Joint Legislative Public Hearing on 2017-2018 Executive Budget Proposal: Topic "Local Government Officials - General Government" - Testimonies

1 BEFORE THE NEW YORK STATE SENATE FINANCE
AND ASSEMBLY WAYS AND MEANS COMMITTEES
2 ----------------------------------------------------
JOINT LEGISLATIVE HEARING
3 In the Matter of the
2017-2018 EXECUTIVE BUDGET
4 ON LOCAL GOVERNMENT OFFICIALS/
GENERAL GOVERNMENT
5 ----------------------------------------------------

6 Hearing Room B
Legislative Office Building
7 Albany, New York

8 January 30, 2017
10:09 a.m.
9

10 PRESIDING:

11 Senator Catharine M. Young
Chair, Senate Finance Committee
12
Assemblyman Herman D. Farrell, Jr.
13 Chair, Assembly Ways & Means Committee

14 PRESENT:

15 Senator Liz Krueger
Senate Finance Committee (RM)
16
Assemblyman Robert Oaks
17 Assembly Ways & Means Committee (RM)

18 Senator Diane J. Savino
Vice Chair, Senate Finance Committee
19
Assemblyman Michael Benedetto
20 Chair, Assembly Cities Committee

21 Senator Simcha Felder
Chair, Senate Committee on Cities
22
Senator Kathleen A. Marchione
23 Chair, Senate Committee on Local Government

24

1 2017-2018 Executive Budget
Local Government Officials/
2 General Government
1-30-17
3

4 PRESENT: (Continued)

5 Assemblyman Michael J. Cusick

6 Senator Roxanne J. Persaud

7 Assemblyman David Weprin

8 Assemblywoman Catherine T. Nolan

9 Assemblyman Jeffrion L. Aubry

10 Senator Gustavo Rivera

11 Senator Martin Golden

12 Assemblywoman Nicole Malliotakis

13 Senator Daniel Squadron

14 Assemblywoman Rebecca Seawright

15 Assemblyman Robert Carroll

16 Senator Terrence Murphy

17 Assemblyman Walter T. Mosley

18 Assemblywoman Nily Rozic

19 Senator Brad Hoylman

20 Assemblyman Erik M. Dilan

21 Senator Timothy Kennedy

22 Assemblywoman Rodneyse Bichotte

23 Assemblywoman Earlene Hooper

24 Assemblywoman Inez E. Dickens

1 2017-2018 Executive Budget
Local Government Officials/
2 General Government
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3

4 PRESENT: (Continued)

5 Senator Andrea Stewart-Cousins

6 Assemblyman David F. Gantt

7 Senator Daniel Squadron

8 Assemblywoman Tremaine Wright

9 Assemblyman Christopher S. Friend

10 Assemblyman John T. McDonald, III

11 Senator Jesse Hamilton

12 Assemblyman Ron Castorina, Jr.

13 Assemblywoman Shelley Mayer

14 Assemblywoman Patricia Fahy

15 Assemblyman Steven Otis

16 Assemblywoman Jo Anne Simon

17 Assemblywoman Diana C. Richardson

18 Senator James Sanders, Jr.

19 Assemblyman Joseph S. Saladino

20 Assemblywoman Yuh-Line Niou

21 Assemblywoman Stacey Pheffer Amato

22 Senator Elaine Phillips

23 Assemblywoman Monica P. Wallace

24 Assemblyman Edward C. Braunstein

1 2017-2018 Executive Budget
Local Government Officials/
2 General Government
1-30-17
3

4 PRESENT: (Continued)

5 Senator John E. Brooks

6 Assemblyman David Buchwald

7 Assemblyman Brian P. Kavanagh

8 Assemblywoman Crystal D. Peoples-Stokes

9

10

11 LIST OF SPEAKERS

12 STATEMENT QUESTIONS

13 Honorable Bill de Blasio
Mayor
14 City of New York 9 39

15 Scott M. Stringer
Comptroller
16 City of New York 211 223

17 Honorable Byron W. Brown
Mayor
18 City of Buffalo 266 278

19 Honorable Kathy M. Sheehan
Mayor
20 City of Albany 310 321

21 Honorable Lovely A. Warren
Mayor
22 City of Rochester 346 353

23 Honorable Mike Spano
Mayor
24 City of Yonkers 366 377

1 2017-2018 Executive Budget
Local Government Officials/
2 General Government
1-30-17
3
LIST OF SPEAKERS, Cont.
4
STATEMENT QUESTIONS
5
Honorable Stephanie A. Miner
6 Mayor
City of Syracuse 389
7
Julissa Ferreras-Copeland
8 Councilmember
New York City City Council 400
9
Peter A. Baynes
10 Executive Director
Thomas Roach
11 Mayor, City of White Plains
NYS Conference of Mayors
12 and Municipal Officials 411 427

13 Stephen J. Acquario
Executive Director
14 NYS Association of Counties 451 463

15 Gerry Geist
Executive Director
16 Supervisor Bill Moehle
Town of Brighton, Monroe County
17 Supervisor Ed Theobald
Town of Manlius, Onondaga County
18 Town Clerk Rebecca Haines
Town of Ellergy, Chautauqua County
19 Association of Towns of
the State of New York 473 496
20
Barbara Bartoletti
21 Legislative Director
League of Women Voters
22 of New York State 507 515

23 Elena Sassower
Director Center for
24 Judicial Accountability 518

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 fiscal year

6 2017-2018. The hearings are conducted

7 pursuant to Article 7, Section 3 of the

8 Constitution and Article 2, Sections 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 In the interests of time and

16 fundamental fairness to the other witnesses

17 who have been scheduled to speak, limits on

18 the questions and overall time period will be

19 implemented for the first witness, Mayor de

20 Blasio. Any committee member in the seat in

21 the room after 11:30 will not be permitted to

22 ask questions. For those of you that are

23 upstairs in the chambers listening on TV, you

24 must be down by 11:30 to ask a question of

1 Mayor de Blasio.

2 All questioning of the mayor will

3 conclude at 1 p.m. Any additional

4 questioning and photo opportunities should

5 then take place outside of the hearing room,

6 to allow us to promptly continue with the

7 next scheduled witness.

8 I will now introduce members from the

9 Assembly and Senator Young, chair of the

10 Senate Finance Committee, will introduce

11 members from the Senate.

12 We have with us -- I'm going to get as

13 many as I can and then we'll do it as I catch

14 you later -- Assemblywoman Rozic, Assemblyman

15 Mosley, Assemblyman Aubry, Assemblyman

16 Carroll, Assemblywoman Seawright, Assemblyman

17 Benedetto, Assemblyman Weprin, Assemblywoman

18 Nolan, Assemblyman Cusick, Assemblywoman

19 Simon, and Assemblywoman Hooper. Those that

20 I missed, I'll catch later.

21 Senator.

22 CHAIRWOMAN YOUNG: Thank you very

23 much, Mr. Chairman.

24 And I'm delighted to be here today,

1 and I welcome everyone to these proceedings.

2 I am joined by several of my colleagues. I

3 have Senator Diane Savino, vice chair of the

4 Senate Finance Committee. Also we are joined

5 by Senator Simcha Felder, who serves as chair

6 of the Cities Committee, and also Senator

7 Kathy Marchione, who is chair of the Local

8 Governments Committee. In addition to that,

9 we also are joined by Senator Elaine

10 Phillips.

11 And I would turn things over to my

12 colleague who is the ranking member on

13 Finance, and that's Senator Liz Krueger, to

14 introduce the members in her conference.

15 SENATOR KRUEGER: Good morning,

16 everyone. I am also joined by my colleague

17 Senator Roxanne Persaud from Brooklyn and

18 Senator Daniel Squadron from Brooklyn and

19 Manhattan.

20 Thank you. Welcome.

21 CHAIRMAN FARRELL: Assemblyman Oaks.

22 ASSEMBLYMAN OAKS: Yes, we're also

23 joined by Assemblywoman Malliotakis and

24 Assemblyman Castorina.

1 CHAIRMAN FARRELL: Good morning.

2 MAYOR DE BLASIO: Good morning.

3 CHAIRMAN FARRELL: Welcome.

4 MAYOR DE BLASIO: Ready to go?

5 CHAIRMAN FARRELL: Yup, go ahead.

6 MAYOR DE BLASIO: Okay, thank you.

7 Well, I want to thank everyone, and

8 particularly thank the chairs for the

9 opportunity to be here today. Senator Young

10 and Assemblymember Farrell, thank you for

11 your leadership of this joint hearing. And I

12 want to also thank your ranking members,

13 Senator Krueger and Assemblyman Oaks.

14 I want to say, on behalf of the people

15 of the city, a thank you to the legislative

16 leadership across the board. To Speaker

17 Heastie and Majority Leader Flanagan,

18 Democratic Conference Leader Stewart-Cousins,

19 IDC Conference Leader Klein, Assembly

20 Minority Leader Kolb, and all the members of

21 the State Legislature here and across the

22 board, thank you for your partnership and

23 your support for the people of New York City.

24 I want to thank two members of my team

1 who will be joining me and will participate,

2 as warranted, in the Q&A. Of course you know

3 them both, Dean Fuleihan, our director of New

4 York City Office of Management and Budget,

5 and Sherif Soliman, the city's director for

6 state legislative affairs.

7 I want to say up front that the

8 Legislature has been a crucial partner, and

9 that is important to all the work we do on

10 behalf of the people of New York City. And

11 of course we are all in this together:

12 New York City, and all the ways that we

13 attempt to contribute to the larger State of

14 New York and all the ways that the State of

15 New York works with us. This is part of a

16 continuum, and we see our role as continuing

17 to be an economic engine for the state as a

18 whole and for the region. And obviously we

19 are the state's primary gateway to the rest

20 of the world, and we know we have to play

21 that role well.

22 I think it's fair to say that the City

23 of New York can only reach its full potential

24 with the support of the State of New York. I

1 also think it's fair to say that New York

2 State succeeds when New York City succeeds,

3 and New York City succeed when New York State

4 succeeds. It's a truly symbiotic

5 relationship.

6 And at this moment I can say and I'm

7 happy to report to you that New York City is

8 succeeding most clearly in the vein of

9 economic growth. In the last two full years

10 for which we have full information, 2014 and

11 2015, New York City created more jobs itself

12 than all but four states in the country, and

13 that helped push forward New York State's

14 overall gains in terms of economic growth and

15 job creation. And of course New York City

16 accounts for almost 43 percent of the state's

17 total population, 46 percent of the state's

18 jobs, and 60 percent of the state's tax

19 revenue.

20 So we are very happy to play those

21 roles, but we also know we have profound

22 challenges and issues we have to address in

23 terms of our 8.5 million people. Examples

24 are clear: 58 percent of New York State's

1 Medicaid recipients live in New York City, 53

2 percent of the state's free and

3 reduced-price-lunch students attend school in

4 New York City. So we have some of the most

5 powerful ways of contributing to the state;

6 we also have some of the biggest challenges

7 in the state.

8 We're investing, in our latest budget,

9 in the people of our city, but at the same

10 time we're demanding savings from our city

11 agencies. We're setting aside unprecedented

12 reserves, and we're spending within our

13 means. I'm proud to say that just last week,

14 one of the rating agencies, Moody's, noted

15 that our "diverse, vibrant economy drives

16 growth needed to keep pace with fixed costs,"

17 and gave us a very positive review of our

18 fiscal standing.

19 Now, we have to continue our economic

20 strength and our economic growth for the good

21 of all. And we face a variety of challenges,

22 but we are prepared to address them head-on.

23 We also know that we have to ensure, for all

24 of you, that when we ask for state assistance

1 that we can show you we're getting the

2 maximum impact from that state assistance and

3 the maximum bang for the buck.

4 Examples are clear. You, all the

5 members of the Legislature, played a crucial

6 role in allowing us to build out our pre-K

7 program. Now 70,000 4-year-olds are enrolled

8 in pre-K, and we're making sure that that

9 investment pays off. Again, I want to offer

10 my profound thanks on behalf of the parents

11 of the City of New York in allowing us to

12 achieve this success. This is part of a

13 bigger initiative called Equity and

14 Excellence to fundamentally alter and improve

15 our school system, and we've already seen

16 results with higher graduation rates and

17 higher test scores. And we believe those

18 trends will continue because of these

19 investments.

20 So that's an example of state support

21 that's having a real and tangible impact in a

22 very efficient manner.

23 I also want to say, in terms of

24 affordable housing, we are ahead of schedule

1 in our initiative to build and preserve

2 200,000 affordable apartments, enough for

3 half a million people. Already, over three

4 years of this plan, 62,000 apartments have

5 been either financed and built or preserved

6 already. And that immediately is enough

7 affordable housing for almost 200,000 New

8 Yorkers. That is the most affordable

9 apartments -- particularly in the last year,

10 the most affordable apartments created or

11 preserved in a single year since the time a

12 quarter-century ago, that we have set a

13 record for the last quarter-century for the

14 pace of that production.

15 Finally, I want to note, in the vein

16 of impact, that your support has been part of

17 our ongoing effort to make the City of New

18 York the safest big city in America. We're

19 proud to say that the numbers have come in

20 for 2016, and once again we've seen a

21 reduction in crime across the board in New

22 York City, while we've improved the

23 relationship of police and community through

24 our Neighborhood Policing initiative.

1 Another example of investments that have

2 consistently paid off.

3 Now, we're going to continue our

4 efforts to keep our city's economy vibrant

5 and strong, and this is consistent in the

6 fiscal '18 preliminary budget that I

7 presented last week. A few examples I want

8 to offer you. We obviously know that for our

9 continued efforts on public safety, to

10 succeed we need to keep training and

11 equipping our police officers more

12 effectively. So we're investing

13 $10.4 million to install bullet-resistant

14 windows in every NYPD patrol car.

15 We know the city succeeds when people

16 can afford to be there, and we know we have a

17 particular obligation to those residents who

18 live in public housing -- over 400,000 New

19 Yorkers -- and we have to provide them safe

20 and secure housing. The City of New York has

21 made a commitment to invest $1 billion over

22 the next 10 years to fix the roofs at 729

23 NYCHA buildings that have been found to have

24 leaks that cause health problems for the

1 residents. This will allow us to reach

2 literally all of the buildings that have

3 serious roof problems causing health concerns

4 for residents.

5 We know we succeed when our students

6 have the right environment to learn in and

7 are not subjected to overcrowding. And we

8 know overcrowding has been a particular

9 concern for members of the Senate and the

10 Assembly from New York City.

11 So we're tackling the problem head-on

12 by investing an additional $495 million to

13 build 38,000 new school seats, part of the

14 next five-year plan. That total cost will be

15 $4.6 billion. Again, by creating 38,000 new

16 school seats, we will substantially address

17 overcrowding issues.

18 Finally, we know that investment in

19 infrastructure is absolutely necessary to

20 sustain economic growth, so we're fully

21 funding $303 million worth of construction on

22 the Brooklyn and Queens stretch of the 3rd

23 Water Tunnel. Nothing more importantly,

24 obviously, than providing clean and safe

1 water to our residents and having redundancy

2 against all potential challenges.

3 3rd Water Tunnel, the foundation is

4 built, meaning the tunnel itself is in place.

5 It will be filled by the end of this year

6 with water, will be operational and

7 available, redundancy in the event of an

8 emergency, and then the additional work to

9 add shafts and other elements will be done

10 with the $303 million.

11 So when it comes to what we're able to

12 do with our resources and with your support,

13 we feel confident about the progress we're

14 making. But where we feel real uncertainty

15 is on the federal front. And we know that

16 those uncertainties are sharp and profound.

17 Already, of course, we've seen new

18 policies that lead us to be very concerned

19 about their impact on the people of New York

20 City -- just last week, of course, the

21 executive order on immigration, which has

22 raised a host of concerns, and which I

23 believe fundamentally runs contrary to the

24 values of New York City. We believe we will

1 be on a firm legal footing to challenge it

2 and will do so as needed.

3 But this is only a beginning. The

4 great concern we have ahead, of course, is on

5 the budgetary front. What will the impact of

6 proposals from the Trump administration and

7 Republican Congress be in terms of potential

8 cuts to services and funding that the federal

9 government currently provides? This is a

10 great unknown that will have a huge impact on

11 not only the city budget but of course on the

12 state budget that you're debating right now.

13 One crucial example that we all are

14 concerned about, we do not know what

15 direction efforts to repeal the Affordable

16 Care Act will take. ACA now covers

17 1.6 million New York City residents. Changes

18 to the Affordable Care Act or cuts to

19 Medicaid would have an enormous impact on

20 both the well-being of our people and on our

21 ability to fund our public hospital system,

22 our Health and Hospitals Corporation.

23 Of the 1.2 million patients who depend

24 upon our public hospital system, 30 percent

1 are currently uninsured, and 45 percent are

2 on Medicaid. Should the ACA be repealed, we

3 believe that up to 200,000 of our public

4 hospital patients could lose their insurance,

5 not only endangering their health but

6 potentially cost our public hospital system

7 hundreds of millions of dollars in revenue.

8 So we're quite clear that any actions

9 taken in Washington could create real pain

10 for both state and city government. And

11 that's why it's so important that we -- and

12 we ask your support in making sure that the

13 state budget insulates and protects local

14 governments and our work given these great

15 uncertainties.

16 I want to comment briefly on the State

17 Executive Budget, where we certainly see some

18 very good news but also some areas of

19 concern. In terms of education, the City of

20 New York certainly appreciates deeply that

21 the new Excelsior Scholarship Program, when

22 added to existing tuition assistance

23 programs, promises to further ease tuition

24 costs for low- and middle-income students in

1 our state.

2 We're also gratified to see continued

3 support for the DREAM Act, which is

4 particularly important at this moment in

5 history.

6 The Executive Budget continues the

7 commitment to cap local Medicaid costs and

8 assumes control of Medicaid administration.

9 We certainly appreciate and support that.

10 This will save the City of New York

11 $130 million. We appreciate this commitment,

12 and we know that the city can assist the

13 state in Medicaid reimbursements without the

14 specific $50 million New York City mandate

15 that was added in this budget.

16 There's a three-year extension of

17 mayoral control in the Executive Budget. I

18 think it's fair to say that educators,

19 business leaders, and civic leaders alike

20 have called for a multiyear renewal. There's

21 a strong and bipartisan consensus on this,

22 and let's resolve to address this issue right

23 away through the budget process.

24 I'm obviously pleased to see election

1 reform in the Executive Budget. I want to

2 thank the Assembly for passing an election

3 reform package last year including early

4 voting, which is absolutely necessary given

5 the realities of modern lives and people's

6 schedules. Early voting and same-day

7 registration are fundamental reforms we need

8 to improve the democratic process.

9 I continue to support Raise the Age

10 and know we'll be a better and fairer state

11 if we get this done. While we wait for

12 legislative reform in this area, my

13 administration has already made a commitment

14 to move 16- and 17-year-olds off of Rikers

15 Island.

16 I'm also pleased the Governor

17 announced support for speedy trial reform.

18 New Yorkers deserve their day in court, and

19 the principles of fairness and justice demand

20 that we ensure that day in court as

21 expeditiously as possible.

22 I'd like to commend Speaker Heastie

23 for his leadership on this issue, as well as

24 members of the Assembly Democratic Conference

1 for championing these issues.

2 I also support changes to our bail

3 system that would reduce our reliance on

4 money bail and would allow judges to consider

5 whether a defendant poses a danger to the

6 community when making bail determinations.

7 New York City has expanded supervised

8 release so that 3300 individuals a year can

9 be safely supervised in the community instead

10 of being detained. Detaining those who

11 actually pose a risk and releasing those who

12 can safely remain in the community, doing

13 both those things is good public policy, and

14 I look forward to working with you on these

15 issues during the session.

16 I now want to talk about the larger

17 economic reality of our city and how this

18 state budget affects us. We're still dealing

19 with extraordinary challenges in terms of

20 affordability in our city and income

21 inequality that is widespread. This is a

22 problem everywhere.

23 I think everyone was struck by the

24 recent Oxfam report that made clear that

1 eight individuals possess as much wealth as

2 one-half of the residents of this globe. And

3 we also know that the wealthiest among us

4 have every reason to expect a major new tax

5 break at the federal level, given the

6 proposals already put forward by President

7 Trump and the Congress.

8 We think, in light of the fact that

9 the wealthiest will be receiving a

10 substantial federal tax break, that it's time

11 that they pay their share in state and local

12 taxes. So I join the Assembly majority's

13 push to extend and deepen the millionaire's

14 tax. This is critical to all that we are

15 trying to do to improve our economy and

16 support our people.

17 For similar reasons, I believe the

18 time is now ripe to enact a mansion tax for

19 New York City high-value home sales. That

20 means homes that start with a sales price of

21 $2 million or higher. The people who would

22 be affected can certainly afford this

23 additional tax, and the revenue would be used

24 to keep 25,000 senior citizens in their homes

1 at an affordable level. So this would be an

2 additional 25,000 senior citizens who would

3 get affordable housing as a result of this

4 proposal.

5 Moreover, in this uncertain federal

6 climate, identifying local revenue sources

7 for affordable housing preservation is

8 paramount. I think it's fair to say one of

9 the areas most threatened by potential

10 federal budget cuts is affordable housing,

11 public housing, Section 8 -- all of the

12 things that so many of our residents in

13 New York City and across the state depend on

14 to be able to afford to live.

15 Now, a few areas of concern that the

16 City of New York has with the State Executive

17 Budget. First, we're concerned about the

18 421-a tax abatement program. We worked hard

19 with so many of you to eliminate the old and

20 broken version of the 421-a program, which

21 subsidized luxury housing without enough

22 affordable housing in return.

23 We advanced a proposal in 2015 that

24 set forth some clear principles for what

1 421-a should look like. One, more

2 affordability per city tax dollar spent.

3 It's a matter of fairness to our taxpayers.

4 Two, that we could no longer subsidize luxury

5 housing. And three, if a developer got a tax

6 exemption anywhere in New York City, they had

7 to provide affordable housing in return.

8 Those were the core principles.

9 The state's current proposal

10 represents a departure from these principles.

11 To illustrate, if the old, broken 421-a

12 program was extended, the per-unit subsidy

13 would have been $614,000 and likely would

14 have produced only 12,400 affordable

15 apartments over 10 years.

16 By contrast, our proposal from 2015

17 had a per-unit subsidy of $421,700 and would

18 have produced almost twice as much affordable

19 housing: 25,500 affordable apartments --

20 enough, on average, for over 75,000 New

21 Yorkers. In other words, it meant fewer

22 taxpayer dollars spent for each apartment and

23 more affordable housing created.

24 Now, in the state's current proposal,

1 the per-unit subsidy would be $544,300 and

2 produce 21,750 affordable apartments over 10

3 years. In other words, more than $100,000

4 per unit above the cost of our proposal, with

5 less affordable housing.

6 Now, we're concerned by the additional

7 costs imposed by the state's current

8 proposal. But we obviously look forward to a

9 conversation on how we can work together.

10 That being said, we're even more

11 concerned with the potential expansion of any

12 condominium program as negotiations proceed.

13 And we're concerned that we not creep back in

14 the direction of the old and broken system.

15 We are particularly adamant that we

16 cannot support a plan that reverts back to

17 subsidizing luxury condominiums. Costs will

18 balloon in that instance without improving

19 affordability, which is the core objective of

20 the program. And we'd have to ask at that

21 point whether we were repeating mistakes of

22 the past and spending taxpayer dollars to

23 subsidize luxury housing, which I think it's

24 fair to say our taxpayers would not approve

1 of.

2 A second area of concern is education.

3 There appears to be an effort to eliminate

4 the state's commitment to fully fund the

5 shortfall in aid owed to high-need school

6 districts all over the State of New York.

7 Almost a decade ago, the state charted a

8 course of reform in how school aid was

9 allocated. After lawsuits, a study

10 commission, a financial crisis and many

11 budgets later, this vital commitment has yet

12 to be completely fulfilled.

13 The state must continue its commitment

14 to funding the Campaign for Fiscal Equity

15 settlement. Now, the city is doing its part.

16 Since 2008, the city's share of education

17 spending has increased from 49 percent to 57

18 percent, while the state share has declined

19 from 41 percent to 37 percent. The state

20 shortfall is currently $1.6 billion.

21 We are doing our part to provide

22 equitable funding to our schools, but we need

23 the state's partnership, and we need the

24 state to do more.

1 When I came into office, many schools

2 were at just 81 percent of the fair student

3 funding level, and the citywide average was

4 88 percent. Over two years, with your help,

5 with the help of state assistance, we

6 increased the citywide average to 91 percent,

7 with no school below 87 percent of the

8 formula.

9 All, by the way, all of our Community

10 and Renewal Schools are at 100 percent of

11 their fair student funding level.

12 Now, if the state provides a similar

13 increase in education aid as it did over the

14 last two years, we intend to go to a citywide

15 average of 92.5 percent, with no school below

16 90 percent next year. And with the state's

17 continuation of the commitment to CFE, the

18 city has committed to raising all schools to

19 a minimum of 100 percent by fiscal 2021.

20 On another front, the state is

21 proposing a much-needed consolidation of the

22 administration of grant funding for pre-K.

23 We support the goals of streamlining to

24 address the administrative burden on school

1 districts that come with complying with

2 separate funding structures, standards, and

3 reporting requirements.

4 However, the proposal also plans to

5 cut the per-seat rate at a cost of

6 $34 million, or the equivalent of 3400 pre-K

7 seats in New York City. The state has made a

8 giant leap forward over the last years in

9 supporting pre-K, but this proposal and this

10 proposed cut is a leap backwards and counter

11 to all the progress that we've made, with

12 your partnership, in ensuring that 70,000

13 4-year-olds had full-day, high-quality pre-K.

14 This rate cut should not go forward.

15 Additionally, the state is proposing

16 to increase and shift charter school costs it

17 has been paying previously. The proposal

18 strips state support away from charter

19 schools and transfers this cost to school

20 districts abruptly, and to an exorbitant

21 degree. For New York City alone, this would

22 mean $198 million less funding for our

23 schools.

24 If the state chooses to enact this

1 increase in funding for charter schools, then

2 it should cover the costs and fund it

3 separately from our basic school aid, as it

4 has for the past four years.

5 The Executive Budget also removes the

6 geographic cap on charter schools in New York

7 City. The Legislature recently raised the

8 cap, and there are currently 30 charters

9 available for New York City, in addition to

10 29 schools already approved to open. This is

11 ample, and there is no need to raise the cap

12 at this time.

13 Third, there are several cuts in the

14 State Executive Budget that are going to have

15 an effect on thousands and thousands of

16 New Yorkers. These cuts include, first of

17 all, a $32.5 million cut through fiscal '18

18 for public health programs, chipping away at

19 the long history of state partnership in

20 health funding in areas including disease

21 control and emergency preparedness,

22 particularly related to our efforts against

23 Zika, maternal and child health programs,

24 such as the Newborn Home Visiting program,

1 HIV prevention activities, school-based

2 health services, Naloxone education and

3 distribution to address the opioid crisis,

4 and public health campaigns on anti-smoking

5 and obesity-related illnesses.

6 There is a cut of almost $66 million

7 through fiscal '18 with the shift of state

8 costs for the education and care provided to

9 8,900 foster-care youth. There's a cut of

10 $25.5 million through fiscal '18 through the

11 reduction of senior center funding, affecting

12 65 neighborhood programs for seniors serving

13 over 6,000 seniors per today. And there's a

14 cut of almost $30 million through fiscal '18

15 with the elimination of the state share in

16 funding services for more than 800 special

17 education students who have highly

18 specialized needs. These are key areas of

19 need for the city that the budget does not

20 address.

21 A couple more points. I want to say

22 we must all together note the glaring and

23 inexplicable omission of New York City in the

24 design-build authorization in the budget.

1 The Executive Budget extends and expands

2 design-build for state agencies, state

3 authorities, and counties outside of New York

4 City.

5 According to a 2016 report by the

6 Empire State Development Corporation, which

7 evaluated projects in New York State,

8 design-build accelerated dozens of projects

9 and saved taxpayers billions of dollars. If

10 the city also had access to this tool,

11 similar benefits would be realized. Our

12 capital agencies have identified $7.3 billion

13 in projects, with around $450 million in

14 immediate savings for our taxpayers.

15 If the rest of New York State has

16 access to design-build, New York City

17 certainly should as well, as a matter of

18 common sense.

19 Now I'd like to discuss for just a

20 moment the homeless crisis facing New York

21 City, and I want to be clear up-front that my

22 administration is fundamentally dissatisfied

23 with the current homelessness situation in

24 our city. Next month we will be announcing a

1 new, comprehensive vision for addressing it.

2 Homelessness has been a growing

3 problem in our city for decades and only got

4 worse in the years since 2011, when the

5 Advantage rental assistance program was

6 canceled. There's much more to do, and we

7 have made meaningful progress, however, over

8 the last three years.

9 Without our new initiatives, we

10 project, instead of the 60,000-plus people

11 who are in shelters now, that that number

12 would be over 70,000. We have evidence that

13 some of our initiatives are working more

14 consistently, including the fact that our

15 anti-eviction legal services program has

16 helped to reduce evictions by 24 percent

17 since 2013.

18 We know our new HOME-STAT initiative,

19 the most comprehensive program to address

20 street homelessness anywhere in the United

21 States, which began last year, has already

22 brought 690 individuals off the streets and

23 into safer surroundings where they can get

24 support.

1 Of course, the best way to address

2 homelessness is to prevent it from happening

3 in the first place. That's why I'm pleased

4 to support Assemblyman Andrew Hevesi's Home

5 Stability Support proposal, which deserves

6 serious consideration in this budget process.

7 Home Stability Support would create a

8 statewide, primarily state-and-federally-

9 funded rental subsidy program designed to

10 keep people in their homes and out of the

11 shelter. It recognizes the state's

12 responsibility in providing rental assistance

13 and provides an option to local governments

14 to go even farther in their own efforts. And

15 I will tell you right now, rest assured that

16 New York City will do its share if this

17 initiative is passed.

18 I look forward to working with all of

19 you and Assemblyman Hevesi to ensure that the

20 final product is one that can have an

21 immediate impact on people's lives while not

22 imposing an unfunded mandate on local

23 governments.

24 I want to turn for a moment to the

1 Memorandum of Understanding on housing that

2 would unlock $2 billion in housing funding

3 authorized in last year's state budget.

4 Housing is the single biggest expense for our

5 residents, and we welcome additional

6 affordable homes financed by the state as we

7 continue to work together to meet the needs

8 of so many New Yorkers who are one paycheck

9 away from not being able to afford their rent

10 or their mortgage.

11 Negotiating and signing the MOU is

12 also critical because it would facilitate the

13 production of supportive housing units that

14 offer residents an apartment and services to

15 keep their lives on track and help us to

16 fundamentally address the problem of

17 homelessness.

18 My administration announced a

19 commitment to fund 15,000 apartments for

20 supportive housing over the next 15 years,

21 the largest commitment ever made by the City

22 of New York. We've budgeted the necessary

23 resources, and our first 550 apartments will

24 be available this year for people in need.

1 Over the next five years, New York City will

2 produce 4,000 apartments that will address

3 the needs of our most vulnerable residents

4 and have a direct impact on reducing our

5 shelter population.

6 But we have a related concern when it

7 comes to public housing. While the city has

8 made a very substantial commitment to capital

9 improvements for public housing -- as I

10 mentioned, $1 billion committed to fix the

11 roofs in over 700 buildings -- the current

12 total from the state falls short. And we ask

13 your assistance in providing help to the

14 400,000 people who live in public housing. I

15 want to take a moment to thank Speaker

16 Heastie and the Assembly Democratic

17 Conference for fighting to add to that

18 funding.

19 As I wrap up, I want to underscore the

20 importance of partnering with you and with

21 all community leaders to address the housing

22 crisis. As I said, in February I will

23 present a comprehensive vision related to

24 homelessness. And one thing that we will do

1 as part of that vision is address a concern

2 that many of you have raised about community

3 notification. We will include a notification

4 process for you and for community leaders

5 that will be implemented immediately upon the

6 announcement next month.

7 And post-notification, we'll proceed

8 with meaningful community engagement, one

9 that facilitates dialogue between city

10 officials, elected officials, and community

11 leaders, ensuring there's a clear framework

12 and timeline for any shelter opening, and

13 making sure that we're connecting shelter

14 residents to the schools and jobs and

15 community supports they need while addressing

16 the concerns of neighborhood residents at the

17 same time.

18 I want to conclude my testimony by

19 reflecting on how much of all of our work is

20 happening under clouds of uncertainty. As a

21 result of the new administration in

22 Washington, we all must live with the

23 possibility that many things will change, and

24 very much in unexpected ways. I think the

1 events of the last 48 hours certainly

2 illustrate that.

3 I can assure you that no matter what

4 happens in Washington, New York City will do

5 its part to remain a growing and vibrant

6 economic anchor for our region and our state.

7 But in the face of this unprecedented

8 uncertainty from the federal level, your

9 partnership is more important than ever. And

10 now more than ever, it is important to

11 remember a simple truth in terms of the

12 relationship between New York City and New

13 York State: We are all in this together.

14 Thank you, Chairs, for the opportunity

15 to be here.

16 CHAIRMAN FARRELL: Thank you.

17 We've been joined by Assemblywoman

18 Wright, Assemblywoman Wallace, Assemblywoman

19 Pheffer Amato, Assemblywoman Richardson,

20 Assemblywoman Bichotte, Assemblyman

21 Braunstein, and Assemblyman Buchwald.

22 ASSEMBLYMAN OAKS: We've also been

23 joined by Assemblyman Saladino.

24 CHAIRWOMAN YOUNG: Thank you very

1 much.

2 And we've also been joined by Senator

3 Golden, Senator Hamilton, Senator Sanders,

4 and Senator Hoylman.

5 CHAIRMAN FARRELL: And to question,

6 Michael Benedetto, chair of the Cities

7 Committee.

8 ASSEMBLYMAN BENEDETTO: Thank you,

9 Denny.

10 Good morning, Mr. Mayor. Thank you

11 for being here. Always a pleasure.

12 MAYOR DE BLASIO: Thank you.

13 ASSEMBLYMAN BENEDETTO: I have three

14 questions, and I'll try to ask them quickly,

15 and I hope we can get a quick answer so I can

16 get them in.

17 You mentioned that you want

18 design-build to be part of New York City, and

19 I tend to agree with you. However, some of

20 the problems we had with design-build was

21 allaying the fears of women- and

22 minority-owned businesses, labor unions.

23 Could you tell me about your efforts in those

24 areas and what you have done to improve our

1 chances of getting this bill passed?

2 MAYOR DE BLASIO: The simple, fast

3 answer, we've made a clear 30 percent

4 commitment in terms of MWBEs for all

5 contracting. We're going to need your help

6 with some of the legislative elements that

7 would help us to speed that effort. But the

8 City of New York is now committed to a 30

9 percent goal in all contracting for MWBEs.

10 In terms of labor, as I think you've

11 seen, Assemblyman, we have signed PLAs with

12 labor unions, for example, for public housing

13 that are unprecedented and prove that we can

14 create a very positive, cooperative framework

15 for labor having a substantial core role in

16 so much of the work we do. We'd like to see

17 that continue across everything we do.

18 So I think those are examples of the

19 direction we're ready to take. The bottom

20 line on design-build is it will allow for

21 much faster projects and huge savings, which

22 will not only allow for fairness for

23 taxpayers, but it will help us to do even

24 more. And you know how immense our

1 infrastructure problems are in New York City.

2 So while we're waiting to see what

3 happens in Washington -- and as we know,

4 there's a tremendous uncertainty -- one thing

5 that would help us right now to use our own

6 resources more effectively is design-build.

7 ASSEMBLYMAN BENEDETTO: Thank you.

8 Let's hope we get that.

9 New York City passed, Mr. Mayor, a

10 tax -- you call it a fee -- on plastic bags.

11 Okay? And while we understand the

12 environmental concerns and the reasons for

13 it, we -- at least many of us in the Assembly

14 have concerns with that and the cost it's

15 going to be for some of the people who are

16 rather challenged financially in the City of

17 New York.

18 We would like to see possibly a

19 postponement in that bag tax so we can have

20 hearings on it, possibly develop a

21 alternative recycling program -- just for

22 such plastic bags -- that could be good for

23 the environment and also save our citizens in

24 the City of New York this nickel tax.

1 Your view, sir.

2 MAYOR DE BLASIO: Assemblyman, you

3 know we share a common understanding that a

4 lot of people in our city are hurting

5 economically and struggling to make ends

6 meet. I would never belittle that challenge.

7 But at the same time, we all face the immense

8 challenge of an earth in crisis because of

9 climate change and environmental degradation.

10 We have to stop taking plastic bags made with

11 petroleum products. So they're right there,

12 fossil fuels, hurting our environment,

13 exaggerating climate change further because

14 it's fossil fuels being used, and then adding

15 to our landfills, which is bad for the earth

16 and costs taxpayers money.

17 This is the right thing to do to break

18 with the status quo that we're in right now.

19 Plastic bags no longer have a place in our

20 lives. I would not -- I absolutely respect

21 your question, but I would not encourage

22 delay. We have made clear that we believe,

23 with the education efforts and with a

24 concerted effort to provide consumers with

1 permanent bags that they can bring to

2 markets -- as our ancestors did long before

3 there were plastic bags -- we think that can

4 solve the problem. And the City Council

5 initiated this concept, but I was happy to

6 sign the bill because I think it's about

7 protecting the earth.

8 So we believe we can get to the core

9 of your concern that folks of limited means

10 not end up paying more than they can afford

11 by giving them the tool that will allow them

12 to go about their shopping with no additional

13 cost.

14 ASSEMBLYMAN BENEDETTO: Has anything

15 been looked into as a possible recycling

16 program just for such plastic bags? Because

17 bags we get from the dry cleaner's, for

18 instance, bags that are given on takeout

19 foods, they're not going to be included on

20 this. So we're still going to have this

21 problem.

22 But if you do have a recycling plan

23 for those types, maybe we can suit both ends.

24 MAYOR DE BLASIO: I appreciate the

1 thought. I've been down this road on other

2 issues like Styrofoam. I think we have to

3 get away from the use of fossil fuels,

4 period. I think we all know -- maybe there

5 are some in Washington who deny climate

6 change, but I think in general in the State

7 of New York, it's fair to say New York State

8 and New York City have been leaders in

9 addressing climate change. And we don't have

10 any time to waste.

11 So any product made that's -- any

12 petroleum-based product is a problem unto

13 itself. We have to get away from it.

14 Recycling doesn't solve the problem

15 sufficiently.

16 I think if you knew that all of your

17 constituents would have an opportunity to

18 have a bag they could use on a regular basis

19 that did not require plastic bags any longer

20 and they could go about their lives without

21 that additional cost, you'd feel comfortable.

22 That's exactly what we want to achieve.

23 Between public education and providing the

24 maximum number of permanent bags, take that

1 economic burden off people but take, most

2 importantly, the burden off the earth that

3 threatens us all.

4 ASSEMBLYMAN BENEDETTO: Thank you,

5 Mr. Mayor.

6 You have proposed, I believe,

7 $275 million in the budget for the police

8 firing range down at Rodman's Neck in the

9 Bronx. What have -- and we thank you for

10 that, because it's certainly well-needed.

11 But what have you done to address the

12 concerns of many of us who are worried about

13 the pollution, lead pollution that's going to

14 go -- it's going into the water, and has

15 been, and possibly avoiding lawsuits about

16 federal regulations about water pollution?

17 MAYOR DE BLASIO: I'll start and I

18 just will say, as with any answer, if my

19 colleagues want to add some specificity, I'm

20 sure they'll jump in.

21 Bottom line vision for the investment

22 at Rodman's Neck. We have a facility for our

23 police officers that is absolutely essential

24 for their ability to use their firearms

1 properly. It is outmoded. We need to

2 improve firearms training for all reasons,

3 starting with a terror threat -- and this is

4 where we'll do more and more effective

5 active-shooter scenarios for our officers,

6 which literally is about stopping any act of

7 terror in progress and protecting both our

8 residents and our officers alike. These are

9 scenarios also that will help in everyday

10 policing in terms of the ongoing effort to

11 deescalate confrontations and to reduce the

12 use of firearms to the maximum extent

13 possible.

14 This training is quintessential to all

15 we have to do for our city. An improved

16 Rodman's Neck facility will allow us to do

17 it.

18 Now, there's been two concerns that

19 have to be addressed. One, the noise concern

20 of City Island and surrounding areas. This

21 will allow us to do that. Two, the pollution

22 concern. As we modernize the facility, it

23 gives us a chance to address that concern

24 head-on.

1 So I will be able to have our team get

2 you details of it, but the notion here is

3 that the additional work we'll do at Rodman's

4 Neck will allow us to not see any of the

5 residue seep -- from the activity seep into

6 the water. This is an environmental upgrade

7 as well as a sound upgrade.

8 ASSEMBLYMAN BENEDETTO: There are many

9 in the area who, while they applaud your

10 attention, might not be satisfied fully with

11 that.

12 Lastly --

13 MAYOR DE BLASIO: That sounds like all

14 New Yorkers, Assemblyman.

15 ASSEMBLYMAN BENEDETTO: Yes. Yes.

16 And speaking of not being satisfied,

17 and at the risk of having a few on the panel

18 here rolling their eyes, I must direct your

19 attention to the great City of Co-op, Co-op

20 City, with close to 50,000 people in it who

21 have many concerns.

22 I have asked you about numerous

23 concerns in regards to the people in Co-op

24 City, and I get basically a Reagan-era motto:

1 "Just say no." Can you give me any hope for

2 the residents of Co-op City?

3 MAYOR DE BLASIO: We don't tend to --

4 I don't hear a lot of comparisons to Ronald

5 Reagan, so this is a unique moment. I know

6 it's a compliment.

7 We are having a meeting next week with

8 leaders of Co-op City to try and address a

9 number of outstanding issues, the asbestos

10 issue and other issues. I know Co-op City is

11 one of the foundations of affordable housing

12 in New York City. I've spent a lot of time

13 there. I think the residents' concerns are

14 real and honest. We're still trying to find

15 solutions.

16 But there will be a delegation from

17 Co-op City meeting with senior members of the

18 administration -- I'll be a part of that

19 meeting as well -- I believe it's next week.

20 ASSEMBLYMAN BENEDETTO: Well, let's

21 keep it affordable, Mr. Mayor.

22 MAYOR DE BLASIO: Yes, sir.

23 ASSEMBLYMAN BENEDETTO: Thank you,

24 sir.

1 CHAIRMAN FARRELL: Thank you.

2 Senator?

3 CHAIRWOMAN YOUNG: Thank you,

4 Mr. Mayor, and welcome to Albany. And we

5 certainly are appreciating the fact that

6 you're here and that you're actively engaged

7 with us.

8 As chair of the Finance Committee, I

9 have several questions that I will go over in

10 a few minutes. But at this point I'd like to

11 cede my time to Senator Simcha Felder, who is

12 the chair of the Cities Committee.

13 SENATOR FELDER: Good morning,

14 Mr. Mayor.

15 MAYOR DE BLASIO: Good morning,

16 Senator.

17 SENATOR FELDER: Thank you for being

18 here.

19 Last year, on May 4th, you testified

20 here before the Education Committee. You

21 made a commitment then to the parents of

22 special-needs children to finally implement,

23 before the start of this school year,

24 three-year IEPs for special-needs students

1 that require no changes to their IEPs. That

2 never occurred.

3 Although you did provide a letter to

4 my office on May 13th, such policy was not

5 implemented, and children and families are

6 still suffering humiliation and financial

7 hardship to maintain their IEPs by having to

8 pay lawyers over and over and over again

9 despite the fact that there are no changes.

10 So the example I gave last time is if

11 a child has Down syndrome, autism, there's no

12 fix for that, unfortunately, and there's no

13 need to force them to do this over and over

14 again.

15 September 6th of 2016, I requested a

16 meeting in writing to discuss this critical

17 issue and received no response. I called

18 several times after September 6th, received

19 no response. I wrote again on December 6th;

20 still no response.

21 Mayor, I'm not hurt or disturbed

22 personally by your lack of response to me.

23 In fact, many of my colleagues in government

24 have told me of similar experiences regarding

1 your office's inattentiveness, not being

2 responsive. So I know that you share that

3 same love with many of my colleagues as you

4 do with me in not responding.

5 But New Yorkers, and especially

6 families with special-needs children, are

7 suffering, and they demand your response and

8 require you to live up to your commitments.

9 And I thank you for the strides and

10 improvements that you've made, no question

11 about that. But that doesn't give me or

12 anyone else a pass on doing what we have to

13 do to help these families. So I sincerely

14 hope New Yorkers can count on your

15 commitments in 2017.

16 MAYOR DE BLASIO: Senator --

17 SENATOR FELDER: I didn't finish.

18 Let's start fresh in 2017 and hope for the

19 best.

20 Now, shortly after you made those

21 commitments, the City Council passed the

22 controversial bag tax that was referred to by

23 my colleague by I think a close vote, 28 to

24 20. Let me be clear. I think New Yorkers

1 are tired of being insulted and lied to. The

2 debate about the plastic bag tax, fee,

3 charge, whatever you want to call it, has

4 nothing to do with whether people care or

5 don't care about the environment or whether

6 people care or don't care about climate

7 change. That is not the issue. I don't

8 believe there's anyone here that wants to

9 hurt the environment.

10 The issue is whether we have to be

11 punitive every time that there is an issue.

12 And that's the way things go regularly. If

13 government doesn't have a way to fix

14 something, no problem: Tax. No problem:

15 Ticket. No problem: Fine.

16 So the bag tax was scheduled to be

17 implemented this past October. There was a

18 postponement. It's quite shocking to me,

19 based on what the mayor just mentioned to the

20 Assemblymember, why there would have been

21 even a short postponement. But after -- and

22 it went -- it was supposed to be implemented

23 in October, and instead it was postponed to

24 February 15th. An overwhelming outcry of

1 New Yorkers opposed to being

2 nickeled-and-dimed and fined, and my

3 colleagues and I introduced legislation to

4 stop it.

5 It was passed in June, then New York

6 City delayed it to February 15th. And it was

7 common knowledge at the time that a

8 commitment was made to the Assembly by you

9 and the New York City Council to use the

10 five-month intervening delay to make changes

11 to the bag tax and possibly work towards a

12 better solution to protect New Yorkers and

13 the environment. Let's stop saying that the

14 only way you can protect the environment or

15 address climate change is by taxing people.

16 Neither your office or the City

17 Council tried at all to work out a solution

18 or a compromise. Strangely, no media

19 coverage, no publicity on implementation of

20 the bag tax or a compromise to be worked out.

21 Nothing. Until late last fall, when notices

22 were mailed to local retailers telling them,

23 guess what, the tax is going into effect

24 February 15th. The commitment made to work

1 on a solution was yet another commitment

2 ignored.

3 We're now about two weeks away from a

4 crisis facing average New Yorkers. And

5 Mr. Mayor, I'm sure you're familiar with the

6 saying "Fool me once, shame on you; fool me

7 twice, shame on me."

8 So my question, Mr. Mayor, is please

9 set the record straight. What steps have you

10 taken to eliminate, reform the onerous tax?

11 And based on some of the comments you made

12 earlier, it sounds like you don't want a

13 postponement because you don't want to make

14 any adjustments. Did you make -- did your

15 administration make any adjustments or

16 attempts to improve this bill during the

17 five-month postponement that existed?

18 I'm finished now.

19 (Laughter.)

20 MAYOR DE BLASIO: Senator, we -- I say

21 this with deep respect, and we've known each

22 other a long time and worked together a long

23 time. But we just disagree very

24 substantially on these matters. And I think

1 it's respectful to be blunt about that

2 disagreement.

3 I fundamentally disagree that this is

4 an issue that isn't urgent to address in

5 terms of climate change. Our entire -- our

6 city, our state, our nation, we are so far

7 behind right now where we need to be to

8 protect our earth, and it's going to have

9 devastating impacts if we don't address it on

10 all levels. And what we saw with Sandy is

11 just an example of things to come.

12 So we must do this, and we have now

13 even more urgency, because we don't know

14 whether the federal government is going to

15 take a step backwards on addressing climate

16 change.

17 So I don't think there's any

18 contradiction in saying to you that this is

19 an urgent matter, as are a host of other

20 things that we are trying to do

21 simultaneously to address climate change.

22 Second, as I said to the Assemblyman,

23 we believe that a combination of public

24 education and providing consumers with bags

1 that they can use addresses this issue. And

2 that was true for generations and

3 generations. Plastic bags as a common part

4 of our society is a few decades old. I do

5 not believe it's a matter of unfairness to

6 people to work us all away from plastic bags.

7 And I believe if people have permanent bags,

8 they don't need a plastic bag, they're not

9 paying anything. And those permanent bags

10 will be provided for free. A lot of people

11 have them already.

12 So it is about changing -- all of us

13 have to change our behavior in a lot of ways

14 to address this new reality or it will

15 endanger us and our children and our

16 grandchildren.

17 So I believe that we said that from

18 the beginning. The City Council initiated

19 this, as I said, but we believe they were

20 working in the right direction. The two

21 pillars of educating people and providing

22 them with an alternative are how you address

23 this issue.

24 One thing I know for sure is the

1 status quo is not acceptable. If we continue

2 using petroleum-based products on a mass

3 scale when we don't need them, we're only

4 exacerbating climate change. We're a very

5 big market in New York City, we have a very

6 big impact on the world, and it's our job to

7 do it differently.

8 On the special education question,

9 Senator, I -- again, we've had this

10 conversation before. I will only say my

11 instruction to all of my employees, whether

12 in the Albany office or at City Hall, is that

13 when any member of the Senate or the Assembly

14 has a concern, we need to be in dialogue with

15 them immediately, whether it's a sit-down

16 meeting, a phone call, a letter. I make that

17 a priority.

