DE BLASIO:  Could you say the 
 
 4          whole sentence for everyone's edification?
 
 5                 DIRECTOR FULEIHAN:  So we're going to 
 
 6          make sure I get it to you.
 
 7                 SENATOR KRUEGER:  Okay.
 
 8                 MAYOR DE BLASIO:  We're experiencing 
 
 9          technical difficulties, Senator.
 
10                 SENATOR KRUEGER:  I appreciate your 
 
11          ability to respond so quickly.  I knew that 
 
12          we had so many questioners, I was trying to 
 
13          be fast here.
 
14                 MAYOR DE BLASIO:  Very good.  We'll 
 
15          get that clarified in just one second here.
 
16                 SENATOR KRUEGER:  We're going to get 
 
17          clarified.  Okay, I appreciate that.
 
18                 And there was one other section of the 
 
19          budget I believe you talked about in the 
 
20          context of housing.  It would require two 
 
21          additional steps that the City of New York 
 
22          would have to go through before it could 
 
23          approve city affordable housing projects.
 
24                 MAYOR DE BLASIO:  Correct.
 
 
                                                                  82
 
 1                 SENATOR KRUEGER:  Is there any basis 
 
 2          to make the argument that the City of 
 
 3          New York hasn't been able to handle this 
 
 4          effectively up until now --
 
 5                 MAYOR DE BLASIO:  No, Senator.
 
 6                 SENATOR KRUEGER:  -- and needs two new 
 
 7          levels of oversight?
 
 8                 MAYOR DE BLASIO:  No.  This recalls 
 
 9          the famous phrase "If it ain't broke, don't 
 
10          fix it."  We've been producing an immense 
 
11          amount of affordable housing using the bond 
 
12          cap authority.  As I said, we had 1200 more 
 
13          units that could have been produced had the 
 
14          additional authority been extended to us.  
 
15                 I think everyone here wants to see 
 
16          affordable housing built as quickly as 
 
17          possible, and anything that can be done by 
 
18          government done efficiently, and we think 
 
19          adding this additional layers will only slow 
 
20          down the process at a point where thousands 
 
21          and thousands of people are waiting for 
 
22          housing that will allow them and their 
 
23          families to be able to make ends meet.
 
24                 SENATOR KRUEGER:  Thank you very much.
 
 
                                                                  83
 
 1                 MAYOR DE BLASIO:  Thank you.
 
 2                 SENATOR KRUEGER:  And if there's 
 
 3          not -- yes.
 
 4                 DIRECTOR FULEIHAN:  I will answer.  It 
 
 5          is what I thought, I apologize.  
 
 6          approximately 60 percent of the revenues of 
 
 7          the state are generated within New York City.
 
 8                 SENATOR KRUEGER:  Thank you very much.
 
 9                 Thank you, Senator.
 
10                 CHAIRWOMAN YOUNG:  Thank you, Senator.
 
11                 CHAIRMAN FARRELL:  Thank you.
 
12                 Assemblyman Weprin.
 
13                 ASSEMBLYMAN WEPRIN:  Thank you, 
 
14          Mr. Chairman.  
 
15                 And thank you, Mr. Mayor, for coming 
 
16          up here in the midst of cleanup, which I know 
 
17          is still taking place.  And we're very -- 
 
18          considering it was the second-largest storm 
 
19          in the history of the City of New York, you 
 
20          know, I don't think you did so badly, 
 
21          although I know there's still some issues 
 
22          outstanding.
 
23                 On another subject, I chair the 
 
24          Assembly Task Force on People with 
 
 
                                                                  84
 
 1          Disabilities, and I was very proud to march 
 
 2          with you and former Senator Tom Harkin last 
 
 3          summer, with your commitment to ADA and the 
 
 4          25th anniversary, with Disability Pride 
 
 5          Month.  
 
 6                 And your commissioner, Victor Calise, 
 
 7          does a great job, and I work very closely 
 
 8          with his office.  And I know you are very 
 
 9          committed personally to ADA compliance and to 
 
10          making New York City accessible to all.
 
11                 Having said that, though, as you know, 
 
12          the U.S. Attorney, Preet Bharara, came out 
 
13          with the results of a two-year investigation 
 
14          and released that on December 21st, saying 
 
15          that 83 percent of New York City schools are 
 
16          not ADA-compliant.  And I know there was 
 
17          supposed to be some response from the city, I 
 
18          believe it was just last week, January 20th.  
 
19          Can you give us what the result of that is 
 
20          and what the fiscal cost might be to bring 
 
21          New York City schools to be ADA-compliant.
 
22                 MAYOR DE BLASIO:  Well, I'll start and 
 
23          Dean Fuleihan may want to join in on the cost 
 
24          issue.
 
 
                                                                  85
 
 1                 First of all, the U.S. Attorney 
 
 2          raised, obviously, an important issue.  We 
 
 3          all care deeply about maximizing 
 
 4          accessibility in every way, and we've tried 
 
 5          to do that in a host of ways in the city, 
 
 6          including, for example, ensuring that more of 
 
 7          our taxis are accessible and any number of 
 
 8          other areas where we're trying to focus on 
 
 9          making the city accessible for all. 
 
10                 In terms of the city schools, since 
 
11          approximately 1992, as schools have been 
 
12          built or substantially rehabilitated, that 
 
13          has been done with accessibility standards.  
 
14          In terms of our ongoing efforts to upgrade 
 
15          older schools, we have $100 million in the 
 
16          current budget focused on additional 
 
17          accessibility efforts.  
 
18                 Eight hundred fifty-five of our 1582 
 
19          school buildings -- so again, 855 out of 
 
20          1,582 school buildings -- are either fully or 
 
21          partially accessible.  So that's a 54 percent 
 
22          level.  And with only one exception, every 
 
23          one of our 32 districts has at least eight 
 
24          accessible buildings.  
 
 
                                                                  86
 
 1                 So considering we have a school 
 
 2          system, many of which the buildings were 
 
 3          built 50, 60, 70, 80 years ago, we've managed 
 
 4          to make real progress on accessibility.  
 
 5          We're absolutely committed to it for the long 
 
 6          haul and will certainly work closely with the 
 
 7          U.S. Attorney.  
 
 8                 Just by way of reference, walking 
 
 9          distance from my home in Brooklyn is a school 
 
10          -- it's certainly typical, but it makes the 
 
11          point -- a school that was built in 1875, PS 
 
12          39.  So we're dealing with schools of all 
 
13          different configurations.  
 
14                 But it's an ongoing commitment of the 
 
15          city to continue to increase accessibility in 
 
16          our schools.
 
17                 ASSEMBLYMAN WEPRIN:  Okay.  And the 
 
18          cost?
 
19                 MAYOR DE BLASIO:  The cost of, again, 
 
20          ADA compliance per se, we're in the many 
 
21          billions of dollars.  But I don't think we 
 
22          have a --
 
23                 DIRECTOR FULEIHAN:  Right, we don't 
 
24          have a specific cost at this time.
 
 
                                                                  87
 
 1                 MAYOR DE BLASIO:  We can try and give 
 
 2          you a better reading on that, but certainly 
 
 3          many, many billions of dollars.
 
 4                 ASSEMBLYMAN WEPRIN:  Okay.  Yeah, I 
 
 5          know you are personally committed and I would 
 
 6          like to work closely with your Office of 
 
 7          People with Disabilities and Commissioner 
 
 8          Calise on anything we can do at the state 
 
 9          level to make sure that accessibility occurs.
 
10                 In answer to Senator Krueger's 
 
11          question, my own personal recollection is 
 
12          that AIM was eliminated for the first time 
 
13          for New York City in Governor Paterson's last 
 
14          year, which was my first year up here, in 
 
15          2010, and it was supposed to be for one year 
 
16          only and restored the following year.  But 
 
17          when Governor Cuomo came in in 2011, he 
 
18          stated that there was no cut because it was 
 
19          already zero from last year.  So I think 
 
20          they've kind of forgot about what we thought 
 
21          was a commitment between the state in 
 
22          providing AIM the following year.
 
23                 So, you know, I continue to argue that 
 
24          New York City should still continue to get 
 
 
                                                                  88
 
 1          that AIM and we shouldn't give up on it, that 
 
 2          our understanding as legislators was it was 
 
 3          only going to be a one-year, one-time cut and 
 
 4          it would be restored the following year.
 
 5                 MAYOR DE BLASIO:  Well, we agree with 
 
 6          your interpretation, it's certainly never 
 
 7          something we're going to give up on.  I think 
 
 8          your recollection of history is exactly 
 
 9          right.
 
10                 ASSEMBLYMAN WEPRIN:  Thank you, 
 
11          Mr. Chairman.
 
12                 CHAIRMAN FARRELL:  Thank you.
 
13                 Mr. Mayor, one of the problems we have 
 
14          is we're going to have elections and people 
 
15          are being moved out of the schools.  And 
 
16          Manhattan, the northern end is hills, so what 
 
17          looks like three blocks apart can actually be 
 
18          a hundred-foot drop and walking 10 blocks and 
 
19          then back.  And we've had a lot of problems 
 
20          getting the school secure, the reason why we 
 
21          don't have the voting there.
 
22                 I'd appreciate it if you could look 
 
23          into that so that we don't have a problem 
 
24          where people will be going 10 blocks and 
 
 
                                                                  89
 
 1          20 blocks when they didn't have to because a 
 
 2          railing is loose on the entrance which could 
 
 3          be fixed for $10.
 
 4                 MAYOR DE BLASIO:  I couldn't agree 
 
 5          more.  We will follow up with the Board of 
 
 6          Elections.  And obviously we're deeply 
 
 7          concerned about people being able to vote and 
 
 8          not finding any hindrance to vote.  So I 
 
 9          appreciate you raising this, and we'll follow 
 
10          up right away.  
 
11                 CHAIRMAN FARRELL:  Yeah, because I 
 
12          thought they had problems in Brooklyn, too, 
 
13          with the same thing, losing the schools.  
 
14                 Thank you.  Senator?
 
15                 CHAIRWOMAN YOUNG:  Thank you very 
 
16          much.
 
17                 Our next speaker will be Senator Tony 
 
18          Avella.
 
19                 SENATOR AVELLA:  Thank you, Madam 
 
20          Chair.
 
21                 Good morning, Mr. Mayor -- I think 
 
22          we're still in the morning.
 
23                 MAYOR DE BLASIO:  Good morning.  Yes.
 
24                 SENATOR AVELLA:  I'd like to go back 
 
 
                                                                  90
 
 1          to the property tax cap, the 2 percent cap 
 
 2          that the rest of New York State has.  
 
 3                 You made a comment earlier, in 
 
 4          reference to a question from one of the 
 
 5          Assemblymembers about this, that the city 
 
 6          hasn't raised its tax rate in a number of 
 
 7          years.  But I can assure you, everybody 
 
 8          watching your comments on TV is probably 
 
 9          having the same reaction that I did, is that 
 
10          everybody's assessment goes up every year.  
 
11          And that is a tremendous burden on many 
 
12          homeowners, many seniors, disabled 
 
13          individuals who we want to keep in their 
 
14          homes.
 
15                 And I know at the same time you've 
 
16          been asking for the state to restore the 
 
17          Medicaid cuts.  
 
18                 So I and the IDC, the Independent 
 
19          Democratic Conference, will make this 
 
20          recommendation to you and to the Governor, 
 
21          that if you would institute the property tax 
 
22          cap, including assessments, in New York City, 
 
23          then we would urge the Governor and the 
 
24          Legislature to restore the Medicaid funding.
 
 
                                                                  91
 
 1                 Your thoughts?
 
 2                 MAYOR DE BLASIO:  With real respect, 
 
 3          Senator, I think that would be a very 
 
 4          dangerous path for New York City.  We have to 
 
 5          be clear about the fact that, again, we have 
 
 6          only ourselves to depend on in a moment of 
 
 7          difficulty.  
 
 8                 And I do understand fully how many of 
 
 9          my constituents are facing a burden which is 
 
10          related to, obviously, strangely enough the 
 
11          success of New York City, the growth and 
 
12          strength of New York City, our property 
 
13          values have gone up.  And with that have gone 
 
14          up the assessments.  And that has created a 
 
15          challenge and a burden.
 
16                 But I do -- I have to disagree, first 
 
17          of all, that I think -- again, as a homeowner 
 
18          myself -- there's a big difference between 
 
19          growth of an assessment based on value versus 
 
20          a property tax increase.  A property tax 
 
21          increase is another form of negative for a 
 
22          homeowner, another hit on the homeowner, and 
 
23          we're working very, very conscientiously to 
 
24          avoid any scenario where a property tax 
 
 
                                                                  92
 
 1          increase would be necessary.
 
 2                 Anything that would artificially limit 
 
 3          our ability to put together resources would 
 
 4          undermine all of our efforts, whether it be 
 
 5          at public safety, affordable housing, 
 
 6          education, etc, which are necessary for the 
 
 7          city's future.  
 
 8                 And I would argue -- again, with real 
 
 9          respect -- that that tradeoff is an unfair 
 
10          tradeoff on its face, because the state has 
 
11          an obligation to cover these Medicaid 
 
12          expenses.  And we're certainly going to 
 
13          remind people the city has that obligation 
 
14          and should consistently hold to that 
 
15          obligation.  
 
16                 Anything -- look, when this proposal 
 
17          first came out -- and again, I want to 
 
18          emphasize the Governor quickly said it would 
 
19          not cost the city a penny, and I appreciate 
 
20          that deeply.  But when it came out, what was 
 
21          so interesting was it was criticized by many 
 
22          members of the Senate and Assembly, it was 
 
23          criticized by CUNY students, it was 
 
24          criticized by people in the healthcare field, 
 
 
                                                                  93
 
 1          it was criticized by the Citizens Budget 
 
 2          Commission and the Manhattan Institute.  Now, 
 
 3          you don't usually see that particular 
 
 4          coalition.  But everyone had the same 
 
 5          message:  That would be the state supplanting 
 
 6          its obligations and putting them on the City 
 
 7          of New York.  
 
 8                 And the City of New York, in the 
 
 9          end -- again, we do not have a safety net, we 
 
10          have to take care of our own -- no matter 
 
11          what happens levels of government above us, 
 
12          no matter what happens in the global economy, 
 
13          we have to take care of our own people.
 
14                 So I would not agree that that's a 
 
15          fair deal for New York City.
 
16                 SENATOR AVELLA:  Well, with all due 
 
17          respect, I'm going to disagree, and I think 
 
18          Senator Young sort of outlined the situation 
 
19          by which the cap was imposed on other 
 
20          municipalities upstate.  In return, the state 
 
21          assumed the Medicaid funding.  So I think if 
 
22          -- we should apply the same logic to New York 
 
23          City.  
 
24                 And, Mr. Mayor, you know, I represent 
 
 
                                                                  94
 
 1          a middle-class district.  And if we don't 
 
 2          help the middle class of this city, we're 
 
 3          going to have an exodus like we had years 
 
 4          ago.  And as property values go up, even 
 
 5          though the tax rate is not going up, their 
 
 6          assessments are going up dramatically.  I 
 
 7          heard from a couple of people who got their 
 
 8          tax bill just the other day, and they're 
 
 9          talking $800 and $900 for a one-family home.  
 
10          For a lot of seniors, they cannot afford 
 
11          that.
 
12                 And if you had the 2 percent cap as 
 
13          the rest of the state does, you'd be eligible 
 
14          for a lot of the state relief programs for 
 
15          homeowners.
 
16                 And I would just add -- and I'll 
 
17          finish with this, because we can obviously 
 
18          follow this up later.  But I believe at the 
 
19          end of your statement you said we're all New 
 
20          Yorkers.  And I think it's unfair that New 
 
21          York City homeowners, property owners, don't 
 
22          benefit from the same property tax cap that 
 
23          everybody else in the state does.
 
24                 MAYOR DE BLASIO:  Senator -- Senator, 
 
 
                                                                  95
 
 1          you yourself pay city income tax and you know 
 
 2          that that is not the norm in the rest of the 
 
 3          state.  So I would urge you to recognize the 
 
 4          fact that we have a set of challenges in our 
 
 5          city that are different, a set of needs that 
 
 6          are different.  You know that we cover a lot 
 
 7          of things in the city ourselves that are very 
 
 8          costly and very challenging.  And that in 
 
 9          fact the notion -- I just can't agree with 
 
10          you on any notion of an exodus of the middle 
 
11          class when in fact we're seeing the opposite 
 
12          phenomenon:  The city is gentrifying.  And 
 
13          that comes with some good elements and some 
 
14          really problematic elements.  Property values 
 
15          are increasing intensely.  There's no flight 
 
16          of the middle class in New York City.  We're 
 
17          dealing with, in fact, the reverse 
 
18          phenomenon, trying to figure out how best to 
 
19          navigate it.
 
20                 But I'll tell you one thing, what 
 
21          would start to threaten the existence of the 
 
22          middle class in New York City is if we did 
 
23          not invest in public safety, if we did not 
 
24          invest in a better education system.  
 
 
                                                                  96
 
 1          Everyone knows we have sustained public 
 
 2          safety gains, but that will only continue if 
 
 3          we make the right investments protecting both 
 
 4          our communities and our officers.  Everyone 
 
 5          knows our school system is still not where it 
 
 6          needs to be for the 21st-century economy, we 
 
 7          must make those investments.  Our 
 
 8          infrastructure, I'm sure you would agree, is 
 
 9          far beyond where it needs to be for a major 
 
10          global economic capital.  We're far, far 
 
11          behind some of our competitors that made 
 
12          massive infrastructure investments because 
 
13          their federal governments, their national 
 
14          governments believe in that as a priority.  
 
15          Ours doesn't.  So we end up having to do it.
 
16                 So I just have to remind you that if 
 
17          we don't have the resources to protect the 
 
18          quality of life in our city, the safety of 
 
19          our city, the infrastructure of our city, 
 
20          that's what will actually threaten the middle 
 
21          class.
 
22                 SENATOR AVELLA:  Well, Mr. Mayor, 
 
23          again, I'm not going to debate you on this.  
 
24          I would disagree -- all those things you 
 
 
                                                                  97
 
 1          mentioned, of course we want to do that.  But 
 
 2          as you well know, balancing the budget is 
 
 3          taking issues and rectifying what are the 
 
 4          needs.  And I would just think that -- and 
 
 5          again, I disagree with you because I hear 
 
 6          from people in my district every day that 
 
 7          they're going to leave the City of New York 
 
 8          because of the taxes, and the property tax is 
 
 9          one of them.
 
10                 Thank you, Mr. Mayor.
 
11                 CHAIRMAN FARRELL:  Thank you.
 
12                 Senator?
 
13                 ASSEMBLYMAN OAKS:  We've been joined 
 
14          by Assemblyman Walter.
 
15                 CHAIRMAN FARRELL:  Assemblyman 
 
16          Brennan.
 
17                 ASSEMBLYMAN BRENNAN:  Good morning, 
 
18          Mr. Mayor.
 
19                 MAYOR DE BLASIO:  Good morning.
 
20                 ASSEMBLYMAN BRENNAN:  You identified 
 
21          as a concern the proposal by the Governor 
 
22          that the city be required to pick up 30 
 
23          percent of the CUNY senior college budget, 
 
24          and you indicated you had learned that the 
 
 
                                                                  98
 
 1          Governor was clarifying this proposal to 
 
 2          assure that reforms and efficiencies would 
 
 3          achieve those savings, and therefore there 
 
 4          wouldn't be imposed this burden on the city 
 
 5          government.
 
 6                 Can you imagine how reforms and 
 
 7          efficiencies could cover 30 percent of the 
 
 8          budget of the City University?
 
 9                 MAYOR DE BLASIO:  Let me separate two 
 
10          points within this, if I may.
 
11                 The Governor put forward the proposal, 
 
12          and then the Governor clarified the proposal.  
 
13          So obviously I would urge the Legislature to 
 
14          get clarity from the Governor on how he 
 
15          intends to proceed.  
 
16                 In terms of the question of looking 
 
17          for reforms and efficiencies, we think that's 
 
18          a smart thing to do in government.  And we 
 
19          look forward to sitting down, hopefully as 
 
20          early as next week, city and state officials, 
 
21          to talk about these two areas, Medicaid and 
 
22          CUNY, and see if there are some available 
 
23          options.  But that process has not begun, so 
 
24          I can't tell you at this moment what it will 
 
 
                                                                  99
 
 1          yield on what kind of timeline.  We take the 
 
 2          Governor at his word on the statement that 
 
 3          for this budget, it will not cost the city a 
 
 4          penny, and that's what I think we should all 
 
 5          hold to and hold him to.
 
 6                 But those conversations on the details 
 
 7          have not begun.
 
 8                 ASSEMBLYMAN BRENNAN:  I guess also, by 
 
 9          the same token, forcing the city government 
 
10          to once again cover the full increased cost 
 
11          of the Medicaid program, which you indicated 
 
12          would cost a billion dollars a year by 2021, 
 
13          approximately -- you know, given the fact 
 
14          that, you know, the Medicaid managed care 
 
15          system now underpays our hospitals, both HHC 
 
16          and the voluntaries, by very substantial 
 
17          amounts, does not cover their cost of care, I 
 
18          think it would be very dangerous to force the 
 
19          city to find another billion dollars worth of 
 
20          savings in the Medicaid program just inside 
 
21          the City of New York itself.
 
22                 MAYOR DE BLASIO:  I think there's 
 
23          again two areas here that collide:  In 
 
24          effect, the proposed cuts, which again we 
 
 
                                                                  100
 
 1          look forward to being handled in a way that 
 
 2          does not affect the city directly, and the 
 
 3          challenge we're having with Health and 
 
 4          Hospitals.  Which absolutely, as you say, is 
 
 5          related to a series of policy changes, some 
 
 6          that are part of the Affordable Care Act -- 
 
 7          which is I think a fundamental step forward 
 
 8          for this country, was the Affordable Care 
 
 9          Act.  But there were some elements of it that 
 
10          had, I think, unintended consequences for our 
 
11          public health systems.  Some of the Medicaid 
 
12          reform that the state achieved -- again, in 
 
13          many ways a very good policy -- had some real 
 
14          unintended consequences for our public health 
 
15          system.  
 
16                 We're seeing a number of factors 
 
17          collide.  They're making the economics of 
 
18          public health systems not only here, but all 
 
19          over the state and all over the country, less 
 
20          and less viable.  So we're going to have to 
 
21          come up with some different solutions, 
 
22          because a huge number of our citizens rely on 
 
23          those public hospitals.
 
24                 ASSEMBLYMAN BRENNAN:  Thank you.  I 
 
 
                                                                  101
 
 1          just also wanted to mention that I share your 
 
 2          view that the state should restore the AIM 
 
 3          funding to the City of New York, once known 
 
 4          as revenue sharing.  Just as an aside, New 
 
 5          York City's revenue sharing from the state in 
 
 6          1990 was $500 million.  And it was Governor 
 
 7          Spitzer who actually started trying to cut 
 
 8          revenue sharing.  We had restored about half 
 
 9          of it when the recession hit, and that's how 
 
10          the remainder got wiped out.
 
11                 MAYOR DE BLASIO:  Thank you.
 
12                 CHAIRMAN FARRELL:  Thank you.
 
13                 Senator?
 
14                 CHAIRWOMAN YOUNG:  Thank you, 
 
15          Assemblyman.
 
16                 Next it would be Senator Kathy 
 
17          Marchione.
 
18                 SENATOR MARCHIONE:  Thank you, Madam 
 
19          Chair. 
 
20                 Thank you, Mayor, for being here.
 
21                 MAYOR DE BLASIO:  Thank you, Senator.
 
22                 SENATOR MARCHIONE:  I serve as the 
 
23          chairman for Local Government for the Senate.  
 
24          And I hear it all the time, how we're one 
 
 
                                                                  102
 
 1          state, we need to be one state.  I watch the 
 
 2          remainder of the state outside of New York 
 
 3          City struggling, coming in and appearing 
 
 4          before Local Government about how difficult 
 
 5          it is to live within the 2 percent tax cap -- 
 
 6          which isn't even 2 percent.  This year it's 
 
 7          much less.
 
 8                 But I listened to you tell me that we 
 
 9          are one state, but I see your spending at 6 
 
10          percent.  I have difficulties stating at one 
 
11          point that we're one state and then in the 
 
12          next mouthful saying it's okay because I have 
 
13          needs.  Every single municipality that has 
 
14          come before us has a unique set of 
 
15          circumstances that requires them to do the 
 
16          best they can for their residents, but 
 
17          they're doing their best to live under the 2 
 
18          percent tax cap.
 
19                 I wonder, and I'm asking your opinion, 
 
20          if the Executive didn't actually require you 
 
21          to pay a portion of your Medicaid -- even 
 
22          though I know you're saving like $145 
 
23          million, because it's only 2 percent this 
 
24          year -- because you're not adhering to a 2 
 
 
                                                                  103
 
 1          percent tax cap that we self-impose and that 
 
 2          we have imposed upon every other municipality 
 
 3          and government in New York State except for 
 
 4          New York City.
 
 5                 MAYOR DE BLASIO:  Well, again, 
 
 6          Senator, I appreciate the point.  And I think 
 
 7          everyone is struggling in different ways.
 
 8                 SENATOR MARCHIONE:  They are.
 
 9                 MAYOR DE BLASIO:  And I don't -- 
 
10          again, I would never for a moment belittle 
 
11          the challenges being faced by municipalities 
 
12          all over the state.  
 
13                 We have an unusual reality because we 
 
14          have an income tax.  So that means for the 
 
15          average taxpayer, they are paying both a city 
 
16          property tax and a city income tax, and 
 
17          probably it would be healthy for all of us to 
 
18          look at the overall impact, what that means, 
 
19          and to compare across localities.
 
20                 But I think the bigger point here is 
 
21          we have a host of challenges that I think are 
 
22          particularly large and complicated in our 
 
23          city -- again, that aging infrastructure.  I 
 
24          know it's a problem all over the state.  Ours 
 
 
                                                                  104
 
 1          is just extraordinary in its size.  For 
 
 2          example, bridges over a hundred years old in 
 
 3          the City of New York, I believe there's 160 
 
 4          such bridges.  So we just have the sheer 
 
 5          weight of so many years of expenses that were 
 
 6          deferred.  
 
 7                 I mentioned our public housing 
 
 8          authority, home for 400,000 people.  That 
 
 9          public housing authority alone has a 
 
10          $17 billion unmet capital need level.
 
11                 So I'm not trying to, if you will, 
 
12          compare scars.  Everyone's got problems and 
 
13          challenges.  What I would say is that our 
 
14          taxpayers -- and it's a long-standing 
 
15          tradition -- pay two types of taxes.  Our 
 
16          challenges are particular and in many ways 
 
17          growing.  Some of the new obligations we're 
 
18          being hit with are different than what's 
 
19          happening in some other places.  We're also 
 
20          trying to be honest about the fact that -- 
 
21          and we say this almost in a spirit of 
 
22          collegiality -- we know when trouble hits, 
 
23          and it will, we can't come up here and 
 
24          pretend to say to you, as the state is 
 
 
                                                                  105
 
 1          dealing its own problems and other 
 
 2          municipalities are dealing with theirs, we're 
 
 3          not going to be able to say to you:  Bail us 
 
 4          out.  We're going to have to do that, to the 
 
 5          maximum extent possible, ourselves.
 
 6                 So that's why we consider ourselves, 
 
 7          in a sense, to have to meet our own 
 
 8          obligations in times of trouble, that's one 
 
 9          reason why a cap would be counterproductive.  
 
10                 But I think the point that Dean 
 
11          Fuleihan made earlier, and I say this in a 
 
12          positive vein, because we're all 
 
13          interconnected -- if we're paying upwards of 
 
14          60 percent of the revenue that goes into 
 
15          state coffers, I don't begrudge that, I think 
 
16          that is something it's my obligation to keep 
 
17          doing, in the sense of having a strong 
 
18          economy that creates jobs, that grows, that 
 
19          creates more revenue for all.  I'm trying to 
 
20          do the things that will allow that to happen.  
 
21                 And what I hear from business leaders 
 
22          all the time, number-one concern, public 
 
23          safety, where we're continuing to invest; 
 
24          second concern, education; third concern, 
 
 
                                                                  106
 
 1          affordable housing.  We get those pieces 
 
 2          right, we will continue to build the New York 
 
 3          City economy for the good of the whole state.  
 
 4          As I said, we're on our way, I think quite 
 
 5          soon in the scheme of things, to a 
 
 6          9-million-person population, which is also 
 
 7          going to create a whole series of strains, 
 
 8          but with many benefits for the entire 
 
 9          metropolitan area and the entire state.
 
10                 That's my argument about why I think 
 
11          we should avoid a strategy that actually 
 
12          could limit that growth and undermine our 
 
13          ability to handle the downturns when they do 
 
14          come.
 
15                 SENATOR MARCHIONE:  Thank you.  And I 
 
16          appreciate what you're saying, and I do agree 
 
17          that New York City is critically important to 
 
18          all of us in New York State.  And I 
 
19          understand that you have a different set of 
 
20          circumstances.  I myself come from a district 
 
21          this week, last week that a water line broke, 
 
22          it was a main line, it was 110 years old.  
 
23          The size and the magnitude of what you have 
 
24          is different, but the problems are pretty 
 
 
                                                                  107
 
 1          much the same.
 
 2                 MAYOR DE BLASIO:  Exactly.  I agree 
 
 3          with that.
 
 4                 SENATOR MARCHIONE:  And they're living 
 
 5          under a 2 percent tax cap.
 
 6                 So I understand what you're saying, 
 
 7          but the rest of us are doing our very best to 
 
 8          make sure we can save billions of dollars for 
 
 9          people who live here in New York State.  And 
 
10          I believe that New York City, although 
 
11          larger, although having your unique set of 
 
12          circumstances, if we're one state, then we're 
 
13          one state, and we should be under the same 
 
14          guidelines to save our taxpayers' dollars.
 
15                 My next question came from something 
 
16          you said about rent control, that we need to 
 
17          have more rent control, a one-bedroom 
 
18          apartment is $3100 and the state is providing 
 
19          $1500.  When you increase your budget by 
 
20          6 percent, aren't those additional monies 
 
21          being passed on to your taxpayers so that, 
 
22          although we want more rent control paid for 
 
23          by the state, when you're adding to your tax 
 
24          burden then you are adding to the amount that 
 
 
                                                                  108
 
 1          those owners of those properties have to 
 
 2          charge to pay the additional tax?  Am I 
 
 3          missing something here?
 
 4                 MAYOR DE BLASIO:  Well, I would just 
 
 5          say I think there's a couple of additional 
 
 6          pieces to the puzzle.  First of all, a lot of 
 
 7          that growth over the last few years is a 
 
 8          result of Hurricane Sandy, and that's very 
 
 9          specific.  Remember, our representatives in 
 
10          Washington fought very hard for the kind of 
 
11          relief that New York City, New York State, 
 
12          and New Jersey deserved as a result of Sandy, 
 
13          the kind of relief that other areas of the 
 
14          country had gotten when they experienced such 
 
15          disasters.  
 
16                 There's no question Sandy was the 
 
17          biggest natural disaster in the history of 
 
18          New York City.  Massive amount of damage 
 
19          caused.  So when those resources came in from 
 
20          FEMA, came in from HUD, they went into our 
 
21          city budget, they positively inflated our 
 
22          city budget.  They will be spent on 
 
23          resiliency efforts and recovery efforts, and 
 
24          then that will be gone from the budget.  So 
 
 
                                                                  109
 
 1          again, that budget will contract when this 
 
 2          immediate cycle of federal funding is over.
 
 3                 The other fact, again, major new 
 
 4          obligations -- which for us are very 
 
 5          striking, the fact that we had a one-two 
 
 6          punch of the actuary change and the specific 
 
 7          needs of our Health and Hospitals Corporation 
 
 8          that meant a billion-dollar additional charge 
 
 9          in this fiscal year alone.  These situations 
 
10          I think are specific challenges -- again, I 
 
11          agree with you a hundred percent, every place 
 
12          has a challenge, each one is different.  
 
13          These are some of ours, both the negative of 
 
14          the billion dollars that we were suddenly hit 
 
15          with, the positive of the federal aid, but 
 
16          knowing that that federal aid will then be 
 
17          used and no longer appear in the budget.  So 
 
18          that I think modifies a little bit some of 
 
19          the points that you're making.
 
20                 But look, overall, we're simply trying 
 
21          to put the pieces together in a way that is 
 
22          sustainable for this city and for the good of 
 
23          our city economy.  I think we'd both agree if 
 
24          we failed to take the right steps and New 
 
 
                                                                  110
 
 1          York City started to falter, everyone would 
 
 2          be hurt by that.  And that's what happened in 
 
 3          the '60s and '70s.  Let's face it, we saw it 
 
 4          with our own eyes:  Government made the wrong 
 
 5          choices, government was not fiscally 
 
 6          disciplined, did not put reserves in place -- 
 
 7          when the bad times came, there was nothing to 
 
 8          fall back on -- and didn't make the kind of 
 
 9          investments that kept the city economically 
 
10          viable.  
 
11                 We're trying to learn, unfortunately, 
 
12          the lessons of the past and make the 
 
13          adjustments that will allow us to be strong 
 
14          for the good of all going forward.  So that's 
 
15          our core strategy.  And it is a 
 
16          different approach.  Every place has to 
 
17          tailor the approach to their own needs.  This 
 
18          is the one that we think is working.  And I 
 
19          hope we can all agree that some of these 
 
20          numbers are really encouraging for all of us.  
 
21          We've got 213,000 new jobs in New York 
 
22          City -- that's a blessing for this whole 
 
23          state.  And it's our job to keep that going.
 
24                 SENATOR MARCHIONE:  Thank you, Mayor.  
 
 
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 1          And I think I just want to end on this point, 
 
 2          to say that you're not on your own as you've 
 
 3          been saying you're on your own.  Not one of 
 
 4          us sitting up here are on our own.  When you 
 
 5          had problems with Hurricane Sandy, the state 
 
 6          came in, the federal government came in.  
 
 7          When I had problems with my water line, I 
 
 8          went to the Governor's office to ask for some 
 
 9          assistance.  We're not on our own.  We're one 
 
10          state.  And when we're in need, as -- I 
 
11          believe you've got a lot of money in the 
 
12          budget this year, going into transportation, 
 
13          to fix major, important things in the state 
 
14          budget.  We're not on our own.
 
15                 MAYOR DE BLASIO:  Senator, if I may, I 
 
16          appreciate -- and I agree with you there are 
 
17          certainly areas where there's been 
 
18          extraordinary commonality.  This recent storm 
 
19          is a great example.  Tremendously good 
 
20          coordination between the city and the state, 
 
21          the MTA, et cetera, and everyone working in 
 
22          common cause.
 
23                 I would differentiate in an economic 
 
24          downturn, I really would, and I say this with 
 
 
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 1          absolute respect for your point.  I think 
 
 2          Sandy and other natural disasters are one 
 
 3          type of category -- and you'll remember that 
 
 4          the federal government was rather slow to 
 
 5          respond in terms of the financial support, 
 
 6          and it took a real fight in Washington to get 
 
 7          there, different than it would have been 10 
 
 8          or 20 years ago.  So I think there was a lot 
 
 9          of concern about whether the standards were 
 
10          changing in terms of federal obligation in a 
 
11          disaster.
 
12                 But what I was referring to is in an 
 
13          economic downturn where the revenues of the 
 
14          state will be deeply affected, the revenues 
 
15          of the federal government will be affected.  
 
16          When I say we're on our own, it's an 
 
17          acknowledgment of the fact that everyone will 
 
18          be hurting and we won't be in a position to 
 
19          ask for additional help.  Even if we're 
 
20          hurting, even if we're cutting vital 
 
21          services, we know we can't turn to people who 
 
22          already have had their own revenue cut to ask 
 
23          for help.  That's where we believe the 
 
24          prudent thing to do is to save for that rainy 
 
 
                                                                  113
 
 1          day.  That's the way we look at it.
 
 2                 SENATOR MARCHIONE:  And those in 
 
 3          upstate New York, we are in a downturn 
 
 4          economically.  We're not as vibrant as you 
 
 5          are in New York City.  And even though they 
 
 6          are in an economic downturn, they're still 
 
 7          staying within the 2 percent tax cap.  
 
 8          They're doing the very, very best that they 
 
 9          can.
 
10                 My last question, I've listened to you 
 
11          talk about police protection, and I guess I'm 
 
12          looking for an update on where police 
 
13          relations stand in the city, specifically do 
 
14          the courageous men and women of law 
 
15          enforcement have the support, financially, 
 
16          materially, personnel, personally, they need 
 
17          to continue doing the important jobs that 
 
18          they do?
 
19                 MAYOR DE BLASIO:  Thank you for the 
 
20          question.  Absolutely.  
 
21                 First of all, I'm very proud to say I 
 
22          gave them the finest police leader in the 
 
23          United States of America in Bill Bratton.  He 
 
24          and his leadership team have done an 
 
 
                                                                  114
 
 1          extraordinary job.  Two years running now, we 
 
 2          have driven down major crime across the seven 
 
 3          major crime categories.  We have a 5.8 
 
 4          percent decrease in crime over two years.  
 
 5                 We are adding resources for the latest 
 
 6          police vests for every one of our officers to 
 
 7          protect them.  We're adding resources for 
 
 8          technology, like the shot protection system 
 
 9          that's in our current city budget, so that 
 
10          our officers have immediate alerts when a 
 
11          shot is fired in key areas of the city -- and 
 
12          it also helps them tremendously in the 
 
13          investigation efforts.  
 
14                 We're adding resources so that every 
 
15          single one of our officers has the most 
 
16          up-to-date technology so they can get, for 
 
17          example, a suspect description and even a 
 
18          photo or a sketch of a suspect in their hand 
 
19          on an iPhone instantly.  Something that 
 
20          wasn't true just a year ago now is becoming 
 
21          common for every single officer.  That's 
 
22          going to greatly intensify their ability to 
 
23          protect both communities and themselves when 
 
24          they have that kind of information.
 
 
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 1                 The most training our officers have 
 
 2          ever received, including tactical training 
 
 3          that helps to keep them safe, every single 
 
 4          member of our force being trained.  
 
 5                 A 500-plus-person critical response 
 
 6          command.  I'm very proud of this change we 
 
 7          made in June.  It is an anti-terror unit, a 
 
 8          stand-alone, dedicated anti-terror unit, well 
 
 9          armed, well trained, that we can use -- 
 
10          obviously, given that we are, sadly, one of 
 
11          the number-one global terror targets.  This 
 
12          unit used to be drawn off -- a similar unit 
 
13          was drawn off of individual police precincts 
 
14          on a temporary basis.  We're now going to 
 
15          have 500-plus officers who do only 
 
16          anti-terror operations.  We think that's 
 
17          going to help them be ever more effective at 
 
18          preventing terror in the city.
 
19                 An overall increase of 2,000 officers 
 
20          on patrol strength -- again, the first 
 
21          increase since 2001 to help us sustain our 
 
22          safety.  And obviously I think police 
 
23          officers would be the first to say one of the 
 
24          best ways to keep them safe is to add to the 
 
 
                                                                  116
 
 1          ranks and give them the backup they deserve, 
 
 2          and we're doing that.
 
 3                 SENATOR MARCHIONE:  Thank you very 
 
 4          much.
 
 5                 MAYOR DE BLASIO:  Thank you.
 
 6                 SENATOR MARCHIONE:  Thank you for your 
 
 7          answers.
 
 8                 CHAIRMAN FARRELL:  Thank you.
 
 9                 Assemblywoman Malliotakis.
 
10                 ASSEMBLYWOMAN MALLIOTAKIS:  Thank you, 
 
11          Mr. Mayor, and thank you to your staff for 
 
12          keeping me informed during the snowstorm.  We 
 
13          appreciate the open communication.  
 
14                 I just wanted to talk also about this 
 
15          property tax cap.  Last year we supported 
 
16          rent-control legislation for the City of New 
 
17          York as well as we saw the Rent Control 
 
18          Board, of which you appoint all nine members, 
 
19          implement a rent freeze.  We really don't see 
 
20          the same type of empathy for the property 
 
21          taxpayers in the City of New York.  Or, aside 
 
22          from property taxes, we could even say like a 
 
23          water bill freeze, which puts many landlords 
 
24          in a jam here if you're going to freeze the 
 
 
                                                                  117
 
 1          rents.  
 
 2                 But my homeowners I think are in a 
 
 3          situation now where if this budget goes 
 
 4          through as is, we're going to see them be 
 
 5          doubly hit; one, because their property taxes 
 
 6          will not be capped, and two, then they also 
 
 7          have to take on the burden of the $650 
 
 8          million over the next three years for 
 
 9          Medicaid.  
 
10                 So I'm very disappointed that you 
 
11          don't support the cap.  I'll continue to 
 
12          advocate that with my colleagues.  But I hope 
 
13          you really reconsider, because I think that 
 
14          the property taxpayers in the City of New 
 
15          York deserve the same type of relief that 
 
16          you've put forth for the rent payers in the 
 
17          city.
 
18                 MAYOR DE BLASIO:  Well, 
 
19          Assemblymember, may I speak to that?
 
20                 ASSEMBLYWOMAN MALLIOTAKIS:  Sure.
 
21                 MAYOR DE BLASIO:  First of all, I want 
 
22          to emphasize with the Rent Guidelines Board, 
 
23          the charge that I've given them is to look at 
 
24          the real expenses each year and to adjust the 
 
 
                                                                  118
 
 1          increases in rent according to the real 
 
 2          expenses that landlords have.  You will 
 
 3          remember that the first year was one number, 
 
 4          the second year was a different number.  
 
 5          Every year you're going to see a different 
 
 6          number according to the facts.  
 
 7                 Now, one thing that did change in the 
 
 8          last couple of years, it's well known, is the 
 
 9          price of fuel went way down.  In the past, 
 
10          honestly, when such a change occurred in 
 
11          favor of the landlord's bottom line, it was 
 
12          not necessarily reflected in the rent 
 
13          increase of tenants.  In fact, the rent 
 
14          increase of tenants stayed fairly substantial 
 
15          regardless of whether the cost for landlords 
 
16          went up or down.  
 
17                 We have a different view.  We believe 
 
18          it should be a very clear process to reflect 
 
19          what those costs are.  When costs of 
 
20          landlords go down, tenants should have that 
 
21          savings reflected in their rent situation.  
 
22          When it goes up, we should also pass that 
 
23          along --
 
24                 ASSEMBLYWOMAN MALLIOTAKIS:  But the 
 
 
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 1          water bills and the property taxes have 
 
 2          continued to rise.  
 
 3                 But more specifically, instead of the 
 
 4          landlords, I want to focus on my 
 
 5          constituents, who are the homeowners and 
 
 6          residential homeowners on Staten Island and 
 
 7          Bay Ridge, Brooklyn.  
 
 8                 I also just -- maybe you can answer 
 
 9          this question, because no one seems to be 
 
10          able to give me a straight answer of why 
 
11          those individuals who paid their property 
 
12          taxes in full last year were hit with a 
 
13          notice in September saying that they owed 
 
14          more money.
 
15                 MAYOR DE BLASIO:  Could you be 
 
16          specific about that?
 
17                 ASSEMBLYWOMAN MALLIOTAKIS:  Okay.  So 
 
18          for instance, I'm a property owner and I paid 
 
19          my taxes in full, and then in September I 
 
20          received a notice saying, oh, by the way, you 
 
21          owe another hundred or $200 -- I think it was 
 
22          a percentage, a point -- I'm not sure of the 
 
23          exact percentage that increased.  But I found 
 
24          that to be very odd, that someone who had 
 
 
                                                                  120
 
 1          paid their property taxes in full received 
 
 2          another a bill later on saying that they owed 
 
 3          more money.  And then I found out that many 
 
 4          other constituents in my community were hit 
 
 5          with the same type of notice.
 
 6                 MAYOR DE BLASIO:  I'll get a 
 
 7          clarification to you.  Again, as I said, 
 
 8          we're adamant about not increasing the rate.  
 
 9          We know a number of people's assessment has 
 
10          gone up and that's affected them.  But I'll 
 
11          get back to you on the specific point you're 
 
12          raising.
 
13                 I just want to make one other point on 
 
14          your previous point on the water bills.  One 
 
15          of the things I talked about when I was 
 
16          public advocate was ending the practice of 
 
17          the city using water bills as a general 
 
18          revenue source.  We've incrementally moved on 
 
19          that, and we're going to be at a point soon 
 
20          when we end that practice entirely.  And from 
 
21          that point on, the water bill will only 
 
22          reflect the costs of maintaining the water 
 
23          system.  
 
24                 Now, I do want to emphasize, Lord 
 
 
                                                                  121
 
 1          knows there's nothing more important than 
 
 2          water to human life, and our system is 
 
 3          extraordinary and it has been -- it's one of 
 
 4          the great virtues of New York City is having 
 
 5          such a great water system.  It is costly to 
 
 6          maintain.  But what I feel adamantly, and I'm 
 
 7          a homeowner too, is that we should only pay 
 
 8          for a water bill for water and nothing else.  
 
 9          So we're making those adjustments rapidly.  
 
10                 Second, we've added in protections for 
 
11          senior citizens, low-income homeowners to try 
 
12          to lessen the impact of water bill increases 
 
13          on them, and those are available to 
 
14          constituents.  So I want you to be aware of 
 
15          that.
 
16                 ASSEMBLYWOMAN MALLIOTAKIS:  Okay, I 
 
17          appreciate that.  Because I remember when you 
 
18          were the public advocate and you called for 
 
19          water bills to be frozen.  And now that 
 
20          you're mayor, it seems that there's been a 
 
21          charge of heart.  
 
22                 So I appreciate that, and I look 
 
23          forward to working with you on that front.
 
24                 Regarding the $337 million for the 
 
 
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 1          HHC, I want to also add my voice to that of 
 
 2          Assemblyman Cusick, who said that we would 
 
 3          really like Staten Island to be considered.  
 
 4          You mentioned in your remarks, you used the 
 
 5          term "fair and proportional."  Staten Island 
 
 6          would like to receive their funds fair and 
 
 7          proportionally as well when it comes to the 
 
 8          HHC, because there are 11 public hospitals 
 
 9          throughout the City of New York, and none of 
 
10          them are in the borough of Staten Island.  
 
11                 And so not that we are advocating for 
 
12          a public hospital, but we would like to have 
 
13          our proportional funds supporting those two 
 
14          hospitals that we do have and are certainly 
 
15          at capacity.  So we appreciate if you would 
 
16          consider that.
 
17                 MAYOR DE BLASIO:  Yes.
 
18                 ASSEMBLYWOMAN MALLIOTAKIS:  Also, with 
 
19          regard to the city putting forth an $868 
 
20          million capital plan to add 11,800 seats in 
 
21          schools throughout the city, I can't stress 
 
22          to you enough how the schools in my district, 
 
23          as I'm sure many others' here, are at 
 
24          capacity, whether it's 100 percent over 
 
 
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 1          capacity, 150 percent over capacity.  
 
 2                 One school in particular, PS 13 in my 
 
 3          district in Rosebank, which I share with 
 
 4          Senator Savino, they have been advocating for 
 
 5          a K-8.  With the new development of Mount 
 
 6          Manresa and your affordable housing plan to 
 
 7          add 200,000 affordable housing units, we 
 
 8          really need to address this issue of 
 
 9          overcapacity, and we hope you'll be looking 
 
10          at those schools in my district.  
 
11                 And I'd like to talk to you further 
 
12          another time about the particular issues that 
 
13          we have in Staten Island and Bay Ridge.
 
14                 MAYOR DE BLASIO:  Absolutely.  I look 
 
15          forward to that.  
 
16                 And I would say, you know, as you 
 
17          indicate, in the capital budget we have 
 
18          announced an additional 11,800 seats, 
 
19          bringing us to a grand total of 44,000, I 
 
20          believe it is, for this capital plan.  There 
 
21          will be more in the next capital plan, which 
 
22          is after fiscal 2020.  
 
23                 We have a profound problem with 
 
24          overcrowding.  This number we've reached by 
 
 
                                                                  124
 
 1          adding the 11,800 is the number we believe 
 
 2          not only that we can afford but that is 
 
 3          physically reachable in the time frame of the 
 
 4          next three years of the capital plan.  So our 
 
 5          charge to the School Construction Authority 
 
 6          was to tell us what was the maximum you could 
 
 7          actually build, practically, in that time 
 
 8          frame, and this is what they've come back 
 
 9          with.  
 
10                 No surprise to you that as this city 
 
11          continues growing, finding the space and 
 
12          putting together the lots for a new school 
 
13          and construction of a new school is more 
 
14          difficult all the time.  We're committed to 
 
15          the numbers and the ones after, but this is 
 
16          what we think is the outer limit for the next 
 
17          few years.
 
18                 ASSEMBLYWOMAN MALLIOTAKIS:  Okay.  
 
19          With some of the parochial schools closing, I 
 
20          think we may have opportunities on 
 
21          Staten Island to expand, so I would like to 
 
22          speak with you at a later time.  
 
23                 MAYOR DE BLASIO:  Absolutely.  We're 
 
24          very -- and we have a running dialog with the 
 
 
                                                                  125
 
 1          Archdiocese and also with the Diocese of 
 
 2          Brooklyn and Queens that we have an interest 
 
 3          in any and all properties that come online, 
 
 4          whether for schools or other uses.
 
 5                 ASSEMBLYWOMAN MALLIOTAKIS:  Great.  
 
 6          Great.  
 
 7                 With regards to the 41,000 units that 
 
 8          you have achieved in affordable housing and 
 
 9          the 200,000 that you have planned for, how 
 
10          much of that is senior housing?  We have a 
 
11          terrible crisis in my community of a 
 
12          tremendous amount of seniors without housing 
 
13          that's affordable for them.  Can you give me 
 
14          any specifics?
 