18 And I said in the beginning of my

19 testimony we appreciate all of the

20 partnership we've had. If you believe

21 there's a widespread belief among your

22 colleagues that they are not given the proper

23 communication, that's what you've heard.

24 I've heard something very different from a

1 lot of your colleagues. But if anyone here

2 or any member of the Senate or Assembly feels

3 they did not get the kind of response they

4 deserve, I want to fix that.

5 But I -- the instruction has been

6 given, and I have plenty of evidence of the

7 instruction being followed. And I don't know

8 what's happening in the specific case of the

9 communication between your office and my

10 office, and we will work to fix that.

11 But I disagree with you fundamentally

12 on how far we have come on special education.

13 I agreed energetically with the vision of

14 addressing the original problem of our

15 parents having to litigate for services they

16 already deserve. This was something I worked

17 on as public advocate. I appreciate your

18 leadership. I think we all got to a very

19 good place several years ago that actually

20 started real change, and I've heard from

21 numerous parents, unsolicited, how much

22 change has occurred in their lives.

23 And then you further -- I think

24 appropriately -- raise the issue of locking

1 in three-year plans when there aren't any

2 variations in the IEP or the programing to

3 support the IEP. And I agreed to that,

4 again, openly, energetically. And that is

5 being implemented. Not all of it happens

6 overnight, but it is being implemented.

7 But I can tell you that we have

8 specific evidence of moving consistently

9 towards more and more cases being settled

10 without litigation. That's the order I have

11 given to our Department of Education. And

12 we'll get you the chapter and verse on how

13 that is moving.

14 We also know there are some cases that

15 are complex. That's a given. You said that

16 too, I remember, when you offered the point

17 that you knew not every case was easy and

18 that there would be cases where there would

19 be a change in IEP or a change in the needs

20 of a child year to year.

21 But I agree with the vision you've

22 laid out, and we are energetically

23 implementing it. And I think there should be

24 a battle of facts. I'm happy to have that

1 battle of facts, and we will give you all of

2 our information, chapter and verse, on what

3 we're doing.

4 SENATOR FELDER: Well, first of all, I

5 just want to address the chair that I know

6 there's a time limit, but obviously the mayor

7 didn't hear anything I said. Because the

8 first thing I said was that we're not

9 debating whether to address climate change or

10 whether to address the environment. The

11 question is how to do it. That's the issue.

12 Mr. Mayor, do you know how much a

13 pound of bread costs today? Do you know how

14 much a dozen eggs costs a regular family?

15 Let me tell you, I was in a local shop a week

16 ago and a mother came in with a few children

17 and put down whatever she wanted, and they

18 did not have enough money. And the store

19 owner said this was the price, and she had to

20 put back sliced cheese.

21 So again, the issue is not about

22 protecting the environment. That's --

23 everybody agrees. The crisis you've

24 mentioned very clearly. I never said it

1 shouldn't be given priority. You know, when

2 I got into this business, somebody said when

3 they ask you questions that you don't want to

4 answer, you answer whatever you want. You

5 don't have to talk about what they asked you.

6 I'm not talking about that. I'm

7 talking about regular New Yorkers and why the

8 city has to be punitive all the time. It's

9 just not fair. Every poll has shown that

10 most New Yorkers oppose a tax. The question

11 here now is not whether we have to do

12 something about the environment. Everyone

13 agrees. No matter how many times I say it,

14 you say it, everybody else, we are not going

15 to make this debate about whether the

16 environment is or is not important. It is,

17 period.

18 How do you get it done? Why can't it

19 be positive? Why don't you give a nickel

20 back to New Yorkers for every bag they don't

21 use? A nickel back, for a change. Reward

22 positive behavior. Implement the law that

23 exists for store owners to do what they're

24 supposed to do for the last 10 years, have

1 recycling bins in front of the stores so that

2 people can recycle it.

3 What are we doing? We're not taking

4 the nickel and putting it to protect the

5 environment. We're giving the store owners

6 another nickel profit. From who? From poor

7 and middle-class New Yorkers. So that's not

8 protecting.

9 Recycle. We educate. Give them back

10 a nickel. Give them reusable bags. And what

11 about incentivizing businesses? Patagonia

12 uses recycled plastic to make clothes. Trex

13 uses recycled bags to make synthetic lumber.

14 Why can't New York City? You talked about a

15 mansion tax before. This is a mansion credit

16 for the 1 percent. The mayor always talks

17 about the 99 percent? Well, let me tell you,

18 this is a 99 percent tax on the 99 percent.

19 It's a credit for the 1 percent. Because the

20 people who have limousines, chauffeurs,

21 nannies are not dragging their groceries,

22 they're getting them delivered or brought

23 home by somebody else.

24 It's irrational and it's punitive.

1 The issue is not whether we want to do

2 something or not do something, the issue is

3 why New Yorkers have to be overtaxed,

4 overfined, overticketed, and can't be treated

5 like mature adults instead of like children

6 who you decide you can't discipline any other

7 way and smack them across the face over and

8 over by charging them -- it doesn't make

9 sense. It doesn't make sense.

10 CHAIRWOMAN YOUNG: Thank you. Thank

11 you, Senator Felder.

12 CHAIRMAN FARRELL: Assemblyman Cusick.

13 ASSEMBLYMAN CUSICK: Mr. Mayor --

14 CHAIRMAN FARRELL: I hope everybody is

15 watching the clock.

16 ASSEMBLYMAN CUSICK: I'm watching it

17 right now, Mr. Chairman. Thank you,

18 Mr. Chairman.

19 Thank you, Mr. Mayor, for attending

20 today. I'm just going to echo quickly what

21 the two speakers before me said, the chairmen

22 of our Cities Committee.

23 As you know, I'm the sponsor of the

24 bill that companions Senator Felder's in the

1 Assembly. For many of my constituents, it's

2 just that they feel that rather than going to

3 a tax first, that they wanted to see that

4 there are other alternatives that we looked

5 at. Possibly recycling, if recycling was

6 looked at.

7 No one is more sensitive to the

8 environmental issue than I am. I represent

9 the area that used to have the world's

10 largest garbage dump. I know the issues of

11 climate change. I know the issues of what

12 plastic bags do to our environment. But I

13 think that many of us feel that there might

14 be another way to do this, and we'd like to

15 work with the city to come up with an

16 alternative that will work for all

17 New Yorkers.

18 MAYOR DE BLASIO: Assemblyman, I know

19 you care deeply about the environment and I

20 know you've seen the effects of climate

21 change. No place knows that better than

22 Staten Island.

23 We're always willing to work together.

24 We feel urgency, and we feel that -- you say

1 recycling. Again, you're still talking about

2 a petroleum-based product that will be

3 recycled by some people some of the time.

4 You and I both know other times it won't be.

5 So we're going to keep using something that

6 ultimately is bad for the earth.

7 And look, part of why cities and

8 localities around the country turn to this

9 approach is because we have to break out of a

10 cycle that was harming us. And again, I'll

11 tell you, when my grandmother came here from

12 Italy, I'm sure she understood that she could

13 go shopping without a plastic bag. And she

14 did that for her whole life. So I'm not

15 trying to be flip, I'm saying some of this is

16 about learning some new habits. We're all

17 learning smaller cars and more fuel-efficient

18 cars, all sorts of other things are changing

19 that are making us more able to protect the

20 earth.

21 But the notion is not to be punitive

22 in the least. The notion is to just break us

23 out of a habit, provide people with the

24 alternative of a permanent bag, do the

1 education we need to. I think it's the best

2 way to address the problem. But if there's

3 other good ideas, of course we're always

4 willing to work together.

5 ASSEMBLYMAN CUSICK: Right. And I

6 think what many of us are concerned about is

7 that there is state law in effect that

8 mandates supermarkets to have these bins

9 accessible to people to recycle, and it's not

10 being done, whether it's the city or the

11 state. That's something that I know many of

12 the members of the Assembly and Senate are

13 looking into. I think that that's what we

14 want to do, is work together to come up with

15 -- because people are exhausted. They're

16 exhausted by constant fees, the fares,

17 everything. And not that I'm putting that

18 all on the city or you, Mr. Mayor. But the

19 issue here is that they just want to know

20 that there are other alternatives looked at

21 before we went to a tax. And that's just

22 what a lot of the folks are relaying to me.

23 But I just -- I see my time is running

24 out. I want to also talk, Mr. Mayor, ask you

1 about the alternative exemption for property

2 taxes for veterans the New York State

3 Legislature last year passed that would allow

4 New York City to opt into what's happening

5 throughout the State of New York. It would

6 amend and extend the property tax exemption

7 for veterans.

8 The City Council could vote to allow

9 this to happen. I know that it wasn't in

10 your preliminary budget. I know there's a

11 price tag to this. I wanted to see, is there

12 a possibility that this is being discussed to

13 be in your next stage of budget proposals?

14 MAYOR DE BLASIO: Assemblyman, we're

15 definitely going to discuss it in the next

16 phase. I thank you for supporting this

17 proposal so strongly.

18 You know, we've worked together on

19 making sure there's property tax relief at

20 times for veterans, and obviously we created

21 in the City of New York our new Department of

22 Veterans Services, and we've expanded a lot

23 of what we're doing to serve our veterans.

24 So I certainly appreciate this proposal.

1 You're right, there are cost

2 implications, other implications we have to

3 look at. But this is something we very much

4 look forward to working with you and the

5 Council on as we look ahead to the Executive

6 Budget.

7 ASSEMBLYMAN CUSICK: And I urge you to

8 -- if you could put it in the budget, it's

9 very important. As you know, there are a

10 quarter of a million veterans throughout New

11 York City. This is much needed. Again, it

12 goes to the cost of living in New York City.

13 And it's something that's very important.

14 And again, it now allows the city to

15 opt in. And we would just like to see if in

16 the city budget we could get the funding for

17 it.

18 MAYOR DE BLASIO: Thank you.

19 ASSEMBLYMAN CUSICK: Thank you,

20 Mr. Chair.

21 CHAIRMAN FARRELL: Senator.

22 CHAIRWOMAN YOUNG: Thank you very

23 much.

24 Mayor, I have several questions, as I

1 said. And you know, you unveiled your city's

2 preliminary budget, I believe last week, and

3 it continues to assume significant increases

4 in property taxes. For example, you expect

5 to receive $24.2 billion in the city fiscal

6 year '17, which ends June 30th, from the

7 general property tax, and $25.6 billion in

8 '18, which is an increase of $1.4 billion, or

9 5.9 percent.

10 We talk about affordability and

11 New York City and the fact that homeowners

12 and commercial property owners are

13 suffocating in many ways, whether it's

14 through the bag tax, whether it's through

15 other fees, but also through property taxes.

16 And as you know, on the state level we have

17 limited the growth of property taxes to 2

18 percent or less. And I was wondering what

19 you're doing to address this issue. Because

20 obviously it's always all tied together, as

21 far as the economy, as far as people having

22 affordable housing and building owners being

23 able to stay in business and the whole thing.

24 So could you please address that for

1 us?

2 MAYOR DE BLASIO: Yes. Madam Chair,

3 first of all, I made very clear now in the

4 fourth budget that there will not be a

5 property tax rate increase in New York City.

6 As you know, this was something that was done

7 under my predecessor, it's something I've

8 been very clear I do not agree with. And we,

9 four budgets running, have not had a property

10 tax rate increase.

11 We're also trying to defray other

12 costs for homeowners, reducing the rate of

13 growth of water bills and in fact trying to

14 get a credit back for homeowners on water

15 bills, and we're in court right now trying to

16 move that program forward.

17 So I'm a homeowner myself, in

18 Brooklyn. I certainly feel deeply the

19 challenges that homeowners face. The rising

20 assessments, as you know, as the value of

21 real estate in New York City has gone up,

22 have caused a number of homeowners to have to

23 pay more.

24 We have to look at the entire system,

1 our entire property tax system. There's a

2 number of issues that have to be addressed.

3 I think that's going to be a very intensive

4 multiyear process. It's one that I'm

5 committed to, to create a more transparent

6 and consistent system.

7 So in the meantime, my mission is to

8 make sure that the rate doesn't go up. My

9 mission is to see if we can reduce costs

10 elsewhere, like the water bills, and reduce

11 some of the unfair fines that homeowners have

12 suffered from. We've reduced fines in a

13 number of agencies, many of which were

14 applied very arbitrarily. But I think the

15 property tax dynamic is going to need a very

16 full treatment to be addressed fairly.

17 CHAIRWOMAN YOUNG: Well, thank you for

18 that. But as you point out, it's the

19 assessments that are driving the revenues up.

20 And it's a shell game, because you can say

21 that I haven't increased the tax rate, and

22 that's true, but the assessments continually

23 go up and go through the roof.

24 And you're talking about possibly

1 revamping the tax system, but we had a

2 lengthy conversation in this very room last

3 year, and I was wondering when that's going

4 to happen. Because maybe you could fill us

5 in on anything that you've done in the past

6 year to change the tax system. Because as

7 far as I can tell, nothing has happened.

8 MAYOR DE BLASIO: Two points, Madam

9 Chair.

10 On the first point, I respect you and

11 we've worked well together. I respectfully

12 don't agree with your terminology. I was

13 part of a city where property tax rates went

14 up. I assure you, homeowners felt that

15 deeply. It is a very different issue than

16 assessments going up. Assessments were going

17 up at the same time as that rate increase

18 occurred, so people were hit by both. And

19 homeowners will tell you, and I'll say it as

20 one myself, that not having a property tax

21 rate increase is a very important issue for

22 everyday homeowners.

23 But on the question of how we will go

24 forward, I look forward to bringing a

1 specific idea. This is something that is

2 going to have to be very carefully

3 constructed. It's going to have to be an

4 approach that will maximize public input and

5 transparency but deal with an exceedingly --

6 as you know better than anyone, an

7 exceedingly complicated issue of taxation,

8 and trying to balance all of the different

9 needs of all the different types of property

10 owners.

11 Again, a very difficult, intensive

12 work. It's something I'm committed to doing,

13 and we'll put forward a specific vision of

14 how to do that.

15 CHAIRWOMAN YOUNG: Thank you.

16 Switching to education, the state

17 provides the city with more than $10 billion,

18 and most of that is in unrestricted operating

19 aid. How does the city decide what to use

20 these funds for, and which schools are they

21 directed to? And when are we -- I know that

22 we passed some legislation this past year,

23 but you're concerned about mayoral control,

24 and we really need this information.

1 So could you tell us where the funding

2 is going?

3 MAYOR DE BLASIO: Let me defer in

4 terms of the mechanics of how we take in

5 state funding and distribute it, to my

6 colleagues, starting with Mr. Fuleihan, but

7 just say at the outset, I think if I had to

8 summarize what I believe you would want us to

9 do with the funding, is to continually

10 produce better results.

11 It's a fact -- and it's all based on

12 the analysis of the State Department of

13 Education -- it's a fact that our graduation

14 rates are the highest they've ever been in

15 the history of New York City, over 70

16 percent. It's a fact that our test scores

17 have continued to improve. In fact, our

18 English test scores improved in all 32 of our

19 school districts in New York City. It's a

20 fact we've provided things that are

21 foundational to the future, like pre-K for

22 all.

23 So in terms of return on investment, I

24 believe we're doing the things you would want

1 us to do, and doing them efficiently. But

2 I'd like Mr. Fuleihan to talk to you about

3 specifically how we've taken the funding and

4 determined its use.

5 DIRECTOR FULEIHAN: So we -- the mayor

6 actually -- am I on? Yes. The mayor

7 outlined, actually, in the opening comments,

8 in the --

9 CHAIRWOMAN YOUNG: Dean, could you

10 pull that a little bit closer?

11 DIRECTOR FULEIHAN: I apologize.

12 Better?

13 CHAIRWOMAN YOUNG: Thank you.

14 DIRECTOR FULEIHAN: The mayor outlined

15 in his testimony one of the major uses that

16 we're doing. And when the mayor called for

17 meeting the CFE obligation, he pointed out

18 that we began with really no improvement in

19 the fair student funding, how we distribute

20 aid among our schools, and that we are

21 allocating our dollars, the dollars you

22 provide us, to reach 100 percent of fair

23 student funding.

24 So as you give us an increase, we are

1 committed, and the mayor made that

2 commitment, to get to a hundred percent.

3 We're already at a hundred percent on our

4 Renewal and Community Schools, and we're

5 willing to do it for every single school.

6 And those dollars are teachers, directly

7 teachers in those schools that were neglected

8 in years past.

9 We also do other mandates -- and we

10 are happy to give you book and verse on

11 this -- but English language learners -- for

12 other poverty-related programs. And we're

13 happy to go through and delineate every

14 single one of those dollars, including the

15 mandates that are imposed on us by the state

16 that we're happy to comply with.

17 CHAIRWOMAN YOUNG: Thank you very

18 much. I think that the law says that you

19 should be giving that information to us.

20 It's been very difficult to get the specifics

21 and the breakdown as to where the money is

22 actually going, especially with particular

23 schools.

24 The Governor's budget provides --

1 DIRECTOR FULEIHAN: We will be happy

2 to provide whatever information you need on

3 specific information, and I'm quite sure we

4 do that.

5 CHAIRWOMAN YOUNG: Great. When could

6 we expect that?

7 MAYOR DE BLASIO: Senator, I just

8 wanted -- if I may add, that in addition

9 to -- we'll answer any and all of your

10 questions, but as Mr. Soliman just reminded

11 me, in May that we're going to be providing a

12 comprehensive report based on last year's

13 discussions here in the Legislature. That's

14 going to be coming to you on time.

15 CHAIRWOMAN YOUNG: Okay, that's great.

16 So we should expect that information by May.

17 MAYOR DE BLASIO: Well, in addition to

18 any other specifics you're asking our team to

19 put together, we'll happily do for you.

20 CHAIRWOMAN YOUNG: Okay, great. Thank

21 you very much.

22 I was wondering, too, if you could

23 include in that -- and maybe it's included in

24 your preliminary budget. But how much of the

1 Foundation Aid increase that goes to

2 high-needs districts, how much is that --

3 your Department of Education funding in your

4 budget going to the individual high-needs

5 districts? Could you give us an accounting

6 of that?

7 DIRECTOR FULEIHAN: We'll give you --

8 I will get back to you on specifically how

9 much the total dollar value. What we did

10 say, and the challenge that we made to you,

11 was with any increase you give, we would take

12 those funds and put them towards reaching our

13 goal.

14 I will say the mayor also pointed out

15 that of the Executive Budget that provides us

16 $240 million in additional formula-driven

17 school aid, it then effectively takes away

18 $200 million by redirecting it to the

19 charters.

20 CHAIRWOMAN YOUNG: How much funding

21 per pupil does the city provide to its

22 high-needs districts? Could you include that

23 in any kind of information that you get to

24 us?

1 DIRECTOR FULEIHAN: Yes, we will. No,

2 I understood the question.

3 CHAIRWOMAN YOUNG: And how does that

4 compare to the city's funding of its other

5 schools? If that could be an element of

6 that.

7 And the other question I had was

8 maintenance of effort. So state funding to

9 education in New York City has increased at a

10 rate of more than one-third faster than the

11 city's funding increases, even though the

12 city's reserves are at historically high

13 levels and the city isn't subject to either

14 the 2 percent spending cap or the 2 percent

15 property cap, as I pointed out previously.

16 So I'm wondering why, Mr. Mayor, the

17 city hasn't provided additional money for

18 education.

19 MAYOR DE BLASIO: Madam Chair, I think

20 it's very important that we compare specific

21 facts, and we want to do that with you.

22 I would say, as I noted in my

23 testimony, we believe that the city's

24 investment in education has continued to grow

1 constantly. It was true in the Bloomberg

2 administration, it's true in my

3 administration with our own city dollars. We

4 appreciate state support. I think I would

5 argue that our facts would show you that

6 additional city investment has grown more

7 rapidly than additional state investment. So

8 I'd like us to compare statistics and see if

9 we're saying the same thing.

10 CHAIRWOMAN YOUNG: Thank you.

11 DIRECTOR FULEIHAN: I would just add

12 that during the tenure of this

13 administration, we have done, I believe, over

14 double what the state has committed in actual

15 direct support to our schools.

16 And the mayor cited the share

17 difference. While the state's share of total

18 support for New York City has actually

19 declined, the city's share has increased. So

20 we're now 57 percent, where the state is now

21 37, and the state used to be in the 40s.

22 CHAIRWOMAN YOUNG: Thank you. And any

23 more information you can get us on that would

24 be helpful.

1 I just wanted to touch briefly on

2 failing schools. The State Education

3 Department has determined that JHS 162 failed

4 to show it was making demonstrable

5 improvement since it was identified as a

6 persistently struggling school, which means

7 that it was performing in the lowest

8 5 percent of schools for student achievement

9 for more than 10 years.

10 The state required the placement of an

11 independent receiver, but your

12 administration, Mr. Mayor, determined that

13 the school was not making improvement.

14 However, under the New York City -- your

15 Renewal Schools Program, the school was

16 considered to be improving in that it was

17 meeting five of its six benchmarks.

18 This will be the fourth school to

19 close under the city's Renewal Schools

20 Program. So the questions are, what accounts

21 for the drastic differences in the

22 determination of the state finding the school

23 is not improving and needing an outside

24 independent receiver to run the school, and

1 your own Department of Education's

2 determination that the school met five of its

3 six benchmarks?

4 Are the city's standards too low?

5 Because that's quite a discrepancy.

6 MAYOR DE BLASIO: Again, I respect the

7 question deeply, Madam Chair, but I would

8 argue we have a different perspective. A

9 school can meet the benchmarks, but that

10 doesn't mean we don't come to the conclusion

11 that it needs to be closed.

12 The question of our Renewal School

13 Program is that a school has to constantly

14 make progress to the day that it will no

15 longer be in the program. And there are

16 dozens of schools in our Renewal School

17 initiative that we believe are making that

18 progress, and we look forward to the day when

19 they graduate out of that status.

20 There are others that we've already

21 said either needed to be merged or

22 consolidated, because they had become

23 ineffective at their small size, or that we

24 were already moving to close. And then

1 coming up at the end of this year, we will

2 announce judgment on the entire remaining

3 group of schools, which ones we believe have

4 graduated out of Renewal Schools, which ones

5 are on the pathway to it, and which ones we

6 believe are not going to make it and need to

7 be closed.

8 I think the difference here is that we

9 felt -- I saw this with my own eyes, I talked

10 to parents all over the city -- that the

11 previous approach, which emphasized the

12 previous administration's strong focus on

13 closing schools, with unfortunately a lot of

14 negative impact on kids who were left behind

15 as the school phased out. That problem

16 needed to be addressed. Schools that could

17 be turned around were not being given

18 sufficient opportunity.

19 We had to go with those problems. And

20 what we've found with Renewal Schools is we

21 have seen a real increase in graduation

22 rates, we've seen a real increase in test

23 scores, better attendance, a lot of promising

24 signs. But we're going to look at each one,

1 with, as I said, final judgment happening by

2 the end of this year.

3 And I said from the moment I announced

4 the Renewal School Program, I have no problem

5 closing a school if we've made every effort

6 over these last few years to address its

7 needs and turn it around and provide it

8 better leadership, more master teachers,

9 et cetera. If that's not enough, move to

10 closure. If it is enough, that's a huge

11 thing for the parents and kids of that

12 community, that a school that was struggling

13 got back on track rather than disruption and

14 many unintended consequences that happen with

15 the closure.

16 So in this one case, we were very

17 comfortable working with the state on PS 162

18 to say, you know what, we understand where

19 the state's coming from, we're happy to work

20 with that, we were happy to do a closure and

21 come up with a new plan.

22 CHAIRWOMAN YOUNG: But it just seems

23 like instead of trying to fix the schools,

24 that you're opting to close them rather than

1 go to a state receivership.

2 And you were very critical of your

3 predecessor for closing schools, and you're

4 talking about how your stance has changed.

5 And this is a direct quote from November 19,

6 2015: "Bloomberg opted to condemn schools

7 rather than fix them, treating closure as a

8 panacea." And so it just seems that you have

9 changed your tune quite a bit --

10 MAYOR DE BLASIO: No.

11 CHAIRWOMAN YOUNG: -- and why not fix

12 these schools?

13 MAYOR DE BLASIO: Again, Madam Chair,

14 with real respect, I just disagree that there

15 is a change in my belief. There is not.

16 I believe the previous administration

17 moved to close too frequently, without

18 accounting for the unintended consequences

19 caused by the closure and without a honest

20 effort to turn around a lot of schools that

21 could be turned around.

22 The proof will be in the pudding. We

23 started with 94 schools. We're going to show

24 you, by the time we get to the end of this

1 calendar year, we'll have an assessment of

2 which ones have made enough progress and

3 which ones didn't. And we'll act according.

4 But for every school that we turn

5 around and get on track without dislocating

6 all the families and all the students, I

7 think that's a victory. I think parents

8 would agree with me. We ultimately work for

9 our residents and our parents. They don't

10 want to see a school closed if it can be

11 turned around. If it can't be turned around,

12 the parents are the first to agree with the

13 closure.

14 I think in the case of PS 162, we got,

15 again, to the point where we agreed with the

16 state's assessment that we could do something

17 better, we could come up with a new approach.

18 And we think it will succeed.

19 But I don't think there's anything

20 about the statement you read that I disagree

21 with at this point.

22 CHAIRWOMAN YOUNG: Thank you.

23 And switching gears, I want to talk

24 about ACS right now. And there have been a

1 lot of press questions and stories about the

2 ACS and mismanagement, negligence. And the

3 budget for ACS in 2016 was nearly $3 billion,

4 and the total state funding of this was about

5 $680 million, which is 23 percent of the

6 budget. We've had several high-profile cases

7 of children dying, people not following up

8 when they are supposed to follow up. And,

9 you know, there's really a deep cause for

10 concern because what's happening is that

11 people are not only getting hurt, but they're

12 actually dying because of this.

13 And there are several things that I

14 would like to point out. Seventy-three

15 percent, or 2,360 cases of the closed ACS

16 investigations lacked the required minimum

17 number of manager's reviews. In 68 percent,

18 or 2,516 cases, of both open and closed

19 high-priority ACS investigations, a risk

20 assessment profile was not completed within

21 the required 40 days. Thirty-two percent

22 lacked the required number of supervisor's

23 reviews. Fifty-three investigations were

24 closed without ACS investigators ever meeting

1 with a child who was allegedly abused. In 22

2 percent of the investigations, ACS

3 investigators did not meet with the child

4 within 24 hours of the abuse allegation. In

5 26 percent of the investigations, ACS

6 investigators did not meet with the child the

7 required number of times.

8 So obviously there's something wrong

9 with the system. And the question is, why

10 shouldn't the state withhold the funding for

11 the Administration for Children's Services

12 until you address the situation?

13 MAYOR DE BLASIO: Madam Chair, I want

14 to once again respectfully disagree with some

15 of that assessment. And also even the facts

16 you cite were based on a look at a small

17 amount of the work of ACS.

18 You have a real expert sitting down

19 the row from you in Senator Savino, who knows

20 this work very well.

21 I spent eight years when I was a

22 legislator in our City Council as the

23 chairman of the Oversight Committee; I spent

24 a tremendous amount of time and energy

1 working on the issue of protecting our

2 children. And Madam Chair, I can tell you

3 that when I started on this work in 2002, the

4 City of New York was nowhere near as able to

5 protect children as it is today. That is a

6 factual statement. The tragic case of

7 Nixzmary Brown in the year 2006 pointed out

8 vast gaps in the city's approach to

9 protecting children.

10 I commend the Bloomberg administration

11 for making some of the reforms that were

12 needed. We have continued to make additional

13 reforms. But we also know that there was a

14 disinvestment in ACS for years that we've

15 been working intensely to correct, hiring

16 more caseworkers, reducing caseworker ratios,

17 providing more training to the caseworkers

18 that they desperately needed, providing them

19 more support from other agencies like NYPD

20 and the Department of Education.

21 This is very personal for me. I'm a

22 parent, and I've worked on these issues. And

23 I consider it a moral issue that we have to

24 protect every single child. But I have to

1 put in context, Madam Chair, there are

2 between 50,000 and 60,000 complaints called

3 in every year from New York City of potential

4 abuse and neglect of children.

5 In the overwhelming majority of those

6 cases, the Administration for children's

7 Services plays a crucial role in stopping

8 abuse against children and stopping that

9 neglect and protecting those children. In

10 many cases, ACS asks a court for the right to

11 remove a child from the home, and a court

12 disagrees and stands in the way of that

13 action of ACS, something that I think needs

14 to be looked at more carefully, because ACS

15 often is taking a more aggressive stance and

16 is not allowed to follow through, by a

17 judge's decision.

18 The vast majority of our caseworkers

19 do their jobs well and protect our children.

20 And if you look at the overall trend over the

21 last few years, thank God, the number of

22 child abuse and neglect cases has gone down,

23 and the number of child abuse deaths has gone

24 down. But one is one too many.

1 So I just have to disagree with the

2 premise. We have real work to do, and when

3 someone in our employ does something wrong,

4 we fire them. As you saw in the recent case,

5 the Zymere Perkins case, people were fired

6 who didn't do their job. And we'll do that

7 each and every time. There will be new

8 leadership soon at ACS, and we're going to

9 continue to deepen reforms and we'll make

10 whatever investment we need to.

11 But I just think a lot of the

12 assumptions that are being made are unfair.

13 They're not based on facts, they're not based

14 on the overall history of what's happened

15 here, and they're certainly not showing

16 respect for the women and men who do this

17 work every day of protecting our children.

18 You know, I don't think I've seen a single

19 article talking about the children who are

20 saved every single day. I only see coverage

21 when there's a tragedy.

22 The tragedy grabs at me like every one

23 of us, and we're not going to allow these

24 tragedies. But Madam Chair, I have to tell

1 you, the vast majority of the work of that

2 agency is life-saving. And I need it to

3 continue, and we're going to keep supporting

4 it.

5 CHAIRWOMAN YOUNG: Thank you,

6 Mr. Mayor. And I think that, you know,

7 you're saying that you dispute the facts.

8 The facts are the facts. And also the facts

9 are that we have several cases and names of

10 children. Like Mikey Guzman, age 5 years

11 old, Sherlin Yeslin Camacho, age 3 months,

12 Zymere Perkins, age 6 years.

13 And we have to do better. And as I

14 said, the state is investing a lot of money

15 into the system, and we have to do better.

16 And the final question is so your

17 Commissioner Gladys Carrion is still there,

18 and it just came out recently that she was

19 still there. I was just wondering what the

20 status is, and why is she there? If there

21 are so many failures under the system, why is

22 she there?

23 MAYOR DE BLASIO: Again, Madam Chair,

24 I respect the question, but I have spent a

1 lot of my life working on these issues. And

2 I think -- I am not saying the facts aren't

3 the facts. I agree. But unfortunately, the

4 facts are not being represented fairly by the

5 media, even in the cases that you just

6 delineated. And I happen to have access, of

7 course, to a deeper understanding of some of

8 the details than the general public does. In

9 too many cases, the media are suggesting a

10 fact pattern that does not exist -- and of

11 course these cases are subject to very, very

12 careful attention because of confidentiality

13 issues. And a picture is painted for the

14 public that is not fair, because the vast

15 majority of the work at ACS is succeeding in

16 protecting children's lives. We're going to

17 continue that work.

18 But in terms of the commissioner, the

19 commissioner has spent 40 years of her life

20 protecting children, including as the state

21 commissioner. She, in the last three years,

22 implemented a series of reforms and

23 improvements at ACS. There were some cases

24 not handled properly, I've said that

1 publicly. And it angers me, and people have

2 been fired. And anyone who doesn't handle a

3 case will be fired, it's as simple as that.

4 Commissioner Carrion announced her

5 resignation, and it was clear there would be

6 a transitional period. That transitional

7 period will end at end of this week. Her

8 first deputy commissioner will take over for

9 the interim. A new commissioner will be in

10 place by the end of February or beginning of

11 March.

12 I further want to note we're going to

13 deepen the close working relationship between

14 the NYPD and ACS. Again, going back to the

15 Nixzmary Brown case, one of the most

16 prominent and tragic cases this city ever

17 went through, one of the fault lines, one of

18 the problems was there was not that

19 relationship that was needed between NYPD and

20 ACS. We've improved over time. There's more

21 to do.

22 Chief Robert Boyce, who is our chief

23 of detectives, one of the most respected

24 leaders in the NYPD, will be working more

1 closely with ACS -- in fact, will cochair the

2 ChildStat process, which is the ACS

3 equivalent of CompStat at the NYPD. He'll be

4 cochairing that with the acting commissioner

5 going forward to intensify our efforts to

6 look deep into each case and look for any

7 potential danger. And I think the growing

8 cooperation and partnership between ACS and

9 NYPD will allow us to go much farther in

10 protecting children.

11 CHAIRWOMAN YOUNG: Thank you.

12 CHAIRMAN FARRELL: Assemblyman Weprin.

13 ASSEMBLYMAN WEPRIN: Thank you,

14 Mr. Chairman.

15 Thank you, Mayor. As the new chair of

16 the Correction Committee, I appreciate your

17 comments on bail reform and on voluntarily

18 raising the age, removing 16- and

19 17-year-olds from Rikers. As you know, the

20 Assembly has long supported raising the age,

21 and hopefully with the Governor putting it in

22 his budget, it will be an issue that may

23 finally come this year.

24 I know there is a commission taking

1 place now where Judge Lippman is discussing

2 some of the issues, along with some

3 colleagues on the commission, about Rikers

4 Island. And I know they're due to have a

5 report soon. One of my first meetings as

6 chair of the Correction Committee was with

7 Commissioner Joe Ponte, and I was very

8 impressed with his concern about safety at

9 Rikers. And I know -- I've had a discussion

10 with you as well, and I know there have been

11 a number of incidents, and I'm happy to see

12 that you're working on that.

13 But I know there have been some

14 proposals to the commission, and possibly

15 from outside the commission, on the

16 possibility of closing Rikers. I think we're

17 talking about close to 10,000 inmates at

18 Rikers. What are your thoughts on what

19 should be done at Rikers, and what is your

20 knowledge as to what the commission is going

21 to report, the Lippman commission on Rikers,

22 and what is their timing?

23 MAYOR DE BLASIO: Assemblyman, I'm

24 certainly not going to steal Judge Lippman's

1 thunder. That commission continues to work;

2 my understanding is we'll hear a report from

3 them in the spring.

4 I've said, when I announced the

5 preliminary budget, that we'll have a lot

6 more to say on the future of our correction

7 system at the time of the Executive Budget.

8 I want to thank you as you assume the

9 chairmanship. We very much look forward to

10 working with you and appreciate the

11 partnership we've had already. And I

12 appreciate you meeting with our correction

13 officials, and I think you're seeing already

14 that Commissioner Ponte has achieved some

15 pretty extraordinary reforms. And we have

16 some examples of both reduction of violence

17 and improvement in the way that we treat and

18 rehabilitate our inmates that are very, very

19 compelling. We want to do a lot more.

20 In terms of the future of Rikers,

21 again, I'll reserve the broad judgment until

22 the time of the Executive Budget. But I will

23 say this. You know, a very powerful report

24 came out a few weeks ago pointing out that

1 the mass incarceration issue is becoming even

2 more of a debate all over this country -- and

3 a bipartisan one, I want to say, in a good

4 and healthy way. There's a recognition that

5 mass incarceration failed and was inhumane

6 and extraordinarily costly in human and

7 economic terms.

8 One of the better stories in this

9 country is in New York City, where over the

10 last few decades we've reduced the population

11 at Rikers by 55 percent. It's now getting

12 closer to 9,000 than 10,000. Of course there

13 are variations in any given week or month,

14 but we do see a good downward trend and we

15 intend to continue that and deepen that.

16 So whatever we do in terms of the

17 specific facilities -- and there's a lot of

18 complexities we have to address, not only at

19 Rikers Island today, but the other correction

20 facilities around the city. And any plan

21 that we would have going forward, we'd have

22 to talk about all of them.

23 But what I can say is we are reducing

24 the number of people incarcerated,

1 consistently. We're coming up with

2 alternatives that are working. And more

3 important than anything, we're reducing

4 crime, which reduces the flow of people into

5 the correction system. And I want to give

6 credit to all the men and women in the NYPD

7 for a three years running reduction in crime,

8 particularly in serious crime. That's the

9 gateway to everything else.

10 So what I can safely say to you is for

11 anyone who wants to see change in our

12 correction system, support us in the changes

13 we're making in policing that are allowing us

14 to drive down crime and get to the root

15 cause.

16 ASSEMBLYMAN WEPRIN: Well, I look

17 forward to working with you and your staff

18 over the next weeks and months for various

19 reforms at Rikers, and hopefully we're there

20 to be as helpful as possible working with

21 you.

22 MAYOR DE BLASIO: Thank you very much.

23 CHAIRMAN FARRELL: Thank you.

24 We've been joined by Assemblywoman

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1 Yuh-Line Niou and Assemblyman Brian Kavanagh.

2 Senator?

3 CHAIRWOMAN YOUNG: We've been joined

4 by Senator Terrence Murphy and Senator

5 Gustavo Rivera.

6 And our next speaker is Senator

7 Krueger.

8 SENATOR KRUEGER: Good morning, Mayor,

9 and your staff.

10 MAYOR DE BLASIO: Good morning.

11 SENATOR KRUEGER: Let's do some

12 lightning round, if you can.

13 MAYOR DE BLASIO: Okay, I'm ready. I

14 feel like I'm on NY-1.

15 SENATOR KRUEGER: Thank you.

16 So there seems to be a lot of

17 information here, I guess coming out of both

18 the Governor's office and in the question you

19 got, that New York City has been decreasing

20 its MOE to education. I just want to

21 reiterate what I thought I heard Dean

22 Fuleihan say, that actually it's the

23 opposite. Could you repeat that data?

24 MAYOR DE BLASIO: I'll repeat from the

101

1 testimony, and then Dean will take it from

2 there, because we think the fact is pretty

3 good here. Hold on. Oh, Dean was way ahead

4 of me, okay.

5 Since 2008, the city's share of

6 education spending -- so let me just affirm

7 this, the Bloomberg administration and my

8 administration, both of which increased city

9 spending on education. Since 2008, the

10 city's share of education spending has

11 increased from 49 percent to 57 percent,

12 while the state share has declined from

13 41 percent to 37 percent.

14 SENATOR KRUEGER: Thank you.

15 Senator Young brought up the ACS

16 issues. And she is right, it's a crisis when

17 children die. And it's a crisis when workers

18 don't get the support they need to do the

19 right thing, and they should be removed when

20 they don't.

21 But it sounded like I was hearing that

22 the state gives you so much more money for

23 child welfare now than it has in the past.

24 And I didn't think that was correct. I'm

102

1 looking at, again, your budget director.

2 MAYOR DE BLASIO: Again, I'll let Dean

3 speak to the history. I think the state

4 support for our child welfare efforts issues

5 is crucial. And again, what is too often

6 lost in this discussion, between 50,000 and

7 60,000 cases -- because you're talking about

8 every single call to the state registry has

9 to be investigated.

10 By definition, and we can give you the

11 chapter and verse on the tragedies that have

12 occurred, we feel every one very humanly.

13 But thank God, they are a very small number

14 compared to the tens of thousands of cases

15 where our ACS workers get to the bottom of

16 the situation, stop problems before they

17 happen, provide preventive services -- which

18 is something I've backed for many years, and

19 we've expanded. Which means literally the

20 ability of charitable and nonprofit

21 organizations to intervene with the family

22 and support them and help them deal with

23 their problems. That work has continued and

24 has deepened, and that is why so many

103

1 children have been saved.

2 And further, I've been very blunt

3 about this, there are a number of times,

4 hundreds of times, when ACS has asked for the

5 removal of children from a family only to

6 have a judge refuse. That's unfair to the

7 people who do such hard work at ACS, that if

8 they are requesting removal and a judge will

9 not let them do that. The judge may have a

10 reason in their own mind, but we have to

11 grade fairly here.

12 Just as we would our police or our

13 firefighters or anyone else who's a first

14 responder, our ACS workers are another type

15 of first responders, and they're regularly

16 saving lives. They get precious little

17 credit for it.

18 But when something goes wrong, I feel

19 it personally. And we are not afraid to take

20 the most resolute action to deal with anyone

21 who doesn't do their job.

22 SENATOR KRUEGER: And in other parts

23 of -- oh, I'm sorry. You said Dean.

24 DIRECTOR FULEIHAN: And state funding

104

1 has not changed.

2 SENATOR KRUEGER: It has not changed.

3 So in other parts of the state, as

4 charters have expanded, the state has made a

5 commitment to not have the local district

6 have to absorb those costs out of its school

7 funding. But I believe your testimony was

8 that New York City would actually have to

9 kick in an additional $200 million of its

10 school funding for the charter proposal this

11 year?

12 DIRECTOR FULEIHAN: Correct. Correct.

13 SENATOR KRUEGER: And that's a new

14 demand on the city.

15 DIRECTOR FULEIHAN: Yes.

16 SENATOR KRUEGER: And because there's

17 also a proposal to not lift the charter cap

18 statewide, but to allow whatever charters are

19 unassigned now to all come to New York City,

20 do you have an estimate of additional cost to

21 yourself if that all were to happen,

22 particularly the building costs?

23 DIRECTOR FULEIHAN: We'll get you that

24 estimate. I don't have a quick estimate.

105

1 I'll try and get one now.

2 SENATOR KRUEGER: It's my

3 understanding it was -- up until now, there

4 was this sort of interesting the city kicks

5 in the first 40 million, but then after that,

6 not. But if we suddenly see a massive

7 increase in charters opening in New York City

8 under the Governor's language, could you

9 potentially see a much bigger cost to

10 yourselves, not just on operating but on

11 capital as well?

12 DIRECTOR FULEIHAN: Yes. We would

13 definitely see cost increases.

14 But as the mayor pointed out, there's

15 already room in the existing cap that applies

16 to New York City for charters.

17 SENATOR KRUEGER: Correct. But there

18 could be so many more.

19 DIRECTOR FULEIHAN: Yes, there would

20 be additional costs.

21 SENATOR KRUEGER: Thank you.

22 Pre-K, you said there was a cut in

23 funding for pre-K in New York City in the

24 state budget?

106

1 MAYOR DE BLASIO: Yeah. And again,

2 it's in the context of something good, which

3 is the consolidation of how the grant funding

4 is used. We applaud that. But the poison

5 pill that has to be addressed is that the

6 per-seat rate would be cut in the bargain.

7 And we think those things should be

8 dealing -- we think consolidation is smart

9 government, but cutting the per-seat rate is

10 not good for our children, obviously. It

11 means 3400 seats that are currently funded

12 would not be funded.

13 SENATOR KRUEGER: So to be parochial,

14 my district is one of the two districts in

15 the city that still has incredible wait lists

16 for pre-K. We don't have adequate pre-K

17 seats. Your people know that. And partly

18 it's because our schools are overcrowded and

19 our rental costs for alternative sites have

20 been so high.

21 I don't want to see any cuts in pre-K

22 money at all, but I also really want the kids

23 in my district to have the same rate to go to

24 pre-K as the other districts.

107

1 MAYOR DE BLASIO: Senator, as you

2 know, although I am a Brooklynite, I am

3 living currently on the Upper East Side, and

4 I talk to people all the time about this

5 problem.

6 One, we absolutely want to do more to

7 solve it. We've made some progress in terms

8 of school seats in general, and pre-K seats

9 in specific, for the Upper East Side.

10 But as you indicated, it is literally

11 the hardest territory in the city for us to

12 address because, one, it's so thoroughly

13 built out and, two, because of the costs

14 involved with the very limited new

15 development that is happening.

16 We are still trying to find creative

17 solutions. But I want to just -- a

18 respectful minor correction. Even though it

19 is not what we ideally would want for any

20 district -- which is the maximum seats

21 immediately, you know, geographically where

22 parents want them ideally -- every single

23 student is guaranteed a pre-K seat.

24 Now, in your district, I think, again,

108

1 one of the most difficult situations in all

2 of the City of New York. We still work very

3 hard, parent by parent, with a facilitated

4 enrollment system that's literally a person

5 who is a specialist working individually with

6 that parent to find them the closest

7 available seat that works for them. For many

8 parents, as you know, that might be closer to

9 their work than it is to their home. That

10 might be better for them. A lot of parents

11 feel good about a seat that's very near their

12 workplace, for a variety of reasons.

13 But we will work with any one of your

14 constituents to find a placement. They will

15 have a placement for free. We'll do our

16 damnedest to make sure it's as convenient as

17 possible while we're trying to build out the

18 capacity.

19 SENATOR KRUEGER: We continue to

20 struggle.

21 I want to shift to housing. While

22 some people apparently feel plastic bags is

23 biggest crisis facing New York City, I would

24 argue the lack of affordable housing is, and

109

1 the future environmental damage that will

2 continue until we radically change our

3 consumer production and our production

4 behavior.

5 The 421-a proposal that's been

6 renamed -- although I'm calling it the -- you

7 know how the old 421-a was bad; this has a

8 new name, but it's worse. There are some

9 people actually proposing that co-ops get

10 brought back into this. You in your

11 testimony testified about the old 421-a, your

12 proposal -- which I didn't love either, by

13 the way.

14 MAYOR DE BLASIO: You're equal

15 opportunity, Senator.

16 SENATOR KRUEGER: There you go.

17 The new one, can you project what the

18 loss of city revenue would be if co-ops were

19 brought back into this program the way they

20 were in the old program?

21 MAYOR DE BLASIO: I will give you a

22 broad answer, and then my colleagues may give

23 you something more specific. But here's the

24 bottom line. We had a program, which I say

110

1 is the old broken 421-a, that cost taxpayers

2 a lot and subsidized luxury housing. We

3 can't let that happen again. It's not in the

4 interest of our people and it's not in the

5 interest of our taxpayers. I think at this

6 moment it would be even more unacceptable

7 than it was years ago.

8 So right now, as you saw from the

9 numbers we put forward, the current proposal

10 is inching back towards the same cost as the

11 previous one, which rewarded luxury housing.

12 And we fear that the door is now open for the

13 inclusion of luxury housing, which could make

14 it as costly or even more costly -- quickly,

15 easily could be more costly than the old

16 421-a. So that would then be the worst of

17 all worlds, where taxpayers are being hit

18 worse than they were in the past, we're not

19 getting the affordability we deserve, and

20 we're subsidizing luxury buildings again.

21 I think a lot of people -- look, there

22 is a particular building on 57th Street, a

23 luxury building, very tall luxury building,

24 that when New Yorkers found out that that got

111

1 a tax break for purely luxury housing, no

2 affordable housing, there was a massive

3 outcry in New York City. We just cannot go

4 back to those days.

5 So we are happy to work with all

6 members of the Legislature and the Governor

7 and all other interests on the current

8 proposal, which in our view has merits and

9 has issues we want to address too. But going

10 back in the direction of the old proposal

11 would be untenable and would make it a net

12 loss for the people of New York City.

13 SENATOR KRUEGER: I agree, although

14 again, I think it's even worse. Because even

15 without the condos, the new proposal would

16 allow market rate to take advantage of 421-a

17 even if there was no affordable units in a

18 specific building.

19 So again, I would urge everyone

20 listening to look carefully at that proposal

21 and the damage it would do. Personally, if I

22 had $2.4 billion in city taxpayer revenue,

23 I'd actually want to buy $2.4 billion in

24 affordable housing with it, not maybe $150

112

1 million in affordable housing.

2 There was a bill passed last year --

3 which we then did a counter bill, but then

4 the Governor vetoed -- on the MTA sort of

5 real estate not related to transportation

6 being able to violate New York City zoning,

7 actually anyone's zoning in the 12 MTA

8 counties. Disappointingly, the Governor

9 vetoed the Legislature's attempt to reverse

10 that.

11 Is the City of New York attempting to

12 do anything about that at this point? And do

13 you see that as causing problems for you in

14 the future?

15 MAYOR DE BLASIO: You know, Senator --

16 I'll start, and again my colleagues may want

17 to add -- that we worked very productively

18 with our colleagues in suburban counties. By

19 the way, on a bipartisan basis. There was a

20 lot of unity on this point, that it was not

21 the place of the State of New York or any

22 entity of the State of New York, like the

23 MTA, to override local zoning. Which is, I

24 think, pretty sacrosanct. There's a number

113

1 of things localities do -- policing,

2 education, zoning -- that all of us can say

3 are decisions best handled locally with

4 maximum citizen input. And the MTA should

5 not be overriding that reality.

6 And I think clearly there was

7 tremendous support in both the Senate and the

8 Assembly, having heard from local leaders of

9 all different-size jurisdictions and both

10 parties, you know, we felt very much

11 appreciative for the support we received in

12 the Legislature.

13 We disagreed with the Governor's

14 decision, obviously. We think we need to

15 restart that process again and build up even

16 more support from the local level, because I

17 think it's something people feel deeply.

18 They do not want to see their local rights

19 trampled on. And it matters a lot in a place

20 like New York City, but I could argue it

21 matters even more in smaller jurisdictions,

22 that it fundamentally changes the trajectory

23 of their cities and towns to have major new

24 development that is done without their

114

1 approval.

2 So we are going to work closely with

3 all of you and with our colleagues in local

4 government to once again try and address

5 this.

6 SENATOR KRUEGER: And then -- I know

7 I'm at zero, but I'm taking advantage of

8 ranking status for a moment. In your

9 testimony, you proposed that a mansion tax go

10 into effect for apartments or houses selling

11 for over $2 million and say that the money

12 would be used for senior housing.

13 Can you explain a little bit about how

14 much money you project this to be? And what

15 kind of senior housing program would you be

16 starting with it?

17 MAYOR DE BLASIO: We project it would

18 provide us with $330 million a year. It

19 would allow us to provide ongoing support for

20 25,000 seniors who are having trouble

21 affording housing. It would mean that for

22 all seniors who are part of this initiative,

23 it would pay no more than 30 percent of

24 whatever income they have. And we know so

115

1 many of our seniors are on low fixed incomes.

2 That would be 25,000 apartments on top

3 of our current 200,000-apartment plan. So

4 everything we're doing in our housing plan,

5 200,000 apartments, reaches half a million

6 people by 2024. This new initiative -- which

7 again I think is fair because it only reaches

8 those who have homes of $2 million or more in

9 value when it's sold, and people who are

10 about to get a major tax break from the

11 federal government, as everyone knows -- this

12 will allow us to reach 25,000 more seniors on

13 an ongoing basis, lock in affordability for

14 them long-term through preservation. So we

15 would be subsidizing apartments in place for

16 the long-term.

17 SENATOR KRUEGER: Thank you. And

18 thank you for your last sentence, which was

19 reminding everyone that Washington is very

20 likely to change our tax structure to lower

21 taxes for the highest-income Americans very,

22 very soon. And that in fact will translate

23 into less money available from the federal

24 government for the programs we depend on and

116

1 actually is a reason to support the

2 Assembly's proposal to increase the

3 millionaire tax, as they put it, and also to

4 recognize that proposing a tax on high-cost

5 house sales or apartment sales still will

6 translate, when we do the math, I assume, to

7 be a significant reduction in people's

8 federal taxes, even if they see some increase

9 upon the sale of a home or some increase

10 because they're in the highest income

11 brackets as a state resident.

12 MAYOR DE BLASIO: I would argue,

13 Senator, even if nothing changed on taxation,

14 this would be fair to ask those who own homes

15 of $2 million or more to do a little more to

16 help seniors who built our city, built our

17 state, and now are struggling to have

18 housing. I think it would be fair under any

19 circumstance.

20 But given that -- I agree with you --

21 this will unfortunately, from my point of

22 view, when the federal government gets done,

23 when the Congress gets done with its tax

24 plan, unquestionably the tax breaks for

117

1 wealthy individuals will far outstrip

2 anything we're talking about here, and the

3 wealthy will be paying less in taxes overall

4 than they're paying now, even with the

5 continuation of the millionaire's tax, or

6 extension of it, or improvement of it. And

7 with a mansion tax, still, wealthy people are

8 going to end up with more money in their

9 pocket under any scenario, based on what

10 we're hearing from Washington.

11 SENATOR KRUEGER: Do you happen to

12 know where a lot of those wealthy people

13 live?

14 MAYOR DE BLASIO: Again, please?

15 SENATOR KRUEGER: Do you happen to

16 know where a lot of those wealthiest people

17 live?

18 MAYOR DE BLASIO: There's a number of

19 districts I could name. One of them might be

20 yours.

21 SENATOR KRUEGER: Thank you.

22 Thank you very much.

23 CHAIRMAN FARRELL: Thank you. We've

24 been joined by Assemblyman Dilan and

118

1 Assemblyman Otis.

2 Next to question, Assemblywoman Nolan.

3 ASSEMBLYWOMAN NOLAN: Thank you,

4 Mr. Chairman.

5 Mr. Mayor, welcome to Albany.

6 MAYOR DE BLASIO: Thank you.

7 ASSEMBLYWOMAN NOLAN: I do have a

8 question, but I want to point out something

9 that was said earlier. It referenced it as

10 someone who's a parent of a child in a city

11 public school. It's actually quite easy to

12 find the budget for each individual school,

13 each of the 1600 schools that the city

14 administers. You just go to the website and

15 you type in "school budgets," and you can get

16 the budget for every single individual

17 school.

18 And as someone who's complained at

19 times about those budgets, I would point out

20 that it's something that is relatively

21 recent. And I congratulate you and

22 Chancellor FariÒa for providing that

23 information, which in prior administrations

24 was not available by individual school. And

119

1 it is very helpful for parents advocating for

2 their children, and it is available on a

3 school-by-school basis.

4 I do have a question on trailers.

5 I've asked both you and Mayor Bloomberg about

6 it, and you know that it's a continuing sore

7 spot for many of us, particularly in the

8 Bronx, Brooklyn, and Queens, where I

9 represent. And I know there is a report that

10 we've required to be filed, but I would like

11 to hear from you what the progress is on

12 eliminating trailers.

13 MAYOR DE BLASIO: I'm going to start,

14 and I think Sherif will add.

15 But look, the bottom line has been we

16 are committed to a phaseout of all trailers.

17 As we've been honest with you, it takes time

18 and is complicated in some specific

19 locations. But in fiscal '13, we had 352

20 trailers in use. We are continuing to

21 decline. Now, in fiscal '17, we are down to

22 245. We are projecting the next jump for

23 next year to go down to 176. We're just

24 going to continue consistently to move. And

120

1 we obviously have put substantial resources

2 in the budget to do so.

3 ASSEMBLYWOMAN NOLAN: Thank you very

4 much.

5 I want colleagues to understand that

6 even -- and this is really great progress,

7 and you deserve credit for it. But even with

8 this progress, there are still more children

9 attending school in a trailer in the City of

10 New York than in some of the largest

11 districts in our state, and that has been the

12 case for over 30 years.

13 So again, the contrast, colleagues,

14 that there are more children attending school

15 in a trailer in the City of New York for the

16 last 30 years than the size of most of the

17 districts of the 700 school districts of our

18 state.

19 One of the reasons I bring this up is

20 that we tried very hard to give you some

21 additional revenue to get rid of these

22 abominations, and the city is due, I believe,

23 $700 million from the Smart Schools Bond Act.

24 You didn't mention the bond act in your

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1 testimony, but I wondered if you would care

2 to comment. My understanding is the city's

3 application is there. Do we know why the

4 Executive has not acted on it?

5 MAYOR DE BLASIO: In terms of the bond

6 act, I'm going to defer to Dean.

7 DIRECTOR FULEIHAN: So thank you.

8 We have, as you know, completely

9 allocated funding for the removal of the

10 trailers. So that is completely in the city

11 budget. It is now going through the process

12 that the mayor outlined.

13 And no, we have had our application

14 before the state, and we're waiting for

15 approval.

16 ASSEMBLYWOMAN NOLAN: Do we have any

17 idea whether the bond act -- have they

18 reached out to you, the people on the board

19 of the state bond act?

20 DIRECTOR FULEIHAN: I believe we

21 submitted in November -- I'm going to ask

22 behind me -- in last May, and we have not --

23 ASSEMBLYWOMAN NOLAN: The Education

24 Committee intends to keep some focus on

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1 what's happening with the Smart Schools Bond

2 Act, so we will follow up with Chancellor

3 FariÒa.

4 DIRECTOR FULEIHAN: We would

5 appreciate that. Thank you.

6 ASSEMBLYWOMAN NOLAN: And we will

7 certainly be following up with the Executive.

8 I would like the mayor just to

9 comment, if you would. In your testimony you

10 talked a little bit about the importance of

11 the CFE settlement. Some suggest that public

12 school parents like you and I have been duped

13 into thinking that it's been settled or

14 resolved. I find that statement shocking. I

15 don't want to get into who said it, but I

16 thought it was very ill-advised.

17 As someone who's son never really --

18 my son is graduating, your son has already

19 graduated, and your daughter. We were part

20 of this so long ago, we never really saw the

21 true fulfillment of CFE. Do you believe that

22 CFE has been finished or fulfilled and that

23 you and I were duped into thinking that there

24 was enough money for the city schools -- and

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1 all the schools in our state, many of whom,

2 rural, poor areas as well, would benefit by a

3 full CFE?

4 MAYOR DE BLASIO: Assemblymember,

5 first of all, this is an occasion for me to

6 thank you for what you do as chair of the

7 Education Committee, which is so crucial and

8 important for the children in New York City.

9 It really is. Because you're asking a

10 question that needs to be answered and hasn't

11 been in our public discourse, and it amazes

12 me it has not been.

13 No, there has not been a resolution on

14 CFE. Yes, there has been a consistent effort

15 to dupe people into thinking the issue is

16 resolved and in the past. It's not in the

17 past. It's perfectly alive today, to the

18 tune of $1.6 billion.

19 Every single person here and every

20 parent in New York City who says, Why is my

21 school not getting 100 percent of the fair

22 funding formula, it's because we should be

23 getting $1.6 billion more in our budget,

24 according to a decision of the Court of

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1 Appeals, the highest court in the state, a

2 decade ago. And there are some who allege

3 that that decision was not binding. It was

4 absolutely binding.

5 And further proof is that in the Eliot

6 Spitzer administration, CFE was implemented

7 and funding was changed -- not just for New

8 York City, but other high-needs districts in

9 upstate cities and rural areas as well. So

10 the State of New York not only recognized a

11 decision by our highest state court, but then

12 proceeded to implement it.

13 But for a change of administration and

14 one of the greatest economic crises in the

15 history of this country, I suspect we would

16 have seen steady progress and we'd be having

17 a very different discussion today.

18 But no, it cannot be airbrushed out of

19 history. Our children have suffered for the

20 lack of that funding. And you've seen it and

21 I've seen it as public school parents. We're

22 not going to let it go. And what we are

23 concerned about is we see a change in the

24 State Budget terminology that suggests an

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1 attempt to remove the notion of CFE once and

2 for all from the discussion. That's not

3 particularly legal, in our view.

4 ASSEMBLYWOMAN NOLAN: Thank you.

5 CHAIRWOMAN YOUNG: Thank you very

6 much.

7 Our next speaker is Senator Marty

8 Golden.

9 SENATOR GOLDEN: Thank you, Madam

10 Chair.

11 Thank you, Mr. Mayor, for being here.

12 I'm sure it's been a long morning, and it's

13 going to be a little longer, I presume.

14 On some of the questions -- I had to

15 leave for some press conferences, so my

16 questions may have been asked and answered.

17 And one of them I heard when I came in,

18 Senator Krueger was talking about -- and I

19 know Cathy had spoken about the ACS. I don't

20 think anybody in this room doesn't believe

21 ACS has to be revamped, that they need help

22 and something has to be done, and funding has

23 to be put into them.

24 We passed a bill out last week, we

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1 passed it last year and the Governor vetoed

2 it, and that's limiting the number of cases

3 to the ACS workers to 15. You may even be

4 under that number. But there are other

5 counties across the state that are not. So

6 we want to limit the number of caseloads to

7 each caseworker. Would you be supportive of

8 that bill?

9 MAYOR DE BLASIO: Having not seen the

10 language of the bill, I just want to reserve

11 judgment. But let me agree with the concept.

12 We have been trying to drive down caseloads,

13 and we succeeded at that by additional city

14 funding. So our goal, which we've acted on,

15 is reduced caseloads and more training for

16 the caseworkers, who have very, very

17 difficult, complex jobs.

18 I also -- what you didn't hear, and I

19 want to reiterate, is we announced that the

20 first deputy commissioner will be taking over

21 the agency as of next Monday, that a

22 permanent new commissioner will be in place

23 at the end of February, beginning of March.

24 But an additional important point, someone

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1 you probably know well, Chief Bob Boyce, of

2 the NYPD --

3 SENATOR GOLDEN: Excellent.

4 Excellent.

5 MAYOR DE BLASIO: -- will be coming

6 over not -- he's going to be doing all his

7 regular job too, but in addition he's going

8 to come over to ACS and cochair the ChildStat

9 program, which is based on CompStat, which

10 has had so much success in driving down

11 crime. ChildStat was initiated in the

12 Bloomberg administration, to their credit.

13 We're going to enhance that approach and make

14 it even closer in its mindset to CompStat and

15 bring over the chief of detectives of NYPD to

16 cochair those meetings and even get deeper

17 into the cases to determine how we can do

18 better.

19 SENATOR GOLDEN: Mr. Mayor, if the

20 question's already been asked and answered,

21 just tell me it's been -- because my members,

22 I'm sure more members want to speak, and I'm

23 sure that we can look it up later and find

24 out what the testimony was.

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1 There's another bill that we had

2 last -- two years ago and a year ago, and

3 it's about giving our ACS workers, the

4 protective workers into the home, iPads, and

5 let them do their actual work within the home

6 so that the cross-grids can show that the

7 individual is there taking a picture of the

8 inside of the home and taking a picture of

9 the child and a picture of the house itself.

10 Hopefully you can be supportive of that bill.

11 And there's a backup piece to this

12 that has not yet been put forward, but there

13 is technology out there that today gives you

14 in-time technology of how many times that

15 child has been in and out of foster care,

16 what the frailties of the child are, the

17 abuse of the child, the parents, the parent's

18 background, the foster parent's background,

19 and domestic violence. All of those things

20 are there in this technology.

21 It's working in Chemung County, and

22 it's working -- Suffolk County is going to do

23 a pilot program. I don't think it should be

24 a pilot program, I think it should be a

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1 statewide program. But if not, at least

2 hopefully the city will take the initiative

3 to turn around and have these interviews with

4 these individuals that have this technology

5 and try to get that into your iPads and get

6 the workers in the homes with these iPads so

7 that we can get a true picture of what's

8 going on in the true time. I think that's

9 important.

10 MAYOR DE BLASIO: Senator, a couple of

11 points.

12 One, I now have clarification on your

13 proposed legislation on the caseload cap at

14 15 cases. I want to just formally say we

15 endorse and support your legislation.

16 Second, one of the things we want to

17 do -- the NYPD has had such success with the

18 use of new technology. And the work of ACS

19 and NYPD parallel in crucial areas. But as

20 you know -- and this was the tragic truth in

21 the Nixzmary Brown case in 2006 -- the two

22 agencies didn't have a culture of connection

23 the way we needed them to. There's been real

24 progress.

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1 Under Commissioner O'Neill and Chief

2 Boyce, there is an intensified idea of

3 deepening the interconnection between ACS and

4 NYPD, which will be exemplified by the

5 cochairing of the ChildStat process. Your

6 point is well taken, that we should also

7 learn from the positive example of NYPD,

8 which is the smartphones, Bill Bratton's

9 great focus on bringing that handheld

10 technology to our officers, which has had a

11 tremendously positive effect. Any number of

12 crimes have been stopped with those

13 smartphones that would not have been in the

14 past.

15 I agree with that concept in terms of

16 ACS workers. We have to figure out details

17 in terms of cost, training, et cetera. But

18 in principle, I think that's a very

19 productive idea.

20 SENATOR GOLDEN: Another issue, the

21 veterans program. You introduced that

22 beautiful veterans program a year ago, two

23 years ago, tremendously successful. We have

24 a tremendous number of homeless in our city,

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1 I'm sure it's been addressed. But where I

2 live, in Bay Ridge and Fort Hamilton Army

3 Base, I have homeless; probably about 40

4 percent of it is military. And one of the

5 reasons is because the VA hospital is there,

6 the other reason is because Fort Hamilton is

7 there.

8 I was a little distressed to see that

9 you cut an employee from that and that you've

10 taken some funding from there. I do believe

11 -- I hope that you look at that and redo --

12 it's in the budget, cutting one employee and

13 one -- what was the name of the program?

14 MAYOR DE BLASIO: Just -- Dean and I

15 are not aware of any cut to that program, so

16 we will follow up with you.

17 SENATOR GOLDEN: Do me a favor. I

18 read it, so it's out there. So if it is,

19 please put an end to that for sure.

20 MAYOR DE BLASIO: We want to correct

21 it if it's wrong, for sure.

22 SENATOR GOLDEN: Okay. The other

23 thing is the 421-a. I know that everybody's

24 talking about these luxury condos. We're not

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1 talking about luxury condos, we're talking

2 about condos in the outer boroughs so people

3 can have affordable living.

4 MAYOR DE BLASIO: May I?

5 SENATOR GOLDEN: We want people to be

6 able to -- yes, sir.

7 MAYOR DE BLASIO: Sorry to interrupt,

8 I want to just -- you're -- I want to

9 differentiate, because you're making a fair

10 point.

11 But on the previous, thank you for the

12 acknowledgement. New York City has ended

13 chronic veteran homelessness, and the federal

14 government recognizes that fact. And it was,

15 as you know, a big job. We had thousands of

16 veterans that we had to address, and we were

17 able to.

18 There still are veterans who are not

19 chronically homeless but still at times are

20 homeless. That's still not good enough, from

21 my point of view. I want to reach every

22 single one of them. And the mandate is to

23 find housing for each and every one.

24 So we've made real progress in that

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1 area. We've been adding positions to address

2 veteran housing needs. So we'll check on

3 that --

4 SENATOR GOLDEN: It's a good program.

5 Keep it up.

6 MAYOR DE BLASIO: But I can just jump

7 ahead on the condo issue. What I've tried to

8 say in the testimony is right now the

9 proposal the state has made, after all the

10 negotiation with the different players, there

11 are some very good elements to that proposal,

12 there are some areas of concern we still want

13 to talk through. It is more expensive to the

14 taxpayer than what we originally proposed,

15 and it doesn't achieve as much affordability.

16 But it still has merits, it's still much

17 better -- hold on one second while I make

18 this -- much better than what was originally

19 going on a few years ago with 421-a.

20 Our concern is not what you have

21 proposed, which you're right, is outer

22 borough and for folks of -- I wouldn't say

23 limited means, but certainly not luxury

24 apartments. Our concern centrally is

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1 anything that would take us another step back

2 toward the old broken 421-a --

3 SENATOR GOLDEN: We don't want to go

4 there.

5 MAYOR DE BLASIO: -- which literally

6 subsidized pure luxury apartments.

7 SENATOR GOLDEN: I agree with you.

8 There is a problem, obviously, there's a

9 billion dollars off the street right now.

10 That money is someplace else. It's not being

11 invested in housing. It's not being invested

12 in low-income housing. It's not giving the

13 city its fair shot. That money is somewhere

14 else. It could be in Philadelphia, it could

15 be offshore, it's anywhere.

16 And the longer it takes us to get that

17 bill done, the longer that money is off the

18 street. We need the people building those

19 units, we need all of the players at the

20 table, and we need to close down on this bill

21 ASAP so we can get that money distributed to

22 the city for affordable housing. We cannot

23 afford to leave this out any longer, sir.

24 Okay, I know my time is limited, so

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1 that's why I'm running through this.

2 Three-quarter disability with the New York

3 City Police Department. The police

4 department obviously -- it's a negotiation,

5 and the last thing you want to do is get in

6 the middle of a negotiation here. But you've

7 got 13,000 or 14,000 police officers out

8 there without three-quarter disability. It

9 doesn't make much sense to keep that many

10 officers out there without disability. We're

11 keeping them on the job anyway, so it's

12 costing us more money than getting them off

13 on disability.

14 So I would suggest that we try to come

15 to a close on that if we can. I know that

16 that the NYPD was at 4 percent, you were at 2

17 percent. I'm sure somewhere in the middle we

18 can come to some ground. I'm sure that the

19 -- dealing with the -- and I'm not going to

20 ask you to get involved, I'm just asking you,

21 as a Senator and as a representative from the

22 City of New York, that you come to some

23 resolution on that as soon as possible.

24 MAYOR DE BLASIO: Let me give this

136

1 very brief response. First of all, Senator,

2 in addition to your current public service, I

3 thank you for the time you spent as a member

4 of the NYPD.

5 SENATOR GOLDEN: Thank you.

6 MAYOR DE BLASIO: And I will just

7 state the fact so everyone's clear on it. We

8 have almost every municipal union -- this is

9 a striking reality -- almost every municipal

10 union under contract in New York City,

11 including every uniformed service union

12 except the PBA, every other police union --

13 which you know there are four others --

14 except the PBA. That's the contract side.

15 On the disability side, as you know,

16 we've come to an agreement with our

17 firefighters, our sanitation workers, and our

18 correction officers, on the disability plan,

19 each one tailored to the specific reality of

20 their department. All agreed to, all

21 implemented. Again, the only place we have

22 not been able to find an agreement is with

23 the PBA, and we have sought that agreement,

24 and we will continue to. There's a mediation

137

1 process going on right now. And I have said

2 very clearly that I will do anything and

3 everything to work together to see if we can

4 come to a positive result.

5 But Senator, I just emphasize, we're

6 very proud that we have all of our other

7 uniformed service workers under contract and

8 with the kind of disability plans that are

9 fair to them. We want to continue that

10 progress.

11 SENATOR GOLDEN: Last question before

12 my cochairs here kill me. The Brooklyn

13 hospitals, the hospital Brooklyn 1, have you

14 been briefed? Do you understand what's going

15 on at the state level?

16 MAYOR DE BLASIO: I'm sorry, the part

17 you said a moment -- the hospital --

18 SENATOR GOLDEN: In Brooklyn, Brooklyn

19 North, they're going to have a condensing

20 four hospitals into a -- similar to what you

21 have, Health & Hospitals. I'm not sure, but

22 I think there's a deficit there of a

23 billion-plus. I'm not sure we're not moving

24 into the same here with the state program.

138

1 But are you briefed on that with the

2 state fully from the Governor's office?

3 MAYOR DE BLASIO: Not fully. I think,

4 from what I know so far, it's an honest

5 effort to try and deal with the ever-changing

6 realities of healthcare costs, which are

7 already in a very difficult place in terms of

8 handling it, and only going to get worse if

9 the ACA is repealed.

10 So I think, from what I've seen, it's

11 a productive proposal, but I cannot say I've

12 seen all the details of it.

13 SENATOR GOLDEN: I would ask you to

14 delve into that, because it just -- Kings

15 County is ground zero when it comes to

16 healthcare, not just for the city but for the

17 state and for the nation. As Brooklyn goes,

18 so shall the state, so shall this nation. I

19 don't want them closing University Hospital,

20 I don't want them closing any hospitals,

21 because we need those hospitals open and

22 available to the people of our communities.

23 I'm from Brooklyn South, but if you

24 close a hospital in Brooklyn North, it

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1 affects Brooklyn South, it affects New York

2 City, it affects Queens, it affects us all

3 the way around. So if I can, I appreciate

4 your indulgence in that. Thank you.

5 MAYOR DE BLASIO: Thank you.

6 CHAIRWOMAN YOUNG: Thank you, Senator

7 Golden.

8 SENATOR GOLDEN: Thank you.

9 CHAIRMAN FARRELL: Thank you.

10 Assemblywoman Malliotakis.

11 ASSEMBLYWOMAN MALLIOTAKIS: Thank you,

12 Mayor, for being here.

13 MAYOR DE BLASIO: Thank you.

14 ASSEMBLYWOMAN MALLIOTAKIS: First let

15 me thank you for investing in the bulletproof

16 windows for our NYPD patrol vehicles. I

17 think that is a wise investment and something

18 unfortunately, in this day and age, that is

19 needed.

20 Additionally, let me say I share your

21 concern about the senior centers and

22 potential loss of funding with the shifting

23 that the Governor is looking to do with the

24 Title 20 funding that perhaps would take

140

1 what's discretionary right now to the city

2 and move it to a mandate for something else,

3 which would be, in this case, childcare,

4 which could also be a worthy cause. But

5 again, we don't want to be taking money away

6 from our senior citizens.

7 So I want to say that I agree with you

8 on that and I share your voice in saying to

9 the Governor to please leave the Title 20

10 funding alone.

11 However, there's one area where you

12 and I seem to have a disagreement on, and

13 that is with what has been transpiring over

14 the last week, the potential for New York

15 City to be losing billions of dollars in

16 federal funding if they do not comply with

17 federal law. And for the city, this could

18 potentially mean $7 billion.

19 Now, as you're aware, the federal

20 government only issues detainer requests for

21 individuals who are here illegally under

22 certain circumstances. It is limited, it's

23 not just a blanket if someone is here

24 illegally or if they merely commit a traffic

141

1 violation, as you have said in some news

2 shows over the weekend. It's strictly for

3 individuals who pose a threat to public

4 safety or have previously been convicted.

5 Under Local Law 58 and 59, which you

6 signed into law in 2014, the city no longer

7 complies, necessarily, with detainer requests

8 in certain circumstances. In fact, over a

9 two-year period from October 1, 2014, to

10 September 30, 2016, the city only complied

11 with 32 out of 584. And as I mentioned, the

12 federal government only issues those requests

13 in certain circumstances: Someone poses a

14 threat to the public or has previously had a

15 conviction.

16 My issue is why would the mayor of the

17 City of New York, who is entrusted to protect

18 the safety of our citizenry, say that they're

19 not going to comply with these detainer

20 requests when they're only in certain

21 circumstances? So for instance, if an

22 individual is here, conducts sexual

23 misconduct, forcible touching, sexual abuse

24 in the second or third degree, grand larceny,

142

1 welfare fraud, identity theft -- this is just

2 a small list of a much larger list in which

3 the city refuses to comply with detainer

4 requests from the federal government.

5 Why would you protect individuals who

6 are here illegally, committing these crimes,

7 instead of putting your citizenry first and

8 foremost and making -- ensuring that we

9 receive the federal funding we need for our

10 law enforcement to do their job?

11 MAYOR DE BLASIO: Assemblymember, I

12 know you are a true believer in your

13 ideology, and I am in mine. And we have very

14 different facts we're working from, so we're

15 just going to have to disagree, I think, on

16 even the premise of the question, in my

17 opinion. But let me go piece by piece real

18 quick.

19 There are 170 offenses that as a

20 matter of New York City law, when any of

21 those offenses is committed, we cooperate

22 with ICE.

23 ASSEMBLYWOMAN MALLIOTAKIS: I agree

24 with you on that, there are 170. But there's

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1 even more that are not included --

2 MAYOR DE BLASIO: Well, but again, I

3 respectfully think that I've seen this

4 attempt to confuse the meaning of what we're

5 doing.

6 If there are some offenses that we

7 should add, we are willing to do that always.

8 But I would say anyone in good conscience who

9 reads that list of 170 offenses -- which is

10 essentially any act of violence, anything

11 involving a weapon, anything involving

12 terror, any major drug offenses, it's quite

13 comprehensive -- understands the intent is to

14 protect the safety of all New Yorkers. And

15 we will cooperate fully with ICE, and we have

16 cooperated fully with ICE.

17 I would disagree with you -- and

18 again, and I'm willing to add offenses if

19 they're -- when you come up with a list of

20 170 offenses, if there were several more that

21 should be included, I'm perfectly happy to

22 include them.

23 But on the point about how ICE makes

24 its requests, I think it is unfair to say

144

1 that every one of their requests, even

2 previously, let alone under a new

3 administration, would track that same notion

4 of serious and violent crime. We have no

5 such guarantee.

6 So we are concerned that any

7 offense -- in the examples I've given,

8 low-level marijuana possession, for example,

9 could, in the eyes of ICE, be considered for

10 deportation.

11 The problem is we have 500,000 people

12 in our city, a number of whom are parents of

13 children or breadwinners for their families.

14 Now, I would argue, on a humane and moral

15 level -- and I can certainly say that

16 Cardinal Dolan has spoken out in the same

17 vein, and many other faith leaders -- but I

18 also will tell you on a practical level, from

19 the point of view of taxpayers, is it right

20 to deport someone who did a very minor

21 offense, leave a family without a

22 breadwinner, leave children without their

23 parents? Is that good public policy? No.

24 So a final point, on the $7 billion.

145

1 Respectfully, by the decision of our -- or

2 the evaluation of our corporation counsel,

3 Zach Carter, former U.S. Attorney, that is

4 not a figure that we see any scenario for

5 dealing with. The only -- according to the

6 Supreme Court decision in 2012 written by

7 Justice Roberts, the current Chief Justice,

8 any attempt to cut funding must conform to a

9 specific funding stream. In the executive

10 order it mentions only two agencies, Justice

11 and Homeland Security. The grand total of

12 their funding to New York City is between

13 $150 million and $200 million. And that

14 means if they went ahead with that, we

15 believe we can defeat it in court on many

16 levels. But let's say it were to happen.

17 Then the federal government would make a

18 decision to take away anti-terror funding

19 from New York City. I believe they're going

20 to think twice before doing that, beyond all

21 the questions of legality.

22 So talk to Commissioner O'Neill, talk

23 to police chiefs all around the country, they

24 will tell you that maintaining the working

146

1 relationship between immigrant communities

2 and police is foundational to public safety.

3 That the minute this type of detainer

4 situation gets to be much more extensive and

5 based on much more minor offenses, it will

6 shut down the willingness of undocumented

7 folks to speak to police officers for fear of

8 deportation. It will make us all less safe.

9 That's the belief structure we're working

10 from.

11 ASSEMBLYWOMAN MALLIOTAKIS: Well, I

12 think that we can be compassionate and at the

13 same time look at protecting our citizens.

14 And I think there is an issue here. Because

15 when violent and serious crimes -- that's the

16 only case in which -- what the city defines

17 violent and serious crime, that's the only

18 case in which the city will comply. But

19 there's a whole slew of other crimes.

20 And you asked for suggestions, so

21 sexual misconduct, forcible touching, sex

22 abuse in the second and third degree --

23 CHAIRMAN FARRELL: Your microphone's

24 off.

147

1 ASSEMBLYWOMAN MALLIOTAKIS: -- grand

2 larceny, welfare fraud, and identity theft,

3 all crimes that currently an individual can

4 commit and the city will refuse to comply

5 with a detainer request. I think that's

6 something we need to look at and make sure

7 our priorities are focused on ensuring public

8 safety -- and making sure that we're

9 complying with the federal law so we get the

10 $7 billion dollars, because we can't afford

11 to lose that.

12 MAYOR DE BLASIO: Again, I'd just

13 really quickly -- Assemblymember, I think

14 those are two separate concepts. I think we

15 believe that the executive order, on its

16 face, is contradictory and attempts to do

17 things beyond that which the Supreme Court

18 has allowed. And we're going to challenge it

19 if -- if there's an effort to even take away

20 funding. Until that time, it's abstract.

21 But we will challenge it in court, and I know

22 a number of other cities and states will as

23 well.

24 The last time we had a scenario like

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1 that, it was President Obama's executive

2 action on immigration, which you remember was

3 challenged in court by states and ultimately

4 defeated. So we remind people of that

5 history.

6 But I would caution, you list in good

7 faith a number of offenses you believe are

8 not included. I would like our lawyers to

9 talk to you to show you how we constructed

10 the 170 offenses, because I think they do

11 overlap with some of the categories you've

12 talked about. I think there are some, and

13 you mentioned, that I believe are not on our

14 list and deserve full consideration, and

15 we'll work with you on that.

16 I think there are others -- because if

17 you look on all sorts of areas of sexual

18 abuse, for example, that clearly delineate a

19 number of offenses, I believe we are

20 addressing those issues. But I will

21 certainly want a dialogue to see if there's

22 areas we should add.

23 ASSEMBLYWOMAN MALLIOTAKIS: I

24 appreciate that.

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1 First, sexual abuse in the first

2 degree is included on your list, but second

3 and third degree are not, so I appreciate you

4 -- and we'll continue the dialogue.

5 MAYOR DE BLASIO: Thank you.

6 CHAIRMAN FARRELL: Thank you.

7 Senator?

8 CHAIRWOMAN YOUNG: Our next speaker is

9 Senator Squadron.

10 SENATOR SQUADRON: Thank you very

11 much, Chairs.

12 Thank you, Mr. Mayor. And actually, I

13 extend that with some specific ones in the

14 last year. The city has expended significant

15 funds to make good on the prior

16 administration's promise to make Bushwick

17 Inlet Park a reality, $160 million.

18 Greenpoint and all of the city really

19 appreciate that. It shows that a promise can

20 be kept; sometimes it takes the next

21 administration, but it can.

22 You referenced design-build earlier,

23 which -- for the BQE process, which is going

24 to cut like a scar through my district for a

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1 number of years. The city, I want to point

2 out, is funding $1.7 billion of that rehab,

3 which is a hundred percent of the funding.

4 We appreciate that quite a bit.

5 And on resiliency in Lower

6 Manhattan -- Assemblymember Niou is also here

7 and has already started that fight. The city

8 has put in significant funding, well over

9 $100 million, towards a continuous storm

10 barrier from 23rd Street around the tip of

11 Lower Manhattan and back around. We still

12 have a gap, and we want to continue working,

13 but your resilience folks have been strong on

14 that. Last year's budget was an investment.

15 We appreciate all of those things.

16 There's no question, in that, just a number

17 of thank yous.

18 I do, though, want to talk about

19 Rivington House briefly, which is also in my

20 district. I think many here have heard of

21 it. In December I sent a letter to the

22 corporation counsel suggesting that based on

23 the administration's comments on Rivington

24 House, it appeared from the public record

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1 that there could potentially be a False

2 Claims Act case to pursue here.

3 And just to take you through it, in

4 September Deputy Mayor Shorris used the term

5 "deceptive practices." Last March, former

6 Press Secretary Hinton said Allure misled the

7 city. In July of 2016, Deputy Mayor Shorris

8 said that he believed the sellers intended to

9 keep it as a nursing home.

10 I'll continue. Mr. Mayor, you in

11 August said that "They misled us." In

12 September, you called them "unscrupulous

13 developers looking to make a buck." And

14 we've already spoken about housing here. In

15 April, you said "We are looking at all legal

16 options because there's a lot of evidence

17 they misled us." In April, again, you

18 reiterated that.

19 Unfortunately, since I sent the letter

20 on the False Claims Act, the only comment in

21 response from the administration -- and this

22 is unfortunately sometimes a pattern -- was

23 at a press conference where you dismissed the

24 entire thing out of hand as a simple press

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1 release.

2 Well, the letter is here, it's quite

3 substantive. We have no idea what hasn't

4 been shared with the public, because it

5 hasn't been shared with the public. Based on

6 what has, the Lower East Side community has

7 good reason to believe a False Claims Act

8 case, with treble damages, could move

9 forward.

10 We appreciate the moderate investment

11 to replace what happened at Rivington House

12 from the city, but it's moderate. It does

13 not replace Rivington House. Treble damages

14 on a False Claims Act could have a

15 significant impact. Why did you dismiss that

16 out of hand, and why isn't the city pursuing

17 a False Claims Act case on the Rivington

18 House --

19 MAYOR DE BLASIO: Senator, look, you

20 and I have worked together for a long time,

21 and I know you put forward the suggestion in

22 good faith. I may have been speaking out of

23 frustration; I didn't mean to make that too

24 personal. I apologize for that.

153

1 But clearly, all the quotes you read

2 were based on a very heartfelt anger at what

3 the developer did, and a sense that the

4 people were cheated. And you know me, I have

5 a lot of concerns about some of the ground

6 rules in our laws related to the free

7 enterprise system that I think are overly

8 generous. I would love nothing more than to

9 find a way to recoup what has been done to

10 the community.

11 But respectfully, long before your

12 letter, I have asked this question probably

13 two dozen times of my corporation counsel,

14 who goes back and looks constantly for a

15 pathway and cannot find it, one that he

16 believes will legally be effective. We're

17 not going to bring an action if we believe

18 it's susceptible to immediate defeat.

19 So if you know something we don't

20 know, I will directly arrange for a

21 conversation between you and Zach Carter. If

22 you've found a path we haven't, I will thank

23 you publicly and we will implement it. But

24 to date, we have not found a way to recoup

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1 that, and it angers me deeply.

2 What I can say is because we have

3 changed our administrative approach, you know

4 now that no such action can be taken without

5 my personal signature. And if this had been

6 presented to me, I would have turned it down,

7 you know, faster than I can finish this

8 sentence. And the City Council has passed

9 laws to regulate the process going forward.

10 There's not going to be another situation

11 like this. But I would love to get the

12 resources back; I just don't know how.

13 SENATOR SQUADRON: Mr. Mayor, to be

14 clear, I don't have any information the city

15 doesn't have. That's the problem. All I

16 have is the extensive public record that I

17 read, plus the report of the Attorney

18 General and, you know, executive news reports

19 about multiple ongoing investigations at lots

20 of levels and the report of the City

21 Comptroller on it.

22 But, you know, the False Claims Act is

23 pretty clear. It uses very similar language

24 to the language we've seen out of the

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1 administration. And what I would urge and

2 request, respectfully, is that if there's

3 something you know that we don't, you share

4 it with us. Because it frankly leads to

5 questions when there's this very strong

6 public outcry at the highest levels of the

7 administration accusing them of misleading

8 around the amount they were paying for a deed

9 restriction that, you know, in everyone's

10 intent would have required a healthcare

11 facility, though a for-profit one. And, you

12 know, to just be told "We agree, but we

13 can't" is not sufficient for a community

14 that's still smarting from the loss of a

15 healthcare facility.

16 MAYOR DE BLASIO: Well, Senator, look,

17 I think it's absolutely fair to say it would

18 be helpful to your community to delineate our

19 legal understanding. We can certainly do

20 that.

21 You know, in addition to the reforms

22 to make sure that no such incident happens

23 again, that we have made major commitments to

24 the community to try to in some way make up

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1 for what was lost. You know that the

2 Rivington facility had gone through changes

3 and was being used less than it had in the

4 past. But we've committed to a nursing

5 facility, as part of our Health and Hospitals

6 system, that will help low-income seniors in

7 your community, as one way to try and give

8 back some of what was lost. And that is a

9 good-faith effort.

10 But the whole episode -- I've been so

11 angry since this happened, angry for all of

12 us. And as Attorney General Schneiderman

13 pointed out in his report, it's quite clear

14 these developers attempted to game the

15 system. And I wish they would pay for that.

16 And you've noted in other situations we have

17 not done business with them.

18 But right now, we will look under

19 every stone. If you can help us find a

20 better approach, if we have a legal leg to

21 stand on, we will go for it.

22 SENATOR SQUADRON: And I do hope that

23 the corporation counsel or the mayor's office

24 does respond with exactly that legal

157

1 delineation of why a False Claims Act is not

2 appropriate here, sooner rather than later.

3 I think we would really appreciate it.

4 And thank you for the time and for

5 those other items.

6 MAYOR DE BLASIO: Thank you.

7 CHAIRWOMAN YOUNG: Thank you, Senator

8 Squadron.

9 CHAIRMAN FARRELL: Assemblywoman

10 Hopper -- Hooper.

11 UNIDENTIFIED SPEAKER: Hooper.

12 CHAIRMAN FARRELL: Hooper, I'm sorry.

13 ASSEMBLYWOMAN HOOPER: I didn't

14 recognize the name.

15 (Laughter; off-the-record comments.)

16 ASSEMBLYWOMAN HOOPER: I'm sorry,

17 Mr. Chair, I didn't recognize the name. When

18 you said Hopper, I thought we had a new

19 member.

20 CHAIRMAN FARRELL: If I kept going,

21 I'd get the right one.

22 ASSEMBLYWOMAN HOOPER: All right,

23 thank you.

24 Before I ask the esteemed mayor maybe

158

1 just one question, really, I'd like to

2 acknowledge Dean Fuleihan, whom you had the

3 wisdom to take into your administration.

4 And Dean, remember, I always told you

5 it doesn't matter where you go, I shall

6 always find you. Welcome to Albany.

7 MAYOR DE BLASIO: I think that was

8 heartfelt.

9 (Laughter.)

10 ASSEMBLYWOMAN HOOPER: It was

11 heartfelt, yes. Dean and I had a strong,

12 wonderful working relationship. And one of

13 the brightest men and one of the brightest

14 persons I've had the privilege to work with.

15 And you're really blessed to have him aboard.

16 My question to Mayor de Blasio relates

17 to something that definitely has an impact on

18 Nassau County, from where I hail. Anything

19 that happens in New York City definitely has

20 an impact throughout the state. And as we

21 have witnessed over the past few hours, the

22 President has taken positions that are quite

23 unusual as it relates to what we do in the

24 United States, generally speaking. I'm

159

1 waiting for the other shoe to fall.

2 And this question is seeking from you

3 an opinion as it relates to the unaccompanied

4 undocumented illegal youths who arrived in

5 this nation and specifically New York State

6 in the school year 2015-2016. In the school

7 district in Hempstead, Nassau County, we have

8 probably the highest number of undocumented

9 unaccompanied youth outside of New York City.

10 And I would like to know if you would

11 share with me what type of plans would you

12 have when the President, from what I

13 understand, will be initiating the removal of

14 these youth from the United States. How

15 would you respond to that, so that we might

16 have some idea of how we should respond when

17 this -- I anticipate very shortly that the

18 President will present an executive order to

19 remove these young people. Could you share

20 that with me, please?

21 MAYOR DE BLASIO: Yes, absolutely,

22 Assemblymember. I thank you for the

23 question. It's one of the most powerful

24 questions before us as a nation right now.

160

1 Look, I raised this concern to the

2 President when I met with him, and it was --

3 ASSEMBLYWOMAN HOOPER: Excuse me, you

4 said you raised that specific issue?

5 MAYOR DE BLASIO: The concern about

6 the --

7 ASSEMBLYWOMAN HOOPER: About the

8 children?

9 MAYOR DE BLASIO: You can call them

10 Dreamers, you can call them DACA children,

11 whatever way you want to call them.

12 ASSEMBLYWOMAN HOOPER: Yes, the DACA

13 children.

14 MAYOR DE BLASIO: The way we talked

15 about it was specifically about children who

16 came here not of their own choice, grew up

17 here, essentially, have only known America,

18 and in many instances would have no

19 connection to the country they came from.

20 And at that moment in the discussion with the

21 President, then President-Elect, the then

22 Senator, now Attorney General, Mr. Sessions,

23 participated in the conversation.

24 And I spoke very explicitly about the

161

1 impact that it would make on children and

2 families to have these children deported,

3 what it would mean morally, what it would

4 mean humanly, what it would mean for the

5 families left behind, what it would mean

6 again for the relationship with our police in

7 communities. We went into great detail.

8 I will not typify the President --

9 then President-elect, now President Trump's

10 response. But I will say that I think he

11 recognized that this was a different part of

12 the reality than the larger immigration

13 debate. And he has made several statements

14 since becoming president that suggest he may

15 treat those eligible for DACA differently.

16 Now, I do not want to assume anything,

17 especially given what I see as the extremism

18 of the recent executive orders. But I'm

19 going to hold out hope that there will be

20 some understanding in the new administration

21 that those children should be treated,

22 unquestionably, as you would any other

23 American, because that's the only thing

24 they've known, the vast majority of them.

162

1 And a lot of them are contributing greatly to

2 our nation right now and have great promise

3 and should be treated as children of promise

4 who love this country.

5 So I'm going to offer that as, I hope,

6 an indicator of something that may turn out

7 better than we fear.

8 In the event it does not, we will

9 actively engage in any legal action we can,

10 working with other cities and states -- and I

11 know many will join -- to stop any effort to

12 deport our Dreamers.

13 And we will also, as we've started to

14 do in New York City, provide legal assistance

15 to help families not be torn apart. Again,

16 this is moral, and some of our faith leaders

17 are speaking out deeply on this. In fact,

18 the U.S. Conference of Bishops is meeting

19 here on an emergency basis to address this

20 crisis, because they believe as Pope Francis

21 believes, that all immigrants should be

22 respected wherever they are in the world.

23 But it's also a very practical

24 challenge. Because the minute Dreamers are

163

1 deported in any appreciable numbers, that

2 will be the final straw, again, in the

3 relationship between police and community.

4 It also will leave many families without a

5 breadwinner and start to force more and more

6 responsibility for those families onto

7 taxpayers. It's a very slippery slope.

8 So our best option, if we do get to

9 that moment, is to, one, fight legally with

10 all the tools we have, and, two, provide

11 individual support for those families to try

12 and stop those individual deportations.

13 ASSEMBLYWOMAN HOOPER: I really

14 appreciate the position that New York City

15 has taken. As you are aware, we in the

16 Assembly have been working diligently to

17 address the issues of the Dreamers. But

18 specifically I'm speaking about what I

19 believe I heard, or maybe read, that the

20 President has indicated that anyone who has

21 come here and has used his or her information

22 fraudulently -- in other words, the wrong

23 address or illegal information -- I'm

24 thinking now about the youth who came here

164

1 who were unaccompanied, without adults, who

2 have been here less than two years and are in

3 elementary school.

4 In the Village of Hempstead, we have a

5 very large influx of those youth, as well as

6 in the Roosevelt School District. And I

7 assume that you have that representation also

8 in the City of New York.

9 With the Dreamers and those who have

10 been here, they have not -- they do not have

11 a history of any other place except the

12 United States. But these young children who

13 came unaccompanied, undocumented, have been

14 here less than 24 months, how would you

15 address that should your President decide to

16 say that because they used an address that

17 was really not a legal address, or an

18 incorrect address, and they are using funds

19 that are somehow or another directed from the

20 federal government into the school district,

21 how would you -- how could you suggest that

22 we address that issue if those youth are

23 being attempted to be removed? I'm talking

24 about children under the age of 18.

165

1 MAYOR DE BLASIO: Right. Yeah. I

2 think it's the same -- I think it's -- you're

3 raising an important piece of the equation.

4 I think it's the same response, that the

5 bottom line in whatever technicality is used,

6 it still will mean a family torn apart, which

7 none of us who are in public service should

8 be party to, and it means a lot of unintended

9 consequences.

10 I think we need to recognize and just

11 broaden the point, there's 11 or 12 million

12 people in this country. And the fact that

13 for years and years, a lot of Republicans,

14 including Ronald Reagan, tried to find

15 constructive ways to acknowledge that reality

16 and work with it in a positive, appropriate

17 path forward rather than try mass

18 deportation.

19 And it is -- you know, we've obviously

20 heard at moments in the campaign, the --

21 Candidate Trump said some very shocking

22 things, including at one point praising a

23 deportation effort from the 1950s that was a

24 truly mass deportation initiative.

166

1 But look, it's important that he had

2 to go all the way back to the 1950s. That if

3 you go from the 1960s to present, Democrats

4 and Republicans alike did not attempt mass

5 deportation. In fact, President Reagan

6 attempted to find some kind of way to address

7 the issue at its root.

8 I think the answer is the same either

9 way, to try and use every legal recourse we

10 have and to try and support those individual

11 families -- because, otherwise, a lot of

12 families torn apart, a lot of

13 responsibilities that will then fall on

14 localities that aren't able to handle it as

15 families are torn apart.

16 ASSEMBLYWOMAN HOOPER: Thank you.

17 Lastly --

18 CHAIRMAN FARRELL: Thank you.

19 ASSEMBLYWOMAN HOOPER: Just one last

20 question? Oh, I'm out of time. I'll ask you

21 later. Thank you.

22 MAYOR DE BLASIO: Thank you.

23 CHAIRMAN FARRELL: Thank you.

24 CHAIRWOMAN YOUNG: Thank you.

167

1 Senator Persaud.

2 SENATOR PERSAUD: Thank you. Thank

3 you, Mr. Mayor, for being here so that we can

4 discuss issues affecting New York City in

5 particular.

6 You mentioned that you will be

7 unveiling a new comprehensive program to deal

8 with the homeless population. As we know,

9 last November our studies showed that

10 New York City had the highest number of

11 homeless people ever. Most of the people,

12 particularly the individuals who are living

13 on the streets, are there because of mental

14 illnesses.

15 In this comprehensive plan that you

16 will unveil, will you have an aggressive plan

17 to deal with the mental health issues of the

18 homeless population?

19 MAYOR DE BLASIO: Senator, thank you.

20 And the quick answer is yes, that that piece

21 of the equation is already in motion. I

22 think you're pointing out something we have

23 to discuss more in the discussion on

24 homelessness.

168

1 There are two fronts in this battle:

2 Street homelessness, meaning absolutely,

3 permanently, 24-hour permanently homeless

4 folks who, depending on the survey that's

5 taken, typically number between 3,000 and

6 4,000 people. Which is obviously too big a

7 number, but is nowhere near the number of

8 folks in a shelter. And when we talk about

9 street homeless, we have to exclude

10 panhandlers who have a home, we have to

11 exclude people who have a shelter but go out

12 during the day and hang out on the street.

13 The real core of that problem you

14 indicate is 3,000 to 4,000 people. They need

15 mental health services, they need substance

16 misuse services. Overwhelmingly, they are

17 there because of one of those two problems.

18 And now through the HOME-STAT

19 initiative, the most intensive outreach

20 effort in the history of the city or any

21 city, 700 of them since March have come in

22 and accepted services and not gone back out,

23 which is a very promising sign.

24 On the other side, the other battle is

169

1 on homelessness that takes the form of folks

2 ending up in a shelter. That's, today, just

3 over 60,000 people. It was higher a few

4 months ago, thank God has come down a little.

5 Those folks increasingly are families,

6 increasingly because of economic reasons, not

7 mental health or substance reasons,

8 increasingly are working people or people who

9 recently were working. And that has all to

10 do with the growing cost of housing in the

11 city and the lack of good-paying jobs.

12 That's what we're focused on now. And

13 so that plan that will come out will

14 particularly focus on the shelter population,

15 because the thrust in terms of street

16 homelessness -- we've seen great success with

17 HOME-STAT, we're seeing great success with

18 the Safe Haven Program, which is finding

19 smaller facilities that people would come

20 into off the street.

21 We're seeing great success with the

22 NYPD playing a leadership role now,

23 supervising and managing safety and security

24 in our shelters. That's having a real

170

1 impact. We think that will help get more

2 people off the street.

3 And we now have the biggest mental

4 health initiative we've ever had, the Thrive

5 program that my wife initiated, which means

6 that we have much more available for people

7 who need mental health services, when they do

8 come off the street, we have more options for

9 them now.

10 So I think you'll see in the plan a

11 lot of strength on the street homelessness

12 side, a lot more we have to do and do better

13 on the shelter homelessness side.

14 SENATOR PERSAUD: Okay, another thing

15 on the homeless. I had the opportunity to

16 tour a site, a homeless shelter, a couple of

17 weeks ago. And the underlying complaint that

18 many of them had was about getting an

19 apartment. They have vouchers, but the

20 owners and landlords are not willing to

21 accept the vouchers.

22 What is the city doing to stress to

23 the landlords to accept vouchers so that we

24 can remove these people who have the means of

171

1 getting into an apartment, to get into an

2 apartment?