15                 MAYOR DE BLASIO:  The overall plan 
 
16          calls for a minimum of 10,000 units of senior 
 
17          housing.  Now, obviously some of the housing 
 
18          that is being created that will not be 
 
19          phrased as "senior housing" will still go to 
 
20          the seniors.  But the minimum that we're 
 
21          allotting specifically to reach seniors is 
 
22          10,000, and we're looking for ways to add 
 
23          upon that.
 
24                 ASSEMBLYWOMAN MALLIOTAKIS:  Ten 
 
 
                                                                  126
 
 1          thousand out of the 200,000?
 
 2                 MAYOR DE BLASIO:  Correct.
 
 3                 ASSEMBLYWOMAN MALLIOTAKIS:  That seems 
 
 4          like a very low number.  But also what about 
 
 5          out of the 41,000 that has already been 
 
 6          achieved?
 
 7                 MAYOR DE BLASIO:  Again?
 
 8                 ASSEMBLYWOMAN MALLIOTAKIS:  The 41,000 
 
 9          that has already been achieved, is that 
 
10          included in the 200,000 or is that separate?  
 
11                 MAYOR DE BLASIO:  Yes, the 41,000 out 
 
12          of the 200,000.
 
13                 ASSEMBLYWOMAN MALLIOTAKIS:  Okay.  
 
14          Well, I hope, you know, if we could look more 
 
15          at the senior population here, especially -- 
 
16          I happen to represent one of the largest 
 
17          populations of senior citizens in my 
 
18          district, and so I think that this is 
 
19          something that has come to me time and again 
 
20          out in the community.  
 
21                 I have one last question regarding 
 
22          Hurricane Sandy and the Build It Back 
 
23          program.  Are we still on schedule to 
 
24          complete the Build It Back construction by 
 
 
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 1          the end of this year?  
 
 2                 MAYOR DE BLASIO:  Yes.  I asked this 
 
 3          question of Amy Peterson, who's the director 
 
 4          of that program and I think has done an 
 
 5          outstanding job, I ask her every few weeks.  
 
 6          We are adamant, for the single-family 
 
 7          homes -- we know for some of the 
 
 8          multi-families it's a little more 
 
 9          complicated -- for the single-family homes, 
 
10          by December 31st of this year.
 
11                 ASSEMBLYWOMAN MALLIOTAKIS:  I've also 
 
12          been speaking with Amy Peterson, and I agree 
 
13          that she has been very responsive to my 
 
14          office and has taken our recommendations into 
 
15          consideration, has helped us accomplish some 
 
16          of these goals.  
 
17                 With regards to the abandoned 
 
18          properties on Staten Island, myself and 
 
19          Senator Lanza and our councilman, Steve 
 
20          Matteo, we have written to you and Amy 
 
21          Peterson regarding having the city purchase 
 
22          for acquisition for redevelopment those homes 
 
23          that have been abandoned during Hurricane 
 
24          Sandy.  I understand that there's a favorable 
 
 
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 1          outcome.  I just wanted to -- if you could 
 
 2          share the details.
 
 3                 MAYOR DE BLASIO:  For this question -- 
 
 4          I appreciate very much the question and 
 
 5          appreciate that you and your colleagues have 
 
 6          really pushed us to look at this as another 
 
 7          good option.  I would like to call in a 
 
 8          relief pitcher for this question and turn to 
 
 9          Sherif Soliman.
 
10                 DIRECTOR SOLIMAN:  We are interested 
 
11          in finding a way to use this HUD funding, and 
 
12          we hope to start developing the pilot this 
 
13          February.  And so we'll be in touch with you 
 
14          and your colleagues on that.
 
15                 ASSEMBLYWOMAN MALLIOTAKIS:  Okay, 
 
16          excellent.  
 
17                 The last question, because I ran out 
 
18          of time, is do you anticipate -- because 
 
19          we've received some constituents in my office 
 
20          that would like to --
 
21                 MAYOR DE BLASIO:  I'm sorry, say 
 
22          again?
 
23                 ASSEMBLYWOMAN MALLIOTAKIS:  We 
 
24          received some constituents over the last few 
 
 
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 1          years that have missed the Build It Back 
 
 2          deadline and would like to be in the program.  
 
 3          Do you anticipate opening up the program 
 
 4          again for applicants should you have money 
 
 5          left over?  
 
 6                 MAYOR DE BLASIO:  I do not anticipate 
 
 7          that.  We don't see a scenario at this moment 
 
 8          where there will be money left over.  But 
 
 9          most importantly, we've set this deadline 
 
10          after a very extensive process to -- many 
 
11          opportunities were given to people to 
 
12          participate.  A lot of people chose not to.  
 
13          Some people who thought they were eligible 
 
14          were not.  But we feel fundamentally the door 
 
15          was open for a long time.  It's time to put 
 
16          Sandy behind us, get this job done and move 
 
17          on.
 
18                 ASSEMBLYWOMAN MALLIOTAKIS:  Okay.  And 
 
19          please let my office know how we can be 
 
20          helpful in achieving this goal, making sure 
 
21          we do finish, indeed, the construction by the 
 
22          end of the year.  Thank you.  
 
23                 MAYOR DE BLASIO:  Thank you very much.
 
24                 CHAIRMAN FARRELL:  Thank you.  
 
 
                                                                  130
 
 1                 Senator?  
 
 2                 CHAIRWOMAN YOUNG:  Thank you very 
 
 3          much.  Our next speaker would be Senator 
 
 4          Ruben Diaz.
 
 5                 SENATOR DIAZ:  Thank you.  Thank you.  
 
 6          Good morning, good morning --
 
 7                 MAYOR DE BLASIO:  Good morning.
 
 8                 SENATOR DIAZ:  Good afternoon, 
 
 9          Mr. Mayor.
 
10                 MAYOR DE BLASIO:  Good afternoon, 
 
11          whatever it is.
 
12                 SENATOR DIAZ:  Mr. Mayor, yesterday I 
 
13          wrote in my column, "What You Should Know," 
 
14          and I gave you praise.
 
15                 MAYOR DE BLASIO:  I saw that, Senator.  
 
16          I was very appreciative.  We monitor your 
 
17          statements closely, Senator.
 
18                 SENATOR DIAZ:  Yeah, but today we're 
 
19          going to change.  Today we're changing.
 
20                 (Laughter.)
 
21                 MAYOR DE BLASIO:  Senator, it was fun 
 
22          while it lasted.
 
23                 SENATOR DIAZ:  Today we go back to 
 
24          normal.
 
 
                                                                  131
 
 1                 MAYOR DE BLASIO:  It was fun while it 
 
 2          was lasted.
 
 3                 SENATOR DIAZ:  Okay.  I want to talk 
 
 4          about the homeless situation with the City of 
 
 5          New York.  We have 40,000 families who are in 
 
 6          shelters.  There are community-based 
 
 7          organizations sponsoring these programs, some 
 
 8          of them, and they're {inaudible}.  So 
 
 9          Mr. Scott Stringer, the comptroller of the 
 
10          City of New York, has decided to stop payment 
 
11          and not to sign the contracts.  That has 
 
12          forced some organizations to borrow money, 
 
13          community-based organizations to borrow money 
 
14          from the banks to pay interest that the city 
 
15          will not pay them, they will not reimburse 
 
16          them.  
 
17                 And also families that need services 
 
18          are being -- are paying the price and are 
 
19          being discriminated.  I think that what 
 
20          Comptroller Stringer is doing is very 
 
21          damaging to the families and to the 
 
22          community-based organizations.  Because if a 
 
23          landlord has some kind of violation, they 
 
24          hold the landlord's money but the community 
 
 
                                                                  132
 
 1          organization continues providing the good 
 
 2          services.  
 
 3                 My question to you, how come -- why 
 
 4          have you not sued Scott Stringer, the 
 
 5          New York City comptroller, to compel him to 
 
 6          register the contracts as the law requires?  
 
 7                 MAYOR DE BLASIO:  Well, Senator, the 
 
 8          goal always in government is to see if we can 
 
 9          work things out.  And we're in the process of 
 
10          we think productive conversations with the 
 
11          comptroller on that issue.  And right now we 
 
12          are not being hindered from doing the work we 
 
13          have to do or making sure that providers who 
 
14          are doing their job get the resources they 
 
15          need.
 
16                 Look, at the same time we have a lot 
 
17          we have to address in terms of the 
 
18          homelessness crisis.  We look forward to 
 
19          working, for example, with the state 
 
20          comptroller, Tom DiNapoli, and with 
 
21          Comptroller Stringer, auditing the shelters, 
 
22          together making sure the repairs happen that 
 
23          are needed.  We're doing a host of reforms in 
 
24          terms of homelessness -- our new HomeStat 
 
 
                                                                  133
 
 1          outreach effort, obviously the 15,000 units 
 
 2          of supportive housing that we've committed 
 
 3          to.  We're very, very happy the Governor has 
 
 4          committed to additional units.  What we're 
 
 5          doing all the time to prevent homelessness in 
 
 6          the first instance, which has been more and 
 
 7          more successful.  And the 22,000 people who 
 
 8          were in shelter who we got out of shelter and 
 
 9          got to better housing.  We're going to deepen 
 
10          all those efforts.
 
11                 When it comes to the question with the 
 
12          city comptroller, we think we're moving 
 
13          productively to resolve that issue and to 
 
14          make sure that the providers who are doing 
 
15          their work the right way do continue to get 
 
16          the resources they need.
 
17                 SENATOR DIAZ:  Because I'm afraid that 
 
18          now with the new power that the Governor gave 
 
19          to the comptroller, the families are going to 
 
20          continue suffering.  We have to protect the 
 
21          families.
 
22                 MAYOR DE BLASIO:  Of course.
 
23                 SENATOR DIAZ:  We have to be sure that 
 
24          those people in the shelters get the right 
 
 
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 1          services, good services.
 
 2                 Even though, even though -- I'm going 
 
 3          to repeat myself again -- some landlords 
 
 4          might have some violations, hold the 
 
 5          landlords money but don't punish the 
 
 6          community-based organizations and the 
 
 7          recipients.
 
 8                 MAYOR DE BLASIO:  Well, Senator, what 
 
 9          I'd say is, first of all, the way the 
 
10          Governor structured his policy, it is an 
 
11          audit process led by the state comptroller.  
 
12          And I've talked to the Governor about this 
 
13          and I've talked to the state comptroller 
 
14          about it.  It is led statewide by the state 
 
15          comptroller working with the local 
 
16          comptroller in New York City and in Buffalo.  
 
17          They are not controlling the shelters.  The 
 
18          shelters continue to be operated by our 
 
19          nonprofit partners or in some cases by the 
 
20          city directly.  That will continue.  The 
 
21          audit will provide us information about 
 
22          things that need to be improved.
 
23                 So we continue to have the same 
 
24          oversight of shelters we've had, the same 
 
 
                                                                  135
 
 1          operations we've had.  I agree with you 
 
 2          entirely, if we find a shelter with a problem 
 
 3          we're not going to penalize the people who 
 
 4          are being sheltered.  We're going to make 
 
 5          sure that shelter continues to be fixed.  
 
 6                 And I agree with the formulation the 
 
 7          Governor put forward in the State of the 
 
 8          State:  If we find a shelter operator who 
 
 9          needs to do better, we'll make sure they do 
 
10          better.  If we find one that just isn't up to 
 
11          it and we can replace them with another good 
 
12          operator, we'll do that.  In a very small 
 
13          number of cases I think we're going to find a 
 
14          few shelters that need to be closed wholesale 
 
15          and we'll use a different location.
 
16                 But most importantly, we're not going 
 
17          to penalize the people who are already 
 
18          suffering.  We're going to make sure --
 
19                 SENATOR DIAZ:  That's what we're doing 
 
20          now.  That's what we are --
 
21                 MAYOR DE BLASIO:  And there's nothing 
 
22          -- there's nothing -- just to clarify, 
 
23          there's nothing in what the Governor has said 
 
24          or that either comptroller has said or done 
 
 
                                                                  136
 
 1          that stops us from continuing to make sure 
 
 2          that the shelters operate and that providers 
 
 3          get the resources they need.
 
 4                 SENATOR DIAZ:  I appreciate you agree 
 
 5          with me on that, because I believe that 
 
 6          that's what the comptroller is doing, he's 
 
 7          punishing, he's penalizing the wrong people.  
 
 8          And that sounds like discrimination to me.
 
 9                 But let me ask you one more question 
 
10          and then I'll finish, because we have to make 
 
11          a long line here to get our 15 minutes of 
 
12          fame.  So let me get another question.  How 
 
13          come we have so big discrepancies in payment?  
 
14          Some homeless organizations are getting -- 
 
15          for doing the same kind of work, some are 
 
16          getting paid at a higher rate than others.  
 
17          And that's doesn't sound right.  It sounds -- 
 
18          why?
 
19                 MAYOR DE BLASIO:  Senator, I think you 
 
20          raise an important point.  Look --
 
21                 SENATOR DIAZ:  Oh, man, I'm hitting 
 
22          good today.
 
23                 MAYOR DE BLASIO:  Yeah, I think the 
 
24          simple -- I talked about this at length a 
 
 
                                                                  137
 
 1          couple of weeks back.  The status quo that's 
 
 2          existed in our shelter system is not 
 
 3          acceptable to me, nor is the overall status 
 
 4          quo of homelessness in the city.  It's gone 
 
 5          on for decades, it's grown over decades.  
 
 6          Between 2011, when the Advantage Program was 
 
 7          cut in that budget that year, that state 
 
 8          budget and the city budget, and the end of 
 
 9          the previous administration -- that was just 
 
10          a 2-1/2-year time frame -- the shelter 
 
11          population went up by 13,000 people in just 2 
 
12          1/2 years in the previous administration.  
 
13          So -- and I've been dealing with additional 
 
14          challenges as well.  
 
15                 So my bottom line message to everyone 
 
16          in New York City is that we are not going to 
 
17          accept the status quo on homelessness, which 
 
18          is why we're changing so many of the 
 
19          strategies.  But as part of our 90-day review 
 
20          of the operations of the Department of 
 
21          Homeless Services, we're going to look at the 
 
22          contracting process and make sure that there 
 
23          is parity in the way contracts are handled.
 
24                 SENATOR DIAZ:  Thank you.  Thank you.  
 
 
                                                                  138
 
 1          Because we're talking about raising the 
 
 2          minimum wage of people, that people cannot 
 
 3          suffer, but then you have throughout the City 
 
 4          of New York so many community-based 
 
 5          organizations trying to provide services to 
 
 6          the needy and then some of them are 
 
 7          struggling and another is getting a higher 
 
 8          rate, another is getting a low rate.  I mean, 
 
 9          I have an organization in the Bronx that's 
 
10          getting $60 per night per person, where 
 
11          others are getting $143.
 
12                 MAYOR DE BLASIO:  No, that is part of 
 
13          the review for sure.  And I appreciate it.
 
14                 SENATOR DIAZ:  Thank you, Mr. Mayor.  
 
15          And congratulations for the good job on the 
 
16          snow.
 
17                 MAYOR DE BLASIO:  You're a good man.  
 
18          Thank you.
 
19                 SENATOR DIAZ:  Luis Sepulveda told me 
 
20          to say that.
 
21                 (Laughter.)
 
22                 CHAIRWOMAN YOUNG:  Always lively with 
 
23          Senator Diaz.  
 
24                 I do want to point out that we have 
 
 
                                                                  139
 
 1          been joined by Senator Jesse Hamilton and 
 
 2          Senator Phil Boyle.  
 
 3                 Assemblyman?  
 
 4                 CHAIRMAN FARRELL:  Thank you, Senator.  
 
 5                 Assemblywoman Nolan. 
 
 6                 ASSEMBLYWOMAN NOLAN:  Thank you, 
 
 7          Mr. Chair.  Thank you.  
 
 8                 First, just quickly, a personal note.  
 
 9          I want to congratulate Senator Young on 
 
10          really a wonderful achievement for women here 
 
11          in the Legislature, which is to be the lead 
 
12          member, the chair of such an important 
 
13          committee.  
 
14                 When I got here, the only woman who 
 
15          served on this committee was the late 
 
16          Assemblywoman from Brooklyn, Eileen Dugan, 
 
17          and she was here all alone.  It was her first 
 
18          year on these committees.  
 
19                 So though I philosophically don't 
 
20          agree with anything you said, and I certainly 
 
21          share -- and I completely agree with Liz's 
 
22          comments, I just had to make that personal 
 
23          note to congratulate you and wish you well on 
 
24          such a really important achievement for 
 
 
                                                                  140
 
 1          women --
 
 2                 CHAIRWOMAN YOUNG:  Thank you, Cathy, 
 
 3          you're a good friend.  Thank you.  
 
 4                 ASSEMBLYWOMAN NOLAN:  And you did a 
 
 5          great job for the issues that you represent, 
 
 6          we just don't agree.
 
 7                 But let me ask the mayor quickly about 
 
 8          the Smart Schools Bond Act.  We have a lot of 
 
 9          education questions, but we'll save some of 
 
10          them for the chancellor tomorrow.  But the 
 
11          city was promised $700 million -- you know, 
 
12          because I've asked you, this is the third 
 
13          time now, and I certainly asked Mayor 
 
14          Bloomberg and his predecessors, I 
 
15          represent -- and many of us in Queens have 
 
16          trailers.  When we talk about things like 
 
17          overcrowding in our schools or disability 
 
18          accessibility, we're really -- trailers 
 
19          really crystallize that, because we still 
 
20          have 10,000, 10,000 and more children -- 
 
21          though I think the number may finally be down 
 
22          to eight -- that attend classes in a 
 
23          substandard trailer in the City of New York.  
 
24          That amount is larger than most of the other 
 
 
                                                                  141
 
 1          600-plus school districts.  
 
 2                 So how are we doing on trailers?  
 
 3          That's I guess our first thing.  
 
 4                 And generally, I thought the Governor 
 
 5          promised you $700 million, and I thought we 
 
 6          promised you $700 million in that bond act.  
 
 7          I'm wondering if you've seen any of it yet.
 
 8                 MAYOR DE BLASIO:  Let me speak to the 
 
 9          first question and then ask Dean and Sherif 
 
10          to speak to what we've overall seen from the 
 
11          bond act.  
 
12                 Specifically on the question of 
 
13          trailers, so just a recap of recent history.  
 
14          At the end of the previous administration in 
 
15          the city, 352 trailers at 120 sites.  And 
 
16          overwhelmingly, as you know, in overcrowded 
 
17          districts, particularly in Queens.
 
18                 We have now eliminated 70, with an 
 
19          additional 100 slated for elimination in the 
 
20          near term.  So as this plan proceeds, 
 
21          basically 170 out of the 350 we inherited, 
 
22          we're talking about half of them now that we 
 
23          will have removed quickly.  
 
24                 And in terms of the funding, our 
 
 
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 1          capital plan provides $450 million for 
 
 2          trailer removal and for the alternatives 
 
 3          needed, $100 million of which comes from the 
 
 4          Smart Schools Bond Act.  
 
 5                 ASSEMBLYWOMAN NOLAN:  Has any Smart 
 
 6          Schools Bond Act money been released or 
 
 7          authorized or --
 
 8                 DIRECTOR FULEIHAN:  No.  Our 
 
 9          understanding is that the plan will be 
 
10          finalized over the next month -- I want to 
 
11          make sure of that.  Yeah, over the next 
 
12          month.  So we have not received that yet.
 
13                 ASSEMBLYWOMAN NOLAN:  Okay, thank you.  
 
14                 And then just generally on education, 
 
15          the Regents -- as you know, the Regents' 
 
16          submission is for a 2.9, I think it was, 
 
17          billion dollar increase to finally begin to 
 
18          move forward on the Campaign for Fiscal 
 
19          Equity settlement.  The governor came in with 
 
20          a number he feels is reasonable, 
 
21          understandably.  He has to balance the 
 
22          budget.  But having said that, it's in my 
 
23          opinion not enough.  Many of us in the 
 
24          Assembly would like to see more on Foundation 
 
 
                                                                  143
 
 1          Aid, and I wondered if you would care to 
 
 2          comment on the city's position on what it 
 
 3          needs to run its schools.  Not a share, not 
 
 4          some formula that goes back into the mists of 
 
 5          time, but what do you need from the state to 
 
 6          assist our city's schoolchildren.
 
 7                 MAYOR DE BLASIO:  I appreciate the 
 
 8          question deeply.  When you think about the 
 
 9          history of this city and what it's led us to, 
 
10          we're now -- only about a third of our 
 
11          kids are reading at third-grade level.  And 
 
12          unfortunately, well under half of our kids 
 
13          who graduate are actually college-ready by 
 
14          the state's own standards.  
 
15                 We have a long way to go in bringing 
 
16          our schools up to the level they need to be 
 
17          at, both for the good of our children but 
 
18          also to have a viable workforce for the 
 
19          21st-century economy.  
 
20                 The commitment made by the Court of 
 
21          Appeals in the Campaign for Fiscal Equity 
 
22          suit is as pertinent today as ever because 
 
23          the demands are greater than ever.  We have 
 
24          made a series of major new investments in our 
 
 
                                                                  144
 
 1          schools, but we know we cannot go as far as 
 
 2          we need to until we see that kind of 
 
 3          fundamental change.  
 
 4                 That kind of funding would allow us, 
 
 5          once and for all, to address the equity 
 
 6          issues that you know better than anyone have 
 
 7          gone unaddressed for many, many years.  To 
 
 8          really once and for all address the fair 
 
 9          school funding formula properly would require 
 
10          that the $2 billion or so that we would get 
 
11          additionally under Campaign for Fiscal Equity 
 
12          were provided to the city.  So we have a lot 
 
13          we could do and a lot of wrongs we could 
 
14          right, but we can't do it on the level 
 
15          necessary for our kids until we see that kind 
 
16          of budgetary fairness.
 
17                 ASSEMBLYWOMAN NOLAN:  And then just 
 
18          one quick question with the remaining 
 
19          minutes; I thank the chairman.  
 
20                 As you know, I represent Long Island 
 
21          City, and we are a growing community.  The 
 
22          number of residential units has skyrocketed.  
 
23          We still don't really feel the city planning 
 
24          people have really come up with an adequate 
 
 
                                                                  145
 
 1          plan for, for example, fire service.  We've 
 
 2          talked to you about trying to get the 
 
 3          reopening of a firehouse.  We have all kinds 
 
 4          of needs down there, both schools -- which I 
 
 5          know your budget proposes building some 
 
 6          there, because we have nothing to offer 
 
 7          people -- but even as basic as the issues 
 
 8          with snowplowing or residential pickup.  It's 
 
 9          still a commercial sanitation pickup zone, 
 
10          for example.  
 
11                 And I would just ask that you consider 
 
12          having some kind of response to us about Long 
 
13          Island City as it grows in all the city 
 
14          services, whether it's EMS, fire -- the 
 
15          precinct down there has got to be over a 
 
16          110-year-old building in the midst of all 
 
17          these giant high rises.  I don't even know if 
 
18          it has adequate bathroom service for the men 
 
19          and women that work there.  So we really need 
 
20          somebody to take a look at that.  It's a 
 
21          local question, but I have to ask it.  
 
22                 And then just if either your wonderful 
 
23          tablemates there want to respond on the Smart 
 
24          Schools Bond Act, the trailers, or any of 
 
 
                                                                  146
 
 1          these education issues, we're happy to get 
 
 2          some more follow-up.  We still have a long 
 
 3          way to go on the trailers, particularly in 
 
 4          the high school level, which I understand has 
 
 5          never been properly counted.  When you talk 
 
 6          about 120 sites, I'm not sure, I think that 
 
 7          may just be elementary and middle school.  
 
 8          Maybe someone can clarify that for me, 
 
 9          because apparently since high school kids 
 
10          only go to trailers for a single class, like 
 
11          a science class, that's not counted.  And 
 
12          it's just wrong.  So we really need to get a 
 
13          handle on the trailer issue still, moving 
 
14          forward, but it is progress that's 70 of them 
 
15          are gone, and we hope to see more progress, 
 
16          more progress, and get that Smart Schools 
 
17          Bond Act money there.
 
18                 MAYOR DE BLASIO:  I appreciate it.  
 
19          And yes, we are hard at work on removing the 
 
20          next hundred.  I want to do that as quickly 
 
21          as possible.  We'll keep you updated on that.  
 
22          I think we can get you the 120 sites to 
 
23          confirm how high schools are treated.  So 
 
24          we'll get you that list.
 
 
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 1                 On the Long Island City issue, I 
 
 2          agree.  Again, a good challenge on one level 
 
 3          to have areas that are growing and doing so 
 
 4          well, but the infrastructure has to be there.  
 
 5          This is an area where, as a council member, 
 
 6          as public advocate, I was very critical of 
 
 7          the city government not adequately 
 
 8          recognizing the infrastructure needs.  
 
 9                 We have put more and more money into 
 
10          infrastructure.  One of the ways we did it 
 
11          was with that capital stabilization reserve, 
 
12          which allowed us to make sure we could keep 
 
13          up our debt service payments.  But I said the 
 
14          other day when I did one of my presentations, 
 
15          I think our constituents want infrastructure 
 
16          spending, more than ever in the past, on 
 
17          exactly what you described.  As areas are 
 
18          growing, we need to support them with all the 
 
19          different pieces that people expect.  We'll 
 
20          keep making that investment on a capital 
 
21          level because we know it's such a priority 
 
22          for our neighborhoods.
 
23                 ASSEMBLYWOMAN NOLAN:  But we do want 
 
24          to see down the road whether the city will 
 
 
                                                                  148
 
 1          reopen that firehouse or do some other 
 
 2          responses to the explosion of population in 
 
 3          what was once a factory area.  So we're going 
 
 4          to continue to follow up with you on that.
 
 5                 And on that same line, there are a 
 
 6          number of new housing developments -- you and 
 
 7          I attended the groundbreaking for one, and 
 
 8          much to both of our mutual surprise, there 
 
 9          was an issue there that we were under the 
 
10          assumption when we passed a bill here in 
 
11          Albany, that that was going to be a labor 
 
12          union project, and that seems to have broken 
 
13          down.  It's not design/build, it's not a 
 
14          union job.  That's just unacceptable, I know, 
 
15          to both of us.  And I would ask for some 
 
16          follow-up on that.  
 
17                 When we were there that day, we spoke 
 
18          with people from the building trades who were 
 
19          extremely unhappy about that, as they should 
 
20          be, because that was never what was intended.  
 
21          So just generally, as we grow Long Island 
 
22          City and we grow the waterfront, we need to 
 
23          have a more comprehensive approach, whether 
 
24          it's through city planning or your office, to 
 
 
                                                                  149
 
 1          come up with fire service, make sure that 
 
 2          these buildings are being built properly, 
 
 3          that these high rises are being built with 
 
 4          the right labor force and not just a 
 
 5          fly-by-night group, and just generally come 
 
 6          up with the schools and the services that 
 
 7          people will need in the future.
 
 8                 MAYOR DE BLASIO:  Thank you.
 
 9                 ASSEMBLYWOMAN NOLAN:  And thank you, 
 
10          and congratulations again, Senator.  Thank 
 
11          you.  And thank you, Chairman Farrell.
 
12                 CHAIRWOMAN YOUNG:  Thank you very 
 
13          much.  Our next speaker is Senator Andrew 
 
14          Lanza.
 
15                 SENATOR LANZA:  Thank you, Madam 
 
16          Chair.  
 
17                 Good afternoon, Mayor de Blasio.
 
18                 MAYOR DE BLASIO:  Good afternoon.
 
19                 SENATOR LANZA:  It's great to see you.  
 
20                 I was not going to speak because I 
 
21          enjoy the opportunity of speaking to you and 
 
22          your staff and your administration on a 
 
23          regular basis concerning the needs of our 
 
24          shared constituents.  However, this afternoon 
 
 
                                                                  150
 
 1          much discussion has centered around my 
 
 2          legislation concerning the property tax cap 
 
 3          for New York City, and I thought it important 
 
 4          that I speak publicly to some of the comments 
 
 5          that have been made and also hopefully 
 
 6          clarify some of the aspects of that 
 
 7          legislation.
 
 8                 In your statement you talked about the 
 
 9          affordable housing crisis that exists in New 
 
10          York City and the fact that New Yorkers are 
 
11          concerned about the cost of housing and 
 
12          whether they're going to be able to live in 
 
13          the City of New York.  And that is a concern 
 
14          that I share with you, Mayor.  
 
15                 The middle class feel that concern as 
 
16          well.  In your opening statement you 
 
17          discussed the chasm between the very, very 
 
18          wealthy -- I think you said for every 
 
19          multi-million-dollar condo that is built in 
 
20          New York City, there are more and more people 
 
21          who don't have a place to live which they can 
 
22          afford.  In between that are the middle 
 
23          class, who are being squeezed.  
 
24                 And in response to Senator Avella you 
 
 
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 1          talked about the middle class growing in New 
 
 2          York City, and I'm not sure that is correct.  
 
 3          I think your first statement is correct, that 
 
 4          we have more wealthy and more poor.  And the 
 
 5          middle class I see leaving in leaps and 
 
 6          bounds.  I see that on Staten Island.  And 
 
 7          this has been going on long before you became 
 
 8          mayor.  People are leaving, people I grew up 
 
 9          with are leaving to places like Delaware and 
 
10          Maryland and North Carolina and South 
 
11          Carolina and other places.  
 
12                 And when you talk to them about why it 
 
13          is they've decided to leave, with their 
 
14          families, the place that they were either 
 
15          born or have called home, they universally 
 
16          tell me and will say that it is because the 
 
17          cost of living in New York City is too high 
 
18          for a family.  And when you look at the 
 
19          components of the cost of living, especially 
 
20          of homeownership -- because as Senator 
 
21          Marchione pointed out, if you are a renter 
 
22          you pay that increase as well, it's passed 
 
23          down to you.  But the components that factor 
 
24          into that cost of living are the property tax 
 
 
                                                                  152
 
 1          in New York City, the income tax, the water 
 
 2          bill that has been mentioned, the taxes on 
 
 3          everything associated with homeownership, 
 
 4          like the tax on heating and cooling your 
 
 5          home, the electricity, the natural gas, the 
 
 6          heating oil, the telephone bill, and it goes 
 
 7          on and on.  And it's one big basket that a 
 
 8          family needs to pay if they are going to be 
 
 9          able to afford to live in New York City.
 
10                 Senator Krueger and I enjoy a healthy 
 
11          debate, usually on the floor of the Senate, 
 
12          over this legislation.  I think we missed it 
 
13          today, Senator Krueger.  I believe the bill 
 
14          has passed.  
 
15                 Let me tell you why I proposed and 
 
16          authored this legislation a few years ago.  
 
17          It was at that time that Senator Krueger 
 
18          joined me in passing a 2 percent property tax 
 
19          cap for the rest of the state.  And I just 
 
20          thought that fairness dictates that the folks 
 
21          in New York City that we serve also enjoy 
 
22          that same protection.  And so that's the 
 
23          genesis for this legislation, that New York 
 
24          City should live within its means and that 
 
 
                                                                  153
 
 1          the homeowners and renters in New York City 
 
 2          should be protected by the same cap that the 
 
 3          rest of the state enjoys.  I think -- not to 
 
 4          get him in trouble -- but Assemblyman Cusick 
 
 5          is the sponsor of this legislation in the 
 
 6          Assembly.
 
 7                 You pointed out that we need to be 
 
 8          able to address emergencies as they arise.  
 
 9          In the wake of September 11th, the single 
 
10          largest increase in New York City property 
 
11          taxes -- I think was 18.5 percent, followed 
 
12          by another 7 percent -- in the history of the 
 
13          City of New York was enacted.  I thought that 
 
14          went too far, and so do most of my 
 
15          constituents.  
 
16                 But nevertheless, Mayor, I want you to 
 
17          know that in this legislation there is an 
 
18          emergency pressure release valve, if you 
 
19          will.  During an emergency, it can be 
 
20          overridden by a supermajority of the City 
 
21          Council and with the mayor's signature.  So 
 
22          this legislation takes into consideration any 
 
23          eventual emergency.  
 
24                 Beyond that, you've talked about the 
 
 
                                                                  154
 
 1          years in which the city did not spend within 
 
 2          its means, and that is precisely what this 
 
 3          legislation seeks to protect against.  I 
 
 4          commend you, Mayor, because you have acted to 
 
 5          spend within the means that you have 
 
 6          available right now.  I don't know who the 
 
 7          mayor is going to be in the future.  We know 
 
 8          it has happened in the past.  And I think, as 
 
 9          you say, and in your memorandum in opposition 
 
10          -- for folks who don't know, when you propose 
 
11          legislation around here you are inundated by 
 
12          pieces of paper.  They are either pink, which 
 
13          means the people who wrote them oppose your 
 
14          legislation, or yellow, meaning they support 
 
15          your legislation.  I received a pink piece of 
 
16          paper from the City of New York.  And I only 
 
17          tease the mayor because I know we disagree on 
 
18          this point, because the city opposes this 
 
19          legislation.  
 
20                 But within that very memorandum it 
 
21          says that over the last 20 years since 1997, 
 
22          the city has requested that the state enact 
 
23          an even lower increase into law, generally 2 
 
24          percent.  And you have touted the way in 
 
 
                                                                  155
 
 1          which you have constrained city spending 
 
 2          during your administration, and I commend 
 
 3          you.  All I am saying is that we need to 
 
 4          codify that.  We need to codify the 
 
 5          responsible policy that you espouse and that 
 
 6          you have employed so that future generations 
 
 7          of people, homeowners and renters in New York 
 
 8          City, can have that sense of security to know 
 
 9          that in the same way that they need to live 
 
10          within their means, the city will.  
 
11                 To Assemblyman Cusick's point, the 
 
12          certainty of knowing that you won't wake up 
 
13          in the City of New York one day to find out 
 
14          that property taxes are once again raised by 
 
15          25 percent.  I think we can all agree that 
 
16          the specter of that possibility is something 
 
17          that provides uncertainty to homeowners and 
 
18          new families, and more and more of them are 
 
19          deciding to take their families or start 
 
20          their families outside of New York City, 
 
21          outside of New York State, and we've got to 
 
22          prevent that from happening.  
 
23                 Because I think when you talk about 
 
24          the gentrification, I think yes, we have more 
 
 
                                                                  156
 
 1          million and $2 million and $3 million homes, 
 
 2          and we have more people who can't afford any 
 
 3          home.  And in the middle, what that tells 
 
 4          you -- because it's in many respects a 
 
 5          zero-sum equation -- is that the middle class 
 
 6          are being squeezed.
 
 7                 MAYOR DE BLASIO:  So, Senator, just a 
 
 8          couple of responses.  
 
 9                 I mean, first of all, it's always 
 
10          difficult to argue with you even when I 
 
11          disagree because of our long-standing 
 
12          friendship and because you were a member in 
 
13          the City Council.  We were two of the fiscal 
 
14          watchdogs in the process there, coming from 
 
15          different parties and different ideologies, 
 
16          but we shared a common belief that we had to 
 
17          be responsible.  And I appreciate what's 
 
18          motivating your legislation.
 
19                 I would argue that, again, we -- first 
 
20          of all, we are seeing a number of people come 
 
21          into our city who I would certainly not 
 
22          define as rich.  I don't think it's quite as 
 
23          black and white as that.  Yes, there is a 
 
24          fundamental problem of income inequality.  We 
 
 
                                                                  157
 
 1          both recognize that.  There are a lot of 
 
 2          people who can afford the very expensive 
 
 3          coops; that most of us can't relate to in 
 
 4          terms of our personal finances.  But we also 
 
 5          have a lot of people coming into the city who 
 
 6          I would define as middle class who are 
 
 7          seeking opportunity in the city in a lot of 
 
 8          the areas -- technology and film and TV and a 
 
 9          lot of the healthcare, a lot of the areas 
 
10          that are booming.  Which is why we have 
 
11          213,000 new jobs.  Which is why our 
 
12          population is growing.  We're at the 
 
13          all-time-highest population we've ever had, 
 
14          and it's growing.  
 
15                 So I don't think it's fair to say 
 
16          every net new resident is just a wealthy 
 
17          person.  I think it's fair to say a lot of 
 
18          people coming in certainly are also 
 
19          middle-class folks.  But that doesn't for a 
 
20          moment negate your point.  There's a real 
 
21          squeeze on the middle-class residents we 
 
22          have, and we're trying to figure out how to 
 
23          help them in a lot of different ways.  
 
24                 The affordable housing plan has a very 
 
 
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 1          substantial element to it that is 
 
 2          moderate-income and middle-income housing.  
 
 3          The classic scenario we often talk about, a 
 
 4          family that is -- let's say two public 
 
 5          servants, one's a cop, one's a teacher.  A 
 
 6          big portion of the affordable housing plan 
 
 7          literally focuses on people with that kind of 
 
 8          combined income, to give them opportunity for 
 
 9          affordable housing as well.  
 
10                 Everything we're doing in terms of 
 
11          public safety, infrastructure, everything 
 
12          that grows the economy also grows opportunity 
 
13          for better-paying jobs for middle-class 
 
14          people.  The tech sector, 300,000-plus jobs 
 
15          now in the larger tech sector, much more 
 
16          likely to be the higher-paying middle-class 
 
17          jobs.  So I think it's a mixed bag on that 
 
18          front.  
 
19                 But I do get your underlying point.  I 
 
20          would argue that you would expect of me not 
 
21          only balanced budgets but to protect the 
 
22          public safety, to improve the schools.  I 
 
23          know how passionately you feel about public 
 
24          education.  That's what these investments are 
 
 
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 1          going towards.  
 
 2                 And I do appreciate that there's in 
 
 3          effect a circuit-breaker in the event of 
 
 4          problematic times in your bill.  But I also 
 
 5          would say you and I have served in the 
 
 6          City Council of New York City; a 
 
 7          supermajority is not easy to come by.  And no 
 
 8          one likes to increase property taxes.  
 
 9                 So what I'm trying to work with, 
 
10          practically speaking, is a responsible budget 
 
11          wherein I'm telling the people up front, I'm 
 
12          working every day to avoid a property tax 
 
13          increase.  I don't belittle the effect of 
 
14          assessments.  I know it's hitting people hard 
 
15          and we should all work together to think 
 
16          about different ways to address that.  But 
 
17          one thing I'm adamant about is I will keep 
 
18          present budgets that do not involve a 
 
19          property tax increase, and that's one of the 
 
20          ways we're trying to help the middle class in 
 
21          New York City.
 
22                 SENATOR LANZA:  Quickly, two points, 
 
23          the first picking up on what Assemblyman 
 
24          Cusick brought up, and that is the 
 
 
                                                                  160
 
 1          prescription drug/opioid addiction crisis in 
 
 2          America and certainly here at home in New 
 
 3          York City.  I thank you for coming to Staten 
 
 4          Island a short while ago to discuss some of 
 
 5          the measures New York City is now going to 
 
 6          put in place to combat this issue.  
 
 7                 I can tell you, and I think we agree, 
 
 8          we are not doing enough as a city, as a 
 
 9          state, as a nation.  Whenever there is a loss 
 
10          of life due to gun violence, for instance, we 
 
11          see press conferences from the most local of 
 
12          governments all the way to the White House 
 
13          and calls for change in policy.  I'm not 
 
14          saying that's not appropriate; we should 
 
15          always look for ways to prevent the loss of 
 
16          life.
 
17                 I tell you, Mayor, and these are the 
 
18          facts, drug addiction overdose is the 
 
19          number-one preventable cause of death in 
 
20          America right now, and I would like to see 
 
21          the same fervor, I would like to see the same 
 
22          attention.  We need to do this.  We need to 
 
23          come together.  And one of the most noble 
 
24          things we can do as a society is to save 
 
 
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 1          lives, and this is an opportunity for us to 
 
 2          do that.  So I look forward to working with 
 
 3          you to build upon some of the measures that 
 
 4          you've put in place already.  We really need 
 
 5          to do more if we're going to turn back the 
 
 6          tide of this crisis.  
 
 7                 And the last point, and I'll just 
 
 8          leave it, I'll speak to you privately 
 
 9          about -- I have some legislation I'd like to 
 
10          talk to you about.  I know it's a very 
 
11          difficult decision, you've put a lot of 
 
12          thought into it, but the school closure 
 
13          decision on Staten Island, I think we could 
 
14          have used another day for cleanup.  I think 
 
15          we should have erred to more caution in terms 
 
16          of whether or not we were ready to put 
 
17          second-graders and third-graders out into 
 
18          that storm.  But I will talk to you privately 
 
19          about that.  And I do have some ideas about 
 
20          some legislation.  
 
21                 But on the opioid addiction issue, if 
 
22          you would.
 
23                 MAYOR DE BLASIO:  Well, I certainly 
 
24          look forward to talking to you on the school 
 
 
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 1          closure idea.  I believe the way we're going 
 
 2          about it is sound and does protect our kids' 
 
 3          safety.  And obviously we were blessed 
 
 4          yesterday to have, thank God, a nice sunny 
 
 5          day as part of the cleanup continued.  But 
 
 6          certainly look forward to talking to you 
 
 7          about that.
 
 8                 On the opioid question, you know, 
 
 9          we've only just begun to fight.  I know you 
 
10          feel the same way; there's a lot more we have 
 
11          to do.  Outside of your own family, one of 
 
12          your biggest fans in New York City is the 
 
13          First Lady of New York City, Chirlane McCray, 
 
14          my wife, who believes fundamentally in what 
 
15          you're doing and wants to partner with you on 
 
16          Staten Island and beyond.  So we're going to 
 
17          be doing a lot more together.
 
18                 SENATOR LANZA:  Thank you, Mayor.
 
19                 CHAIRMAN FARRELL:  Thank you, Senator.
 
20                 Assemblyman Ortiz.
 
21                 ASSEMBLYMAN ORTIZ:  Thank you, 
 
22          Mr. Chairman.  
 
23                 Good afternoon, Mr. Mayor.
 
24                 MAYOR DE BLASIO:  Good afternoon.
 
 
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 1                 ASSEMBLYMAN ORTIZ:  First of all, let 
 
 2          me just thank your staff during the weekend 
 
 3          of the -- during the heavy snowstorm that we 
 
 4          were facing, due to the fact that we had 
 
 5          numerous phone calls in my office.  My office 
 
 6          was open Saturday and Sunday, just for the 
 
 7          record.
 
 8                 MAYOR DE BLASIO:  Good for you.  We 
 
 9          appreciate that.
 
10                 ASSEMBLYMAN ORTIZ:  As a result that 
 
11          we were getting so many phone calls of people 
 
12          who have no heat and no hot water.  And I 
 
13          would like to thank your staff, HPD as well 
 
14          as your staff from the government affairs, 
 
15          Daniel Abramson and Brian Honan, for their 
 
16          persistent and continued talking back and 
 
17          forth with me during the weekend until we 
 
18          solved the problems in Red Hook.  We had two 
 
19          buildings in Red Hook completely without 
 
20          heat; they came back in less than two hours.  
 
21          We have people in my district whose landlords 
 
22          was not giving the heat; they managed to talk 
 
23          to NYCHA and agreed, as well as to the 
 
24          landlords themselves, because I have the 
 
 
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 1          phone number of the landlords.  So we used 
 
 2          your agency and your power to scare them and 
 
 3          get it done.
 
 4                 So I guess I want to put that on the 
 
 5          record for the job well done during this 
 
 6          storm.
 
 7                 I do have a few questions; I'm going 
 
 8          back to education.  As you probably know, 
 
 9          there was a study that was conducted by CDC 
 
10          back in 2013 where it stated that suicide is 
 
11          the third leading cause of death for 
 
12          Hispanics aged 15 to 24, and this includes 
 
13          females and males.  In New York City, 
 
14          Hispanic teens attempt suicide at more than 
 
15          twice the rate of white youth.  
 
16                 My question to you is whether or 
 
17          not -- what is the plan that you have in 
 
18          place in order to address the issues of 
 
19          mental health, especially suicide, among 
 
20          teenagers in the school system? 
 
21                 MAYOR DE BLASIO:  Well, I appreciate 
 
22          the question, Assemblyman.  It's a real 
 
23          challenge, and one of the things we believe 
 
24          is that till now we have not had a holistic 
 
 
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 1          mental health strategy for the city.  The 
 
 2          effort my wife has been working on, Thrive 
 
 3          NYC, is at least a strong beginning towards a 
 
 4          comprehensive mental health system and 
 
 5          approach for the city.  
 
 6                 One of the things we're doing is 
 
 7          focusing on children early.  That means 
 
 8          everything from making more resources 
 
 9          available for mental health supports for the 
 
10          youngest children to focusing on the way we 
 
11          teach our teachers to approach mental health 
 
12          issues, straight on through to our community 
 
13          school approach, which puts mental health 
 
14          professionals in the schools directly so we 
 
15          can identify problems and act on them.
 
16                 We all know and there's many tragic 
 
17          examples of young people identified early on 
 
18          -- I sadly point out the example in Newtown, 
 
19          Connecticut, the young man who ended up 
 
20          killing so many schoolchildren and had 
 
21          evident mental health problems for years and 
 
22          years that went untreated.  We have a chance 
 
23          to reach young people early, and that could 
 
24          be about stopping suicide or other types of 
 
 
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 1          negative outcomes.  So we believe the 
 
 2          investments we're making are going to lead to 
 
 3          a lot more young people being identified 
 
 4          early and actually having the services they 
 
 5          need.  
 
 6                 We're also creating something called 
 
 7          NYC Support, which will come online over the 
 
 8          next year, which is literally a service 
 
 9          through which people can call and get 
 
10          connected to healthcare services, and then 
 
11          there's an ongoing monitoring effort to 
 
12          support them in that, to make sure they 
 
13          actually get what they need on a timely basis 
 
14          and follow through.
 
15                 That hasn't existed in the past, 
 
16          because we all know it's very hard for anyone 
 
17          to navigate the mental health opportunities 
 
18          that exist, especially for parents with 
 
19          children.  The system is almost set up in a 
 
20          way that even if you heard about where 
 
21          services are, they're very, very hard to 
 
22          access.  So we're trying to break through 
 
23          that fundamentally, and that I think will be 
 
24          one of the ways we start to address this 
 
 
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 1          tragic reality of teen suicide.
 
 2                 ASSEMBLYMAN ORTIZ:  Well, one of the 
 
 3          things that I -- I have introduced a piece of 
 
 4          legislation about mandating that we should do 
 
 5          early assessment of mental health in the 
 
 6          school system.  I do believe, like you, and I 
 
 7          do believe strongly that prevention, once we 
 
 8          identify the problems that maybe some child 
 
 9          might have, that that problem probably was 
 
10          not created by the child, was created by the 
 
11          parents.  And we also have to realize that 
 
12          sometimes the parents have been stuck at the 
 
13          age of 6 or 7 or 10 years old.  
 
14                 So I do have a bill mandating that we 
 
15          should have a social worker, mental social 
 
16          worker in every school in the State of New 
 
17          York, a psychologist in the schools of 
 
18          New York as well, as well as define what the 
 
19          role of the psychologist and the guidance 
 
20          counselor is all about.  
 
21                 I would like for you and your staff to 
 
22          look at it and give me your recommendation.  
 
23          I think that -- again, I do believe in early 
 
24          intervention.  I believe that if we can catch 
 
 
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 1          the problem early enough, we will be able to 
 
 2          have less of our youth to go to through the 
 
 3          criminal justice path.  And I hope that I can 
 
 4          encourage you to do so.
 
 5                 Now, last year I was invited by 
 
 6          default to be part of your announcement at 
 
 7          the South Brooklyn Marine Terminal to be 
 
 8          built, the port, in Sunset Park.  One of the 
 
 9          major issues that we are facing is the lack 
 
10          of communication with EDC.  And the way that 
 
11          they conducted, the way that they conducted 
 
12          these two hearings to include people -- I was 
 
13          very happy to hear from them to ask for my 
 
14          recommendation, but then my recommendation 
 
15          was not really taken into consideration.  
 
16                 And my recommendation was very simple:  
 
17          Reach out to the community, talk to the 
 
18          community, make sure the community gets 
 
19          engaged.  I even offered my office to make 
 
20          sure that we can do outreach together, the 
 
21          fact that I have a list of community groups 
 
22          and community organizations and constituents 
 
23          that can participate and be part of the 
 
24          process.
 
 
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 1                 So, you know, the lack 
 
 2          of communication regarding embracing more 
 
 3          people to participate in the process was 
 
 4          lacking.
 
 5                 One of the biggest questions I have 
 
 6          is -- this is a rumor that is going out in 
 
 7          Sunset Park more and more often now and 
 
 8          coming more close to my office -- is that 
 
 9          there's a belief that this project and this 
 
10          development will bring about 55,000 more 
 
11          trucks into Sunset Park every year.  
 
12                 As you know, I have the BQE that 
 
13          everybody can cross through Sunset Park.  
 
14          They pay the toll in Staten Island and they 
 
15          pay the toll in Manhattan at the end of 
 
16          the -- at the other side.  We don't get no 
 
17          money as a result of that, we just get the 
 
18          environmental impact of the emission that is 
 
19          coming out of the fumes of the cars.  
 
20                 So my question is -- and if you don't 
 
21          have the answer, you know, we can follow up 
 
22          later.  But my question is, is there going to 
 
23          be any kind of environmental impact study and 
 
24          also a trucking study, a vehicle study, about 
 
 
                                                                  170
 
 1          how many trucks are going to be coming in and 
 
 2          out of this facility once the facility is 
 
 3          built?  
 
 4                 And the last question is regarding the 
 
 5          jobs opportunity where the unions, 
 
 6          longshoremen, feel that they've been left out 
 
 7          of the process.  And I've been trying to 
 
 8          encourage them to be in the process, because 
 
 9          I hope that the people of Sunset Park will 
 
10          benefit from these good-paying jobs that are 
 
11          coming as a result of this development that I 
 
12          will continue to support, I've been a 
 
13          supporter of that.  I have no problem with 
 
14          the backlash that I'm getting.  But I think 
 
15          it is very critical for me to assure the 
 
16          people in my community that these 5,000 
 
17          trucks that are coming through, it is true, 
 
18          it is not true, and what the city is doing to 
 
19          address that.  
 
20                 And thank you, Mr. Mayor, for being 
 
21          here today.
 
22                 MAYOR DE BLASIO:  Thank you.  Thank 
 
23          you for raising the concerns, Assemblyman.  
 
24                 First of all, I'd say I share your 
 
 
                                                                  171
 
 1          enthusiasm for the potential of what we can 
 
 2          do in terms of creating jobs in your 
 
 3          district.  And these in many cases, again, 
 
 4          would be solid middle-class jobs in terms of 
 
 5          the pay levels and the benefit levels.  
 
 6                 There's a lot that has to be worked 
 
 7          out till we get to that point.  So by the 
 
 8          time we get to the jobs being created and 
 
 9          whatever trucks running, there's a lot of 
 
10          time to make the adjustments and to create 
 
11          the kind of balance we need.  We all want the 
 
12          jobs.  We all want high-quality jobs, we want 
 
13          them to maximally benefit Sunset Park and Red 
 
14          Hook and the surrounding communities that 
 
15          have a lot of economic need.  
 
16                 If that involves a certain amount of 
 
17          truck traffic, we obviously have to make sure 
 
18          it's a fair amount and it's managed properly 
 
19          and we look at any health or safety issues 
 
20          related.  But there is time to do that.
 
21                 I'll certainly -- I want to make sure 
 
22          you feel that you're being consulted, your 
 
23          community is being consulted.  We certainly 
 
24          want to work with our labor partners.  So 
 
 
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 1          we'll double back with EDC to make sure that 
 
 2          that process is consultative going forward.  
 
 3          But I think the goal here is one that will 
 
 4          greatly benefit your district.
 
 5                 ASSEMBLYMAN ORTIZ:  Thank you.
 
 6                 MAYOR DE BLASIO:  Thank you.  
 
 7                 CHAIRMAN FARRELL:  Thank you very 
 
 8          much.  
 
 9                 We're going to take a 10-minute break, 
 
10          and we will come back and continue. 
 
11                 MAYOR DE BLASIO:  Thank you, 
 
12          Mr. Chair.
 
13                 (A brief recess was taken.)
 
14                 CHAIRWOMAN YOUNG:  We're back after a 
 
15          break, and the next to question is Senator 
 
16          Diane Savino.
 
17                 SENATOR SAVINO:  Thank you, Senator 
 
18          Young.
 
19                 Good afternoon, Mayor de Blasio.  
 
20          First I want to thank you for the 
 
21          coordination of your office with my office 
 
22          and others on Staten Island and Brooklyn with 
 
23          respect to the response to the storm.  And I 
 
24          for once can say that I think we on 
 
 
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 1          Staten Island overall were quite happy.  So 
 
 2          thank you for that.
 
 3                 MAYOR DE BLASIO:  Music to my ears, 
 
 4          Senator.
 
 5                 SENATOR SAVINO:  I know, it's amazing.
 
 6                 Not to belabor the point on the 
 
 7          property tax issue, I would be remiss if I 
 
 8          did not at least chime in on it.  And while 
 
 9          it is an undisputed fact that the city has 
 
10          not taken steps to raise the property tax 
 
11          rate, property taxes have gone up 
 
12          nevertheless.  And homeowners are feeling it, 
 
13          and I just want you to understand the 
 
14          concerns that they have.  And also it's the 
 
15          unfair way in which we assess properties in 
 
16          New York.  It's a byzantine method.
 
17                 So while we may disagree on the issue 
 
18          of a property tax cap, I think the discussion 
 
19          has to continue so that we can provide some 
 
20          sort of relief for our middle class 
 
21          homeowners.  We want them to stay and thrive 
 
22          in New York City.  I just wanted to get that 
 
23          on the record.  So you don't have to respond; 
 
24          I know your position on it.  
 
 
                                                                  174
 
 1                 I want to go to a couple of issues in 
 
 2          your presentation, one on your housing plan.  
 
 3          I know you have an ambitious housing plan to 
 
 4          create 200,000 units of affordable housing, 
 
 5          but with the collapse of the 421a and the 
 
 6          tremendous opposition you're getting from 
 
 7          community groups across the city, how are you 
 
 8          going to achieve that goal of 200,000 units?
 
 9                 MAYOR DE BLASIO:  Well, I would say a 
 
10          couple of things.  First of all, we believe 
 
11          that the 421a reform we put forward made 
 
12          sense, actually represented an extraordinary 
 
13          consensus between City Hall, the real estate 
 
14          community, housing advocates.  There was a 
 
15          real sense that this was the kind of balanced 
 
16          reform that was in the taxpayers' interest, 
 
17          would create more affordable housing, would 
 
18          stop subsidizing luxury housing, et cetera.
 
19                 We believe that idea is alive and well 
 
20          and should be handled here in the Legislature 
 
21          as quickly as possible so we can have the 
 
22          kind of program that's actually fair and will 
 
23          help us to create a substantial amount of 
 
24          affordable housing.  
 
 
                                                                  175
 
 1                 But in the meantime, we have a number 
 
 2          of efforts already underway that certainly 
 
 3          throughout calendar year 2016 will yield a 
 
 4          tremendous amount of affordable housing.  So 
 
 5          a lot of the development that was already 
 
 6          moving and a lot of our preservation efforts, 
 
 7          which have nothing to do with the 421a 
 
 8          program, those will continue and in fact 
 
 9          we'll intensify them as we work with the 
 
10          Legislature to find a way forward on a tax 
 
11          incentive program.
 
12                 In terms of the response to mandatory 
 
13          inclusionary zoning, we believe mandatory 
 
14          inclusionary zoning is more pertinent than 
 
15          ever, given that 421a is now not on the 
 
16          table.  And it's one of the best tools we 
 
17          have to get more affordable housing and 
 
18          demand fairness from developers, who 
 
19          obviously want the opportunity to build, and 
 
20          often build higher, in the city.
 
21                 Yes, community boards have expressed 
 
22          real concern.  I say, as a former City 
 
23          Council member, it never surprises me when a 
 
24          community board, in perfectly good faith, 
 
 
                                                                  176
 
 1          expresses concern about any form of 
 
 2          development.  I think it's, you know, the 
 
 3          assumption.  But when you look at the City 
 
 4          Council members, when you look at the views 
 
 5          of other elected officials and major 
 
 6          organizations in our city like AARP, which 
 
 7          has a huge membership and fully supports our 
 
 8          plan, I think the debate is more and more 
 
 9          balanced in favor of the plan and I think we 
 
10          will be able to move forward.
 
11                 SENATOR SAVINO:  Hopefully so.
 
12                 I want to turn to another issue.  As 
 
13          you know, earlier this year Senator Klein and 
 
14          myself, joined by Councilmember Ritchie 
 
15          Torres and Councilman Mark Treyger -- who is 
 
16          somewhere in the room here, or he's stepped 
 
17          out -- we released a report on the New York 
 
18          City Housing Authority detailing what we 
 
19          called the worst slumlord in the state.  And 
 
20          you know the conditions of NYCHA, the NYCHA 
 
21          developments.  And we all know that they have 
 
22          suffered from years of neglect, there's no 
 
23          doubt about that.
 
24                 So last year the city put up 
 
 
                                                                  177
 
 1          $100 million towards NYCHA.  This year you're 
 
 2          proposing the same thing, you're asking the 
 
 3          state to match it.  We did that last year.  
 
 4          But the concern we have is that if we just 
 
 5          give the money over the NYCHA, we're going to 
 
 6          get the same result we've gotten not just -- 
 
 7          it's not your problem, it's happening with 
 
 8          every administration.  NYCHA seems to be the 
 
 9          giant black hole that money goes to to 
 
10          disappear, and we never see actual 
 
11          improvements in the facilities, in the 
 
12          properties.
 
13                 So how can we make sure that the money 
 
14          is spent appropriately and goes towards the 
 
15          things that we know we need, whether it's 
 
16          mold remediation or, you know, safety and 
 
17          lighting and security and door locks and, you 
 
18          know, improvements in kitchens and bathrooms?
 
19                 MAYOR DE BLASIO:  I would say that I 
 
20          understand why you feel what you feel about 
 
21          the history of the housing authority.  I 
 
22          think you're right about the history of 
 
23          disinvestment.  I think you were in the past 
 
24          too often right that money was not used well 
 
 
                                                                  178
 
 1          enough.
 
 2                 We have been very clear that I am 
 
 3          taking personal responsibility for the 
 
 4          situation at the housing authority.  I talk 
 
 5          regularly with the leadership.  We have 
 
 6          provided unprecedented financial support for 
 
 7          the housing authority.  We literally canceled 
 
 8          a city tax on the housing authority, it was a 
 
 9          pilot, going back to 1947.  We canceled that 
 
10          so the housing authority could take those 
 
11          resources and put them towards repairs.
 
12                 As you know, for many years the 
 
13          housing authority was forced to pay 
 
14          separately for police coverage of its 
 
15          developments.  We canceled that, put that 
 
16          money back towards repairs.  Consequently, 
 
17          the amount of repairs has increased 
 
18          intensely.  
 
19                 We changed the policy in terms of the 
 
20          scaffolding in many of the developments that 
 
21          were being left for no apparent reason for 
 
22          months or years on end; we ended that policy.  
 
23          We ensured that projects are moved on rapidly 
 
24          and then the scaffolding comes down.  We're 
 
 
                                                                  179
 
 1          changing a lot of things.  
 
 2                 But the biggest thing is the 
 
 3          NextGeneration NYCHA plan.  Given the 
 
 4          $17 billion in capital needs that have gone 
 
 5          unmet, we had to come up with a plan for the 
 
 6          long term that would deal with the capital 
 
 7          challenges, and we had to come up with a 
 
 8          financial restructuring in terms of the 
 
 9          expense side of the budget.  We have that now 
 
10          with the NextGeneration NYCHA plan.  
 
11                 And we will keep doing everything we 
 
12          have to do, including the right kind of 
 
13          development on NYCHA land that focuses on 
 
14          affordable housing and also resources that 
 
15          actually go back to NYCHA for changes.  And 
 
16          then we're putting our own city capital 
 
17          dollars in to address the roof issues.  And 
 
18          again, a lot of the resources that come out 
 
19          of the other approaches within NextGen NYCHA 
 
20          will go to issues like fixing roofs, fixing 
 
21          mold, safety systems, et cetera.
 
22                 So I think NYCHA is changing rapidly, 
 
23          and this plan, with each passing year, will 
 
24          have more and more impact.  That being said, 
 
 
                                                                  180
 
 1          we need help from the state.  That first 
 
 2          $100 million has still not arrived.  We're in 
 
 3          the fiscal year still; we have not seen the 
 
 4          money.  We need your support and your 
 
 5          colleagues' support in ensuring that money 
 
 6          arrives.  It will help, obviously, hundreds 
 
 7          of thousands of people.  And then I think 
 
 8          there's a big question, when we look forward 
 
 9          to next year, what will be the status of the 
 
10          federal government on the question of 
 
11          housing.  And there could be some big changes 
 
12          next year in the composition of the federal 
 
13          government that might lead to a reopening of 
 
14          the housing discussion and, we'd like to 
 
15          believe, a chance to get some of the support 
 
16          that would actually relieve some of this 
 
17          pressure.
 
18                 SENATOR SAVINO:  We live in hope on 
 
19          that.
 
20                 I want to move to homeless policy.  
 
21          You and I have been around long enough by now 
 
22          that we remember when the Department of 
 
23          Homeless Services was created, back in 1993 
 
24          by the City Council in response to the 
 
 
                                                                  181
 
 1          lawsuit and also, if I remember, Muzzy 
 
 2          Rosenblatt.  Do you remember Muzzy 
 
 3          Rosenblatt?
 
 4                 MAYOR DE BLASIO:  Yes.  Memorable 
 
 5          name.
 
 6                 SENATOR SAVINO:  Right.  He convinced 
 
 7          Mayor Dinkins that if we had a separate, 
 
 8          free-standing agency to focus on homeless 
 
 9          policy, that that would be the best way to 
 
10          deal with the homeless crisis.  Which is very 
 
11          similar to the crisis we're seeing now, 
 
12          thousands of people undomiciled, living in 
 
13          the streets, you know, the city not getting 
 
14          the best value from the shelters that they 
 
15          were using or putting people up in hotels.  
 
16          Very similar situation.
 
17                 I would say after 22 years of this 
 
18          experiment, I actually believe that we'd be 
 
19          better off if we put DHS back into HRA, under 
 
20          the auspices of, you know, the commissioner 
 
21          of HRA, Steve Banks.  What's your opinion on 
 
22          that?
 
23                 MAYOR DE BLASIO:  We have a 90-day 
 
24          review that's well underway now, Commissioner 
 
 
                                                                  182
 
 1          Banks, working with First Deputy Mayor 
 
 2          Shorris and our new deputy mayor, 
 
 3          Dr. Palacio, and we're going to look at a 
 
 4          number of options of how to improve the work 
 
 5          of DHS and the coordination between DHS and 
 
 6          HRA.
 
 7                 I've certainly heard some -- and, you 
 
 8          know, you and others suggest a potential 
 
 9          re-merging.  All options will be on the 
 
10          table.  I don't want to bias the discussion 
 
11          by saying we have a preference, because we're 
 
12          going through a careful operational review.  
 
13          But one thing I can guarantee is at the end 
 
14          of this process, we are going to have a 
 
15          better operation, a different operation.  
 
16                 And I agree with you that Commissioner 
 
17          Banks has done an outstanding job, as part of 
 
18          this review and before, in addressing these 
 
19          very difficult issues.
 
20                 The changes now, I would say -- and 
 
21          you're an expert, you've paid a lot of 
 
22          attention to this issue for a long time.  We 
 
23          needed a whole different level of supportive 
 
24          housing.  For the first time, only in the 
 
 
                                                                  183
 
 1          last few months, with the city's announcement 
 
 2          of 15,000 units and now the Governor coming 
 
 3          forward with 20,000 units, this is the first 
 
 4          time literally in our history we've talked 
 
 5          about the real numbers we need.  That's a 
 
 6          great blessing, and I commend the Governor 
 
 7          for that.  We look forward to following 
 
 8          through on that.
 
 9                 We never had the right kind of 
 
10          preventative programs -- or we had them only, 
 
11          maybe more accurately, for a very brief 
 
12          period of time.  We never had the right kind 
 
13          of rental subsidy programs for a sustained 
 
14          period of time.  We rarely had the right kind 
 
15          of anti-eviction programs.  
 
16                 We've now taken all of those tools and 
 
17          put them on the playing field simultaneously, 
 
18          well resourced and for the long haul.  And 
 
19          we've told landlords all over the city that 
 
20          these subsidy programs are -- we're going to 
 
21          keep them for the long haul because we need 
 
22          to do it right.
 
23                 The preventative programs have reached 
 
24          91,000 people -- not all of them would end up 
 
 
                                                                  184
 
 1          in shelters, but some of them for sure would 
 
 2          have, and that's helped 22,000 folks who have 
 
 3          been moved out of shelter into housing.  That 
 
 4          shows that the subsidy efforts are working.  
 
 5          And for the first time ever, we're going to 
 
 6          have HomeStat doing consistent outreach, 
 
 7          working individual by individual to get 
 
 8          people off the streets, 500 new Safe Haven 
 
 9          beds, more homeless and runaway youth beds 
 
10          than ever before, growing as needed each 
 
11          year.
 
12                 So I'd like to believe that despite 
 
13          the fact this is a historic problem, for the 
 
14          first time the city is arraying the tools 
 
15          necessary to actually turn this problem 
 
16          around.
 
17                 SENATOR SAVINO:  Hopefully.  And, you 
 
18          know, I'm also a big supporter of the 
 
19          Governor's intervention here and his 
 
20          willingness to partner with the city to 
 
21          create what I believe that both of you know 
 
22          very well, it's that continuum of care for 
 
23          the homeless.  As you and I know, 
 
24          homelessness doesn't happen overnight to 
 
 
                                                                  185
 
 1          people.  It's usually a slow, steady descent 
 
 2          into it.  It's not just income insecurity, 
 
 3          it's a combination of things.  There are 
 
 4          addiction issues and domestic violence and, 
 
 5          you know, mental illness, and all of those 
 
 6          things lead to further income insecurity and 
 
 7          housing insecurity.
 
 8                 So hopefully there will be real 
 
 9          coordination between the city and the state 
 
10          to address those issues.  And I'm just going 
 
11          to say this again, I think HRA is the agency 
 
12          that really should oversee this, because many 
 
13          of these clients are cross-systemized.  
 
14          They're already being serviced by HRA 
 
15          caseworkers as well.  So to the extent that 
 
16          you have broad case management, you're able 
 
17          to really service a family.
 
18                 MAYOR DE BLASIO:  Appreciate it.
 
19                 SENATOR SAVINO:  Thank you.
 
20                 CHAIRMAN FARRELL:  Thank you.
 
21                 CHAIRWOMAN YOUNG:  Thank you, Senator.
 
22                 CHAIRMAN FARRELL:  Assemblyman Colton.
 
23                 ASSEMBLYMAN COLTON:  Thank you, 
 
24          Mr. Chair.
 
 
                                                                  186
 
 1                 Good afternoon, Mayor.
 
 2                 MAYOR DE BLASIO:  Good afternoon.
 
 3                 ASSEMBLYMAN COLTON:  I would like to 
 
 4          ask you a few questions on a topic which is a 
 
 5          very high priority to me, and I'd like to go 
 
 6          from the earliest to the highest levels of 
 
 7          it.
 
 8                 I believe that CUNY is an institution 
 
 9          which is very important to New York as an 
 
10          economic engine, both to the city and to the 
 
11          state.  Up to 1976, the history was that 
 
12          there was a 50/50 split in terms of the 
 
13          operating expenses of this great institution.  
 
14          And then during the city's fiscal crisis at 
 
15          that point, the state stepped up to the plate 
 
16          and the city's share was reduced to what now 
 
17          I understand is a token of 1 or 2 percent of 
 
18          the operating costs.
 
19                 I believe that CUNY -- very 
 
20          passionately -- is extremely important, 
 
21          especially to all of our young adults in 
 
22          terms of giving them what they need in order 
 
23          to be able to overcome economic difficulties.  
 
24                 Now, in this particular time we have 
 
 
                                                                  187
 
 1          the city and the state, both their economic 
 
 2          climates are a lot better.  Obviously we need 
 
 3          to reserve money and we need to make sure 
 
 4          that they stay in good condition.  But would 
 
 5          it not be reasonable for the city to show its 
 
 6          willingness to step up to the plate and to 
 
 7          increase their share as a symbol of the 
 
 8          importance of this institution to young 
 
 9          people throughout the city and the state, and 
 
10          as a way, you know, to show its willingness 
 
11          and its priority to making sure that young 
 
12          people continue to have all the benefits of 
 
13          CUNY?  Would it not be unreasonable {sic} to 
 
14          raise it more than the 1 or 2 percent of the 
 
15          operating expenses?
 
16                 MAYOR DE BLASIO:  I'm going to let -- 
 
17          Assemblyman, Dean Fuleihan will go over the 
 
18          overall financial reality and the 
 
19          contributions we make.
 
20                 The City of New York contributes in 
 
21          substantial ways to CUNY.  In fact, in the 
 
22          last two budgets we've added resources to 
 
23          CUNY in a strategic manner.  We believed 
 
24          fundamentally in the ASAP program as a tool 
 
 
                                                                  188
 
 1          to make sure that young people who went into 
 
 2          CUNY succeeded, and we thought that was a 
 
 3          good investment on top of any other 
 
 4          obligations that we had.  We believed 
 
 5          fundamentally that STEM programs should be 
 
 6          supported, so we put a growing amount of 
 
 7          resources into supporting two-year STEM 
 
 8          programs because we knew that would help a 
 
 9          lot of our young people go right into 
 
10          technology jobs that are now growing in the 
 
11          city, even with a two-year degree.
 
12                 So we have certainly made targeted 
 
13          investments in CUNY.  We have already made 
 
14          clear to the state that we will pay our 
 
15          proportionate share in terms of the labor 
 
16          agreement that we hope will be struck.  We 
 
17          believe that folks who work, members of PSC 
 
18          CUNY deserve a new labor deal.  We obviously, 
 
19          in terms of the city workforce, are very 
 
20          proud of the fact we have 95 percent of our 
 
21          union members now in either a ratified 
 
22          contract or an agreement.  We think the PSC 
 
23          CUNY members should be covered by a new 
 
24          contract; we've already made very clear we 
 
 
                                                                  189
 
 1          will pay our appropriate share of that.
 
 2                 So there's many ways in which we 
 
 3          contribute to CUNY.  I think, given the other 
 
 4          needs that I've outlined, the challenges we 
 
 5          face -- pension costs, Health and Hospitals 
 
 6          costs, everything we're trying to invest in 
 
 7          in terms of public safety, education, 
 
 8          et cetera -- and the fact that our reserves 
 
 9          could easily be wiped out by an economic 
 
10          downturn, I don't think it's right to take 
 
11          state obligations and increasingly put them 
 
12          on the City of New York.
 
13                 But I'd like Dean just to summarize 
 
14          the city's ongoing contributions to CUNY.
 
15                 DIRECTOR FULEIHAN:  Right.  When the 
 
16          takeover occurred, CUNY's senior colleges 
 
17          were put on the exact same footing as SUNY 
 
18          senior colleges.  The community college piece 
 
19          was divided so that the city would pay a 
 
20          third, tuition would do a third, the state 
 
21          would do a third.  And that's the exact same 
 
22          arrangement as all community colleges across 
 
23          the state, except in all local community 
 
24          colleges in SUNY, actually the local 
 
 
                                                                  190
 
 1          government controls the local board of 
 
 2          trustees, where we have one-third 
 
 3          representation on the whole piece.
 
 4                 So we do pay actually 34 percent, 
 
 5          tuition pays about 40 percent, and the state 
 
 6          pays the remainder of the difference.  So we 
 
 7          do make more than the actual statutory 
 
 8          commitment to the community colleges.  And 
 
 9          then we pay half of the capital on the 
 
10          community colleges.
 
11                 ASSEMBLYMAN COLTON:  All right.  I 
 
12          just think that in the sense of partnership, 
 
13          and in making it clear the priority that CUNY 
 
14          has to New York City and to New York State, 
 
15          that it would be not unreasonable to think 
 
16          about increasing the percentage, when of the 
 
17          operating costs it's so -- 1 or 2 percent 
 
18          is -- you know, it seems very low.
 
19                 MAYOR DE BLASIO:  Again -- I'm sorry 
 
20          to interrupt, Assemblymember, I just want to 
 
21          make sure -- because I think Dean kind of ran 
 
22          through that.  We're paying half the capital 
 
23          costs of the community colleges, and repeat 
 
24          again --
 
 
                                                                  191
 
 1                 DIRECTOR FULEIHAN:  -- 34 percent of 
 
 2          the operating cost of the community colleges, 
 
 3          the biggest governmental contribution.  
 
 4          Tuition pays 40, and the remainder is paid by 
 
 5          the state.
 
 6                 MAYOR DE BLASIO:  And please just 
 
 7          reiterate how that compares to what other 
 
 8          localities do around the state with their 
 
 9          community colleges.
 
10                 DIRECTOR FULEIHAN:  We're at the high 
 
11          end of what most localities do around the 
 
12          state in their community college 
 
13          contribution.
 
14                 ASSEMBLYMAN COLTON:  I think one of 
 
15          the reasons why New York City does generate 
 
16          so much revenue to the state is because of 
 
17          the importance of CUNY.  And, you know, I 
 
18          think -- but that also means it's important 
 
19          to New York City.  So I think as a gesture it 
 
20          is not unreasonable.  There has to be 
 
21          negotiation, there has to be discussion.  For 
 
22          example, the Governor has said we need to 
 
23          find administrative efficiencies with CUNY 
 
24          and SUNY.  You know, is it reasonable that 
 
 
                                                                  192
 
 1          the state funds CUNY 36 million and funds 
 
 2          SUNY 14 million?  So there's room here for 
 
 3          maneuvering.  And I just think that, you 
 
 4          know, the city has to, you know, engage in 
 
 5          that.
 
 6                 On another topic which is also very 
 
 7          important, the area of pre-K.  Last year the 
 
 8          Governor stepped up and he made a commitment 
 
 9          to provide state funding to New York City for 
 
10          over $300 million.  And that has continued, 
 
11          he's proposing that be continued again this 
 
12          year.
 
13                 Also, under the Smart Bonds issue, 
 
14          which the Governor proposed and the 
 
15          Legislature passed and the voters approved, I 
 
16          believe we're going to have -- New York City 
 
17          will be eligible for some $783 million in 
 
18          funding.
 
19                 One of the things that I think I want 
 
20          to emphasize, in association with 
 
21          Assemblymember Cathy Nolan, is the importance 
 
22          of the transportable units, those units 
 
23          being, you know, replaced.  But also a very 
 
24          big issue in my district is pre-K seating.  
 
 
                                                                  193
 
 1          We have serious problems with that.  There 
 
 2          isn't enough, for example.  And even where 
 
 3          it's found, there are problems.  In 
 
 4          District 20 a location was found for pre-K 
 
 5          seating, and it's in the middle of a heavy 
 
 6          truck zone and there's a lot of community 
 
 7          opposition with parents on that.
 
 8                 So what efforts, what plans has the 
 
 9          city made to try to get more pre-K seats in 
 
10          the public schools?  And how do we do that?
 
11                 MAYOR DE BLASIO:  A couple of 
 
12          different things, Assemblyman.  So the effort 
 
13          to reach the level that we are at now, 
 
14          68,500-plus young people in pre-K -- and 
 
15          again, that was 20,000 when I started my 
 
16          administration.  So we've added almost 50,000 
 
17          kids per year now.  
 
18                 That happened -- an extraordinary 
 
19          effort, and I commend all of my colleagues 
 
20          who pulled that off, and I thank again 
 
21          everyone here and everyone in the Legislature 
 
22          for providing the funding.  That required a 
 
23          heavy emphasis on existing community-based 
 
24          organizations, existing schools of various 
 
 
                                                                  194
 
 1          types, including religious schools, and it's 
 
 2          been a very, very effective effort.
 
 3                 At the same time, we want to develop 
 
 4          more capacity.  So, for example, in our 
 
 5          capital plan there are additional pre-K 
 
 6          centers, stand-alone pre-K centers in some 
 
 7          neighborhoods.  We continue to work closely 
 
 8          with the archdiocese and the diocese in terms 
 
 9          of buildings that they have available coming 
 
10          into our domain, either by lease or by 
 
11          purchase.  And we also make adjustments 
 
12          constantly.
 
13                 The locations we had this year were 
 
14          the ones that we thought were the best able 
 
15          to provide the best-quality pre-K for our 
 
16          kids.  But if we find that a location ended 
 
17          up to not be as good as we want it to be, we 
 
18          can make adjustments for next year because we 
 
19          actually had additional locations being 
 
20          offered.  Not always geographically exactly 
 
21          where we wanted them, but we still have 
 
22          choices to work with.  
 
23                 We would love to work with you and 
 
24          your office, if we think there's a location 
 
 
                                                                  195
 
 1          that should be better, to see if there's 
 
 2          another site in the community that would be a 
 
 3          better alternative.
 
 4                 ASSEMBLYMAN COLTON:  Yeah, because 
 
 5          this is a very important priority, I think 
 
 6          from the pre-K level all the way up to higher 
 
 7          education.  And I really think the city has 
 
 8          to put a big effort into that.
 
 9                 There are a couple of other areas I 
 
10          had, but I'm going to leave that for now 
 
11          because my time is just about up.  So thank 
 
12          you, Mr. Mayor.
 
13                 MAYOR DE BLASIO:  Thank you.
 
14                 CHAIRMAN FARRELL:  Senator.
 
15                 CHAIRWOMAN YOUNG:  Thank you, 
 
16          Assemblyman.
 
17                 Our next speaker is Assemblyman 
 
18          Espaillat.
 
19                 SENATOR ESPAILLAT:  Good afternoon, 
 
20          Mr. Mayor.
 
21                 MAYOR DE BLASIO:  Good afternoon.
 
22                 SENATOR ESPAILLAT:  Well, first let me 
 
23          start out by trying to dispel something that 
 
24          has been really alluded to here with regards 
 
 
                                                                  196
 
 1          to CUNY and what seems to be a perception 
 
 2          that the rest of the state is going to be 
 
 3          saddled disproportionately with the 
 
 4          operational costs of CUNY.  When in fact, you 
 
 5          know, traditionally -- and I've been here 20 
 
 6          years -- it's the other way around.  The city 
 
 7          produces far more revenue for the state than 
 
 8          it gets back in the budget.  That was the 
 
 9          basis for the Campaign for Fiscal Equity 
 
10          lawsuit, that many felt that the city was 
 
11          giving more in revenue, that the windfall of 
 
12          revenue from the city, coming from the city, 
 
13          was so much more than we got back for 
 
14          schools.
 
15                 And just recently, when we had the 
 
16          settlement on -- the Attorney General's 
 
17          office had settlement money distributed here 
 
18          to the state, although the offenses may have 
 
19          been committed in the city, it was really 
 
20          more upstate and outside of the city that 
 
21          benefited from the investment in these close 
 
22          to maybe 5-point-something billions of 
 
23          dollars.
 
24                 So I want to dispel the notion that 
 
 
                                                                  197
 
 1          the city is saddling the rest of the state.  
 
 2          First of all, it perpetuates this 
 
 3          upstate-versus-downstate scenario which I 
 
 4          think is damaging to all of us.  
 
 5                 But let me also just begin with the 
 
 6          CUNY piece and say that in traditional 
 
 7          Shakespearean Albany logic, a cut is a cut by 
 
 8          any other name.  And so every time we see 
 
 9          mergers, we know that at the end of the day 
 
10          it may mean a cut.  When we see downsizing, 
 
11          we know that at the end of the day, when the 
 
12          rubber meets the road, that may be a cut.  
 
13          When we see administrative efficiencies and 
 
14          reform, we know that at the end of the day 
 
15          this could very well be a cut.
 
16                 So I am concerned and I want to ask 
 
17          you, what in fact will be hurt?  Let's say 
 
18          those $485 million were cut right now.  What 
 
19          kind of services, operations will be 
 
20          compromised and hurt within the CUNY system 
 
21          right now if this were to happen today?
 
22                 MAYOR DE BLASIO:  Well, let me start 
 
23          by saying, again, let's acknowledge an 
 
24          unusual situation here.  This item appeared 
 
 
                                                                  198
 
 1          in the budget, was not, you know, part of any 
 
 2          previous discussion, and then the next day 
 
 3          the Governor offered a clarification, which 
 
 4          again I very much appreciate.  The 
 
 5          clarification said that it would not cost the 
 
 6          city a penny, and alternative means would be 
 
 7          worked on -- which again will start hopefully 
 
 8          as early as next week.  And we'll see what 
 
 9          that yields.
 
10                 So what I can say to you is I believe, 
 
11          based on what we are hearing now, that there 
 
12          will not be a cut.  But let's take your 
 
13          theoretical question.  Clearly we have a CUNY 
 
14          system that is trying to reach a lot of young 
 
15          people and give them opportunity and 
 
16          straining to do that.  And if you were to 
 
17          take half billion dollars out, it would mean, 
 
18          you know, any number of potentially negative 
 
19          scenarios.  Obviously a lot fewer kids being 
 
20          served in one way or another.  And let's face 
 
21          it, the kinds of things we're trying to do, 
 
22          like the investment in STEM education so kids 
 
23          can get, young people can get the education 
 
24          and go straight in the workforce, that would 
 
 
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 1          be undercut fundamentally.
 
 2                 Or, you know, if you think about other 
 
 3          areas of the city budget, if you tried to 
 
 4          move those cuts elsewhere, where would you 
 
 5          cut?  Would you cut from education?  Would 
 
 6          you cut from police?  So I think it's fair to 
 
 7          say that this would be a very, very major 
 
 8          impact.  
 
 9                 But again, we're going to take the 
 
10          Governor on his word and follow through in a 
 
11          very transparent fashion on that so that 
 
12          these cuts will not be seen and will not have 
 
13          an impact on our young people.
 
14                 SENATOR ESPAILLAT:  Well, let me just 
 
15          share with you, Mr. Mayor, that I will be 
 
16          looking forward to monitor the situation to 
 
17          ensure that these efficiencies or 
 
18          administrative reforms don't actually turn 
 
19          into a cut, because I think that would be 
 
20          very damaging to the CUNY system if that is 
 
21          the case.  
 
22                 And so I will monitor the situation, 
 
23          and if we talk about trimming the fat, as 
 
24          it's often called, or some minor 
 
 
                                                                  200
 
 1          administrative changes, that's acceptable.  
 
 2          But I know that I've been here long enough to 
 
 3          know that a cut is a cut.  And so I am deeply 
 
 4          concerned that that will impact, dramatically 
 
 5          impact CUNY, which continues to be a beacon 
 
 6          of hope and opportunities.  CUNY is the 
 
 7          Harvard, the Yale, the Cornell of our 
 
 8          working-class and middle-class communities.  
 
 9          And so to potentially absorb a cut of this 
 
10          magnitude puts a hit on the future of the 
 
11          city and the State of New York.
 
12                 On another matter, Mr. Mayor, let me 
 
13          commend you for your interest in tackling the 
 
14          affordability problem in the city, 
 
15          particularly when it comes to affordable 
 
16          housing.  And your administration has 
 
17          proposed mandatory inclusionary zoning as the 
 
18          model to address the issue of affordability 
 
19          in housing in the City of New York.  And 
 
20          whereas that may yield some affordable units, 
 
21          many people across the city -- community 
 
22          boards, myself and others -- are concerned 
 
23          that this particular model, whereas it may 
 
24          yield some affordable units, it could also 
 
 
                                                                  201
 
 1          unleash market forces and gentrification to a 
 
 2          level that many working-class and 
 
 3          middle-class families will be hurt.  
 
 4                 In my particular district we have 
 
 5          already begun to see speculation.  
 
 6          Yesterday's New York Times published an 
 
 7          article that highlighted the Rockaways and 
 
 8          East Harlem as two neighborhoods that have 
 
 9          seen how affordable housing can be built.  
 
10          You yourself were at a ribbon-cutting 
 
11          ceremony in my district where Broadway 
 
12          Housing opened up a full 100 percent 
 
13          affordable housing community.  
 
14                 Why not build affordable housing?  Why 
 
15          can we not build 100 percent affordable 
 
16          housing that guarantees poor people, working 
 
17          people, that are really the ones hurting in 
 
18          the housing crunch?  Because I think by 
 
19          engaging in the 70/30, 80/20 model, we are 
 
20          exposing communities like the one that I 
 
21          serve that have 90 percent of the housing 
 
22          stock, rent-stabilized, privately owned 
 
23          buildings, subject to the market.  And 
 
24          landlords and owners who come in and buy off 
 
 
                                                                  202
 
 1          tenants, it would unleash a whole series of 
 
 2          practices that eventually result in losing 
 
 3          more affordable housing that you have 
 
 4          produced.  
 
 5                 And so this is the essence of the 
 
 6          fear.  I don't think it's just like a frenzy 
 
 7          in the community boards that, you know, we 
 
 8          see maybe regularly on a host of issues.  
 
 9          This is a deep-seated concern that 
 
10          communities have across the City of New York.  
 
11          It has manifested itself in the Bronx, 
 
12          unanimously in Queens, and even in Manhattan.  
 
13          God knows we never agree on anything in 
 
14          Manhattan.  
 
15                 But it's deep-seated, and I am 
 
16          concerned that the mandatory inclusionary 
 
17          zone, although well-intended to produce X 
 
18          amount of affordable housing units, that it 
 
19          will in fact result in the displacement of 
 
20          hundreds and thousands of families that are 
 
21          living in working-class communities around 
 
22          these developments that will witness a 
 
23          dramatic shift in the values of those 
 
24          properties, and subsequently there goes the 
 
 
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 1          rent.
 
 2                 So I am concerned about this.  I would 
 
 3          like to see from the city good faith and that 
 
 4          you come to these neighborhoods and you build 
 
 5          affordable housing.  It's been done in the 
 
 6          past.  The New York Times said yesterday that 
 
 7          it was done successfully in the Rockaways and 
 
 8          East Harlem.  And it's been done in my 
 
 9          district.  Why not start that way and not 
 
10          with the mandatory inclusionary zoning?
 
11                 MAYOR DE BLASIO:  Well, I appreciate 
 
12          the question, Senator, because you're getting 
 
13          to the heart of the matter on many levels.
 
14                 First of all, I want to be clear on my 
 
15          view of the community boards' response.   I'm 
 
16          not trying to in any way stereotype it.  I'm 
 
17          saying I do think community boards have a 
 
18          history of being dubious of all types of 
 
19          development.  I don't think that's an unfair 
 
20          statement; I think everyone who's worked with 
 
21          community boards -- I spent eight years 
 
22          working closely with the community boards in 
 
23          my district when I was a councilman -- we 
 
24          know that's a pretty consistent reality.
 
 
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 1                 At the same time, I agree with you, 
 
 2          whether it's community boards or community 
 
 3          activists or clergypeople, they're speaking 
 
 4          up out of deep concern and fear about 
 
 5          displacement.  And I've tried to speak 
 
 6          bluntly to it, and I started that process a 
 
 7          year ago in my State of the City speech 
 
 8          because, honestly, here's what I think is the 
 
 9          bigger picture.  I don't think the issue of 
 
10          gentrification has been honestly discussed in 
 
11          this city over 10 or 20 years as it has been 
 
12          growing as a phenomenon.  I don't think there 
 
13          was a honest debate about what it meant, 
 
14          about the impact it was having, about what we 
 
15          could do about it, what was the role of 
 
16          public policy, what should we do differently.  
 
17          None of that happened.
 
18                 And in the previous administration, 
 
19          with all due respect to them, there was I 
 
20          think a kind of laissez-faire approach 
 
21          wherein market forces dominated the entire 
 
22          playing field.  As you know, a lot of this 
 
23          city is in an as-of-right status where 
 
24          developers have the right to work within the 
 
 
                                                                  205
 
 1          existing zoning and can do a lot with it.  
 
 2          The areas that are now being discussed for 
 
 3          rezoning are relatively few in the scheme of 
 
 4          things.  A lot of rezoning happened in the 
 
 5          previous administration already.
 
 6                 And what we found in the previous 
 
 7          approach was that there were not particularly 
 
 8          stringent demands put on developers in terms 
 
 9          of affordable housing, and even some of the 
 
10          plans that were agreed to with communities 
 
11          were not honored.  So that has bred a lot of 
 
12          cynicism, rightfully, in communities about 
 
13          any affordable housing plan.  
 
14                 I think it's fair to say I have a very 
 
15          different approach.  I think I've proven that 
 
16          on many levels.  What I saw -- and maybe it 
 
17          has to do with personal experience -- what I 
 
18          saw happen in my neighborhood in Brooklyn and 
 
19          in surround neighborhoods, I can certainly 
 
20          say this about Bed-Stuy, I can say this about 
 
21          Bushwick, I can say this about a lot of 
 
22          places -- is in the absence of a policy, the 
 
23          market forces simply created displacement.  
 
24          They didn't need rezonings, it just kept 
 
 
                                                                  206
 
 1          happening and happening -- with no 
 
 2          compensating impact in favor of the 
 
 3          community.  So if you literally say if we 
 
 4          just walked away now, we said let the market 
 
 5          determine all of this, you would see more and 
 
 6          more people displaced, you would not see new 
 
 7          affordable housing built in appreciable 
 
 8          numbers.  Because if we just took the part 
 
 9          out of our plan that did not benefit from 
 
10          some type of private-sector activity, it 
 
11          would be a much, much smaller number.  We'd 
 
12          never get to 200,000 units.
 
13                 So we would have a lot less affordable 
 
14          housing being built, we'd still have a lot of 
 
15          people being displaced, we wouldn't have the 
 
16          opportunity to do a lot of good things in 
 
17          communities through rezonings.  And, you 
 
18          know, you know as well as I do, rezoning is 
 
19          an opportunity to do a lot of the capital 
 
20          improvements to a community, a lot of the 
 
21          things that have been unaddressed previously 
 
22          can be addressed, and we're very committed to 
 
23          it.  
 
24                 We've put a very substantial allotment 
 
 
                                                                  207
 
 1          in our capital budget to address 
 
 2          infrastructure needs with rezonings, and that 
 
 3          was not true in the past.  We've tried to be 
 
 4          up-front about the fact.  If communities need 
 
 5          new schools, parks, whatever it happens to 
 
 6          be, that's going to be factored into the 
 
 7          rezoning process.  We obviously have a heavy 
 
 8          emphasis on creating local jobs.
 
 9                 So I would say it this way.  I think 
 
10          it's a pretty stark contrast.  Let the market 
 
11          decide, period.  You'll get most of the same 
 
12          unfortunate outcomes from our community 
 
13          residents without any of the compensating 
 
14          positive factors.  Under our plan, you will 
 
15          get an unprecedented amount of affordable 
 
16          housing, you'll get job creation which will 
 
17          be as much as possible targeted to local 
 
18          residents, you'll get community improvements 
 
19          and capital improvements.
 
20                 The other part of the equation, which 
 
21          you know very well -- and we all grapple 
 
22          with -- is the units that are going out of 
 
23          rent regulation.  And I know and all your 
 
24          colleagues have fought to strengthen rent 
 
 
                                                                  208
 
 1          regulation.  I know you've found a certain 
 
 2          amount of resistance in that process.  But we 
 
 3          still lose a lot of units even with the 
 
 4          recent improvements, which we appreciate.  We 
 
 5          lose a lot of units out of rent regulation, 
 
 6          we lose a lot of units out of Mitchell-Lama.  
 
 7          If we had not stepped in with our housing 
 
 8          plan to stop 5,000 units at Stuy Town and 
 
 9          Peter Cooper from being privatized, we would 
 
10          have lost 5,000 more -- almost a thousand 
 
11          units at the Riverton in Harlem we would have 
 
12          lost had we not stepped in.
 
13                 So I argue that there has to be an 
 
14          interventionist approach by the city 
 
15          government to the maximum extent possible, 
 
16          and that's the best, the best strategy we 
 
17          have at this moment to preserve affordable 
 
18          housing.
 
19                 SENATOR ESPAILLAT:  You know, I 
 
20          commend your model.  I'm not saying that we 
 
21          should not have an intervention of some kind 
 
22          of regulatory practices to get more for the 
 
23          development that's going on in New York City.
 
24                 What I'm saying to you is that in many 
 
 
                                                                  209
 
 1          neighborhoods that may be a blessing, because 
 
 2          in East Harlem, where you have the highest 
 
 3          concentration of NYCHA buildings, people that 
 
 4          are protected for two, three, four 
 
 5          generations, maybe that's not so bad -- they 
 
 6          have the ability to cushion the blow.  But in 
 
 7          a neighborhood with 90 percent plus 
 
 8          apartments that are rent-stabilized, 
 
 9          privately owned, where 25 percent of the 
 
10          leases are preferential rent leases, that 
 
11          means that the landlord has not been able to 
 
12          get the rent that they want, therefore they 
 
13          issue a lease for less rent that doesn't 
 
14          guarantee any rent stabilization rights or 
 
15          privileges to the tenant.  That landlord is 
 
16          going to go out there -- once you've built 
 
17          those towers through mandatory inclusionary 
 
18          zoning, that landlord is going to go out 
 
19          there and try to get that market rate, and 
 
20          that tenant is out.  That's one out of four 
 
21          in that immediate area where you're proposing 
 
22          that in our district.
 
23                 So what I'm saying is city government 
 
24          and state government -- which proposes 
 
 
                                                                  210
 
 1          $20 billion for housing, $10 billion for 
 
 2          affordable housing, $10 billion to deal with 
 
 3          the homeless issue -- should not get out of 
 
 4          the affordable housing business as we knew it 
 
 5          that really helped communities in the past.  
 
 6          You know, Mayor Koch rebuilt the Bronx, you 
 
 7          know, when it burnt.  You know, Freddie 
 
 8          Ferrer, the borough president, did a 
 
 9          fantastic job at ushering that in.  You know, 
 
10          we need that kind of energy again to save 
 
11          neighborhoods.
 
12                 I think that you're well intended, 
 
13          this is a well -- I'm not saying that you -- 
 
14          I think it's better than what we had in the 
 
15          past.  But it doesn't cut the mustard, not 
 
16          for neighborhoods where people are having a 
 
17          tough time making ends meet.  And I propose 
 
18          that you get back into the affordable housing 
 
19          business as well.
 
20                 MAYOR DE BLASIO:  Just a final 
 
21          comment.
 
22                 I believe, again, that a lot of 
 
23          neighborhoods -- I would not underestimate, 
 
24          if you look at the neighborhoods that have no 
 
 
                                                                  211
 
 1          rezoning activity but are seeing those 
 
 2          preferential rents you point to, that in many 
 
 3          neighborhoods it is already being swept away 
 
 4          just by market activity alone.  
 
 5                 If it was a zero-sum, if you were -- 
 
 6          for example, if all those preferential rents, 
 
 7          you know, being kept low, if that was all 
 
 8          there was to it, don't do rezoning and 
 
 9          they're all going to stay low, that would be 
 
10          an interesting discussion.  I don't believe 
 
11          that's what's happening.  I think the market 
 
12          dynamics are already sweeping past that, and 
 
13          if we don't intervene there'll be nothing 
 
14          left in terms of affordability.  And we have 
 
15          to use every tool we have to create it.
 
16                 So I respect deeply your position, I 
 
17          just want you to hear that we believe that, 
 
18          you know, that cow's out of the barn already.
 
19                 SENATOR ESPAILLAT:  Well, I thank you, 
 
20          Mr. Mayor.  And I hope that we can continue 
 
21          to have this discussion in regards to 
 
22          affordability.
 
23                 MAYOR DE BLASIO:  Absolutely.
 
24                 SENATOR ESPAILLAT:  Thank you.
 
 
                                                                  212
 
 1                 MAYOR DE BLASIO:  Thank you.
 
 2                 CHAIRWOMAN YOUNG:  Thank you.
 
 3                 SENATOR KRUEGER:  Assembly?
 
 4                 CHAIRMAN FARRELL:  Thank you.
 
 5                 Assemblyman McDonald.  Is he there?  
 
 6          Oh, very good.  Oh. 
 
 7                 (Laughter.)
 
 8                 CHAIRMAN FARRELL:  In his place, 
 
 9          Mr. Titone will make a very quick speech.
 
10                 (Laughter.)
 
11                 CHAIRMAN FARRELL:  He's not really 
 
12          doing this.
 
13                 ASSEMBLYMAN TITONE:  I know I'm not 
 
14          really permitted to speak, but I just wanted 
 
15          to really thank you publicly for increasing 
 
16          the ferry service on Staten Island.  Very 
 
17          much appreciate it, Mayor.  Thank you.
 
18                 MAYOR DE BLASIO:  Thank you very much.  
 
19          It was the right thing to do.
 
20                 CHAIRMAN FARRELL:  All right.  We 
 
21          close on this, then.
 
22                 MAYOR DE BLASIO:  And ferry service 
 
23          kept going all through the storm.  We're 
 
24          proud of that fact.
 
 
                                                                  213
 
 1                 ASSEMBLYMAN TITONE:  Well, we still 
 
 2          have some parking to do there.
 
 3                 MAYOR DE BLASIO:  We will.  We will.
 
 4                 CHAIRWOMAN YOUNG:  Assemblyman Farrell 
 
 5          was quite accurate about the briefness of 
 
 6          Assemblyman Titone's --
 
 7                 CHAIRMAN FARRELL:  I wish the other 
 
 8          side would understand that.
 
 9                 CHAIRWOMAN YOUNG:  We have a lot of 
 
10          questions.
 
11                 Next it would be Senator Squadron.
 
12                 SENATOR SQUADRON:  Thank you.  I will 
 
13          take a lesson from Assemblyman Titone, but 
 
14          not the one you'd like me to.
 
15                 I would like to join him on thanking 
 
16          you for ferry service expansions throughout 
 
17          the city and the investment the city is doing 
 
18          in that.
 
19                 By the way -- actually a good segue 
 
20          into my questions -- is the state budget 
 
21          helping with the ferry expansions throughout 
 
22          New York City?  No?  Zero dollars from the 
 
23          state for ferry expansions?
 
24                 MAYOR DE BLASIO:  That's all us.
 
 
                                                                  214
 
 1                 SENATOR SQUADRON:  And last year the 
 
 2          state put in, as Senator Savino mentioned, 
 
 3          $100 million for NYCHA.  This year how much 
 
 4          is the city expecting to get from the state 
 
 5          for public housing capital?
 