3 And landlords are also saying that

4 when they accept vouchers, if the client no

5 longer pays their portion of it, they're left

6 without funding. What is the city doing to

7 let landlords understand that they will not

8 be left high and dry?

9 MAYOR DE BLASIO: Two crucial

10 initiatives. First, I had the honor when I

11 was in the City Council to be the author of

12 legislation which banned discrimination

13 against Section 8 holders and other folks who

14 got income from affordable housing programs.

15 That was very important because a lot of

16 people were being turned away simply because

17 their own government said, You qualify,

18 here's support -- they were being turned away

19 literally because they had that support.

20 That is now illegal in New York City. We've

21 intensified enforcement of that. Our Human

22 Rights Commission has been beefed up to be a

23 stronger player in that enforcement.

24 Second, I've met personally with some

172

1 of the leading landlords who provide housing

2 for folks with Section 8 and other programs.

3 I have told them my personal commitment,

4 which we've stayed true to. I've told them

5 that unlike the past, when Advantage was

6 canceled -- which I think was the biggest

7 single mistake in the history of homelessness

8 in New York City, and that was April 2011.

9 At that point there were about 36,000 people

10 in shelter. By the end of the Bloomberg

11 administration, there were 50,000 people in

12 shelter. And the linear connection between

13 the choice to end Advantage and that huge

14 uptick, April 2011 to December 2013, you can

15 see it right there, is because of the loss of

16 Advantage.

17 That also burned a lot of landlords

18 who had been told they could depend on it.

19 When I came in, I met with a lot of them, and

20 my senior leaders of the administration have

21 met with them, to say we believe in these

22 subsidy approaches, rental assistance

23 approaches, they have worked, they're much

24 better for the taxpayer.

173

1 The taxpayer saves a huge amount of

2 money with a subsidy rather than somebody

3 ending up in a shelter. Remember, the cost

4 of a family in shelter is now, for a year,

5 pushing $40,000. A rental subsidy is nowhere

6 near that.

7 So I've made clear to those landlords

8 that we are there for the long haul. And I

9 think they've heard it. But we have more

10 work to do to convince them.

11 What I can say is that under previous

12 administrations, the follow-through with

13 landlords was very shoddy by the government.

14 They had every right to say that the

15 inspections took too long, the reimbursements

16 took too long. We've made major strides in

17 fixing those problems and showing them that

18 we will not let the bureaucracy stand in the

19 way of them getting the resources they

20 deserve.

21 SENATOR PERSAUD: Thank you very much.

22 CHAIRWOMAN YOUNG: Thank you.

23 CHAIRMAN FARRELL: Thank you.

24 Assemblyman Castorina.

174

1 ASSEMBLYMAN CASTORINA: Thank you,

2 Mr. Mayor, for being here.

3 Thank you, Chair.

4 I have two very brief questions. The

5 first is with respect to mayoral control of

6 the schools. We had a vote last year, I

7 voted no. Which is unusual, because I am

8 very much in favor of mayoral control. I

9 think it's a good plan, it's a good model.

10 But what concerns me is that throughout the

11 time that we've had mayoral control in the

12 City of New York, there's been lots of

13 opportunity for people to criticize the way

14 it's been implemented and to talk about the

15 structure, and there's been so many

16 opportunities for the city to hear these

17 concerns. But it doesn't appear as though

18 anything has been done.

19 And particularly my concern is that

20 the board itself essentially operates as a

21 rubber stamp for the mayor. There's no real

22 autonomy. And so I'd like for you to speak a

23 little bit about that.

24 And then the second question relates

175

1 to the issue that my colleague Assemblymember

2 Malliotakis brought up.

3 MAYOR DE BLASIO: Sure. On the first

4 point, Assemblyman, I appreciate the

5 question.

6 Assemblyman, there is a reason why so

7 many business leaders in New York City

8 support mayoral control. People are

9 absolutely, adamantly focused on the bottom

10 line and the future of our city and our

11 workforce because of the simple -- I'll give

12 you the easiest statistic in the world. The

13 day that Mayor Bloomberg achieved mayoral

14 control, which I praised at the time and have

15 praised ever since, our graduation rate was

16 under 50 percent. Today our graduation rate

17 is over 70 percent. That was achieved in

18 less than 15 years, and we are aiming for

19 80 percent over the next eight years. And

20 we're going to get there.

21 Our test scores have continually gone

22 up. We are now essentially equivalent with

23 the rest of the state in terms of where we

24 stand on graduation rate and in many ways are

176

1 getting close on test scores. These were

2 inconceivable ideas -- I was a school board

3 member in my communities in Brooklyn in the

4 beginning of the 2000s. If you had told me

5 that we could make that kind of progress in

6 this kind of time, I would have told you,

7 Wow, you're a dreamer, that's impossible.

8 But it happened because it was a better

9 system. And I commend Mayor Bloomberg and I

10 commend my colleagues in the business

11 community who have stood with us every step

12 along the way.

13 The bottom-line question you raised

14 about autonomy, I can tell you there have

15 been many times, many times when the members

16 of the PEP have rejected a proposal that came

17 forward in the initial discussion, and that

18 it had to be modified to meet their concerns.

19 There have been times when a proposal was

20 agreed upon and then, in the debate at the

21 meeting, was rejected.

22 Now, with all due respect to my

23 predecessor, you may remember on the question

24 of social promotion when he had some members

177

1 vote against his proposal, he removed them

2 the same day. That's not how I have

3 operated. I have said I'm naming good people

4 with diverse views, and I expect them to

5 exercise their judgement. And they've pushed

6 back many a time, and they've voted things

7 down, and they're still in their seat.

8 So I think we've improved upon the

9 dynamics of the original iteration.

10 Remember, and I say this with real respect

11 for my predecessor -- I always had

12 disagreements too -- but he had his own brand

13 of mayoral control. I've tried to make it

14 more responsive to checks and balances and

15 more responsive to parents as a public school

16 parent myself, which is obviously something

17 that's very different from my predecessor. I

18 lived it with my own kids, I was a school

19 board member. I think we've made progress.

20 But the number-one thing I want to say

21 as you consider your vote this year, I think

22 you rightfully demand of us results. The

23 best measures, literally the very best

24 measures, graduation rate and test scores, I

178

1 can show you chapter and verse why we keep

2 succeeding. And those numbers are going to

3 continue to improve. That's helping kids'

4 lives.

5 But if I didn't have the ability to

6 make things happen quickly -- this is a story

7 of pre-K too. The only reason, with your

8 support, we moved pre-K in two years from

9 20,000 to 70,000 kids -- we could never have

10 done that without mayoral control. It would

11 have taken a decade or more.

12 I just ask that you consider that,

13 because I know -- and we come from different

14 parties. That doesn't mean we can't find

15 common ground. I know you want efficient

16 government, I know you want the taxpayers'

17 needs to be respected --

18 ASSEMBLYMAN CASTORINA: And

19 transparency.

20 MAYOR DE BLASIO: Right. I think we

21 have it with mayoral control in a way we

22 never had in the past.

23 ASSEMBLYMAN CASTORINA: I'm likewise

24 concerned about the fiscal implications of

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1 the City of New York deciding not to follow

2 an executive order of the President. I think

3 it's wrong, I think it's -- In fact, I think

4 it would be illegal.

5 Instead of going forward and digging

6 in on the notion of sanctuary cities, why not

7 reach out to the administration and talk

8 about a real pathway to citizenship? Why not

9 focus resources in that direction as opposed

10 to this face-off of sorts? Which is

11 certainly only going to create more acrimony,

12 may put the city at risk for losing billions

13 of dollars in federal aid, and also the fact

14 that the notion of a sanctuary city creates

15 really a second-class citizen of sorts,

16 people that have to live in the shadows,

17 people that have to operate in a different

18 economy at times. And it would make more

19 sense, I think, from a humane, from a moral

20 perspective, that we work toward a pathway to

21 citizenship for these undocumented folks.

22 And I wonder if you have had the

23 opportunity to speak with either the

24 President-elect or the President about this

180

1 issue, and if you plan on doing so.

2 MAYOR DE BLASIO: I would happily

3 engage in that conversation. I began that

4 conversation when he was President-elect, and

5 when it was Senator Sessions, by describing

6 what we are doing in New York City.

7 I think the term "sanctuary city" is

8 being used very broadly, and I think we need

9 to reevaluate the understanding of that

10 concept because it's different in lots of

11 different places, first of all. And

12 secondly, I don't think it gets to the heart

13 of the matter.

14 Back I think as far as Ed Koch, New

15 York City made a decision that for public

16 safety reasons alone, we could not create a

17 dynamic where our undocumented immigrants

18 feared talking to the police if they saw a

19 crime or were a victim of crime.

20 This is a reality all over this

21 country when you talk about 11 million or

22 12 million people. We at the local level

23 have to make decisions what to do with the

24 reality as we have received it. We didn't

181

1 create the immigration reality -- it

2 occurred, and now we have to deal with it.

3 What we've seen is consistency by

4 local leaders of both parties. We have seen

5 this from police chiefs all over the country,

6 we've seen it with faith leaders all over the

7 country. The common thread in all regions of

8 the country has been to recognize that if we

9 are cutting off communication between police

10 and immigrants, it has very dangerous

11 ramifications for public safety. And if we

12 end up in a situation where people are

13 deported -- again, breadwinners deported,

14 parents deported, children left behind --

15 immoral, in my view, but from a practical

16 point of view, of course the taxpayer is

17 going to be left holding the bag, and in a

18 situation that creates huge human pain.

19 So this is very practical. "Sanctuary

20 cities" as a phrase suggests something

21 ideological. That's why I don't tend to use

22 it. I come to a very practical place. Now,

23 Mayor Koch felt this, Mayor Dinkins felt

24 this. Famously, Mayor Giuliani felt it and

182

1 explicitly continued for eight full years

2 that concept as a practical matter. And so

3 on, Mayor Bloomberg and straight through to

4 me.

5 I think we have to look at that and

6 understand -- and this is why I talked to

7 President Trump -- that that's a reality.

8 And I urged him to talk to the police chiefs

9 of the nation -- Commissioner O'Neill has

10 spoken out, Chief Beck in L.A. has spoken

11 out, many other cases. I said, "Let's take

12 it away from the politicians. Talk to the

13 police chiefs and seek their guidance, I

14 guarantee you they will tell you this is a

15 dangerous situation that cannot be acted on

16 too precipitously."

17 Now, as for a path to citizenship, I

18 agree with you, that's what we should get the

19 conversation back to. There can be

20 differences, but I think again you've noticed

21 a bipartisan trend up through the last few

22 years of both sides looking for a solution

23 that did involve a pathway to citizenship.

24 ASSEMBLYMAN CASTORINA: It's

183

1 pragmatic, I agree.

2 MAYOR DE BLASIO: It's in everyone's

3 interest. And I believe in comprehensive

4 immigration reform with a pathway to

5 citizenship. There are plenty of Republicans

6 who have told me privately they do too --

7 different iterations, but they do too.

8 I think we should get the conversation

9 back there. We're going to use everything

10 we've got to work with everyone in Washington

11 to reframe the conversation back to that

12 core, root problem.

13 But I will tell you that I referred

14 explicitly in my conversation with the

15 President-elect and the then-Senator Sessions

16 to the 170 offenses that we fully cooperate

17 with ICE on. And I said I think this might

18 be a helpful model for getting past it,

19 because I don't think anyone can debate that.

20 And I can have a respectful

21 disagreement with your colleague on whether

22 we've gotten exactly the right 170, but I

23 think we all agree on those 170. Forget if

24 you say there's more or you think we should

184

1 add -- I think if you look at those 170,

2 though, you'll find nothing there you would

3 say to take away. I think if that were the

4 concept all over the country, let's get to

5 some unity and bipartisanship. We all should

6 agree on that. And if New York City could do

7 it, anywhere could do it. Then we could also

8 open the door to a better discussion around

9 respecting the kids who qualify for DACA who

10 really are different than the people who made

11 the decision to come here, and a different

12 discussion about what would a pathway to

13 citizenship look like for anyone who's here

14 and what they would have to do to qualify for

15 it. That would be healthier.

16 Finally, to your opening point, we do

17 not see this as an act of defiance for

18 defiance's sake. We see an executive

19 order -- which, as you'll remember again,

20 President Obama's immigration action was

21 challenged by dozens of states. Even if I

22 disagree with them, they exercised their

23 rights under the Constitution and they

24 prevailed. We saw an executive order that we

185

1 would thought would make our city less safe,

2 and we also thought it could at maximum be

3 applied very narrowly, according to the

4 Supreme Court decision. That's our right and

5 obligation as a city, to go and defend our

6 interests and assert that. We do not believe

7 that Justice Robert's decision would allow it

8 ever to get near the larger pool of money

9 that the city receives.

10 But to say we will accept funding cuts

11 and therefore do something that we think will

12 make us less safe in the bargain, I don't

13 think I'd be serving the people of New York

14 City for that to be my position.

15 CHAIRMAN FARRELL: Thank you.

16 ASSEMBLYMAN CASTORINA: Thank you.

17 Thank you, Mr. Chairman.

18 Thank you, Mayor.

19 MAYOR DE BLASIO: Thank you.

20 CHAIRWOMAN YOUNG: Senator Murphy.

21 SENATOR MURPHY: Hello, Mayor.

22 MAYOR DE BLASIO: Hello, Senator.

23 CHAIRMAN FARRELL: We have two more

24 people, one Senator Murphy and one over here.

186

1 SENATOR MURPHY: Welcome to Albany.

2 It was great to see you down in Washington at

3 the inauguration.

4 MAYOR DE BLASIO: Yes.

5 Congratulations again.

6 SENATOR MURPHY: Mayor, last year I

7 asked you to convince me of why I should

8 trust you with mayoral control, billions of

9 dollars, the ability to educate over

10 1 million kids and give them the opportunity

11 to succeed.

12 In my eyes, you failed. I did not.

13 Now you're back here one year later asking

14 for three years of mayoral control. And I

15 just find this absolutely, incredibly

16 astonishing, with everything that's going on

17 with you and your administration. Mayor,

18 things have only gotten worse, not -- and I

19 repeat, not -- better for you and your

20 administration.

21 And what I mean by that, which should

22 be of grave concern to every single person in

23 this room, is the two sitting grand juries,

24 is the $11 million that you're asking the

187

1 taxpayers to pay for representation for you

2 and your administration. I say we take the

3 $11 million and we give it to our veterans

4 who represent New York State and the

5 United States.

6 So I'm here again to ask you, convince

7 me why I should vote yes for mayoral control

8 and give you billions of dollars, with all

9 the scrutiny that's going on with you and

10 your administration.

11 MAYOR DE BLASIO: Senator,

12 respectfully, I have asserted consistently

13 that we have handled all matters of

14 government appropriately, made every effort

15 to cooperate in investigations, providing

16 information that we believe will show that

17 beyond a shadow of a doubt.

18 In terms of the governance of our

19 school system, again, if you're interested in

20 results -- I would hope you would be -- for

21 1.1 million children, consistently improved

22 graduation rates, consistently improved test

23 scores should mean something to you.

24 In terms of the needs of taxpayers,

188

1 don't believe me, believe the business

2 leadership of New York City, which across the

3 board supports mayoral control of education.

4 And they have watched the three years of

5 progress that we have added on top of what

6 Mayor Bloomberg started, and they

7 wholeheartedly and energetically support

8 mayoral control, and they come here to Albany

9 to say it. And they've contacted a lot of

10 you to say it. They believe removal of

11 mayoral control would set New York City back

12 deeply and return to a system -- not

13 allegations, Senator, allegations against me

14 that I believe fundamentally --

15 SENATOR MURPHY: These aren't my

16 allegations.

17 MAYOR DE BLASIO: Senator, I'm sorry,

18 they are allegations --

19 SENATOR MURPHY: These are not my

20 allegations. This is at another whole level

21 besides me.

22 MAYOR DE BLASIO: Senator --

23 Senator -- allegations are one thing. In the

24 previous system of educational governance,

189

1 they weren't just allegations, there was

2 proof of corruption and chaos year after year

3 after year. That's what Mayor Bloomberg

4 decided to break us out of, and I commended

5 him at the time. And this is a much, much

6 better system.

7 So you can vote against something that

8 has been proven to work. As I mentioned, in

9 less than 15 years, the graduation rate going

10 from under 50 percent to over 70 percent.

11 You can vote against something the entire

12 business establishment believes is good for

13 the children of New York City. You can vote

14 against something that philosophically I

15 would hope you would agree with.

16 Because you don't like me, or you

17 don't agree with me, that's your business.

18 But this is more than about any of us. This

19 is about a decision on how we're going to

20 govern our schools and whether we're going to

21 serve 1.1 million children or not. If you

22 want to vote for the old system of chaos and

23 corruption, that's your choice.

24 SENATOR MURPHY: How many kids go on

190

1 to college?

2 MAYOR DE BLASIO: Wait a minute. I'm

3 the first to say we had a school system under

4 the previous governance structure that failed

5 our children in terms of graduation, failed

6 our children in terms of getting into

7 college. We have said openly that we need to

8 retool this school system in so many ways to

9 increase not only graduation rates but

10 college readiness, which is unacceptably low.

11 But this entire school system, we have

12 only begun the work of retooling it.

13 Full-day pre-K is part of it. Training all

14 our teachers on a higher level is part of it.

15 If you prefer to vote for a system that was

16 typified by chaos and corruption, that's your

17 choice. I can tell you that people in

18 New York City will tell you, especially our

19 business leadership, that you would be voting

20 to take us backwards.

21 SENATOR MURPHY: Well, I don't believe

22 it has gotten any better --

23 MAYOR DE BLASIO: Well, given these

24 facts, I don't know how you can --

191

1 SENATOR MURPHY: -- under your

2 administration. I'd like to know what your

3 graduation rate was, having people go on to

4 graduation --

5 MAYOR DE BLASIO: You actually deny --

6 SENATOR MURPHY: -- what kind of

7 careers they come out with --

8 MAYOR DE BLASIO: Wait, wait, wait,

9 wait. You deny graduation --

10 SENATOR MURPHY: -- are they coming

11 back to New York City.

12 MAYOR DE BLASIO: Senator, you would

13 literally --

14 SENATOR MURPHY: These are some of the

15 simple questions that I'd like answered.

16 MAYOR DE BLASIO: If you're saying the

17 State Department of Education is misreporting

18 graduation rates around the state, then you

19 should take that up with the State Department

20 of Education. These are not my numbers,

21 they're their numbers.

22 Graduation rate and test scores, those

23 are things you will learn from the State

24 Department of Education. They have made

192

1 clear the steady progress we've made in

2 New York City under two administrations.

3 Those are matters of fact.

4 SENATOR MURPHY: Well, like I said

5 last year, it was a matter of trust. And the

6 trust factor --

7 MAYOR DE BLASIO: It's a trust system,

8 Senator.

9 SENATOR MURPHY: -- the -- excuse me,

10 I'm talking. The trust factor is just

11 something that everybody in this room and

12 everybody in New York State should be worried

13 about. And you did not, you did not convince

14 me last year. And just the little dialogue

15 that we've had this year, it's just still not

16 convincing to me --

17 MAYOR DE BLASIO: Senator, you

18 obviously have a bone to pick --

19 SENATOR MURPHY: -- okay?

20 MAYOR DE BLASIO: You obviously have a

21 bone to pick. If you're literally going to

22 vote for a system of chaos and corruption,

23 that's your business. And people will

24 remember that vote.

193

1 But I'm telling you, if you are

2 denying an increase in graduation rate,

3 denying an increase in test scores,

4 denying --

5 SENATOR MURPHY: I did not say

6 anything of the sort.

7 MAYOR DE BLASIO: -- mayoral control

8 of education started by a Republican mayor --

9 SENATOR MURPHY: All's I wanted was

10 the statistics that you should provide for

11 us. That's all I asked for.

12 MAYOR DE BLASIO: If you think a

13 system started by a Republican mayor and

14 backed up by the business community in a

15 New York City is a bad system, I look forward

16 to you having that conversation with the

17 business community. I think they'll feel

18 differently about your view.

19 SENATOR MURPHY: Thank you, Mayor.

20 CHAIRWOMAN YOUNG: Thank you.

21 CHAIRMAN FARRELL: Thank you.

22 To close, Mr. Carroll.

23 ASSEMBLYMAN CARROLL: Good afternoon,

24 Mayor de Blasio.

194

1 First I want to applaud you and the

2 City Council for your leadership on the

3 plastic bag issue. Conservation is very

4 important. And not so coincidentally, I have

5 my reusable bag, because I don't leave home

6 without it.

7 MAYOR DE BLASIO: Well done,

8 Assemblyman.

9 ASSEMBLYMAN CARROLL: My first

10 question is about voting reforms here in New

11 York State. I'm glad that you support

12 same-day registration and early voting. But

13 do you support shortening the time period a

14 voter has to wait to change their party

15 enrollment, which in some cases can be

16 11 months?

17 MAYOR DE BLASIO: Assemblyman -- and I

18 just want to note, thank you for your

19 service. Because you are my Assemblyman in

20 Brooklyn, and I welcome you to your new role.

21 I think we need same-day registration,

22 early voting, electronic poll books, a series

23 of reforms that are all -- you know, all over

24 the nation. We're one of the only states

195

1 that has none of those.

2 I think that we rightfully have a

3 system that recognizes party membership and

4 respects it in the primary process, but I

5 think our deadlines are too long. I would be

6 comfortable with a much shorter time period,

7 a few months or whatever might be

8 appropriate, because I think people honestly,

9 especially in a very dynamic political

10 environment, make a decision sometimes that

11 they are changing -- I've certainly met

12 people who have made decisions personally to

13 change their party affiliation, go from

14 independent to party member or from one party

15 to another one for very real reasons.

16 But enough of a time gap to discourage

17 what exists now in some states, which is in

18 the morning you're a Democrat, you sign up to

19 be a Republican for just that day, just that

20 caucus or primary, and by evening you're back

21 to being a Democrat. I don't think that's

22 fair. I think then people are trying to game

23 each election and have an impact that really

24 is not about, you know, the broader views of

196

1 the people, but trying to get inside and

2 manipulate the specific process.

3 General elections, obviously everyone

4 gets to vote equally. But in primaries, I

5 think party identifications matter. But we

6 shouldn't create such a barrier that

7 people -- like a year away, I think is our

8 current reality. It's just too onerous and

9 doesn't reflect the realities of human

10 decision-making.

11 ASSEMBLYMAN CARROLL: My next question

12 is about the mansion tax that you proposed.

13 Is this tax in addition to the current tax on

14 $1 million home sales, or is it taking its

15 place?

16 MAYOR DE BLASIO: Go ahead.

17 DIRECTOR FULEIHAN: It's in addition.

18 ASSEMBLYMAN CARROLL: It's in

19 addition. And what is the rate?

20 DIRECTOR FULEIHAN: The current rate

21 is 2.5 percent. It's a marginal -- the

22 marginal rate at that level will be

23 2.5 percent. So the marginal rate right now

24 is 1.4 percent.

197

1 ASSEMBLYMAN CARROLL: My next question

2 is a question that both myself and my

3 colleague Assemblymember Richardson care

4 deeply about, and it's about area median

5 income and whether you've spoken with our

6 federal representatives about seeing if we

7 can change the way area median income is

8 computed so that it is more locally based.

9 MAYOR DE BLASIO: Look, yes, I think

10 that's a powerful issue. First of all, I

11 think area median income is such a difficult

12 thing for average people to understand. I

13 struggle with it, everyone in meetings

14 struggles with their different charts and

15 all.

16 I think it would be better for all of

17 us to, one, start talking about household

18 income, which is really the thing people can

19 make sense of. And two, you're right, the

20 federal measure is so broad it doesn't

21 reflect local reality.

22 I'm not sure how to go about getting

23 that changed, but it's the kind of thing we'd

24 like to see action on. And we need to do a

198

1 better job, again, translating the numbers.

2 But one of the things that we are

3 going to try and address, because we hear it

4 from -- we've heard it from you and

5 Assemblymember Richardson and we've heard it

6 from other members of the Legislature and the

7 Council, is we understand there's tremendous

8 frustration that so many folks have lower

9 incomes and are grappling with trying to find

10 enough housing.

11 In a number of the affordable housing

12 projects we're working on, we think there's

13 ways to improve the mix of units so that more

14 can be lower-income. We're going to have

15 more to say on that soon.

16 But second, I've got to do a better

17 job of explaining to the people of New York

18 City the underlying theory of the affordable

19 housing program, which is for folks of

20 different income bands on purpose. We could

21 have had a program that was just middle-class

22 affordable housing, just working-class

23 affordable housing, just low-income

24 affordable housing. We said we needed to do

199

1 some of all of the above to have a strong,

2 vibrant city.

3 There are folks -- I told the story

4 the other day of parents who were part of my

5 son Dante's -- their kids were on my son's

6 Dante's travel baseball team. You know the

7 78th Precinct Youth League very well.

8 ASSEMBLYMAN CARROLL: I do.

9 MAYOR DE BLASIO: And these two

10 parents, literally a New York City

11 firefighter and a nurse at one of our local

12 hospitals -- I remember the day we were

13 sitting in the bleachers together and they

14 said to me they looked all over Brooklyn,

15 they could not find a home they could afford

16 in Brooklyn. This was maybe -- you know,

17 less than 10 years ago, eight years ago,

18 perhaps. Quintessential, you know,

19 two-income, hardworking folks doing public

20 service jobs.

21 And my answer is that our housing plan

22 is supposed to serve them too. So you'll see

23 middle-class affordable housing in our plan,

24 in addition to working-class, in addition to

200

1 low-income. We're trying to strike that

2 balance. I think what a lot of elected

3 officials have said to us is, Can you find

4 ways to get to some more lower-income, deepen

5 the affordability, and as you say, adjust it

6 more to a specific neighborhood. We're

7 trying to do that.

8 ASSEMBLYMAN CARROLL: My last question

9 is, as you know, the city is the economic

10 driver of the state. How do you feel that

11 the state only allocates about 5 percent in

12 economic development funds towards the city

13 and that we're currently still looking at a

14 $1.6 billion loss in CFE and we possibly

15 might see budget shortfalls in the capital

16 budget of the MTA for this capital period?

17 MAYOR DE BLASIO: Well, I will give

18 you a balanced answer on that because I feel

19 like -- you know, I spent a lot of time

20 working around the State of New York when I

21 had the honor of serving in the federal

22 government at the U.S. Department of Housing

23 and Urban Development. I worked in all parts

24 of the state -- in upstate cities, in

201

1 suburbs, in rural communities. Look, a lot

2 of New York State has deep, deep economic

3 development needs. And so -- and as I said

4 at the beginning of the testimony, what's

5 good for New York City, I believe, is good

6 for the state, because we're an economic

7 engine. But I think what's good for the

8 state is good for the city. So I certainly

9 don't want to for a moment suggest that there

10 aren't a number of areas that need help even

11 more than New York City. They do.

12 But that, I think, should be balanced.

13 If we say there are particular economic

14 development needs in other parts of the state

15 that must be addressed, that should be

16 balanced with a recognition of where some

17 other needs are in a place like New York City

18 that are even more profound than some other

19 parts of the state, and education is a great

20 example.

21 But to me that goes far beyond

22 philosophy. I don't understand how we can

23 ignore a decision of the highest court in the

24 state. The Court of Appeals made a decision,

202

1 period. No one has ever legally successfully

2 challenged that or written a law that

3 overwrote it. It is a decision of the Court

4 of Appeals. It needs to be acted on.

5 And we all understood during the Great

6 Recession that the state was on its heels,

7 and everyone understood that. But that's not

8 true anymore. It hasn't been true for years.

9 So I would argue I respect that there

10 are parts of the state that have special

11 needs, and we want to see those needs met.

12 And we give more revenue by far, we're

13 60 percent of the state's revenue coming out

14 of New York City. We are happy to

15 participate in helping our brothers and

16 sisters in other parts of the state. But

17 recognize our needs on education are going

18 unmet. And that's not going to be good for

19 anyone if a lot of our kids are not properly

20 educated.

21 ASSEMBLYMAN CARROLL: Thank you.

22 MAYOR DE BLASIO: Thank you.

23 CHAIRMAN FARRELL: One more?

24 CHAIRWOMAN YOUNG: Okay. Senator

203

1 Savino, as vice chair.

2 SENATOR SAVINO: Thank you, Senator

3 Young.

4 Thank you, Mr. Mayor, for being so

5 patient and putting up with all of us. I'll

6 be actually very brief. The reason I wanted

7 to go last is I wanted to make sure I didn't

8 go over things that people had already asked

9 you.

10 So you know my position on the plastic

11 bag thing; you don't need to hear it. You

12 know my position on some other issues.

13 I am anxiously awaiting the new policy

14 on community notification that you'll be

15 rolling out in a couple of weeks, because we

16 are all very concerned about the homeless

17 issue and how it affects our communities.

18 I do want to speak very briefly about

19 ACS. And I want to acknowledge publicly the

20 changes in the administration under your

21 mayorship. I've been through four mayors

22 with this agency in the 26Ω years that I've

23 been involved in ACS, and I don't think it

24 gets stressed publicly enough the commitment

204

1 of your administration. When I disagree with

2 you, I have no problem saying so. You know

3 that. But you are putting real resources and

4 efforts into this agency.

5 And I don't think that the media

6 properly portrays what goes on on a

7 day-to-day basis with the front-line CPS

8 staff and the fact that unless you've knocked

9 on someone's door in the middle of the night

10 and convinced them to hand you their child,

11 you really don't understand how difficult

12 this job is. So I do think it's important

13 that we get that out there.

14 And I have recently met with your

15 administration at ACS to talk about some

16 changes I'm going to propose here in Albany,

17 legislative changes, to undo what I think

18 over the years has been some unnecessary

19 requirements on the CPS staff that take them

20 away from their core mission of identifying

21 risks that exist in homes so that they can

22 properly assess more quickly and provide the

23 right type of services.

24 So I'm going to pursue that here. I'm

205

1 going to work very closely with your

2 administration to help make that possible,

3 because I think we all have the same goal,

4 whether it's providing enough funding to the

5 administration, whether it's the commitment

6 to protecting children, keeping families

7 together where it's appropriate, and

8 separating them where it's appropriate.

9 I will say, though, I have had several

10 conversations with some front-line CPS

11 staffers and I have heard from more than one

12 that they have been overruled by judges when

13 they have requested a remand in court. That

14 is a departure from past practice. It is one

15 that concerns me greatly. Because again, the

16 decision should not be to keep families

17 together when all indications are that they

18 should not be kept together.

19 So I'm going to work very closely, I

20 think, with the current administration there.

21 Whoever you bring in, hopefully they will be

22 someone who understands the complexities of

23 New York City's child welfare system, its

24 vast nonprofit structure that supports it,

206

1 and, you know, how hard it is to protect

2 children in this city.

3 But I just want to say publicly you

4 have made the commitment that other mayors

5 didn't, and I don't think that that gets said

6 enough.

7 MAYOR DE BLASIO: Senator, I really

8 appreciate that. And I indicated earlier

9 you're one of the people in this state who

10 understands these issues the best -- I know

11 you've devoted your life to it -- and I

12 appreciate your acknowledgment of the

13 investments we've made and the focus.

14 I also would say that, you know, my

15 predecessors came from different backgrounds.

16 This was a lot of work I did in my career

17 focused on the issues of children, so I feel

18 this very personally.

19 I think it's important -- you and I

20 are both frustrated when someone who is

21 trained to understand the danger to children

22 asks a judge to remove a child as an active

23 caution -- it's not forever, but to avoid an

24 immediate danger -- and a judge says no.

207

1 You know, I respect, of course, the

2 division of powers in our government. But

3 it's very frustrating, because I'm a believer

4 that you do the safe thing, you do the

5 abundance-of-caution thing in every case

6 involving a child's life. And we need to ask

7 our judges to think long and hard before

8 turning down a request that professionals say

9 is in the interests of protecting a child.

10 But on your earlier point about the

11 work we can do to clarify the role of our

12 protective workers, I'm very open and

13 appreciate your suggestions. Look, I think

14 the historical thing that also does not get

15 noted is that every administration has

16 grappled with these issues. They're some of

17 the most challenging issues in public

18 service. We're talking about broken

19 families, by any definition, and lots of

20 social ills that have come into a family.

21 We're talking about things we can't even see

22 sometimes -- you know this from your work --

23 as we've often seen, for example, a quote,

24 unquote boyfriend coming into the house that

208

1 we don't even know is there who is often the

2 perpetrator.

3 We are constantly trying to figure out

4 how to improve this work. To the credit of

5 my predecessors -- look, I had lots of

6 disagreements with Mayor Giuliani, but after

7 the death of Elisa Izquierdo, he brought Nick

8 Scoppetta in, he made major changes. But he

9 had to learn the hard way what we were not

10 doing well enough.

11 Mayor Bloomberg, after the death of

12 Nixzmary Brown, made major changes, many of

13 which I agreed with. But he had to learn

14 what we were missing. Good people served as

15 commissioners. No one fully cracked the code

16 on everything we have to do.

17 And I learned a lot in a parallel

18 reality with NYPD, working with Bill Bratton,

19 working with Jimmy O'Neill, seeing how every

20 day they're trying to figure out how to do

21 things better than they did in the past.

22 ACS has been going that same route but

23 not getting credit for it. We still have

24 more to do. There's no question we have more

209

1 to do. But I'll tell you one thing, our new

2 commissioner is going to have full support,

3 have the resources that he or she needs, the

4 deeper involvement of the NYPD. I think

5 that's going to make a world of difference.

6 And we're going to keep working to get it

7 right.

8 SENATOR SAVINO: I certainly hope so.

9 And also I think it's worth noting

10 that the agency that I went to work for 26

11 years ago is not the same agency that exists

12 today. You don't -- I don't think the public

13 and even the media takes the time to

14 recognize that the majority of the children

15 and families are not directly supervised by

16 ACS, they are supervised by a nonprofit

17 structure of volunteer agencies who have

18 direct contact with these families on a

19 regular basis. And that is a structure that

20 is understaffed, overstretched. The turnover

21 rate in those agencies is, you know, at

22 astronomical levels. And that also hinders

23 the ability to provide for many of these

24 families. And we need to strengthen that

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1 sector of the service provision as well.

2 And so again, I look forward to

3 working with your administration and with

4 this sector of our very important work that

5 we do in government. So I want to thank you.

6 MAYOR DE BLASIO: Thank you. And

7 quick response that we are going to be -- we

8 have been investing more in preventative

9 services than any previous administration.

10 But you're making a key point. The

11 investment is great, but we have to make sure

12 the quality is there, we have to make sure

13 the staff are actually retained, we have to

14 figure out the kinds of things that will

15 constantly improve the quality.

16 You're right, we can't do it

17 without -- we have faith-based partners,

18 community-based partners, all sorts of

19 organizations that do what government could

20 never do on its own. We have to constantly

21 help improve their work at the same time.

22 And that's going to take real focus and real

23 investment, but we're committed to it.

24 Thank you.

211

1 SENATOR SAVINO: Thank you.

2 CHAIRMAN FARRELL: Thank you.

3 CHAIRWOMAN YOUNG: Thank you.

4 MAYOR DE BLASIO: That's it?

5 CHAIRMAN FARRELL: That's it.

6 MAYOR DE BLASIO: Thank you, Chairs,

7 appreciate it.

8 CHAIRMAN FARRELL: Thank you.

9 (Pause.)

10 CHAIRWOMAN YOUNG: So Chairman Farrell

11 will be right back, and then we'll start.

12 (Discussion off the record.)

13 CHAIRMAN FARRELL: New York City

14 Comptroller Scott Stringer.

15 Good afternoon.

16 NYC COMPTROLLER STRINGER: Good

17 afternoon.

18 And I want to start out by thanking

19 Chair Young and Chair Farrell and members of

20 the committees and the Legislature for having

21 me here today.

22 You know, in these uncertain times,

23 it's great to be surrounded by old friends

24 and colleagues who share the notion that our

212

1 New York values will withstand the turbulence

2 of these next four years.

3 And I'm joined here today by my deputy

4 comptroller for budget, Preston Niblack, who

5 many of you know from New York City.

6 I know from my 13 years of service in

7 the Assembly that today marks only the

8 beginning of the budgeting process. I

9 welcome the opportunity to speak about the

10 Governor's proposed Executive Budget on

11 behalf of New York City, and I look forward

12 to working with all of you toward a budget

13 that will progress New York as a leader in

14 the fight for fairness and opportunity for

15 all our people, and not just some.

16 Last year the Senate and the Assembly

17 worked together to enact meaningful change to

18 do just that. New York passed a $15 an hour

19 minimum wage, which will benefit 1.5 million

20 people and boost wages by more than

21 $10 billion. New York became only the fourth

22 state in the country to guarantee paid family

23 leave, so that no working person will have to

24 choose between keeping their job and caring

213

1 for a loved one.

2 And our state government's Minority

3 and Women-Owned Business Development program

4 has continued to grow, promoting equal

5 opportunity for our businesses and helping to

6 create wealth in all of our neighborhoods.

7 The state's goal of 30 percent procurement

8 with MWBEs is an important one, and we must

9 ensure that the city has tools to match or

10 surpass it.

11 And that's why I support Assemblywoman

12 Bichotte's legislation that would enable city

13 agencies to develop capacity-building

14 programs for MWBEs, expand the city's ability

15 to use prequalification lists when awarding

16 contracts, and create more flexibility to use

17 best value in evaluating bids or proposals

18 for city contracts.

19 I'd also like to commend the Assembly

20 for passing the Reproductive Health Act and

21 the Comprehensive Contraception Coverage Act,

22 which ensure that women in New York can make

23 their own healthcare decisions and have

24 access to affordable services. The Governor

214

1 has taken the first step towards guaranteeing

2 that important gains in access to women's

3 healthcare and reproductive services are not

4 undone by a potential repeal of the

5 Affordable Care Act.

6 The Governor's and the Assembly's

7 actions are perfect examples of how we need

8 to respond when policymakers in Washington

9 threaten the rights of all New Yorkers. I do

10 encourage the State Senate to follow that

11 lead.

12 And going forward, we must build on

13 these accomplishments to ensure we foster an

14 economy in which every New Yorker has a fair

15 chance to get ahead. But we cannot do so

16 without facing the fact that this President

17 and this Congress are determined to abdicate

18 the federal government's responsibility

19 towards our citizens and actively impede our

20 efforts to build a fair and just society.

21 I know you are all familiar with the

22 risks that face our state's economy under

23 this administration, but I'd like to speak

24 today about potential ramifications for

215

1 New York City.

2 My office analyzed the potential

3 impact of federal funding cuts and found that

4 aid is concentrated at 11 city agencies that

5 serve our must vulnerable citizens and keep

6 our city safe. Federal funds support

7 60 percent of counterterrorism efforts, half

8 of the budget for child protective services

9 and numerous critical housing and healthcare

10 programs, like Section 8 vouchers, which

11 support 124,000 New York City families.

12 The safety net that we've worked for

13 decades to strengthen in New York is now at

14 risk of collapsing. The city's Housing

15 Authority, which is home to more than 400,000

16 New Yorkers, or 5 percent of the city's

17 population, depends on the federal government

18 for 60 percent of its budget. And our public

19 hospital system requires hundreds of millions

20 of dollars in federal aid to survive.

21 These federal cuts are a jockeying

22 tool between a President and Republican

23 Congress to see who can cut taxes the most

24 for the wealthy. Meanwhile, the President's

216

1 proposed tax plan would cost the federal

2 government trillions of dollars in lost

3 revenue and leave our most vulnerable

4 citizens without access to the services they

5 depend on. The only things that will trickle

6 down to states and localities are spending

7 cuts. And with the city's revenues slowing,

8 alongside the state's, we have to be prepared

9 for harder times ahead.

10 One tool for saving is the city's

11 budget cushion. At the beginning of the

12 fiscal year 2009, prior to the Great

13 Recession, the city had accrued a cushion

14 equal to 17 percent of expenditures, which

15 was indispensable in helping us weather that

16 downturn. As of now, we will start fiscal

17 year 2018 with a cushion of only 10 percent.

18 We're going to do everything we can to

19 identify more savings in the city budget.

20 And meanwhile, our homelessness crisis

21 continues to consume precious budget

22 resources, with total city spending on

23 homelessness rising to $2.1 billion this

24 year. Assemblymember Hevesi has put forward

217

1 a bold new plan that deserves your serious

2 consideration. Home Stability Support is a

3 potential long-term solution to this crisis

4 that could offer a real path out of the

5 shelter system for thousands of New Yorkers

6 and save the city millions in shelter costs.

7 The City and the State must stand

8 together to protect our core values and

9 guarantee that all of our working families,

10 homeless or otherwise, have a fair chance to

11 get ahead. This Executive Budget includes

12 many initiatives to do just that, and I

13 encourage you to support them.

14 First, with looming threats of

15 deportation, we should all stand behind the

16 Governor's call to defend our immigrant

17 friends and neighbors.

18 Second, we must make it easy for all

19 New Yorkers to participate in our democratic

20 process by curbing barriers to voting.

21 And third, we have to expand access to

22 higher education. I ask you all to pass the

23 DREAM Act, so that thousands of undocumented

24 students in New York can get the financial

218

1 support they need to go to college.

2 The proposed Excelsior Scholarship is

3 another important tool to help middle-class

4 families afford higher education. College is

5 a gateway to a lifetime of financial

6 security, but not if students are left buried

7 under mountains of debt on graduation day.

8 The Legislature should accept the Governor's

9 proposal and move to expand upon it.

10 First, we should include part-time

11 students, many of whom simply cannot afford

12 to attend full-time. Right now, 80,000 CUNY

13 students attend part-time, primarily because

14 they need to work to support themselves and

15 their families. Those students also deserve

16 to benefit from this program.

17 I urge you to fully fund CUNY in the

18 state budget. Since 2010, CUNY's cumulative

19 shortfall in state funding is now over

20 $700 million. Let's open the gateway to a

21 high-quality education for all our students.

22 I also strongly support the Governor's

23 proposed expansion of the childcare tax

24 credit. The average statewide cost of

219

1 center-based infant care is more than $14,000

2 per year, and about $12,000 for pre-K.

3 Paying for child care for an infant and a

4 4-year-old is comparable to the cost of

5 renting a $2,000 per month apartment, and

6 that's just so unrealistic for too many of

7 our New Yorkers. I support the proposal to

8 double the existing credit for families

9 earning between $50,000 and $150,000.

10 Our students are our future, and I

11 cannot emphasize enough the need for

12 continued investment in our public schools

13 and pre-K programs. That's why I support the

14 extension of mayoral control and the

15 Governor's further investments in community

16 schools. I hope the Legislature will keep us

17 moving in the right direction towards

18 ensuring the quality education guaranteed by

19 the Campaign for Fiscal Equity decision.

20 This Executive Budget also raises an

21 important issue that my office has been

22 focused on since I became comptroller. Since

23 2012, the city has failed to collect more

24 than $450 million in Medicaid reimbursements

220

1 for supportive health services to our

2 students. It's time for the city to fix this

3 long-standing problem and bring these funds

4 back into the classroom, with the support of

5 the State.

6 But we need to set a realistic

7 timetable to ensure our children do not miss

8 out on funding for critical services because

9 the city fails to meet the state's targets.

10 So I would urge you to work collaboratively

11 and cooperatively to improve the Department

12 of Education's Medicaid reimbursement

13 claiming process, and stop leaving precious

14 dollars on the table.

15 Together we can also lift roughly

16 15,000 New Yorkers out of poverty by allowing

17 the city to triple its contribution to the

18 Earned Income Tax Credit to 15 percent of the

19 federal allocation. The EITC is the most

20 effective anti-poverty program in America,

21 and by tripling its input, the city could add

22 more than $200 million directly back into our

23 businesses, our neighborhoods, and most

24 importantly, our families.

221

1 This Executive Budget does include

2 some provisions that I hope you will reject.

3 First, the appropriations bills

4 contain language that would give the budget

5 director unilateral authority to push the

6 burden of federal aid cuts down the food

7 chain onto local governments. I would urge

8 you, the Legislature, to reject such an

9 approach that would bypass this legislative

10 body and do tremendous harm to cities and

11 counties throughout the state.

12 I would also ask you to reject cost

13 shifts for foster care, public health, and

14 special education that single out New York

15 City.

16 Finally today, I urge you to not just

17 extend the millionaire's tax this session,

18 but to expand it. But let's be clear, this

19 is not robbing Peter to pay Paul. I'm not

20 here today to tag on a tax for the rich just

21 for the sake of it. The fact is, even with a

22 tax increase at the state level, New York's

23 millionaires will still stand to gain

24 $3 billion in annual savings from Trump's

222

1 proposed tax plan, with an average increase

2 in their after-tax income of more than

3 5 percent. Meanwhile, middle-class taxpayers

4 will get much smaller savings, and in many

5 cases could actually pay more than they do

6 under current law.

7 Raising the millionaire's tax to help

8 address the impact of federal spending cuts

9 is not just a matter of fairness, it's going

10 to be a necessity.

11 So in conclusion, I feel confident in

12 this Legislature's ability to advance a fair

13 and balanced budget despite the challenges

14 and uncertainties of new leadership in

15 Washington. As federal leaders are poised to

16 roll back progress of the last eight years,

17 New York must continue to push forward

18 without leaving any of our people behind.

19 Let us instead work together -- city,

20 counties, and state, legislative and

21 executive branches -- to protect our values

22 and maintain New York as a fair and equitable

23 home to all of our people.

24 I want to thank you again for giving

223

1 me this opportunity, as you do every year, to

2 come and testify. And if you have any

3 questions, I'll be happy to answer them.

4 Thank you very much.

5 CHAIRMAN FARRELL: Thank you very

6 much.

7 We've been joined by Assemblywoman

8 Crystal Peoples-Stokes.

9 First to ask questions, Michael

10 Benedetto, chair of the Cities Committee.

11 ASSEMBLYMAN BENEDETTO: Thank you,

12 Denny.

13 Welcome, Mr. Comptroller. Always good

14 to see you. Glad you're here.

15 One question. You know Co-op City,

16 and I represent Co-op City, and Co-op City is

17 a great place. Co-op City does a lot of

18 things to help the City of New York. Co-op

19 City, for instance, has installed a garbage

20 compactor. And so the Sanitation Department,

21 instead of going around to all the buildings

22 in Co-op City two times, three times a week,

23 they -- Co-op City collects their own trash,

24 brings it to the compactor, where the

224

1 sanitation trucks of the City of New York

2 once a week come in just to pick it up and

3 go. Probably saving the great City of

4 New York millions of dollars. And for this

5 service, Co-op City gets nothing.

6 Co-op City has their own police force,

7 90 men and women who do a wonderful job

8 within the city. And thus the police

9 department, who we all love and does a

10 wonderful job in the 45th Precinct that

11 covers Co-op City, they don't have to patrol

12 as much in Co-op City. In fact, they really

13 don't have to patrol at all; Co-op City takes

14 care of it. And for the expenses that Co-op

15 City pays out in their own police force,

16 Co-op City is reimbursed, by the City of

17 New York, nothing.

18 Now, in lieu of this, are there any

19 other places in the City of New York that may

20 get some reimbursement for services provided

21 that New York City should be providing but

22 doesn't?

23 NYC COMPTROLLER STRINGER: So off --

24 you know, nothing of what you're suggesting

225

1 comes to mind. But I do know that Co-op City

2 is truly a city within a city. And my

3 grandmother lived in Co-op City, so as a kid

4 I remember running around the complex. And

5 since I've been comptroller, I've gotten to

6 know much of the leadership there.

7 I would be happy to sit down with you

8 and the leadership of Co-op City to figure

9 out what we can do, to crunch some numbers,

10 to look at what you're talking about and sort

11 of figure out, going forward, if there's any

12 initiatives that we should be looking at so

13 that we can continue to make Co-op City as

14 vibrant as ever for the families and for the

15 seniors who live there. I'd be happy to work

16 with you.

17 And as a former chair of the

18 Cities Committee, I know you care about all

19 the cities, especially Co-op City.

20 ASSEMBLYMAN BENEDETTO: And of course

21 Co-op City is a fine example of affordable

22 housing, affordable middle-class housing,

23 what we greatly need in the great City of

24 New York.

226

1 NYC COMPTROLLER STRINGER: No

2 question. No question.

3 ASSEMBLYMAN BENEDETTO: No more

4 questions. Thank you.

5 CHAIRMAN FARRELL: Thank you.

6 Senator?

7 CHAIRWOMAN YOUNG: Thank you.

8 Senator Sanders.

9 SENATOR SANDERS: Thank you. Thank

10 you, Madam Chair.

11 Well, I just want to start by saying I

12 represent the Co-op City of Queens --

13 NYC COMPTROLLER STRINGER: You do.

14 SENATOR SANDERS: -- Rochdale Village,

15 so I am also interested in the conversation

16 that you may have. If there is any way, then

17 we in Queens certainly could use it also.

18 I want to offer you a friendly

19 amendment to your conversation earlier, to

20 your testimony. I carry the MWBE in the

21 Senate, and my school bill, if you wish, my

22 community college bill, predates the

23 Governor's proposals. And as a matter of

24 fact, most of my proposals end up in the

227

1 Governor's proposals.

2 But I want to speak to you about MWBE

3 for a moment. And I want to just ask and see

4 if I can't get a better understanding.

5 Assuming the rate of returns are at least

6 even, what prevents you from putting more

7 pension funds or more of your funds, rather,

8 into banks of color, so-called minority

9 banks?

10 NYC COMPTROLLER STRINGER: Well, I

11 mean, part of what we have focused on in our

12 office is a number of things. First, as you

13 know, we hired the city's first chief

14 diversity officer. And we each year evaluate

15 the procurement spending of each city agency.

16 And that has, I think, shone an important

17 transparent light on just the fact that we're

18 not focusing on contracts -- actual spend for

19 women- and minority-owned businesses.

20 The second thing we've also been

21 having some success with is we've said to the

22 people who manage pension dollars that, Look,

23 at the end of the day, when you have diverse

24 money managers -- women, people of color,

228

1 people of all different backgrounds -- the

2 fact is the investments do better. Right?

3 That's true with corporate boards.

4 When you have different people on a board,

5 the company tends to be better. If the

6 companies are all male or pale or -- you

7 know, those boards suffer from groupthink.

8 So diversity, in addition to being a

9 civil rights issue, as a fiduciary, it's

10 critical that we diversify those boards. And

11 we have made it clear to the money managers

12 that we expect to see investors who are

13 diverse. Because that is now, for the first

14 time in the history of our pension fund, a

15 criteria for whether we will do business with

16 you.

17 And in direct answer to your question,

18 we have upped the spending in more asset

19 classes in excess of a billion dollars than

20 any comptroller in history. And we continue

21 to look at ways we can create a funding

22 mechanism to give people an opportunity.

23 Part of what we do is we look at this

24 through a fiduciary lens, because this is not

229

1 my money or the city's money, this is really

2 the money of our pensioners, our

3 firefighters, police officers, teachers, city

4 workers. So everything we do, there's a

5 caveat which says we have to do it through

6 the lens of our returns and what's best for

7 the pension fund.

8 But diversity is a key criteria for

9 enhancing the value of our pension fund.

10 SENATOR SANDERS: I look forward to

11 working with you on that.

12 My last question, can I encourage you

13 to look at the sanctuary city movement in

14 terms of its impact on New York City, that we

15 should at least understand that if our

16 President does carry through his stated

17 position, we should know what this means for

18 New York City in terms of -- and for any

19 other sanctuary city in the state. We should

20 at least know what we're talking about so we

21 can have an intelligent conversation.

22 NYC COMPTROLLER STRINGER: So I've

23 issued two reports in the last couple of

24 weeks. The sanctuary city report that we

230

1 issued identified $165 million in money we

2 could lose immediately.

3 Incredibly, the money that we would

4 lose is the money that we use to fight

5 terrorism. So that's about $156 million.

6 That's the money for cameras and for the

7 hardware that we use, technology. Everybody

8 knows New York City is the number-one

9 terrorist target. You would think the

10 President would understand that.

11 So we have $156 million there, and

12 there's a $9 million DOJ grant that I think

13 would be wiped out if there would be any

14 changes.

15 Long term, we've identified -- and I

16 mentioned this in our testimony -- we've

17 identified that the city could lose up to

18 $7 billion in federal aid, aid that primarily

19 goes to the poorest people in the city,

20 through a certain number of agencies that

21 make up at least between 33 percent and

22 50 percent of an agency. So Department of

23 Homeless Services. You know, you all talked

24 a lot with the mayor about ACS.

231

1 So the stakes have never been higher.

2 And we will continue in this office to crunch

3 the data so that you can look at it as you

4 grapple with adopting a state budget, making

5 sure that we continue to get our fair share

6 of funding. And I'll try to provide with you

7 that information on an ongoing basis. And if

8 you or anyone else here needs us to take a

9 look, Preston or our investigative team would

10 be happy to work with you.

11 SENATOR SANDERS: Thank you.

12 Thank you, Madam Chair.

13 CHAIRWOMAN YOUNG: Thank you, Senator.

14 CHAIRMAN FARRELL: Thank you.

15 Assemblywoman Hooper.

16 ASSEMBLYWOMAN HOOPER: Thank you,

17 Mr. Chair.

18 Scott, it's always good to see you.

19 And because of you, I remained in my seat to

20 acknowledge you and to ask you just a -- not

21 a question, but to make a statement and ask

22 your support.

23 In reading, looking over the

24 presentation that you gave, you did refer to

232

1 the looming threats of deportation. And that

2 you are asking us to support the Governor's

3 call to defend our immigrant friends and

4 neighbors. And certainly I believe that we

5 shall, those of us who understand the

6 importance of immigration as it relates to

7 the history of this nation.

8 So I'm asking, in your very august

9 position as the Comptroller of New York City,

10 when you have an opportunity to talk in

11 reference to the deportation and the

12 immigration issue as it relates in New York

13 City, to look at what has happened

14 historically to those attempted immigrants

15 from the country of Haiti.

16 As you are aware -- perhaps you are

17 aware -- that when the Haitians attempt to

18 access this great nation and they are

19 encountered in the shark-infested waters

20 which they attempt to transverse, they are

21 turned back without an opportunity to even

22 access the rewards of this nation.

23 So would you be kind enough, in your

24 position, to, when this President's executive

233

1 order expires and it returns to where it was

2 as related to the Haitians, in New York City

3 lead the way that the Haitians should also be

4 considered those persons, those human beings

5 who have a right to come to this great nation

6 and access the services and the great

7 American life? I would appreciate that very

8 much. Because I don't hear -- I rarely hear

9 anyone speaking on behalf of the Haitian

10 community. And I have a sizable community, a

11 sizable representation in my district. And I

12 would appreciate that.

13 NYC COMPTROLLER STRINGER: Well, I

14 would tell you that in New York City we have

15 an incredible Haitian community that

16 contributes mightily to the economy of

17 New York City, as Diana -- Assemblywoman

18 Richardson -- well knows. And it's a growing

19 community and an important community.

20 But you know, you raise an interesting

21 question, which is people should understand

22 the contributions of immigrants, especially

23 in New York City. And we've put out a

24 report -- we've been busy lately -- we put

234

1 out a report to showcase the contributions of

2 immigrants in New York City. And here's

3 something people have to understand:

4 New York City would not be the great economy

5 it is without immigrants. Forty-six percent

6 of our workforce is foreign-born. More than

7 half of the business owners today are

8 immigrants, 83,000. In total, immigrants

9 earn $100 billion in annual income, one-third

10 of all income earned in New York City. And

11 the city is home to an estimated 500,000

12 undocumented immigrants.

13 The point is that in a city of

14 immigrants, this city has flourished. And by

15 the way, it's not just immigrants coming here

16 and opening up a small business or a small

17 restaurant. Today immigrant communities,

18 Haitians included, are in the medical field,

19 entertainment field, financial field. And

20 you just can't, you just can't appreciate

21 just how critical immigrants are to our

22 economy.

23 Now, it's really incredible that in

24 Washington -- and the President, he has no

235

1 understanding of this, considering he's a

2 New Yorker and he's done business in New York

3 City. So his ideological ranting and raving

4 has just no basis in fact or understands the

5 contributions of immigrants.

6 I would argue that the report that I

7 did outlining the incredible contributions of

8 the immigrant community, you probably could

9 do that same report for Chicago, L.A.,

10 counties and towns across America. It's not

11 just New York City. And that's the

12 foundation of the United States of America.

13 People from all over the world come here,

14 sometimes with very little money or no money,

15 and their entrepreneurial spirit and the

16 hustling and, you know, the entrepreneurship

17 creates wealth in so many parts of America.

18 And we need to keep the focus on that.

19 ASSEMBLYWOMAN HOOPER: I appreciate

20 that. I appreciate that. But in closing,

21 also there's some of us immigrants who have

22 contributed very much to the wealth of this

23 great nation, and we came -- we did not

24 voluntarily come. So I need to keep that in

236

1 perspective as well.

2 NYC COMPTROLLER STRINGER: I lost my

3 voice over the weekend because I've been

4 going to so many rallies to support

5 immigration. And the first thing I say when

6 we're at a rally supporting the Muslin

7 community is I say, "Listen, I'm an American

8 Jew, and I stand with Muslims. Because when

9 they come for the Muslims, they're going to

10 come for the Jews." And they come for the

11 Haitians, they're going to come for the

12 Latinos. And we all are now in the same

13 boat. It's no longer people separated, we

14 are literally in the same boat.

15 And maybe that's a good thing at the

16 end of the day. Because I happen to think --

17 not to get political here, but I actually

18 think Trump has been a tremendous unifier in

19 this country. Everyone is coming together

20 against his policies. And you usually don't

21 see that in the first 10 days of a

22 presidency.

23 (Laughter.)

24 ASSEMBLYWOMAN HOOPER: Thank you very

237

1 much.

2 NYC COMPTROLLER STRINGER: And by the

3 way, as comptroller, you know, I do the

4 numbers. You know? And there was nobody at

5 his inauguration. I did that --

6 ASSEMBLYWOMAN HOOPER: I wonder why.

7 Thank you.

8 NYC COMPTROLLER STRINGER: I don't

9 mean to be ideological.

10 ASSEMBLYWOMAN HOOPER: Thank you very

11 much.

12 NYC COMPTROLLER STRINGER: Thank you.

13 CHAIRMAN FARRELL: Senator.

14 CHAIRWOMAN YOUNG: Senator Savino.

15 SENATOR SAVINO: Thank you, Senator

16 Young.

17 Thank you, Comptroller Stringer. I

18 just have one or two questions.

19 First, I want to thank you for

20 pointing out something that doesn't get

21 mentioned enough in the budget. Almost at

22 the end of your testimony, you make the point

23 that the budget language contains some

24 interesting verbiage about how, in the event

238

1 of some cuts -- and there are very

2 significant cuts that could be coming down

3 from Washington, actions that we might not be

4 able to anticipate, that the budget doesn't

5 take into consideration -- that in fact they

6 wouldn't have to bring it back to the

7 Legislature, that the administration could

8 just act unilaterally, affecting not just the

9 state budget, usurping our authority to

10 oversee it, but county and local governments

11 as well.

12 So thank you for pointing that out,

13 because I really don't think people have paid

14 enough attention to that. And that, you

15 know, if there are going to be cuts that come

16 as a result of actions in Washington, those

17 of us who help craft the budget here in

18 Albany should be part and parcel of any

19 decisions on how we're going to redirect

20 funding or cut funding to programs that we've

21 already made decisions about. So I want to

22 thank you for pointing that out.

23 I want to ask you, though, about

24 MWBEs, because I know you're committed to it.

239

1 And you and I have had this discussion in the

2 past. I think -- last year I did a hearing

3 on it when I shared the Senate Banking

4 Committee. Assemblywoman -- she's not here

5 now, she's stepped out -- Bichotte and I

6 cochaired the hearing around access to

7 capital and credit and the difficulties that

8 many of the MWBEs face getting access to

9 capital and credit from traditional banking

10 sources, including those that have been set

11 up for that express purpose.

12 And later in the year we did a

13 roundtable in the district and one in

14 Brooklyn with The Black Institute, led by

15 Bertha Lewis. And she has a proposal that

16 would direct the city's pension system to set

17 aside some funding for that purpose.

18 Has there been any further discussion

19 around that, expanding on that, about the

20 possibility of creating a pool of dollars for

21 that purpose?

22 NYC COMPTROLLER STRINGER: Well, yes.

23 And we have been meeting with The Black

24 Institute throughout, our financial advisors

240

1 have been working with The Black Institute

2 staff. And, you know, the talks are ongoing

3 and we're really working hard. That's I

4 think a critical gap. And if we can get

5 there from the fiduciary lens, we're going to

6 do everything we can.

7 In the meantime, we have been -- this

8 office has been the most aggressive in the

9 history of this office on women- and

10 minority-owned businesses, on financial

11 services. I think it really helps having a

12 chief diversity officer.

13 And look, we said the city should have

14 a chief diversity officer, and then every

15 agency. I mean, it's pretty incredible that

16 the city spends 15.3 billion on procurement,

17 buying paperclips, paper -- the amount of

18 money we spend is larger than some

19 countries -- and only 4.8 percent of that

20 spending goes to women, African-Americans,

21 Latinos, Asians. It is just a paltry sum.

22 And so I think we have to shake the

23 system up. And that's what we've done in our

24 office. And we've issued forward-thinking

241

1 reports, we've done the budget analysis. And

2 the reason why I mentioned it here is because

3 the state has made some tremendous progress.

4 And the Bichotte legislation that you've

5 highlighted in your hearings will go a long

6 way in unlocking some of the challenges that

7 small firms have -- access to capital,

8 bonding authority, all the things that keeps

9 a small business small.

10 And I'll continue to work with you and

11 Bertha and everybody to keep working on this.

12 SENATOR SAVINO: And following up with

13 that, the Senate Labor Committee last year,

14 under the previous chairmanship of Senator

15 Martins, did a hearing on prompt payment in

16 the construction industry to some of our

17 MWBEs. It turns out that we have the same

18 problem there where MWBEs are not able to

19 compete because once they get a contract,

20 guess who the worst payers are? Government.

21 Particularly the MTA.

22 So we state that we have a stated

23 goal, it's in the public interest to have

24 30 percent of our contracts go to MWBEs,

242

1 particularly around the construction

2 industry -- and then, in the end, we're not

3 paying promptly enough. And they don't have

4 access to capital and credit from traditional

5 lending sources, they then go out of

6 business, they can't meet payroll, they get

7 debarred, and they can't compete.

8 So anything that we can do to help

9 support this effort I want to continue

10 working on it, because --

11 NYC COMPTROLLER STRINGER: Let's

12 continue to collaborate. You're raising some

13 very important issues. You're absolutely

14 right. You know, the big firms can absorb

15 the hit and they have enough revolving

16 revenue to, you know, wait for the paycheck.

17 And you're absolutely right, the small

18 struggling firms can't.

19 And look, we also need better

20 public-private partnerships -- we need a

21 better partnership between big firms and

22 small firms, because what you really want to

23 do is you just don't want to keep MWBEs in

24 the subcontractor role, you want to start

243

1 small and then build it up.

2 And I can't stress enough, as we do

3 some of the economic analyses, these small

4 businesses, these MWBEs, are so critical to

5 wealth creation in a community. You know, we

6 think it's just, okay, we're helping the

7 small business. But that small business

8 grows into a large business, hires locally,

9 they operate -- they don't necessarily

10 operate in the Manhattan business district,

11 they're actually operating throughout our

12 boroughs. And that's a wealth creator in the

13 community.

14 And we need that. Given high rent and

15 some of the cost of living, we need to just,

16 you know, up the amount of revenue in a

17 community.

18 SENATOR SAVINO: Thank you.

19 NYC COMPTROLLER STRINGER: Thank you.

20 CHAIRMAN FARRELL: Senator?

21 CHAIRWOMAN YOUNG: Thank you. I think

22 we're done.

23 CHAIRMAN FARRELL: Oh, no, we're not

24 done.

244

1 CHAIRWOMAN YOUNG: On our side.

2 CHAIRMAN FARRELL: Assemblyman

3 Carroll.

4 ASSEMBLYMAN CARROLL: Thank you.

5 Thank you for coming here today,

6 Comptroller Stringer. I have two questions.

7 The first is about your EITC program.

8 I agree with you that it's a wonderful

9 anti-poverty program. I want to know if your

10 office has looked into expanding those tax

11 credits, especially for individuals who are

12 single without dependents, because I think

13 the program doesn't do a great job there. I

14 think there are lots of folks who are single

15 without dependents but actually do have

16 children. Or it's a way to also combat youth

17 unemployment, to persuade folks to come into

18 the workforce. And so I'd just like to know

19 your thoughts on that.

20 And the second question is about

21 whether your office has looked into, if

22 Donald Trump does follow through with

23 defunding sanctuary cities, ways that the

24 city can help stop its residents from

245

1 remitting tax dollars to the federal

2 government. Because we are a tax provider.

3 We actually put more much more into the

4 federal government than we receive. And so

5 if they're going to defund our city, we

6 should just not -- you know, we should be

7 capturing as many tax dollars as possible.

8 NYC COMPTROLLER STRINGER: I'm not

9 going to advocate tax evasion here today.

10 So --

11 (Laughter.)

12 ASSEMBLYMAN CARROLL: Okay. We can

13 talk about the EITC then, I guess.

14 NYC COMPTROLLER STRINGER: We can talk

15 about EITC.

16 Look, I think -- and you can be

17 assured that New York City, the mayor's

18 office, the comptroller's office, we're going

19 to work very hard to use every tool at our

20 disposal to legally challenge whatever comes

21 down from Washington that puts our city in

22 economic jeopardy or harms our immigrant

23 brothers and sisters in the city.

24 As relates to money that we remit to

246

1 Washington, I do believe that knowledge is

2 power. And when people understand the

3 billions we send to Washington -- that, by

4 the way, we never get back. As much money as

5 we get from the federal government, it's not

6 as much as what we give. And, you know,

7 New Yorkers know that. You know, we always

8 have given more to this country.

9 And so I think we have to continue to

10 talk about these issues. That's why we're

11 preparing these reports. That's why we did

12 the report on the value of immigrant

13 contributions to the New York City economy.

14 That's why we're exposing the fact of the

15 $7 billion in potential cuts, the collapse of

16 the safety net.

17 And I look forward to working with all

18 of you on these issues, because the truth is

19 I get a lot of ideas from legislators on

20 these issues. And, you know, not to stray to

21 another topic, but as Assemblywoman Niou

22 knows, you know, part of the reason why we

23 were able to do the Rivington investigation

24 was because the community came to us and

247

1 said, There's something wrong here, would you

2 take a look at it, would you do an analysis?

3 And that's what led to the investigation and

4 exposed the $72 million that we were losing.

5 But, you know, it doesn't only come

6 out of my office. I really do need eyes and

7 ears to tell me what's going on.

8 ASSEMBLYMAN CARROLL: And EITC?

9 NYC COMPTROLLER STRINGER: Listen, I

10 think single with children, yes. Also

11 seniors. And we're going to continue to work

12 with the Legislature. I hope you consider

13 giving us the authority to do this.

14 ASSEMBLYMAN CARROLL: Thank you.

15 CHAIRWOMAN YOUNG: Mr. Comptroller, I

16 do have maybe one or two questions that

17 crossed my mind.

18 We had a discussion earlier with Mayor

19 de Blasio, very briefly, about the

20 Administration for Children's Services. And

21 in December of 2016, you actually issued a

22 letter, following up with a July 2016 report,

23 on the failures at ACS. Could you just very

24 briefly go over that? And then I have a

248

1 follow-up.

2 NYC COMPTROLLER STRINGER: Before that

3 letter, we issued an audit in which we found

4 a lot of issues related to the management of

5 ACS. And part of my audit responsibility is

6 not just to raise issues but also to follow

7 up to see if our recommendations were being

8 implemented. And I do think that the people

9 in ACS, the front-line workers, the

10 overwhelming majority are doing everything

11 they can. There's a lot of heroes in that

12 agency. There's a lot of people who dedicate

13 their lives to saving children. I don't

14 think we talk about that enough.

15 But when you look at some of the

16 management failures at ACS, the high

17 caseloads, the lack of ACS following their

18 own protocols -- they're not my protocols,

19 they're ACS protocols -- we find that very

20 troubling. And we have called -- raised this

21 issue with the agency and the mayor's office.

22 CHAIRWOMAN YOUNG: So you think that

23 some of the recommendations are being

24 followed; however, there's much further to

249

1 go? Not to put words into your mouth, but

2 you think that there's a lot of work to do?

3 NYC COMPTROLLER STRINGER: I think

4 that's a very accurate characterization of

5 where we're coming from.

6 CHAIRWOMAN YOUNG: So one of the

7 reasons I wanted to ask was -- first of all,

8 I applaud you for taking on this issue.

9 Obviously this is so crucial and we have,

10 unfortunately, an abysmal track record of

11 children being severely hurt and killed

12 because of mismanagement, as you pointed out.

13 In the executive proposal that's

14 before us right now, there is additional

15 responsibilities under the Raise the Age

16 program that would have to be undertaken by

17 ACS. And I just wanted to get your opinion.

18 If they haven't fixed what's wrong already,

19 how would they be able to manage additional

20 responsibilities?

21 NYC COMPTROLLER STRINGER: I think

22 it's going to be very challenging. But look,

23 we are going to continue to highlight the

24 problems there as a way of moving the city to

250

1 act, you know. And I couldn't tell you -- I

2 couldn't break it down for you today, but I

3 certainly can work with you to get you that

4 information.

5 But look, we have real challenges in

6 our city. We have an exploding homeless

7 population. And we have children who are

8 dying that shouldn't be dying. And to the

9 extent that we can work with the city by

10 offering analysis and audit, that's part of

11 what I'm supposed to do. At the end of the

12 day, transparency is important because it

13 gives us an opportunity to see what's really

14 going on.

15 CHAIRWOMAN YOUNG: Thank you.

16 CHAIRMAN FARRELL: Thank you.

17 Assemblyman Weprin.

18 ASSEMBLYMAN WEPRIN: Good afternoon,

19 Comptroller Stringer. And it's great to see

20 my old friend Preston Niblack, a great

21 acquisition. When I was chair of the City

22 Council Finance Committee and he was our

23 director, he was invaluable and we could not

24 have done what we did back in those years

251

1 without Mr. Niblack.

2 NYC COMPTROLLER STRINGER: That's what

3 he told me when he interviewed.

4 (Laughter.)

5 NYC COMPTROLLER STRINGER: But he is a

6 great addition.

7 ASSEMBLYMAN WEPRIN: I know you've

8 done a couple of audits -- I think you did

9 one in 2014, and you did one recently in

10 November 2016 -- involving Rikers Island.

11 And I'm the new chair, as you know, of the

12 Corrections Committee. And I know there's a

13 former Judge Lippman Commission report that's

14 supposed to report back on some of the issues

15 in Rikers.

16 Could you kind of summarize -- I think

17 you talked about the increased cost per

18 inmate at Rikers recently and also some of

19 the violence involving Rikers. Could you

20 kind of give a little synopsis of your audit

21 and what is being done as a follow-up?

22 NYC COMPTROLLER STRINGER: As the

23 population in Rikers decreases, the cost per

24 inmate is rising, which makes no sense to me.

252

1 It's now $137,000. Now, some of that, to be

2 fair, are new programs that are being

3 implemented.

4 But part of why we're focusing on this

5 is that violence is increasing, the cost is

6 going up, and we don't have a long-term

7 Rikers plan, and that's something that we

8 have to continue to talk about. One option

9 on the table -- and perhaps the Lippman

10 Commission will address it -- is how do we go

11 about closing Rikers, because it is an

12 antiquated place. I've been there

13 voluntarily, and it's -- it's -- you know --

14 ASSEMBLYMAN WEPRIN: I'm glad you

15 clarified that.

16 (Laughter.)

17 NYC COMPTROLLER STRINGER: Well, in

18 these times.

19 It is a place that is in desperate

20 need of reform, and the physical plant is in

21 just terrible condition.

22 But I'm very excited that you are the

23 new chair, and I do look forward to working

24 with you. We are going to continue to look

253

1 every few months at some of the issues facing

2 Rikers, because it's important for the people

3 there that we do everything we can to make

4 Rikers safe, cost-effective, and efficient.

5 ASSEMBLYMAN WEPRIN: Do you think

6 closing it is an option?

7 NYC COMPTROLLER STRINGER: I think it

8 absolutely should be studied. I think it's

9 critical that we look at this huge place that

10 has just been operating in a way that's just

11 in a different era. And when you think about

12 how we can best house our inmates, keep them

13 safe, and keep costs down, I mean I think

14 that all goes hand in hand.

15 ASSEMBLYMAN WEPRIN: Okay. Well, if

16 we did close it, where would the -- you know,

17 it's a little bit less than 10,000 inmates

18 now; at one point it was 20,000.

19 NYC COMPTROLLER STRINGER: It's about

20 9,000, yeah.

21 ASSEMBLYMAN WEPRIN: Where would you

22 suggest that we house those inmates?

23 NYC COMPTROLLER STRINGER: Well,

24 that's going to be up to you. And part of

254

1 what we'll have to do is work on having a

2 discussion with city officials -- we're

3 certainly not there today. I think we do

4 need to do research and analysis, what is the

5 best way to house our inmate population.

6 The Rikers footprint is huge, and it

7 is a plant that is slowly falling into

8 disrepair. So the cost of maintaining it,

9 you know, may turn out to be

10 cost-prohibitive. And so this is not

11 something that's going to happen overnight.

12 But sometimes you have to start laying the

13 groundwork for different options. And I

14 think we have to talk to people, our

15 constituents in New York City, show them it's

16 costing $137,000 a year just to, you know,

17 incarcerate an inmate when there's so many

18 forward-thinking ideas in terms of how we

19 house our inmates in a safe way that's

20 cost-effective. And with you as chair, I

21 think you'll breathe some life into that

22 discussion.

23 ASSEMBLYMAN WEPRIN: Thank you very

24 much, Comptroller.

255

1 NYC COMPTROLLER STRINGER: Thank you.

2 CHAIRMAN FARRELL: Thank you.

3 Senator?

4 CHAIRWOMAN YOUNG: Senator Krueger.

5 SENATOR KRUEGER: Hi, how are you,

6 Comptroller Stringer?

7 NYC COMPTROLLER STRINGER: You're

8 back.

9 SENATOR KRUEGER: I'm back. I

10 apologize, I had to run off to do something

11 with the Governor and got back.

12 Thank you for being here. I did have

13 a chance to review your testimony quickly,

14 and you cover so many important progressive

15 issues for the City of New York and where we

16 need to go.

17 NYC COMPTROLLER STRINGER: Thank you.

18 SENATOR KRUEGER: I was just curious,

19 today on the floor of the Senate there's

20 going to be a bill -- I'll be voting no on

21 it -- that would limit New York City's

22 property tax to the same kind of formula the

23 rest of the state's property tax caps are set

24 at. And I'm curious whether you have any

256

1 analysis of what that would mean for the

2 city's finances if in fact the bill -- that I

3 believe Senator Lanza sponsors in the

4 Senate -- were to become law.

5 NYC COMPTROLLER STRINGER: You know, I

6 think that's sort of comparing apples to

7 oranges. I don't think, say, a 2 percent cap

8 for the city would work at all. Our

9 expenses are going up by around 5 percent a

10 year, given all the issues and things that we

11 deal with. So I think to sort of strangle us

12 in that way would not be smart financially,

13 fiscally.

14 I think there's a better conversation

15 to be had, but I don't think that's the way

16 to do it. And I would say, as somebody who

17 watches the finances of the city, I commend

18 you for voting no.

19 SENATOR KRUEGER: Thank you.

20 And you spoke of, in your testimony,

21 supporting the continuation of what people

22 euphemistically talk about as the

23 millionaire's tax, and even extending it.

24 And I publicly have supported it already

257

1 earlier today.

2 There's always somebody who argues if

3 you do this, you'll lose all your

4 millionaires and you'll actually end up

5 losing tax revenue for the city. Can you

6 speak from your experience, since we've now

7 had this tax for multiple years?

8 NYC COMPTROLLER STRINGER: Well, as I

9 mention in the testimony, the very wealthy

10 actually stand to benefit greatly from

11 federal tax cuts. And we estimate that

12 New York City residents making more than

13 $1 million would reap a $3 billion federal

14 tax cut under the Trump plan. So we think

15 that under the federal tax plan, we're

16 actually going to see millionaires doing very

17 well.

18 The people we're concerned about are

19 in some cases the middle class, who would get

20 a relatively paltry tax cut, and in some

21 cases no tax cut at all. We think that to

22 make up the revenue, that to support the

23 Assembly tax plan makes sense today.

24 Now remember, the millionaire's tax

258

1 was first proposed in 2009 during the Great

2 Recession. The top bracket raised to

3 $1 million for single filers and $2 million

4 for joint filers. The top rate is only 8.97.

5 That has been lowered to 8.82 percent, right?

6 So we think that this is a good time

7 to generate a little more because of the

8 trillions that are going to be taken off the

9 table.

10 SENATOR KRUEGER: Thank you.

11 And one more question --

12 NYC COMPTROLLER STRINGER: And let me

13 just mention something.

14 SENATOR KRUEGER: Certainly.

15 NYC COMPTROLLER STRINGER: Because we

16 did an analysis in our office that found that

17 half of all taxpayers with incomes greater

18 than $1 million, right, do not actually live

19 in New York, and that these taxpayers are

20 less likely to move than lower-income

21 taxpayers. So half the people don't even

22 live here.

23 SENATOR KRUEGER: And I always enjoy

24 discussing fiscal issues with you as the city

259

1 comptroller, so you're the perfect person for

2 me to ask these questions of. So thank you.

3 In the Governor's budget, something I

4 don't think came up yet today, there's a

5 proposal to basically expand on Internet fair

6 taxation. So we've had the -- what they

7 euphemistically call the Amazon tax, and in

8 the Governor's proposal it expands it, which

9 some people are saying but if they have no

10 bricks and mortar in New York, why should we

11 be able to tax them? And of course others

12 point out as more and more commerce moves to

13 the Internet, you have fewer people shopping

14 retail and less sales tax coming into local

15 governments.

16 Do you have a position for sales tax

17 revenue to the City of New York from this

18 proposal?

19 NYC COMPTROLLER STRINGER: We think

20 under the proposal we would see $40 million

21 for New York City. We already have a process

22 in place to capture that revenue. This would

23 just make the provider responsible for

24 collecting it. So I actually think it would

260

1 be a benefit to the city.

2 SENATOR KRUEGER: And you don't see a

3 negative for the City of New York if we were

4 to implement this?

5 NYC COMPTROLLER STRINGER: We're in a

6 new world when it comes to this. But this, I

7 think, is a moderate way to take a look at

8 how we can, you know, look at revenue without

9 hurting businesses, but at the same time

10 making sure that New York City is capturing

11 what it's supposed to in terms of sales tax.

12 SENATOR KRUEGER: Thank you very much

13 for your testimony.

14 NYC COMPTROLLER STRINGER: Thank you,

15 Senator.

16 CHAIRMAN FARRELL: Thank you.

17 Mr. Lupinacci. Braunstein, I'm sorry.

18 ASSEMBLYMAN BRAUNSTEIN: Can you hear

19 me? Good afternoon, Mr. Comptroller.

20 As you're aware, significant inequity

21 exists within New York City's property tax

22 system. If you look at effective property

23 tax rates for co-op owners in the outer

24 boroughs compared with their neighboring

261

1 single-family homeowners as well as co-op

2 owners in Manhattan and parts of Brooklyn,

3 you'll see that outer borough co-op owners

4 pay significantly higher effective property

5 taxes than their similarly situated

6 neighbors.

7 The reason co-ops in Manhattan and

8 Brooklyn are assessed differently than the

9 outer boroughs has to deal with comparables

10 and sometimes they use rent-regulated

11 comparables, and that's an issue for another

12 time. But one of the reasons that

13 single-family homeowners have relatively

14 lower property taxes is because there's caps

15 on assessments at 6 percent a year,

16 20 percent over five years.

17 In the district I represent, many

18 people can't afford to buy a home. So we

19 have young families, middle-class families,

20 seniors on fixed incomes who live in co-ops,

21 and they're seeing their property taxes rise

22 at an exponential rate. And it's forcing

23 many people to make difficult decisions about

24 whether or not they can continue to stay in

262

1 their home.

2 I introduced legislation in 2013, in

3 coordination with the City Council -- and

4 Mr. Niblack here helped me work on it as

5 well -- that would cap assessments on co-ops

6 at 8 percent a year, 30 percent over five

7 years.

8 I've pleaded with the de Blasio

9 administration to help us push this proposal

10 because, while we can unilaterally do it up

11 here, generally as a policy, when we make

12 major tax changes to a locality, we tend to

13 try and get a green light, especially in the

14 Assembly.

15 Would you be open to supporting an

16 8 percent assessment cap per year, 30 percent

17 over five years, for co-ops?

18 NYC COMPTROLLER STRINGER: Listen, I

19 think you've been a leader to make our

20 property tax system more fair and equitable.

21 I do think we should review our property tax

22 system. We haven't had a real discussion

23 about it for a very long time. We do have a

24 system that does not treat everybody equally,

263

1 and I think you're right to raise these

2 issues, as was the City Council.

3 As a former chair of the Real Property

4 Taxation Committee in the Assembly some years

5 ago -- more than a decade ago -- we talked

6 about taking a look at this system. And I'll

7 be happy to work with you. I don't want to

8 commit today on your bill, partly because I

9 haven't reviewed it.

10 ASSEMBLYMAN BRAUNSTEIN: Sure.

11 NYC COMPTROLLER STRINGER: But I do

12 think that we're long overdue to just simply

13 start talking about the tax system. I think

14 we could make some headway. I'm going to ask

15 Preston just to talk about it from -- because

16 of his experience --

17 ASSEMBLYMAN BRAUNSTEIN: No, I just

18 wanted to bring it to your attention because

19 it's becoming a very serious problem --

20 NYC COMPTROLLER STRINGER: No, I

21 understand.

22 ASSEMBLYMAN BRAUNSTEIN: Especially

23 seniors on a fixed income, that property tax

24 is passed on to their maintenance. And their

264

1 pension has not gone up like that, their

2 Social Security benefits aren't going up like

3 that, but they're seeing -- I mean,

4 exponential. I've gone to the co-op board

5 meetings, and you see the curve of how much

6 the property tax has gone up, and even in the

7 next few years it's going to be a big

8 problem.

9 NYC COMPTROLLER STRINGER: You're

10 right, you're absolutely right to raise it.

11 It's time to have that discussion.

12 NYC DEPUTY COMP. NIBLACK: I think the

13 problem that we were trying to address with

14 your bill, your proposal, really at its core

15 was about the assessment process and how it

16 treats buildings -- like mine, frankly, on

17 the Upper West Side, that is compared to a

18 set of rent-controlled apartment buildings

19 and is underassessed as a result, as opposed

20 to the buildings out in your district, which

21 we looked at very closely, that get assessed

22 at something that's much closer to market

23 value.

24 And it creates distortions, that

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1 assessment method creates distortions. I

2 spent lots of time with David Weprin on this

3 as well. And that's really the core of this

4 problem.

5 ASSEMBLYMAN BRAUNSTEIN: I mean,

6 theoretically that sounds like a good

7 proposal, but there's so many winners and

8 losers in that plan that it's almost

9 politically untenable. Whereas a straight

10 cap on assessments across the board is

11 something that I think everybody could

12 support. So I'm just happy to bring it to

13 your attention.

14 NYC COMPTROLLER STRINGER:

15 Assemblyman, we'll be happy to work with you

16 on this, absolutely.

17 CHAIRMAN FARRELL: Thank you.

18 Senator?

19 CHAIRWOMAN YOUNG: I think we're all

20 set.

21 CHAIRMAN FARRELL: Thank you very

22 much.

23 NYC COMPTROLLER STRINGER: Thank you

24 very, very much. Best of luck in the

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1 deliberations. Thank you.

2 SENATOR KRUEGER: Thank you.

3 CHAIRWOMAN YOUNG: Thank you,

4 Mr. Comptroller.

5 CHAIRMAN FARRELL: Sophia said to say

6 hello. I told her you would be here.

7 NYC COMPTROLLER STRINGER: Is she

8 here?

9 CHAIRMAN FARRELL: No, she isn't. She

10 wanted to be.

11 NYC COMPTROLLER STRINGER: Max and

12 Miles say hello.

13 (Discussion off the record.)

14 CHAIRMAN FARRELL: City of Buffalo,

15 Mayor, the Honorable Byron Brown.

16 This is the long version, right?

17 MAYOR BROWN: Yes. That's a longer

18 version than I'm going to give.

19 CHAIRMAN FARRELL: It's as long as

20 this?

21 MAYOR BROWN: No, it's shorter than

22 that.

23 Chairman Denny Farrell, chairman of

24 Ways and Means, Senator Catharine Young, our

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1 Finance chair, and to all of the members of

2 the Legislature, it's a wonderful pleasure to

3 be back here with you in Albany and to have

4 the opportunity to give my perspective on

5 Governor Cuomo's proposed budget.

6 I have with me today City of Buffalo

7 Commissioner of Administration and Finance

8 Donna Estrich. And as per the indirect

9 instructions of Chairman Farrell, I will give

10 an abbreviated presentation of what you have

11 in front of you.

12 I want to just first of all say that

13 my administration has worked continuously to

14 improve Buffalo's fiscal situation, which has

15 created a strong business environment and

16 continues to attract investment and create

17 jobs. There has been a remarkable revival in

18 the City of Buffalo. And while there is

19 still much that we need to accomplish in

20 Buffalo, our efforts have produced incredible

21 results.

22 For example, we've delivered 11

23 balanced budgets. It has been five years

24 since Buffalo's hard control board shifted to

268

1 a soft advisory panel. Overall, the crime

2 rate has dropped 32 percent, and violent

3 crime is down 27 percent. The City of

4 Buffalo has added over 1,400 affordable

5 housing units since 2006.

6 And I know earlier there was much

7 discussion with Mayor de Blasio and

8 Comptroller Stringer about minority- and

9 women-owned businesses and concerns about

10 immigration and the recent immigration

11 orders. I have hired the first chief

12 diversity officer in the City of Buffalo a

13 year ago, to support the growth and

14 development of minority- and women-owned

15 businesses, and we are seeing great success

16 in that area.

17 And I have also created the Office of

18 New Americans to ease the transition of

19 immigrants and refugees into the City of

20 Buffalo.

21 The city has also improved its bond

22 ratings with the Big 3 credit rating

23 agencies, receiving an A+ from Standard &

24 Poor's, an AA- from Fitch Ratings, and an A1

269

1 from Moody's Investor Services. We are

2 continuing to keep costs down and create a

3 more open and efficient government.

4 We've reduced our costs by switching

5 over to a VOIP telecommunications system.

6 We've implemented a fuel monitoring system

7 and installed GPS in much of our municipal

8 fleet to reduce waste and be more efficient.

9 The City of Buffalo recently acquired

10 a downtown federal building to consolidate

11 police and fire administrative offices into

12 one location, and we are fully confident that

13 this will create efficiencies and save money

14 in both operations. This will also enable us

15 to sell the police building, which is

16 considered valuable real estate, in the

17 current downtown market.

18 We created and implemented the BPD21C

19 Police Academy Pre-Employment Scholarship

20 Program, a first of its kind in the nation

21 program, which has put new police officers on

22 the streets more quickly and saved the city

23 millions while developing a community police

24 force that better reflects the demographics

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1 of our diverse city.

2 After 242 public meetings to assess

3 and consider input from residents across the

4 city, I signed a new unified development

5 ordinance into law earlier this month, the

6 "Green Code." It is the first major overhaul

7 to Buffalo's zoning laws since 1953 and will

8 serve as a blueprint for zoning and

9 development in the 21st century. And Buffalo

10 joins only two other major American cities

11 that have done this, and so we're very proud

12 of that accomplishment.

13 The City of Buffalo is also working

14 with the Sunlight Foundation and the

15 Johns Hopkins University Center for

16 Government Excellence to improve the use of

17 data-driven decisionmaking and analysis. I

18 issued an executive order to create an open

19 data policy, and will soon release an RFP to

20 procure an open data portal that will be a

21 central repository for city data and will

22 enhance transparency in city government.

23 And last year, I want to thank you for

24 the land bank superbid power that you passed

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1 for the City of Buffalo and was signed by the

2 Governor. I want to thank Assemblymember

3 Crystal Peoples-Stokes, for being the

4 Assembly sponsor of that legislation, and

5 State Senator Patrick Gallivan, for being the

6 Senate sponsor.

7 This has enabled us in the City of

8 Buffalo to break the cycle of foreclosed

9 properties being purchased by absentee owners

10 who seldom invest in them, and to create

11 homeownership opportunities for residents to

12 contribute to the stabilization of our

13 neighborhoods.

14 I am proud to report that the City of

15 Buffalo, thanks to a lot of support that we

16 have received from the Legislature and the

17 Governor, and the hard work that we have done

18 locally, is in sound financial condition.

19 You have been very instrumental in our

20 renaissance, and I want to thank you for

21 that.

22 This year's Executive Budget proposal

23 makes important investments that will ensure

24 Buffalo's continued prosperity. I am

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1 grateful for the faith and commitment that

2 Governor Cuomo has shown in the potential of

3 our city, with the Buffalo Billion initially

4 and now the Buffalo Billion 2. The focus on

5 job creation and providing support to

6 businesses and entities that stimulate

7 development will continue the tremendous

8 progress that has been made under the

9 original Buffalo Billion program.

10 I'd also like to thank Governor Cuomo

11 for including $10 million for the Better

12 Buffalo Fund in this year's budget. The

13 Better Buffalo Fund has supported projects

14 that have boosted the growth of small

15 businesses and increased employment and

16 housing options along corridors served by

17 public transportation. These investments are

18 building neighborhoods and improving quality

19 of life.

20 Fifty years of deindustrialization and

21 disinvestment has impaired the ability for

22 rapid progress on the East Side of Buffalo

23 more than any other neighborhood in our city.

24 The rapid population loss from the 1970s

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1 through the 2000s, coupled with the high

2 concentration of poverty, has led to an

3 abundance of abandoned and dilapidated

4 housing. The Governor's proposal to invest

5 $10 million to help eliminate zombie

6 properties and revive and reinvent blighted

7 areas on the East Side and in the suburb of

8 Cheektowaga will have a profound impact on

9 the quality of life in these neighborhoods.

10 To guide unemployed or underemployed

11 individuals into advanced manufacturing and

12 energy industries which are growing in the

13 City of Buffalo, Governor Cuomo has allocated

14 $10 million for a workforce development plan

15 to support job growth and ensure Buffalo has

16 a workforce with skills to meet the

17 requirements of the jobs of the future, and

18 we certainly support that.

19 Approximately $60 million of the

20 proposed Buffalo Billion 2 funding is

21 currently targeted for East Side

22 revitalization projects where the city is

23 experiencing high poverty. I applaud the

24 Governor for this much-needed investment.

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1 The new funding for the Buffalo

2 Niagara Medical Campus, as part of the

3 Buffalo Billion 2, will support the region's

4 growth of medical startups, another area that

5 is driving record amounts of employment

6 opportunities for residents of the City of

7 Buffalo.

8 I'm also enthusiastic about the

9 Governor's budget proposal to make college

10 tuition free for middle-class families at

11 SUNY and CUNY. Many of Buffalo's

12 top-performing high school students never

13 apply to college even though they have

14 displayed the ability to succeed

15 academically. A majority of these students

16 come from low-income households.

17 The City of Buffalo has made

18 modernizing our municipal infrastructure a

19 top priority. Buffalo has invested over

20 $217 million -- $95 million of that in

21 drinking water, and $122 million in sewer

22 improvements -- since 2006. I applaud the

23 Governor for including over $2 billion for

24 clean water infrastructure.

275

1 Buffalo is continuing to protect the

2 progress it has made and add tools that will

3 allow the City of Buffalo to reach its full

4 potential. We continue to need assistance to

5 continue our fiscally responsible growth

6 strategy. For example -- and I am going to

7 summarize these, because you have the

8 testimony in front of you -- we're seeking to

9 build a public works campus and consolidate

10 the operations of our Public Works

11 Department, consolidating six facilities into

12 one. Phase 1 would be a $30 million

13 investment.

14 Cars Sharing Main Street funding --

15 I've been before you before and talked about

16 the fact that 30 years ago our Main Street

17 was closed to vehicular traffic when the

18 light-rail rapid transit system was

19 installed. And to date we have been able to

20 invest close to $60 million in opening up

21 Main Street to vehicular traffic, with

22 federal, state, and City of Buffalo dollars.

23 It has been of major benefit to the City of

24 Buffalo, and we would like to continue that

276

1 process with an allocation of $30 million to

2 open up another two blocks of our

3 Main Street.

4 I will tell you that the $60 million

5 of investment with public resources that we

6 have been able to make has stimulated over

7 $500 million of private-sector investment.

8 We'd also like to create a unique

9 Tax-Reduction Incentive Program. And we'd

10 like Buffalo to be the model for that

11 program, where our state would provide an

12 incentive for those municipalities who

13 actually cut taxes and maintain those tax

14 cuts for at least five years. The details of

15 the program are in our presentation before

16 you.

17 We would also like to close the

18 utility services tax loophole. We've talked

19 about this before. Cities like Buffalo,

20 Rochester, and Yonkers previously have had

21 the ability -- and we still do -- to collect

22 the 3 percent tax on gross receipts of local

23 services provided by utility companies, but

24 we are not able to do that on the wireless

277

1 companies. The state has adopted legislation

2 to give the state the ability to impose an

3 excise tax on telecommunications, and that is

4 not the case with cities outside of New York

5 City. And that would be very important to

6 Buffalo and other upstate cities to have this

7 ability.

8 Finally, AIM funding is the lifeblood

9 of municipal governments, and any decrease or

10 disruption in this funding jeopardizes

11 essential services. As you know, in 2010 the

12 AIM program was cut by 7.6 percent and has

13 not been fully restored since that time. As

14 the operating costs of running a municipality

15 have continued to increase at an almost

16 unsustainable pace over the last seven years,

17 AIM funding has remained flat. My request is

18 that AIM funding be increased to coincide

19 with the rate of inflation.

20 Again, through hard work and careful

21 planning, and with the support of the

22 Governor and this legislative body, we have

23 been able to make significant progress in the

24 City of Buffalo. We have worked hard to

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1 build a foundation for future growth and

2 investment. We are grateful to your role in

3 that, and we're asking for your continued

4 support and assistance as you deliberate this

5 year's state budget.

6 Thank you very much.

7 CHAIRMAN FARRELL: Thank you.

8 Mr. Benedetto?

9 ASSEMBLYMAN BENEDETTO: Yes. Welcome

10 here, Mayor, and it's a pleasure to have you

11 in the hall.

12 MAYOR BROWN: It's a pleasure to be

13 here.

14 ASSEMBLYMAN BENEDETTO: Everything

15 sounds like things are going in the right

16 direction in Buffalo, and you are rather

17 laudatory towards our Governor and for the

18 things he has done.

19 MAYOR BROWN: And the Legislature as

20 well.

21 ASSEMBLYMAN BENEDETTO: Okay. We'll

22 take that.

23 The Governor has various competitions.

24 The municipal consolidation and efficiency

279

1 competition -- have you taken advantage of

2 that? Do you have any nearby cities or towns

3 that you can join with, and have you?

4 MAYOR BROWN: We have been able to

5 implement a number of efficiencies in the

6 City of Buffalo, some of them I outlined in

7 my presentation, that have saved the

8 residents and taxpayers of our city in some

9 cases hundreds of thousands of dollars -- in

10 other cases, potentially millions of dollars.

11 Buffalo is the largest municipality in

12 the Western New York region, and many

13 consolidations have been done over a long

14 period of time. So, for example, at one time

15 the city and the county both had health

16 departments. Those have been consolidated.

17 There's only a county health department. The

18 city and county once had separate library

19 systems. The library systems have been

20 consolidated.

21 So a lot of the major consolidations

22 that could have been implemented in our

23 region over the years have been implemented,

24 so it would be hard for us to identify other

280

1 consolidations with our neighboring suburban

2 municipalities.

3 ASSEMBLYMAN BENEDETTO: So this

4 particular one would not really apply to you

5 enough really to benefit from.

6 Tell me about the Car Sharing Main

7 Street project. I'm not familiar with it,

8 but it sounds like a wonderful program.

9 Enlighten me.

10 MAYOR BROWN: So about 30 years ago, a

11 light-rail rapid transit system was installed

12 on Main Street in downtown Buffalo. The

13 installation of the light rail was heralded

14 as being a great thing for retail and

15 business in downtown Buffalo, but the project

16 took so long it essentially killed retail in

17 downtown Buffalo and caused the closure of

18 many businesses in our downtown.

19 During my entire tenure as mayor, we

20 have been working to assemble funds to reopen

21 Main Street to vehicular traffic and to

22 stimulate private-sector reinvestment in the

23 downtown and the City of Buffalo, and we have

24 been very successful in doing that. We've

281

1 attracted federal funds, we've been able to

2 secure state funds, and we have put City of

3 Buffalo funds into the project, almost

4 totaling about $60 million, opening three

5 blocks of Main Street.

6 And in opening those three blocks of

7 Main Street, we have seen substantial

8 private-sector investment and business

9 relocation and startup in those areas where

10 we have been able to reopen the Main Street

11 and downtown to vehicular traffic.

12 ASSEMBLYMAN BENEDETTO: Very

13 interesting. One of these days I'll have to

14 get up and visit Ms. Peoples and take an

15 actual look and see how things are going.

16 MAYOR BROWN: We would love to host

17 you.

18 ASSEMBLYMAN BENEDETTO: Thank you for

19 your time.

20 CHAIRMAN FARRELL: Thank you.

21 Senator?

22 CHAIRWOMAN YOUNG: Thank you very

23 much, Mr. Chairman. Thank you.

24 It's always great to see a fellow

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1 Western New Yorker here, so I welcome you,

2 Mayor. I'm so happy to see you again.

3 MAYOR BROWN: Great to see you,

4 Senator Young.

5 CHAIRWOMAN YOUNG: We are just

6 thrilled with the rejuvenation of Buffalo and

7 your good work and what we've been able to do

8 as partners on the state level.

9 I just did have one really quick

10 question. Recently you signed into law

11 Green Code legislation which would affect

12 many aspects of development in the city, from

13 historic preservation to environmentally

14 friendly policies to even walkability. And

15 there have been many articles about what it's

16 going to do as far as impacting the

17 community, and I was wondering about the

18 city's budget. And could you give us an

19 outline as to what you think the impact will

20 be on the city budget, not only this year but

21 prospectively?

22 MAYOR BROWN: Well, what the Green

23 Code will do is really update our land use

24 planning, and it will be a unified

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1 development ordinance for the City of

2 Buffalo. As I mentioned in my testimony, we

3 haven't updated our zoning laws in any

4 substantial way in 63 years. So this has

5 been a major undertaking, a major planning

6 effort for us.

7 We're one of only three major cities

8 in the country to do a complete overhaul of

9 our zoning laws, and we believe it will make

10 the development process in the City of

11 Buffalo quicker and more predictable. It

12 will make it easier for people who want to

13 build things to be able to do that, and it

14 will give citizens who previously have been

15 concerned about some development the

16 opportunity to weigh in and say what they

17 would like to be built, how they would like

18 it to be built, and where they would like it

19 to be built, built into the codes that will

20 address everything, as you mentioned, from

21 walkability to historic preservation and

22 other issues as it relates to development.