 6                 MAYOR DE BLASIO:  So again, with the 
 
 7          $100 million that was in the last budget of 
 
 8          the state, in the current fiscal year for 
 
 9          NYCHA we still have not seen a dime.  We 
 
10          would very much like that money to come in so 
 
11          we can do more to fix public housing 
 
12          developments.  We welcome a plan from the 
 
13          state.  We're ready to get to work doing this 
 
14          work, and we have --
 
15                 SENATOR SQUADRON:  Once -- sorry to 
 
16          cut you off.  But once you get the hundred 
 
17          million, is NYCHA's fiscal need satisfied 
 
18          then or is it --
 
19                 MAYOR DE BLASIO:  No, no.  Not at all.  
 
20          Not at all.
 
21                 But the point being we made a 
 
22          commitment last year when I was here with you 
 
23          that we would do a hundred million each year, 
 
24          current fiscal year, next two as well.  We 
 
 
                                                                  215
 
 1          have that in our new budget.  We asked that 
 
 2          the state match that, because the need -- as 
 
 3          I said, there's a $17 billion capital need at 
 
 4          NYCHA for the buildings that cover 400,000 
 
 5          people.  But that first hundred million still 
 
 6          has not arrived.  And we believe -- you know, 
 
 7          we have some strong views on the best use of 
 
 8          that money, but we also obviously respect the 
 
 9          Legislature's prerogatives.  Whatever the 
 
10          ultimate decision of the state on how best to 
 
11          use it, we're ready to implement it.  We're 
 
12          ready to put that money to work immediately.  
 
13          But we'd ask your help in making sure it 
 
14          shows up as soon as possible.
 
15                 SENATOR SQUADRON:  Great.  And again, 
 
16          the city made a three-year, $100 million a 
 
17          year commitment --
 
18                 MAYOR DE BLASIO:  Yes.
 
19                 SENATOR SQUADRON:  -- and so far the 
 
20          state has not this year proposed a hundred 
 
21          million equal.
 
22                 MAYOR DE BLASIO:  That's right.
 
23                 SENATOR SQUADRON:  At its high-water 
 
24          mark, the Advantage, Work Advantage 
 
 
                                                                  216
 
 1          anti-homelessness program, the state was 
 
 2          giving the city I think $35 million in 
 
 3          operating funds for that program?
 
 4                 MAYOR DE BLASIO:  We'll check that.  
 
 5                 And again, while Sherif and Dean check 
 
 6          that question, let me emphasize I appreciate 
 
 7          your sense of history, because not only was 
 
 8          the state contribution to Advantage 
 
 9          substantial, but Advantage was working.  
 
10                 And about the time Advantage ended, we 
 
11          went from approximately 37,000 people in our 
 
12          shelter system just in the following two and 
 
13          a half years to 50,000 plus.  So really one 
 
14          of the biggest factors in the increase in our 
 
15          shelter population was the absence of 
 
16          Advantage.  And, you know, it's going to take 
 
17          a long time to recapture that ground and 
 
18          reverse that trend.  This is why we're 
 
19          concerned now to make sure that homelessness 
 
20          funding for the city is equitable and does 
 
21          address some of the things that were cut in 
 
22          the past so we can actually turn this corner.
 
23                 Do you have an answer on the --
 
24                 DIRECTOR FULEIHAN:  We'll get it.
 
 
                                                                  217
 
 1                 MAYOR DE BLASIO:  We're checking that 
 
 2          dollar figure.
 
 3                 SENATOR SQUADRON:  And I think it's an 
 
 4          important one.  The Advantage Program needed 
 
 5          to be fixed, but -- and the supportive 
 
 6          housing capital dollars are absolutely 
 
 7          wonderful that are being proposed by the 
 
 8          state, by the Governor.
 
 9                 But, you know, the total statewide 
 
10          Homeless Prevention Program now I think is 
 
11          less than $35 million, which means that's a 
 
12          cut for the city. 
 
13                 Earlier you mentioned the BQE triple 
 
14          cantilever, which is in my district.  So far 
 
15          is there any state capital funding allocated 
 
16          for the fixing of the BQE cantilever so that 
 
17          it doesn't fall into Brooklyn Bridge Park and 
 
18          bounce into the harbor?
 
19                 DIRECTOR FULEIHAN:  Not that we know 
 
20          of at this point.
 
21                 SENATOR SQUADRON:  Okay, none.  Thank 
 
22          you.
 
23                 Resiliency, I want to really thank the 
 
24          administration again for the commitment 
 
 
                                                                  218
 
 1          you've made, Mr. Mayor, and the 
 
 2          administration more broadly, $115 million, 
 
 3          almost, from the city alone, support on the 
 
 4          federal application that got us $176 million 
 
 5          from HUD because of the leadership of the 
 
 6          city to get a barrier that protects Lower 
 
 7          Manhattan, I think the third or fourth 
 
 8          largest business district in America, Lower 
 
 9          Manhattan.  We talk about having tax dollars 
 
10          and having revenue; we need Lower Manhattan 
 
11          to be working to have revenue in every corner 
 
12          of the state from Chautauqua County to 
 
13          Suffolk County.
 
14                 So I would just ask, of the 
 
15          $301 million we now have to protect from 
 
16          Montgomery Street around to Battery Park 
 
17          City, how much of that has the state 
 
18          allocated?
 
19                 MAYOR DE BLASIO:  We'll have to check 
 
20          that one too for you.  We'll get that for 
 
21          you.
 
22                 SENATOR SQUADRON:  I believe it's 
 
23          8 million.
 
24                 MAYOR DE BLASIO:  Okay, we'll 
 
 
                                                                  219
 
 1          double-check -- well, you seem to be ahead of 
 
 2          us.
 
 3                 SENATOR SQUADRON:  Great.  The Rikers 
 
 4          Island population, obviously Rikers is rife 
 
 5          with problems and I urge the administration 
 
 6          to continue aggressive reform there, not rest 
 
 7          on its laurels.  But one of the drivers of 
 
 8          that is a broken speedy trial law in New York 
 
 9          State that essentially strips the accused -- 
 
10          not the convicted, but the accused -- of 
 
11          their constitutional speedy trial rights.
 
12                 If we reformed the speedy trial laws, 
 
13          we believe the Rikers population could come 
 
14          down significantly.  Just as an example, what 
 
15          would the city save if the state fixed speedy 
 
16          trials and the Rikers population, for 
 
17          example, went down 25 percent?
 
18                 MAYOR DE BLASIO:  Well, you may have 
 
19          the exact estimate yourself; I can see that 
 
20          you're well prepared.
 
21                 There's no question -- look, I think 
 
22          you're exactly right that that reform would 
 
23          make a big difference both in terms of 
 
24          justice and in terms of the cost at Rikers.  
 
 
                                                                  220
 
 1          We've tried in many ways -- you know, our way 
 
 2          of addressing the mass incarceration crisis 
 
 3          has been to try to get at the root of the 
 
 4          matter with Rikers to work on efforts to 
 
 5          ensure that people don't end up in Rikers who 
 
 6          don't need to.  That's some of the bail 
 
 7          reform efforts that we're working on, for 
 
 8          example.  And obviously appropriate 
 
 9          diversionary programs for folks who have 
 
10          committed low-level, nonviolent offenses.  We 
 
11          believe fundamentally in that.  And working 
 
12          with the court system to improve the timing 
 
13          of trials so people are not there any longer 
 
14          than they have to be.  
 
15                 Unquestionably, everything that will 
 
16          help us drive down the population not only 
 
17          saves costs, it will reduce violence, it will 
 
18          allow us to focus on a deepening of the 
 
19          reforms we've made.  So we can get you exact 
 
20          dollar figures that could be projected, but 
 
21          there's no question that's exactly in the 
 
22          direction we need to go to break the back of 
 
23          what's been, you know, many, many years of a 
 
24          cycle of violence at Rikers that's 
 
 
                                                                  221
 
 1          unacceptable.
 
 2                 SENATOR SQUADRON:  Look, just in 
 
 3          summary, like each of these issues are 
 
 4          critical issues that impact New York City 
 
 5          uniquely in the state.  They also speak to 
 
 6          this idea that because New York City is as 
 
 7          fiscally healthy as it is right now, the 
 
 8          state doesn't need to worry about it and in 
 
 9          fact should start trying to figure out how 
 
10          to, you know, damage it even further.
 
11                 There have been cuts to the state 
 
12          support over a number of years.  We talked 
 
13          about AIM funding earlier; we just talked 
 
14          about these on critical, really city-specific 
 
15          issues -- not unique, but city-specific 
 
16          issues.  And so I would just urge that you do 
 
17          continue to be responsible with your budget, 
 
18          you do shore dollars away for a rainy day 
 
19          fund.  Goodness knows in the history of 
 
20          New York City we've seen that; we saw that 
 
21          eight years ago, we saw that through the 
 
22          nineties off and on.
 
23                 But also I want you to know that from 
 
24          the state perspective, this idea that you're 
 
 
                                                                  222
 
 1          a piggy bank can't work.  What we need to be 
 
 2          doing is figuring out how to save you money 
 
 3          so that you can save more money, and also so 
 
 4          that the areas where we are providing state 
 
 5          aid, we can provide less so that we can send 
 
 6          it to other parts of the state that are in 
 
 7          desperate need of it and could use the 
 
 8          economic development and the support in other 
 
 9          ways.
 
10                 Just briefly, one thing the state did 
 
11          do last year is increase the funding for 
 
12          Nurse-Family Partnership, one of the 
 
13          evidence-based maternal home visiting 
 
14          programs, in combination with Healthy 
 
15          Families New York, the kind of -- a big 
 
16          combination.  This year the current proposal 
 
17          is to reduce that funding again.
 
18                 I just want to be very clear.  If we 
 
19          are able to produce the funding in the state, 
 
20          because the city has been a long-time 
 
21          supporter of this program, is the city 
 
22          willing to match us dollar for dollar with 
 
23          city dollars in any amount of money that we 
 
24          increase the Nurse-Family Partnership 
 
 
                                                                  223
 
 1          program?
 
 2                 MAYOR DE BLASIO:  One, I want to do 
 
 3          two things.  I want to give Dean and Sherif 
 
 4          an opportunity to gather themselves for that 
 
 5          answer; I want to go back a step on your 
 
 6          previous question.  
 
 7                 You make a very powerful point.  There 
 
 8          are actions that the state can take that will 
 
 9          save the city money, will be in everyone's 
 
10          interests.  We had a very, I think, 
 
11          respectful and informed discussion earlier 
 
12          about how the city and state interrelate and 
 
13          what our relationship is.  Well, one of the 
 
14          things that is good for everyone, speeding up 
 
15          trials, avoiding longer stays in Rikers, is 
 
16          in everyone's interest.  The same as having 
 
17          effective preventative efforts in terms of 
 
18          homelessness.  
 
19                 You know, long ago, when I was the 
 
20          chairman of the General Welfare Committee in 
 
21          the Council, I talked about the fact that 
 
22          when you prevent a family from going into 
 
23          shelter, for example, with a thousand-dollar 
 
24          rental subsidy -- that's $12,000 a year -- if 
 
 
                                                                  224
 
 1          that family goes into a shelter, it is 36, 
 
 2          37, $40,000 a year.  From the taxpayer point 
 
 3          of view it's not even close.  Nor of course, 
 
 4          on the human level, what it means for that 
 
 5          family.
 
 6                 So the points you raise are ways that 
 
 7          the state can help us to save a lot of money, 
 
 8          which is in both the state and the city's 
 
 9          interest.
 
10                 On the Nurse-Family Partnership, 
 
11          you're right, we believe in the value of that 
 
12          program, to the question of that --
 
13                 DIRECTOR FULEIHAN:  We should continue 
 
14          the conversation with you and see what kind 
 
15          of dollars you're talking about.  But you're 
 
16          right, there's --
 
17                 SENATOR SQUADRON:  Well, it's a 
 
18          minimum commitment.  As, up here, Senator 
 
19          Savino, Senator Gallivan and I, in a 
 
20          tripartisan way, fight for more dollars for 
 
21          this program, can we at least be clear that 
 
22          the city will not reduce its own contribution 
 
23          even if the state increases it?
 
24                 DIRECTOR FULEIHAN:  We're not reducing 
 
 
                                                                  225
 
 1          the contribution.
 
 2                 SENATOR SQUADRON:  You will not reduce 
 
 3          the contribution if the state -- I appreciate 
 
 4          that.
 
 5                 DIRECTOR FULEIHAN:  And just on the 
 
 6          Advantage Program, the state contribution was 
 
 7          $75 million, the federal contribution, which 
 
 8          flows through the state, was also an 
 
 9          additional 75 million, and the city 
 
10          contribution was 75 million.
 
11                 SENATOR SQUADRON:  Thank you very 
 
12          much.  
 
13                 And the mayor's point, to the budget 
 
14          director I would point out that a proposal I 
 
15          long ago made called Prevention-Based 
 
16          Budgeting would make it a lot easier to 
 
17          balance the budget while also funding 
 
18          evidence-based proven programs to prevent 
 
19          homelessness, to prevent incarceration, 
 
20          through home visiting and other programs.  So 
 
21          I would urge you take a look at that as well.
 
22                 Thank you very much.
 
23                 MAYOR DE BLASIO:  Thank you.
 
24                 CHAIRWOMAN YOUNG:  Thank you, Senator.
 
 
                                                                  226
 
 1                 The next speaker is Senator Perkins.
 
 2                 SENATOR PERKINS:  Thank you very much.
 
 3                 So I want to first express my 
 
 4          appreciation for your presence and your 
 
 5          indulgence with us, and also for what you've 
 
 6          been doing so far in representing us as the 
 
 7          mayor.  And I think I did the right thing by 
 
 8          supporting you.
 
 9                 MAYOR DE BLASIO:  Thank you.
 
10                 SENATOR PERKINS:  It's always a good 
 
11          thing when you hit the number --
 
12                 MAYOR DE BLASIO:  You're a visionary.
 
13                 SENATOR PERKINS:  -- when you hit the 
 
14          number, so to speak.  I'm not a visionary, 
 
15          but I think I got lucky with this one.
 
16                 But I'm concerned, I'm very concerned, 
 
17          because as a native New Yorker, you know, we 
 
18          have a little extra pride about ourselves 
 
19          because of this here great city.  And it's 
 
20          not simply because of the bridges, like the 
 
21          Brooklyn Bridge or the statues, like the 
 
22          Statue of Liberty or other iconic features 
 
23          that are world-renowned, but actually, most 
 
24          importantly, because of its public education 
 
 
                                                                  227
 
 1          system.
 
 2                 MAYOR DE BLASIO:  Amen.
 
 3                 SENATOR PERKINS:  You know, this was 
 
 4          the opportunity that for many of us allowed 
 
 5          us to be where we are today, and even for 
 
 6          many others, other places are doing great.
 
 7                 But what's happening is that which was 
 
 8          sort of the crown jewel of all the jewels in 
 
 9          our New York City ego has sort of come under 
 
10          hard times in terms of bragging rights, so to 
 
11          speak.  Ergo, charter schools -- you 
 
12          understand? -- and the infiltration of those 
 
13          schools overwhelming attention from the 
 
14          public schools without even necessarily 
 
15          measuring up in terms of what they're 
 
16          actually providing; nevertheless, being 
 
17          promoted and applauded, most importantly, 
 
18          with more and more money.
 
19                 And my concern is are we abandoning 
 
20          our public education commitment and fooling 
 
21          ourselves into saying that this other 
 
22          arrangement, which is a privatized model, is 
 
23          the way to go?
 
24                 MAYOR DE BLASIO:  No.  I understand 
 
 
                                                                  228
 
 1          the concern for sure.  And maybe there's some 
 
 2          voices that believe in that, but not this 
 
 3          administration.  We believe -- first of all, 
 
 4          look, we want to serve every child in the 
 
 5          city.  They're all, you know, our collective 
 
 6          future.  So I'm very proud of the efforts 
 
 7          that we've made, together with parochial 
 
 8          schools and charter schools, to reach all our 
 
 9          kids who need our help.  And that's something 
 
10          we believe in.
 
11                 But I say that at the same time that 
 
12          I'm very comfortable saying the future of 
 
13          New York City will be determined by its 
 
14          traditional public schools, because the 
 
15          traditional public schools are where the vast 
 
16          majority of our students are.  And those 
 
17          schools have to improve fundamentally.  The 
 
18          status quo that existed when I came into 
 
19          office wasn't acceptable -- as I mentioned, a 
 
20          third of our kids reading at third-grade 
 
21          level, well under half of even our high 
 
22          school graduates being college-ready.  These 
 
23          are not acceptable realities. 
 
24                 So what we believe in is really going 
 
 
                                                                  229
 
 1          at the heart of the matter.  To fix our 
 
 2          traditional public schools -- again, the 
 
 3          mother lode here of our education system -- 
 
 4          we have to do a lot in the way of new 
 
 5          investments:  Early childhood, particularly 
 
 6          in the vein of pre-K; a very focused effort 
 
 7          to bring kids to reading level by third 
 
 8          grade -- that's part of our Equity and 
 
 9          Excellence plan -- after-school programs for 
 
10          every middle school child for free, 
 
11          unlimited; algebra for all for middle school 
 
12          kids; AP classes for all, every high school; 
 
13          computer science for all throughout the 
 
14          curriculum at all grade levels; 130 community 
 
15          schools; renewal schools -- these are all 
 
16          part of a fundamental change in our approach 
 
17          to our public education system.  
 
18                 So I think the answer to your question 
 
19          is in our city we are doubling down on our 
 
20          commitment on our public schools, and we have 
 
21          to transform them for the 21st century.  And 
 
22          I believe that model is going to be much more 
 
23          effective than looking to other models which 
 
24          so far have obviously been, one, limited in 
 
 
                                                                  230
 
 1          terms of the number of people they reach, but 
 
 2          two, as you said, different models, some very 
 
 3          successful, some not so successful, some very 
 
 4          collaborative, some not so collaborative, 
 
 5          some that were very inclusive of English 
 
 6          language learners, special ed kids, et 
 
 7          cetera, some not so.
 
 8                 We like the traditional public school 
 
 9          model because it's always inclusive.  That's 
 
10          a statement of fact.  It is always inclusive 
 
11          of all children.  And more and more we 
 
12          believe our traditional public schools are a 
 
13          place where a lot of innovation is occurring 
 
14          and a lot of progress is occurring.
 
15                 SENATOR PERKINS:  So let me say this.  
 
16          In the state budget for 2014-2015, at the 
 
17          very last moment a number of changes were 
 
18          added with respect to charter schools, 
 
19          particularly as they operate in the city.  
 
20          These changes, which were executed with 
 
21          little or no public input or transparency, 
 
22          weakened your mayoral control over decisions 
 
23          concerning how to use and allocate precious 
 
24          space in public school buildings; forbade the 
 
 
                                                                  231
 
 1          city for charging rent to charters; 
 
 2          grandfathered in old collocations, thus 
 
 3          immunizing them from any changes; and 
 
 4          essentially forced the city to approve all 
 
 5          new collocations or pay for space elsewhere 
 
 6          out of pocket.  To your credit, your office 
 
 7          strongly opposed these changes, as did I, but 
 
 8          they were nevertheless approved.
 
 9                 So two years later, I'm wondering what 
 
10          has been the impact on the ground of these 
 
11          policies.
 
12                 MAYOR DE BLASIO:  I'll start, and 
 
13          maybe Dean or Sherif want to add.  
 
14                 Look, we did oppose that change.  We 
 
15          have been able to work with the rules to 
 
16          maximize what we think is fair to make sure 
 
17          that if there's a proposal that we think is 
 
18          not going to work or isn't appropriate, that 
 
19          we do have, in effect, due process rights 
 
20          around it.  And we certainly want to work, 
 
21          going forward, to rationalize that.
 
22                 But I think the bottom line is that we 
 
23          continue with an overall reform agenda for 
 
24          our public schools.  That's where the vast 
 
 
                                                                  232
 
 1          majority of our energy of course has to go.  
 
 2          That is moving forward.  We ask the support 
 
 3          of the Legislature in continuing that 
 
 4          progress.  
 
 5                 And obviously I believe -- and I think 
 
 6          you're right to say -- there's different 
 
 7          elements of the mayoral control equation, and 
 
 8          sometimes there is a discussion that's not 
 
 9          the literal question of mayoral control but 
 
10          still can affect the level of control, like 
 
11          that decision you refer to.  I'm a bit of a 
 
12          purist on this point.  Mayoral control of 
 
13          education is how we fix the school system.  
 
14          My predecessor and I didn't agree on a lot of 
 
15          things, but on that we fundamentally agree.  
 
16          And it should not be diminished in any way, 
 
17          shape or form; it should be reinforced so we 
 
18          can actually get to the work of doing these 
 
19          fundamental things -- getting our kids to 
 
20          reading level, making sure high school 
 
21          graduation actually means college-ready.  
 
22          That's what we're trying to focus on right 
 
23          now.
 
24                 SENATOR PERKINS:  So I know that you 
 
 
                                                                  233
 
 1          opposed some of these changes.  But how much 
 
 2          control do you have over charter schools, 
 
 3          particularly from a budgetary point of view?
 
 4                 MAYOR DE BLASIO:  Look -- again, I'll 
 
 5          start and would ask Dean and Sherif to fill 
 
 6          in any blanks.  There are obviously state 
 
 7          rules governing what kind of allotment 
 
 8          charter schools get, and we respect --
 
 9                 SENATOR PERKINS:  Are any of those 
 
10          rules undermining your control over your 
 
11          schools?
 
12                 MAYOR DE BLASIO:  I think what I would 
 
13          say is the basic rules per se are not my 
 
14          central concern.  The decision-making about 
 
15          our buildings and the ability to make just 
 
16          decisions about each application -- we 
 
17          approved plenty of applications from charters 
 
18          that we thought fit in a building 
 
19          appropriately.  There's others we thought did 
 
20          not.  That has to be the prerogative of the 
 
21          City of New York under a mayoral-control 
 
22          system.  That should not be compromised.
 
23                 Additional funding requirements, like 
 
24          I mentioned, in the current budget proposal 
 
 
                                                                  234
 
 1          by the Governor that would add to the 
 
 2          obligations of the City of New York and no 
 
 3          other locality in the state, clearly are not 
 
 4          fair, from our point of view.
 
 5                 So the point from my point of view is 
 
 6          not to add additional onerous costs or 
 
 7          regulations onto the city that would 
 
 8          undermine our ability to make the right 
 
 9          decisions for our schools.
 
10                 SENATOR PERKINS:  My concern is -- so 
 
11          I guess -- I'm trying to understand that -- 
 
12          first, who pays the rent on these charter 
 
13          schools, you or Eva Moskowitz or whoever the 
 
14          operator is?  How does --
 
15                 DIRECTOR FULEIHAN:  Under the 
 
16          agreement two years ago, we pay -- there's a 
 
17          collocation process.  If the collocation 
 
18          process fails and the charter is able to find 
 
19          alternative space, then we pay the rent up to 
 
20          I believe it's $40 million, at which point it 
 
21          is a shared expense with the state.  And so 
 
22          far we're about $20 million -- so far we've 
 
23          committed about $20 million.
 
24                 SENATOR PERKINS:  So how is that 
 
 
                                                                  235
 
 1          $20 million commitment being used, 
 
 2          explicitly?
 
 3                 DIRECTOR FULEIHAN:  We are paying at 
 
 4          this point about $20 million.
 
 5                 SENATOR PERKINS:  Towards?
 
 6                 DIRECTOR FULEIHAN:  Towards those 
 
 7          charters.  We reimburse them for the rent, 
 
 8          and it's approximately $20 million.
 
 9                 SENATOR PERKINS:  So we pay the rent?
 
10                 DIRECTOR FULEIHAN:  Yes.
 
11                 MAYOR DE BLASIO:  Under the agreement 
 
12          from two years ago.  Again, that was not our 
 
13          choice, but that's what was --
 
14                 SENATOR PERKINS:  That's not your 
 
15          choice.
 
16                 MAYOR DE BLASIO:  Yes.
 
17                 SENATOR PERKINS:  So it sounds more 
 
18          like you -- it's not your choice.  What would 
 
19          you prefer?
 
20                 MAYOR DE BLASIO:  We would go back to 
 
21          the system before that.
 
22                 SENATOR PERKINS:  To what?
 
23                 MAYOR DE BLASIO:  We would go to the 
 
24          structure before that.
 
 
                                                                  236
 
 1                 SENATOR PERKINS:  Would you explain 
 
 2          that again so we can see, for the record, 
 
 3          what the difference is between what you'd 
 
 4          prefer and what's being imposed on you?
 
 5                 DIRECTOR FULEIHAN:  Prior to that, the 
 
 6          city had the opportunity to make its own, 
 
 7          completely its own decision.  This created a 
 
 8          process which had, as the mayor pointed out, 
 
 9          a due process stage in it where we could 
 
10          negotiate with the charters and then there 
 
11          were -- if that didn't work, there were other 
 
12          options that could be used.
 
13                 SENATOR PERKINS:  So we're happy about 
 
14          this arrangement?  You think we should, as a 
 
15          Legislature, reinforce this arrangement by 
 
16          more opportunities for this --
 
17                 MAYOR DE BLASIO:  Again, we think the 
 
18          previous arrangement, the arrangement before 
 
19          two years ago, was better.  I believe in 
 
20          mayoral control --
 
21                 SENATOR PERKINS:  For the sake of the 
 
22          record, when you say it was better, better 
 
23          means what?  Specifically.  
 
24                 MAYOR DE BLASIO:  Okay, I'll start and 
 
 
                                                                  237
 
 1          Dean will fill in the blanks.  
 
 2                 Let me just put this in the larger 
 
 3          rubric.  I, like I think any mayor, I would 
 
 4          imagine any county executive in this state, 
 
 5          believe that we have to have the freedom to 
 
 6          make local decisions effectively and use our 
 
 7          resources effectively.  We are always 
 
 8          concerned about mandates that tie our hands.
 
 9                 The structure two years ago and 
 
10          before, gave us the freedom to make these 
 
11          decisions more effectively.  The current 
 
12          structure has added additional limitations.  
 
13          Although again, as you heard, we've broadly 
 
14          been able to find ways to work with it, we 
 
15          don't think it's the right way to go.  We 
 
16          think things before were better.
 
17                 Dean can define that.
 
18                 DIRECTOR FULEIHAN:  Right.  
 
19                 But I will just add, Senator, what the 
 
20          mayor identified in his original testimony 
 
21          was the piece that we are focused on in the 
 
22          current budget was the additional obligation 
 
23          that was only falling on New York City, on 
 
24          charter school tuitions, and that's about 
 
 
                                                                  238
 
 1          $30 million in the current budget.  And 
 
 2          that's the piece we actually focused on in 
 
 3          the testimony.
 
 4                 MAYOR DE BLASIO:  Right.  That's the 
 
 5          new problem.
 
 6                 DIRECTOR FULEIHAN:  And that is only 
 
 7          in New York City.
 
 8                 MAYOR DE BLASIO:  Right.  That is a 
 
 9          new problem that we're very concerned about 
 
10          that's in this budget now.
 
11                 SENATOR PERKINS:  And how does the 
 
12          Governor respond to this problem that's being 
 
13          imposed on you?
 
14                 MAYOR DE BLASIO:  How has --
 
15                 SENATOR PERKINS:  The Governor.
 
16                 MAYOR DE BLASIO:  He proposed it.
 
17                 SENATOR PERKINS:  So he's not 
 
18          cooperating with you, is that what you're 
 
19          saying?
 
20                 MAYOR DE BLASIO:  I'm not going to 
 
21          characterize it.  It's a proposal --
 
22                 SENATOR PERKINS:  Forgive my language.  
 
23          I didn't mean to put it that way.
 
24                 MAYOR DE BLASIO:  -- we don't agree 
 
 
                                                                  239
 
 1          with.  No, it's a proposal we don't agree 
 
 2          with.
 
 3                 SENATOR PERKINS:  You don't agree with 
 
 4          it.
 
 5                 MAYOR DE BLASIO:  Absolutely not.  I 
 
 6          said that in my testimony.
 
 7                 SENATOR PERKINS:  Well, I just want to 
 
 8          reiterate, you know, because I might not have 
 
 9          heard it.  Was it like written?
 
10                 MAYOR DE BLASIO:  Yes, it's in the 
 
11          budget proposal.
 
12                 SENATOR PERKINS:  Will you send my 
 
13          office a copy of your concerns?  And we'll 
 
14          move on.
 
15                 MAYOR DE BLASIO:  Yes, absolutely.
 
16                 SENATOR PERKINS:  Again, have you as 
 
17          the mayor and the superchancellor, so to 
 
18          speak, had an opportunity to determine, as 
 
19          per this experiment called charter schools --
 
20                 MAYOR DE BLASIO:  Say again?
 
21                 SENATOR PERKINS:  As per this 
 
22          experiment that we've come to know as charter 
 
23          schools, which was designed, intended and 
 
24          proposed at the time to be not a second 
 
 
                                                                  240
 
 1          department of education but laboratories, so 
 
 2          to speak, that would provide the opportunity 
 
 3          for us to learn how to teach our children 
 
 4          better, and those lessons would be replicated 
 
 5          throughout the district -- has any of that 
 
 6          part of the proposal that was originally been 
 
 7          brought forward been actually fulfilled in 
 
 8          terms of what did the charter school movement 
 
 9          teach you as the mayor, or other mayors, how 
 
10          to better --
 
11                 MAYOR DE BLASIO:  I think it's a 
 
12          decidedly mixed bag.  I think it's a very 
 
13          fair and important question.  Yes, the 
 
14          charter school movement started with the 
 
15          promise of innovation and sharing of best 
 
16          practices and creating good --
 
17                 SENATOR PERKINS:  Sharing with who, by 
 
18          the way?
 
19                 MAYOR DE BLASIO:  With the traditional 
 
20          public schools.
 
21                 SENATOR PERKINS:  Okay.  Just so we 
 
22          know.
 
23                 MAYOR DE BLASIO:  No, very fair point.
 
24                 And so I think the fact is that 
 
 
                                                                  241
 
 1          history has proven to be a real mixed bag.
 
 2                 One of the things Chancellor Farina 
 
 3          has done, and I agree with her entirely, is 
 
 4          she's reached out to a number of charter 
 
 5          schools that want to have a close working 
 
 6          relationship with our traditional public 
 
 7          schools, that want to share best practices 
 
 8          both ways -- because, by the way, we believe 
 
 9          in a lot of our traditional public schools 
 
10          real innovation is happening that can help 
 
11          charters, and vice versa.
 
12                 I would say there is a mixed bag in 
 
13          the charter movement:  Some schools doing 
 
14          great and important work that is yielding 
 
15          innovations that the traditional public 
 
16          schools can use and are being shared very 
 
17          openly and productively with the traditional 
 
18          public schools, often on a district basis.  
 
19          Others where that's not happening, where the 
 
20          innovation either is not occurring or it's 
 
21          not being shared or the student body is not 
 
22          representative, et cetera.
 
23                 SENATOR PERKINS:  Let me interrupt for 
 
24          a second, because --
 
 
                                                                  242
 
 1                 SENATOR KRUEGER:  Senator Perkins -- 
 
 2          Senator Perkins, I'm sorry, you're at zero, 
 
 3          so we just have to let the mayor close up and 
 
 4          go on to the next --
 
 5                 SENATOR PERKINS:  Just if you don't 
 
 6          mind, Madam Chair, Senator Krueger, Senator 
 
 7          Krueger, let me finish what I'm saying, 
 
 8          because I did wait a while to be here.  But 
 
 9          -- so I think --
 
10                 SENATOR KRUEGER:  No, I know, we've 
 
11          all been here --
 
12                 SENATOR PERKINS:  I don't -- and I 
 
13          don't think -- am I being irrelevant or out 
 
14          of order --
 
15                 SENATOR KRUEGER:  Just close it up 
 
16          here.  Just close your sentence, okay?
 
17                 SENATOR PERKINS:  Okay, but don't -- 
 
18          but I just don't want to be rushed through 
 
19          what I've waited so long to share, because 
 
20          it's important.  The heart of the movement is 
 
21          in my district, as you know.
 
22                 MAYOR DE BLASIO:  Yes.
 
23                 SENATOR PERKINS:  So I'm not going 
 
24          to -- just here to, you know, deal with this.  
 
 
                                                                  243
 
 1          It's a big thing for me.  It's the biggest 
 
 2          thing that one could imagine when you have a 
 
 3          district where the public schools are not 
 
 4          doing well and then you bring in another 
 
 5          whole entity that is not transparent and 
 
 6          accountable.
 
 7                 So I'm just trying to understand, have 
 
 8          you done a report or has anybody done a 
 
 9          report on the successes of the charter 
 
10          schools that have been made available to you 
 
11          or any other city entity that could be 
 
12          replicated in our public schools so that our 
 
13          children could get the benefit of those 
 
14          particular lessons at all?
 
15                 MAYOR DE BLASIO:  I think you're 
 
16          raising another important point, and I 
 
17          certainly understand --
 
18                 SENATOR PERKINS:  Could you -- I 
 
19          can't -- could you say that again, please?
 
20                 MAYOR DE BLASIO:  I'm sorry.  I think 
 
21          you're raising a very important point.  And I 
 
22          think, knowing your district well, your 
 
23          district has gone through a particularly 
 
24          tough experience during this last decade or 
 
 
                                                                  244
 
 1          so.
 
 2                 There is not, to the best of my 
 
 3          knowledge, a coherent, consistent approach -- 
 
 4          certainly not one that we inherited -- for 
 
 5          looking at what the innovations were coming 
 
 6          out of the charters and figuring out how they 
 
 7          can work with the traditional public schools.
 
 8                 Honestly, I believe in the previous 
 
 9          administration that was not the world view.  
 
10          It was not that the traditional public 
 
11          schools are going to be the great core of our 
 
12          school system and where we're really going to 
 
13          make a difference for our children, and that 
 
14          the charters were providing obviously 
 
15          important options for some kids but also 
 
16          they're supposed to be that laboratory, that 
 
17          innovative force that you talk about.  I 
 
18          certainly don't know of any effort to bring 
 
19          that concept together and figure out how to 
 
20          systematically help the traditional public 
 
21          schools.
 
22                 So what we're trying to now, in 
 
23          effect, through the Equity and Excellence 
 
24          plan, is find the charters that do want to be 
 
 
                                                                  245
 
 1          those district partners with traditional 
 
 2          public schools and cross-fertilize 
 
 3          productively.  As I said, some are very 
 
 4          willing to do that and are good partners in 
 
 5          that, some are more resistant or have a 
 
 6          different approach.  But where we can work 
 
 7          together, we will.  
 
 8                 So has it been made systematic ever?  
 
 9          I would say, from my experience, no.
 
10                 SENATOR PERKINS:  Okay.
 
11                 SENATOR KRUEGER:  Mr. Mayor, can we 
 
12          ask you if you have a staff person who can 
 
13          follow up with Senator Perkins after the 
 
14          hearing?
 
15                 MAYOR DE BLASIO:  Absolutely.  I'll 
 
16          follow up personally -- given our 
 
17          long-standing history, we will set a time to 
 
18          follow up directly.
 
19                 SENATOR PERKINS:  I appreciate you 
 
20          doing that.  And I hope you will be --
 
21                 CHAIRWOMAN YOUNG:  Thank you, Senator 
 
22          Perkins.
 
23                 SENATOR PERKINS:  -- as detailed as 
 
24          possible.  But this is a very, very big issue 
 
 
                                                                  246
 
 1          for us in my district.  And I understand, 
 
 2          Senator Krueger, how you may feel, and I 
 
 3          respect your chairmanship, but I have a right 
 
 4          to ask these questions about my district --
 
 5                 SENATOR KRUEGER:  No, I know, Senator 
 
 6          Perkins, but unfortunately --
 
 7                 SENATOR PERKINS:  -- and other people 
 
 8          have had more time than I have.
 
 9                 SENATOR KRUEGER:  No, everybody's 
 
10          stuck with the 10-minute clock.  We've been 
 
11          careful about that.
 
12                 SENATOR PERKINS:  Well, then I'd ask 
 
13          one final question --
 
14                 MAYOR DE BLASIO:  We'll follow up.
 
15                 SENATOR KRUEGER:  We'll follow up 
 
16          afterwards.  Thank you.
 
17                 CHAIRWOMAN YOUNG:  Senator Persaud is 
 
18          the next speaker, please.
 
19                 SENATOR PERSAUD:  Thank you very much.
 
20                 Thank you, Mr. Mayor, for being here.  
 
21          I just want to first commend your staff for 
 
22          the open lines of communication during the 
 
23          storm that we had.
 
24                 MAYOR DE BLASIO:  Thank you, Senator.
 
 
                                                                  247
 
 1                 SENATOR PERSAUD:  But looking forward, 
 
 2          what are your plans for -- because it seems 
 
 3          as though we're -- there's a climate change 
 
 4          and the -- more frequent occurrences of these 
 
 5          natural disasters are occurring, especially 
 
 6          in my community where it's -- you know, the 
 
 7          water is just coming in every time you look 
 
 8          around.  What are your plans for upgrading 
 
 9          the equipment and what plans do you have, 
 
10          long-term plans do you have in place?
 
11                 MAYOR DE BLASIO:  Well, Senator, I 
 
12          know your district, obviously, and your 
 
13          district has been vulnerable in the light of 
 
14          climate change.  So I'd say when it comes to 
 
15          snow on the one hand versus flooding issues 
 
16          or hurricane issues, I think we have two 
 
17          different realities.
 
18                 On snow, I feel the city's response, 
 
19          of course, was very strong.  We're going to 
 
20          learn each time, we're going to make 
 
21          adjustments each time.  I think we learned a 
 
22          lot even from the last few blizzards.  We 
 
23          certainly learned a lot from the 2010 storm, 
 
24          where I think the city did not have its 
 
 
                                                                  248
 
 1          assets properly in position.  You know, I 
 
 2          think the MTA, again, I agree with and 
 
 3          appreciate the way they handled things, 
 
 4          getting the buses in at the right time, 
 
 5          et cetera.  So in terms of snow response, 
 
 6          we're learning a lot and I think we have a 
 
 7          very strong capacity to address these kinds 
 
 8          of blizzards.
 
 9                 In terms of hurricanes and coastal 
 
10          issues, the resiliency work is increasing all 
 
11          the time.  It's been a very good working 
 
12          relationship with the Army Corps of 
 
13          Engineers, obviously our Parks Department and 
 
14          others.  That's of course going to happen 
 
15          year by year.  A lot of federal money coming 
 
16          in, a lot of city and state efforts as well.  
 
17          That will be ongoing work, meaning in the age 
 
18          of climate change, resiliency work will 
 
19          essentially never end.  We will keep at it 
 
20          all the time, improving resiliency.  
 
21                 And we want to figure out, obviously 
 
22          working with you, what other things we can 
 
23          do.  I think there's some real DEP issues in 
 
24          your neighborhood that we could work on 
 
 
                                                                  249
 
 1          together.  So I would look forward to 
 
 2          figuring out a plan with you and our 
 
 3          DEP commissioner, Emily Lloyd.
 
 4                 SENATOR PERSAUD:  Okay.  But you also 
 
 5          need to work with Sanitation to upgrade the 
 
 6          equipment that they have.  You really need to 
 
 7          upgrade some of the equipment.
 
 8                 MAYOR DE BLASIO:  Just for clarity, 
 
 9          what do you mean specifically?
 
10                 SENATOR PERSAUD:  The snow movers.  
 
11          They're kind of ancient.  You know, they've 
 
12          passed their prime.
 
13                 MAYOR DE BLASIO:  Well, we're going to 
 
14          keep investing in them, I assure you.
 
15                 SENATOR PERSAUD:  But they did a 
 
16          better job being prepared this time.
 
17                 Another thing, the state has decided 
 
18          to not add additional funding for Summer 
 
19          Youth, because we're looking at the minimum 
 
20          wage increase.  So the funding is just flat.  
 
21                 What is the city doing?  Because we -- 
 
22          you look at many -- most of the kids who are 
 
23          applying for Summer Youth are not receiving 
 
24          jobs.  And we have a situation in the city, 
 
 
                                                                  250
 
 1          especially in the lower-income areas, where 
 
 2          there's a spike in violence.  And you can 
 
 3          correlate the spike in violence with the kids 
 
 4          having nothing to do.
 
 5                 What is the city doing to help -- 
 
 6          DYCD, some of the other agencies -- to fund 
 
 7          Summer Youth?
 
 8                 MAYOR DE BLASIO:  We had an increase 
 
 9          in our local funding this last summer, so we 
 
10          had a substantial increase in the number of 
 
11          summer jobs.  We just sat down with the 
 
12          Council members when I announced my 
 
13          preliminary budget.  We're going to look to 
 
14          the Executive Budget in May for further 
 
15          determinations on summer jobs.  Clearly 
 
16          there's immense interest in the Council in 
 
17          building on the number we had last year.  
 
18                 So I'm not going to make a formal 
 
19          announcement, but I can simply say we're very 
 
20          focused on it, the Council is very focused on 
 
21          it.  Everyone's interested in raising that 
 
22          bar if we can find a way to do it.  Obviously 
 
23          as I -- I want to come back to where I 
 
24          started the testimony:  We're going to be 
 
 
                                                                  251
 
 1          watching the overall economic indicators very 
 
 2          closely in the next few months because 
 
 3          there's a lot of warning signs that will 
 
 4          cause us to have to be very smart about how 
 
 5          we spend money.  But it is certainly our goal 
 
 6          to go farther when it comes to summer jobs.
 
 7                 SENATOR PERSAUD:  Thank you.  I just 
 
 8          want to make sure that we understand it.  We 
 
 9          have to be smart in the way we're spending 
 
10          money, but spending money on our youth is 
 
11          really important.  That's the smartest thing 
 
12          that we can --
 
13                 MAYOR DE BLASIO:  Well, with your 
 
14          help, with your help, you're talking to the 
 
15          guy who focused on pre-K and after-school for 
 
16          middle school kids.  So I'm there.
 
17                 SENATOR PERSAUD:  My last question is 
 
18          about the rise in crime.  What plans do you 
 
19          have in place for this upcoming summer?
 
20                 MAYOR DE BLASIO:  Wait, say that 
 
21          again, I'm sorry?
 
22                 SENATOR PERSAUD:  The increase in 
 
23          violence, especially the increase in gun 
 
24          violence within districts.
 
 
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 1                 MAYOR DE BLASIO:  Well, I'd like to 
 
 2          reframe that in my view.  We always take very 
 
 3          seriously violence in any community, and we 
 
 4          know there is a scourge of gun availability 
 
 5          and gun violence.  But I want to emphasize, 
 
 6          these numbers I'm about to indicate represent 
 
 7          human lives.  When I say overall serious 
 
 8          crime is down 5.8 percent over two years, 
 
 9          shootings were down from 2014 to 2015, gun 
 
10          arrests went up 10 percent, this is all 
 
11          indicative of a city that's getting safer 
 
12          even though there are serious challenges 
 
13          still to be addressed.
 
14                 In the course of this year, 2,000 more 
 
15          officers will be on patrol, between the 1300 
 
16          new that we are bringing on the force and the 
 
17          700 or so that are being civilianized from 
 
18          desk jobs to patrol. 
 
19                 All of these pieces are going to 
 
20          increase our ability to get at the root of 
 
21          the problem, which as Commissioner Bratton 
 
22          and Chief O'Neill always say, is several 
 
23          thousand particularly violent felons that are 
 
24          still out there, many associated with gangs 
 
 
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 1          and crews.  The focus, more and more, is on 
 
 2          the real violence-doers, that core set of 
 
 3          violent criminals, and we're doing better at 
 
 4          getting at them -- you know, getting the 
 
 5          evidence, building cases about them, getting 
 
 6          the arrests, getting the guns off the 
 
 7          streets.  That's going to intensify.
 
 8                 But I think the simplest way I can say 
 
 9          it is 2,000 more cops on the street is going 
 
10          to make a huge difference.
 
11                 SENATOR PERSAUD:  Thank you very much.
 
12                 MAYOR DE BLASIO:  Thank you.
 
13                 CHAIRWOMAN YOUNG:  Thank you, Senator.
 
14                 Senator Kennedy.
 
15                 SENATOR KENNEDY:  Thank you, Mayor, 
 
16          very much for being here.  Thank you for your 
 
17          leadership.
 
18                 MAYOR DE BLASIO:  Thank you.
 
19                 SENATOR KENNEDY:  And for your 
 
20          patience.  I know it's been a long testimony 
 
21          today --
 
22                 MAYOR DE BLASIO:  Patience is a 
 
23          virtue, Senator.
 
24                 SENATOR KENNEDY:  It certainly is.  
 
 
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 1          Over four hours, and I appreciate all of your 
 
 2          comments.
 
 3                 I just had a couple of different 
 
 4          thoughts, you know.  Going way back several 
 
 5          hours in the testimony, there were a couple 
 
 6          of colleagues from upstate that touched upon 
 
 7          a couple of initiatives I want to ask you 
 
 8          about.  The first has to do with the property 
 
 9          tax cap for New York City.
 
10                 You know, there's been a lot of 
 
11          positioning, a lot of rhetoric, a lot of 
 
12          conjecture up here, and legislation proposed 
 
13          and whatnot.  I just want to hear again, you 
 
14          know, your comments on the property tax cap 
 
15          for the City of New York and, you know, 
 
16          furthermore, if you believe -- because I have 
 
17          a feeling I know what your answer may be -- 
 
18          if you feel that a study to get to the root 
 
19          of this thing to back up our position on --
 
20                 MAYOR DE BLASIO:  The last part of the 
 
21          question, I'm sorry?  I believe --
 
22                 SENATOR KENNEDY:  Do you believe -- 
 
23          are you open to some sort of a study to that 
 
24          effect on a property tax cap for New York 
 
 
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 1          City if in fact that is necessary?
 
 2                 MAYOR DE BLASIO:  I don't agree with 
 
 3          it philosophically.  And practically as well.  
 
 4          I always want to --
 
 5                 SENATOR KENNEDY:  What -- what is 
 
 6          that?
 
 7                 MAYOR DE BLASIO:  I always want to 
 
 8          learn more, but I want to explain the "why" 
 
 9          in this.
 
10                 SENATOR KENNEDY:  On the property tax 
 
11          cap itself?  I'm sorry.
 
12                 MAYOR DE BLASIO:  Yes.  I just don't 
 
13          believe that it's a productive tool in terms 
 
14          of what we're doing.  
 
15                 So again, when you combine the 
 
16          particular challenges that the city faces -- 
 
17          which I don't think I have to document -- 
 
18          New York City has a whole host of very, very 
 
19          intense challenges that have developed over 
 
20          decades.  That had a lot to do with the 
 
21          quality of life in our city, the safety of 
 
22          our city, fairness and decency in our city.  
 
23          You know, these challenges didn't occur 
 
24          overnight, but they're ours.  Whether it is 
 
 
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 1          the affordability crisis, the homelessness 
 
 2          crisis, the safety challenges -- which I'm 
 
 3          thrilled at how well NYPD has done on, but 
 
 4          there's more to come, obviously.  The threat 
 
 5          of global terror that is aimed at New York 
 
 6          City in a way that's true of only a few 
 
 7          places in the United States of America.  We 
 
 8          have a particular set of challenges.
 
 9                 We also know that in a downturn 
 
10          scenario we're vulnerable in a way that's 
 
11          overwhelming because, again, we know that the 
 
12          federal and state partners will be 
 
13          compromised in such a scenario and we know 
 
14          that our fixed costs don't change.  If we're 
 
15          going to keep our streets safe, if we're 
 
16          going to deal with a tremendous amount of 
 
17          human need, we have to keep doing that, 
 
18          downturn or no downturn.  
 
19                 So from my point of view, anything 
 
20          that limits our capacity arbitrarily could 
 
21          undermine the fundamentals of our city but 
 
22          also undermine our ability to do the thing 
 
23          which I think we're doing well now -- and I 
 
24          want to give my predecessors credit and I 
 
 
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 1          want to give the people in New York City 
 
 2          credit -- the fact that we're economically 
 
 3          stronger, after some decades where we were 
 
 4          really in decline, we are strong -- we have 
 
 5          to maintain that.  For the good of our 
 
 6          people, for the good of the people of the 
 
 7          whole state, we have to keep that going.
 
 8                 So I don't want anything that inhibits 
 
 9          our ability to do that.  I am sensitive to 
 
10          the fact -- I am a homeowner in Brooklyn.  I 
 
11          understand people are going through some real 
 
12          challenges in terms of the cost of living and 
 
13          that property taxes are part of it.  We're 
 
14          certainly going to always look at ways that 
 
15          we can address the challenges of our 
 
16          homeowners.  But a cap I think is a 
 
17          problematic approach.  
 
18                 As I mentioned to Senator Lanza, I 
 
19          know he's offering it in very good faith.  
 
20          But even the circuit-breaker, or the override 
 
21          capacity, is one that I think would be an 
 
22          imperfect tool given the reluctance that 
 
23          elected officials have, obviously, when it 
 
24          comes to taxation.
 
 
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 1                 So I think we're going to certainly 
 
 2          engage in fiscal discipline, we're going to 
 
 3          engage in ways of helping our homeowners, but 
 
 4          that would not be the one I'd choose.
 
 5                 SENATOR KENNEDY:  Do you feel strong 
 
 6          enough in that, Mayor, to put a study forward 
 
 7          to back up that plan that you have put in 
 
 8          place?
 
 9                 MAYOR DE BLASIO:  Again, I'm being 
 
10          careful in my answer because I think that is 
 
11          very much an eye-of-the-beholder question.  
 