23 We think budgetarily it will have the

24 impact of stimulating additional economic

284

1 development. We think it will add to our tax

2 base. We have tried to be extremely

3 efficient in the City of Buffalo. We have

4 really tightened our belts over the years,

5 and we are looking forward to now being able

6 to reap the benefit of that by being able to

7 generate additional tax revenue because we're

8 bringing more businesses and residents into

9 the city.

10 CHAIRWOMAN YOUNG: Thank you.

11 CHAIRMAN FARRELL: Thank you.

12 We've been joined by Assemblywoman

13 Fahy and Assemblyman McDonald.

14 Next to question, Crystal

15 Peoples-Stokes.

16 ASSEMBLYWOMAN PEOPLES-STOKES: Thank

17 you, Mr. Chairman, for the opportunity to ask

18 a few questions of the mayor of the great

19 City of Buffalo.

20 Mr. Mayor, I want to thank you and

21 your commissioner for being here this morning

22 to share with us your thoughts on the

23 Governor's proposed budget. I did want to

24 ask you one thing that you did not mention in

285

1 your presentation that the Governor has

2 included in his proposed budget, and that's

3 ride-sharing and Uber. So I wanted to

4 hear -- well, did you -- your thoughts on

5 that. Did you support the Governor's

6 position on it? Do you have some concerns

7 about local control? Where are you on that

8 issue?

9 MAYOR BROWN: We certainly support

10 ride-sharing in the City of Buffalo.

11 I have been a very vocal proponent of

12 ride-sharing. We think it provides another

13 option for transportation for residents and

14 visitors in the City of Buffalo.

15 We think also, being a very large

16 college community with a number of colleges

17 and universities, it also provides a measure

18 of safety for our young people when they go

19 out on weekends, to make sure that they can

20 call one of the ride-sharing companies and

21 safely be able to get home without the

22 potential of driving and drinking. We think

23 it will reduce that in communities, as has

24 been evidenced in other communities where

286

1 ride-sharing exists.

2 And then we also believe that it is

3 another option to provide employment

4 opportunities for members of our community

5 where we do have high poverty in some

6 segments of the population.

7 So we are very much in favor of the

8 Governor's proposal for ride-sharing. I know

9 that many in the Legislature have also been

10 very strong proponents of ride-sharing, and

11 we believe that it can be done without having

12 a detrimental impact on the traditional

13 taxicab industry.

14 ASSEMBLYWOMAN PEOPLES-STOKES: Well,

15 can you just explain a little bit about how

16 you think that can be done without having

17 that detrimental impact? Because I'm hopeful

18 that it can be done without that

19 detrimental -- but I haven't heard the

20 clarity on that yet, from the Governor's

21 perspective.

22 MAYOR BROWN: Well, you know, like

23 you, we're certainly waiting for more

24 details. What we have always done when we

287

1 have expressed our support for ride-sharing

2 is also express that we support the

3 traditional taxicab industry, and we would

4 like to see a proposal developed that allows

5 for healthy business competition but also

6 allows those two types of businesses to exist

7 to provide more transportation options for

8 our residents.

9 So I am hopeful that as the proposal

10 is more fully fleshed out and developed, we

11 will see that kind of detail and we will see

12 a proposal that will allow those

13 transportation options for the community.

14 Because I think the more options we can

15 provide to people and the more business

16 competition that is offered, we will see

17 pricing go down and people having the

18 particular transportation option that best

19 suits their needs.

20 ASSEMBLYWOMAN PEOPLES-STOKES: Great.

21 Thank you. I concur, and I think it will be

22 a huge economic benefit to the region as

23 well. So I'm hopeful that through these

24 conversations we will work it out so that

288

1 both the new Uber driver and the traditional

2 taxi driver can work collaboratively.

3 The other question I wanted to ask, if

4 you could just expound on it a little bit, is

5 the whole issue of land grant, which as you

6 know was a pretty significant measure to get

7 done. I certainly want to give many thanks

8 to my colleague Mr. Gallivan, and certainly

9 the Governor for signing the bill.

10 But the thought process that your

11 administration has on using those properties

12 to actually allow people to become first-time

13 homeowners. Have you implemented that

14 process yet? And if so, how many people has

15 it positively affected?

16 MAYOR BROWN: So we're in the process

17 of implementing that policy now. We will be

18 certainly in communication with your office

19 and other members of the Western New York

20 delegation to give them a preview of the

21 details of the program that we will be

22 initiating to assist people in becoming

23 owner/occupants with the properties that we

24 have been able to secure in the in rem

289

1 foreclosure auctions.

2 Thanks to you and your colleagues, in

3 this first foreclosure auction since we got

4 the superbid power, we've been able to

5 acquire 60 properties in the City of Buffalo.

6 And our goal with all of those properties is

7 to assist people who are currently renters in

8 the neighborhoods surrounding the properties

9 to become homeowners.

10 The other thing that is important to

11 note is in being able to do that, we will

12 work with people in various city

13 neighborhoods and establish what is called

14 homebuyers clubs, where we will help people

15 repair their credit, where we will help

16 people become prequalified for mortgages so

17 that they can not only take advantage of

18 these city housing opportunities through the

19 land bank, but other housing opportunities

20 that exist in the neighborhoods in the City

21 of Buffalo.

22 So this is a critically important

23 piece of legislation that not only will

24 promote home ownership but will help to

290

1 stabilize the tax base in the City of Buffalo

2 and help people improve their personal

3 finances.

4 And I also want to just thank you,

5 Assemblymember, for the work that you have

6 been doing with my office in partnership to

7 help people strengthen and stabilize their

8 finances in the city. And one example of

9 that is the series of wills and estates

10 workshops that we have done in the City of

11 Buffalo that actually help people establish a

12 will for themselves so that when they pass

13 on, and we will all do that, it is determined

14 where their property will go so that we can

15 keep wealth and assets in families.

16 ASSEMBLYWOMAN PEOPLES-STOKES: Well,

17 thank you for your comments on that, because

18 it is a very important initiative that we're

19 doing.

20 But you know, I just want to add this.

21 I think your work in creating home ownership

22 for people who are now renters in communities

23 that are close to becoming gentrified means

24 they have an opportunity not only to stay in

291

1 the communities where they have always been,

2 but also to be in a community that is

3 transitioning in terms of the quality of the

4 housing stock, and quite frankly the support

5 of the businesses that will come there as

6 well.

7 MAYOR BROWN: This is just one tool

8 that we will use to try to prevent

9 gentrification in the community. Also, in

10 addition to using this as a tool, we have

11 been meeting in different communities to talk

12 about this and how it will work. So it's

13 going to -- there will be extensive community

14 outreach so people are aware of this.

15 Because initially when this

16 legislation was passed, people felt that it

17 would give the city the ability to come in

18 and take their homes. So we are going to be

19 in intense communication with the residents

20 to let them know that this has been

21 established for their benefit.

22 I also want to just finally mention,

23 on this point, the properties that the city

24 was able to secure with this superbid power

292

1 were not -- were taken from absentee owners

2 not living in the City of Buffalo. So we did

3 not take a property from someone that lived

4 in the city, that lived in the home. So no

5 one's personal property was taken as a result

6 of this legislation. These were all

7 absentee-owned properties that the city

8 acquired.

9 ASSEMBLYWOMAN PEOPLES-STOKES: Right.

10 So again, I want to commend your

11 administration for figuring out a strategy, a

12 legislative strategy, albeit, that we were

13 happy to get through for you that will really

14 kind of help deal with this great problem

15 that we have.

16 Our economy is growing, we're excited

17 about that, people are moving in, excited

18 about that -- but at the end of the day, we

19 don't want to force the existing constituent

20 into a place where they can't afford to live

21 in the communities that they've traditionally

22 lived in. So I want to thank you for your

23 efforts on that.

24 Finally, I will just ask about the

293

1 Tax-Reduction Incentive Program. Is that a

2 concept that you and your administration have

3 come up with that could be beneficial to the

4 state and other municipalities across the

5 state, or is this something that has been in

6 place for some time somewhere else?

7 MAYOR BROWN: No, it's a new concept

8 that we are proposing to the Governor and to

9 the Legislature.

10 What we've tried to do is -- we know

11 that there is a tax burden in the state that

12 we're all concerned about, and what we've

13 tried to do is actually come up with an

14 incentive to encourage municipalities on

15 their own, in partnership with the state, to

16 find ways that they can reduce their tax

17 burden. And as they find ways to reduce that

18 tax burden, the way that the state would

19 partner would be to provide them with an

20 incentive to do that.

21 So there is the stick approach and

22 there is the carrot approach. We are

23 proposing a carrot approach for those

24 municipalities that work in partnership with

294

1 the state to find ways to reduce the tax

2 burden on the local level. We think we have

3 found ways to do that in the City of Buffalo.

4 We would like to be a model for how that can

5 be done, and we think that this could become

6 a statewide program, particularly for upstate

7 cities.

8 ASSEMBLYWOMAN PEOPLES-STOKES: Thank

9 you. Thank you, Mr. Chairman.

10 CHAIRMAN FARRELL: Thank you.

11 Senator?

12 CHAIRWOMAN YOUNG: Senator Krueger.

13 SENATOR KRUEGER: Thank you.

14 How are you, Mr. Mayor?

15 MAYOR BROWN: I'm doing well, Senator

16 Krueger. Good to see you.

17 SENATOR KRUEGER: Nice to see you

18 again.

19 So you answered the question before

20 that under the Governor's proposed

21 consolidation between cities and counties,

22 that for you, you really believe you've done

23 this before with Buffalo and Erie.

24 And yet, as I read the Governor's

295

1 proposal, if you didn't do something and get

2 it past your local election process, you'd

3 lose money. Is that your understanding?

4 MAYOR BROWN: That is our reading of

5 it.

6 SENATOR KRUEGER: I can't imagine you

7 really want to lose your AIM funding.

8 MAYOR BROWN: We do not want to lose

9 money.

10 SENATOR KRUEGER: Me either. I don't

11 want you to lose that AIM funding either.

12 Second, in the Governor's budget

13 language, he puts a sentence in several

14 different sections of bill language that if

15 we lost federal revenue, or otherwise lost

16 revenue, that he would be able to cut aid to

17 localities.

18 Now, you and I were legislators

19 together, so this would actually pull the

20 Legislature out of the process of

21 reevaluating the budget at a time where we

22 might see a reduction in certain kinds of

23 revenue. How do you feel about that?

24 MAYOR BROWN: Well, you know, I would

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1 say that clearly, as a former legislator, I

2 do believe in the checks and balances in our

3 system of government. And I'm certainly

4 hopeful through these budget deliberations

5 and negotiations that this will be resolved

6 in a way that will be beneficial to

7 municipalities across the state.

8 SENATOR KRUEGER: Thank you.

9 My final question, so I've been to

10 your lovely city, I know how close it is to

11 this country called Canada, across the

12 bridge. I even met with the Canadian

13 representatives when they were here in town,

14 I guess -- two weeks ago? Two weeks ago.

15 And I was very disturbed to read an article

16 over the weekend that President Trump intends

17 to require a new process for allowing people

18 to cross the border, and there were people

19 from I think both sides of the border saying

20 this could increase the time frame for people

21 to cross the Canadian-New York border, you

22 know, by 10 or 20 times what it takes them

23 now.

24 What do you believe the impact would

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1 be on your city if basically people couldn't

2 really cross the border to come from Canada

3 across to Buffalo and vice versa?

4 MAYOR BROWN: That would be a major

5 concern for us. Obviously Canada is one of

6 our largest trading partners. Being a border

7 city, we see the folks on the border as our

8 friends and our neighbors and in some cases

9 family members. We have enjoyed the ability

10 to move pretty quickly back and forth across

11 the Canadian border, and in fact over the

12 last few years American and Canadian agencies

13 as well as the State of New York have worked

14 very diligently together to make the speed of

15 crossing even faster at the Canadian border

16 with Buffalo and with Niagara Falls. We

17 certainly would not want to see that time

18 substantially increase.

19 We are concerned about the President's

20 new immigration executive orders. We have

21 made it quite clear, I have made it quite

22 clear, that Buffalo is a welcoming city, that

23 we welcome immigrants and refugees. We've

24 also made it clear that we are concerned

298

1 about some elements of the immigration

2 orders, and we have communicated -- we will

3 be communicating our concerns to the

4 White House, but we certainly would not want

5 to see some of these provisions enacted that

6 would slow the ability to move freely between

7 the U.S. and the Canadian border.

8 SENATOR KRUEGER: I certainly agree

9 with your position. I would just highlight I

10 think this proposal, unlike some of the other

11 disturbing executive orders around

12 immigration and refugees, would serve to keep

13 shoppers and tourists from coming across from

14 Canada to Buffalo and Western New York. And,

15 you know, I've talked to other colleagues

16 about the incredible tourism we get into the

17 Adirondacks and the Great Lakes areas and the

18 Thousand Islands during the summer. And it

19 seems to me this could shut all of that down,

20 with an enormous economic negative impact.

21 MAYOR BROWN: That could have a

22 disastrous economic impact for Buffalo and

23 Western New York. If you go to many of our

24 areas for shopping in the City of Buffalo, in

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1 Western New York, if you go to Buffalo Bills

2 games or Buffalo Sabres games, there are

3 literally thousands and thousands of

4 Canadians that come to shop, that come to

5 sporting events, that are pumping millions of

6 dollars into our economy.

7 So we would be very concerned, and we

8 are very concerned about this proposal.

9 SENATOR KRUEGER: I am too. Thank you

10 very much, Mr. Mayor.

11 MAYOR BROWN: Thank you.

12 CHAIRMAN FARRELL: Thank you.

13 Mr. McDonald.

14 ASSEMBLYMAN McDONALD: Thank you.

15 Mr. Mayor, good to see you.

16 MAYOR BROWN: Good to see you too,

17 Assemblymember.

18 ASSEMBLYMAN McDONALD: So, glad to see

19 your DPW effort is still moving ahead. I

20 think it's great and it's a great effort of

21 consolidating but also making opportunities

22 available.

23 I was interested in your TRIP program,

24 the Tax-Reduction Incentive Program. And in

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1 it you mentioned the idea of the state

2 incentivizing by -- I guess it's providing

3 $2 million for every 1 percent of combined

4 real property tax reductions, so reducing the

5 levy by 1 percent.

6 So what does that mean? Quantify it

7 in regards to Buffalo. What does that, in

8 dollars and cents, mean? A reduction of X

9 will lead to $2 million.

10 MAYOR BROWN: You know, so for Buffalo

11 and other communities it could mean

12 significant resources.

13 ASSEMBLYMAN McDONALD: No, I

14 understand. I mean, is it -- a 1 percent

15 reduction is equal to what, $300,000,

16 $50,000? Reducing the levy -- what would

17 that 1 percent be?

18 COMMISSIONER ESTRICH: I think we're

19 talking about reducing the tax rate.

20 ASSEMBLYMAN McDONALD: You're talking

21 about reducing the rate or the levy?

22 COMMISSIONER ESTRICH: The tax rate.

23 MAYOR BROWN: The tax rate.

24 ASSEMBLYMAN McDONALD: The tax rate.

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1 MAYOR BROWN: The tax rate.

2 ASSEMBLYMAN McDONALD: Okay.

3 MAYOR BROWN: So rate times levy, as

4 you know, equals the tax bill.

5 ASSEMBLYMAN McDONALD: Right. Okay,

6 okay.

7 I think the idea is great. You know,

8 it's interesting, because I think property

9 taxes have been a challenge for every

10 municipal leader. I'm not too far removed

11 from being one myself. And oddly enough,

12 probably the only option that hasn't been

13 tried in the last several years is to

14 financially incentivize municipalities to get

15 to the desired target. This is actually one

16 of the few times that we do that.

17 I know that we talked about AIM

18 funding, and AIM funding is critical, it's

19 important. I personally don't believe it

20 should be on the chopping block right now,

21 trying to arrange these forced marriages

22 that's being discussed with the referendum.

23 But I do believe an opportunity to

24 incentivize municipal leaders to reduce their

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1 tax rate, if that's what you're saying, is a

2 step in the right direction. Because at the

3 end of the day, Mrs. Jones looks at her tax

4 bill in 2015 and 2016 and doesn't really know

5 about the freeze, doesn't really know about

6 the rebate check that's coming, but when she

7 sees $3,000 and then sees it at $2,700,

8 that's actually real, achievable savings.

9 So I'm in concert with that idea, and

10 I appreciate your making this suggestion.

11 MAYOR BROWN: Thank you, Assemblyman.

12 ASSEMBLYMAN McDONALD: Thank you.

13 CHAIRWOMAN YOUNG: Thank you very

14 much.

15 Senator Kennedy?

16 SENATOR KENNEDY: Thank you, Senator

17 Young.

18 Mayor, welcome. Welcome back.

19 MAYOR BROWN: Good to see you,

20 Senator Kennedy.

21 SENATOR KENNEDY: It's always great to

22 see you.

23 First of all, thank you for your

24 testimony here today. I think you

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1 highlighted some extremely important not only

2 numbers and programs but initiatives that

3 your administration has put forward.

4 I think it -- suffice it to say that

5 the city is on extremely solid footing under

6 your leadership, and there has been quite a

7 transformation over the course of the last

8 decade. As a matter of fact, I was in my

9 office talking to some young folks today

10 about the transformation of the last

11 10 years.

12 The last several years we have seen an

13 unprecedented commitment from the state, and

14 with your leadership and the leadership of

15 your administration and the leadership of

16 Governor Cuomo, we have enacted the Buffalo

17 Billion initiative of funding from Albany.

18 I know you touched on it in your

19 testimony; the second round of the Buffalo

20 Billion is upon us in the budget

21 deliberations that are taking place right

22 now. Can you just speak to the importance of

23 this initiative, the second round -- where

24 we're at, the momentum that's been created

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1 because of the first Buffalo Billion, what it

2 means to Buffalo and how it will be

3 implemented moving forward?

4 MAYOR BROWN: Well, it means a great

5 deal to Buffalo. Working very closely with

6 Governor Cuomo, the Western New York

7 legislative delegation, and the members of

8 the Legislature both in the Assembly and in

9 the Senate, we have seen transformational

10 economic development in the City of Buffalo.

11 Just from 2012 to present, we are now up over

12 $6 billion of economic development projects

13 that have broken ground in the city.

14 A number of those projects, many of

15 those projects are being fueled by the

16 Buffalo Billion, but some of those projects

17 that are being developed and moving forward

18 in our community now with the first

19 Buffalo Billion have not even had their

20 impact yet as facilities are being built out.

21 Tonight, for example, I have a meeting

22 where roughly 200 people will be in

23 attendance for the Northland Workforce

24 Development Center, a major workforce

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1 development center that will focus on green

2 technology, advanced manufacturing, that will

3 train thousands of people in Buffalo and

4 Western New York for the jobs that are coming

5 online in our community and pump new life

6 into an area of the city that has been

7 incredibly hard-hit with disinvestment for

8 several decades, where there are many

9 residents of that community living in serious

10 poverty.

11 The hope and opportunity that people

12 are feeling that live in that surrounding

13 area is just absolutely amazing. I support

14 strongly the Buffalo Billion 2. A number of

15 the items that went into that proposal were

16 recommended by my administration to the

17 Governor's office.

18 You know, I thank the Governor for

19 partnering with us, for listening to us, for

20 seeing that for many decades Buffalo, the

21 second largest city in the State of New York

22 and Western New York, one of the largest

23 regions in our state, was largely left out of

24 major state economic development investment

306

1 for decades and decades and decades.

2 This is creating a real interest --

3 not just locally and regionally, but

4 nationally and internationally -- in

5 businesses wanting to invest in the City of

6 Buffalo. I think that that is important for

7 the entire State of New York.

8 The other things that I like about the

9 Buffalo Billion 2 is it is not just for the

10 City of Buffalo in this round. It addresses

11 the City of Niagara Falls, it puts resources

12 into surrounding suburban municipalities, it

13 provides resources for small business, it

14 provides resources for the East Side of

15 Buffalo, which is largely an African-American

16 section of the city where there is high

17 poverty.

18 So I think it is very creative in its

19 design. I think it's going to pump more jobs

20 into the region, that it's going to create

21 more opportunity not only for city residents,

22 city residents living in poverty, those who

23 are unemployed and underemployed, but

24 residents throughout the entire region,

307

1 making that a strong region in the State of

2 New York.

3 SENATOR KENNEDY: Thank you.

4 You know, you touched on training and

5 education, and I know a large piece of that

6 second Buffalo Billion initiative is focused

7 on getting it to the folks that need it the

8 most, as you mentioned -- unemployed,

9 underemployed.

10 I want to touch on education as well.

11 And you have been in the forefront of the

12 Say Yes to Education initiative. Part of

13 that Buffalo Billion is focused on bringing a

14 portion, about $10 million in the proposed

15 budget, to Buffalo. Last year Syracuse

16 received a large portion in the budget,

17 Buffalo this year will be receiving -- if all

18 is enacted through the budget -- $10 million

19 to the Say Yes to Education program.

20 Can you speak to that and the

21 importance of that and what it means to the

22 education of our youth, where it's taking our

23 schools, and quite frankly -- in the

24 interests of time I'll leave it at this --

308

1 what it means to a younger population being

2 educated, staying in the City of Buffalo, and

3 setting up roots, as we're seeing the

4 millennials staying in our community?

5 MAYOR BROWN: Well, you know, as you

6 know, education is critically important as a

7 building block for people being able to

8 improve their lives and live out the American

9 dream. We are fortunate that about four

10 years ago now we were able to be selected for

11 the Say Yes to Education program to come to

12 Buffalo.

13 The first municipality in this state

14 that got that program was the City of

15 Syracuse, and we were able to look at the

16 wonderful lessons learned in that great,

17 great city, and we really came together as an

18 entire community to bring this program to

19 Buffalo that promises a college scholarship

20 for every child that graduates from a Buffalo

21 public or charter school.

22 But beyond that, it provides support

23 to children and families to get our children

24 to the point where they can actually qualify

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1 to graduate from high school and get into

2 college. At this point, in the private

3 sector over $25 million has been raised for

4 the scholarship portion of the program,

5 showing the significant commitment that the

6 community has to the program. And since the

7 program has been in place in our community,

8 high school graduation rates in Buffalo that

9 sadly were abysmally low, hovering around

10 48 percent, are now up to 64 percent.

11 So the program has been a major

12 benefit to children in the City of Buffalo,

13 and I think what this $10 million infusion

14 for Say Yes that the Governor has proposed --

15 we will see graduation rates continue to

16 rise, we will see college matriculation

17 increase in the City of Buffalo, and we will

18 find more hope for families that previously,

19 no matter how bright some of our children

20 were, who didn't feel like they would be able

21 to send their children to college to get a

22 higher education. Now those barriers are

23 lifted, and that hope and opportunity for a

24 good education and a brighter future exist

310

1 for every child in the City of Buffalo.

2 SENATOR KENNEDY: That's great. Thank

3 you, Mayor.

4 CHAIRWOMAN YOUNG: Thank you.

5 CHAIRMAN FARRELL: Thank you.

6 We've been -- David Gantt is here.

7 That's it. Thank you very much.

8 MAYOR BROWN: Thank you, Mr. Chairman.

9 Thank you, Madam Chair, legislators. Thank

10 you all very much.

11 CHAIRWOMAN YOUNG: Thank you.

12 MAYOR BROWN: Good luck with your

13 deliberations.

14 CHAIRMAN FARRELL: The Honorable Kathy

15 M. Sheehan, mayor, City of Albany.

16 MAYOR SHEEHAN: Good afternoon.

17 CHAIRMAN FARRELL: Good afternoon.

18 CHAIRWOMAN YOUNG: Good afternoon.

19 MAYOR SHEEHAN: Are we ready?

20 CHAIRMAN FARRELL: Yes, we're ready.

21 MAYOR SHEEHAN: So I'd like to start

22 by thanking Chairpersons Young and Farrell

23 for inviting me here today to speak with you

24 about the City of Albany. And I want to

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1 thank the Senate Finance Committee and the

2 Assembly Ways and Means Committee and the

3 other members of the Senate and Assembly who

4 are present, along with members of our

5 delegation. I know I saw Assemblymember Pat

6 Fahy, Assemblymember McDonald is here, and

7 Senator Breslin, who works so closely with

8 the City of Albany with respect to all sorts

9 of issues, but in particular our financial

10 challenges.

11 So I'd like to start by reminding

12 everybody about the City of Albany. We are

13 the capital of the state, as you know, and it

14 is a city that doubles in population nearly

15 every day. And that's great for the economy,

16 but it's actually a bit of a mixed blessing

17 for the City of Albany because those

18 employees, most of them, walk into tax-exempt

19 buildings.

20 Our largest employers, other than

21 state government, are Albany Medical Center,

22 St. Peter's Hospital, the VA, Memorial

23 Hospital, UAlbany, SUNY Poly, the Center for

24 Disability Services -- those are the large

312

1 employers in this area. And all of them

2 enjoy a tax exemption.

3 And while we would benefit from sales

4 tax revenues that employees generate at

5 lunchtime, many of these large

6 institutions -- actually, all of these large

7 institutions -- provide on-site dining, and

8 sales taxes are shared countywide. So the

9 sales tax dollars generated in the City of

10 Albany are taken by the county and then

11 distributed countywide based on population.

12 So it is a challenge for the City of Albany.

13 And we are a city of neighborhoods.

14 We have 25 unique neighborhoods, and our

15 homeowners and residents in those

16 neighborhoods really bear a disproportionate

17 burden of our tax levy. So residents own

18 about 35 percent of the value of all of the

19 property in the City of Albany, yet they pay

20 nearly 60 percent of the tax levy.

21 We are investing in our neighborhoods.

22 We've seen a tremendous amount of investment

23 in market-rate housing in our downtown, in

24 Park South and in other areas of our city,

313

1 and we're really proud of that growth and

2 seeking to incentivize and encourage that

3 type of growth.

4 I announced in my State of the City

5 this year that we have identified HUD funding

6 that we are going to be using $1 million of

7 to encourage investment in vacant buildings,

8 in collaboration with the land bank, so that

9 we can layer that funding on top of funding

10 that's available from our land bank and other

11 sources in order to get vacant buildings back

12 on-line.

13 And we're providing a $300,000 pool

14 for emergency repairs. We have so many of

15 our residents who are just above the

16 threshold to receive HUD funding for those

17 emergency repairs -- you know, they're just

18 above that 80 percent of AMI -- and so we've

19 identified a pool of funding from a repayment

20 of a HoDAG loan that's going to allow us to

21 help individuals who are in that 80 to

22 125 percent stay in their homes, not lose

23 their home because their furnace breaks down

24 or they need to put in new stairs.

314

1 So we're really working to invest in

2 every neighborhood and to keep people in our

3 homes and to attract people to our city,

4 because that's how we grow our tax base here.

5 As you will note, if you look at the

6 fiscal stress test chart that we provided,

7 the New York State Comptroller fiscal stress

8 score, Albany is obviously significantly the

9 most fiscally stressed city in the state, and

10 you can see that we are in significant fiscal

11 stress. The next closest city is just edging

12 into that significant fiscal stress

13 territory. And the Comptroller, certainly

14 being here in Albany, understands the

15 challenges and how we got to where we were.

16 We've been deficit-spending since at

17 least 2007, and we have depleted our Rainy

18 Day Fund, and we've reached really the end of

19 our ability to use that Rainy Day Fund to

20 bridge the gap between what it costs to run

21 the city and what we can reasonably raise in

22 revenue.

23 But we are working to build that

24 bridge. Since I took office we have, with a

315

1 tremendous amount of help from the state,

2 been able to implement Enterprise Resource

3 Planning software -- we have not had new

4 software since a purchase in 1998. And so we

5 went to the Financial Restructuring Board,

6 they provided us with funding to be able to

7 purchase that software so that we could

8 realize immediate savings and not have to

9 finance that software going forward.

10 We've implemented an automated

11 time-keeping system. We've implemented new

12 tax billing software that has allowed us to

13 collect more of our taxes and be more

14 effective and efficient. And we've invested

15 in additional technology to bring about

16 efficiencies.

17 We've rolled out an automated

18 recycling pilot program that automates the

19 pickup of recycling that allows us to reduce

20 the number of drivers on our trucks, reduce

21 the number of injuries and our worker's

22 compensation expenses. In a city like

23 Albany. We can't deploy it throughout the

24 entire city because we have many narrow

316

1 streets and townhouses. But everywhere that

2 we can, we're doing it. And we're learning

3 from that program and looking to extend it to

4 all municipal solid waste.

5 We have done a tremendous amount of

6 work to eliminate waste and find cost

7 reductions and savings, and so in my 2017

8 budget we were able to show a 2 percent

9 reduction, year over year, from '16 to '17.

10 That's the largest expenditure decrease in

11 more than 15 years, and only the third

12 decrease in 18 years.

13 So it's important because we are

14 working hard to cut our way to the

15 efficiencies that we know we can get from

16 these investments in technology, in

17 consolidation opportunities and efforts, and

18 working better with the county and even among

19 our own departments in the City of Albany.

20 And so we've already cut nearly $9.5 million.

21 We are asking again for $12.5 million.

22 I want to start by thanking you for

23 supporting the spinup that was in the

24 Governor's budget last year. We are

317

1 requesting, though, that we seek a permanent

2 increase in funding for the capital city.

3 The PILOT payment that we currently

4 receive from the state for the Empire State

5 Plaza really is equivalent to just about

6 0.36 percent of the value of all of the state

7 property that is in the City of Albany. So

8 that's, I'll say that again, 0.36 percent.

9 So we are really seeking to ensure

10 that the capital city can provide services

11 that we know are essential -- police, fire,

12 emergency services, street maintenance -- for

13 the nearly 200,000 people who come here to

14 work every day, many of them in this building

15 and in this plaza.

16 We are really working to close the

17 revenue gap. The Financial Restructuring

18 Board highlighted that the city needs to

19 expand revenue sources. We thoroughly

20 reviewed our finances again with an outside

21 consultant that was provided by the state,

22 and that consultant agrees that

23 notwithstanding our cost-saving efforts, that

24 gap still exists.

318

1 A patchwork of spinups and one-time

2 one-shots really helped to maintain our

3 solvency from year to year, but at this point

4 the structural deficit of $12.5 million is

5 real and it is a significant challenge for

6 the City of Albany. If we were to have to

7 place that burden on our taxpayers, every

8 property owner would receive a 22 percent

9 property tax increase, if we were not able to

10 receive the $12.5 million in capital city

11 funding.

12 You know, overall, 63 percent of the

13 property in the city is tax-exempt, and

14 60 percent of that tax-exempt property is

15 owned by the state. And as I said, the

16 current funding that we get under 19A is just

17 0.36 percent of the value of all of that

18 property.

19 I provided a map that just shows how

20 widespread the amount of tax-exempt property

21 is in the city. And so what does that drive?

22 Well, it certainly would drive a conversation

23 with respect to AIM.

24 And I'm often asked, why is AIM for

319

1 the City of Albany so low compared to the

2 other upstate cities? If you look at the

3 upstate cities, we have the lowest amount of

4 AIM of any other city with a population of at

5 least 50,000 residents. It's $128.84 per

6 capita, compared to $617 for Buffalo,

7 $494 for Syracuse, $419 for Rochester.

8 And I'm not suggesting that these

9 municipalities do not need the AIM that they

10 receive. I provide this information because

11 I think it's critically important to

12 understand what impact this is having on the

13 City of Albany, and really how effective

14 we've been with taxpayer dollars and with our

15 AIM money in being able to provide the level

16 of service that we currently provide.

17 If you look at our actual city and

18 school tax levies in dollars, which is the

19 next chart that I provide, AIM as a

20 percentage of our total levy is just

21 7.8 percent. In actual dollars, our city tax

22 levy is higher than Rochester and Syracuse.

23 And the total tax levy of city and

24 school is the highest -- almost. Rochester

320

1 beats us out by a little bit less than a

2 million dollars, or just about a million

3 dollars, in a city that is more than twice

4 the size.

5 So it demonstrates to you that our

6 residents and our taxpayers and our

7 businesses are really bearing a significantly

8 and disproportionately heavy burden with

9 respect to property taxes. And so what does

10 that mean? It's not even just across the

11 state, it impacts our competitiveness right

12 here in the Capital Region.

13 So, you know, a couple of places that

14 I know where we see our legislators enjoying

15 dinner is at Cafe Capriccio or at Jack's

16 Oyster House, as compared to out on

17 Wolf Road. Many of the members like to go

18 out there to places like Blu Stone Bistro --

19 the tax bill on Wolf Road for a restaurant is

20 60 percent lower than the tax bill paid by

21 that same establishment in the City of

22 Albany. Sixty percent. So you can locate

23 just across the line and significantly reduce

24 your tax burden.

321

1 That's what I'm talking about with

2 respect to our need for this $12.5 million in

3 additional capital city funding.

4 So, you know, our proposal is to

5 address the gap with $12.5 million in capital

6 city funding, amending the Public Land Law to

7 provide this as an additional source of

8 revenue, because it is consistent with the

9 amount of state property that is owned here

10 and that we are so proud to be a part of, but

11 that we just simply cannot continue down a

12 path -- we have completely depleted our

13 Rainy Day Fund.

14 And we are here to say thank you for

15 the support that you've provided for this

16 capital city funding, and to urge you to make

17 this, rather than a spinup, additional aid

18 for the capital city.

19 Thank you.

20 CHAIRMAN FARRELL: Thank you.

21 Questions?

22 CHAIRWOMAN YOUNG: Hi, Mayor.

23 MAYOR SHEEHAN: Hi.

24 CHAIRWOMAN YOUNG: Welcome today.

322

1 We're very happy to have you here as part of

2 this discussion, and I just had a couple of

3 questions.

4 Last year you had asked for the

5 $12.5 million spinup, which was granted with

6 the condition that the Financial

7 Restructuring Board work with you to come up

8 with ways to solve your problems. The

9 Financial Restructuring Board is supposed to

10 help you come up with budgets that don't have

11 the $12.5 million included. Can you tell us

12 what the status of the Financial

13 Restructuring Board is, and where you're at

14 as far as developing budgets that don't

15 include the $12.5 million?

16 MAYOR SHEEHAN: So we worked with the

17 consultant that was hired by the Financial

18 Restructuring Board all throughout the course

19 of last year. We developed budget models

20 that looked out three years, seeking to

21 reduce the gap of that $12.5 million. But in

22 this year, even with the help of that

23 additional resource, we were not able to --

24 and they were not able to -- identify a way

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1 to bridge the $12.5 million gap.

2 We are exploring opportunities in the

3 outyears for reducing the amount of the

4 12.5 million; even that is particularly

5 challenging.

6 But one of the things that we are

7 moving forward with is the possibility of

8 combining our 911 with the county 911. The

9 county has already consolidated some other

10 towns into that 911, which would result in

11 some savings.

12 We are also looking at revenue

13 opportunities with respect to the ability of

14 us to look at how we collect municipal solid

15 waste and what revenue opportunities might

16 exist. We do have a fee right now that may

17 have to be expanded.

18 And we also are looking at the impact

19 of purchasing our street lights. Based on

20 the study that we conducted with respect to

21 savings, we could see an additional

22 $2 million in savings if we are able to

23 purchase back our street lights in a way that

24 is affordable.

324

1 So we are looking at and have

2 identified, with that consultant, both

3 revenue opportunities and cost-savings

4 opportunities, but they were not able to

5 close the gap for 2017.

6 And I also just want to be clear, you

7 know, we are requesting $12.5 million not in

8 a spinup, but in an addition to 19A payments

9 to the city for the tax-exempt property that

10 is here.

11 CHAIRWOMAN YOUNG: Thank you. And

12 just a couple more questions.

13 So when you talk about revenues -- and

14 we have the presentation here, which is very

15 nice to look at, but it doesn't have very

16 many details in it. But for example, last

17 year and this year, when you talk about

18 revenues and shortfalls, are you talking --

19 when you're discussing this with us and

20 presenting information, are you including all

21 of the revenues that the city gets and that

22 information?

23 So for example, do you have the

24 revenues from the water district and what you

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1 make on that, or do you separate those out?

2 MAYOR SHEEHAN: So we have a separate

3 water authority, and the City of Albany does

4 not get the revenue from the water authority.

5 We have an operating agreement with our water

6 authority, and that does result in revenue

7 for the city. They pay us approximately a

8 half-million dollars a year to provide their

9 IT services, we do their personnel services,

10 their payroll -- it wouldn't make any sense

11 for them to create that separately, and so we

12 are reimbursed for providing them with that

13 service.

14 But the revenues for the water

15 department remain with the water department.

16 They are a separate authority. So that does

17 not come directly to the City of Albany. So

18 yes, the budget that you see, that

19 includes -- you know, we have to balance the

20 budget, so it's all of our revenues and all

21 of our expenditures.

22 Other than property taxes, our next

23 most significant source of revenue is the

24 sales tax revenue, which, as I said, is

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1 shared countywide. It's just a formula, and

2 we project that revenue based on what the

3 county is projecting to happen to sales tax

4 revenue when they put together their budget.

5 We also have been successful in

6 getting some voluntary payments from the

7 large not-for-profits in the City of Albany,

8 about a million and a half dollars, but every

9 little bit helps in this. We were successful

10 in getting that revenue in 2015 and 2016, and

11 we have commitments for 2017 as well.

12 CHAIRWOMAN YOUNG: Thank you.

13 CHAIRMAN FARRELL: Mr. Otis.

14 ASSEMBLYMAN OTIS: Good afternoon,

15 Mayor Sheehan.

16 I just wanted to touch base with

17 you -- and I've heard you testify on this

18 topic in recent years -- what your current

19 projection is for short-term or long-term

20 water infrastructure repairs. I know it's a

21 big burden; you had a water main break

22 recently. But for that kind of forecasting,

23 what can you share with us?

24 MAYOR SHEEHAN: Well, one of the

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1 benefits of the water authority being

2 separate is that this is not a city that has

3 raided water funds in order to fund

4 operations, and so the revenue that is raised

5 by the water authority stays with the water

6 authority. And we have been successful in

7 receiving grants.

8 We have been very successful with many

9 of the state programs that have been

10 supported by you and others, and that has

11 helped with the investment that we are able

12 to make. We've been able to double the

13 amount of capital expenditures that we spend

14 out of our operating budget every year in

15 infrastructure.

16 We also have a number of projects that

17 are going on -- because we're subject to a

18 consent order with the DEC, and so we have a

19 number of projects that we're required to

20 undertake to reduce the amount of flow into

21 the Hudson River. And while we can always

22 use more, I think that this is an area where

23 we've demonstrated some pretty significant

24 strength and good sound fiscal management in

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1 being able to invest in that infrastructure.

2 That said, it's very old, and we're dealing

3 with a sinkhole right now as we speak for a

4 sewer line that was built in the 1800s.

5 So it is a significant challenge, but

6 it is one that I believe we're managing as

7 best as we possibly can. And again, that's

8 not the reason that we have this

9 $12.5 million shortfall, because those assets

10 are managed separately.

11 ASSEMBLYMAN OTIS: So your water

12 authority handles drinking water, sanitary

13 sewers, and stormwater?

14 MAYOR SHEEHAN: That's correct.

15 ASSEMBLYMAN OTIS: Okay. Thank you

16 very much.

17 MAYOR SHEEHAN: Thanks.

18 CHAIRMAN FARRELL: Senator.

19 CHAIRWOMAN YOUNG: Senator Marchione.

20 SENATOR MARCHIONE: Thank you.

21 Thank you, Mayor, for being here.

22 You talked about your AIM funding

23 being the lowest of some of the cities, but I

24 didn't hear why. Why is your AIM so much

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1 lower than the rest?

2 MAYOR SHEEHAN: That is a question for

3 the ages. It has been historic that the City

4 of Albany's AIM funding has been low. The

5 formula that is used to determine AIM funding

6 is -- in other municipalities, there were

7 increases that were done when there was

8 fiscal stress in some of those cities, and so

9 it has resulted in a lot of disparity.

10 I think one of the challenges that we

11 have in Albany is that like other upstate

12 cities, we have the same issues with respect

13 to poverty rates. We have a poverty rate of

14 approximately 26 percent. We have huge

15 challenges with graduation rates at our high

16 school. We have the lowest home ownership

17 rate as a percentage of the other upstate

18 cities, at around 42 percent.

19 So many of those indicia of challenges

20 and stress that drove up AIM in other

21 municipalities have impacted the City of

22 Albany. And I think one of things that made

23 it become as emergent as it is is that when

24 we saw such a huge increase in pension

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1 expenses and other expenses that occurred

2 after the recession, we had been able to

3 build up a bit of a Rainy Day Fund, but that

4 was quickly depleted because of it.

5 And so in looking at the challenges

6 that the city faces, again, you know, if we

7 were at half of the AIM, of the average AIM

8 for the other upstate cities, I wouldn't be

9 here. But looking at where we are now in

10 that -- actual dollars -- we have to raise

11 more in property taxes in order to balance

12 our budget than these other, much larger

13 upstate cities, demonstrates that we've

14 reached the end of what we could possibly

15 expect our taxpayers to bear, and we need to

16 find a way of finding additional aid for the

17 city.

18 And I think one of the things that

19 makes us unique is the fact that we are the

20 capital city and have so much tax-exempt

21 property.

22 SENATOR MARCHIONE: Have you asked

23 your legislators to carry legislation that

24 might make some changes relative to the way

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1 the formula is?

2 MAYOR SHEEHAN: You know, we've

3 discussed how to address this gap and what

4 the best way is to address this gap, and I

5 know that AIM funding is an incredibly

6 difficult conversation for any of us to have.

7 I certainly believe --

8 SENATOR MARCHIONE: It seems like it

9 needs to be one --

10 MAYOR SHEEHAN: -- that AIM should be

11 increased --

12 SENATOR MARCHIONE: -- it seems like

13 it should be one that you need to have.

14 MAYOR SHEEHAN: Right.

15 But again, I think one of the things

16 about the capital city that provides us with

17 a unique opportunity to, you know, in the

18 long run -- you know, my understanding is

19 that the reason that the city got spinups in

20 prior years to its 19A money was as a bridge

21 to fix AIM.

22 And that started, as I understand it,

23 I believe back in 2004. It was many, many

24 years ago. And so it still has not been

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1 fixed. And notwithstanding the willingness

2 of our representatives to engage in that

3 conversation, it creates challenges across

4 the state.

5 SENATOR MARCHIONE: It sounds to me,

6 though, that you really need to have that

7 discussion, because it doesn't seem

8 appropriate that you would be at the bottom

9 of the AIM.

10 MAYOR SHEEHAN: As I've said, if we

11 got the same AIM as Utica, I wouldn't have to

12 come here and bother you every year.

13 SENATOR MARCHIONE: Your population

14 and Utica's population, how do they compare?

15 MAYOR SHEEHAN: Utica's about 61,000.

16 We're about 98,000.

17 SENATOR MARCHIONE: And you're getting

18 that much lower than they?

19 MAYOR SHEEHAN: Yeah.

20 SENATOR MARCHIONE: Okay. Also, do

21 you know of any other cities that have as

22 much tax-exempt property or close to

23 tax-exempt property as Albany does?

24 MAYOR SHEEHAN: We are at the top of

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1 the large cities outside of New York City,

2 and there are some cities that are -- some

3 municipalities that are a little bit smaller

4 that have, say, a prison or a large presence.

5 I think the thing, again, that's

6 unique about Albany is that the

7 infrastructure that we have here, the value

8 that we have here of tax-exempt -- it's not a

9 state park, it's not a prison that is sort of

10 a unit unto itself. We have to plow the

11 streets, we have to provide police, we

12 respond when somebody dials for 911, you

13 know, for a health -- so we have to provide a

14 significant amount of services to all of

15 these tax-exempt entities that are here in

16 the city.

17 SENATOR MARCHIONE: How many

18 employees, Mayor, do you have in the city?

19 MAYOR SHEEHAN: We have

20 approximately -- just under 1,200 FTEs.

21 SENATOR MARCHIONE: Wow, that's a lot

22 of people.

23 MAYOR SHEEHAN: That includes the

24 water department, though. So that's where

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1 our -- you know, our operating agreement with

2 the water department comes into play, because

3 again, for efficiency purposes, we -- so that

4 they don't have to deal with hiring, we

5 provide that, and then they just reimburse us

6 for the expenses of those employees.

7 SENATOR MARCHIONE: And are you

8 self-insured for health insurance for all

9 those employees?

10 MAYOR SHEEHAN: We are to an extent

11 self-insured, but we also have CDPHP and some

12 other insurance companies as well for our

13 employees.

14 For our Blue Cross, we're

15 self-insured. For the overwhelming majority

16 of our employees, our union employees, we're

17 self-insured.

18 SENATOR MARCHIONE: Have you had to

19 experience any layoffs in the last three or

20 four years?

21 MAYOR SHEEHAN: We have sought to

22 reduce our workforce through attrition, and

23 we've been able to, through

24 reorganizations -- when we make changes with

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1 respect to the organizational structure, the

2 mantra is that the total dollar, the total

3 spend has to be lower with every

4 reorganization.

5 So we've shifted people around, we've

6 been able to create some new positions to

7 give us the ability to be more efficient and

8 effective, but that has always resulted in an

9 overall reduction in our personnel spending.

10 SENATOR MARCHIONE: And when you talk

11 about you have a lot of sales tax in the city

12 but you have to share it with the county, I'm

13 sure you recognize that as a city you could

14 actually collect it yourself.

15 MAYOR SHEEHAN: Well, except that

16 because our property taxes are so high, the

17 major retailers are located just outside the

18 city. So Colonie Center, Guilderland, you

19 know -- I'm not complaining about the

20 sharing, it's just -- it's important to

21 recognize that.

22 And I think it's -- you know, from the

23 standpoint of a dollar spent anywhere in the

24 county benefiting the whole county is overall

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1 a positive result with respect to encouraging

2 cooperation and collaboration.

3 SENATOR MARCHIONE: So actually you

4 wouldn't collect as much --

5 MAYOR SHEEHAN: We've never looked at

6 the numbers. Some of the car dealerships are

7 here, some of them are just across the city

8 line.

9 SENATOR MARCHIONE: Thanks very much,

10 Mayor.

11 MAYOR SHEEHAN: Thank you.

12 CHAIRMAN FARRELL: Thank you.

13 Mr. McDonald.

14 ASSEMBLYMAN McDONALD: Thank you.

15 Thanks for being here, Mayor, and

16 thank you for continuing to tell the

17 challenges with the capital city.

18 And as much as AIM aid is a -- to me,

19 it's a symptom of the disease. I do agree

20 that looking at the 19A, which kind of gets

21 away from the "what about me" syndrome they

22 made -- that's part of the problem, is that

23 if you do one then you have to do the other,

24 and that's part of the challenge here.

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1 Meanwhile, by the same token, 19A is

2 19A. It's public land. And if it becomes

3 developed, if I remember correctly -- you've

4 talked about, in the past, about reducing

5 that number, if I remember correctly.

6 MAYOR SHEEHAN: That's right. There

7 was a proposal at one point in time,

8 particularly with respect to the Harriman

9 Campus, that would have resulted in a PILOT

10 payment for the Harriman Campus that would be

11 reduced to the extent that it was offset by

12 tax revenue from privatization of any of that

13 property.

14 ASSEMBLYMAN McDONALD: And the

15 Harriman Campus today is still -- as much as

16 it's had some fits and starts, we haven't

17 gotten anywhere with it.

18 MAYOR SHEEHAN: Right. You know, I

19 think when I first started coming here --

20 this is my fourth time here -- and we were

21 optimistic about private development at the

22 Harriman Campus, the former Convention Center

23 site, and none of those have seen

24 development. There was an RFP that was put

338

1 out for the Harriman Campus, and it received

2 no bids, and the former Convention Center

3 site still remains undeveloped.

4 So our ability to expand our tax

5 base -- while we have expanded our tax base

6 over the last three years, and we've seen

7 growth, it has not been enough to offset the

8 challenge that we face.

9 ASSEMBLYMAN McDONALD: You were one of

10 the first to -- and I think it was almost at

11 the beginning of your term -- jump right into

12 the fray with the FRB. And I think the state

13 did provide you -- was it $5 million?

14 MAYOR SHEEHAN: That's right.

15 ASSEMBLYMAN McDONALD: A one-time --

16 one-time $5 million which allowed you to

17 carry out some of the items that you talked

18 about today.

19 And I think I've forgotten, although

20 we talk almost daily -- the streetlights,

21 which in the outyears could provide some

22 savings with the conversion. Do we know what

23 the cost would be to actually take over the

24 streetlights, to be in that position to save?

339

1 MAYOR SHEEHAN: So we're in the

2 process right now of asking National Grid --

3 they have to give us basically an asking

4 price.

5 And we are, right alongside that,

6 going to be working to ensure that we have a

7 GIS of every streetlight and know the

8 condition of it so that we're doing our due

9 diligence before we buy them.

10 ASSEMBLYMAN McDONALD: My

11 recollection, and it's been a while since

12 I've looked at streetlight inventory, is the

13 strain of the investment cost is not

14 insignificant.

15 MAYOR SHEEHAN: It's very significant.

16 And so again, looking at opportunities for

17 assistance with funding that -- but even with

18 looking at the different options that are

19 available, we believe that we would still

20 have operating savings. And it is far better

21 than either a do-nothing scenario or even

22 a -- working with National Grid to have them

23 change over all the streetlights to LED.

24 ASSEMBLYMAN McDONALD: Thank you.

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1 MAYOR SHEEHAN: Thanks.