12          I'm always happy to have this conversation 
 
13          with you.  But there's no scenario that I can 
 
14          envision where we would want to tie our hands 
 
15          in terms of our ability to maintain the 
 
16          standard of living of the people in New York 
 
17          City and the safety of the people in New York 
 
18          City.
 
19                 If we had a different world, which 
 
20          maybe was true 40 years ago, let's say, 
 
21          50 years ago, where there was a federal 
 
22          government ready, willing and able to come in 
 
23          in the event of crisis -- and that was very 
 
24          true in that time frame; not true today -- 
 
 
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 1          maybe I'd have a different world view.  But I 
 
 2          have no illusion of that fundamental reality 
 
 3          changing any time soon, so I have to very 
 
 4          carefully protect the interests of my city, 
 
 5          and that's why I can't see any scenario where 
 
 6          I would agree with that.
 
 7                 SENATOR KENNEDY:  Understood.
 
 8                 What about comparing, if you compare 
 
 9          property tax caps -- so if that's off the 
 
10          table, the potential -- I know it's been 
 
11          offered, and there's been talk about this -- 
 
12          the potential for a Medicaid cap.  Your 
 
13          thoughts on that as well.  
 
14                 MAYOR DE BLASIO:  I think we've got 
 
15          two dynamics happening simultaneously that 
 
16          have to be addressed.
 
17                 Again, I've spoken to the Governor's 
 
18          proposal, and I have affirmed that I 
 
19          appreciate the Governor's clarification that 
 
20          it won't cost the city a penny.  But we 
 
21          understand there are real challenges in the 
 
22          Medicaid system in general.  As I said, I 
 
23          appreciate that the Governor, when he first 
 
24          came into office, focused on some of the 
 
 
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 1          fundamental reforms needed.  
 
 2                 And then we have -- so there's that 
 
 3          ongoing issue, but then we have a whole 
 
 4          different related issue of our Health and 
 
 5          Hospitals Corporation, which will need 
 
 6          substantial reform.  So we'll absolutely 
 
 7          engage the Governor in ways that we can look 
 
 8          at reforms and efficiencies vis-a-vis 
 
 9          Medicaid in general in the city, but 
 
10          specifically we have to engage in a process 
 
11          very quickly of coming up with a reform plan 
 
12          for our health and hospitals, our public 
 
13          health and hospitals.  That has to happen 
 
14          under any event.  The two to some extent 
 
15          interrelate.  
 
16                 But what I can tell you is, having 
 
17          just gone through the process with our 
 
18          Housing Authority -- and remember, our 
 
19          Housing Authority houses over 400,000 people.  
 
20          And there was not a reform plan previously to 
 
21          deal with its financial reality; we put that 
 
22          in place -- we'll take the situation with 
 
23          Medicaid, the situation with our Health and 
 
24          Hospitals Corporation head-on.  It's our 
 
 
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 1          obligation to do so.  We'll present a plan, 
 
 2          certainly I'm sure it will be part of the 
 
 3          conversation here, as with our City Council.  
 
 4          But we're dealing with a series of changes 
 
 5          that really represent a lot of history, 
 
 6          unfortunately, coming home and, you know, 
 
 7          having a very big impact now -- $17 billion, 
 
 8          in the case of the Housing Authority, that 
 
 9          should have spent over many years.  It 
 
10          wasn't.  We have to deal with that problem 
 
11          now.  Medicaid issues that have only been 
 
12          exacerbated by changes in state and federal 
 
13          policy, no matter how well-intentioned.  
 
14          That's what's happening, and it's happening 
 
15          to public health systems all over the county.  
 
16          So we've got to make a series of big changes.  
 
17          They'll be tough, but it's our obligation to 
 
18          do them.
 
19                 SENATOR KENNEDY:  Thanks, Mayor.  One 
 
20          other item, and I suppose that this has -- 
 
21          look, every initiative that comes out of New 
 
22          York City, as you know, has a major impact 
 
23          not just on this state but this country.  And 
 
24          one of the issues that I think has had an 
 
 
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 1          impact on all of us for generations, and you 
 
 2          talk about, you know, where the city has come 
 
 3          from over the course of the last several 
 
 4          decades.  And the city's a much different 
 
 5          place than it was back in '03 when the bonds 
 
 6          were refinanced.  
 
 7                 But I want to go back to 1975, before 
 
 8          I was born.  And we're going to be paying 
 
 9          these bonds off well into 2030 to 2034, as it 
 
10          stands today.  And as you had mentioned 
 
11          earlier, we're going back hours in your 
 
12          testimony, so forgive me for having --
 
13                 MAYOR DE BLASIO:  Ancient history.
 
14                 SENATOR KENNEDY:  Forgive me for 
 
15          having waited so long to get back to this, 
 
16          but I think it's important to talk about that 
 
17          refinancing.  That, you know, it was the 
 
18          state, back again in '03, that picked up the 
 
19          refinancing during a new crisis -- again, 
 
20          before your administration -- and these 
 
21          bonds, these STAR-C bonds were refinanced, 
 
22          saving about $600 million.  But as far as I'm 
 
23          concerned, again, as an outsider of the 
 
24          City of New York, as an upstater, these are 
 
 
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 1          funds that the state, including us upstate, 
 
 2          helped to pay for.  
 
 3                 And, you know, with a lot of these 
 
 4          cash-strapped cities, including my own and 
 
 5          other upstate cities, when it comes to AIM 
 
 6          funds -- and I know we've discussed that 
 
 7          before, and I heard your testimony about AIM 
 
 8          funding -- don't you feel that it would be 
 
 9          more appropriate to take that funding and 
 
10          reinvest it into other cash-strapped cities 
 
11          and municipalities like the ones in upstate 
 
12          that are really in dire need right now?
 
13                 MAYOR DE BLASIO:  Again, Senator, I 
 
14          know this is -- we're all providing, I hope, 
 
15          a positive lesson here in a responsible, 
 
16          positive public dialog between people who 
 
17          happen to come from different regions, 
 
18          different parties.  You know, this is 
 
19          actually what I think the people would like 
 
20          to see more and more of all over the country.
 
21                 You're raising a perfectly fair 
 
22          question.  What is fairness in this equation?  
 
23          I again have spent a lot of time, I've been 
 
24          very blessed to spend a lot of time in 
 
 
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 1          Western New York, working in public service.  
 
 2          The profound needs -- profound hope, I 
 
 3          believe, great attributes to Western 
 
 4          New York, and profound needs.  When we hear 
 
 5          about initiatives to help upstate, I applaud 
 
 6          them, I applaud them, because we're all in 
 
 7          this together.
 
 8                 So the question then becomes what's 
 
 9          fair in each and every one of the decisions 
 
10          we look at.  My point of view is, first of 
 
11          all, when you talk about the AIM money -- so 
 
12          $300 million-plus at the time it was cut; as 
 
13          Dean reminds me, $500 million not long before 
 
14          that.  We can do the math any way we want.  
 
15          If we take the $300 million, say it was cut 
 
16          five years ago, that's $1.5 billion that 
 
17          would have come to New York City.  That's 
 
18          gone.  If you take the $500 million figure, 
 
19          it obviously goes to $2 billion or more.
 
20                 How about the money that was agreed to 
 
21          by the Court of Appeals, the highest court in 
 
22          the land, a decade ago that would have led to 
 
23          many billions more for my public schools that 
 
24          clearly are not where they need to be?  And 
 
 
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 1          no one's -- I know you feel the same about 
 
 2          your public schools -- no one's -- I don't 
 
 3          want to in a bad way compare scars.  We're 
 
 4          all trying to fix problems that were handed 
 
 5          to us by history.  We're all trying to serve 
 
 6          our people.  But if I've got 30 percent of my 
 
 7          kids reading at third-grade level, I can't 
 
 8          say to you that I don't need the resources to 
 
 9          fix that problem fundamentally.  By my 
 
10          account, by the highest court in this state, 
 
11          we should have had many billions more to deal 
 
12          with that problem.  
 
13                 So we've lost a lot in these 
 
14          transactions.  On this one, we believe 
 
15          fundamentally it is a ironclad understanding, 
 
16          it was affirmed by the Court of Appeals on 
 
17          the MAC bond issue.  Once something is 
 
18          written in stone like that and we are 
 
19          depending on it, we need it, and then that 
 
20          helps us make up for the sudden $600 million 
 
21          that our actuary just put on our current 
 
22          budget out of nowhere, which will go on every 
 
23          year in the future.  The problem with Health 
 
24          and Hospitals -- which again, no matter how 
 
 
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 1          well intentioned, did stem from, in part, 
 
 2          state and federal policy changes.
 
 3                 I could go on and on with all the 
 
 4          unanticipated problems or the infrastructure 
 
 5          challenges, et cetera.  It doesn't make any 
 
 6          sense for me to say agreed-upon dollars we're 
 
 7          just going to give away when we have this 
 
 8          level of need.
 
 9                 SENATOR KENNEDY:  Well, to your 
 
10          point -- and I know I'm down to zero, so this 
 
11          will be just the last comment, Mayor.  Look, 
 
12          there's much that I agree with you on.  This 
 
13          one, I disagree with you on.  I believe if 
 
14          we're going to focus on those education 
 
15          funds, those AIM funds, those other areas, 
 
16          that we should do so.  But, you know, I think 
 
17          a lot of folks get aggravated about the shell 
 
18          game that's played.  And, you know, there's 
 
19          $600 million on the table.  And just from my 
 
20          perspective -- again, as an upstater, as a 
 
21          Western New Yorker -- after this refinancing, 
 
22          I believe that that funding could be utilized 
 
23          in our area of the state as much as anywhere 
 
24          else in the state, including the City of 
 
 
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 1          New York.
 
 2                 MAYOR DE BLASIO:  I know you're saying 
 
 3          that in good faith, and I just want to 
 
 4          respond in good faith.
 
 5                 The CFE decision, which was also aimed 
 
 6          at helping Buffalo, for example, and other 
 
 7          upstate cities, if I -- and I say this with 
 
 8          absolute respect, if we all could restart 
 
 9          that discussion productively, then it might 
 
10          be possible to talk about different 
 
11          trade-offs.  But I have to say, over the last 
 
12          couple of years I've been mayor, I've 
 
13          presented the concern, I understand that 
 
14          people have felt like it's something they 
 
15          couldn't really entertain, for better or for 
 
16          worse.  But we're not having that 
 
17          conversation, let's be straightforward about 
 
18          that.
 
19                 If we were having a conversation about 
 
20          restoring the AIM money that was supposed to 
 
21          be a one-year pause, and now it should come 
 
22          back on the table, if that conversation were 
 
23          going on, we would be having -- we could have 
 
24          a more holistic conversation, perhaps.  But 
 
 
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 1          that's not what's happening.  
 
 2                 I don't mean that to be negative; I'm 
 
 3          trying to be very constructive and positive.  
 
 4          Somehow, in all the back and forth, some 
 
 5          things come on the table, some things go off 
 
 6          the table.  And I think when you tote it all 
 
 7          up, we certainly know some of those have hurt 
 
 8          us quite a bit.
 
 9                 On this one, again, we feel it's 
 
10          straightforward.  I understand your 
 
11          frustration.  I hope over the years we can 
 
12          all find ways to rationalize some of these 
 
13          things and make sense of them for the long 
 
14          haul.  But certainly just taking the narrow 
 
15          question of the AIM money, what does it feel 
 
16          like to, you know, the people of New York 
 
17          City that we were supposed to have a one-year 
 
18          pause and we've never seen it again?  I'm 
 
19          sure you can give your own parallel examples.
 
20                 Until we're going to put all of that 
 
21          on the table, it's hard for us to want to say 
 
22          let's just give away something that we 
 
23          believe is guaranteed to us.
 
24                 CHAIRWOMAN YOUNG:  Thank you, Senator.
 
 
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 1                 Thank you, Mayor.  I do have a couple 
 
 2          of additional questions, and then we'll 
 
 3          close.
 
 4                 So as you pointed out, I've been very 
 
 5          involved in housing issues, we worked 
 
 6          together on housing issues.  And I agree with 
 
 7          you -- I want to go to page 6 of your 
 
 8          testimony, because I had a question there.  
 
 9          You talk about the bond cap allocation being 
 
10          a vital resource for the city, and I fully 
 
11          agree with your assessment regarding that.
 
12                 And you also pointed out that last 
 
13          year the city's Housing Development 
 
14          Corporation efficiently used all of its state 
 
15          bond cap allocation to fund its projects.  
 
16          Which is true, but then you go on to say that 
 
17          HDC couldn't even get started on almost 1200 
 
18          affordable apartments across the five 
 
19          boroughs simply because it did not receive 
 
20          enough in bond cap allocations from the 
 
21          state.
 
22                 And so my question is, isn't the HDC 
 
23          amount an amount that is determined and 
 
24          requested by the city, and so if you ran out 
 
 
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 1          of money, did you ask for too little?
 
 2                 MAYOR DE BLASIO:  No.  In fact, we 
 
 3          asked for more.  I'll start, and my 
 
 4          colleagues may have more sense of the 
 
 5          details, but I'll give you the overview.
 
 6                 We certainly asked for more.  And we 
 
 7          understand that there's a statutory amount 
 
 8          and then, beyond that, a pretty consistent 
 
 9          history of additional resources coming in in 
 
10          terms of where the projects could be most 
 
11          effectively achieved.  
 
12                 Look, that's -- again, this is not a 
 
13          Democrat or Republican or upstate or 
 
14          downstate thing.  We all want the taxpayers' 
 
15          money used well.  So we would rather see 
 
16          resources go to a project ready to go than be 
 
17          held for something that's not ready to go, or 
 
18          a project that is going to yield more 
 
19          affordable housing versus less.
 
20                 In this instance, those units were 
 
21          ready to go, the state was quite aware of it.  
 
22          We had requested the additional authority, 
 
23          and we were told it was not going to be made 
 
24          available.  Even though we think it could 
 
 
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 1          have been made available.
 
 2                 We were obviously working in good 
 
 3          faith to keep moving these efforts forward.  
 
 4          We don't want to add additional layers that 
 
 5          we think will only slow down a structure that 
 
 6          right now needs to move as quickly as 
 
 7          possible because of the desperate need for 
 
 8          affordable housing.
 
 9                 CHAIRWOMAN YOUNG:  And I agree with 
 
10          you, there's a desperate need for affordable 
 
11          housing.  And actually I'd like to applaud 
 
12          you for your goal of developing 200,000 new 
 
13          units of affordable housing.
 
14                 MAYOR DE BLASIO:  Thank you.
 
15                 CHAIRWOMAN YOUNG:  I think it's 
 
16          absolutely necessary for the future of the 
 
17          city.
 
18                 But I do want to point out a couple of 
 
19          things because as you know -- I think you 
 
20          know this -- that it's extraordinarily 
 
21          expensive to live and to work and to do 
 
22          business in the city, and it's the result of 
 
23          several dynamics, and you've pointed some of 
 
24          them out today.  One of them has to do with 
 
 
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 1          the tax burden that we have in the city.  And 
 
 2          I want to applaud -- Senator Lanza had to go 
 
 3          to another hearing, but I want to applaud 
 
 4          Senator Lanza for his focus on property tax 
 
 5          relief for the middle class in his district, 
 
 6          for seniors on fixed incomes.  
 
 7                 And you've pointed out that you are 
 
 8          opposed to a property tax cap.  You just made 
 
 9          that very clear to Senator Kennedy during 
 
10          your remarks.  But at the same time, when 
 
11          you're saying you're not raising property 
 
12          taxes, as Senator Avella pointed out, maybe 
 
13          that's not happening, but assessments are 
 
14          going up year after year.  And as a result of 
 
15          the assessments going up, then we have the 
 
16          net effect of property taxes going up.  
 
17          That's a real impediment in so many ways to 
 
18          growth in the city.
 
19                 And as a result, based on that, based 
 
20          on, you know, exorbitant land costs, based on 
 
21          the high cost of doing business, whether it's 
 
22          regulatory, a lot of extra bureaucracy and so 
 
23          on, all those things drive up costs in the 
 
24          city.  And so it has exacerbated the housing 
 
 
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 1          shortage that we have in the city.  
 
 2                 And so as a result of that, I would 
 
 3          suggest that there's a structural problem 
 
 4          that you're dealing with with regulatory 
 
 5          systems, with tax systems, with the cost of 
 
 6          land.  And have you considered what you could 
 
 7          do as mayor to tackle that structural problem 
 
 8          that you have?  Because that is actually 
 
 9          contributing in such a big way to the housing 
 
10          shortage that you face right now.
 
11                 MAYOR DE BLASIO:  I appreciate the 
 
12          question, and I think you're right, that 
 
13          there are some really big factors at play 
 
14          here.
 
15                 Now, I would argue we have -- I used 
 
16          to use the phrase "A tale of two cities."  I 
 
17          still use it sometimes, and I'll use it in 
 
18          this case, because we have it in this sense.  
 
19                 One, there are some exceedingly 
 
20          positive factors that are actually 
 
21          complicating things.  Right?  The increased 
 
22          value on our land and on our buildings, our 
 
23          real estate values just continuing to grow, 
 
24          is obviously a blessing on so many levels and 
 
 
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 1          indicates economic strength.  The fact that 
 
 2          the city is growing physically in terms of 
 
 3          population, growing in terms of job growth, 
 
 4          these are wonderful things.  But they also 
 
 5          put immense pressure on the affordable 
 
 6          housing equation.  So in that sense the 
 
 7          success you want creates some real unintended 
 
 8          consequences.
 
 9                 If the question is do we need to 
 
10          rethink some of the elements of our tax 
 
11          structure, I think that's a fair point, 
 
12          because there's always been a certain amount 
 
13          of inconsistency and lack of clarity in the 
 
14          New York City property tax system.  It's 
 
15          something that will have to be done very 
 
16          carefully, very intelligently.  It's 
 
17          something that would take a lot of work.  But 
 
18          I've said long ago I recognize there are 
 
19          challenges and problems in our tax system 
 
20          that have to be looked at.
 
21                 At the same time, the thing I can do 
 
22          right now -- and we're all, you know, here to 
 
23          think about how we can practically help 
 
24          people -- what I can do right now is make 
 
 
                                                                  275
 
 1          sure there is not a property tax rate 
 
 2          increase, which is one thing I think would 
 
 3          unify all the homeowners of New York City, is 
 
 4          that that would be an added burden.  We've 
 
 5          avoided that for now three budgets in a row, 
 
 6          and we're going to keep avoiding that.
 
 7                 But in terms of coming back at these 
 
 8          underlying issues -- you know, ways that we 
 
 9          can help our seniors, ways that we can create 
 
10          more consistency in our tax system and more 
 
11          consistency across the different parts of the 
 
12          city -- these are real issues.  I'm certainly 
 
13          going to be looking at them.  I've been 
 
14          thinking about ways we could approach them.  
 
15          The one thing you'll appreciate, that will 
 
16          take a big, complicated structural fix, and 
 
17          it will take time to sort that out, for sure.
 
18                 CHAIRWOMAN YOUNG:  I think you're 
 
19          right for sure on that point, because every 
 
20          time property taxes go up, there is an 
 
21          impact, for example, on rental housing also.  
 
22          And tenants in market-rate apartments, you 
 
23          know, have their costs go up because the 
 
24          property taxes go up because the assessments 
 
 
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 1          go up.  Tenants who live in rent-regulated 
 
 2          apartments, the costs go up for owners and 
 
 3          then the owners aren't able to fix their 
 
 4          buildings.  So there is an impact on tenants, 
 
 5          there's an impact on homeowners, there's an 
 
 6          impact on businesses, there's an impact on 
 
 7          the ability to develop more affordable 
 
 8          housing.  So I think that those are very, 
 
 9          very dire issues that need to be looked at.
 
10                 And so as a result of the heavy costs 
 
11          associated with doing business in New York 
 
12          City, the only economic development tool that 
 
13          we have is the 421-a program, which as you 
 
14          know provides incentives and benefits to 
 
15          develop affordable housing units.  And so I'd 
 
16          just say that we need to take a look at that 
 
17          again because right now there's nothing to be 
 
18          able to develop affordable housing, and that 
 
19          is a critical issue that needs to be 
 
20          addressed.  And I'm sure you would agree with 
 
21          that.
 
22                 MAYOR DE BLASIO:  I agree, and we 
 
23          would appreciate -- and we know you've worked 
 
24          closely with us, and we'd appreciate deeply 
 
 
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 1          your help and your leadership, because we 
 
 2          think there is a solution available, given 
 
 3          the plan we put forward, which had widespread 
 
 4          support.  We think there's a way to reach 
 
 5          that plan or something like it, and move 
 
 6          forward.  But the bottom line is we have a 
 
 7          need to keep the right kind of development 
 
 8          forward so we can create that affordable 
 
 9          housing.  There's no reason for it to stall 
 
10          if by good decisions here in Albany we can 
 
11          keep it moving.
 
12                 CHAIRWOMAN YOUNG:  Yup.  So thank you 
 
13          for that.
 
14                 You also talked about, you know, rent 
 
15          control, rent regulation and units going out 
 
16          of the system.  But the reason those units 
 
17          are going out is that the people living in 
 
18          them have actually hit a certain income 
 
19          threshold.  So these are people with higher 
 
20          incomes that are going out of the system, and 
 
21          I'm sure you would agree with me that those 
 
22          kinds of assistance through rent regulation 
 
23          really should go to people who truly need it.  
 
24          And so we have programs like the Senior 
 
 
                                                                  278
 
 1          Citizen Rent Increase Exemption program that 
 
 2          actually freezes the rent for people who are 
 
 3          seniors on fixed incomes who can't afford to 
 
 4          pay their rent because it's so much of their 
 
 5          income every year.  And, you know, in 2014 
 
 6          the Legislature actually changed the amount 
 
 7          from $29,000 per year up to a threshold of 
 
 8          $50,000 a year, which actually has helped a 
 
 9          lot of seniors in New York City.
 
10                 The same with the similar program for 
 
11          people with disabilities with a freeze on 
 
12          rent.  And you probably know that I sponsor 
 
13          legislation to do the same for all tenants 
 
14          who make $50,000 a year or less and pay a 
 
15          high amount of their income toward rent.  And 
 
16          I'd like to see that move forward, because I 
 
17          think that's a much more positive solution 
 
18          than the current system.
 
19                 With that being said, I noticed after 
 
20          we had passed that in 2014 there was an 
 
21          article in the New York Times, I think it was 
 
22          May 20th, that said that the city needs to do 
 
23          a better job on getting the information out 
 
24          to people who qualify for the SCRIE and the 
 
 
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 1          DRIE programs.  And then there was a 
 
 2          follow-up, I was very interested, right after 
 
 3          Christmas, on December 31st of 2015, there 
 
 4          was a follow-up article about a senior in a 
 
 5          rent-controlled apartment who was concerned 
 
 6          because her rent may be going up because she 
 
 7          wasn't under the same freeze as the Rent 
 
 8          Guidelines Board.  But the point was is that 
 
 9          she qualified for SCRIE, and I noticed that 
 
10          right away in that article.  
 
11                 And I guess the question is, what is 
 
12          the city doing to help those people, and 
 
13          should there be a better focus on making sure 
 
14          the word gets out to those renters?
 
15                 MAYOR DE BLASIO:  Well, first of 
 
16          all -- and I'll turn to Dean and Sherif in a 
 
17          second, but let me first say thank you for 
 
18          your leadership in adjusting that income 
 
19          level.  That was absolutely crucial for 
 
20          people all over the state, and certainly in 
 
21          the city as well.  And we appreciate that 
 
22          deeply because that reflected the reality of 
 
23          people's lives, to have SCRIE and DRIE 
 
24          adjusted that way.
 
 
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 1                 We do engage in very energetic 
 
 2          outreach efforts.  We're trying to improve 
 
 3          upon them and strengthen them.  We know a lot 
 
 4          of our colleagues, local elected officials, 
 
 5          do as well, and they're key partners in that.  
 
 6          So I agree with you, the last thing I want to 
 
 7          see is anyone having that right and not 
 
 8          taking advantage of it.  We've tried to on 
 
 9          many fronts do a better job, because I think 
 
10          previously New York City government was not 
 
11          sufficiently communicative with its people.  
 
12          So we've tried to fix that on many, many 
 
13          fronts.
 
14                 In terms of SCRIE and DRIE directly, 
 
15          Dean or Sherif?
 
16                 DIRECTOR FULEIHAN:  Right, we will 
 
17          come back to you with specifics.  We do 
 
18          recognize that, and we are taking -- the 
 
19          mayor's right, he has directed us to take 
 
20          much more active outreach on SCRIE, on DRIE, 
 
21          and actually on the EITC as well.
 
22                 CHAIRWOMAN YOUNG:  I think you'd be 
 
23          helping a lot of very needy people as a 
 
24          result of that.
 
 
                                                                  281
 
 1                 And as you also know, we fundamentally 
 
 2          philosophically disagree about price controls 
 
 3          and rent control.  And, you know, on our side 
 
 4          of the equation we believe that it has 
 
 5          exacerbated the housing shortage in New York 
 
 6          City.  It was supposed to be temporary from 
 
 7          1943, and it's still in place.  And, you 
 
 8          know, better solutions -- we all want more 
 
 9          affordable housing.  Better solutions would 
 
10          be a free market system, developing more 
 
11          affordable housing, and actually having a 
 
12          system that addresses the most needy people 
 
13          who can't afford to live.  So that's 
 
14          something that we continue to work on --
 
15                 MAYOR DE BLASIO:  Senator, if I may, 
 
16          just -- despite there may be some 
 
17          philosophical differences, in addition to 
 
18          thanking you for the partnership on many 
 
19          fronts, I would say we also have put a very 
 
20          clear focus in our affordable housing plan on 
 
21          promoting the creation of market-rate rental 
 
22          housing.  We all know the reality of the new, 
 
23          higher-priced condos that have become such a 
 
24          big part of the housing landscape.
 
 
                                                                  282
 
 1                 We think -- I think this may be a 
 
 2          point where there's some agreement -- that a 
 
 3          robust market-rate rental market is very good 
 
 4          for the overall availability of affordable 
 
 5          housing.  So we have a series of actions that 
 
 6          are part of our overall plan to support and 
 
 7          encourage that development as well for the 
 
 8          good of all.
 
 9                 CHAIRWOMAN YOUNG:  Okay, thank you for 
 
10          that, Mayor.  
 
11                 And just one final question, going 
 
12          back to the questioning at the beginning.  
 
13          You know, so we have the budget in place for 
 
14          New York City through the state right now for 
 
15          this year.  And when you compare the budget 
 
16          for this year with the proposed budget from 
 
17          the Governor for 2017, which one is better, 
 
18          which one would you prefer to see, if you had 
 
19          to compare the two?
 
20                 MAYOR DE BLASIO:  I have to honestly 
 
21          say to you that there's so many unclear 
 
22          points in the current budget, there's so many 
 
23          unanswered questions, that I can't in good 
 
24          faith give you a perfect comparison.  Maybe 
 
 
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 1          when we've gotten all the facts I can answer 
 
 2          that better.
 
 3                 Obviously almost a billion dollars 
 
 4          that at this moment we're assured will not be 
 
 5          manifested as a cut, we need that to be 
 
 6          ratified as we go forward.  That's an area of 
 
 7          tremendous concern.  But overall, there's 
 
 8          just a lot of elements of this budget that we 
 
 9          don't have the full facts on.  We deeply 
 
10          appreciate, as I said, the very first words 
 
11          of my testimony, there's some elements of 
 
12          this budget -- on the supportive housing, for 
 
13          example -- that I am exceedingly appreciative 
 
14          for.  But there's a lot of other areas where 
 
15          until we get answers, I can't give you an 
 
16          honest comparison.
 
17                 CHAIRWOMAN YOUNG:  I appreciate that 
 
18          answer.  But I will say to you that in this 
 
19          budget, from what I can see, there are 
 
20          significant investments in the city across 
 
21          the board -- you know, transportation, 
 
22          supportive housing, all kinds of things that 
 
23          are very beneficial to the city.  So we'll 
 
24          continue to go through the process, but I 
 
 
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 1          believe that when we look at things side by 
 
 2          side, at the end of the day, you would prefer 
 
 3          this budget over last year's because of those 
 
 4          significant investments.
 
 5                 So thank you very much for your 
 
 6          testimony today.
 
 7                 MAYOR DE BLASIO:  Thank you, Madam 
 
 8          Chair.
 
 9                 CHAIRWOMAN YOUNG:  Really appreciate 
 
10          it.
 
11                 MAYOR DE BLASIO:  Thank you very much.
 
12                 SENATOR KRUEGER:  Thank you, 
 
13          Mr. Mayor.
 
14                 CHAIRMAN FARRELL:  Thank you.
 
15                 (Pause.)
 
16                 CHAIRMAN FARRELL:  Next, New York City 
 
17          Comptroller Scott Stringer. 
 
18                 COMPTROLLER STRINGER:  How're you 
 
19          doing?  Thank you.
 
20                 CHAIRMAN FARRELL:  I just wanted you 
 
21          to remember who you are.  
 
22                 COMPTROLLER STRINGER:  Well, thank 
 
23          you, Chairman Farrell and Senate Republican 
 
24          colleagues, Democrats, Republicans -- first 
 
 
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 1          of all, I want to lay aside my remarks and 
 
 2          just simply say, based on the mayor's 
 
 3          impressive performance today, a four-hour 
 
 4          marathon --
 
 5                 CHAIRMAN FARRELL:  Five hours.
 
 6                 COMPTROLLER STRINGER:  -- I think that 
 
 7          he gets everything he asks for, so --
 
 8                     (Laughter.)
 
 9                 COMPTROLLER STRINGER:  So let me try 
 
10          to fill in some of the mayor's talking points 
 
11          and -- it really is great to be here, because 
 
12          I really do welcome the chance to speak to 
 
13          you today about the Governor's proposed 
 
14          Executive Budget.  
 
15                 And as someone who has served in the 
 
16          Legislature for 13 years, I understand that 
 
17          this is not the beginning.  This is actually 
 
18          the beginning of a conversation that we're 
 
19          going to have for many, many months, and I 
 
20          want to thank everybody for sitting through 
 
21          this very long hearing.  And I look forward 
 
22          to working with all of you to advance a 
 
23          budget that is equitable and sound.  
 
24                 The Governorís proposed budget makes a 
 
 
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 1          number of critical investments in both human 
 
 2          and physical infrastructure that will lay the 
 
 3          foundation for continued economic growth 
 
 4          across the State.
 
 5                 So first, I stand with the Governor in 
 
 6          supporting an increase in the minimum wage to 
 
 7          $15 an hour.  Raising the minimum wage is one 
 
 8          of the most effective tools we have to attack 
 
 9          income inequality and will place our state 
 
10          firmly back in a leadership role on this 
 
11          vital issue.
 
12                 As my office has found, a phased-in 
 
13          $15 minimum wage would put an additional 
 
14          $10.2 billion into the pockets of 
 
15          1.46 million workers in New York City alone.  
 
16          Thatís real money that can help provide 
 
17          working families a pathway to the middle 
 
18          class so they can pay for college, make a car 
 
19          payment, or just put food on the table.
 
20                 Likewise, I strongly support the 
 
21          Governorís proposal for a permanent extension 
 
22          of the Earned Income Tax Credit to 
 
23          non-custodial parents.  Since 2012, the EITC 
 
24          has pulled 70,000 New York City households 
 
 
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 1          out of poverty, and in 2014 it returned some 
 
 2          $4.1 billion to New Yorkers -- an average of 
 
 3          over $2,300 per tax filer.  Thatís called 
 
 4          making work pay.  And I would argue and urge 
 
 5          this Legislature to go even further by 
 
 6          doubling New York Cityís EITC, expanding 
 
 7          eligibility to childless workers, and 
 
 8          lowering the age floor to 21.
 
 9                 In addition to raising wages for 
 
10          low-income New Yorkers, I support the 
 
11          Governor's push for paid family leave.  
 
12          According to a survey by my office, 
 
13          80 percent of New Yorkers support a paid 
 
14          family leave system funded by a small 
 
15          employee payroll deduction, such as the Paid 
 
16          Family Leave Insurance Act, which passed the 
 
17          Assembly last year.
 
18                 Governor Cuomo has also issued a 
 
19          series of proposals that support New Yorkís 
 
20          historic legacy as a land of immigrants.  
 
21          From certifying UVisa applications for more 
 
22          immigrant victims of crime, to making the 
 
23          Task Force to Combat Worker Exploitation 
 
24          permanent, we will continue to show that New 
 
 
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 1          York is open to all.  
 
 2                 Finally, the proposed budget makes key 
 
 3          investments to aid one of our most vulnerable 
 
 4          groups: our homeless population.  Last night 
 
 5          58,000 city residents, including 23,000 
 
 6          children, slept in our homeless shelters, 
 
 7          with thousands more choosing to sleep on our 
 
 8          streets.
 
 9                 In December, my office completed an 
 
10          audit that found more than half of shelter 
 
11          units for children and families were plagued 
 
12          by peeling paint, roaches, rats, and the 
 
13          chill from broken windows.  Earlier this 
 
14          month, we analyzed every single building 
 
15          housing homeless families with children, from 
 
16          shelters and hotels to so-called "scatter 
 
17          site" housing.  We found that two-thirds of 
 
18          sites had unaddressed violations that 
 
19          threaten life, health, and the safety of 
 
20          residents.  
 
21                 This is our invisible city, and we 
 
22          will continue to shine a light on these 
 
23          conditions and demand change.  Thatís why we 
 
24          welcome the Governor's increased support for 
 
 
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 1          combating homelessness.  And we look forward 
 
 2          to seeing improvements as we continue to 
 
 3          monitor shelters in New York City, just as 
 
 4          State Comptroller Tom DiNapoli and Buffalo 
 
 5          Comptroller Mark Schroeder do the same in 
 
 6          other parts of the State.  We may not be able 
 
 7          to fix homelessness in a day, but we can 
 
 8          ensure that our shelters are safe, clean, and 
 
 9          livable, and thatís what we intend to do.
 
10                 At the same time, we must also do more 
 
11          to address the underlying causes of 
 
12          homelessness, including the lack of 
 
13          affordable housing in our communities.
 
14                 For decades, the New York City Housing 
 
15          Authority has been a bastion of affordability 
 
16          throughout the five boroughs.  But despite 
 
17          the fact that NYCHA is home to over 400,000 
 
18          New Yorkers, it has a capital shortfall of 
 
19          $17 billion.  Thatís why today I am renewing 
 
20          a call I made two years ago to create a new, 
 
21          dedicated revenue stream for NYCHA, using 
 
22          surplus funds from the Battery Park City 
 
23          Authority.
 
24                 Battery Park City generates a surplus 
 
 
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 1          every year.  As part of a settlement 
 
 2          agreement between the city and the state, a 
 
 3          portion of those dollars have been directed 
 
 4          to affordable housing and other city capital 
 
 5          needs since 2010.  We now have an opportunity 
 
 6          to direct those dollars explicitly toward 
 
 7          NYCHA, our largest source of affordable 
 
 8          housing.
 
 9                 I know there is support in the 
 
10          Legislature for this idea.  But we could do 
 
11          this without legislation.  Under the terms of 
 
12          the existing settlement agreement, all that 
 
13          is required is a unanimous vote by the mayor, 
 
14          the governor, and the city comptroller -- and 
 
15          I vote yes.  I hope that you can help us, 
 
16          talking to our mayor and governor, to get 
 
17          this done.
 
18                 NYCHA residents shouldn't have to wait 
 
19          any longer for roofs to be fixed, mold to be 
 
20          eradicated, and doors to be secured.  We 
 
21          should make this happen this year.  This 
 
22          excess money would total more than 
 
23          $400 million over 10 years, and provide the 
 
24          first new source of recurring revenue for 
 
 
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 1          NYCHA in years.  That is our way of saying we 
 
 2          can find new sources of revenue, we don't 
 
 3          only have to be reliant on what has always 
 
 4          been.
 
 5                 Now, recent discussions concerning 
 
 6          CUNY and Medicaid have raised the prospect of 
 
 7          efficiencies in each system.  I am pleased 
 
 8          that Governor Cuomo and Mayor de Blasio have 
 
 9          been discussing these vital programs and have 
 
10          committed to making no cuts.  Funding CUNY is 
 
11          essential.  We should be investing more in 
 
12          higher education if we truly want to keep New 
 
13          York a global center of commerce and 
 
14          innovation.
 
15                 No place represents those aspirations 
 
16          better than CUNY, where three quarters of 
 
17          undergrads come out of New York City public 
 
18          schools; 42 percent are the first generation 
 
19          of their families to attend college; and 
 
20          where a quarter of students are African 
 
21          American, 29 percent are Latino, and 19 
 
22          percent are Asian.  These are the future 
 
23          leaders of our city and our state, and they 
 
24          deserve our support.
 
 
                                                                  292
 
 1                 In recent years, CUNY has faced a 
 
 2          number of challenges from rapidly rising 
 
 3          enrollment to annual tuition increases.  In 
 
 4          addition, their appropriation from Albany has 
 
 5          not kept pace with the stateís own operating 
 
 6          budget.  An analysis by my office shows if 
 
 7          aid to CUNY had grown at the same rate as the 
 
 8          stateís operating budget over the last seven 
 
 9          years, the system would have an additional 
 
10          $637 million on hand today.  Colleges and 
 
11          universities play a key role in making New 
 
12          York City a vibrant place to live and work.  
 
13          We should be doubling down on the economic 
 
14          engine of CUNY.
 
15                 We also need to recognize that CUNYís 
 
16          staff are the lifeblood of these 
 
17          institutions, and, unlike most other state 
 
18          workers, have been without a contract for 
 
19          five years.
 
20                 We need to put CUNY on a solid, 
 
21          sustainable path forward.  Because when we 
 
22          invest in higher education, we win.  When we 
 
23          invest in students, we win.  And when we 
 
24          invest in teachers, we definitely win.  And I 
 
 
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 1          think we should now work towards that issue 
 
 2          in this coming budget cycle.
 
 3                 Now, I recognize as a former 
 
 4          legislator that budgets are fluid, and I have 
 
 5          been assured that negotiations are 
 
 6          progressing between the city and the state 
 
 7          over Medicaid efficiencies.  But I want to 
 
 8          make it clear:  Our Medicaid system covers 
 
 9          one out of every three New Yorkers, many of 
 
10          whom have no healthcare at all if not for 
 
11          this system.  Any shifting of costs has to be 
 
12          examined through the prism of these patients.
 
13                 If New York City had to pay for all 
 
14          the growth in its Medicaid costs, it could 
 
15          add up to $300 million to fiscal year 2017, 
 
16          it would climb to $735 million by fiscal year 
 
17          2020.  These additional burdens come at a 
 
18          time when the New York City Health and 
 
19          Hospitals Corporation is already facing 
 
20          significant financial challenges.
 
21                 As my office found in our "Holes in 
 
22          the Safety Net" report, New York City Health 
 
23          and Hospitals treated over 430,000 uninsured 
 
24          patients in 2014.  That included many 
 
 
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 1          undocumented residents who are ineligible for 
 
 2          Medicaid coverage or subsidies under the 
 
 3          Affordable Care Act.
 
 4                 Mayor de Blasio has acted fast.  He 
 
 5          has recently announced plans for a broad 
 
 6          restructuring of HHC and in the meantime has 
 
 7          dedicated over $300 million in dedicated 
 
 8          funds to keep the systemís doors open to all.  
 
 9          Reducing state Medicaid support will make it 
 
10          that much harder for the mayor to continue 
 
11          his efforts to put Health and Hospitals on a 
 
12          stable path.  These hospitals are vital 
 
13          pieces of our safety net and deserve to be 
 
14          protected.
 
15                 Finally, I want to address the STAR-C 
 
16          bond financing.  In 2003 the state helped the 
 
17          city, then in the grips of the post 9/11 
 
18          recession, by assuming the remaining 
 
19          Municipal Assistance Corporation bonds, bonds 
 
20          that helped New York City emerge from the 
 
21          fiscal crisis.  Ultimately the city issued 
 
22          so-called STAR-C bonds to pay off the MAC 
 
23          debt.  In 2014, the mayorís Office of 
 
24          Management and Budget and my office, the 
 
 
                                                                  295
 
 1          comptrollerís office, worked together and 
 
 2          took the opportunity to refinance the STAR-C 
 
 3          credit with lower interest rates.  That 
 
 4          allowed the city to achieve savings of over 
 
 5          $600 million, money that was reinvested to 
 
 6          support vital city services.  This was one of 
 
 7          the many fiscally wise decisions made by the 
 
 8          city in the aftermath of the Great Recession 
 
 9          to refinance debt at lower interest rates.
 
10                 Cities and localities should be 
 
11          encouraged to refinance their debt when 
 
12          opportunities arise.  However, the proposed 
 
13          budget does the opposite by diverting 
 
14          $600 million of savings from the city to the 
 
15          state over the next three state fiscal years.  
 
16          It sends the wrong message to localities:  If 
 
17          you do the right thing, if you fix 
 
18          strategically, if you come up with a plan and 
 
19          you invest wisely, you work with the 
 
20          comptroller, treasurer, city manager, mayor, 
 
21          however your government structure is, the 
 
22          first thing that's going to happen is you 
 
23          become a victim of your own success.  I urge 
 
24          you to leave our funding alone in this 
 
 
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 1          regard.
 
 2                 I look forward to the successful 
 
 3          resolution of these budgetary issues, as well 
 
 4          as other critical pieces of the Governorís 
 
 5          budget.  That includes a extension of mayoral 
 
 6          control, which I support.  Mayors need to be 
 
 7          held responsible for the performance of our 
 
 8          schools, so we need to give them the tools 
 
 9          required to get the job done.  Itís all part 
 
10          of rebuilding the foundation of New York 
 
11          City.  
 
12                 Itís easy to forget that just 40 years 
 
13          ago the City faced the prospect of a 
 
14          crippling financial crisis, a burgeoning drug 
 
15          epidemic, and a rapidly declining population.  
 
16          Many believed that we were in a downward 
 
17          spiral that would culminate in the death of 
 
18          the Great American City.  In the years that 
 
19          followed, however, something truly amazing 
 
20          happened.  The public and private sectors 
 
21          came together to invest in New Yorkís future, 
 
22          pumping billions of dollars into 
 
23          infrastructure.  We laid the foundation for 
 
24          the cityís economic revival, and today we've 
 
 
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 1          got over 4 million private-sector jobs -- the 
 
 2          most ever -- record tourism and tax receipts, 
 
 3          and a diverse, growing population.  And 
 
 4          thatís good for all of us, because as goes 
 
 5          the city, so goes the state.  
 
 6                 But believing in the inevitability of 
 
 7          New Yorkís rise today is as foolhardy as 
 
 8          believing in our demise 40 years ago.  In the 
 
 9          past few months alone, we've seen plenty of 
 
10          storm clouds:  A slowdown in Chinaís economy 
 
11          that has sent oil and commodity prices 
 
12          crashing down, while raising the risks of a 
 
13          world-wide economic slump; a seven percent 
 
14          drop in the S&P 500 index since the beginning 
 
15          of the year, a fresh reminder that the cityís 
 
16          finance industry generates approximately 15 
 
17          percent of its tax revenue.  Jobs have been 
 
18          cut at the Bank of America, Morgan Stanley, 
 
19          Citi, Barclays, and Deutsche Bank.  We also 
 
20          must continue to wrestle with some of our 
 
21          most intractable problems: homelessness, 
 
22          affordable housing, and true wage stagnation.
 
23                 But that's the historic opportunity 
 
24          before us today.  Thanks to a brighter 
 
 
                                                                  298
 
 1          economic outlook, we now have a chance to 
 
 2          attack those tougher, long-term challenges.  
 
 3          For years now, we've had to scramble from one 
 
 4          crisis to another:  9/11, the Great 
 
 5          Recession, Hurricane Sandy.  New York always 
 
 6          comes back.  But now we as a city and a state 
 
 7          have a chance to really pay down our 
 
 8          principal and get at the root of our 
 
 9          toughest, long-term challenges.  We can house 
 
10          the homeless.  We can educate every child.  
 
11          We can create good jobs at good salaries.  
 
12          And we can make sure that New York City 
 
13          continues to be the economic engine that 
 
14          powers the Empire State.
 
15                 To do that, we need to come together 
 
16          as a city and a state and invest in our 
 
17          futures.  Because when we do that, we all 
 
18          win.  You see, it's not about upstate and 
 
19          downstate -- you have yours, I want mine.  
 
20          This is about a partnership.  And for many of 
 
21          us who represent the 8.5 million people in 
 
22          the city, we are here today to tell you, 
 
23          especially those of you not from New York 
 
24          City, that we do respect our partnership, we 
 
 
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 1          do respect the give-and-take, we do respect 
 
 2          your priorities.  We just ask you to respect 
 
 3          ours as well.
 
 4                 Thank you for giving me this 
 
 5          opportunity, and it truly is great to be back 
 
 6          with many of you that I have known and, of 
 
 7          course, Chairman Farrell, with you always.  
 
 8          So thank you.
 
 9                 CHAIRMAN FARRELL:  Thank you very 
 
10          much.  
 
11                 Assemblyman Benedetto.
 
12                 ASSEMBLYMAN BENEDETTO:  Thank you, 
 
13          Mr. Chairman.  
 
14                 And Mr. Comptroller, welcome to 
 
15          Albany.  Thank you for your patience as well.
 
16                 COMPTROLLER STRINGER:  I enjoyed every 
 
17          minute of it.
 
18                 ASSEMBLYMAN BENEDETTO:  I'm sure you 
 
19          did.
 
20                 COMPTROLLER STRINGER:  I know I have 
 
21          issues.
 
22                 (Laughter.)
 
23                 ASSEMBLYMAN BENEDETTO:  The Mayor, 
 
24          throughout his comments here today, 
 
 
                                                                  300
 
 1          continually stressed that yes, we're going to 
 
 2          have a surplus of money, we're going to put 
 
 3          them into reserves, reserves for the bad 
 
 4          times in the future.  And that, towards the 
 
 5          end of your comments here, you kind of 
 
 6          recognized that the future is not always 
 
 7          bright.
 
 8                 Do you care to comment on the mayor's 
 
 9          proposal, the mayor's building up of some 
 
10          reserves?  And is the mayor putting aside 
 
11          enough for the future?
 
12                 COMPTROLLER STRINGER:  You know, some 
 
13          of you may think that we have too much of a 
 
14          cushion.  I would argue with the mayor that 
 
15          we have to actually put more away.  We should 
 
16          put away -- we should look at putting away 12 
 
17          to 18 percent in terms of our budget outlays.  
 
18          We have to get the cushion up more.  And I'll 
 
19          tell you why.  After 9/11, any cushion we had 
 
20          was wiped out.  Hurricane Sandy -- wiped out. 
 
21                 This is such a unique city and it's so 
 
22          massive and big that it may seem like a lot 
 
23          of cushion, but it's really not.  So I think 
 
24          that to protect our city and our state we 
 
 
                                                                  301
 
 1          need more of a cushion.  I think we're about 
 
 2          1.6 billion short.  
 
 3                 Obviously, you know, as comptroller I 
 
 4          have a certain perspective on the fiscal end.  
 
 5          The mayor is grappling with a lot of what he 
 
 6          has to do budgetarily and has different 
 
 7          priorities, and so we also will have a give 
 
 8          and take between the City Council and the 
 
 9          mayor on some of these budget priorities.
 
10                 ASSEMBLYMAN BENEDETTO:  Thank you very 
 
11          much for your honesty.  
 
12                 Thank you, Mr. Chairman.  I'm fine. 
 
13                 CHAIRMAN FARRELL:  Thank you very 
 
14          much.  
 
15                 Senator?  
 
16                 CHAIRWOMAN YOUNG:  Thank you very 
 
17          much.  
 
18                 And welcome, Comptroller Stringer.  
 
19          It's good to see you again.
 
20                 As you may recall, because it was so 
 
21          long ago, we did serve together in the 
 
22          State Assembly.  So it's always great to see 
 
23          you.  
 
24                 COMPTROLLER STRINGER:  We served 
 
 
                                                                  302
 
 1          together on the Housing Committee.  
 
 2                 CHAIRWOMAN YOUNG:  That's true.
 
 3                 COMPTROLLER STRINGER:  And I want to 
 
 4          congratulate you on your new role.  
 
 5                 You were always great on the 
 
 6          committee, and I always knew that when you 
 
 7          voted yes, I had to vote no, and we'd both 
 
 8          keep coming back here.  So that's great.
 
 9                 CHAIRWOMAN YOUNG:  Some things never 
 
10          change.
 
11                 (Laughter.)
 
12                 CHAIRWOMAN YOUNG:  So I'd like to call 
 
13          on my colleague, Senator Marchione, who has 
 
14          some questions. 
 
15                 SENATOR MARCHIONE:  Hi.  Do you run, 
 
16          in the City of New York, youth programs where 
 
17          you hire youth in the summer?
 
18                 COMPTROLLER STRINGER:  Yes.
 
19                 SENATOR MARCHIONE:  And can you tell 
 
20          me how many youth you hire?
 
21                 COMPTROLLER STRINGER:  I don't have 
 
22          that available to me right now.
 
23                 I don't do the hiring.  You know, as 
 
24          comptroller, I do the oversight.  But the 
 
 
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 1          city has many programs that hire young 
 
 2          people.
 
 3                 SENATOR MARCHIONE:  So you have a 
 
 4          budget, then, for those youth? 
 
 5                 COMPTROLLER STRINGER:  Well, there 
 
 6          would be a budget line, yes.
 
 7                 SENATOR MARCHIONE:  So you don't know 
 
 8          what that budget line is?
 
 9                 COMPTROLLER STRINGER:  I didn't bring 
 
10          that information with me. 
 
11                 SENATOR MARCHIONE:  Okay.  I'd like to 
 
12          know that.
 
13                 You're proposing a $15 an hour minimum 
 
14          wage.  Are you prepared to pay the youth in 
 
15          the City of New York $15 an hour?  Do you 
 
16          have those monies in the budget to pay youth 
 
17          $15 an hour?  And do you have an age that you 
 
18          hire throughout the city?
 
19                 COMPTROLLER STRINGER:  I don't think 
 
20          we've gotten that far, you know.  We're 
 
21          phasing in the $15 minimum wage.  
 
22                 But it certainly would be a great goal 
 
23          so that when young people, whatever their 
 
24          age, spend time at a summer job that they can 
 
 
                                                                  304
 
 1          actually get a real wage.  Maybe they can put 
 
 2          some of that money away and buy schoolbooks 
 
 3          or pay for a lunch while they're going to 
 
 4          class.
 
 5                 SENATOR MARCHIONE:  I'm not saying 
 
 6          that the money wouldn't be good for them.  
 
 7          What I'm asking is, have you prepared to put 
 
 8          those monies in?  Because even though it's 
 
 9          going to be phased in, you're going to face 
 
10          it if it gets passed this July.  And you're 
 
11          phasing in in New York City much faster than 
 
12          what we're phasing in in our --  
 
13                 COMPTROLLER STRINGER:  I believe that 
 
14          we should ensure that people can earn a 
 
15          livable wage, and $15 an hour is a reasonable 
 
16          wage for the City of New York.  
 
17                 And we did a study, because I know 
 
18          people last year asked me this question and 
 
19          now you're asking me again, but I cannot tell 
 
20          you how much a minimum wage increase to $15 
 
21          would mean to the New York City economy.  
 
22                 We would pump $10 billion into 
 
23          communities all over the city.  The economic 
 
24          engine that that would create, not just 
 
 
                                                                  305
 
 1          benefiting individuals but benefiting our 
 
 2          local business community, making sure that 
 
 3          people have the extra dollars to go into 
 
 4          stores, go into restaurants, support local 
 
 5          businesses, I think would be a pretty 
 
 6          important aspect of our economic strategy.
 
 7                 SENATOR MARCHIONE:  But you still have 
 
 8          to have it in the budget no matter how well 
 
 9          it's going to be spent throughout the city.  
 
10          You still have to have it.  I can't pay 
 
11          something I don't have in my pocket, if I'm a 
 
12          small business.  You don't have it, you can't 
 
13          pay it either.
 
14                 Could you look into your budget and 
 
15          let me know whether you have increased your 
 
16          youth budget, how many youth you do have, and 
 
17          whether you're preparing for a $15 an hour --
 
18                 COMPTROLLER STRINGER:  We'll certainly 
 
19          get back to you.
 
20                 SENATOR MARCHIONE:  Thank you.
 
21                 CHAIRWOMAN YOUNG:  Thank you, Senator. 
 
22                 CHAIRMAN FARRELL:  Thank you.  
 
23                 Assemblywoman Malliotakis.  I have to 
 
24          read it.
 
 
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 1                 ASSEMBLYWOMAN MALLIOTAKIS:  Every time 
 
 2          he says my name, it's different.
 
 3                 (Laughter.)
 
 4                 COMPTROLLER STRINGER:  Hi, Nicole.
 
 5                 ASSEMBLYWOMAN MALLIOTAKIS:  Thank you, 
 
 6          Mr. Comptroller, for being here and being 
 
 7          patient.
 
 8                 I just had two quick questions.  You 
 
 9          recently came to my district to do a couple 
 
10          of hearings, one on Sandy oversight.  You had 
 
11          initially, before the hearing, had issued a 
 
12          report that about $17 million were paid to 
 
13          consultants and that there was a lot of waste 
 
14          in the system.  There were also some double 
 
15          billings to some of the contractors -- or 
 
16          consultants, rather.  
 
17                 I just wanted to get an update on what 
 
18          your findings were and what improvements have 
 
19          been made at the city level to try to make 
 
20          this more efficient and streamlined.
 
21                 COMPTROLLER STRINGER:  You know, we 
 
22          did this audit two ways.  We actually held 
 
23          hearings -- I think you were there -- in each 
 
24          of the impacted areas of Sandy, not just on 
 
 
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 1          Staten Island but throughout the city.  And 
 
 2          we took testimony from New Yorkers in every 
 
 3          part of the area --   South Brooklyn, Coney 
 
 4          Island.  
 
 5                 And it was amazing to me that people 
 
 6          were coming to our hearings testifying to the 
 
 7          fact that their paperwork and financial 
 
 8          documents had been lost.  And we heard this 
 
 9          over and over again, if you remember.  And we 
 
10          couldn't quite understand how you could come 
 
11          to Build It Back and just have paperwork 
 
12          lost, no intake person that followed your 
 
13          case -- all the basic issues.
 
14                 So we launched our audit while we were 
 
15          having these hearings, and at the conclusion 
 
16          we said Build It Back was an unmitigated 
 
17          disaster.  Thousands of people got hurt in 
 
18          the process.  The paperwork was lost because, 
 
19          basically, at the first hint of trouble -- 
 
20          meaning a hurricane coming -- the city's 
 
21          response was go hire the consultants:  Go 
 
22          hire PMG, go hire Solix, go hire URS, and 
 
23          they will take care of everything.  They will 
 
24          set up the computer     system, which they 
 
 
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 1          didn't, they will set up a way for people to 
 
 2          engage Build It Back -- that never happened.  
 
 3                 And so basically the only people who 
 
 4          benefited from setting this up were the 
 
 5          actual consultants.  It was truly a scandal.  
 
 6                 And I think it's a lesson to all big 
 
 7          cities that we have to build out -- the 
 
 8          lesson is we have to build out OEM and 
 
 9          emergency services for the disasters that 
 
10          will definitely come our way.  And we have 
 
11          been too lax, because we think we can hire 
 
12          consultants to get us out of the next big 
 
13          storm or the next attack, and what our audit 
 
14          showed was that can't happen.
 
15                 I will tell you, while we haven't gone 
 
16          back and audited, we are monitoring Sandy and 
 
17          the Build It Back.  And while you can look at 
 
18          a better process, I still think we can't 
 
19          account for thousands of people.  And until 
 
20          we can account for thousands of people -- 
 
21          Staten Island, Coney Island, throughout our 
 
22          city -- Lower Manhattan -- then I think we 
 
23          are not whole.  And I will not say that we 
 
24          are doing better.
 
 
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 1                 The other thing that we also did, we 
 
 2          just finished an audit that you'd be 
 
 3          interested in -- I know, Diane, you'll be 
 
 4          interested in this -- that even though we 
 
 5          were told that NYCHA was coming up with a 
 
 6          plan so that the next disaster they would be 
 
 7          ready for, I went in and audited NYCHA.  
 
 8                 There's no plan.  If, God forbid, 
 
 9          something happened, it would be just like the 
 
10          same.
 
11                 And so -- I know you're shocked at 
 
12          this -- but we should also look at our 
 
13          different agencies and make sure that they're 
 
14          actually creating emergency plans that are 
 
15          realistic.  I can tell you, and I'll send 
 
16          this to you if you want, our NYCHA audit 
 
17          showed that we're no better today with 
 
18          NYCHA's planning process than we were on the 
 
19          day the storm hit.
 
20                 ASSEMBLYWOMAN MALLIOTAKIS:  The other 
 
21          question I had is regarding to your Red Tape 
 
22          Commission.  You also came to Staten Island 
 
23          and also in Brooklyn -- in all the boroughs, 
 
24          actually -- and listened to the concerns of 
 
 
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 1          the small business community.  
 
 2                 It seems that small businesses are 
 
 3          sort of being hit at every level, whether 
 
 4          it's the city, the state, or federal.  Some 
 
 5          of the policies coming out of City Hall, I 
 
 6          believe, are hurting the small business 
 
 7          community in the city.  
 
 8                 What were some of the results of that 
 
 9          Red Tape Commission, and what recommendations 
 
10          have you made to the City Council and the 
 
11          administration to make changes?
 
12                 COMPTROLLER STRINGER:  So we're 
 
13          looking at -- so this commission, as you've 
 
14          said, we've had hearings in all five 
 
15          boroughs.  And it's not just the 
 
16          comptroller's staff doing this, we've 
 
17          actually put together a very good blue-ribbon 
 
18          commission of people with varied backgrounds 
 
19          taking a look at many of the agencies' 
 
20          relationships with small businesses -- fines 
 
21          and fees and taxes and, you know, the 
 
22          well-documented history of businesses 
 
23          opening, politicians rushing to the 
 
24          ribbon-cutting, and then the next day the 
 
 
                                                                  311
 
 1          agencies start coming in:  You know, you have 
 
 2          a fruit fly in the vodka bottle, and we're 
 
 3          going to shut you down for three days.  You 
 
 4          know, there's an ant on the floor two blocks 
 
 5          away, it must have been you, and we're going 
 
 6          to fine you.  I'm making light of this, but 
 
 7          everybody's talked to small business owners.  
 
 8                 I think we've lost sight of the fact 
 
 9          that many small business owners open their 
 
10          business with their life savings.  They just 
 
11          can't go to Citibank and say "I need a 
 
12          million-dollar loan."  Most people can't get 
 
13          that.  So they save and save, work three jobs 
 
14          to have their entrepreneurial dream, and the 
 
15          day they open, it's not market forces very 
 
16          often that determine their economic success, 
 
17          it's the sheer brunt of the agencies that 
 
18          determine their future.
 
19                 So the Red Tape Commission, we are 
 
20          looking at all of these agencies, looking at 
 
21          it in a critical way.  I don't want to 
 
22          announce the findings today, but I think this 
 
23          is going be one of those bipartisan 
 
24          moments -- Republican/Democrat, 
 
 
                                                                  312
 
 1          liberal/conservative -- that I hope that we 
 
 2          can generate a real consensus that we need to 
 
 3          take a sledgehammer to the bureaucracy that 
 
 4          is just dragging down so many mom-and-pop 
 
 5          stores and killing the entrepreneurial spirit 
 
 6          of our millennials, the next generation.  All 
 
 7          they want to do is create and, you know, they 
 
 8          have a whole set of problems in terms of 
 
 9          office space and dealing with connectivity 
 
10          and those issues.
 
11                 ASSEMBLYWOMAN MALLIOTAKIS:  I 
 
12          appreciate that, and I appreciate you doing 
 
13          this commission.  When are the findings going 
 
14          to be announced?
 
15                 COMPTROLLER STRINGER:  I would like -- 
 
16          I'm hoping in the spring.  We're working on 
 
17          the report now, and it's a collaborative 
 
18          effort, so we're working with all the 
 
19          commission members.
 
20                 We also have an online survey, so in 
 
21          addition to the hearings we held, we actually 
 
22          have reached out to hundreds of businesses 
 
23          with an online survey which is gathering more 
 
24          data and -- actually, I should make a pitch 
 
 
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 1          to get you the link, because we certainly 
 
 2          would want to hear from more people on Staten 
 
 3          Island.  So maybe I can set that up.  And we 
 
 4          can also show you what we're asking, the 
 
 5          questions.  
 
 6                 ASSEMBLYWOMAN MALLIOTAKIS:  
 
 7          Absolutely.  Any way we can help in -- or 
 
 8          talk to the chambers of commerce locally, let 
 
 9          us know.
 
10                 COMPTROLLER STRINGER:  That'd be 
 
11          great.  Thank you.  
 
12                 ASSEMBLYWOMAN MALLIOTAKIS:  Thank you.  
 
13                 COMPTROLLER STRINGER:  Thank you.  
 
14                 CHAIRMAN FARRELL:  Questions?
 
15                 CHAIRWOMAN YOUNG:  Thank you, yes. 
 
16                 Senator Krueger.  
 
17                 SENATOR KRUEGER:  Hello, 
 
18          Mr. Comptroller.  It's nice to see you up 
 
19          here instead of in our island of Manhattan.  
 
20                 COMPTROLLER STRINGER:  And nice to see 
 
21          you there.
 
22                 SENATOR KRUEGER:  Thank you.  
 
23                 So in your testimony, where I don't 
 
24          really have any disagreements, just one 
 
 
                                                                  314
 
 1          clarification --
 
 2                 COMPTROLLER STRINGER:  Yeah.
 
 3                 SENATOR KRUEGER:  -- you're proposing 
 
 4          the Battery Park City money be dedicated to 
 
 5          NYCHA, and you estimate $400 million over 10 
 
 6          years, so we'll say $40 million a year.  I 
 
 7          agree NYCHA desperately needs the money.  But 
 
 8          what won't we be spending it on instead?  
 
 9          Because what do we use it for now?
 
10                 COMPTROLLER STRINGER:  Well, it would 
 
11          be for -- it would take away -- I shouldn't 
 
12          say take away, but it would redirect money 
 
13          from other housing programs and earmark it to 
 
14          NYCHA.  And basically, there's a big pot of 
 
15          money for other housing subsidy programs and 
 
16          capital monies, and they tend to do okay, 
 
17          especially capital.  
 
18                 But everyone has talked about helping 
 
19          NYCHA, but no one's willing to direct monies 
 
20          to actually help NYCHA.  And I think this 
 
21          would be a way of us saying that we are going 
 
22          to find a new revenue stream.  We've never 
 
23          had one in modern history that I'm aware of.  
 
24          And I believe the city can certainly make up 
 
 
                                                                  315
 
 1          the difference of any existing program.  
 
 2                 I've come here to tell you our 
 
 3          finances are strong, I'm not afraid to say 
 
 4          that.  This is our one shot where we could 
 
 5          take Battery Park City money and put a marker 
 
 6          down on NYCHA.
 
 7                 SENATOR KRUEGER:  And last year when 
 
 8          you testified, you had just recently released 
 
 9          or were about to release something you called 
 
10          the Fair Share report, and you went into some 
 
11          details about the state's declining 
 
12          commitment to New York City with its budget 
 
13          monies.  
 
14                 Is there anything that has changed 
 
15          since that time other than the new proposals 
 
16          in the Governor's budget that would decline 
 
17          monies even more?
 
18                 COMPTROLLER STRINGER:  We made the 
 
19          point that when you lose AIM and you lose 
 
20          other programs that we used to have in 
 
21          New York City, whether it's the commuter tax 
 
22          or AIM, that we're not doing well.  And 
 
23          considering that we're sending so much more 
 
24          to the state than we're getting back -- I 
 
 
                                                                  316
 
 1          think one of the things, when you stay at a 
 
 2          hearing for four hours and you listen much of 
 
 3          the time, the one takeaway I've had --  I did 
 
 4          do that -- the one takeaway I've had through 
 
 5          this is that someone asked a question and 
 
 6          said, Well, you know, New York City had the 
 
 7          benefit of a program in the 1970s or in the 
 
 8          1990s, say, and that program never expired.  
 
 9          And that's true.  And I was listening, but 
 
10          then I wanted to scream out:  But there are 
 
11          other programs that we did lose.  And some 
 
12          were more beneficial to the city economically 
 
13          than others.  
 
14                 The commuter tax is a wonderful 
 
15          example of the billions and billions of 
 
16          dollars that we used to get, to rely on, that 
 
17          simply disappeared in a midnight deal that we 
 
18          never got back.
 
19                 So yes, we certainly have gotten 
 
20          funding from the state -- we thank you, we 
 
21          know that this doesn't happen easily -- but 
 
22          we've also lost money through the budget 
 
23          process as well.  And so I just ask you to 
 
24          take that into consideration.
 
 
                                                                  317
 
 1                 I'll resend you that report for your 
 
 2          deliberations, because it's something that I 
 
 3          should probably have brought back this year.
 
 4                 SENATOR KRUEGER:  I found it online 
 
 5          while we were listening to the four and a 
 
 6          half hours with Mayor de Blasio.  
 
 7                 So thank you, and --
 
 8                 COMPTROLLER STRINGER:  We all had a 
 
 9          lot of time to --
 
10                 SENATOR KRUEGER:  We did.  We had a 
 
11          lot of time to do research and listen to each 
 
12          other.
 
13                 COMPTROLLER STRINGER:  A very good 
 
14          hearing, Senator.  Yeah. 
 
15                 SENATOR KRUEGER:  Because that report 
 
16          shows that the city received $1.2 billion 
 
17          less in state revenue in fiscal year 2014 
 
18          compared to 2009.  And the yearly decline 
 
19          from $12.1 billion to $10.9 billion between 
 
20          2009 and 2014 -- these are fiscal years -- 
 
21          the state's operating funds grew by almost 16 
 
22          percent, but contributions to the city 
 
23          continued to be reduced.
 
24                 COMPTROLLER STRINGER:  Right.
 
 
                                                                  318
 
 1                 SENATOR KRUEGER:  And so you show that 
 
 2          the city would have had an additional $3.1 
 
 3          billion to meet its expenses in fiscal year 
 
 4          2014 if we hadn't been reducing state funds 
 
 5          to the city so much.
 
 6                 So I appreciated having that on the 
 
 7          record, because I did want to go on the 
 
 8          record that some people seem to believe 
 
 9          New York City is taking more money than 
 
10          historically it has, or is actually using 
 
11          more state money than it's actually 
 
12          contributing to the state, and I know that 
 
13          your work has shown that is not true.
 
14                 COMPTROLLER STRINGER:  Nothing is 
 
15          farther from the truth.  We have always paid 
 
16          a whole lot more.  And, you know, I would 
 
17          argue that we're actually happy to do it, 
 
18          because we recognize a strong New York State 
 
19          is also good for New York City.  And so when 
 
20          we can be helpful, we don't expect money in, 
 
21          money back.  When we come here, it's because 
 
22          we have specific needs that you don't want to 
 
23          -- you don't want to create a tipping point 
 
24          in New York City, because it limits our 
 
 
                                                                  319
 
 1          ability to help the state financially.  
 
 2                 SENATOR KRUEGER:  I agree with you.  
 
 3          And I do think, to repeat what I think 
 
 4          Senator Marchione said earlier, we are one 
 
 5          state and we all rise or fall together.  
 
 6                 So I do agree that the city actually 
 
 7          has been a significant contributor to the 
 
 8          upstate economy, and I just didn't want today 
 
 9          to end without reflecting that fact.
 
10                 COMPTROLLER STRINGER:  And let's put 
 
11          it on the record today -- and Senator 
 
12          Moynihan rest in peace -- but you know what 
 
13          we've given to Washington that we don't get 
 
14          back.  And maybe Congress will finally 
 
15          recognize that, you know, we can't carry the 
 
16          country and carry the state.
 
17                 SENATOR KRUEGER:  And you talked about 
 
18          the CUNY issues within your testimony.  Did I 
 
19          miss your touching on education funding?  
 
20                 In the past we've spent so much time 
 
21          talking about fair funding through the CFE 
 
22          lawsuit decision, which of course would 
 
23          affect the entire state.  Where are we in 
 
24          that realm at this point?
 
 
                                                                  320
 
 1                 COMPTROLLER STRINGER:  Well, obviously 
 
 2          we haven't gotten the full dollars from CFE.  
 
 3                 We did not get -- CUNY did not keep 
 
 4          pace with state spending, as we revealed 
 
 5          today, a $637 million difference.  That's 
 
 6          pretty significant.  That's over a half a 
 
 7          billion dollars that CUNY did not get.  
 
 8          Despite the lack of funding, that is an 
 
 9          incredible institution.  But you have to 
 
10          invest capital money, you have to invest 
 
11          programmatic money, you have to invest in the 
 
12          professors, you have to invest in the 
 
13          students.  And when we do that, and I would 
 
14          say that for SUNY and CUNY, we turn out some 
 
15          of the best and the brightest, the most 
 
16          diverse school population that go on to do 
 
17          great things for the world, and I think that 
 
18          we should make that a priority in the budget. 
 
19                 SENATOR KRUEGER:  Thank you very much 
 
20          for your testimony.
 
21                 COMPTROLLER STRINGER:  Thank you.  
 
22                 CHAIRWOMAN YOUNG:  Thank you, Senator 
 
23          Krueger.
 
24                 CHAIRMAN FARRELL:  Thank you.  
 
 
                                                                  321
 
 1                 CHAIRWOMAN YOUNG:  Senator Savino.
 
 2                 CHAIRMAN FARRELL:  Oh, no, I have one.
 
 3                 CHAIRWOMAN YOUNG:  I'm sorry, do you 
 
 4          have one?  Excuse me.  I thought you were 
 
 5          done.
 
 6                 CHAIRMAN FARRELL:  No.  I thought so 
 
 7          too.
 
 8                 Mr. McDonald.  
 
 9                 (Laughter.)
 
10                 CHAIRWOMAN YOUNG:  You told me you 
 
11          were done.
 
12                 COMPTROLLER STRINGER:  We have three 
 
13          and a half hours to go.
 
14                 SENATOR SAVINO:  I'll only take up 
 
15          two.
 
16                 (Laughter.)
 
17                 CHAIRMAN FARRELL:  Mr. McDonald.  
 
18                 CHAIRWOMAN YOUNG:  I'm sorry, Senator 
 
19          Savino, we have an Assemblymember who is up 
 
20          who we were not aware of.  So you're next, 
 
21          after that.
 
22                 ASSEMBLYMAN McDONALD:  I'll be quick, 
 
23          Comptroller.  
 
24                 And for reference, I replaced your 
 
 
                                                                  322
 
 1          colleague Ron Canestrari, so I represent five 
 
 2          cities:  Cohoes, Watervliet, Rensselaer, 
 
 3          Troy, and the City of Albany.  And being a 
 
 4          former mayor, I think you'll understand some 
 
 5          of the context of my questions.
 
 6                 The mayor earlier, when you sat 
 
 7          through the five-hour presentation, had 
 
 8          referenced a $600 million increase in our 
 
 9          pension costs.  And the one question I meant 
 
10          to ask, but stepped out:  Is the fund 90 
 
11          percent, 100 percent funded?  Where is the 
 
12          pension fund in regards to its 
 
13          responsibilities?
 
14                 COMPTROLLER STRINGER:  New York State?  
 
15          New York City pension fund?  
 
16                 ASSEMBLYMAN McDONALD:  New York City.  
 
17          Yeah, not New York State.  
 
18                 COMPTROLLER STRINGER:  So we're 
 
19          roughly -- we're at $155 billion.  We're the 
 
20          fourth-largest pension fund in the United 
 
21          States.  We're actually the 14th largest in 
 
22          the world.  We protect the retirement 
 
23          security of 710,000 people, so it really is 
 
24          an incredible responsibility that we have.  
 
 
                                                                  323
 
 1          We're about 71 percent funded.  
 
 2                 ASSEMBLYMAN McDONALD:  Okay.
 
 3                 COMPTROLLER STRINGER:  We are in a 
 
 4          strong position.  
 
 5                 There's a lot more that we have to do.  
 
 6          You know, our pension fund is made up of five 
 
 7          boards.  We've better aligned our pension 
 
 8          fund.  Thanks to the hard work of the 
 
 9          trustees, we are now going to have one 
 
10          investment meeting -- people should know that 
 
11          today we are releasing a report by an 
 
12          independent consultant talking about the 
 
13          Bureau of Asset Management, that I run, and 
 
14          the wholesale reform that's needed to bring 
 
15          the system into the 21st century.  And we are 
 
16          slowly but consistently working with the 
 
17          trustees to create the opportunity so that 
 
18          when the economy is good we can take 
 
19          advantages, you know, take advantage of the 
 
20          markets and all that we have to invest in, 
 
21          and then when there are tough times we have 
 
22          enough risk officers and a risk plan in place 
 
23          to hedge against a tough economy.  And that 
 
24          is my goal as comptroller.
 
 
                                                                  324
 
 1                 ASSEMBLYMAN McDONALD:  You earlier -- 
 
 2          and I agree with that -- when they were 
 
 3          talking about how much reserve should New 
 
 4          York City have --
 
 5                 COMPTROLLER STRINGER:  How many what?
 
 6                 ASSEMBLYMAN McDONALD:  How much 
 
 7          reserves New York City should have.  And 
 
 8          every wise comptroller will say there's never 
 
 9          enough reserves, and you gave a very 
 
10          appropriate answer.
 
11                 What's your goal in regards to the 
 
12          pension?  Where do you want to be in three to 
 
13          five years, percentage-wise?  Or is that --
 
14                 COMPTROLLER STRINGER:  In terms of the 
 
15          cushion for the city?
 
16                 ASSEMBLYMAN McDONALD:  In regards to 
 
17          the pension fund.  In regards -- you know, 
 
18          you're at 71 percent right now; the state is 
 
19          running at a little bit higher rate.  What's 
 
20          the goal of the city pension fund?
 
21                 COMPTROLLER STRINGER:  You know, 
 
22          rather than get to the end game, which of 
 
23          course is to be fully funded in a perfect 
 
24          world, my goal is that we reduce the reliance 
 
 
                                                                  325
 
 1          of taxpayer dollars going into the pension 
 
 2          fund to make up shortfalls.  
 
 3                 I think it's critical that we hit our 
 
 4          actuarial target.  It's very critical to us 
 
 5          that we get there, and we get there making 
 
 6          sure that our asset classes are -- you know, 
 
 7          our different asset classes are much more 
 
 8          moderate.  I wouldn't quite -- I never want 
 
 9          to use the word "conservative," but actually 
 
10          I find myself more conservative recognizing 
 
11          that we don't have to hit it big, our goal is 
 
12          to be responsible long-term investors, hit 
 
13          our 7 percent, do it in the way that 
 
14          safeguards these individuals' retirement.
 
15                 You know pensions, the average pension 
 
16          is under $40,000.  This is people's total 
 
17          retirement.  That and Social Security in New 
 
18          York City doesn't even pay the rent.  So it's 
 
19          a very crucial part, I think it's actually 
 
20          the biggest of our job, is to think about 
 
21          this every day.
 
22                 ASSEMBLYMAN McDONALD:  I agree, and I 
 
23          appreciate what you're doing.
 
24                 The other is more of a comment.  I 
 
 
                                                                  326
 
 1          know you went to great pains to put it in 
 
 2          your presentation; obviously the mayor was 
 
 3          asked questions about it several times with 
 
 4          the STAR-C bond refinancing.  And, you know, 
 
 5          and I appreciate your comments, and probably 
 
 6          the first thing I did when I was the mayor 
 
 7          was went through and refinanced all my old 
 
 8          debt too -- all we could do -- and it brought 
 
 9          about appreciable savings.  
 
10                 By the same token, I think the 
 
11          challenge here -- and it's just a comment, 
 
12          and mostly I'm saying it for the people who 
 
13          are taking notes, not you -- is that many of 
 
14          our cities are struggling financially.  
 
15          Fortunately, many of them have not gone to 
 
16          that depth of debt that the city has seen.  
 
17          And at the same token, they're all looking 
 
18          for solutions.  They're all looking for ways 
 
19          to avoid going into debt.  You know, you'll 
 
20          be hearing from the mayor of Albany, the 
 
21          mayor of Troy very soon, and they're very 
 
22          much on that decline.  And unfortunately 
 
23          there's not a lot of resources being directed 
 
24          to prevent that from happening.
 
 
                                                                  327
 
 1                 So I think when Senator Kennedy was 
 
 2          grilling the mayor and a few others, they 
 
 3          were appropriate.  I share that concern.  We 
 
 4          need all of New York State to be successful.  
 
 5          I understand there's always going to be 
 
 6          friction between the city and the state -- we 
 
 7          won on this one, we lost on this one.  It's a 
 
 8          very large scorecard.  At the end of the day, 
 
 9          I just hope that everybody has an open mind 
 
10          to recognize the fact that you need to make 
 
11          sure that we're all strong financially.
 
12                 COMPTROLLER STRINGER:  You know, one 
 
13          of the things I learned in my 13 years in 
 
14          Albany is that the world does not only 
 
15          revolve around your local district.  Right?  
 
16          There's a much bigger world out there.  You 
 
17          have Magnarelli in Syracuse and people who I 
 
18          serve with who represented big cities with 
 
19          just the same struggles and challenges New 
 
20          York City faces. 
 
21                 I actually think these hearings, 
 
22          though there's -- obviously there's a certain 
 
23          ideology, there's a certain natural 
 
24          upstate/downstate friction -- at the end of 
 
 
                                                                  328
 
 1          the day, if the state is doing badly and only 
 
 2          New York does well, it's not good for New 
 
 3          York.  People stay away from our state.  The 
 
 4          tourists don't come.  We are so linked 
 
 5          together, even though we don't always see it 
 
 6          right away -- and I would hope that in this 
 
 7          budget process -- I come here as comptroller 
 
 8          fighting for my city, but it is not at the 
 
 9          expense of Syracuse, of Rochester, the Big 5, 
 
10          it's not against any city or town.  
 
11                 We've got to do this together, and I 
 
12          think you heard that from the mayor today.  
 
13          He came here today not talking only about us, 
 
14          but making sure that we could figure out a 
 
15          way to get everyone where we need to be. 
 
16                 Look, some years there will be a 
 
17          crisis in your community that will allow us 
 
18          to take away from our city.  That has 
 
19          happened time and time again.  It's going to 
 
20          happen again.  We're here to tell you that we 
 
21          do have some real issues in New York City 
 
22          that we have got to deal with to keep the 
 
23          engine going.  It's education, it's 
 
24          homelessness -- these are issues beyond the 
 
 
                                                                  329
 
 1          glittering city.  I just want to take you 
 
 2          back to our invisible city:  58,000 people, 
 
 3          23,000 children, and they're going to be 
 
 4          sleeping in shelters.  No child should sleep 
 
 5          in those situations.  
 
 6                 We're going to inspect, we're going to 
 
 7          blow the whistle, but we also need the 
 
 8          programmatic money and the strategy to clean 
 
 9          them up.  And if we clean them up, we're 
 
10          going to make taxpayers out of these 
 
11          children, we're going to educate them, 
 
12          they're going to have productive lives, and 
 
13          then we can dismantle -- you know, the goal 
 
14          is to dismantle our shelter system.  
 
15                 Wouldn't it be great if we only needed 
 
16          one shelter?  Right?  Maybe one shelter per 
 
17          borough, and that's just because we need to, 
 
18          you know, keep -- bad things happen.  Right 
 
19          now we've got an absolute mess, years in the 
 
20          making -- the mayor's right, it didn't happen 
 
21          overnight -- and now's the time for us to 
 
22          tackle it for the sake of the whole state.
 
23                 ASSEMBLYMAN McDONALD:  Thank you for 
 
24          the good work that you're doing.  I do have 
 
 
                                                                  330
 
 1          to say, from an upstater perspective, all 
 
 2          your efforts, particularly the homeless 
 
 3          shelter, was very eye-opening and it really 
 
 4          brought the crisis to the forefront.
 
 5                 COMPTROLLER STRINGER:  Thank you.  
 
 6          Thank you.  
 
 7                 Did we serve together?
 
 8                 ASSEMBLYMAN McDONALD:  What's that?
 
 9                 COMPTROLLER STRINGER:  Did we serve 
 
10          together?
 
11                 ASSEMBLYMAN McDONALD:  No.  I just got 
 
12          here three years ago.
 
13                 COMPTROLLER STRINGER:  It's nice to 
 
14          meet you.
 
15                 CHAIRMAN FARRELL:  Thank you.  
 
16                 Senator? 
 
17                 CHAIRWOMAN YOUNG:  Thank you.  
 
18                 Senator Savino.
 
19                 SENATOR SAVINO:  Thank you, Senator 
 
20          Young. 
 
21                 Can I call you Scott?  It's easier 
 
22          than "Comptroller Stringer."
 
23                 COMPTROLLER STRINGER:  Yes.  Fine.
 
24                 SENATOR SAVINO:  I want to pick up 
 
 
                                                                  331
 
 1          where Assemblyman McDonald left off on the 
 
 2          pension issue.  
 
 3                 I know that part of the problem with 
 
 4          the city having to put up another 
 
 5          $600 million is basically the actuarial 
 
 6          assumptions are somewhat wrong.  You know, 
 
 7          we're dealing with a system that was designed 
 
 8          when 55 was old and 65 was dead, and 
 
 9          unfortunately our retirees are living longer 
 
10          than we assumed they would.  So I'm going to 
 
11          assume that's going to be a problem going 
 
12          forward.  
 
13                 So what steps --
 
14                 COMPTROLLER STRINGER:  You kind of 
 
15          hope that's a -- 
 
16                 SENATOR SAVINO:  Yeah.  I mean, it's 
 
17          likely.  You know, people are living longer, 
 
18          and they're going to be continuing to collect 
 
19          pensions, so there has to be some way for the 
 
20          system to adapt to that so that we don't have 
 
21          these shortfalls.  
 
22                 Is there something that you guys are 
 
23          working on now that will help deal with that?  
 
24          I see Tim is writing furiously there.
 
 
                                                                  332
 
 1                 COMPTROLLER STRINGER:  So Tim 
 
 2          Mulligan -- who is our excellent deputy 
 
 3          comptroller for budget who I probably forgot 
 
 4          to introduce, but everyone knows him so well 
 
 5          because you call him all the time.  And he's 
 
 6          served the city, so thank you, Tim.  
 
 7                 In the new tables that the actuary has 
 
 8          issued, a lot of future growth is built into 
 
 9          the table, Tim reminds me.  So I think that's 
 
10          helpful. 
 
11                 But we're going to have to think about 
 
12          retirement beyond the pension --
 
13                 SENATOR SAVINO:  Sure.
 
14                 COMPTROLLER STRINGER:  And we have to 
 
15          figure out retirement not just for people who 
 
16          are city or state workers.  And we are 
 
17          collaborating to come up with ways to create 
 
18          retirement plans for every citizen.  You 
 
19          know, everybody in this country can have a 
 
20          secure retirement.
 
21                 SENATOR SAVINO:  Well, I totally 
 
22          agree.  I know the Governor has a proposal on 
 
23          it, I have a piece of legislation that would 
 
24          allow for it.  And I've often said that many 
 
 
                                                                  333
 
 1          people would have a pension and many 
 
 2          employers would provide pensions if they 
 
 3          could afford to maintain a plan.  It's 
 
 4          incredibly expensive to develop one.  
 
 5                 And I do think that we are probably 
 
 6          missing out on the opportunity for small 
 
 7          employers, or even medium-sized ones, to 
 
 8          utilize the New York City or New York State 
 
 9          pension system as a vehicle of investments, 
 
10          separating the funds, of course, to protect 
 
11          the taxpayer.  But it's something that we 
 
12          really need to look at.
 
13                 COMPTROLLER STRINGER:  So let me -- 
 
14          without letting the cat out of the bag, we 
 
15          have been researching and working on this 
 
16          issue with experts from literally around the 
 
17          world on this issue.  Give me some time, we 
 
18          need some -- many months.  But we are working 
 
19          with a lot of folks -- and obviously you've 
 
20          talked about this -- to come up with a 
 
21          retirement plan that works for everybody.
 
22                 SENATOR SAVINO:  And the other -- on 
 
23          the pension issue, I mean, the New York Times 
 
24          has the report or an article about the report 
 
 
                                                                  334
 
 1          that was released today, the independent one.  
 
 2          But their headline is rather alarming to the 
 
 3          average individual, it says --
 
 4                 COMPTROLLER STRINGER:  Which one, I'm 
 
 5          sorry?
 
 6                 SENATOR SAVINO:  "New York City's 
 
 7          Pension System in Danger of Operational 
 
 8          Failure."  Now, to the average reader that 
 
 9          might seem like there's some sort of crisis 
 
10          impending in the pension system, but I don't 
 
11          believe that's the case.  
 
12                 What my understanding is -- it's a 
 
13          couple of things they've uncovered.  One, 
 
14          something we've known for a long time, that 
 
15          the money managers that operate within the 
 
16          pension system have been taking millions of 
 
17          dollars in fees and not really producing 
 
18          anything, and that there's also this issue of 
 
19          the Bureau of Asset Management.  
 
20                 So I know your predecessor, John Liu, 
 
21          and Mayor Bloomberg at one point talked about 
 
22          restructuring that Bureau of Asset 
 
23          Management, but that plan never went anywhere 
 
24          --   
 
 
                                                                  335
 
 1                 COMPTROLLER STRINGER:  Let me --  let 
 
 2          me just -- 
 
 3                 SENATOR SAVINO:  -- because of 
 
 4          opposition from the funds.  So have you been 
 
 5          able --
 
 6                 COMPTROLLER STRINGER:  So it's a 
 
 7          little --
 
 8                 SENATOR SAVINO:  -- to overcome that 
 
 9          opposition?
 
10                 COMPTROLLER STRINGER:  So it's a 
 
11          little different.  So it was a Liu/Bloomberg 
 
12          plan to consolidate the pension fund, it was 
 
13          a plan that had very little support up in 
 
14          Albany and was never going to happen.  
 
15                 We worked for two years with the 
 
16          trustees to create an opportunity to align 
 
17          the five boards in one investment meeting.  
 
18          Before we were able to accomplish this, we 
 
19          used to have 55 investment meetings a year 
 
20          talking about 96 percent of the same 
 
21          investments.  It was out of a bad movie.  And 
 
22          it grinded down the Bureau of Asset 
 
23          Management to the people who were responsible 
 
24          for looking at deals and investments only 
 
 
                                                                  336
 
 1          were preparing for the next meeting to have 
 
 2          the same discussion all over again.
 
 3                 We worked with our trustees and our 
 
 4          union partners, we worked with the mayor, the 
 
 5          public advocate, borough presidents, and we 
 
 6          now have six meetings a year, not 55, which 
 
 7          has now given us a lot more time to tackle 
 
 8          the issues related to the Bureau of Asset 
 
 9          Management.  
 
10                 When I took office I said, Look, a lot 
 
11          of BAM is hanging by a thread because we 
 
12          haven't invested in infrastructure, we 
 
13          haven't invested in IT, we haven't invested 
 
14          in whole host of things.  When I became 
 
15          comptroller, there was no compliance officer 
 
16          in a $160 billion pension fund.  There wasn't 
 
17          a risk management officer, a risk officer to 
 
18          review the investments the CIO was making.  
 
19          We still had pay-to-play in the pension 
 
20          system, we never banned placement agents.  
 
21                 We had a six-point plan, we 
 
22          accomplished it, but then I realized we have 
 
23          to go deeper.  And this is where sometimes -- 
 
24          and today's story in the Times, the headline 
 
 
                                                                  337
 
 1          is a little chilling, but I hired an outside 
 
 2          consulting firm with the trustees, a $1.4 
 
 3          million report that I think is very telling 
 
 4          that says we accomplished a lot in the last 
 
 5          two years, but if you want to have 
 
 6          best-practice pension funds, you've got to 
 
 7          finish the job over the next two to six to 10 
 
 8          years.  
 
 9                 We released that because it's 
 
10          transparent.  You get a report, you put it 
 
11          out for public consumption.  I want people to 
 
12          feel there's a sense of urgency.  I want, as 
 
13          comptroller, to be held to that standard, 
 
14          that urgency, and I want the person who comes 
 
15          after me to feel that the Funston report is 
 
16          what you take to work in the morning when 
 
17          you're dealing with our pension fund.
 
18                 So I am not upset; I thought theirs 
 
19          was a great article that talked about the 
 
20          report we did on Wall Street fees, 
 
21          challenging these money managers to recognize 
 
22          it's not just about them, but that they 
 
23          actually represent retirees and public 
 
24          dollars.  And so I think we're in an era of 
 
 
                                                                  338
 
 1          great reform within the comptroller's office 
 
 2          and with the pension fund.  And I do want to 
 
 3          say on the record -- because sometime the 
 
 4          elected official gets more notoriety about it 
 
 5          -- true, you get more blame -- but I think 
 
 6          people should really thank the trustees of 
 
 7          Police, Fire, NYCERS, Teachers -- they have 
 
 8          been as reform-minded as anyone at the 
 
 9          pension fund.
 
10                 SENATOR SAVINO:  It's very good to 
 
11          hear that.
 
12                 And finally, on your new 
 
13          responsibility of administering the state's 
 
14          homeless, I don't know, $20 billion -- do you 
 
15          have a sense of what your role will be 
 
16          separate and apart from what you currently do 
 
17          right now?  As city comptroller you have the 
 
18          ability to audit contracts, and you've been 
 
19          very aggressive about that with some of these 
 
20          bad actors in the shelter system, refusing to 
 
21          approve contracts until they clean up their 
 
22          act.  So what will be different about what 
 
23          the Governor's budget would grant to you than 
 
24          you're currently doing?
 
 
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 1                 COMPTROLLER STRINGER:  So this is not 
 
 2          an Al Haig moment for me, okay?  This is -- 
 
 3          what we're doing is what I've been doing from 
 
 4          the very beginning, which is auditing city 
 
 5          agencies -- we've been very aggressive with 
 
 6          the Department of Homeless Services.  We 
 
 7          exposed the weakness in the contracting 
 
 8          system, we got blowback from DHS, and it 
 
 9          turns out we were right, there were issues.  
 
10          We went into the shelter system, did a 
 
11          hard-hitting audit, and we revealed the 
 
12          terrible conditions people were living in.  
 
13                 Imagine living with rodents, 
 
14          infestation, doors that don't lock or close, 
 
15          security nowhere in sight, repairs that were 
 
16          so terrible -- it's from back in the days of 
 
17          the '70s when there was redlining and you 
 
18          would go to court with tenants in terrible 
 
19          conditions.  This is what kids are living 
 
20          with, 23,000 children.  It is so outrageous 
 
21          that I sometimes can't stop myself.  
 
22                 We are grateful, I am grateful that 
 
23          the Governor, in the State of the State 
 
24          message, said:  You know what, I'm willing to 
 
 
                                                                  340
 
 1          give you resources if you need them.  I want 
 
 2          to coordinate with Comptroller DiNapoli, 
 
 3          Comptroller Schroeder, and your office so 
 
 4          that if we see dire conditions, that we can 
 
 5          take strong action.
 
 6                 In addition to the Governor working 
 
 7          with us on this, we are also working with the 
 
 8          Mayor, and we're working with Commissioner 
 
 9          Banks.  Because at the end of the day, my 
 
10          goal as the auditor-in-chief of our city is 
 
11          to make sure that by the time we're done that 
 
12          the shelters are going to be places where a 
 
13          child can stay, still get an education, have 
 
14          room to study, have a place to play.  This is 
 
15          the 21st century, people.  This should not be 
 
16          that difficult.  And we're going to continue 
 
17          to do it.  
 
18                 And listen, we're ruffling feathers.  
 
19          We're pushing the city administration.  This 
 
20          is obviously something that they've got to 
 
21          get their arms around.  But we're pushing, 
 
22          and that's what my job is.  
 
23                 I am glad the Governor is committed to 
 
24          this process.  It is not a negative.  It is 
 
 
                                                                  341
 
 1          important, we should support that effort, and 
 
 2          you should also have assurance from me that 
 
 3          we are working with Steve Banks, who is 
 
 4          someone I respect, as HRA commissioner.  We 
 
 5          have had multiple meetings, we talk on the 
 
 6          phone all the time, and we are collaborating.  
 
 7          And I want you to know that as well.
 
 8                 SENATOR SAVINO:  Well, that's great.  
 
 9          I just wanted one final point.  
 
10                 I made the point earlier when I spoke 
 
11          to the mayor about the history of DHS, it's a 
 
12          separate agency from HRA.  You know, we're 
 
13          all old enough now, we were there -- I 
 
14          remember Muzzy Rosenblatt, the original 
 
15          commissioner who convinced the previous mayor 
 
16          -- they claimed then it would make service 
 
17          provision easier or better for the homeless, 
 
18          and in fact it was really just a ploy to 
 
19          privatize the shelter system.  And as a 
 
20          result, now you're auditing thousands of 
 
21          contracts for these private shelter operators 
 
22          and many of them, as you pointed out, are 
 
23          running shelters that are not fit for humans.  
 
24                 So one of the things I would hope you 
 
 
                                                                  342
 
 1          would focus on is also looking at the number 
 
 2          of these private shelters that are contracted 
 
 3          by the city that are not abiding by the rules 
 
 4          that say sex offenders should not be living 
 
 5          in a place where you have children.  They do 
 
 6          it all the time, they've taken the position 
 
 7          that they can't prevent it because if a 
 
 8          family comes into a family shelter system and 
 
 9          they're part of a family unit, that they 
 
10          can't prevent even a Level 3 sex offender 
 
11          from coming in with his family.  
 
12                 We believe that that's wrong, and we 
 
13          would look -- hopefully your agency and your 
 
14          office will get a handle on that in a way DHS 
 
15          has refused to do up until now.
 
16                 COMPTROLLER STRINGER:  Well, look, we 
 
17          would love to be able to collaborate with you 
 
18          on a lot of these issues.  I think -- it's 
 
19          not new power/old power you have.  If there's 
 
20          a will to get into these shelters and find 
 
21          out what's going on, hold these operators 
 
22          accountable, look at these cluster sites -- 
 
23          look, one of the things that we exposed that 
 
24          I just find incredible -- with a LINC voucher 
 
 
                                                                  343
 
 1          you can go and get an apartment; right?  The 
 
 2          LINC voucher program is very significant.  
 
 3          There are landlords that won't rent to 
 
 4          homeless people.  
 
 5                 I mean, it's in violation -- it's a 
 
 6          violation of the law, and it shouldn't be 
 
 7          allowed, and we should crack down on that.  
 
 8          People who want to find permanent housing 
 
 9          ought to have the ability to do that, 
 
10          especially if they have a voucher and a means 
 
11          to pay for affordable housing, but the 
 
12          landlord says "No homeless need apply."  I 
 
13          mean, come on.  That is something that we 
 
14          have to be very, very tough on.
 
15                 At the same time, we have to be very 
 
16          tough to make sure that communities are 
 
17          consulted in the siting of facilities.  We 
 
18          have to involve communities.  We shouldn't be 
 
19          afraid of communities.  When I was a borough 
 
20          president I sited homeless facilities, 
 
21          working with different administrations.  When 
 
22          you talk to people with respect in a 
 
23          community, when you engage people, you'd be 
 
24          surprised how much people want to help.  When 
 
 
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 1          you tell people that there are 23,000 
 
 2          children in our homeless shelters today, in 
 
 3          the greatest city on earth in a time of some, 
 
 4          you know, prosperity in the city, people get 
 
 5          very emotional.  
 
 6                 We have the will of the people on our 
 
 7          side to clean up the shelters, and that means 
 
 8          we should be funding initiatives by the 
 
 9          Governor and the Mayor to create permanent 
 
10          housing, supportive housing.  We have got to 
 
11          create a revenue stream for NYCHA because, at 
 
12          the end of the day, we have got to make sure 
 
13          that housing is strong or we could tip that 
 
14          housing into disrepair, and we'll be doing 
 
15          those kinds of audits looking for children 
 
16          who are living in dangerous conditions.  And 
 
17          I don't want to see that happen at all.
 
18                 SENATOR SAVINO:  Thank you.  
 
19                 CHAIRWOMAN YOUNG:  Thank you, Senator. 
 
20                 CHAIRMAN FARRELL:  Thank you.  
 
21                 CHAIRWOMAN YOUNG:  Assemblyman?  
 
22                 CHAIRMAN FARRELL:  Assemblyman Oaks.
 
23                 ASSEMBLYMAN OAKS:  Hi, Comptroller.  
 
24                 I just -- I know Assemblyman McDonald 
 
 
                                                                  345
 
 1          and Senator Savino both talked some about the 
 
 2          retirement system, and I just wanted to add a 
 
 3          little bit into -- the $600 million, is that 
 
 4          all due increase -- is that all due to the 
 
 5          actuarial, or is that somewhat also -- I know 
 
 6          there was a little bit of maybe down 
 
 7          performance from the year before, so --
 
 8                 COMPTROLLER STRINGER:  All of that 
 
 9          $600 million is about assumptions.  There's 
 
10          no performance factored into that. 
 
11                 ASSEMBLYMAN OAKS:  So the total amount 
 
12          of increase, do you know, then, that $600 
 
13          million -- is there an increase year to year 
 
14          anticipated too, or don't we have those 
 
15          figures yet?
 
16                 COMPTROLLER STRINGER:  That 
 
17          performance piece was phased in in our 
 
18          November plan.  I don't have it with me, but 
 
19          I can get it for you.
 
20                 ASSEMBLYMAN OAKS:  Okay.  I was just 
 
21          trying to get an idea as -- I mean, over the 
 
22          last several years are we seeing year-to-year 
 
23          going up each year?  I know in some of the 
 
24          statewide ERS and some of the systems we've 
 
 
                                                                  346
 
 1          seen some decline in the percentages that are 
 
 2          paid due to performance and whatever.
 
 3                 COMPTROLLER STRINGER:  So in our 
 
 4          situation, I wouldn't say we've gone up.  We 
 
 5          have actually started to flatten out over the 
 
 6          last couple of years.
 
 7                 ASSEMBLYMAN OAKS:  Okay.  And I'd 
 
 8          appreciate seeing some of those figures.  
 
 9          Thank you very much.  
 
10                 COMPTROLLER STRINGER:  We'd be happy 
 
11          to provide them.
 
12                 CHAIRWOMAN YOUNG:  Thank you very 
 
13          much.  
 
14                 Senator Rivera.
 
15                 SENATOR RIVERA:  Thank you, Madam 
 
16          Chairwoman. 
 
17                 Comptroller, good afternoon.  I have a 
 
18          couple of questions for you regarding 
 
19          Medicaid.  
 
20                 Now, I obviously recognize that we all 
 
21          recognize that the budget that we have before 
 
22          us is the working draft, so obviously these 
 
23          budget hearings are precisely about looking 
 
24          for input to figure out the places where we 
 
 
                                                                  347
 
 1          could do some shifts and do things in a 
 
 2          smarter way.  But I wanted to ask you, at 
 
 3          least the numbers that we have right now -- 
 
 4          we covered it yesterday in the Medicaid 
 
 5          hearing, but I wanted to -- as the fiscal 
 
 6          watchdog of the City of New York, there are 
 
 7          many of us that are concerned with the way 
 
 8          that the formula on Medicaid has been, at 
 
 9          least currently in the budget proposal, has 
 
10          been reorganized, if you will, for the City 
 
11          of New York and the impact that it's going to 
 
12          have on it.  
 