2 CHAIRMAN FARRELL: Senator.

3 CHAIRWOMAN YOUNG: Senator Krueger.

4 SENATOR KRUEGER: Hi, Mayor.

5 So last year when you were making your

6 plea for additional money and using the

7 example of AIM funding, I pointed out

8 somebody must really not like you. I'll just

9 point out, the one who they dislike more is

10 New York City, because New York City hasn't

11 seen AIM now in five, six, seven years.

12 Your examples -- 60 percent of your

13 property is tax-exempt because the State of

14 New York is using it. You're at the highest

15 rate of crisis with your educational funding

16 because property tax pays for schools, but

17 you can't tax most of the property in your

18 city. And you can't push it farther for the

19 people who are taxpayers for two reasons:

20 One, we cap you; and two, as you've already

21 pointed out, they'll all pick up and move out

22 of Albany.

23 You know, if I were you, I'd be

24 screaming. I wouldn't be smiling and being

341

1 very polite, I'd be saying, like, "You people

2 are killing the City of Albany." And the

3 concept that Albany still denies that we are

4 starving particularly our upstate cities, and

5 the revenue-sharing formulas are

6 ridiculous -- Kathy Marchione pointed out

7 somebody ought to do something about that.

8 Yes, we should have a formula that's

9 based on population for AIM calculations.

10 That doesn't seem like brain surgery. I

11 could probably do a spreadsheet pretty easily

12 for towns and villages and counties. And I

13 really think that everybody needs to get

14 louder in their demands on Albany, that we do

15 a reasonable and fair distribution of AIM.

16 But I have a question. In the

17 Governor's proposal, if you don't somehow do

18 some kind of coordination with the county and

19 move it through to consolidate and get a vote

20 of the public, you're not even getting that

21 AIM. What's your plan for the consolidation

22 proposal?

23 MAYOR SHEEHAN: We will find a

24 consolidation proposal and we will put it

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1 before the voters. But we do have

2 opportunity in the City and County of Albany.

3 And as I said, we're actually already down a

4 path. So, you know, I know a lot of my

5 fellow mayors have already done a tremendous

6 amount of consolidation. And so the number

7 of opportunities that exist remains small.

8 In the City of Albany, in the County

9 of Albany, both myself and the county

10 executive have a great working relationship.

11 That wasn't always the case in the past. And

12 so we've been able to identify a number of

13 cost-saving opportunities and are working --

14 actually, as we speak, our staffs are working

15 on a consolidation proposal to move forward.

16 So, you know, I think that that is an

17 area where -- you know, we remain ready,

18 willing, and able. I would have loved

19 nothing more than for the FRB, and then for

20 the second set of consultants, to come in and

21 hit me upside the head and say "Why don't you

22 just do this, and you can save all this money

23 or raise all this revenue." That has not

24 occurred.

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1 Our numbers have been scrubbed, we've

2 opened our books, we've done anything and

3 everything to determine ways for us to bridge

4 this gap and to reduce this gap. It exists

5 for a reason. And I think if you look at the

6 history, and the lack of AIM -- I know there

7 was a report that was written in 2010 called

8 "Capital Punishment" that really outlined

9 how, as the state capital, it does, to our

10 residents, sometimes feel as though we're

11 being punished for being the state capital

12 because of the way this formula works.

13 So it's very challenging. My hair is

14 red, but I have considered setting it on fire

15 to demonstrate the urgency. And, you know, I

16 think that the numbers are so compelling.

17 And I don't want my smile to in any way

18 detract from the fact that we are in a

19 crisis. We are in a complete crisis.

20 And this gap is a gap that we should

21 be able to fill. We're not asking for more

22 than any of the other upstate cities that

23 have similar challenges that we have, with

24 vacancies and poverty and challenges with our

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1 schools. All we're asking for is not even

2 parity -- again, as I'm saying, give us half,

3 and we can do a lot with it. Because we've

4 demonstrated that we can be effective and

5 efficient and that we are very good stewards

6 of taxpayer money.

7 SENATOR KRUEGER: And there are some

8 cities around the country that have actually

9 started to charge nontaxable properties for

10 the city services -- police, fire, garbage

11 collection.

12 Obviously that wouldn't be a very

13 popular thing for me to propose as the state.

14 But since we're here and we're not talking to

15 the public, have you explored that option for

16 yourselves?

17 MAYOR SHEEHAN: So we have looked at a

18 number of models. And, you know, it's

19 incredibly challenging. Right? The

20 not-for-profits here are providing -- so the

21 state, we can't do anything to. You're the

22 state. So you can't tax or fee up.

23 So then that means we've got to look

24 at who we could provide or ask for fee

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1 revenue from, and you're talking about our

2 healthcare institutions. You're talking

3 about hospitals that would then be coming to

4 the state and saying, Wait a minute, our

5 Medicare and Medicaid reimbursements are now

6 going to have to cover these additional fees.

7 You know, we're part of a broader

8 system, and so when we -- if you look at

9 UAlbany, for example, and SUNY Poly, we know

10 there's a huge affordability issue with

11 respect to higher education. And so while it

12 may be easy to sit back and say, Well, let's

13 just put a fee on every student who comes

14 here, we know that that can really impact a

15 person's ability to be able to attend college

16 and get a degree.

17 So again, I think that it's -- nothing

18 is off the table, but as we reviewed revenue

19 opportunities with consultants from the state

20 and with the FRB, it was decided not to go

21 down that path.

22 SENATOR KRUEGER: Thank you.

23 CHAIRMAN FARRELL: Thank you.

24 Further questions? Thank you very

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1 much.

2 MAYOR SHEEHAN: Thank you.

3 CHAIRWOMAN YOUNG: Thank you.

4 MAYOR SHEEHAN: Thank you very much.

5 CHAIRMAN FARRELL: We've been joined

6 by Shelley Mayer.

7 Next, the Honorable Lovely Warren,

8 mayor of the City of Rochester. 1:30.

9 MAYOR WARREN: Good afternoon, sir.

10 CHAIRMAN FARRELL: Good afternoon.

11 MAYOR WARREN: I am joined here with

12 my budget director, Chris Wagner.

13 Good afternoon again, Chairman

14 Farrell, Chairwoman Young, members of the

15 Assembly Ways and Means and Finance

16 Committees, members of the Senate and

17 Assembly. Thank you for the opportunity to

18 address this panel on behalf of the residents

19 of the City of Rochester.

20 This is my fourth time appearing

21 before this committee, and like always, I

22 will spare you a long testimony and get right

23 to the point.

24 As mayor, my goals are simple -- to

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1 provide each of our citizens access to jobs,

2 safe and vibrant neighborhoods, and quality

3 educational opportunities. While Rochester

4 faces significant challenges, I am proud of

5 the progress we've made over the past three

6 years. We are a city built on the premise

7 that if you are willing to work hard, you can

8 rise above your circumstances and be

9 successful in all areas of life.

10 And to this, we have certainly had

11 some great success, and much of that success

12 has been accomplished with the partnership

13 with the State Legislature and

14 Governor Cuomo.

15 Most recently, we have been able to

16 move forward with our job creating and

17 nationally recognized Inner Loop

18 Redevelopment Project, in which we have

19 provided the gap funding that we needed to

20 complete this project. We also had great

21 success moving ahead with something very near

22 and dear to my heart, my 3-to-3 Initiative to

23 get 3- and 4-year-olds enrolled in quality

24 pre-K programs. It currently stands at over

348

1 90 percent of eligible kids enrolled, and

2 that fantastic accomplishment would not have

3 been possible without state assistance.

4 Your support has allowed us to

5 transform programming at our recreation

6 centers and libraries to be more than just

7 about play or checking out books. We provide

8 quality STEM and STEAM programs at our

9 libraries and recreation centers year round,

10 and other learning programs over the summer

11 to prevent the learning loss that often

12 occurs during recess.

13 As we continue to move forward with

14 the Rochester/Monroe County Anti-Poverty

15 Initiative, our undoubted success would never

16 have happened without the leadership and

17 strong partnership with Albany. Whether it's

18 additional investment in quality housing, or

19 needed repairs or infrastructure like roads

20 and bridges, Albany's ongoing partnership has

21 been the key to our success and I'm grateful

22 for your support through our Restore NY and

23 other similar programs.

24 As I have pushed to reorganize the

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1 Rochester Police Department, to bring it back

2 to a more community-based police model, your

3 assistance has helped us to implement the

4 important body-worn camera program, which

5 continues to go exceedingly well and will be

6 fully operational department-wide within a

7 few more months.

8 As I have mentioned, your assistance

9 in investment in job-creating programs has

10 been significant and important, and nowhere

11 has that been more evident than in our

12 ongoing Photonics Initiative.

13 Senators, Assemblymembers, clearly our

14 past and ongoing partnership has been the key

15 to our success, and these in so many other

16 areas of the city government. And that is

17 why I am asking the state this year to

18 continue your investment in Rochester and to

19 provide us with $30.9 million in education

20 funding to fill the gap between the AIM aid

21 we receive and the state-mandated amount we

22 pay to our school district.

23 The state mandate requires Rochester

24 to provide $119.1 million to our school

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1 district, but we only receive $88.2 million

2 in AIM aid. This $30.9 million shortfall

3 places Rochester at a significant

4 disadvantage. Unlike our sister upstate

5 cities, Rochester must allocate more funding

6 to our school district than we receive from

7 the state in AIM aid. AIM aid from the state

8 exceeds the school funding mandate of our

9 neighbors to the east and west.

10 While ensuring all of our city's

11 children receive a quality education is a top

12 priority, this disparity forces us to

13 consider cuts to other critical services to

14 balance our budget. You can correct this

15 inequity simply by providing us with

16 municipal education funding in the amount of

17 $30.9 million to supplement our AIM aid and

18 make up the difference that we are required

19 to give our schools.

20 Without this amount, Rochester will

21 give 68 percent of our tax levy to the school

22 district and have only 32 percent remaining

23 for critical city services.

24 We will certainly continue to manage

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1 the city's finances as prudently as possible.

2 While we have a strong credit rating, we have

3 significant needs. By funding this mandate,

4 the state will free up city tax levy dollars

5 for improving life outside of the classroom

6 including investing in public safety,

7 libraries, recreation centers, job training

8 programs, youth intervention services and

9 many more programs and services that some of

10 our poorest residents rely on to gain access

11 to jobs and better opportunities.

12 Another important matter that I can

13 call on you to assist Rochester and other

14 municipalities in is the utility gross

15 receipts tax, the GRT. Rochester has seen a

16 56 percent decline in its annual revenue from

17 over $11 million to $5 million because energy

18 service companies, ESCOs, are not paying what

19 the city is owed from their gross receipts

20 taxes. Gas and electric are commodities and

21 should be subject to the GRT tax.

22 Even though the New York State

23 Department of Taxation and Finance agrees

24 that such revenues are subject to the tax,

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1 many ESCOs refuse to pay it. The state can

2 fix this situation once and for all by

3 enacting legislation to clarify that ESCO

4 revenues associated with the sale of gas and

5 electric commodities fall within the scope of

6 the GRT.

7 In addition, I ask that you include

8 cellular or wireless services within the

9 scope of this tax. The use of wireless

10 communications has exploded. Many, many

11 households no longer have landline

12 telephones. To reflect modern-day realities,

13 the revenue from wireless telephone service

14 should no longer be exempt from this tax

15 outside of New York City.

16 Both New York State, in its excise

17 tax, and New York City, in its gross receipts

18 tax, have changed their respective statutes

19 to deem cellular services as taxable. I am

20 here today asking the state to give other

21 New York municipalities the opportunity to

22 benefit from this much-needed revenue stream.

23 With regard to the AIM aid, let me say

24 how much we appreciate the Governor's and

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1 your continued support in our maintaining AIM

2 aid in the Executive Budget.

3 Thank you for listening to this

4 testimony, and I look forward to answering

5 the questions that you may have.

6 CHAIRMAN FARRELL: Thank you.

7 Questions?

8 ASSEMBLYMAN GANTT: Denny, I have

9 questions.

10 CHAIRMAN FARRELL: Yes.

11 ASSEMBLYMAN GANTT: Will you explain

12 to us how it is that in the maintenance of

13 effort you're $30 million -- $31 million

14 down?

15 ASSEMBLYMAN OAKS: They can't hear

16 you.

17 CHAIRWOMAN YOUNG: Your mic isn't on.

18 ASSEMBLYMAN GANTT: Can you explain to

19 us how you are $30 million down while -- and

20 this is not an effort to try and attack

21 anybody else, it's simply -- would you

22 explain how this happened to Rochester versus

23 other cities?

24 MAYOR WARREN: When the maintenance of

354

1 effort was passed in 2010, what it did was

2 lock in that moment of time.

3 At that point in time, the City of

4 Rochester was providing $119.1 million to its

5 school district, and the maintenance of

6 effort said that you cannot give one dollar

7 less than what you were giving at that point

8 in time. So for us, we have to provide that

9 $119.1 million year after year to our school

10 district, while only receiving about

11 $88.9 million in AIM aid.

12 For our sister cities, those cities

13 are receiving more AIM aid than they are

14 contributing to their school district. And

15 so for us, we have to provide $30.9 million

16 more than we receive in AIM aid to our school

17 district, which cuts into the essential

18 services that we're able to provide to our

19 residents.

20 ASSEMBLYMAN GANTT: Can you explain

21 why that happened?

22 MAYOR WARREN: I was not the mayor at

23 the time, but I did work for you.

24 (Laughter.)

355

1 MAYOR WARREN: So I think that what

2 happened was that at the time, the State

3 Legislature did not want to reduce funding to

4 education, and they wanted the cities to

5 continue to provide the same amount to the

6 school districts that they were providing in

7 that year instead of -- when times got tough,

8 the first thing that people might have

9 decided to do was cut the aid to schools.

10 For us, that locked us in at that

11 amount of $119.1 million, and we have been in

12 compliance with the MOE since it has been

13 instituted. However, as I said before, it

14 cuts into our ability to provide for

15 essential services, because actually it's

16 taking 68 percent of the amount that we

17 charge for taxes, and that automatically goes

18 to our school district, not allowing us to

19 utilize those dollars for our police

20 department, our fire department, or our other

21 essential services.

22 ASSEMBLYMAN GANTT: Mr. Chairman and

23 Madam Chairman, a lot of us are not quite old

24 enough to understand what went on probably

356

1 prior to her getting there. But I happen to

2 know that there was a deal made between the

3 county and the city that, in order to not

4 have a -- we talked about a county or city

5 tax on boys who worked in the city at the

6 time.

7 Rather than have that, Lucien Morin

8 and Tom Ryan agreed that we would get more of

9 the county tax dollars, and therefore our

10 concern about education would be on the top

11 of the list. So we provided more money for

12 them than is provided from these other areas,

13 I can guarantee you, as you can see from the

14 pamphlet here.

15 The problem we have, though, is when

16 this maintenance of effort came forward, none

17 of us realized what was coming until the

18 night that it happened, and I think that's

19 how we got hung up in this.

20 Somehow I think the state has to try

21 and help this city out. I mean, it's a city

22 that obviously I represent, but it's also

23 somebody who's concerned about what happens

24 to those kids who go to school there. No one

357

1 is trying to say that we ought not give the

2 schools that, because that's what we were

3 doing when we got caught in what I considered

4 a trick.

5 But now that we understand and know

6 what's happening, I think what must happen is

7 somehow we -- either more AIM aid or, if

8 that's not the case, necessarily, at least

9 understand the amount of money that's being

10 paid by the city.

11 And I would hope that I could talk my

12 colleagues into putting forth that which is

13 fair. Not to take away from anybody else.

14 But when you look at Buffalo, for instance,

15 there's $161 million; the MOE is only

16 $70 million. A $119 million from us, with

17 AIM aid at 88, it's just not fair. And we

18 need to do something about it, find a

19 solution to it.

20 So I thank you for your patience. And

21 thank you, Mayor, for coming.

22 MAYOR WARREN: Thank you.

23 CHAIRWOMAN YOUNG: Thank you,

24 Assemblyman.

358

1 Okay, Senator Marchione.

2 SENATOR MARCHIONE: Mayor, thank you

3 for being here. Just a few questions.

4 You say that your city was asked to

5 offset the cost of schools in your area --

6 110 million, I think you said. Was every

7 city in New York at that time asked to give

8 money to their schools? I wasn't here at

9 that time myself, okay.

10 MAYOR WARREN: So every city in

11 New York State at the time was locked into an

12 amount that they were currently giving their

13 school district. Nothing forbid any city

14 from giving more. But what it said was, when

15 this legislation passed in 2010, that what

16 you are contributing to your school district,

17 no matter every dependent -- well,

18 non-dependent, so that means the larger

19 cities, Buffalo, Syracuse, Rochester, Albany,

20 and I believe Yonkers -- what you're

21 contributing to your school at that moment in

22 time, you have to continue to contribute in

23 perpetuity. So until the Legislature decides

24 that you don't have to do that.

359

1 At that point in time, we were giving

2 our school district $119.1 million.

3 Rochester has always been very generous with

4 the amount of money that it was giving the

5 school district. And therefore at that point

6 in time, our sister cities were giving, I

7 believe, like 80 -- I think it's -- Buffalo

8 was giving $50 million, and then Syracuse was

9 giving $64 million at that point in time. So

10 we got locked in at this $119.1 million.

11 SENATOR MARCHIONE: So before 2010 --

12 I'm just trying to understand -- cities were

13 giving to their schools, it was an ongoing

14 process, you'd give it to your schools --

15 MAYOR WARREN: Yes.

16 SENATOR MARCHIONE: -- always?

17 MAYOR WARREN: The amount that we

18 determined.

19 SENATOR MARCHIONE: The amount that

20 you determined. So beyond --

21 MAYOR WARREN: Yeah, the amount that

22 we determined, we were giving to our --

23 SENATOR MARCHIONE: So beyond giving

24 the school aid in the taxes that you raised

360

1 in the city, the schools do, you also

2 contributed to the schools?

3 MAYOR WARREN: Yes.

4 SENATOR MARCHIONE: Okay.

5 You talk about you having to cut

6 services. Have you had to cut employees, and

7 how many do you have?

8 MAYOR WARREN: Well, a number of years

9 ago we consolidated our neighborhood and

10 business development. Well, we consolidated

11 our neighborhood development and our

12 community development into neighborhood and

13 business development, which was a significant

14 reduction in staff. That was about five

15 years ago? About six years ago. And we

16 continued to reduce that through attrition,

17 our people retiring and things like that.

18 But we're at a point where we are, you

19 know, sort of at our bare minimum to be able

20 to provide the services that we need to

21 provide to our constituents. You know, when

22 people call 911, they expect for a police

23 officer or a firefighter or, you know,

24 someone to come to their aid.

361

1 Right now, as you all know, cities are

2 being asked to give a lot more or to do a lot

3 more with a lot less, and we just don't have

4 the finances to continue to provide the

5 essential services to our residents. We

6 provide recreational services, libraries, we

7 also have other employment programs that we

8 try to help because we recognize that

9 Rochester is in a situation where we have a

10 significant amount of poverty and our

11 residents need the support and the help, and

12 we want to be able to provide that. But we

13 have to be able to get the support from the

14 state in order to do that.

15 SENATOR MARCHIONE: You talked about

16 your utilities and your gross receipts, and

17 the utility companies aren't escrowing money

18 that they owe you. How can that be?

19 MAYOR WARREN: So I'm going to let my

20 budget director explain this, because he can

21 explain it a lot better than I can.

22 SENATOR MARCHIONE: Thank you.

23 BUDGET DIRECTOR WAGNER: Good

24 afternoon.

362

1 SENATOR MARCHIONE: Good afternoon.

2 BUDGET DIRECTOR WAGNER: So back about

3 five, six years ago, the city was getting a

4 little over $11 million a year in annual

5 revenue from a utility gross receipts tax.

6 So Rochester is authorized to tax 3 percent

7 of gross receipts for utilities for

8 transactions within the City of Rochester.

9 So with deregulation and the rise of

10 energy service companies, the energy service

11 companies -- the way the statute is written,

12 it says that the transaction has to occur

13 wholly within the jurisdictional limits of

14 the city. And they argue that because

15 they're buying the commodity off the grid,

16 that the transaction doesn't occur wholly

17 within the city limits, therefore the tax

18 shouldn't apply. So we've gone and seen, you

19 know, $11 million a year shrink down to

20 $5 million a year.

21 And as technologies change and we've

22 gone from landlines to cellphone services,

23 we've lost that revenue as well. So we don't

24 get any tax on cell companies. And as the

363

1 mayor mentioned, you know, New York City

2 does, and the state captures that through the

3 excise tax.

4 SENATOR MARCHIONE: Are you in court

5 over this?

6 MAYOR WARREN: I'm sorry?

7 SENATOR MARCHIONE: Are you in court

8 over this?

9 MAYOR WARREN: No, we are not in

10 court. This is something that -- I know that

11 the Taxation and Finance Department released

12 an opinion on it, and they said that they

13 should pay for it. But we are asking the

14 Legislature to do something legislatively to

15 ensure that the city -- and this is not just

16 the City of Rochester, it's all the cities in

17 upstate New York have this issue.

18 SENATOR MARCHIONE: Thank you.

19 ASSEMBLYMAN OAKS: Assemblyman Otis.

20 ASSEMBLYMAN OTIS: Thank you,

21 Mayor Warren. Nice to see you.

22 Just a question about water

23 infrastructure. Do you have any sense -- and

24 if you don't have numbers with you today,

364

1 after the hearing is fine. Your short-term

2 and long-term water infrastructure costs that

3 you anticipate the city will have to incur,

4 where does that fit in terms of your

5 capital-projects burden going forward?

6 BUDGET DIRECTOR WAGNER: So the city

7 has a five-year capital program, and our

8 water department actually has a much longer

9 25-year capital program.

10 So, you know, we -- I don't have exact

11 numbers here, but our cash capital allocation

12 is generally in the $4 million to $5 million

13 a year, and then we issue a fair amount of

14 debt as well for water infrastructure.

15 One of the things that's coming up,

16 about five or six years out, is LT2

17 compliance requirements. So we're going to

18 have to make investments in our reservoir,

19 and that will be a significant investment.

20 So I can get you exact numbers, but we've got

21 a significant nut to crack there.

22 ASSEMBLYMAN OTIS: That's great. You

23 know, after you go home to Rochester, if you

24 could get us some just sort of real numbers

365

1 or types of projects that you have to do,

2 that would be great. Thank you.

3 MAYOR WARREN: We definitely will,

4 Assemblyman. Thank you.

5 ASSEMBLYMAN OAKS: Hi, Mayor.

6 Just one question. In your handout

7 you laid out a number of things that you are

8 doing, have put together along with

9 Monroe County on shared services or

10 consolidating different things. But along

11 with that, you raise a concern about the

12 Governor's proposal this year that would

13 tie further type of things. Do you think

14 that you've already gone as far as you can

15 go? Or just the fact, the way the Governor

16 has put that together, that would make it

17 very difficult for you to fit within that?

18 MAYOR WARREN: I think that we have,

19 as the City of Rochester and the County of

20 Monroe, have gone as far as we can go with

21 big-ticket items and there would not be a

22 significant amount of savings with the

23 smaller-ticket items.

24 We went through the first process a

366

1 number of years ago, about three years, where

2 they evaluated the City of Rochester finances

3 and looked at ways in which we could

4 consolidate. And what they determined is

5 that the big-ticket items we have already

6 consolidated with the County of Monroe. When

7 we look at our parks, when we look at 911,

8 our library system, our water infrastructure,

9 we have already made those consolidations.

10 So it wouldn't be a significant savings for

11 us to do any more consolidation with the

12 county.

13 ASSEMBLYMAN OAKS: Thank you.

14 CHAIRWOMAN YOUNG: Thank you, Mayor,

15 for joining us today. We appreciate it, and

16 safe travels back to Rochester.

17 MAYOR WARREN: Thank you, Senator.

18 CHAIRWOMAN YOUNG: Our next speaker is

19 the Honorable Mike Spano, mayor of the City

20 of Yonkers.

21 Welcome, Mayor.

22 MAYOR SPANO: Chairwoman, Senator, how

23 are you?

24 CHAIRWOMAN YOUNG: Very well.

367

1 MAYOR SPANO: Our budget director,

2 Andrew Lenney, and our finance commissioner,

3 John Liszewski.

4 And what I'm going to try to do is

5 spare you the read that you all can do.

6 CHAIRWOMAN YOUNG: Thank you. We

7 appreciate it.

8 MAYOR SPANO: I'm giving you our

9 testimony, and I'm just going to basically

10 speak about the issues.

11 So let me just say good afternoon,

12 Chairwoman Young -- I know that the chairman

13 will be back, Assemblyman Farrell -- members

14 of the Senate and Assembly, particularly my

15 friends and former colleagues that are here

16 today. Good to see you, Assemblyman Gantt.

17 And my Assemblywoman, Shelley Mayer here,

18 and -- to talk about the issues.

19 Basically, this is what it boils down

20 to, three major issues at least for us and I

21 think for most of the other cities:

22 education aid, capital projects in terms of

23 rebuilding schools and rebuilding our

24 infrastructure, and of course the perennial

368

1 conversation we usually have, which is about

2 AIM aid.

3 I applaud the Governor and his efforts

4 to look for an avenue from which to provide

5 free tuition for the young people of our

6 state, and that's a very good direction to

7 head in. But as the mayor of a city, we need

8 a little more help in bridging the gap,

9 bridging the gap between education.

10 In Yonkers some of our students, once

11 they move off to college, are double- and

12 triple-remediated. So they're not

13 college-ready yet, and we need to do more in

14 terms of providing for college readiness for

15 the people in our community, especially in

16 the two big areas. The big areas for us are

17 obviously students with disabilities and

18 English proficiency.

19 Poverty continues to be a major reason

20 why young people are not performing the way

21 they should be in our schools, and that is

22 certainly punctuated in our big cities all

23 across New York State. Yonkers is not exempt

24 from that.

369

1 We'd like to have enough dollars so

2 that we can provide all the things that

3 frankly the kids in our suburbs are getting.

4 In other words, the suburbs to our cities.

5 You know, if you're in Yonkers, New York, and

6 we're graduating close to 80 percent of our

7 kids, that's very good in terms of the Big

8 Five, but when you're saddled next to

9 Scarsdale and Hastings and Pelham, you know,

10 they're graduating 99 percent.

11 Our kids suffer from perennial budgets

12 that show shortfalls and don't allow for us

13 to have a full music program, a full arts

14 program, a full intramural and full sports

15 program. These are very important components

16 to a young person's education that allows

17 them -- gives them the tools they need for

18 them to succeed.

19 You know, librarians are 2,500 to 1 in

20 Yonkers, guidance counselors are 700 to 1.

21 Pupil support services have taken a big hit.

22 School psychiatrists are now 1,000 to 1, and

23 the social worker ratio is 2,000 to 1. So

24 these are just some of the issues that we

370

1 continue to deal with as a big city in

2 New York. But, you know, despite that, we've

3 been able to get some great things done.

4 The Governor's $1 billion increase in

5 overall aid to education is a great start.

6 We appreciate that. It doesn't -- in terms

7 of formula, it doesn't do a lot for Yonkers,

8 about $5 million. And again, that formula

9 continues to hurt our city, because we look

10 like a wealthy Westchester community but in

11 fact we are a city just like basically the

12 other four.

13 So we have some issues that we'd like

14 to revisit, and you know that -- you've heard

15 about the formula over and over again, so I'm

16 not going to bore you. But again, it would

17 be certainly helpful for us if we can really

18 figure out a way to get additional dollars to

19 the city.

20 In capital needs, all of our schools

21 are in need of repair. Right now, Yonkers

22 schools have a capital need of over a half a

23 billion dollars just to bring ourselves up to

24 state standards. We have 4,500 students --

371

1 we are over capacity by 4,500 students. We

2 need to build three new schools immediately.

3 And last year we came to you in an

4 effort to get you to pass a Rebuild Our

5 Schools program. You've been very helpful in

6 putting together the structure that will

7 allow us to do that, but we will continue to

8 ask for additional capital support to offset

9 the local share which frankly is going to be

10 very difficult to the taxpayers of Yonkers to

11 afford.

12 We're very close to our constitutional

13 taxing limit, so even if we can get the

14 political will to raise those dollars, you

15 hit the cap and so you can't exceed those

16 numbers which would allow us to rebuild our

17 schools. And again, our kids continue to be

18 educated in standards that we'd like to

19 change.

20 We have to rebuild a firehouse this

21 year. Our firehouse was condemned, the main

22 firehouse, but that is for sure all across

23 the board with all the cities. Firehouses,

24 you know, police precincts, highways,

372

1 bridges, our parks -- again, it's the city

2 and the city's taxpayers that have been

3 squeezed to the point where trying to find

4 the funding that's needed to provide for

5 safety, quality of life, and community at the

6 same time, to provide for the rebuilding of

7 the infrastructure needs, has been very

8 difficult for us. And any type of support

9 that New York State can put into their

10 capital budget in terms of schools and

11 capital needs for the municipal side would be

12 very appreciated for us.

13 AIM aid, you've heard it from

14 everybody. Our maintenance of effort, as you

15 know, is 257, and the AIM aid is 108. So

16 we're on the flip side of what everyone's

17 been talking about. As a matter of fact, if

18 we could switch that, we would. So while we

19 get more AIM aid, you see the numbers we're

20 working against.

21 So since I've been here, five years,

22 the personal income tax has gone up -- to

23 New York State -- by close to 60 percent.

24 That's what we give New York State.

373

1 We have not seen an increase in AIM

2 aid for now six years. And that is a really

3 important number, because that's the

4 recognition that we get from New York that,

5 you know, we're partners. We're partners in

6 providing for the quality of life of the

7 people that we all represent, we're providing

8 for the police, fire, sanitation. It helps.

9 It helps significantly.

10 And over the past five years since

11 I've been mayor, not only has AIM aid not

12 gone up, but we also inherited many of our

13 municipal contracts with many years overdue.

14 So we had some contracts that were nine years

15 out. We have done and renegotiated all but

16 one contract. But at the same time, you have

17 to be able to afford to pay for these

18 contracts in the context of a 2 percent tax

19 cap.

20 It's difficult. We've been able to do

21 it for the most part, but it's been a real

22 tough row for us to hoe. So we really would

23 appreciate, again -- I'm trying to make the

24 case, this AIM aid is critically important

374

1 for the survival of our city, and it's a

2 recognition of that partnership. And we

3 really could use your help in that.

4 And just to give you a couple of other

5 numbers -- I know you've heard it before --

6 you know, healthcare, just in five years,

7 health, life, and dental insurance is up

8 54 percent. Employee retirement system is up

9 100 percent. And police and fire retirement

10 system is up 54 percent. You take those

11 numbers, you take new contracts that were

12 nine years out, you add it together, and it

13 makes it very difficult for us to make ends

14 meet.

15 We can continue to do more with less.

16 We continue to make our budget work. Our

17 bond rating has gone up, and we appreciate

18 all the help -- and you have been, I mean

19 this, New York State has been very helpful to

20 Yonkers in terms of dealing with issues with

21 the Board of Education, in terms of helping

22 us with our economic development program. So

23 I want to say thank you publicly to our great

24 Governor and to the State Legislature.

375

1 We have over $100 billion -- I'm

2 sorry, $1 billion in -- I wish we had

3 $100 billion -- $1 billion in new economic

4 development happening in the city. There's

5 4,000 new units of housing being built on our

6 city's waterfront. We're becoming a

7 destination, a true regional destination.

8 Places like iFLY, obviously Empire City is in

9 Yonkers, Legoland. There's a hotel boom,

10 there's six different hotels that have been

11 built. So there's a lot of positive things.

12 But if you look at the expense line of

13 the ledger and you look at how we're growing

14 in terms of revenues, we're still being

15 outpaced. Our school district grew when most

16 school districts in New York State outside of

17 New York City were in decline. Our school

18 district grew. As you know, when things were

19 held harmless, they weren't really held

20 harmless for us. Because all the numbers

21 were going up while our numbers were going

22 down, so really what that meant was the

23 overall aid per pupil went down.

24 So we need some help and support to

376

1 help us help ourselves. We realize we can't

2 come to you hat in hand every year, and we

3 realize that there are years that you can do

4 better things for us than others. But we

5 know that in terms of education aid, to

6 continue to drive more dollars to education

7 is always helpful to us. To continue to

8 increase the AIM aid, which we haven't been

9 able to do, but that's important to us. And

10 to provide for some capital investments that

11 localities can use to help us.

12 When we rebuild this waterfront -- and

13 that's a great thing that we're doing -- we

14 still have, you know, old infrastructure that

15 needs to be addressed. Because if not,

16 people are going to be living in that

17 waterfront, but they're not going to be able

18 to go anywhere. And so we need to make sure

19 that we have the help.

20 So with that, again, I tried to do a

21 quick runaround. What I wanted was --

22 Chairman Farrell didn't want me to speak too

23 long, and then see if you have any questions.

24 CHAIRMAN FARRELL: Questions?

377

1 Yes.

2 ASSEMBLYWOMAN MAYER: Thank you,

3 Mr. Mayor, and thank you all for being here.

4 And I know my Yonkers colleagues don't

5 seem to be here, so -- I know Senator Latimer

6 didn't feel well. And I think if they could

7 be here, they would.

8 So, one, thank you for working so

9 collaboratively with us to try to drive more

10 money, at least every year since I've been

11 here and you've been mayor, particularly to

12 our schools as we've had some challenges.

13 And I understand your point about the need

14 for additional funding for education, and

15 obviously we will try.

16 One thing I just want to bring to your

17 attention. You know, the Governor proposed

18 that after this year the Foundation Aid would

19 end, which I believe is not consistent with

20 the requirements of the CFE lawsuit. But

21 obviously, as we push for additional funding,

22 we're going to want to have the partnership

23 to work for long-term improvements in the way

24 funding is driven to the Yonkers public

378

1 schools. And I hope we can have your

2 commitment to work with us, because I think

3 the end of Foundation Aid would be very

4 damaging for the City of Yonkers public

5 schools.

6 MAYOR SPANO: We -- listen, I think

7 that's the only hope we actually had was in

8 terms of trying to deal with that with the

9 funding formula. And so yeah, we'll be

10 willing to work with you any way in which we

11 can.

12 The hard-core reality is that while

13 we -- our budget -- and a lot of people look

14 at our budget and say, Well, you know, what

15 is really Yonkers spending its money on? Our

16 budget is about 50 percent right now

17 funded -- funding goes through the Board of

18 Education.

19 ASSEMBLYWOMAN MAYER: Yeah.

20 MAYOR SPANO: And these are coming

21 from you. All the cities outside of -- as

22 you know, all the cities are not even hitting

23 20 percent on their budget, the rest is going

24 to the municipal side.

379

1 So we -- you know, we get banged on

2 both sides. So we get banged on the

3 education side, because we're Westchester

4 County -- that's a rich community -- but yet

5 over 70 percent of our kids live at the rate

6 of poverty. And we have to deal with the

7 high cost of living in Westchester. The

8 workforce, as you know, is at a different

9 type of pay scale. And we have, as a result,

10 over 50 years, have pretty much hit our

11 constitutional taxing authority.

12 So even, like I said before, if we

13 wanted to drive additional dollars back the

14 other direction to try and maybe increase

15 those numbers for our kids, which we want to

16 do -- and we have done it other ways in terms

17 of increases in the sales tax and what have

18 you -- we can't, because we're running

19 against a cap that says, okay, well, we think

20 taxpayers in Yonkers have had enough. And so

21 we hit that constitutional cap, so -- yes,

22 the causes are different, but the effect is

23 still the same. Kids suffer in the end.

24 ASSEMBLYWOMAN MAYER: Right. But we

380

1 will need to push back against this effort to

2 end Foundation Aid, and I hope we can work

3 together on that.

4 On the finding additional money for

5 capital -- and I'm pleased to see you've

6 expanded it beyond just the schools, because

7 I think we all agree we need capital

8 financing. In your testimony on page 4 you

9 show, you know, Yonkers is disproportionately

10 lower in building aid expenditures and

11 reimbursement. And I just want to clarify

12 that in addition to having a lower

13 reimbursement formula, which we all

14 acknowledge we do, and it is a disadvantage

15 for us, one of the reasons we haven't been

16 able to even get more is because we don't

17 have the financing to spend more.

18 So because we have a 70 percent

19 reimbursement, I take it that Yonkers doesn't

20 have the money to spend the 30 percent on the

21 absolutely essential repairs for our schools

22 that have been left in disrepair before you

23 became mayor, and now we're paying the price.

24 So this $10 million, which looks like

381

1 we're getting cheated -- which maybe some

2 could say we are, but it's just so -- we

3 don't have the money to put in.

4 MAYOR SPANO: By my estimates, that's

5 right.

6 ASSEMBLYWOMAN MAYER: Yeah -- am I

7 correct about that?

8 MAYOR SPANO: That's a very good

9 point, Assemblywoman.

10 And, you know, I wasn't trying to be

11 misleading there. It's I guess a symptom of

12 the overall problem, which is we don't have

13 the taxable authority on one end to raise

14 those dollars to pay our share of rebuilding

15 those schools, even at the 70 percent rate

16 that the state is coming through with the

17 money, which is a good -- it's a good place

18 to start. And that's been why we've been

19 asking for additional support in terms of

20 capital funding, so that we can maybe lower

21 that threshold down a little bit and be able

22 to afford to build new schools.

23 I want to address -- the first thing

24 we need to address is the overcrowding in the

382

1 schools. We need to build two more schools,

2 we need to rebuild Gorton, and that's some of

3 the things that we're working at now. But

4 there are also infrastructure needs that need

5 to happen right now in terms of buildings

6 that are just inadequate and need the support

7 to bring them up to standards where they

8 should be.

9 ASSEMBLYWOMAN MAYER: Now, I know -- I

10 don't think the council adopts a capital

11 budget until later in the year, but I'm

12 assuming you're preparing a capital budget

13 that's going to show anticipated shortfalls,

14 preparing your needs against what anticipated

15 capital revenues you would have. And I think

16 that's something we'll want to see in the

17 drafts, to the extent we can be helpful and

18 try to find additional capital funds.

19 MAYOR SPANO: Okay.

20 ASSEMBLYWOMAN MAYER: Lastly, I just

21 want to say on AIM, as you know, I think last

22 year the Assembly one-house budget did

23 increase AIM for cities statewide, and I'm

24 hopeful that this year the Assembly one-house

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1 budget will continue to do that.

2 One thing -- and I appreciate you

3 mentioned the consolidation activities that

4 Yonkers has undertaken. But as you know, the

5 Governor's proposal is really contingent on a

6 very strict consolidation proposal that

7 actually has to go to the taxpayers, which, I

8 think we all know in the political reality,

9 could pose some real challenges.

10 So while I understand the need for

11 more AIM and we certainly will fight for

12 it -- and I'm not asking you to criticize the

13 Governor's proposal, but I just would ask

14 that you recognize that the contingency that

15 he placed on AIM is very troublesome, in my

16 opinion, for cities like Yonkers.

17 MAYOR SPANO: We will work with the

18 legislation as passed. We will -- if we have

19 to work on a proposal to put it to the

20 taxpayers for a vote, we'll do that.

21 But I will tell you that given my

22 experience at the city level, where -- and

23 I'm sure the commissioner of finance can tell

24 you, we had a fun time in doing -- to a

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1 municipal agreement, shared services with the

2 Board of Education -- now, these are trustees

3 that I appointed, and they didn't want to

4 support the shared services that we wanted to

5 do. And we took them kicking and screaming.

6 It saved a lot of money for the school

7 district, it provided for another $2 million

8 for teacher support services, but it was a

9 hard task.

10 I think -- the mission I like. I

11 think the fact that our tax -- the Governor's

12 pushing us to do more in terms of shared

13 services. I get it, I support it, I

14 understand what he's trying to do. It is

15 going to be a monumental lift.

16 In places like human resources, in

17 places like legal, in places like maybe even

18 trash pickup, you might be able to get other

19 municipalities to go along with you and do

20 some type of shared services.

21 In Westchester County, as you know,

22 it's very hard to do that with the

23 high-ticket items like the police department,

24 the fire department, because everybody wants

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1 their own.

2 ASSEMBLYWOMAN MAYER: Right.

3 MAYOR SPANO: Police department, fire

4 department, and they obviously want their own

5 schools.

6 So this is a tall order, there's no

7 doubt about it. But I -- you know, whatever

8 you give to us to do, we're going to follow

9 through and work hard.

10 ASSEMBLYWOMAN MAYER: No, I appreciate

11 that. And I know you well. I just would say

12 that I believe it's the state's obligation to

13 fund cities like Yonkers at a level that they

14 need in order to provide essential services.

15 And while the mission of shared services and

16 reductions is a notable one, I'm concerned

17 about tying these things together, and I

18 think the Assembly will -- I suspect we'll

19 find that a difficult path to hoe.

20 Thank you very much.

21 MAYOR SPANO: Thank you,

22 Assemblywoman.

23 CHAIRMAN FARRELL: Senator?

24 SENATOR MARCHIONE: I'd like to just

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1 recognize that the minority leader, Senator

2 Andrea Stewart-Cousins, has joined us.

3 Welcome.

4 And the only comment that I have -- I

5 don't know if the Senator has any further

6 questions -- is to tell you how much we enjoy

7 your Legoland.

8 MAYOR SPANO: Ah.

9 SENATOR MARCHIONE: My family very

10 much enjoys your Legoland.

11 MAYOR SPANO: Senator, thank you. We

12 are happy -- Yonkers has gone through kind of

13 a rebirth, almost a lot like what you've seen

14 in Brooklyn, but in a smaller way. But

15 there's a regional attraction to the city,

16 and that's been helpful to us, it really has

17 been. And we're building on that.

18 And a lot of it has been made

19 possible, frankly, because of the help that

20 came from you, from the State Legislature,

21 from Leader Stewart-Cousins and all, just

22 making -- and Assemblywoman Shelley Mayer --

23 making it possible for us to attract some of

24 these companies in. And then it's kind of

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1 like the flood gates open a little bit, you

2 know. When you bring somebody in, you can

3 attract maybe two or three others all by

4 themselves.

5 So we get it. We're working hard.

6 But we also know we have a long ways to go.

7 SENATOR MARCHIONE: Thank you.

8 CHAIRMAN FARRELL: Questions?

9 Thank you, Mr. Mayor.

10 MAYOR SPANO: Thank you, Chairman

11 Farrell, Leader Cousins.

12 SENATOR MARCHIONE: Do you have a

13 question?

14 SENATOR STEWART-COUSINS: No, I

15 didn't. I did actually have a --

16 STENOGRAPHER: Mic?

17 SENATOR STEWART-COUSINS: Hello?

18 Better? Okay.

19 Again, I just wanted to, you know,

20 lend my voice in support with so many of the

21 things that are happening in Yonkers and the

22 revitalization.

23 I know the Assemblywoman went through

24 a lot of the things that I was certainly

388

1 concerned about. And definitely, as big

2 proponents of AIM, and certainly as it

3 relates to doing the things that we need to

4 do and a tax cap, I'm always trying to get

5 more AIM funding for municipalities. And so

6 I'm glad that the question was raised as it

7 relates to how we will proceed forward if we

8 tie these two things together. So, you know,

9 I'm always concerned about that.

10 But as far as the schools, I'm sure

11 you've got two bites at the apple because you

12 came here on your Local Government Day to

13 talk mostly about rebuilding schools. I'm

14 assuming that the superintendent will come

15 and talk about the same thing.

16 MAYOR SPANO: Yes, he'll talk about

17 the schools too.

18 SENATOR STEWART-COUSINS: Which is

19 good, because sometimes there are different

20 messages, and people don't know where exactly

21 to focus. But clearly the future of the

22 city's continued revitalization will really

23 hinge on our ability to educate the young

24 people who are coming into the city with

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1 their families. And for that, you know, good

2 buildings and infrastructure, you know, will

3 really be required.

4 So, you know, we will continue to work

5 with all of our colleagues, both sides of the

6 aisle, in both houses, to see what we can do

7 to make it happen.

8 MAYOR SPANO: Thank you for your

9 comments. I appreciate that.

10 SENATOR STEWART-COUSINS: You're

11 welcome.

12 MAYOR SPANO: Thank you.

13 CHAIRMAN FARRELL: Thank you very

14 much.

15 SENATOR MARCHIONE: Thank you.

16 CHAIRMAN FARRELL: The Honorable

17 Stephanie Miner, mayor of the City of

18 Syracuse, 2:30.

19 Good afternoon.

20 MAYOR MINER: Good afternoon.

21 Thank you, Chairman Farrell --

22 CHAIRMAN FARRELL: Good evening.

23 MAYOR MINER: Yes, I guess soon to be

24 evening.

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1 -- thank you, Senator Young, and all

2 the members of the Legislature who have

3 vigilantly stayed to listen to my testimony.

4 In keeping with the spirit of my

5 colleagues, I'm going to echo what they have

6 said about the tremendous financial

7 challenges that cities find themselves under

8 and the need to have more AIM funding.

9 I do want to take this time, though,

10 to specifically thank the Assembly and the

11 Senate for your continued steadfast advocacy,

12 successful advocacy, for more funding for

13 education and recently more funding for

14 infrastructure. Your success in those areas

15 has been incredibly important to my city and

16 other municipalities across New York State.

17 As you said, Chairman Farrell, I am

18 the mayor of Syracuse, and we are the fifth

19 most populous city in the State of New York.

20 And while we have a terrific city that is

21 growing, particularly with immigrants and

22 people who are refugees, which has been in

23 the news this week and last week, we also

24 have tremendous struggles. We are a poor

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1 city, and more than 45 percent of our

2 children are born into poverty. And under

3 recent studies that have been released, we

4 have the highest concentration of black and

5 Hispanic poverty of any city in the nation.

6 These are challenges that we, like

7 Buffalo and Rochester, face every day and are

8 very conscious of providing what I like to

9 call the infrastructure of opportunity to

10 people in our city so that they can grow and

11 become successful citizens.

12 It is customary on this day to plead

13 for additional state aid, which I have just

14 done. But last year I broke somewhat with

15 that tradition and talked about the desperate

16 need for reform. I spoke about corruption

17 and its corrosive influence on our democracy

18 in New York State. And at the same time I

19 also raised issues about how economic

20 development resources were allocated in this

21 state. And unfortunately, since I appeared

22 before you last year, the headlines have been

23 dominated by the intersection of those two

24 issues, corruption in our state's economic

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1 development programs and corruption in

2 general.

3 Tough questions need to be asked,

4 answers need to be had, and people need to be

5 held accountable for performance or a lack of

6 performance. In Central New York we have

7 acutely felt the impact of this corruption,

8 and yet at the same time we have showed a

9 contrast as to what can happen when you have

10 principled economic development.

11 Under my tenure, and this is my eighth

12 year as mayor, our economic development has

13 resulted in $1.5 billion of development. And

14 at the same time, we have had exciting new

15 developments to make sure that we insured

16 local hiring to put our most marginalized

17 citizens to work when we gave away tax

18 benefits.

19 We have seen old classic assets in our

20 city, like the Hotel Syracuse, be

21 redeveloped, and another cornerstone of

22 downtown be revitalized, with local jobs

23 being created and people being put to work.

24 Since becoming elected to office, I've been a

393

1 consistent promoter of what has unfortunately

2 become a radical idea, that tax breaks for

3 developers must be balanced with a

4 commensurate public benefit.

5 Unfortunately, as we have seen in our

6 headlines, corruption in our state's economic

7 development programs has become all too

8 common. There is a systemic problem in that

9 government has increasingly become insulated

10 from the will of the people. That is being

11 felt by the citizens of my city and our

12 community and, indeed, I would say our entire

13 state.

14 While we are limiting voting rights,

15 we are protecting the right of LLCs to

16 influence our laws. We are forcing

17 consolidation on local communities and at the

18 same time refusing to provide promised

19 mandate relief. There is a government that

20 promotes ribbon cuttings while neglecting a

21 sustained investment in our shared

22 infrastructure of opportunities -- our

23 schools, our roads, our water mains.

24 I say this to all of you to say that

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1 when we have the basic foundations of our

2 democracy undermined, to come and speak to

3 you and simply just ask for money seems to me

4 to do a disservice. We need to show the

5 people of our state that government provides

6 the best public policy for everyone, not just

7 those who are wealthy enough to provide

8 campaign contributions.

9 A couple of weeks ago I joined

10 Common Cause in supporting their agenda, and

11 I would urge all of you to look closely at

12 this agenda and adopt it. It includes, among

13 other things, closing the anonymous LLC

14 loophole, engaging in comprehensive

15 contracting oversight, and modernizing our

16 elections. I believe by doing all of this we

17 can inject some energy and transparency into

18 our government and show the people of our

19 state that we really mean it when we say that

20 we are doing the people's business.

21 I would also like to take a moment to

22 talk about the countywide shared services

23 property tax plan initiative in the

24 Governor's proposed budget, as well as the

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1 municipal consolidation and efficiency

2 competition enclosed in last year's budget.

3 The first point I'd like to make is

4 that most local governments in New York,

5 including the City of Syracuse, are already

6 sharing services. And I don't say that just

7 as the mayor of the City of Syracuse, but I

8 say that by quoting a study by Dr. Mildred

9 Warner of Cornell University, who has shown

10 that New York State is a leader in shared

11 services.

12 We in the City of Syracuse have

13 already taken concrete steps over the past

14 seven years to consolidate purchasing,

15 consolidate mail service, implement

16 PeopleSoft for a shared financial management

17 platform -- and in fact, all of these things

18 led to a recognition by Governor Cuomo during

19 his 2014 State of the State Address for the

20 city's efforts in attempting consolidation.