13                 So if you could speak a little bit 
 
14          about the fiscal impact that if the budget 
 
15          proposal stays -- oh, here he is.  This guy, 
 
16          I love this guy when he appears like a ninja 
 
17          out of nowhere, this guy --
 
18                 COMPTROLLER STRINGER:  The --
 
19                 SENATOR RIVERA:  But if you could then 
 
20          speak about the fiscal impact this could have 
 
21          on the City of New York, certainly in this 
 
22          coming fiscal year and in years to come, and 
 
23          whether you think that that is a sustainable 
 
24          thing considering that some folks have said 
 
 
                                                                  348
 
 1          that the broad shoulders of the State of New 
 
 2          York -- 
 
 3                 COMPTROLLER STRINGER:  I appreciate 
 
 4          your leadership on this issue, and you've 
 
 5          been championing our cause here.  
 
 6                 The numbers that we can give you is 
 
 7          that, you know, the Head Start's 2017 -- $300 
 
 8          million goes up to $500 million in '18, then, 
 
 9          you know -- it just doesn't stop.  It gets to 
 
10          2020, and now we're -- as I mentioned in our 
 
11          testimony, it's a $735 million hit.  You 
 
12          know, that accumulation over the next few 
 
13          years is over $2 billion.  
 
14                 And so this is something that ought to 
 
15          be avoided at all costs.  I understand that 
 
16          the Governor and the Mayor talking about 
 
17          efficiencies -- I always believe that you can 
 
18          save money when you look at ways to, you 
 
19          know, come up with new technology, new ways, 
 
20          but at the end of the day, we cannot -- that 
 
21          Medicaid cost would hurt us very badly.
 
22                 SENATOR RIVERA:  So it is your sense 
 
23          that -- and certainly you are experienced, as 
 
24          well, through all the audits that you and 
 
 
                                                                  349
 
 1          your office do on how to spot 
 
 2          inefficiencies -- probably -- not only 
 
 3          certainly, in some cases -- inappropriate 
 
 4          uses of money, but certainly in certain 
 
 5          places where things could be done more 
 
 6          effectively, more efficiently -- it is your 
 
 7          sense, then, that this is not a cost that 
 
 8          could be just burdened {sic} by the city?
 
 9                 COMPTROLLER STRINGER:  I think our 
 
10          health system in New York City is in a 
 
11          precarious situation, and we obviously have a 
 
12          lot of people in the system who are not 
 
13          covered by insurance.  We have a lot of 
 
14          undocumented individuals who have the right 
 
15          to get healthcare, they should get 
 
16          healthcare.  
 
17                 This is not the time to take a hit, 
 
18          especially, as the mayor said today, that 
 
19          we're dealing with real budget issues related 
 
20          to the Health and Hospitals Corporation.  
 
21          We've put $300 million in, and I think that's 
 
22          really -- Tim, you would agree -- a stopgap 
 
23          for what has to happen there in terms of 
 
24          figuring out an economic system that works 
 
 
                                                                  350
 
 1          there.
 
 2                 SENATOR RIVERA:  I'd love to work with 
 
 3          your office to get some of the more detailed 
 
 4          breakdowns, as many of us are arguing that we 
 
 5          should certainly shift this conversation --
 
 6                 COMPTROLLER STRINGER:  You know, maybe 
 
 7          Tim -- we could dig a little deeper, we could 
 
 8          get some more numbers to you and talk about 
 
 9          the different areas.  I think we do have to 
 
10          spend some time thinking about the Health and 
 
11          Hospitals Corporation as well.
 
12                 SENATOR RIVERA:  I immensely 
 
13          appreciate it.  Thank you.  
 
14                 COMPTROLLER STRINGER:  Thank you, 
 
15          Senator.  
 
16                 SENATOR RIVERA:  I'm good.
 
17                 CHAIRWOMAN YOUNG:  Anybody else?
 
18                 CHAIRMAN FARRELL:  That's it.
 
19                 CHAIRWOMAN YOUNG:  Thank you.
 
20                 CHAIRMAN FARRELL:  Thank you.  
 
21                 COMPTROLLER STRINGER:  Thank you.  
 
22          Thank you very much.  Thank you, Chairman 
 
23          Farrell.  Thank you, Senator. 
 
24                 CHAIRMAN FARRELL:  Is your block 
 
 
                                                                  351
 
 1          snowed out?  Snowed in?  
 
 2                 COMPTROLLER STRINGER:  What?
 
 3                 CHAIRMAN FARRELL:  71st Street, is it 
 
 4          -- can I go there on Friday?
 
 5                 COMPTROLLER STRINGER:  Let me just -- 
 
 6          the mayor took care of my street.
 
 7                 (Laughter.)
 
 8                 CHAIRMAN FARRELL:  Oh, okay.
 
 9                 ASSEMBLYMAN McDONALD:  Be careful how 
 
10          you answer that one.
 
11                 (Laughter.)
 
12                 CHAIRMAN FARRELL:  Here we go.  City 
 
13          of Buffalo, Honorable Byron Brown, mayor.
 
14                 Three and a half hours late.  Not by 
 
15          your fault, but mine.
 
16                 MAYOR BROWN:  Good afternoon.    
 
17                 CHAIRMAN FARRELL:  Good afternoon.  
 
18                 CHAIRWOMAN YOUNG:  Good afternoon.  
 
19                 MAYOR BROWN:  Are you all okay?  
 
20          Anybody need a stretch break?  Water?
 
21                 CHAIRMAN FARRELL:  We'll be okay in 
 
22          three weeks.
 
23                 MAYOR BROWN:  Senate Finance Chair 
 
24          Catharine Young, Assembly Ways and Means 
 
 
                                                                  352
 
 1          Chair Herman D. Farrell, Jr., members of the 
 
 2          Legislature, thank you for the opportunity to 
 
 3          address you regarding New York State's 
 
 4          2016-2017 budget and its impact on New York 
 
 5          State's second-largest city, Buffalo, New 
 
 6          York.
 
 7                 Since becoming mayor, my focus has 
 
 8          been on improving the fiscal outlook of 
 
 9          Buffalo, creating a stronger business 
 
10          environment that has attracted investment and 
 
11          jobs and has established a more efficient 
 
12          government.
 
13                 While there are still challenges, our 
 
14          efforts have produced positive results.  For 
 
15          example, we created a rainy day fund; we 
 
16          implemented dozens of efficiency measures; 
 
17          we've delivered 10 on-time, balanced budgets.  
 
18          It's been four years since Buffalo's Control 
 
19          Board shifted to an advisory panel.  The City 
 
20          of Buffalo has improved its bond ratings with 
 
21          the Big 3 credit rating agencies, receiving 
 
22          an A+ from both Standard & Poor's and Fitch, 
 
23          and an A1 from Moody's.
 
24                 We are continuing to keep costs down.  
 
 
                                                                  353
 
 1          We are on track to generate about $3.5 
 
 2          million in annual revenue now that our new 
 
 3          traffic adjudication system is in place, 
 
 4          along with a new plea-by-mail system which 
 
 5          will also make the streets of our city safer.  
 
 6          I want to thank you, the members of the 
 
 7          Legislature, for your support in passing this 
 
 8          very important initiative for the City of 
 
 9          Buffalo.
 
10                 Collective bargaining agreements are 
 
11          also saving us money as a result of 
 
12          provisions like self-insured healthcare and A 
 
13          new prescription drug plan.
 
14                 We've negotiated residency 
 
15          requirements for firefighters and for police 
 
16          officers.  In the past 2 1/2 years, we've 
 
17          successfully negotiated contracts with our 
 
18          major unions, including police and fire.
 
19                 We've created the BPD21C Police 
 
20          Academy Pre-Employment Scholarship Program -- 
 
21          that's Buffalo Police Department 21st-Century 
 
22          Program -- which will get new police officers 
 
23          on the streets quicker, save the city money 
 
24          during training, and create a police force 
 
 
                                                                  354
 
 1          that better reflects the demographics of our 
 
 2          community.  The program is the first of its 
 
 3          kind in the nation.
 
 4                 Buffalo's new "Green Code" was 
 
 5          recently delivered to the Buffalo City  
 
 6          Council for approval.  The Green Code will 
 
 7          overhaul the city's zoning and land use 
 
 8          planning for the first time in 63 years.  It 
 
 9          is designed to simplify the complicated 
 
10          zoning process, making it easier for 
 
11          homeowners, developers, and small-business 
 
12          owners to invest in the city.  
 
13                 We have enhanced public services by 
 
14          installing GPS in many city vehicles, 
 
15          including snow plows, garbage trucks, and 
 
16          police cars.
 
17                 The entire Buffalo Fire and Buffalo 
 
18          Police vehicle fleet has been modernized, and 
 
19          we're in the process of installing LED 
 
20          streetlights along many thoroughfares,  
 
21          business districts, and city-owned parking 
 
22          ramps as part of an energy efficiency plan 
 
23          that will save us money.
 
24                 Today, the City of Buffalo is in its 
 
 
                                                                  355
 
 1          best financial condition in decades.  
 
 2          Governor Cuomo and the State Legislature have 
 
 3          been true partners in Buffalo's renaissance.  
 
 4          This year's Executive Budget proposal makes 
 
 5          important investments.  I am particularly 
 
 6          pleased by the proposed $2.1 billion school 
 
 7          aid increase that will allow the state to 
 
 8          eliminate the outstanding $434 million Gap 
 
 9          Elimination Adjustment over two years, and to 
 
10          provide an operating increase to every school 
 
11          district in the state, as well as the 
 
12          Governor's commitment to rebuilding and 
 
13          modernizing bridges, broadband networks, 
 
14          public buildings, and other critical 
 
15          infrastructure in upstate New York.  
 
16                 However, we in Buffalo, as I'm sure in 
 
17          the other upstate cities, still have 
 
18          concerns.  The City of Buffalo is looking to 
 
19          protect the progress we have made and add 
 
20          tools that will allow our city to reach its 
 
21          full potential.
 
22                 Since I took office in 2006, the City 
 
23          of Buffalo has considerably reduced property 
 
24          taxes.  Our steadfast commitment to making 
 
 
                                                                  356
 
 1          the difficult decisions has stimulated 
 
 2          growth, but we still have to close a 
 
 3          significant budget gap for the upcoming 
 
 4          fiscal year which threatens our city's 
 
 5          ability to continue its progress. 
 
 6                 The city's exploration of alternatives 
 
 7          to property tax increases is critical because 
 
 8          Buffalo seeks to continue the positive 
 
 9          momentum, excitement, and energy which has 
 
10          been amplified by the Governor's Buffalo 
 
11          Billion, Start-Up NY, and other successful 
 
12          development initiatives that the members of 
 
13          the State Legislature have supported. 
 
14                 The city needs some assistance to 
 
15          maintain our fiscally-responsible growth 
 
16          strategy.  We have four requests.  
 
17                 One, we are working to build a Public 
 
18          Works Campus.  Attracting businesses and 
 
19          residents requires public works that provide 
 
20          for safe and efficient travel, clean streets 
 
21          and reliable services, and an investment in 
 
22          maintaining our infrastructure.  Buffalo is 
 
23          now a thriving and vibrant place to live, 
 
24          work and invest. Public works services need 
 
 
                                                                  357
 
 1          to be consistent and available at all times 
 
 2          and in all weather conditions.
 
 3                 The City of Buffalo has undertaken a 
 
 4          study of six existing Department of Public 
 
 5          Works facilities with the intent of creating 
 
 6          a combined Public Works Campus. The campus 
 
 7          would house the city's municipal snow 
 
 8          plowing, garbage collection, paving and 
 
 9          construction vehicles, as well as 
 
10          administrative offices, animal shelter, and 
 
11          auto impound.  Consolidating these functions 
 
12          into one facility will reduce maintenance and 
 
13          staffing costs.  The buildings will be 
 
14          LEED-certified and incorporate solar panels 
 
15          and compressed natural gas filling stations.  
 
16          Construction of the Public Works Campus will 
 
17          enable the city to sell six buildings which 
 
18          are in prime locations for investment.  
 
19                 Phase one of the Public Works Campus 
 
20          is estimated to cost $30 million.  The 
 
21          proposed new Public Works Campus will assist 
 
22          Buffalo's growth by adding to our City's 
 
23          resiliency.  It will be a tool for improving 
 
24          the quality of life for our residents, and it 
 
 
                                                                  358
 
 1          will make the city more self-sufficient 
 
 2          during major storm events, therefore allowing 
 
 3          the state to direct more resources to 
 
 4          surrounding municipalities. 
 
 5                 Car Sharing Main Street Funding is a 
 
 6          project that we have been working on since 
 
 7          the beginning of my first term as mayor of 
 
 8          the City of Buffalo.  Another priority is 
 
 9          continuing our plan to return cars to 
 
10          Main Street.  Automobiles were removed from 
 
11          Main Street in downtown Buffalo over 33 years 
 
12          ago, when the light rail transit system was 
 
13          built.  Metro Rail has been a benefit to 
 
14          Buffalo, but closing our premier downtown 
 
15          street to automobiles resulted in building 
 
16          vacancies, blight, lost property and tax 
 
17          value, and essentially killed retail in 
 
18          downtown Buffalo.  
 
19                 The Cars Sharing Main Street Project 
 
20          has begun to reverse these effects, 
 
21          generating significant economic benefits and 
 
22          transforming the heart of downtown Buffalo 
 
23          back into a thriving and vibrant destination.  
 
24                 I am requested funding for the next 
 
 
                                                                  359
 
 1          phase of the Cars Sharing Main Street 
 
 2          Project, which would be two major blocks in 
 
 3          our downtown, at a cost of $30 million.  We 
 
 4          estimate the total cost of completing this 
 
 5          project to be $80 million.  This project is a 
 
 6          continuation of successful street projects 
 
 7          implemented on the 700, 600, and 500 blocks 
 
 8          of Main Street, totaling almost $60 million 
 
 9          in improvements, using a combination of 
 
10          funding from a 2011 federal TIGER grant, New 
 
11          York State, and the City of Buffalo.  In 
 
12          addition, $22.5 million was recently awarded 
 
13          through a U.S. Department of Transportation 
 
14          TIGER grant and funds from the Dormitory 
 
15          Authority for the lower Main Street/Canalside 
 
16          block of our Main Street.  
 
17                 Since 2012, significant private-sector 
 
18          investment of close to $500 million has been 
 
19          made between the 700 blocks of Main Street 
 
20          and the edge of the waterfront at what we 
 
21          call Canalside in Buffalo.  Main Street is 
 
22          also developing into a healthy urban 
 
23          neighborhood that is attracting thousands of 
 
24          people who want to live and work in downtown 
 
 
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 1          Buffalo.
 
 2                 We also have a need for Homeland 
 
 3          Security funding.  As you are well aware, 
 
 4          emergencies can happen anytime and anywhere.  
 
 5          Ensuring that our critical infrastructure and 
 
 6          first responders are ready to meet any 
 
 7          emergency or disaster is vital.
 
 8                 In the past, the bulk of Buffalo's 
 
 9          Homeland Security funding came from the 
 
10          federal government, through the Urban Area 
 
11          Security Initiative, or UASI, program.  In 
 
12          2011 Buffalo, Albany, Rochester and Syracuse 
 
13          were removed from the UASI Tier 2 program.  
 
14                 Even though funding ended, security 
 
15          risks and vulnerabilities remain.  Buffalo 
 
16          City Hall, opened in 1932, is the tallest 
 
17          city hall in the nation. About 1,700 people 
 
18          are employed in this building, and we host 
 
19          more than 125,000 visitors annually.  This 
 
20          iconic and highly visible government building 
 
21          was evaluated by the U.S. Department of 
 
22          Homeland Security's Protective Security 
 
23          Division and Field Operations Branch 
 
24          Assessment Group last year.  Estimates for 
 
 
                                                                  361
 
 1          implementing the recommendations will cost 
 
 2          the City of Buffalo approximately $1 million.
 
 3                 And finally, we are seeking to close 
 
 4          the utility services tax loophole.  For 
 
 5          decades, the cities of Buffalo, Rochester, 
 
 6          and Yonkers have had the ability to collect a 
 
 7          3 percent tax on the gross receipts of local 
 
 8          services provided by all utility companies 
 
 9          subject to the supervision of the New York 
 
10          State Public Service Commission, including 
 
11          phone companies.  
 
12                 Technological improvements have 
 
13          resulted in widespread reliance on wireless 
 
14          communication, and wireless telecommunication 
 
15          service providers have successfully argued 
 
16          that they do not fall within the definition 
 
17          of a utility as prescribed in New York State 
 
18          Tax Law.
 
19                 New York State subsequently adopted 
 
20          Tax Law S186-E to impose an excise tax on the 
 
21          sale of telecommunication services by all 
 
22          providers, thereby maintaining this 
 
23          significant revenue stream originally 
 
24          provided by the tax on utility services. 
 
 
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 1          However, the telecommunications tax was not 
 
 2          expanded to the local level, except in the 
 
 3          case of New York City and its surrounding 
 
 4          counties.
 
 5                 The City of Buffalo requests that New 
 
 6          York State authorize municipalities to tax 
 
 7          telecommunication service providers at the 
 
 8          same rates municipalities are already 
 
 9          permitted to tax the gross receipts of 
 
10          utility companies.
 
11                 With budget growth consistently under 
 
12          inflation, a significant reduction in our 
 
13          workforce since 2000, and compromises with 
 
14          our unions, the City of Buffalo has made 
 
15          tough choices and tightened its belt. It is 
 
16          critical for local aid, such as AIM funding, 
 
17          to be increased so that the city's fiscal 
 
18          recovery is assured into the future.
 
19                 Through hard work and careful 
 
20          planning, progress has been made in Buffalo.  
 
21          Together we have worked to build a foundation 
 
22          for future growth and investment.  We ask 
 
23          that the State Legislature continues to be a 
 
24          partner in Buffalo's transformation. 
 
 
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 1                 Thank you for your time, and I 
 
 2          certainly wish you success in the budget 
 
 3          deliberations ahead.  Thank you very much.
 
 4                 CHAIRMAN FARRELL:  Thank you, Mayor.  
 
 5                 First to speak, Mr. Magnarelli.  
 
 6                 ASSEMBLYMAN MAGNARELLI:  Thank you, 
 
 7          Mr. Chairman.  
 
 8                 And Mayor, thank you very much.  And 
 
 9          on behalf of myself and my colleagues here, I 
 
10          really want to say thank you for waiting all 
 
11          this time to give your testimony this morning 
 
12          -- this afternoon, now.
 
13                 CHAIRMAN FARRELL:  Getting close to 
 
14          evening.
 
15                 ASSEMBLYMAN MAGNARELLI:  Getting close 
 
16          to evening, that's right.  And hopefully we 
 
17          can do something about it so it doesn't 
 
18          happen next year.  We'll try, I promise you.
 
19                 MAYOR BROWN:  Thank you.
 
20                 ASSEMBLYMAN MAGNARELLI:  The Governor, 
 
21          in his budget, has basically left AIM, the 
 
22          Aid and Incentives for Municipalities, with 
 
23          no change.  It's been that way for a number 
 
24          of years.  At the same time, there's a number 
 
 
                                                                  364
 
 1          of other programs that he has put into place 
 
 2          that have been there for a number of years:  
 
 3          The Local Government Performance and 
 
 4          Efficiency Program, the Local Government 
 
 5          Efficiency Grants, Financial Restructuring 
 
 6          Board, Municipal Restructuring and 
 
 7          Transformational Grants, et cetera, 
 
 8          et cetera.
 
 9                 I'd just like to hear what you think 
 
10          about the AIM financing in the budget and 
 
11          what you think of these other projects.
 
12                 MAYOR BROWN:  Well, this is now my 
 
13          11th year appearing before you as mayor of 
 
14          the City of Buffalo.  I'm in my fourth 
 
15          three-year term.  And every year I have 
 
16          appeared, I have spoken about the importance 
 
17          of AIM funding.  AIM funding continues to be 
 
18          important to the City of Buffalo, and I'm 
 
19          sure you will hear the same from the other 
 
20          upstate mayors who are here to testify today.
 
21                 We have implemented a whole host of 
 
22          efficiency measures in the City of Buffalo 
 
23          which have certainly helped us with our 
 
24          bottom line.  We do plan on applying for the 
 
 
                                                                  365
 
 1          Governor's Program for Efficiencies.  We have 
 
 2          some additional ideas, but we believe that we 
 
 3          can implement efficiencies and we hope to be 
 
 4          able to tap into the resources that are 
 
 5          available for those efficiencies.
 
 6                 We also hope to partner with other 
 
 7          local governments.  One of the ways that we 
 
 8          think that we can partner with other local 
 
 9          governments, and potentially even the State 
 
10          Department of Transportation, is with this 
 
11          Public Works Campus that we seek to build.  
 
12          We believe that there are a number of 
 
13          efficiencies there and services that Buffalo 
 
14          provides now that it could potentially 
 
15          provide to other local municipalities in our 
 
16          region.
 
17                 So the programs that I've laid out can 
 
18          certainly be beneficial to us, that the 
 
19          Governor has placed in his budget, but I have 
 
20          to say that I think AIM is important to local 
 
21          governments, to city governments, and 
 
22          certainly is something that the City of 
 
23          Buffalo is asking for.
 
24                 ASSEMBLYMAN MAGNARELLI:  Just one 
 
 
                                                                  366
 
 1          other question.  Some of the things that you 
 
 2          outlined here that you need additional funds 
 
 3          for -- Public Works Campus, Main Street, $30 
 
 4          million, $80 million -- is any of that doable 
 
 5          with the Buffalo Billion?  
 
 6                 MAYOR BROWN:  I don't believe any of 
 
 7          those items are fully eligible for the 
 
 8          Buffalo Billion.  
 
 9                 We have used some Buffalo Billion 
 
10          funds for the Cars Sharing Main Street 
 
11          Project to reopen Main Street to vehicular 
 
12          traffic.  Those would be included in the 
 
13          almost $60 million that we have already spent 
 
14          on that project.
 
15                 I mentioned that there has been a 
 
16          significant payback in terms of the private 
 
17          sector investment that we're seeing on 
 
18          Main Street as a result of being able to 
 
19          spend those federal, state and local dollars.  
 
20          Some of these other projects that I've 
 
21          mentioned are not eligible for the Buffalo 
 
22          Billion.  
 
23                 ASSEMBLYMAN MAGNARELLI:  Are they 
 
24          eligible for the Regional Economic 
 
 
                                                                  367
 
 1          Development monies?
 
 2                 MAYOR BROWN:  Again, we have worked 
 
 3          with the Regional Economic Development 
 
 4          Council in the Western Region to apply for 
 
 5          funds for different things.  We certainly 
 
 6          will pursue funding through that source.  
 
 7                 It is a competitive process, as you 
 
 8          know.  And while we think competition is good 
 
 9          and competition is a healthy thing, we also 
 
10          believe that these initiatives will give us 
 
11          the ability to be more efficient, to save 
 
12          money, to bring in more private-sector 
 
13          revenue, and potentially to partner with 
 
14          other local governments in our region.
 
15                 ASSEMBLYMAN MAGNARELLI:  Thank you.
 
16                 MAYOR BROWN:  Thank you, sir.
 
17                 CHAIRMAN FARRELL:  Thank you.  
 
18                 Senator?
 
19                 CHAIRWOMAN YOUNG:  Thank you.  
 
20                 And welcome, Mayor Brown.  It's always 
 
21          great to see a former colleague.  
 
22                 And I first of all want to say how 
 
23          thrilled people are in Western New York on 
 
24          the renewal, the rebirth of Buffalo.  As you 
 
 
                                                                  368
 
 1          know, I get up there quite often.  There's a 
 
 2          real synergy and feeling in the air, and 
 
 3          things are really turning the corner.  
 
 4                 So thank you for your leadership in 
 
 5          all of those things.  And the state certainly 
 
 6          has been very happy to support all of your 
 
 7          efforts in a very big way, and we're just 
 
 8          hoping across all of Western New York that 
 
 9          that same prosperity can spread to some of 
 
10          the more rural counties such as the ones that 
 
11          I represent.
 
12                 I just wanted to quickly say thank you 
 
13          for your focus on getting rid of the Gap 
 
14          Elimination Adjustment that has been a fiscal 
 
15          gimmick that has been very destructive to our 
 
16          schools.  As you know, the Senate Republican 
 
17          Conference has led the charge to get rid of 
 
18          it once and for all.  So thank you for your 
 
19          focus on that, because we really are pushing 
 
20          to have that happen in this year's budget.  
 
21          It certainly would help the schools in our 
 
22          district, the schools all over New York 
 
23          State, schools in Buffalo -- so thank you for 
 
24          your focus on education.
 
 
                                                                  369
 
 1                 I'd like to turn it over to Senator 
 
 2          Kennedy.  I believe he has some questions.
 
 3                 SENATOR KENNEDY:  Yes.  Thank you very 
 
 4          much.  
 
 5                 Mayor, thanks for being here.  Thank 
 
 6          you for your patience today.  
 
 7                 MAYOR BROWN:  Thank you, Senator.  
 
 8                 SENATOR KENNEDY:  Most importantly, 
 
 9          thank you for your leadership.  And I'd like 
 
10          to echo our colleague Senator Young's 
 
11          statement.  You know, Buffalo is on the move 
 
12          and, you know, I believe that the partnership 
 
13          that your administration has created with the 
 
14          state has paid extraordinary dividends.  And 
 
15          whether we're talking about the Buffalo 
 
16          Billion program or we're talking about other 
 
17          key strategic investments, including those 
 
18          you bring to the table today, there's no 
 
19          question that the City of Buffalo is better 
 
20          off today than it's ever been, and continuing 
 
21          to build on that momentum.  I think that you 
 
22          bring some very strategic points to the table 
 
23          today.
 
24                 Aside from these, I'd like you to just 
 
 
                                                                  370
 
 1          touch on, a little bit, the impact that the 
 
 2          state investment and working with your 
 
 3          administration has made on key economic 
 
 4          drivers like the Buffalo Niagara Medical 
 
 5          Campus and SolarCity, and I know you had 
 
 6          already touched on Cars Sharing Main Street.  
 
 7          But there seems to be a real, strategic, 
 
 8          focused momentum on critical mass of 
 
 9          development in the core of the city.  Can you 
 
10          just touch on that and talk about your 
 
11          expanding efforts on --
 
12                 MAYOR BROWN:  I sure can, Senator 
 
13          Kennedy.  
 
14                 First of all, let me just say again to 
 
15          you and to the members of the Legislature 
 
16          that are here, thank you for your support of 
 
17          Buffalo.  The Western New York State 
 
18          legislative delegation, the Senate, the 
 
19          Assembly, and the Governor have all been very 
 
20          supportive of the needs of Buffalo.  And I 
 
21          think we're seeing the impact of your support 
 
22          with significant economic development in our 
 
23          city.  
 
24                 SolarCity is a Buffalo Billion 
 
 
                                                                  371
 
 1          project.  SolarCity will be the largest solar 
 
 2          panel manufacturing plant in the northeastern 
 
 3          hemisphere.  That's significant.  It's 
 
 4          expected to create 3,000 jobs for the 
 
 5          residents of Buffalo and Western New York.  
 
 6          It started out on a piece of land that was 
 
 7          purchased by the city in 2008, a remediated 
 
 8          brownfield.  When I initially purchased it as 
 
 9          mayor, people said I was crazy to do that.  
 
10          Years later the state, through the Governor's 
 
11          office, was able to negotiate to bring 
 
12          SolarCity to Buffalo, and that purchase of 
 
13          that remediated brownfield land will now pay 
 
14          dividends to our community.
 
15                 Again, the state and all of you have 
 
16          participated in significantly investing in 
 
17          the Buffalo Niagara Medical Campus, which is 
 
18          a center for healthcare in our city, in our 
 
19          region, a place where significant medical 
 
20          research is being done, where Roswell Park 
 
21          Cancer Institute is located, the first 
 
22          comprehensive cancer care facility in all of 
 
23          the United States of America.  
 
24                 And right now as we speak, there's 
 
 
                                                                  372
 
 1          over $800 million of investment in the 
 
 2          Buffalo Niagara Medical Campus, seeded by 
 
 3          significant public-sector investment, but 
 
 4          certainly incredibly significant 
 
 5          private-sector investment taking place.  That 
 
 6          facility over the next few years is expected 
 
 7          to employ over 21,000 people in Buffalo and 
 
 8          Western New York.  So it is not only a 
 
 9          significant economic engine for Buffalo, it 
 
10          is a significant economic engine for the 
 
11          entire region.  
 
12                 So I'm glad you asked that question, 
 
13          Senator, so that I could demonstrate how just 
 
14          two of the investments that all of you have 
 
15          supported are paying dividends in the City of 
 
16          Buffalo.
 
17                 SENATOR KENNEDY:  Thank you, Mayor.
 
18                 One of the key initiatives for this 
 
19          administration and my colleagues in the 
 
20          Democratic Conference has been enhancing 
 
21          opportunities for everyone, especially those 
 
22          folks that have been left behind in the past.  
 
23          And if you look at the numbers and the 
 
24          statistics, the facts continue to demonstrate 
 
 
                                                                  373
 
 1          that there's a real disparity in hiring for 
 
 2          women and minorities across the entire United 
 
 3          States, but in every single community.  And 
 
 4          the Governor's office has played a key role, 
 
 5          really, in bringing this to the forefront.  
 
 6          And I know, and again in partnership with 
 
 7          your administration, there has been some real 
 
 8          key initiatives.  
 
 9                 Can you speak to those and what 
 
10          initiatives you're really leading the effort 
 
11          on in this state when it comes to women and 
 
12          minority hiring and enhancing that?
 
13                 MAYOR BROWN:  One major initiative 
 
14          that we have worked on with you, Senator 
 
15          Kennedy, and certainly Assemblywoman Crystal 
 
16          Peoples-Stokes, and Governor Cuomo directly, 
 
17          and the Empire State Development Corporation, 
 
18          is again the purchase of industrial land for 
 
19          economic development on the east side of 
 
20          Buffalo, which is in the heart of the 
 
21          African-American community.  Roughly 90 
 
22          percent of the residents that live in that 
 
23          section of the City of Buffalo are 
 
24          African-American, and unfortunately that 
 
 
                                                                  374
 
 1          population has experienced a 
 
 2          disproportionately high unemployment rate in 
 
 3          our community.  So that -- those purchases 
 
 4          will address that.  
 
 5                 But another major investment that will 
 
 6          be made there is a comprehensive workforce 
 
 7          training center, which will be built at a 
 
 8          cost of about $40 million and that will 
 
 9          provide training for residents not only of 
 
10          the east side of Buffalo, the City of 
 
11          Buffalo, but for residents throughout the 
 
12          region to be able to take advantage of the 
 
13          employment opportunities that are coming 
 
14          online in our community, particularly in the 
 
15          high-technology areas.
 
16                 Since 2012, there is nearly $6 billion 
 
17          of economic development activity that is 
 
18          ongoing in the City of Buffalo.  And it's 
 
19          estimated that over the next two years, over 
 
20          12,000 new jobs will be created in the City 
 
21          of Buffalo proper which will benefit not just 
 
22          City of Buffalo residents but residents 
 
23          throughout the Western New York region.
 
24                 SENATOR KENNEDY:  Thank you, Mayor.
 
 
                                                                  375
 
 1                 And there's also, I will point out, 
 
 2          your Opportunity Pledge, that I have signed 
 
 3          and many have signed, and you continue to 
 
 4          promote that as well.  Did you want to speak 
 
 5          to that at all?
 
 6                 MAYOR BROWN:  Yes.  In February of 
 
 7          last year, we initiated what we called the 
 
 8          Opportunity Pledge to give individuals in our 
 
 9          community -- businesses, organizations -- the 
 
10          ability to demonstrate their commitment to 
 
11          the principles of diversity, equity, and 
 
12          inclusion.  
 
13                 We are seeing significant economic 
 
14          development in Buffalo, economists are saying 
 
15          maybe more development than the city has seen 
 
16          in over 45 years.  And as that prosperity is 
 
17          rising in our city, we want to make sure that 
 
18          it reaches all people in our community, all 
 
19          sections of our community, all segments of 
 
20          the population.  And to date, we've had over 
 
21          5500 individuals like yourself and 
 
22          Assemblywoman Crystal Peoples-Stokes sign 
 
23          that Opportunity Pledge.  We've had 225 
 
24          organizations and companies sign the pledge, 
 
 
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 1          which represent over 158,000 people in our 
 
 2          community.  
 
 3                 So that sends an important message to 
 
 4          those who are creating employment 
 
 5          opportunities that we want to respect the 
 
 6          diversity of the community, we want to be 
 
 7          inclusive, and we want to see equity in the 
 
 8          opportunity that is rising in our city.
 
 9                 SENATOR KENNEDY:  Thank you, Mayor.  
 
10                 And one last thing I want to touch on 
 
11          here -- because look, we're talking about the 
 
12          economic renaissance that's taking place, a 
 
13          real true transformation in the City of 
 
14          Buffalo, making sure everyone has these 
 
15          opportunities and gets a chance to get 
 
16          employment, has an opportunity to stay in 
 
17          Buffalo, live, raise their family, and work.  
 
18          And part of that is also the focusing on a 
 
19          lot of the quality of life issues.  
 
20                 And I know that with the state's 
 
21          support -- and if you can touch on how the 
 
22          state has played a role in some of the 
 
23          PeaceMaker work, in the SNUG work -- this is 
 
24          something that has been on the front lines of 
 
 
                                                                  377
 
 1          our conference's agenda that has a real focus 
 
 2          on fighting crime in each and every district 
 
 3          across the state, but particularly focused on 
 
 4          the urban centers that have fallen on harder 
 
 5          times in years past, in generations past.  
 
 6          We're trying to get out of that.  
 
 7                 To me, and I know to your 
 
 8          administration and to my conference, it's 
 
 9          important that we make that strategic 
 
10          investment on public safety.  Can you speak 
 
11          to that, please?
 
12                 MAYOR BROWN:  Well, certainly quality 
 
13          of life is important in communities all 
 
14          across the State of New York, and I know that 
 
15          the members of the Legislature have been very 
 
16          active in providing funding to support 
 
17          quality-of-life enhancements in communities 
 
18          all across the state.  
 
19                 In Buffalo we have focused on being 
 
20          tough on crime as well as being smart on 
 
21          crime.  We've added surveillance cameras -- 
 
22          we now have over 225 surveillance cameras 
 
23          throughout the city -- and license plate 
 
24          readers -- we have over 200 license plate 
 
 
                                                                  378
 
 1          readers throughout the city.  We've 
 
 2          modernized our police fleet; we've added 
 
 3          technologies to our police vehicles that our 
 
 4          police officers carry.  
 
 5                 But in being smarter on crime, we've 
 
 6          worked with programs like SNUG, that has been 
 
 7          funded through the State Legislature, to work 
 
 8          with you to take guns out of the hands of 
 
 9          people in communities, to educate them about 
 
10          violence prevention.  We funded an 
 
11          organization called PeaceMakers that works 
 
12          with at-risk youth and young adults that 
 
13          actually does street patrol and has helped us 
 
14          to reduce crime in the City of Buffalo.
 
15                 During my tenure as mayor, we have 
 
16          been able to reduce crime overall by 
 
17          35 percent, violent crime by 27 percent.  
 
18          We've been able to do that in partnership, 
 
19          and we've been able to effectively utilize 
 
20          the resources that we have received from you, 
 
21          our partners in state government, to be able 
 
22          to do that.
 
23                 SENATOR KENNEDY:  Thank you, Mayor, 
 
24          and thanks for your testimony.  And keep up 
 
 
                                                                  379
 
 1          the great work.  
 
 2                 MAYOR BROWN:  Thank you, Senator.
 
 3                 CHAIRMAN FARRELL:  Thank you very 
 
 4          much.
 
 5                 Crystal Peoples-Stokes.
 
 6                 ASSEMBLYWOMAN PEOPLES-STOKES:  Thank 
 
 7          you, Mr. Chairman, for the opportunity to 
 
 8          bring greetings to my mayor and certainly 
 
 9          welcome him here in Albany.  
 
10                 I suspect you spent a little more time 
 
11          than you expected today.  But you're always 
 
12          welcome.  You've been around here a little 
 
13          while, so you know how it goes.
 
14                 Just to ask for some specificity as it 
 
15          relates to your budget presentation.  On the 
 
16          combined Public Works Campus, how do you 
 
17          anticipate that looking?  And what sort of 
 
18          outreach have you had to other governments 
 
19          via state and/or local governments for their 
 
20          participation in that? 
 
21                 MAYOR BROWN:  So we anticipate a 
 
22          single, unified facility that would house -- 
 
23          that would locate, collocate facilities for 
 
24          public works that are now spread across six 
 
 
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 1          facilities in the City of Buffalo.  Some of 
 
 2          the areas where these facilities are located 
 
 3          are ripe for investment.  In a number of 
 
 4          them, we've already had private-sector 
 
 5          entities express an interest in being able to 
 
 6          purchase or bid to purchase the facilities, 
 
 7          so we think there could be significant 
 
 8          revenue generation there.
 
 9                 But we also believe that in 
 
10          collocating these operations, it would make 
 
11          our various public works activities much more 
 
12          efficient.  It would create cost savings.  
 
13                 We have begun to have dialog with some 
 
14          local governments -- for example, one of the 
 
15          things that Buffalo has that other local 
 
16          governments don't have with the same level of 
 
17          technology, is that they utilize 
 
18          private-sector entities for sign making.  
 
19          And, you know, all governments have to make 
 
20          street signs and other signs.  We found that 
 
21          by us doing it, we could provide a 
 
22          significant savings to other local 
 
23          governments and actually beat private-sector 
 
24          entities that are providing those services 
 
 
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 1          now.  So that's one service that we think we 
 
 2          could help provide to other governments in 
 
 3          our region.
 
 4                 We've also begun to have some very 
 
 5          preliminary conversations with the New York 
 
 6          State Department of Transportation, and we 
 
 7          believe with this facility there would be a 
 
 8          number of services that we could collaborate 
 
 9          on with local governments and potentially 
 
10          even state government.  
 
11                 ASSEMBLYWOMAN PEOPLES-STOKES:  So any 
 
12          idea or estimate on the amount of savings 
 
13          that could happen for either and/or both 
 
14          governments?
 
15                 MAYOR BROWN:  We have worked through 
 
16          some estimates.  We believe that savings 
 
17          could be significant, potentially into the 
 
18          millions.  And even more significant, we 
 
19          believe that the ability to sell these six 
 
20          properties that we have certainly would run 
 
21          into the millions of dollars.  
 
22                 ASSEMBLYWOMAN PEOPLES-STOKES:  Well, 
 
23          I'm sure you know there's often talk about 
 
24          consolidating government, and sometimes the 
 
 
                                                                  382
 
 1          way to even think more broadly about that is 
 
 2          to consolidate services in the delivery of 
 
 3          services.  So I really actually like that 
 
 4          idea, and I hope that we can be helpful in 
 
 5          making it a reality for the City of Buffalo.
 
 6                 And I already know, you know, that I 
 
 7          really like the idea of the barrenness near 
 
 8          the historic Mission Street Quarter to be 
 
 9          used for some other purpose than garbage.  
 
10          It's a huge attraction, a huge tourist 
 
11          destination, and the removal of that barren 
 
12          would do leaps and bounds for that area.
 
13                 MAYOR BROWN:  Well, you have been a 
 
14          champion of the African-American Cultural 
 
15          Corridor in the City of Buffalo.  You've 
 
16          provided significant resources and leadership 
 
17          on that important initiative that is designed 
 
18          not only to protect African-American history 
 
19          in our city and region, but also to attract 
 
20          more tourists to our city.  
 
21                 We have a public works facility right 
 
22          in the heart of that cultural area where we 
 
23          have plow trucks and garbage trucks and other 
 
24          heavy equipment, as you well know, in and out 
 
 
                                                                  383
 
 1          of there on a daily basis.  We would like to 
 
 2          remove that, and this Public Works Campus 
 
 3          would give us the ability to remove that 
 
 4          facility from the African-American Cultural 
 
 5          Corridor in the City of Buffalo.
 
 6                 ASSEMBLYWOMAN PEOPLES-STOKES:  Okay.  
 
 7          So on the Homeland Security assessment that 
 
 8          you had done, was that just on City Hall?  
 
 9                 MAYOR BROWN:  We're talking 
 
10          specifically in terms of the needs of 
 
11          City Hall.
 
12                 ASSEMBLYWOMAN PEOPLES-STOKES:  Well, 
 
13          you know what, I'm really pleased to hear 
 
14          that as well, Mr. Mayor.  It must be the only 
 
15          city hall left in America where you can just 
 
16          walk in the door.  There's no security, 
 
17          there's no one checking to see what you're 
 
18          bringing in there.  And I can't even imagine 
 
19          being in that condition in 2016.  It's not a 
 
20          good place to put any of our public servants, 
 
21          then.  So I'm grateful that you're beginning 
 
22          to take a look at that.
 
23                 On the issue of utility services, the 
 
24          cellphone wireless services, have the 
 
 
                                                                  384
 
 1          wireless companies been collecting these 
 
 2          resources and not sharing them with Buffalo, 
 
 3          Rochester, Syracuse, et cetera?  Or have they 
 
 4          not been collecting them in those areas?
 
 5                 MAYOR BROWN:  Yeah.  The cities that I 
 
 6          mentioned are not able to assess that 
 
 7          3 percent charge on the cellular companies.
 
 8                 ASSEMBLYWOMAN PEOPLES-STOKES:  Right, 
 
 9          but have the companies been collecting them 
 
10          from their constituents?
 
11                 MAYOR BROWN:  We believe that that fee 
 
12          has been collected.  
 
13                 ASSEMBLYWOMAN PEOPLES-STOKES:  Okay.  
 
14          Well, then I believe they should reimburse 
 
15          the municipalities like they do in New York 
 
16          City.  So I would be happy to work with my 
 
17          colleagues and others to try to make sure 
 
18          that happens for not just Buffalo, but for 
 
19          Rochester, Syracuse, and all other cities 
 
20          that you mentioned as well.
 
21                 MAYOR BROWN:  And we can provide you 
 
22          with more specific data on that and how that 
 
23          works.
 
24                 ASSEMBLYWOMAN PEOPLES-STOKES:  Thank 
 
 
                                                                  385
 
 1          you.  Thank you.  And one last thing, 
 
 2          Mr. Mayor -- actually, two.  No, one.  
 
 3                 Does the City of Buffalo anticipate a 
 
 4          budget deficit in your upcoming budget?  
 
 5                 MAYOR BROWN:  We are working now to 
 
 6          close an anticipated $30 million budget 
 
 7          deficit.  Again, some of these efficiency 
 
 8          measures that we're putting in place will 
 
 9          help us to do that, but right now at the 
 
10          outset of the process of closing next year's 
 
11          deficit we're looking at about $30 million.  
 
12                 ASSEMBLYWOMAN PEOPLES-STOKES:  Okay.  
 
13          Well, I thank you very much for your 
 
14          comments, and be safe traveling home.
 
15                 MAYOR BROWN:  Thank you.  Thank you, 
 
16          Assemblymember.
 
17                 CHAIRMAN FARRELL:  Thank you.  
 
18                 Senator?  Assemblyman?  Anyone?  Okay.
 
19                 SENATOR KRUEGER:  Oh, sorry.  
 
20          Senator -- excuse me.  Senator Marchione.
 
21                 SENATOR MARCHIONE:  Thank you.
 
22                 Has Buffalo been able to stay under 
 
23          the tax cap?
 
24                 MAYOR BROWN:  I'm sorry, Senator, I 
 
 
                                                                  386
 
 1          didn't --
 
 2                 SENATOR MARCHIONE:  Has Buffalo been 
 
 3          able to stay under the tax cap, the 
 
 4          2 percent?
 
 5                 MAYOR BROWN:  We have to date stayed 
 
 6          under the tax cap, yes.
 
 7                 SENATOR MARCHIONE:  Congratulations.  
 
 8          It's not easy to do. 
 
 9                 MAYOR BROWN:  It's challenging.  What 
 
10          we find in being able to stay under the tax 
 
11          cap is, as we're seeing new development, new 
 
12          investment in our community, it's been very 
 
13          difficult to realize the benefit of that new 
 
14          investment because of the way the cap is 
 
15          structured.  We have shared some ideas and 
 
16          some concerns with the Governor's office 
 
17          about that.  
 
18                 They have been very receptive to some 
 
19          of the ideas that we have presented, but in a 
 
20          community like ours -- and I'm sure you will 
 
21          hear from my colleagues as well -- where we 
 
22          are working to stimulate new growth, new 
 
23          development, it is hard because our principal 
 
24          source of revenue is the property tax.  It's 
 
 
                                                                  387
 
 1          been hard to generate revenue from the new 
 
 2          investments that we're seeing in our city 
 
 3          with the way the cap is structured.  
 
 4                 SENATOR MARCHIONE:  Thank you.
 
 5                 MAYOR BROWN:  Thank you, Senator.
 
 6                 CHAIRMAN FARRELL:  Thank you.  
 
 7                 Assemblyman McDonald, to close.  
 
 8                 ASSEMBLYMAN McDONALD:  Thank you, 
 
 9          Chairman.  
 
10                 Good afternoon, Mayor.  Ten years into 
 
11          it, you're holding up pretty well.
 
12                 MAYOR BROWN:  Thank you, Assemblyman.
 
13                 ASSEMBLYMAN McDONALD:  That's good.  I 
 
14          did 13 years, he did 12, and look what 
 
15          happens to you after you've been there a 
 
16          while.  So keep that in mind.
 
17                 A couple of things.  On your DPW 
 
18          campus, which I think is a great idea -- and 
 
19          it sounds like you're trying to move along 
 
20          with the agenda of shared services, and it 
 
21          sounds fantastic.  And I think you put a 
 
22          one-time price tag of $30 million on Phase 1.  
 
23          That indicates to me that there might be a 
 
24          Phase 2 or a Phase 3.  I'm just curious what 
 
 
                                                                  388
 
 1          those costs would be.  
 
 2                 MAYOR BROWN:  The total costs that we 
 
 3          anticipate for Phase 2 is another 
 
 4          $30 million.  The whole structure would be 
 
 5          about $60 million.  And we're hoping that 
 
 6          through the sale of those six parcels of land 
 
 7          and facilities that we would consolidate into 
 
 8          one, that we would be able to generate 
 
 9          substantial revenues towards building out 
 
10          Phase 2.
 
11                 ASSEMBLYMAN McDONALD:  Great.  That's 
 
12          very smart.
 
13                 And the other question in regards 
 
14          utilities services' taxable -- with the gross 
 
15          receipts tax that you talked about, do you 
 
16          have any idea what the value would be of 
 
17          that?  Do you have any idea -- I know this is 
 
18          probably taking a shot away from -- 
 
19                 MAYOR BROWN:  For the City of Buffalo, 
 
20          we have lost about $2 million as we have seen 
 
21          the revenue from landlines decrease.  So with 
 
22          more and more people using cellular phones 
 
23          and not having landlines in their home, we 
 
24          have lost about $2 million of revenue in the 
 
 
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 1          City of Buffalo.  
 
 2                 ASSEMBLYMAN McDONALD:  Over what 
 
 3          period of time?
 
 4                 FINANCE CMR. ESTRICH:  Per year.  Per 
 
 5          year.
 
 6                 MAYOR BROWN: Per year over --
 
 7                 ASSEMBLYMAN McDONALD:  Per year?
 
 8                 MAYOR BROWN:  How long?
 
 9                 FINANCE CMR. ESTRICH:  Probably about 
 
10          five years.  Every year it's gone down a 
 
11          little bit more.
 
12                 MAYOR BROWN:  Yeah.  Over a five-year 
 
13          period.  
 
14                 ASSEMBLYMAN McDONALD:  And that also 
 
15          speaks to another issue that I don't think 
 
16          directly affects Buffalo, but maybe it does.  
 
17          When the 911 surcharge, which has always been 
 
18          so much for land, a little bit less for the 
 
19          cellphones -- and we've seen this variation 
 
20          change.  And the reality is most of the 
 
21          challenges for investment for the 911 centers 
 
22          are to deal with the next generation, with 
 
23          the texting and the whole nine yards.  So 
 
24          it's all money, at the end of the day, and 
 
 
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 1          obviously we're all competing for it.  But 
 
 2          it's important that we try to make sure that 
 
 3          the residents have every opportunity to help 
 
 4          support the services they provide.  
 
 5                 Thank you.
 
 6                 MAYOR BROWN:  Thank you, sir.
 
 7                 CHAIRMAN FARRELL:  Thank you.  
 
 8                 Any further questions?  
 
 9                 CHAIRWOMAN YOUNG:  Yes, I do have one 
 
10          final question, Mayor.
 
11                 I know you know the Southern Tier very 
 
12          well, and you know Cattaraugus County.  And 
 
13          located in Cattaraugus County is the former 
 
14          J.N. Adam Developmental Center site, 35 miles 
 
15          south of Buffalo.  And I believe you also are 
 
16          aware of the 20-year-plus problem that we've 
 
17          had with the site.  The history on it is that 
 
18          it originally was started as a tuberculosis 
 
19          hospital in the early 1900s, was actually 
 
20          donated to the City of Buffalo, and the city 
 
21          has basically kind of given up ownership but 
 
22          has reversionary rights to the property.
 
23                 And so this is an ongoing issue.  The 
 
24          state has control of it, and it's been a real 
 
 
                                                                  391
 
 1          problem because of vandalism and the lack of 
 
 2          economic development on the site, the lack of 
 
 3          tax base on the site.  The Town of Perrysburg 
 
 4          has been waiting and waiting and waiting for 
 
 5          a resolution on this, and we've been trying 
 
 6          to help with passing legislation for a study 
 
 7          on what to do with the property.  But as you 
 
 8          know, the City of Buffalo still maintains the 
 
 9          right to sign off on anything done with the 
 
10          land.  
 
11                 And I'm just asking for your help to 
 
12          get a resolution to this.  We've been working 
 
13          with the Governor's office on this, been 
 
14          working with the State Assembly on this, but 
 
15          also I need your help, you as the leader of 
 
16          the City of Buffalo to come to a final 
 
17          positive outcome on it.  And I didn't know if 
 
18          you have any comments on the situation.
 
19                 MAYOR BROWN:  Yes, Senator.  We're 
 
20          aware of the challenge that that facility 
 
21          presents in Cattaraugus County and are 
 
22          certainly deeply concerned about that.  
 
23                 You know, as a municipality that has 
 
24          had vacant, blighted, decaying structures, we 
 
 
                                                                  392
 
 1          certainly don't want to see that for any 
 
 2          other community in the state.  We have been 
 
 3          successful in removing a lot of such 
 
 4          structures in the City of Buffalo.  During my 
 
 5          tenure, we have demolished over 6,000 vacant, 
 
 6          unsalvageable structures.  
 
 7                 And I don't know what necessarily the 
 
 8          plan would be for the facility, but as you 
 
 9          indicated, the city does -- while it has been 
 
10          transferred to the control of the state some 
 
11          time ago, the city does maintain reversionary 
 
12          rights to the site.  We would certainly give 
 
13          up those rights; we have had conversations 
 
14          with the state about it.  I can report to you 
 
15          that as recently as about a week ago, I 
 
16          think, my law department was in discussion 
 
17          with the state agency that was talking about 
 
18          potentially securing or getting us to sign 
 
19          off on that reversionary right at some cost, 
 
20          which we certainly would be willing to do.
 
21                 CHAIRWOMAN YOUNG:  That would be 
 
22          great, to finally have that resolved.  So I 
 
23          would ask that we continue to work together 
 
24          on this.  If you could keep me informed about 
 
 
                                                                  393
 
 1          it, because it does have such a strong impact 
 
 2          in my community and the people who live 
 
 3          there.  And it's been such a terrible problem 
 
 4          for so many years, and it's good to hear that 
 
 5          there is some progress regarding the issue.  
 
 6          So I look forward to working with you.
 
 7                 MAYOR BROWN:  We certainly will keep 
 
 8          you informed of what we're hearing and what 
 
 9          we're doing.  With respect to that, Senator, 
 
10          I know that it's a real frustration to the 
 
11          people that live in that community.  We 
 
12          certainly don't want to see that continue, 
 
13          and anything that we can do in Buffalo to try 
 
14          to help address that and expedite that, we 
 
15          certainly will do.
 
16                 CHAIRWOMAN YOUNG:  Thank you, Mayor.
 
17                 MAYOR BROWN:  Thank you.  
 
18                 And folks, I apologize, I was 
 
19          negligent.  I did not introduce my 
 
20          commissioner of finance, Donna Estrich.  And 
 
21          I just want to thank her for the work that 
 
22          she does with us every day to help manage the 
 
23          finances of the City of Buffalo.
 
24                 Thank you all very much.
 
 
                                                                  394
 
 1                 CHAIRMAN FARRELL:  Thank you very 
 
 2          much.
 
 3                 CHAIRWOMAN YOUNG:  Thank you.
 
 4                 CHAIRMAN FARRELL:  The Honorable Kathy 
 
 5          M. Sheehan, mayor, City of Albany.
 
 6                 MAYOR SHEEHAN:  Good afternoon.
 
 7                 CHAIRMAN FARRELL:  Good afternoon.  
 
 8                 You heard about being late.  We've set 
 
 9          the record there.
 
10                 MAYOR SHEEHAN:  That's okay.  I just 
 
11          have to come across the street.
 
12                 CHAIRMAN FARRELL:  You're the lucky 
 
13          one.
 
14                 MAYOR SHEEHAN:  I feel for my fellow 
 
15          mayors who came from further away.
 
16                 So if you would like me to begin, I 
 
17          want to thank you for inviting me here today, 
 
18          Chairwoman Young and Chairman Farrell, 
 
19          members of the Assembly and the Senate.  I 
 
20          want to thank Senator Breslin and 
 
21          Assemblymembers McDonald and Fahy, who I have 
 
22          worked with over the last two years on many 
 
23          of the challenges and great opportunities 
 
24          that we have here in the Capital Region.
 
 
                                                                  395
 
 1                 And, you know, we are a regional 
 
 2          center, a center for government and for 
 
 3          healthcare and for education, but we are also 
 
 4          a city with diverse neighborhoods and with 
 
 5          many of the challenges and opportunities that 
 
 6          all of our cities face and that we share in 
 
 7          common and that we have had the opportunity 
 
 8          to discuss with mayors and one another.  
 
 9          Because with what you've heard today from 
 
10          Mayor Brown and from the other mayors, I 
 
11          think we are doing extraordinary things 
 
12          within our cities to make sure that we are 
 
13          being fiscally responsible and serving the 
 
14          needs of our residents.
 
15                 And the City of Albany has some 
 
16          wonderful treasures.  It is home to historic 
 
17          homes, to museums, we have a rich Dutch 
 
18          heritage, we have wonderful traditions here 
 
19          in the City of Albany.  And even though, as 
 
20          the Governor said in his State of the State, 
 
21          upstate New York must remain an economic 
 
22          priority, and he talked about the fact that 
 
23          upstate has been shortchanged for many years, 
 
24          I think that what we have been able to do in 
 
 
                                                                  396
 
 1          the City of Albany is quite remarkable with 
 
 2          the resources that have been made available 
 
 3          to us.
 
 4                 And we are very grateful that the 
 
 5          Governor has in this budget created a fund 
 
 6          that is focused on reducing poverty, and 
 
 7          Albany is fortunate as being identified as a 
 
 8          city to receive those funds.  But it's also a 
 
 9          list that you don't necessarily want to be 
 
10          on, to be identified as one of the poorest 
 
11          cities in upstate New York.
 
12                 Under that program the city will 
 
13          receive funding so we can look at 
 
14          anti-poverty efforts that are working in our 
 
15          city and other cities and make sure that we 
 
16          are focused in Albany on workforce 
 
17          development, which is one of our biggest 
 
18          challenges, or people being able to access 
 
19          jobs that are available here in the region.
 
20                 There are other proposals in the 
 
21          budget with respect to upstate:  Water 
 
22          infrastructure funds, funding for the Thruway 
 
23          Authority, roads and bridges and broadband.  
 
24                 I'm pleased to say that we started 
 
 
                                                                  397
 
 1          last year looking at a broadband initiative 
 
 2          in the City of Albany because we have heard 
 
 3          from businesses that have been looking to 
 
 4          locate here, and from developers who are 
 
 5          developing downtown residential, that this is 
 
 6          a real challenge.  And so we need to make 
 
 7          sure that we have access, that we have high 
 
 8          speed, and that we are bridging the digital 
 
 9          divide.  Because it's important, particularly 
 
10          when you look at the need for broadband and 
 
11          the reliance we have on the internet, that 
 
12          this is right along with any other utility -- 
 
13          it's something that needs to be affordable 
 
14          and accessible to all of our residents.  
 
15                 So we are well on the path to coming 
 
16          up with a really great plan for how we can 
 
17          spend these dollars wisely so that we can 
 
18          provide high-speed internet in the City of 
 
19          Albany.
 
20                 But we also have significant 
 
21          challenges.  In September we were identified 
 
22          as a city in significant fiscal distress.  We 
 
23          are the only city in upstate New York that is 
 
24          on that list, and we are one of only two 
 
 
                                                                  398
 
 1          cities in the state that meet the criteria 
 
 2          for significant fiscal distress.
 
 3                 We opened our books when I became 
 
 4          mayor in January of 2014.  One of the first 
 
 5          things that we did was to submit our books to 
 
 6          the Financial Restructuring Board.  We opened 
 
 7          ourselves up to that process.  We went 
 
 8          through and reviewed with representatives on 
 
 9          the restructuring board the challenges that 
 
10          we were facing, and as a result of that for 
 
11          2015 we were able to receive some gap funding 
 
12          to close our budget gap.  We started planning 
 
13          for our 2016 budget year -- we're on a 
 
14          calendar budget -- we started planning for 
 
15          that almost immediately, and again worked 
 
16          very closely with the state and the State 
 
17          Budget Office to review the challenges that 
 
18          we were facing, knowing that we were entering 
 
19          that with a gap because of the one-time 
 
20          funding that closed the budget gap that we 
 
21          had in 2015.
 
22                 Our 2015 and 2016 budgets capped 
 
23          costs, we capped growth at under the 
 
24          2 percent target that the Governor has set.  
 
 
                                                                  399
 
 1          In 2015, we stayed within the property tax 
 
 2          cap, and our 2016 budget proposes no tax 
 
 3          increase.  And that is because our residents 
 
 4          pay by far the highest tax rates in the 
 
 5          region, and our tax rates are uncompetitive.  
 
 6          We cannot tax our way to a balanced budget.  
 
 7          It would cause, I think, further challenges 
 
 8          for economic development and growth in our 
 
 9          city.  
 
10                 So we have been able -- even though we 
 
11          have had a deficit budget in Albany since at 
 
12          least 2007, we have been able, through a 
 
13          patchwork of spinups and other one-time 
 
14          funding streams, to maintain solvency.  But 
 
15          we have reached the end of that solvency.  
 
16          We, in our 2016 budget that was passed by our 
 
17          Common Council, are relying on an additional 
 
18          $12.5 million that we would need to obtain 
 
19          from the state in order to close that budget 
 
20          gap.  
 
21                 The state, as many of you know, owns 
 
22          more than 30 percent of the property in the 
 
23          City of Albany, and more than 60 percent of 
 
24          the property in the City of Albany is not 
 
 
                                                                  400
 
 1          taxable.  So the result of that is that 
 
 2          people who own -- homeowners who own 
 
 3          25 percent of the value of the property in 
 
 4          the City of Albany pay 60 percent of the tax 
 
 5          levy.  And commercial business owners, who 
 
 6          own just 13 percent of the value of taxable 
 
 7          property in the City of Albany, pay 
 
 8          40 percent of the property tax levy.  
 
 9                 And I included in your materials a map 
 
10          that shows just how much nontaxable property 
 
11          we have in the City of Albany.  And when you 
 
12          look at this map -- and this darker gray is 
 
13          also property that is exempt from taxation -- 
 
14          you can see very visually the challenge that 
 
15          we face in raising revenue.  
 
16                 Our property tax levy is the largest 
 
17          source of revenue for the City of Albany.  
 
18          Sales tax is shared countywide, so the sales 
 
19          tax that is raised in the City of Albany is 
 
20          shared countywide in Albany County.  So the 
 
21          only source of revenue, tax revenue, that we 
 
22          control and we directly receive is our 
 
23          property tax levy.
 
24                 And as I said, Albany is not 
 
 
                                                                  401
 
 1          competitive with our immediately adjacent 
 
 2          suburbs.  So when you look at the actual tax 
 
 3          bill, a resident in the City of Albany, 
 
 4          factoring in school taxes, is paying about 20 
 
 5          to 30 percent higher than the surrounding 
 
 6          suburbs.  And a commercial business in the 
 
 7          City of Albany is paying $49 per thousand, 
 
 8          and we are at full assessed value in the City 
 
 9          of Albany.  
 
10                 So when we look at that challenge, 
 
11          again, to increase taxes in order to close 
 
12          our budget gap, I think we would continue to 
 
13          have a challenge in attracting residents to 
 
14          our city and businesses to the City of 
 
15          Albany.  
 
16                 I know that many people, when they 
 
17          come to this region -- and one of the things 
 
18          that I'm really focused on is to think of 
 
19          ourselves as a region and act as a region -- 
 
20          but many people compliment me on how 
 
21          wonderful Colonie Center is or Crossgates 
 
22          Mall or what a great stay they had at a hotel 
 
23          out on Wolf Road.  And I thank them and then 
 
24          I tell them that I'll pass those compliments 
 
 
                                                                  402
 
 1          along to Paula Mahan, who's the town 
 
 2          supervisor in Colonie, or the town supervisor 
 
 3          in Guilderland, because none of those 
 
 4          places are located within the City of Albany.  
 
 5          We are landlocked, and we have significant 
 
 6          challenges in growing our tax base.
 
 7                 But that said, we are growing our tax 
 
 8          base, and we've seen a tremendous amount of 
 
 9          investment in our downtown.  By the end of 
 
10          2016 we will have 450 new units of housing, 
 
11          market-rate housing in our newest 
 
12          neighborhood downtown.  We are working 
 
13          rapidly to redevelop our warehouse district, 
 
14          and we recently passed a zoning overlay so 
 
15          that we can move quickly and entice 
 
16          businesses to come into and invest in our 
 
17          warehouse district.  
 
18                 And we also have been talking to the 
 
19          state -- the state is still considering 
 
20          potentially allowing some private development 
 
21          on the Harriman Campus site, which again will 
 
22          give us an opportunity to grow our tax base.
 
23                 But the challenge for Albany is one of 
 
24          parity.  And we receive $128 per capita in 
 
 
                                                                  403
 
 1          AIM -- less than Schenectady, less than Troy, 
 
 2          less than Utica -- and far less than other 
 
 3          larger upstate cities.  And so that has been 
 
 4          the biggest challenge in looking at our 
 
 5          ability to put together a balanced budget.  
 
 6                 When you look at the property tax levy 
 
 7          in the City of Albany, the levy in actual 
 
 8          dollars, both city and school, is higher than 
 
 9          the levy in actual dollars in cities that are 
 
10          significantly larger than Albany -- not per 
 
11          capita, in actual dollars.  
 
12                 So we have a gap.  It's 12.5 million.  
 
13          When I came here in 2014, I said it was 
 
14          12.5 million.  In 2015, the state was able to 
 
15          provide us with $10 million, and we used 
 
16          $2 million, the last $2 million of our 
 
17          reserves.  And I come to you again today 
 
18          saying it's $12.5 million, and that's in 
 
19          light of the fact and notwithstanding the 
 
20          fact that we have continued to cut 
 
21          significant costs from our budget.  
 
22                 Our costs of running city government 
 
23          are rising much more quickly than this.  Our 
 
24          health insurance costs alone, we're targeted 
 
 
                                                                  404
 
 1          to go up 9.4 percent this year.  But even 
 
 2          with those increases, we've been able to 
 
 3          implement cost-saving measures, make 
 
 4          decisions about streamlining city government, 
 
 5          work with the county and work with other 
 
 6          governments so that we can drive cost 
 
 7          efficiencies.  
 
 8                 But this structural gap that exists, 
 
 9          again, is about $12.5 million.  It's what we 
 
10          would receive if we received the same AIM per 
 
11          capita as the City of Utica.
 
12                 So if we were to try to raise that 
 
13          $12.5 million by increasing our property tax 
 
14          levy, we're looking at a 20 percent property 
 
15          tax increase for our residents, a 22 percent 
 
16          tax increase for our homeowners.
 
17                 We, as I said, held spending to less 
 
18          than 2 percent in each budget since I took 
 
19          office in 2014.  We have gone through the 
 
20          Financial Restructuring Board, which 
 
21          acknowledged that the City of Albany has a 
 
22          revenue problem.  We have instituted not only 
 
23          cuts but new fees, and those fees, while not 
 
24          popular, are measures that we need to put in 
 
 
                                                                  405
 
 1          place so that we can continue to provide 
 
 2          services to our residents.
 
 3                 We need to grow our tax base, and I 
 
 4          believe that we are making the right 
 
 5          decisions and the right investments to do 
 
 6          that.  But we also need state funding that 
 
 7          recognizes the unique and compelling position 
 
 8          that we have as the capital of New York 
 
 9          State.  We recognize that being home to state 
 
10          government and hospitals and universities 
 
11          means that we're a center for jobs.  The 
 
12          challenge for the City of Albany is that we 
 
13          don't have a municipal income tax, we don't 
 
14          have any way of generating a tax base from 
 
15          those people, many of whom -- most of whom 
 
16          are coming into the city to work.  Our city 
 
17          about doubles in population every day.  So 
 
18          residents are choosing to live right outside 
 
19          the city and commute into the city, and 
 
20          they're not walking into buildings that are 
 
21          paying us property taxes.  So that is the 
 
22          challenge.
 
23                 But we are getting there.  We've seen 
 
24          a complete facelift of our Wellington Row at 
 
 
                                                                  406
 
 1          the top of State Street.  I think many of you 
 
 2          have had the opportunity to walk across the 
 
 3          street and see the new Renaissance Hotel, 
 
 4          which is a spectacular new addition to the 
 
 5          city.  We've worked really closely with that 
 
 6          hotel to ensure that the people who are 
 
 7          getting jobs there are residents in the City 
 
 8          of Albany.  
 
 9                 One of the things that we've done over 
 
10          the last two years, and I think we've been 
 
11          successful, is helping the business community 
 
12          focus on the fact that we need to provide 
 
13          jobs for our residents, and they are 
 
14          responding.  
 
15                 And the Capital Center is under 
 
16          construction and will be completed, and we 
 
17          are undertaking a number of initiatives so 
 
18          that we can really capture the economic value 
 
19          of that by having new businesses start in 
 
20          Albany, by ensuring that entrepreneurs and 
 
21          that residents of the City of Albany 
 
22          understand the opportunities that are 
 
23          available because of that.
 
24                 So as I said, the challenge is AIM.  
 
 
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 1          One of the proposals that we have made with 
 
 2          respect to the $12.5 million is that, given 
 
 3          our unique status as the capital city, that 
 
 4          we can amend Section 19A of the Public Lands 
 
 5          Law to provide for additional aid to the City 
 
 6          of Albany so that we can build a bridge to 
 
 7          the future that we have in front of us, which 
 
 8          I do believe is a bright future.  
 
 9                 And we are open to other mechanisms 
 
10          for delivering this additional aid to the 
 
11          City of Albany.  But we do believe, when the 
 
12          city receives less than 0.5 percent as the 
 
13          payment that we receive for all of the state 
 
14          land in the City of Albany, that 19A is a 
 
15          mechanism for delivering this aid to a city 
 
16          that is proud to be your state capital and is 
 
17          proud of the services that we provide and the 
 
18          infrastructure that we provide, but that is 
 
19          need of finally closing this structural gap 
 
20          so that we can move forward and have a bridge 
 
21          to a more permanent solution.
 
22                 Thank you.
 
23                 CHAIRMAN FARRELL:  Thank you very 
 
24          much.  
 
 
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 1                 Mr. McDonough -- McDonald.  
 
 2                 ASSEMBLYMAN McDONALD:  It happens all 
 
 3          the time, McDonough to McDonald.
 
 4                 CHAIRMAN FARRELL:  I'm having trouble.
 
 5                 ASSEMBLYMAN McDONALD:  I know, I know.  
 
 6                 So, Mayor, thank you.  And it's a long 
 
 7          road, and we're not going to get there 
 
 8          overnight, but we're trying to move things 
 
 9          along.  
 
10                 You know, you're doing all the right 
 
11          things, you've -- I know you've streamlined a 
 
12          lot within City Hall, with efficiencies.  
 
13          Reaching out -- I know there's a shared 
 
14          services effort going on with communications 
 
15          with Troy and Albany County, Rensselaer 
 
16          County, which is important.  
 
17                 You're one of the first to go flying 
 
18          into the Fiscal Restructuring Board, which, 
 
19          oddly enough -- it was good, it provided some 
 
20          money, some gap money.  But at the same 
 
21          token, after reading the report -- I had to 
 
22          read it two or three times -- it's almost as 
 
23          if they put their hands up, saying, You've 
 
24          got a gap and you've got to figure it out, 
 
 
                                                                  409
 
 1          you need to generate more income.  
 
 2                 And unlike our five-hour guest this 
 
 3          morning, which has their own way of 
 
 4          generating revenue through the personal 
 
 5          income tax, that's not an option in Albany, 
 
 6          nor would I recommend that we consider that 
 
 7          either.  
 
 8                 The tax-exempt property status is a 
 
 9          large concern.  And as you know, I represent 
 
10          five cities -- I'm fortunate enough to share 
 
11          Albany with Pat -- and, you know, Troy, 
 
12          Rensselaer, and Albany are 1, 2, and 4, I 
 
13          think, in regards to percentage of tax-exempt 
 
14          property overall.  
 
15                 You mentioned 60 percent.  And I'm 
 
16          curious, because we are the home of state 
 
17          government, what is the percent of that 
 
18          property that is tax-exempt that's used for 
 
19          state purposes, to conduct state government?
 
20                 MAYOR SHEEHAN:  Roughly 30 percent of 
 
21          the property in the city is owned by the 
 
22          state.  
 
23                 ASSEMBLYMAN McDONALD:  Okay.  You 
 
24          talked about a lot of the developments that 
 
 
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 1          are moving forward in the city.  Some, of 
 
 2          course, are another tax-exempt entity like 
 
 3          the Capital Center, but we know we'll see 
 
 4          great growth with a bed tax and with sales 
 
 5          tax and life in downtown Albany.  And I know 
 
 6          there's a lot, I think there's over 400 
 
 7          residential units coming online in the 
 
 8          downtown areas.  
 
 9                 Well, do you have any idea what the 
 
10          projection is for what that revenue might be?  
 
11                 MAYOR SHEEHAN:  You know, we're 
 
12          looking out three and five years, and we 
 
13          anticipate that we're going to have to enter 
 
14          into PILOT agreements for the foreseeable 
 
15          future.  But that's a new revenue stream for 
 
16          the city, so we need to build a bridge.  This 
 
17          isn't a one-time ask,  and that's something 
 
18          that I want to stress.  I don't want people 
 
19          to be surprised.  This is a structural 
 
20          deficit, and we are asking for five years to 
 
21          grow our way out of it.  
 
22                 But when we look at what the 
 
23          opportunities are both at the Harriman Campus 
 
24          and in our warehouse district and at the 
 
 
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 1          former Convention Center site, we think that 
 
 2          through a combination of cost-cutting 
 
 3          measures, fees for services, and growth in 
 
 4          our tax base, that we will be able to create 
 
 5          that bridge and get to a sustainable city 
 
 6          budget.  But it will take time.  It will 
 
 7          absolutely take time.  
 
 8                 ASSEMBLYMAN McDONALD:  Speaking of the 
 
 9          bridge, you speak of the bridge, a $12.5 
 
10          million bridge.  And, you know, you have 
 
11          included that in this year's budget.  And at 
 
12          the same token, right now we're going through 
 
13          the process of -- at least we're trying to 
 
14          shepherd it through to make sure that it's 
 
15          there.  
 
16                 And I agree with you, and I want to 
 
17          say this.  I commend you on the fact that you 
 
18          found something unique that reflects, really, 
 
19          the capital city of Albany -- or really the 
 
20          capital of the capital of the world, as we 
 
21          say around here.  And at the same token, it's 
 
22          something that you recognize that as greater 
 
23          growth goes on, on the 19A property, as more 
 
24          property comes on the tax rolls, that you 
 
 
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 1          responsibly would say the state should be 
 
 2          able to ease off its burden.  
 
 3                 Most mayors don't usually do that.  I 
 
 4          don't know, I've been here for 13 years, I 
 
 5          was groveling all the time.  So I commend you 
 
 6          for at least saying here, we want to be part 
 
 7          of the -- we need a solution, and we also 
 
 8          realize that we can't be on your aid the rest 
 
 9          of our lives.  
 
10                 I guess the question that comes up is, 
 
11          what if the 12.5 million doesn't show up?  
 
12                 MAYOR SHEEHAN:  As I've said --
 
13                 ASSEMBLYMAN McDONALD:  And I will say 
 
14          this.  It's part of your presentation, but 
 
15          it's worth repeating.  You know, I only live 
 
16          eight miles up the road.  I'm in Albany just 
 
17          as much as I'm in Cohoes, and I'm in the 
 
18          other communities as well.  And I've been in 
 
19          a lot of houses here in the community.  And 
 
20          you're absolutely right, putting the burden 
 
21          on the backs of the taxpayers is not going to 
 
22          work.  I am -- I've come up with the 
 
23          conclusion that the taxpayers here in Albany 
 
24          are exhausted.
 
 
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 1                 MAYOR SHEEHAN:  Well, the challenge is 
 
 2          that what it's really created is, you know, 
 
 3          we have neighborhoods where we have people 
 
 4          who are able to afford the property tax bill 
 
 5          and we have neighborhoods that are inundated 
 
 6          with low-income housing.  And there is really 
 
 7          not a lot of room for people who are in the 
 
 8          middle here.  And so that's a real challenge 
 
 9          for the city.  
 
10                 If we are not able to bridge this gap, 
 
11          then, you know, the challenge for the City of 
 
12          Albany is that our entire non-union payroll 
 
13          is less than $12 million.  So I'll say that 
 
14          again:  Our entire nonunion payroll is less 
 
15          than $12 million.  So we're talking about 
 
16          significant cuts.  It's about 7.5 percent.  
 
17          If we were to go 7.5 percent across the 
 
18          board, it means that we would probably, in 
 
19          effect, have to disband our neighborhood 
 
20          engagement units because we would only have 
 
21          enough police officers left to respond to 911 
 
22          calls.  
 
23                 We would, in all likelihood, have to 
 
24          disband EMT services.  And we are the front 
 
 
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 1          line of healthcare for the poorest people 
 
 2          living in our community.  Notwithstanding the 
 
 3          healthcare reforms that have occurred, we are 
 
 4          still the front line.  We are the people that 
 
 5          the poorest people in our community call 
 
 6          first to deliver those EMT services.  And our 
 
 7          firefighters are out there when somebody has 
 
 8          an earache, and we are assisting families in 
 
 9          getting to the emergency room because they 
 
10          can't afford the cab fare.
 
11                 So that's just the reality.  And so 
 
12          we're looking at potentially having to 
 
13          disband those EMT services because of the 
 
14          cuts that we would have to make.  
 
15                 And the other, you know, travesty of 
 
16          that is that we will leave money on the 
 
17          table.  We received a SAFER grant from the 
 
18          federal government that's paying for 
 
19          15 firefighters for the next two years.  So 
 
20          not only would we have to cut those 15 and 
 
21          leave that SAFER grant money on the table, 
 
22          we'd have to go deeper in order to actually 
 
23          realize savings.  
 
24                 The same thing with our police 
 
 
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 1          officers.  We'd have to lay off more police 
 
 2          officers, because we received a COPS grant 
 
 3          for some of those police officers, so we'd 
 
 4          have to pay the feds back $3 million for the 
 
 5          first one that we lay off.  So after we pay 
 
 6          back that 3 million, you know, we then would 
 
 7          have to go even deeper and lay off more 
 
 8          personnel.  
 
 9                 We're talking about eliminating a 
 
10          summer youth employment program that employs 
 
11          1,200 of our lowest-income children and 
 
12          provides them with extraordinary job 
 
13          experience and opportunity.  Under my 
 
14          administration, we have completely 
 
15          transformed that program so that on the fifth 
 
16          day of the week, young people transition -- 
 
17          they either spend time learning about career 
 
18          pathways and financial planning, they learn 
 
19          about how to get into college and they visit 
 
20          a college campus, they spend a day with our 
 
21          police officers and learn about knowing their 
 
22          rights from a outside party, our Center for 
 
23          Social Justice that provides them with that 
 
24          training.  So it's really been a very 
 
 
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 1          substantive program aimed at giving young 
 
 2          people the skills that they need to succeed.  
 
 3          We would not be able to provide that.
 
 4                 We would not be able to hire 
 
 5          lifeguards, so we would have to close our 
 
 6          pools and our parks.  
 
 7                 We have gone through and looked at 
 
 8          what we would have to do to get to 
 
 9          $12.5 million.  And what you're left with is 
 
10          not a place where people would want to invest 
 
11          and where people would want to live.  And, 
 
12          you know, we are laser-focused on being as 
 
13          effective and efficient as we can be, but it 
 
14          would be a very devastating impact to the 
 
15          City of Albany.
 
16                 ASSEMBLYMAN McDONALD:  Not only the 
 
17          City of Albany, but the state Capitol as 
 
18          well.
 
19                 MAYOR SHEEHAN:  Well, I think that it 
 
20          would really hurt the region.  And, you know, 
 
21          we do have so much that is going for us.  And 
 
22          I view this as an investment in the success 
 
23          that is here and a recognition that, you 
 
24          know, for reasons that predate all of us, and 
 
 
                                                                  417
 
 1          maybe for a lack of a sense of urgency on the 
 
 2          part of the city -- because in past years 
 
 3          when the pension bill was a million, a 
 
 4          million-five, we were able to, you know, be 
 
 5          able to have years where even with a spinup, 
 
 6          you know, with a spinup we were able to have 
 
 7          surpluses.  With a pension bill now that is 
 
 8          16 to $17 million and has been since 2008, 
 
 9          2009, we're no longer able to do that.  
 
10                 ASSEMBLYMAN McDONALD:  My final 
 
11          comment -- and you don't need to respond if 
 
12          you don't want -- is in the Governor's 
 
13          proposal he rightfully proposes a $25 million 
 
14          investment in the Poverty Initiative, and he 
 
15          chose 10 cities throughout the State of New 
 
16          York.  I'm sure it wasn't chosen for any 
 
17          reason but merit -- and it's not a merit we 
 
18          all subscribe to, but it's a merit 
 
19          nonetheless.  It's unique that the City of 
 
20          Troy and the City of Albany both have been 
 
21          chosen.  Which is ironic, because I know as 
 
22          long as Member Fahy and I have been here for 
 
23          the three short years -- it seems like 20 -- 
 
24          that we've always been told, well, Albany 
 
 
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 1          gets all the jobs, Albany gets all the jobs, 
 
 2          Albany gets all the jobs.  
 
 3                 Well, I find it challenging, if we're 
 
 4          getting all the jobs, you would think we 
 
 5          wouldn't have to worry about having a high 
 
 6          percentage of poverty.  And we're in that 
 
 7          select group of 10.  I just find that to be 
 
 8          something that actually speaks more to the 
 
 9          issue that we're facing here in the city.
 
10                 MAYOR SHEEHAN:  I think people are 
 
11          surprised to learn that the poverty rate in 
 
12          Albany is approaching 26 percent, that more 
 
13          than a third of our children live in poverty, 
 
14          and that fewer than 50 percent of our 
 
15          children are graduating from high school.  
 
16          That number went up, it went up across the 
 
17          state, so we're having more success.  I 
 
18          believe that actually last year we were above 
 
19          that 50 percent mark.  
 
20                 But we face the same challenges as 
 
21          other struggling cities.  But we, like those 
 
22          cities, are tough.  We're working on it, we 
 
23          have a deep commitment to it, and we need to 
 
24          focus on advocating for the resources that we 
 
 
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 1          need in order to accomplish it.  
 
 2                 And, you know, again, I believe that 
 
 3          all of the mayors that I work with and that I 
 
 4          talk to across upstate New York have done a 
 
 5          remarkable job and are doing remarkable 
 
 6          things.  And we shouldn't be pitted 
 
 7          against -- you know, and arguing, you know, 
 
 8          about fairness.  I think we need to just take 
 
 9          a stark look at what the challenges are and, 
 
10          you know, make a commitment and having an 
 
11          urban agenda.  
 
12                 Because these urban centers really are 
 
13          the future of our state.  Young people are 
 
14          deciding where they're going to live, and 
 
15          then they figure out what they're going to 
 
16          do.  When we talk to employers, and I'm sure 
 
17          other mayors say it, they are looking for a 
 
18          place where they can imagine the best and the 
 
19          brightest wanting to come and live.  And the 
 
20          cities of upstate New York, whether it be 
 
21          Albany or Syracuse or Rochester or Troy, we 
 
22          have the bones.  We have beautiful 
 
23          architecture.  We have all of the things that 
 
24          upstate cities need -- great universities, 
 
 
                                                                  420
 
 1          institutions of higher learning, great 
 
 2          healthcare.
 
 3                 And so we need to invest and build on 
 
 4          that.  I think this is a really exciting and 
 
 5          optimistic time in New York State.  
 
 6                 ASSEMBLYMAN McDONALD:  Thank you.
 
 7                 CHAIRMAN FARRELL:  Thank you, 
 
 8          Assemblyman McDonald.  
 
 9                 And now we will ask Assemblywoman Fahy 
 
10          to see if you --
 
11                 SENATOR KRUEGER:  I'm sorry, we have a 
 
12          Senator.  Sorry.
 
13                 CHAIRMAN FARRELL:  Oh, I'm sorry.  
 
14          Senator. 
 
15                 SENATOR KRUEGER:  Sorry.  Senator John 
 
16          DeFrancisco, from Syracuse.
 
17                 SENATOR DeFRANCISCO:  First, I was 
 
18          watching you on TV last night with the clips 
 
19          from the hearing or whatever it was.  I've 
 
20          got to commend you for maintaining your 
 
21          patience.  Because if it was me, I know I 
 
22          wouldn't have.  That was a very difficult 
 
23          thing to do.
 
24                 One quick question.  You said that you 
 
 
                                                                  421
 
 1          had 1200 summer jobs that you employ people 
 
 2          in the city; correct?  What do you pay them 
 
 3          now?
 
 4                 MAYOR SHEEHAN:  We pay the 14- and 
 
 5          15-year olds -- I believe it's $6.50 an hour.  
 
 6          And then if they're 16, we pay the minimum 
 
 7          wage.  
 
 8                 SENATOR DeFRANCISCO:  Okay.  And the 
 
 9          minimum wage now is $9?
 
10                 MAYOR SHEEHAN:  I believe that that's 
 
11          what we budgeted -- yes, it's gone up to 9.  
 
12                 SENATOR DeFRANCISCO:  Okay.  In view 
 
13          of your dire financial situation, as with all 
 
14          the mayors, does that mean if the minimum 
 
15          wage goes up you'll have to employ less 
 
16          people?
 
17                 MAYOR SHEEHAN:  We've been able, 
 
18          through federal funding that helps to fund 
 
19          some of those positions, particularly for the 
 
20          older children, to maintain the numbers.  The 
 
21          numbers go up and down every year.  
 
22                 Our goal actually is to really focus 
 
23          on the 14- and 15-year-olds and be doing such 
 
24          a good job in the experience that they get 
 
 
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 1          that our 16-year-olds get hired by the 
 
 2          private sector.  And we're working really 
 
 3          hard with private-sector employers in the 
 
 4          area to make sure that we're providing the 
 
 5          training that they expect.
 
 6                 SENATOR DeFRANCISCO  Mayor, let me 
 
 7          just cut you off.
 
 8                 MAYOR SHEEHAN:  Yeah.
 
 9                 SENATOR DeFRANCISCO:  You know, I see 
 
10          what you're saying, but whether it's the 
 
11          private-sector employers or the public 
 
12          employers, if there's so many dollars that 
 
13          are set for summer jobs, entry-level jobs 
 
14          where people can learn how to work, how do 
 
15          you get around not eliminating some jobs, 
 
16          private or public, if you've got the same 
 
17          amount of money to deal with?  
 
18                 MAYOR SHEEHAN:  Well, we have, in the 
 
19          projections that we have created, built in 
 
20          the escalation to the $15-an-hour minimum 
 
21          wage that the Governor has proposed, and, you 
 
22          know, the total cost to the City of Albany is 
 
23          in the neighborhood of -- I hope I'm not 
 
24          misquoting this -- I think it's about $2 
 
 
                                                                  423
 
 1          million, ultimately.  And again, that assumes 
 
 2          that we keep the numbers the same.  
 
 3                 So we have to look at opportunities to 
 
 4          reduce that cost.  Our summer youth 
 
 5          employment program only lasts six weeks.  
 
 6          That's not the largest driver of it, but I 
 
 7          think that, you know, if we can see an 
 
 8          increase in minimum wage and move more of our 
 
 9          young people into private-sector jobs, you 
 
10          know, that would be ideal.  We have, as I 
 
11          said, an almost 26 percent poverty rate.  So 
 
12          as a mayor, I know we can debate whether the 
 
13          minimum wage will --
 
14                 SENATOR DeFRANCISCO:  No, I'm not -- 
 
15                 MAYOR SHEEHAN:  -- have the results we 
 
16          asking for, but I think that that would be a 
 
17          positive impact on the city overall.
 
18                 SENATOR DeFRANCISCO:  I'm about ready 
 
19          to take back my compliment --
 
20                 (Laughter.)
 
21                 SENATOR DeFRANCISCO:  -- because this 
 
22          doesn't make too much sense.  
 
23                 But the fact of the matter is you've 
 
24          built it in, so instead of $12.5 million 
 
 
                                                                  424
 
 1          deficit, you may have a little higher 
 
 2          deficit.
 
 3                 MAYOR SHEEHAN:  We know that that's a 
 
 4          bogey that we have to hit.  We've got to find 
 
 5          cost savings to be able to offset that 
 
 6          increase.  
 
 7                 SENATOR DeFRANCISCO:  Okay.  Last 
 
 8          point.  What cost savings other than less 
 
 9          employees can you do?
 
10                 MAYOR SHEEHAN:  Well, we have some 
 
11          work to do on our workers' compensation 
 
12          costs.  We can do a better job of monitoring 
 
13          that within the City of Albany and set some 
 
14          targets for our employees.  
 
15                 We can also do better in our health 
 
16          insurance costs.  And we were successful in 
 
17          interest arbitration to now have all of our 
 
18          firefighters contributing towards health 
 
19          insurance.  And so we've created a union 
 
20          management committee to look at how we can 
 
21          drive down those insurance costs, and our 
 
22          firefighters now have a stake in that.  If we 
 
23          can drive down premiums and look at cost 
 
24          savings measures, they're going to benefit 
 
 
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 1          from that.  So I think that we've got room on 
 
 2          health insurance.  
 
 3                 We have room with respect to using and 
 
 4          implementing changes in technology.  I have 
 
 5          an employee who -- we are being funded 
 
 6          through the Bloomberg Philanthropies to 
 
 7          attend the Denver Peak Academy, which is a 
 
 8          program that was funded by Bloomberg 
 
 9          Philanthropies in Denver where employees have 
 
10          identified $23 million in savings since 2013.  
 
11                 So those are the types of efforts we 
 
12          need to undertake in order to be able to find 
 
13          savings and efficiencies.  
 
14                 SENATOR DeFRANCISCO:  That sounds 
 
15          great.  And it will reduce the $12.5 million 
 
16          you need from Albany then as well.
 
17                 MAYOR SHEEHAN:  We know that we're 
 
18          going to need to find ways, and as I said, 
 
19          we're looking for a bridge.  And I agree.
 
20                 CHAIRMAN FARRELL:  Thank you.
 
21                 Assemblywoman Fahy.  
 
22                 ASSEMBLYWOMAN FAHY:  Thank you, 
 
23          Mr. Chairman.  
 
24                 And thank you, Mayor, for your always 
 
 
                                                                  426
 
 1          compelling testimony.  
 
 2                 Obviously it's very, very sobering, 
 
 3          but I also appreciate that you have a number 
 
 4          of encouraging, encouraging initiatives 
 
 5          underway, including the Capital Center or the 
 
 6          Convention Center, along with a host of other 
 
 7          programs underway.  
 
 8                 And I just want to echo some of the 
 
 9          comments you made earlier and that my 
 
10          colleague Mr. McDonald made, and that is 
 
11          that -- about the region and the impact that 
 
12          Albany has on the region.  
 
13                 I represent three terrific towns as 
 
14          well as the City of Albany -- in fact, a few 
 
15          that you highlighted here in your 
 
16          testimony -- and in each of those towns, I'm 
 
17          often comparing property tax rates, because I 
 
18          live here in Albany and I pay those property 
 
19          taxes.  And I think the only one that I ever 
 
20          find that gives me anything close to a match 
 
21          is the City of Schenectady.  
 
22                 And even among a number of folks in 
 
23          the towns that I represent, they do recognize 
 
24          that if the core, the core of this region, 
 
 
                                                                  427
 
 1          along with the core throughout upstate of our 
 
 2          key cities upstate -- when the core suffers, 
 
 3          the entire region suffers.
 
 4                 So I do recognize that while there's 
 
 5          much encouraging news, there are tremendous, 
 
 6          tremendous challenges.  And I appreciate the 
 
 7          work that you have done.  But as Assemblyman 
 
 8          McDonald said, we recognize this is quite a 
 
 9          challenge on the $12 million.
 
10                 Can we talk a little bit about where 
 
11          you see some of that turnaround, as you've 
 
12          said, over the next few years, and when you 
 
13          see it?  For instance, you made reference to 
 
14          Harriman.  I know this body agreed with the 
 
15          Governor's proposal last year to put tens of 
 
16          millions of dollars into development up at 
 
17          Harriman, and that an estimated 30 acres is 
 
18          supposed to come online to be privately 
 
19          developed.  
 
20                 Do you have a better sense, any 
 
21          updates on that timeline on when we might 
 
22          begin to see some revenues into the city as 
 
23          that is privatized?  
 
24                 MAYOR SHEEHAN:  We've been working 
 
 
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 1          with the state to make sure that they have 
 
 2          the information that they need about the 
 
 3          infrastructure underneath the Harriman Campus 
 
 4          and what the needs would be in order to build 
 
 5          it out.  We were successful in getting 
 
 6          planning funding through the REDC to really 
 
 7          focus on that western part of the city so 
 
 8          that we can support and have the 
 
 9          infrastructure to support growth both at the 
 
10          University at Albany, at SUNY Poly, and at 
 
11          the Harriman Campus.
 
12                 So they, you know, have been 
 
13          requesting information, and it's my 
 
14          understanding that they are developing an 
 
15          RFP.  
 
16                 And when you talk about the investment 
 
17          up there, it's a really great example.  
 
18          Because if that investment had occurred 
 
19          anywhere else but in the City of Albany, it 
 
20          would have generated a PILOT payment.  So 
 
21          under 19A, if you take property in a 
 
22          municipality and use it for state purposes, 
 
23          there is a PILOT that is paid based on a 
 
24          percentage of the work that was done, the 
 
 
                                                                  429
 
 1          construction costs associated  with that.  
 
 2                 And so that is why I think that 19A 
 
 3          provides an opportunity for the state and for 
 
 4          this body to really look at what the impact 
 
 5          is in the City of Albany of this investment, 
 
 6          because of the amount of land in the city 
 
 7          that the state owns.  
 
 8                 ASSEMBLYWOMAN FAHY:  I actually 
 
 9          appreciate you pointing that out on the 
 
10          Harriman Campus.  And please correct me if 
 
11          I'm wrong, but I think there have been 
 
12          long-standing bills that my predecessor had 
 
13          and that I've carried for PILOT payments on 
 
14          Harriman, which is hundreds of acres -- 
 
15          there's about 30 that are to be developed 
 
16          privately.  But my recollection is that would 
 
17          generate about $11 million were we to get a 
 
18          19A payment or PILOT payment on that.  
 
19                 MAYOR SHEEHAN:  Well, actually that 
 
20          number would go up a little bit because of 
 
21          the recent investment that has occurred out 
 
22          there.  So that has increased the value of 
 
23          that property.
 
24                 Again, the elegance of doing this in 
 
 
                                                                  430
 
 1          19A is that we have agreed -- and I think 
 
 2          that it does make us unique in saying that as 
 
 3          the Harriman Campus or as other property 
 
 4          that's owned by the state becomes privately 
 
 5          developed, that should be subtracted from 
 
 6          anything that the state should be responsible 
 
 7          for.  If we're able to get that revenue 
 
 8          through private development, then we are then 
 
 9          more aligned in our interests with the state.
 
10                 ASSEMBLYWOMAN FAHY:  Okay, very 
 
11          helpful.  And any other revenue generators 
 
12          that you could note would also be of help.
 
13                 With regard to the previous question 
 
14          from Senator DeFrancisco, I may have 
 
15          misunderstood, or it might be helpful -- the 
 
16          $2 million that you mentioned would be a 
 
17          shortfall, I guess, if you will, with the 
 
18          minimum-wage proposals, is there a 
 
19          breakout -- 
 
20                 MAYOR SHEEHAN:  No, what we've done is 
 
21          cost out what -- there's an escalator that 
 
22          the Governor has proposed with respect to the 
 
23          minimum wage.  So out at the end, 2021, when 
 
24          the full $15-an-hour minimum wage would be 
 
 
                                                                  431
 
 1          put in the place -- over that period we would 
 
 2          need to be offsetting up to the maximum -- 
 
 3          would be $2 million.  As I recall, I think 
 
 4          it's about $2 million.  
 
 5                 So when we looked at it in the initial 
 
 6          years, with the increases, it would not have 
 
 7          that large of an impact, again because we 
 
 8          have so many employees now who already make 
 
 9          above what that minimum would be.  So we're 
 
10          really just looking at our full-time 
 
11          workforce that's not at minimum wage.  And 
 
12          then our summer youth employment program.
 
13                 And again, in looking at where there 
 
14          are federal dollars that are available for 
 
15          that, we are able to offset more of that 
 
16          increase with the federal dollars.  
 
17                 ASSEMBLYWOMAN FAHY:  Okay.  Thank you 
 
18          for clarifying that.
 
19                 MAYOR SHEEHAN:  These are for 
 
20          income-eligible young people.
 
21                 ASSEMBLYWOMAN FAHY:  Okay.  Thank you 
 
22          for clarifying.  That was a big number.
 
23                 MAYOR SHEEHAN:  Yeah, it's not 
 
24          $2 million in the first year, no, no, no.  
 
 
                                                                  432
 
 1          That's by 2021.
 
 2                 ASSEMBLYWOMAN FAHY:  I know we have a 
 
 3          long night ahead of us, so I will stop there.  
 
 4                 I just want to say there's not a day 
 
 5          that goes by that we don't have conversations 
 
 6          up here regarding this need for these bridge 
 
 7          dollars and the predicament that Albany is 
 
 8          in.  I appreciate that you pointed out that 
 
 9          this is decades in the making and we are 
 
10          trying to get on top of it.
 
11                 I look forward to working with you on 
 
12          both sides of the revenue -- you know, the 
 
13          creative solutions on the revenue, and on any 
 
14          other reductions and savings that you can 
 
15          propose.
 
16                 Thank you, Mr. Chairman.
 
17                 CHAIRMAN FARRELL:  Thank you, Senator. 
 
18                 CHAIRWOMAN YOUNG:  Senator Marchione.
 
19                 SENATOR MARCHIONE:  Thank you.  
 
20                 Mayor, just a couple of follow-up 
 
21          questions.  You said that poverty is 
 
22          26 percent in Albany.
 
23                 MAYOR SHEEHAN:  It's approaching 
 
24          26 percent.  We're at, I think, 24.5 percent.
 
 
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 1                 SENATOR MARCHIONE:  Do you have any 
 
 2          idea what the poverty level is with single 
 
 3          mothers?  
 
 4                 MAYOR SHEEHAN:  A large portion of our 
 
 5          people who are living in poverty are single 
 
 6          head of households.  You know, I don't have 
 
 7          that exactly number.  I do believe that the 
 
 8          Census Bureau does have that information.  
 
 9                 SENATOR MARCHIONE:  The reason I ask 
 
10          is that I got some information on my own 
 
11          district the other day, and the percentages 
 
12          are staggering.  Washington County is almost 
 
13          up to 50 percent poverty of single households 
 
14          with children.  So much so that I'm 
 
15          calling -- I've called a meeting of a variety 
 
16          of stakeholders from throughout my district 
 
17          to look at that to see if there isn't 
 
18          something that can be done to help head of 
 
19          households -- mostly moms that have 
 
20          children -- isn't there something that we can 
 
21          do special to assist them.  
 
22                 So I just wondered if you knew.  I 
 
23          didn't know what your number was, but in my 
 
24          districts in Saratoga, Troy, Rensselaer 
 
 
                                                                  434
 
 1          County, the numbers are very, very high.  
 
 2          Columbia as well.  
 
 3                 So I think we can zero in a little 
 
 4          bit, perhaps we can try to help that group of 
 
 5          people -- and I don't mean with handouts,  I 
 
 6          mean with hand-ups to assist them.
 
 7                 MAYOR SHEEHAN:  And I think that one 
 
 8          of the things, and I've talked to the 
 
 9          hospitals about that in the City of Albany, 
 
10          and other large employers, is looking at 
 
11          their shifts and looking at transportation 
 
12          issues to see whether or not there are 
 
13          adjustments that can be made to accommodate 
 
14          what are, you know, a lot of single heads of 
 
15          household who are juggling childcare issues 
 
16          and schedules that really preclude them from 
 
17          being able to maybe work full-time, as many 
 
18          hours as they want to work, or access the 
 
19          workplace at all.
 
20                 And I think there is an interest in 
 
21          doing that if we can do that on a regional 
 
22          level.  I think that it's another great 
 
23          example of how this region is coming 
 
24          together.  
 
 
                                                                  435
 
 1                 SENATOR MARCHIONE:  Also, you 
 
 2          mentioned that you have 13- and 14-year-olds 
 
 3          that you pay -- 
 
 4                 MAYOR SHEEHAN:  Fourteen and 15.  
 
 5          Sorry.
 
 6                 SENATOR MARCHIONE:  -- $6.75 --
 
 7                 MAYOR SHEEHAN:  I believe it's $6.75.  
 
 8          We raised it last year.