21 And he said: "And there is a ray of

22 hope, because there are local leaders who are

23 stepping up to the plate. And I would like

24 to take a moment to recognize the great

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1 Onondaga County Executive, Joanie Mahoney,

2 and the Mayor of Syracuse, Stephanie Miner,

3 who are working together. They are working

4 together to see if they can achieve

5 consolidation and shared services between

6 Onondaga County and the City of Syracuse. We

7 wish them well and hope other leaders follow

8 that example, because that is exactly the

9 right course."

10 I share that with all of you to say

11 that I have a track record, a successful

12 track record, of doing shared services and

13 consolidations. And I have seen a number of

14 my colleagues in suburban and rural towns and

15 villages alike all struggle under the

16 property tax cap to continue to provide

17 effective services.

18 At the same time, I must remind all of

19 you that when the property tax cap was put

20 into place, we were promised that there would

21 be meaningful mandate relief, and there has

22 not been.

23 Dr. Warner, from Cornell University,

24 has also shown that New York State has the

397

1 highest level of state decentralization of

2 fiscal responsibility of any state in the

3 nation. And in fact, according to her study,

4 64 percent of all state and local

5 expenditures are handled at the local level

6 in New York State. That's the second highest

7 in the nation.

8 The primary drivers of high local

9 property taxes in New York State are indeed

10 mandates that come from the state, including

11 pensions, binding interest arbitration,

12 healthcare, and other things that we are

13 ordered and indeed want to provide. If the

14 idea behind consolidation and shared services

15 is to lower property taxes, then I think that

16 that does a disservice to the public to say

17 that that's going to do it.

18 If we want to lower property taxes in

19 the State of New York, then we have to look

20 at issues like how we pay for Medicaid, how

21 we pay for education, how we pay for pensions

22 and other mandates that the state puts on the

23 local governments. If we want to talk about

24 efficiencies and how we can more efficiently

398

1 provide services, then I would tell you that

2 the way to do it, having done it, is to

3 incent local governments to cooperate, not to

4 bludgeon them over the head with these kinds

5 of mandates.

6 Again, I have been successful and I

7 have been unsuccessful in these efforts. But

8 what I can tell you is that you are most

9 successful when you have a constituency that

10 believes you, thinks you're acting in their

11 best interest, and wants to see the end

12 results.

13 Unfortunately, we are in a time and

14 place where we've seen more and more people

15 not believe what their elected officials are

16 telling them, and they are doubtful when we

17 go to them saying that we are going to give

18 them better government at lower cost. And so

19 I would caution all of you, as you think

20 about these proposals, to keep that in mind.

21 I also want to take this opportunity

22 to strongly endorse Assemblyman Hevesi's Home

23 Stability Support program. As I said, we are

24 a poor city in New York State, and we have

399

1 done tremendous work in providing housing to

2 people who are housing-vulnerable, but

3 Assemblyman Hevesi's program would help us

4 continue to do that and improve living

5 conditions and provide some stability across

6 the state. And so I have publicly said this

7 before, but I would strongly urge the members

8 of the Legislature to support this proposal.

9 And lastly, I want to again add my

10 voice to those who strongly support expanding

11 ride-hailing services outside of New York

12 City. Doing so will help our economy in

13 Syracuse grow and make all of our streets

14 safer for all.

15 So with that, I want to thank you for

16 your time today, and I would welcome any

17 questions that any of you have. Thank you.

18 CHAIRMAN FARRELL: Thank you very

19 much.

20 Questions?

21 CHAIRMAN FARRELL: Thank you.

22 MAYOR MINER: Thank you.

23 CHAIRMAN FARRELL: Julissa

24 Ferreras-Copeland, chair of the Finance

400

1 Committee, New York City Council.

2 Next will be the New York State

3 Association of Counties. If you came down,

4 it would help a little when we start.

5 Good afternoon.

6 COUNCILMEMBER FERRERAS-COPELAND: Good

7 afternoon.

8 CHAIRMAN FARRELL: Did I mess up your

9 name?

10 COUNCILMEMBER FERRERAS-COPELAND: No,

11 you said it perfectly.

12 Good afternoon to Chairwoman Young and

13 Chairman Farrell and the members of the

14 Finance and Ways and Means Committees. I

15 will be testifying on behalf of the New York

16 City Council and Speaker Melissa

17 Mark-Viverito.

18 I am Julissa Ferreras-Copeland, and I

19 am the chairwoman of the New York City

20 Council's Finance Committee. I represent the

21 21st Council District, which includes

22 Elmhurst, East Elmhurst, Corona and

23 Jackson Heights, in the Borough of Queens.

24 It is an honor to be in our state's capital

401

1 to discuss Governor Cuomo's Executive Budget

2 for state fiscal year 2017-2018.

3 I appear before you not only as an

4 elected representative, but also as the

5 daughter of immigrants who live the American

6 dream. I represent some of the most

7 ethnically and racially diverse neighborhoods

8 within the most diverse county in the world.

9 My constituents, many of whom are immigrants,

10 are hardworking and searching for the

11 American dream just as my parents did.

12 It is my sincere hope that we as a

13 state pass a budget that provides all

14 New Yorkers with the opportunity to achieve

15 the American dream. Let us remember that the

16 American dream is the same for my

17 constituents in Queens as it is for the

18 residents of the North Country, Erie County,

19 and all counties across our state. We are

20 one New York.

21 This year's Executive Budget contains

22 familiar proposals that the City Council

23 strongly supports. The budget again

24 recommends the enactment of the DREAM Act to

402

1 provide undocumented immigrants access to

2 state financial aid for higher education.

3 The DREAM Act offers all New York students

4 the same opportunity to pursue the American

5 dream.

6 Now to the issue of raising the age

7 for criminal liability. New York is one of

8 only two states that prosecute teenagers as

9 adults. The Governor proposes raising the

10 age for juvenile jurisdiction from age 16 to

11 18 by January 2020. The budget also contains

12 additional beneficial reforms such as

13 diversion, probation, and programming

14 services for 16- and 17-year olds involved in

15 the juvenile justice system. We urge the

16 Legislature to raise the age of criminal

17 responsibility.

18 I want to express the New York City

19 Council's support of extending the personal

20 income tax top bracket. The budget extends

21 the personal income tax top bracket,

22 otherwise known as the millionaire's tax, for

23 three years. This rate applies to taxpayers

24 with taxable incomes over $2.1 million. This

403

1 action raises needed state revenue while

2 shifting the tax burden to those best able to

3 pay for it.

4 The Governor has also made new

5 proposals that the council commends. The

6 budget permits New Yorkers with family

7 incomes under $100,000 to attend SUNY or CUNY

8 tuition-free beginning next school year. The

9 income threshold increases to $125,000 by

10 school year 2019-2020. We applaud this

11 proposal and urge the Legislature to consider

12 enhancing financial aid available for

13 expenses such as books, transportation, and

14 housing to the lowest-income students.

15 A new proposal creates a partial

16 unemployment insurance benefit which allows

17 an employee to earn $100 or 40 percent of

18 their weekly benefits, whichever is greater,

19 when a worker is partially unemployed.

20 While this year's Executive Budget

21 excludes exceedingly problematic cost shifts

22 like the ones we saw last year, there remain

23 areas of serious concern. The New York City

24 Council is pleased that the Governor proposes

404

1 to again increase school aid, including a

2 $428 million increase in Foundation Aid, and

3 we support the Governor's calls to fund

4 after-school programs, community schools,

5 pre-kindergarten, and early-college high

6 schools.

7 However, we again urge the Legislature

8 to fully fund the Campaign for Fiscal Equity

9 decision, and eliminate funding set-asides

10 proposed for Foundation Aid. Fully funding

11 the CFE decision will provide our public

12 schools the necessary resources to provide

13 all students with a sound, basic education.

14 The budget recommends removing the

15 regional cap on charter school growth in

16 New York City, enhancing the reimbursement

17 for charter school facilities costs, and

18 boosting the charter school per-student

19 payment rate. The significant funding

20 increases proposed for charter schools will

21 leave less of the proposed Foundation Aid

22 increase available for district schools,

23 making compliance with the CFE ruling

24 critical. The council has concerns with

405

1 lifting the charter cap without a further

2 increase in Foundation Aid and support for

3 charter school facility costs.

4 Additionally, the budget proposes to

5 restructure funding for residential

6 placements of children with special needs to

7 require New York City to pay tuition costs

8 associated with the New York City Foster Care

9 placements. While the state anticipates that

10 this proposal impacts New York City by

11 $23 million, costs could exceed this amount

12 as expenditures are dependent on the number

13 of foster care placements and associated

14 tuition costs. We oppose this proposed cost

15 shift to the New York City school system.

16 Finally, the Executive Budget proposes

17 to extend mayoral control of city schools for

18 three years. We are in full support of this

19 proposal.

20 While most of the budget continues

21 existing policies with respect to Medicaid,

22 such as adhering to the spending cap, there

23 are two main programs that cause concern. In

24 an effort to lower state and New York City

406

1 Medicaid costs, the budget requires the city

2 to improve the Medicaid claiming of School

3 Supportive Health Services and to identify

4 opportunities to enhance federal funding for

5 SSHS. Should the plan fail to generate the

6 required savings, DOH will have the authority

7 to reduce Medicaid payments to the city by

8 $50 million.

9 We are also very concerned over the

10 uncertainty at the federal level with the

11 possible repeal of the Affordable Care Act

12 and how that will impact the Medicaid

13 program. Most concerning is whether the

14 federal government will impose a block grant

15 program for Medicaid. The New York City

16 Council hopes that our partners in the state

17 will continue to work with us to protect the

18 people that utilize Medicaid in the event

19 that the federal government repeals the

20 Affordable Care Act to prevent any gaps in

21 services.

22 This budget also reduces the General

23 Public Health Work Program reimbursement to

24 New York City, which supports many public

407

1 health services for vulnerable populations.

2 It reduces the reimbursement rate for the

3 non-emergency claims above the base grant

4 from 36 percent to 29 percent, resulting in a

5 loss of $32.5 million that supports Ending

6 the Epidemic, Nurse-Family Partnership,

7 Newborn Home Visiting Program, and other

8 essential services.

9 Few things are as important to the

10 New York City Council as affordable housing.

11 Here we have mixed feelings about the

12 budget's proposals. The 2018 Executive

13 Budget introduces the tax incentive program

14 Affordable New York Housing Program, which

15 replaces the tax break known as 421-a. I

16 want to start off by saying we support the

17 general goal of this program, which is to

18 develop affordable housing in mixed-income

19 buildings.

20 We are still reviewing the proposal.

21 However, there are a couple of items that are

22 of grave concern to the council. The first

23 of these is the complete elimination of the

24 City Council's authority to restrict or

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1 tighten eligibility of the program. This

2 authority has long been part of the 421-a,

3 but the recent change completely cuts out the

4 council.

5 Related to this concern is the cost of

6 this proposal. The 421-a program already

7 represents an annual cost of $1.2 billion,

8 by far the most expensive tax expenditure in

9 New York City's budget. With the changes

10 contained in this proposal and those that

11 were part of the 421-a renewal in 2015, the

12 cost is expected to grow dramatically. It is

13 worrisome to have such a large expense on our

14 budget with no real control over it.

15 New York City does not shy away from

16 committing significant resources to major

17 priorities. However, we believe it is

18 critical that we are as responsible and

19 efficient with our spending as we can be. I

20 think that this goal of fiscal responsibility

21 is one that everyone here in Albany shares as

22 well.

23 For the reasons mentioned above, we

24 are greatly concerned about this proposal.

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1 It represents an extremely expensive program

2 that is borne solely on the city's budget

3 without a mechanism for the city to adjust or

4 limit the program. As it currently stands,

5 the Affordable New York Housing Program

6 undermines the city's ability to be a good

7 fiscal steward.

8 And now with the housing for our

9 seniors, the budget also appropriates

10 $125 million for developing or rehabilitating

11 affordable housing for low-income seniors.

12 This is beneficial for New York City and

13 aligns with the mayor's affordable housing

14 plan, which will create 4,000 affordable

15 housing units for seniors. However, it is

16 unclear how much of this funding will trickle

17 down to New York City and how many affordable

18 housing units for seniors it will create.

19 The state is investing $20 billion in

20 a comprehensive, five-year plan for

21 affordable and homeless housing. This

22 infrastructure plan is funded from multiple

23 sources, out of which the private sector and

24 local governments will account for

410

1 21 percent. It is unclear if and how much

2 the city will have to contribute to this

3 capital plan and what proportion of the

4 affordable and supportive housing units will

5 actually be in New York City.

6 In addition, the Governor's budget

7 proposal expands the authorization for

8 design-build procurement to include counties

9 outside of New York City. Providing this

10 powerful procurement tool to include the City

11 of New York would help us streamline

12 construction timelines and reduce costs.

13 In conclusion, the council continues

14 its analysis of the Executive Budget, and we

15 look forward to reviewing the response of the

16 Legislature to these proposals. We hope to

17 continue a constructive dialogue with you

18 over the next few months.

19 Thank you.

20 CHAIRMAN FARRELL: Thank you.

21 Questions?

22 COUNCILMEMBER FERRERAS-COPELAND:

23 Thank you.

24 CHAIRMAN FARRELL: Stephen J.

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1 Acquario, executive director, New York State

2 Association of Counties.

3 Peter Baynes?

4 EXEC. DIRECTOR BAYNES: Yes, sir.

5 CHAIRMAN FARRELL: Let's try that

6 again.

7 This is the New York State Conference

8 of Mayors, Peter Baynes, executive director.

9 And Thomas Roach, is that him with you? Did

10 I pronounce -- is that --

11 MAYOR ROACH: Yes.

12 CHAIRMAN FARRELL: Mayor of White

13 Plains.

14 MAYOR ROACH: Yes.

15 CHAIRMAN FARRELL: You've got my

16 daughter. Okay.

17 EXEC. DIRECTOR BAYNES: Thank you.

18 The Association of Towns --

19 CHAIRMAN FARRELL: Thank you for

20 coming.

21 EXEC. DIRECTOR BAYNES: The

22 Association of Counties, they're on their way

23 over from their conference, and they said we

24 could jump ahead of them. And thank you for

412

1 allowing us to do that.

2 As you mentioned, I have Mayor Roach,

3 Tom Roach, from the City of White Plains with

4 me. He's the president of the Conference of

5 Mayors this year. I also have with us

6 Barbara Van Epps, who is NYCOM's deputy

7 director and legislative coordinator.

8 Before I turn it over to -- we are not

9 going to read our testimony which we have

10 submitted, nine pages worth. We are going to

11 summarize the key aspects of our testimony

12 and try to stay under the 15-minute time

13 limit.

14 Before I turn it over to Mayor Roach

15 to talk about, in real terms as a mayor of a

16 city, what the state budget means for him and

17 could mean with some important modifications,

18 I just want to take a moment to try to set

19 the record straight for our members.

20 As I'm sure you're aware, the Governor

21 has repeatedly pointed to local officials as

22 the cause of high real property taxes in

23 New York, and I think the Governor either

24 doesn't know of local government or he's just

413

1 failing to recognize how local government

2 really works.

3 Just a few facts to set the record

4 straight. The Governor cites the number of

5 local governments in New York as an excessive

6 number of 10,500 local governments. There

7 are really only 1,599 general-purpose local

8 governments in New York's counties, cities,

9 towns, and villages.

10 The Governor has said that local

11 officials need to display the fiscal

12 restraint his administration and the

13 Legislature have shown over the past several

14 years. But if you look at cities -- even

15 going back to before the tax cap, when it

16 came into being -- over the past 10 years,

17 cities have increased their taxes on average

18 by 2.4 percent a year -- not the 5, 6,

19 7 percent that was cited prior to the

20 property tax cap coming into being.

21 And for the most current year, for

22 2017, in our city budget survey we found that

23 the average tax increase for our cities was

24 1.3 percent. So they're making the effort,

414

1 our members, on the tax side. On the

2 spending side, they're doing the same since

3 2005.

4 Cities' average spending increase from

5 year to year has been 1.8 percent. That's

6 below the state's self-imposed spending cap

7 of 2 percent. And also, very importantly,

8 the spending calculation for local

9 governments includes capital spending,

10 whereas the state spending cap does not

11 include capital or infrastructure spending.

12 And then the biggest fallacy that we

13 feel has been touted by the Governor -- and

14 it's to the detriment, I think, of local

15 government and the willingness of officials

16 to serve or the public to serve in local

17 government -- is the claim that local

18 governments don't work together and don't

19 want to work together to share services, that

20 they really don't care about their taxpayers.

21 I think -- as many of you come out of

22 local government service, I think anyone with

23 a knowledge of local government or who worked

24 in local government knows that that claim is

415

1 false. We have tried as an association to

2 document the fact that our people, our

3 members, are working together.

4 We did a survey back in 2014, when the

5 Government Efficiency Plan requirement came

6 to be, to see the degree to which our members

7 were sharing services. And of 225 responses

8 we got from our members, they cited 1,600

9 separate examples of shared services, an

10 average of seven shared service arrangements

11 per local government.

12 Mayor Miner cited the Cornell study

13 that documents basically the same thing, that

14 New York is actually a leader at the

15 local-government level in sharing services.

16 So now, the latest iteration of trying

17 to force local governments to do something

18 they're already doing is the Governor's

19 consolidation mandate proposal that has been

20 discussed by many speakers today. It would

21 mandate a county-designed consolidation plan

22 that would then go to a countywide

23 referendum.

24 Notably, it ignores schools and school

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1 taxes, which in the average municipality

2 amounts -- or in the average community

3 amounts to approximately 70 percent of the

4 property tax bill. And I think, as an

5 affront to the Legislature, frankly it -- the

6 AIM appropriation, which we will discuss, is

7 linked to and is dependent upon the State

8 Legislature approving the consolidation

9 mandate proposal that the Governor has

10 proposed.

11 You know, ironically and most

12 frustrating, as I mentioned at the beginning

13 of my remarks, the consolidation that the

14 Governor is working so hard to find a way to

15 force local governments to do is something

16 they're already doing. In this proposal he

17 has specified specific areas where he'd like

18 to see local governments work together. And

19 if you look at it, it's the most -- the types

20 of services he wants to see local governments

21 work together on are the ones that are most

22 prevalent in terms of being shared right now

23 among local governments.

24 Highway equipment sharing, storage and

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1 other facilities sharing, the sharing of

2 plowing services, those are all routinely

3 done in virtually every local government in

4 the state. Cooperative purchasing is also

5 listed in the consolidation mandate proposal.

6 In fact, local governments do a large degree

7 of their purchasing off the state's OGS

8 contract or through county or national

9 municipal programs.

10 A third area of focus the Governor

11 would like to see is local governments start

12 to buy their different insurances

13 cooperatively. The fact of the matter is in

14 New York, in the worker's compensation arena,

15 80 percent of municipalities buy their

16 worker's comp insurance from a statewide or

17 countywide municipal cooperative. Almost

18 60 percent of local governments buy their

19 property and liability insurance from NYMIR,

20 the New York Municipal Insurance Reciprocal,

21 which is truly an intermunicipal cooperation

22 agreement among almost 900 local governments.

23 And then in the health insurance area,

24 there are members of ours that purchase their

418

1 health insurance through countywide

2 cooperatives. Unfortunately, in this area --

3 and you'll see this in other areas where

4 there's a barrier to working together -- when

5 it comes to health insurance, our smaller

6 members that have fewer than 100 employees,

7 they are not able to buy into -- buy health

8 insurance out of cooperatives. So there

9 could be even more sharing in that realm, but

10 we'd have to get the law amended to get rid

11 of that barrier.

12 So the bottom line is local government

13 is doing what the Governor wants them to do.

14 We ask the State Legislature today to put an

15 end to another unnecessary and unfruitful

16 exercise in consolidation.

17 With that, I'm going to turn it over

18 to Mayor Roach to talk more specifically

19 about things going on in his community

20 relative to the state budget and how the

21 state budget can help him serve his community

22 better and all of our members can serve their

23 communities better.

24 Mayor?

419

1 MAYOR ROACH: Thank you. Thank you,

2 Mr. Chairman, and members of the committee.

3 My name is Tom Roach. I'm the mayor

4 of the City of White Plains. We're a

5 population of about 60,000, the

6 fastest-growing city in the State of

7 New York.

8 Thirty-four minutes to Midtown from

9 our train station, and we're at the point now

10 where as many people get off the train to

11 come to work in White Plains in the morning

12 as get on the train to go to work in

13 Manhattan. We're the number-one destination

14 out of Manhattan in the morning. So we have

15 an interesting community where our resident

16 population of 60,000 expands to about 250,000

17 during the day.

18 We have three hospitals, three

19 courthouses, and therefore we have a very

20 large police force, a very large fire

21 department for our population size. But I'm

22 here today -- I can't help but pitch for my

23 city. I'm a mayor, and I know we have at

24 least one former mayor up there, Assemblyman

420

1 Otis, but I can't help but pitch a little for

2 my city. But I'm here today as president of

3 the New York Conference of Mayors.

4 I meet and talk with mayors from

5 around the state. I have been present for

6 the testimony you've heard today from mayors,

7 and it's striking how the issues remain the

8 same throughout this very diverse state. I

9 went to college in Albany, I went to law

10 school in Buffalo, my parents live in

11 Canandaigua, my sister lives in Irondequoit.

12 For a guy from Westchester, I pronounce

13 Canandaigua and Irondequoit; I should get

14 some credibility there. But I know the state

15 very well and enjoy meeting with the mayors,

16 and we all face similar challenges.

17 One of the things that we've all been

18 struck by is the suggestion that there is not

19 a lot of shared services already taking

20 place. And I can tell you that it does take

21 place. It's sometimes as simple as a phone

22 call. You'll get a call from another mayor

23 saying, Hey, listen, can we borrow your leaf

24 claw? They had a storm that didn't really

421

1 impact us. The answer is "Sure." There's

2 not a lot of paperwork involved, it's just

3 helping out.

4 But I have some concern that in a lot

5 of grant situations and a lot of situations

6 where demonstrating that you've done

7 something is part of your ability to get the

8 funding -- which is some of what's happening

9 with the AIM funding -- I have a real concern

10 with it being tied in, but also whether or

11 not we get credit for what we're already

12 doing.

13 It always seems unfair to me when we

14 put in for a grant and they say "You don't

15 get credit for those electric charges because

16 you put them in too soon." So I would think

17 we'd be wanting to reward the people who have

18 already done the work. And so I actually had

19 to ask around, because some of what we do is

20 so engrained in the city today that people

21 forget that it's really shared services.

22 One of the things that I did when I

23 became mayor was our school district is

24 entirely dependent on the city, so we have

422

1 contiguous borders, we serve the same

2 population, but they are a separate branch of

3 government, they receive -- they have their

4 own taxing authority, and they receive their

5 own funding from the state. And I'll just

6 point out that the schools -- and I don't

7 want to stop any funding for the schools --

8 but their increase exceeds our total

9 unrestricted aid package.

10 But we, on our own, we offered and now

11 do, we maintain their vehicles. We have a

12 big shop, we have ASE-certified mechanics.

13 And they actually contract for their buses,

14 so it's more like trucks, fleet cars, things

15 like that. But we save them a lot of money

16 by doing the work ourselves. All they do is

17 buy the parts.

18 We receive nothing from them for that.

19 My feeling was that it benefits the taxpayers

20 as a whole, because the cost to us is lower

21 than the savings to them. So therefore it

22 works out for the taxpayer, but it doesn't

23 make my books look any better.

24 And the irony is that if I lost AIM

423

1 funding, this is one of the first things I'd

2 have to stop doing. And it's actually shared

3 services.

4 We are right now working with them on

5 a program -- we use all of their athletic

6 fields. We have very limited parks in the

7 City of White Plains, so their athletic

8 fields are basically what we use for our

9 recreation programs.

10 We're a very diverse community. We

11 have children coming from all economic

12 backgrounds, and our recreation programs are

13 essential. One of the issues that has come

14 up over the years is you have, you know, 200

15 9-year-olds playing soccer, and there's no

16 access to a bathroom. And for the schools to

17 open the door to the school is very expensive

18 because they have to then staff the school.

19 So we worked with the schools and we're going

20 to be installing outdoor restrooms at all of

21 these fields. They're going to buy the

22 actual restroom, we're going to do the

23 plumbing and site work to install it. So

24 we're both going to benefit from it, and

424

1 we're going to share the cost.

2 We have an interesting thing that we

3 do with the school district, and have done

4 for 18 years, is we provide basically

5 personnel expertise to them. We administer

6 and enforce and interpret the Civil Service

7 Law, the local civil service rules,

8 everything from holding the school's civil

9 service exams to reviewing applicants to

10 classifying new positions, job audits, and

11 things like that.

12 They would have to have retained an

13 expert for that or -- and they pay us a very

14 small amount of money. I'm not even going to

15 read it because it might not look -- maybe

16 I'd -- you know, whatever. But I'm happy

17 because we serve the same taxpayers.

18 As I said, we do things with other

19 governments all the time. Mutual aid -- so

20 there was discussion about fire trucks and

21 police vehicles. Probably older than local

22 government is mutual aid, that when there is

23 a fire in one community, the other

24 communities -- or a police activity that

425

1 requires support -- will come.

2 Today there was a big fire in Yonkers,

3 and I was just talking with Mayor Spano about

4 it. And mutual aid gets involved when you

5 have a fire like that because you have to

6 have staffing in the other houses. And

7 that's done routinely.

8 We have in White Plains a New Year's

9 Eve ball drop. It started many years ago

10 from the back of a fire truck. We now have a

11 big crane, and we get about 25,000 people

12 that come out. So it's a huge event for us.

13 We have so much support from other police

14 departments -- and not just local, but also

15 federal, state, county, and our fellow cities

16 in our area. So that is again another

17 example of mutual aid.

18 So we are working together every day,

19 and we're happy to look at new ways to do it.

20 There may be the potential to work with the

21 Legislature about maybe some changes in

22 regulations that would permit us to do even

23 more together, but I think -- we talk all the

24 time about trying to help each other.

426

1 I want to throw in one more thing, the

2 design-build. So right now I drove across

3 the old Tappan Zee Bridge and looked at the

4 new Tappan Zee Bridge today on my way up to

5 Albany. And it looks beautiful, and it's

6 coming along so well, and it is the product

7 of design-build.

8 And, you know, we had to build a new

9 parking garage in our entertainment district

10 which, thank goodness, is surging and

11 therefore we needed the parking, and we were

12 grateful we had this assistance from the

13 state in doing that. But we had to contract

14 it out under the traditional method. And

15 what generally happens is somewhere along the

16 construction phase, your construction

17 contractor tells you, "This design is wrong,

18 you can't build it like this, we have to

19 change this." Now I have what's called a

20 change order, which you cannot put out to bid

21 because it's just this contractor, so I don't

22 have a good negotiating position.

23 And it is so much preferable, on a

24 large project, to be able to hand it to a

427

1 general contractor who will then be

2 responsible for bringing it in on time and on

3 budget, and not have us bear the cost if

4 there is some difficulty between the person

5 who designed it and the person who's

6 constructing it or even having to arbitrate

7 who is at fault.

8 So I throw that in as one thing, if we

9 could do a little more with the -- I know

10 it's going to drop down to the counties, but

11 perhaps some of the larger cities might also

12 be able to take advantage of that. I think

13 you will see more construction and more jobs

14 as a result, of course. You know, and that

15 would be of great benefit to everyone.

16 EXEC. DIRECTOR BAYNES: We have much

17 more to say, but we will stop at that point.

18 CHAIRMAN FARRELL: Thank you very

19 much.

20 Assemblywoman Hooper.

21 ASSEMBLYWOMAN HOOPER: Thank you so

22 very much for bearing with us and taking the

23 time to be with us all of this evening.

24 I'm going to attempt to be very, very

428

1 quick because I only have a few minutes. But

2 I'm going to make a humble request of the

3 Conference of Mayors. I represent the

4 Village of Hempstead, where I have my mayor,

5 Wayne Hall, and I'm having difficulty in

6 accessing or helping him to overcome his

7 confusions as it relates to Assembly input.

8 I was hoping that perhaps your

9 conference could provide training for some of

10 your members, because the budget process

11 sometimes is elusive if you're not really a

12 part of it. It seems that my mayor is not

13 quite clear as to how AIM, ESPRI, Roads and

14 Streets, PILOTs and CHIPs -- it's confused in

15 that he's not aware or seems not to be --

16 confused and not aware that these things

17 emanate from the budget process, and that the

18 State Assembly as well as the Senate is

19 involved, that we are involved in this

20 process.

21 I would like to also see if you would

22 be able to help not just my mayor but other

23 mayors who might also have this confusion in

24 utilizing local talent in their local

429

1 communities, because it also would be a

2 savings as well as an inspiration for the

3 local community and also provide to those

4 local -- in this case, my mayor, and in my

5 village -- that there are programs that can

6 help the community, such as Sustainable

7 Community Development.

8 We have a project that's ongoing now

9 that we could have used Sustainable Community

10 Development without having an outside

11 contractor come and put in a PILOT and take

12 so much away from the local communities.

13 So I was wondering would you be

14 amenable to providing that kind of training,

15 not just to the mayor of Hempstead but to

16 other villages and other localities who

17 really do not have the access to how a bill

18 becomes a law, the budget process, and how

19 funds are really going from the state to the

20 localities?

21 Unfortunately, the mayor is confused.

22 It's not his fault, because this is an OJT

23 type of job, you have to learn as you're on

24 the job. But he's not aware that when those

430

1 funds go into the village, that they do

2 emanate from the state process. Would you

3 consider that?

4 MAYOR ROACH: Sure.

5 And Assemblywoman, I would say when I

6 became a councilman 16 years ago, I drove up

7 to Albany for the newly elected officials

8 training that NYCOM offers, and I have been

9 actively participating in training ever

10 since, and I've found it extremely valuable.

11 I even got to teach a class last year.

12 I will personally call the mayor --

13 ASSEMBLYWOMAN HOOPER: I appreciate

14 that.

15 MAYOR ROACH: -- and get to the bottom

16 of that part of it. Just by coincidence, he

17 is working actually with our Youth Bureau

18 now. I know he wants to establish a Youth

19 Bureau. We have a very successful Youth

20 Bureau in White Plains, we're already working

21 with --

22 ASSEMBLYWOMAN HOOPER: If you're aware

23 that if you are to get funds for the Youth

24 Bureau, that --

431

1 MAYOR ROACH: Well, we're going to

2 help, we're going to work on that, and I'm

3 going to call --

4 ASSEMBLYWOMAN HOOPER: -- that we are

5 involved. Because he's not aware that the

6 state is involved in any funds that go into

7 the village. He says that the state is not

8 involved, that the Governor sends the money,

9 and straight to him. It's not his fault, I'm

10 not beating him up, it's just that I would

11 appreciate it, if you would, help him to

12 understand the process.

13 MAYOR ROACH: Okay, and we're working

14 with him on the Youth Bureau. And I also met

15 a couple of the council members at the fall

16 training school, and we had a great

17 conversation, so --

18 ASSEMBLYWOMAN HOOPER: I'd appreciate

19 it if you would help him to --

20 MAYOR ROACH: -- so happy to help out.

21 ASSEMBLYWOMAN HOOPER: -- to dispel

22 the confusion, because it has caused a civil

23 dispute in the community with two very large,

24 very important organizations that are

432

1 fighting because the mayor unwittingly has

2 given information that is incorrect -- not

3 because he intended to, but he has caused a

4 serious problem.

5 I would appreciate your input.

6 MAYOR ROACH: I will do everything

7 except wade into middle of whatever this

8 dispute is. Because I've got my own.

9 ASSEMBLYWOMAN HOOPER: No, no, I don't

10 want --

11 MAYOR ROACH: I will be happy --

12 ASSEMBLYWOMAN HOOPER: -- I'm not

13 going to wade into the dispute --

14 MAYOR ROACH: No, I'm not --

15 ASSEMBLYWOMAN HOOPER: Please, please,

16 please. I'm not going to wade into the

17 dispute either.

18 MAYOR ROACH: Yeah.

19 ASSEMBLYWOMAN HOOPER: I'm just asking

20 that you would help --

21 MAYOR ROACH: Absolutely.

22 ASSEMBLYWOMAN HOOPER: -- through

23 training, through your conference, so that

24 these type of things -- I'm sure it's not

433

1 just in the Village of Hempstead.

2 MAYOR ROACH: Yup.

3 ASSEMBLYWOMAN HOOPER: I'm sure there

4 are other mayors and other executives who

5 don't understand the budget process and how

6 funds are funneled into the localities. So

7 your assistance here is greatly appreciated

8 and very much needed.

9 But I'm not asking you to get into a

10 civil dispute.

11 MAYOR ROACH: I'll make the call

12 tomorrow.

13 ASSEMBLYWOMAN HOOPER: I'd appreciate

14 it very much. You can indicate that it was

15 brought up here at the budget hearing.

16 MAYOR ROACH: Absolutely.

17 ASSEMBLYWOMAN HOOPER: Thank you

18 kindly.

19 MAYOR ROACH: Thank you very much.

20 CHAIRMAN FARRELL: Thank you.

21 Senator?

22 CHAIRWOMAN YOUNG: Senator Krueger.

23 SENATOR KRUEGER: Thank you so much.

24 You know, you come and testify every

434

1 year. I appreciate hearing from you. And

2 you talk about a number of things that if

3 only we could get this done at the state

4 level. One of the examples today was the --

5 what are they called, the G -- the utility

6 share.

7 MR. BAYNES: Gross receipts. Gross

8 receipts.

9 SENATOR KRUEGER: Thank you, the GRT.

10 Who's stopping us from doing this? It

11 doesn't seem like it should be that hard for

12 us to fix it for you. Why don't we get it

13 done?

14 MR. BAYNES: Well, you know, we have

15 tried -- we've tried different means of

16 trying to fix the problem. We are pursuing

17 regulatory efforts. We have committed,

18 though, this year to trying to seek a

19 legislative solution. We do know that it's

20 always a challenge to get -- even closing tax

21 loopholes can be misrepresented by some

22 politically as a tax increase. And that

23 makes it a difficult thing to get through

24 legislative bodies.

435

1 But it is something, as you've heard

2 today from several of the city mayors, the

3 GRT, the local gross receipts tax, the

4 noncompliance by the ESCOs by several of the

5 utility companies in Western and Central

6 New York are leading to millions of dollars

7 of unpaid taxes. So it's an important issue,

8 and we're certainly committed to working with

9 the Legislature to see if they can be the

10 answer to the problem.

11 SENATOR KRUEGER: Because in your

12 testimony, it was a two-parter, a two-part

13 issue. But personally, like I think the

14 ESCOs are a scandal, and the Public Service

15 Commission attempted to rein them in and

16 there are suits and countersuits. But, you

17 know, they actually end up costing the

18 consumers who live in your districts more

19 money than whatever they were paying before.

20 As you point out, you can never get taxes

21 from them because nobody can ever, ever

22 really figure out who the hell they are.

23 So I think, one, you should support

24 the state efforts to try to do away with

436

1 these scam ESCOs. But also, if you come

2 together as one negotiating entity, can you

3 in some way force the utilities to have to

4 pay their fair share of taxes to you?

5 MAYOR ROACH: Well, Senator, an

6 interesting point. In Westchester we were

7 the first to do community choice aggregation,

8 which the Public Service Commission pushed

9 forward because of the problems with the

10 ESCOs, and we formed Sustainable Westchester.

11 And in White Plans, that is now the

12 default power provider. It is cheaper than

13 the ConEd-provided power, and it's green.

14 You could opt between green or brown, and the

15 green was just a fraction of a penny -- you

16 know, just a couple of pennies more, so we

17 went for the green.

18 But the nice thing about it is -- and

19 it was NYCOM's suggestion -- when we put out

20 the RFP, you had to agree that you were going

21 to pay the taxes you're supposed to pay. And

22 so now we have a county that the default ESCO

23 is going to be paying the taxes. And -- and

24 the residents are saving money.

437

1 Senator, you're exactly right, because

2 I am shocked by the number of people who --

3 it must be 20-some-odd years since we had the

4 deregulation. And, you know, when you first

5 sign up, you look up who's the best price.

6 Then you forget about it. Two years later,

7 you check your bill and you realize, I'm

8 paying more money than anybody would.

9 The nice thing about the community

10 choice aggregation is you have an entity that

11 is constantly -- the next time the contract

12 comes up, they're going to negotiate it again

13 for you, it's not something that you have to

14 be a part of.

15 So I think as that rolls out across

16 the state, that could be a very beneficiary

17 program in that regard.

18 MR. BAYNES: We also had come together

19 as an association several years ago -- Mayor

20 Warren alluded to this, but we went to Tax

21 and Finance to get them to issue an advisory

22 opinion -- unfortunately, it's just advisory,

23 not binding -- but clarifying what the

24 obligations of the ESCOs and the utilities

438

1 are. Unfortunately, it's just an advisory

2 opinion. Compliance hasn't been what we

3 thought it would be.

4 We've now gone and met with the chair

5 of the PSC to talk about how on the ESCO

6 front we can use the current deliberations

7 the PSC is having with the ESCOs to try to

8 leverage compliance on the GRT. And

9 hopefully that bears fruit.

10 SENATOR KRUEGER: And you didn't

11 testify on this, but I had asked the City of

12 New York earlier. The proposed change in the

13 Internet tax collection, do you see that as a

14 revenue generator for you at the local level?

15 Or not significant enough to really --

16 MR. BAYNES: We're supportive of

17 expanding -- you know, being able to capture

18 as much of the Internet-based sales as

19 possible. Sales -- as we allude to in our

20 testimony, sales tax collections have really

21 flattened out over the past several years and

22 are -- especially for our cities, are a

23 key -- almost as much revenue as the property

24 tax. So when they're losing sales tax, it

439

1 usually means it's got to be made up for with

2 the property tax. So we are supportive of

3 that.

4 SENATOR KRUEGER: And you're going to

5 lose sales tax because we're losing

6 bricks-and-mortar stores. I mean, I know

7 White Plains, I don't know everybody's

8 communities, but the statistics are an

9 unbelievable share of American consumerism is

10 shifting out of stores and into Internet

11 sales. Which means, you know, there's a lot

12 of action for truck deliveries and

13 warehouses, but your communities are losing

14 jobs at the retail level, you're losing taxes

15 from the retail stores. And I think we have

16 to recognize collecting those taxes for you

17 through Internet sales systems.

18 MR. BAYNES: As the world changes, the

19 tax laws have to modernize with them, for

20 sure.

21 MAYOR ROACH: I mean, I have people

22 ask me why are so many restaurants on

23 Mamaroneck Avenue now, and I explain to them,

24 you know, the days when my mother would take

440

1 me shopping before school and we'd go to

2 Buster Brown, and then we'd walk up the block

3 to Thom McAn, are over.

4 So you're having specialized retail,

5 you're having experiential retail, and you

6 need people living in your downtown, because

7 then it is more convenient than the Internet

8 if they can walk up the block. But you're

9 going to see more and more service-oriented

10 facilities -- restaurants and things like

11 that.

12 SENATOR KRUEGER: Thank you very much

13 for your work, all of you.

14 MAYOR ROACH: Thank you. Thank you

15 for your work as well.

16 MR. BAYNES: Thank you.

17 CHAIRMAN FARRELL: Assemblyman Oaks.

18 ASSEMBLYMAN OAKS: Yes, just a couple

19 of questions.

20 Executive Director Baynes, you

21 mentioned, on the health issue, the barrier

22 of not allowing the cooperative or the joint

23 effort if you're under 100 employees. So

24 that is something certainly if there isn't

441

1 legislation now, whether that's a budget fix

2 or separate from that -- certainly I know a

3 lot of municipalities I represent might be

4 able to benefit and could be interested in

5 that.

6 Mayor Miner talked about

7 incentivizing, not mandating cooperation. I

8 know you gave examples, as various mayors

9 have here today, of cooperatively working

10 together. So it seems like we've made

11 progress. Certainly there's always room to

12 grow, but we've gotten there. But it's like

13 taxes continue to be, you know, impacted by

14 continuing costs that we have, and so we

15 continue to nip around the edges but not do a

16 whole lot on the mandate relief side.

17 Certainly from my perspective, you

18 know, you mentioned one thing, you know, that

19 could work just in tweaking the law, but

20 working with NYCOM to come up with other

21 mandate relief things that could make greater

22 strides at that. I know the bigger the

23 mandate, the tougher the ability to get it

24 done. But as Senator Krueger said "Well, why

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1 don't we do it," well, you know, why don't we

2 do more on the mandates?

3 MR. BAYNES: Right. I mean, that's --

4 I agree with everything you said.

5 There is one bit of mandate relief in

6 the budget which isn't world-changing, I

7 wouldn't say, but would mean important

8 revenue to local governments, and that's the

9 interest rate on judgments, which in New York

10 State has been a flat 9 percent statutorily

11 for years and years. It was first put at

12 9 percent back during the, I guess, late '70s

13 when interest rates went through the roof.

14 But interest rates have been very low for

15 years and years, and local governments and

16 the state are still paying 9 percent, a flat

17 9 percent interest rate on judgments.

18 To make that a market rate to float,

19 you know, with what you could make on that

20 money if you invested it, would help local

21 governments quite a bit. I think it would

22 also accelerate the resolution of lawsuits

23 and legal actions against municipalities,

24 because right now it's in the plaintiff's

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1 interest to stall because they're making

2 9 percent on their money when they ultimately

3 get their claim.

4 ASSEMBLYMAN OAKS: Thank you.

5 MAYOR ROACH: I would just note that

6 often cited as mandate relief is the Medicaid

7 being picked up at a greater share by the

8 state. But of course that benefits the

9 counties. And we love the counties, but

10 that's not mandate relief for the localities.

11 ASSEMBLYMAN OAKS: Understood.

12 Thank you.

13 CHAIRMAN FARRELL: Thank you.

14 Senator?

15 CHAIRWOMAN YOUNG: I believe the

16 Senators are done. So we truly appreciate

17 your participation today and wish you well,

18 and we'll continue to work with you.

19 MR. BAYNES: Thank you, Senator.

20 CHAIRMAN FARRELL: Assemblyman Otis to

21 close.

22 ASSEMBLYMAN OTIS: Thank you,

23 Mr. Chairman.

24 Thank you for your testimony. I just

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1 noted first, Mayor Roach, you fulfilled the

2 most important responsibility of a mayor at

3 the beginning of your statement, which is you

4 are a tremendous booster for your community,

5 which is what every mayor should do. You do

6 it very well.

7 MAYOR ROACH: Thank you.

8 ASSEMBLYMAN OTIS: So thank you for

9 all the facts about White Plains.

10 A couple of questions. Just to make

11 it clear -- well, first, thank you in your

12 testimony for NYCOM's strong support for the

13 water infrastructure funding in past years

14 and the Governor's proposal. And NYCOM is

15 strongly in support of that proposal, which

16 is of assistance to local governments. So

17 kudos on that.

18 But one of the things that both Peter

19 and Tom, your testimony touched upon, is that

20 there's a lot of shared service activity that

21 the state actually really doesn't know about.

22 Because if nobody applies for a grant or puts

23 it in some other submission to the state,

24 it's going on via what you do with a

445

1 neighboring community, what you do with a

2 school district.

3 So any further elaboration on that

4 phenomenon? How prevalent is the shared

5 service activity that the state doesn't

6 necessarily hear about?

7 MAYOR ROACH: I do have another

8 example that relates to water. So we're in a

9 water district that serves Yonkers,

10 Mount Vernon, Scarsdale and White Plains, and

11 there's two shafts that bring water from the

12 City of New York. One shaft the city treats

13 with UV; the other shaft is not treated with

14 UV. And the EPA now requires UV treatment.

15 The county runs the water district.

16 They did not comply as quickly as they were

17 supposed to, and we don't really have a say.

18 But we met about it, and they proposed a

19 different solution that would accelerate the

20 process in which we can get the UV treatment

21 started, but it would require sites in

22 White Plains. And I said fine.

23 So they have now located -- this year

24 they should both be completed, two plants, on

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1 our pump station sites, that will UV-treat

2 the water. And that UV treatment is going to

3 benefit the whole district. Because even the

4 cities that were on the shaft that was

5 getting UV treatment, had we not done this,

6 they would have had to take some of that

7 water and push it back up the other shaft.

8 It's more complicated than you want to know.

9 But it was an example of, I think, we

10 saw an opportunity to accelerate the process

11 that would benefit all the communities,

12 benefit all the residents, by making

13 available space in White Plains.

14 ASSEMBLYMAN OTIS: And you are

15 supportive of efforts to try and take down

16 additional barriers for doing shared services

17 where we can find them, or where you have

18 obstacles in the law. I mean, you're doing a

19 good thing. Sometimes it's hard for school

20 districts to work with municipalities, but

21 you found a way to do it.

22 In some other parts of the state,

23 we've heard some municipalities say, well,

24 it's a little harder and maybe just school

447

1 districts don't want to participate for one

2 reason, and different bookkeeping and stuff.

3 But I'd say that's one thing NYCOM is in

4 support of, and I think we would enjoy, if

5 there are little pieces of state law that we

6 should be changing through this process to

7 facilitate more shared services, your

8 partnership would be a great thing.

9 MAYOR ROACH: We're lucky -- I mean,

10 when you're in a city, so your school

11 district has the same boundaries as the city,

12 so it's all the same taxpayers. Where it

13 gets complicated is if you're Lakeland School

14 District, which is in Yorktown, and in

15 Put Valley, and so you have different towns,

16 it gets a little more complicated. I'm sure

17 it can still be achieved.

18 But certainly we would welcome

19 anything that would make it easier to share

20 services. We're definitely always looking

21 for ways to save money and improve service.

22 ASSEMBLYMAN OTIS: And you point out

23 the obstacle in a lot of these is nonmatching

24 jurisdictions and how to fairly account for

448

1 cost savings so that all taxpayers are

2 treated fairly in that situation. So maybe

3 we could come up with some ways to facilitate

4 that, but --

5 MAYOR ROACH: You can even have

6 communities where, by geography, there's a

7 portion of the town or the village or the

8 city that is kind of disconnected from the

9 rest and yet adjacent to a neighboring

10 community that could probably provide the

11 services more easily. And that's the type of

12 thing that you really can't do today. Maybe

13 there's a way to work on that.

14 ASSEMBLYMAN OTIS: Great. Thank you

15 very much. Appreciate it.

16 MAYOR ROACH: Thank you, Assemblyman.

17 CHAIRMAN FARRELL: Thank you.

18 Further questions?

19 Yes. Assemblyman Friend.

20 ASSEMBLYMAN FRIEND: Thank you,

21 Chairman.

22 And thank you for your testimony this

23 afternoon, really appreciate it. I haven't

24 heard about this, and I noticed in your

449

1 testimony the idea that the property tax

2 installment may be another unfunded mandate.

3 Could you elaborate on that?

4 MR. BAYNES: Yes. In the budget there

5 is a proposal that would mandate every local

6 government, including every school district,

7 allow installment payment of property taxes.

8 It doesn't sound that harmful initially, but

9 the way it's structured is basically if a

10 local government doesn't do anything to

11 either opt out or alter the structure of that

12 new installment program, it would allow any

13 adequate delinquent property taxpayer to use

14 a local government school district as a

15 bank -- come in and pay a hundred this week,

16 two weeks later pay 50, and just keep paying

17 it over time. Whereas the general rule with

18 local government property taxes is you have

19 to pay them all or you can't pay anything.

20 So we don't think it was a really

21 well-thought-out proposal. There are already

22 in statute options for local governments to

23 do installment payments of -- to offer

24 installment payments of property taxes.

450

1 Villages have their own provisions. Cities

2 can do it via their charter. Schools, I

3 believe, have the option already.

4 So there are the options and the means

5 to do it. And where it makes sense

6 financially and from an administrative point

7 of view, local governments are doing it. But

8 for the state to mandate it and then put the

9 onus on local governments to opt out of this

10 new, very loose installment payment program

11 we don't think is appropriate. And it really

12 is a mandate.

13 MAYOR ROACH: And we collect on behalf

14 of the school district and on behalf of the

15 county, and in Westchester we guarantee

16 collection to the county as well, the

17 localities. So that might be another wrinkle

18 in there.

19 ASSEMBLYMAN FRIEND: And then also in

20 your testimony here you also point out that

21 you're not allowed to do proportional -- or

22 the different fees, they have to be done

23 proportionally. Also which would also be

24 more complicated and add another layer

451

1 of confusion to the --

2 MR. BAYNES: Yes, with each

3 installment payment you'd have to allocate

4 the payment, the delinquency, among all the

5 jurisdictions you collect on behalf of.

6 ASSEMBLYMAN FRIEND: So instead of

7 streamlining the process, it's just made it

8 more convoluted and put more of a burden on

9 the localities again to have to take the --

10 be proactive and opt out in the first place

11 if they're not doing it.

12 MR. BAYNES: Exactly. Yes.

13 ASSEMBLYMAN FRIEND: Okay. Thank you.

14 CHAIRMAN FARRELL: Questions?

15 Finished?

16 CHAIRWOMAN YOUNG: Finished.

17 CHAIRMAN FARRELL: Thank you very

18 much.

19 MR. BAYNES: Thank you, Chairman.

20 CHAIRMAN FARRELL: Stephen J.

21 Acquario, executive director, New York State

22 Association of Counties, 3:15.

23 MR. ACQUARIO: Senator Young, good

24 evening --

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1 CHAIRMAN FARRELL: Good evening.

2 CHAIRWOMAN YOUNG: Good evening.

3 Welcome.

4 MR. ACQUARIO: Good evening,

5 Assemblyman Farrell, members of the

6 committee, Senators, members of the Assembly.

7 My name is Stephen Acquario, and I'm

8 the executive director of the New York

9 Association of Counties. The association has

10 been in existence for nearly 100 years,

11 serving and representing county interests in

12 the State of New York.

13 It is my pleasure to be with you here

14 this evening to offer some county perspective

15 on a state budget proposed by our chief

16 executive which is presently before you.

17 I will condense my testimony, in the

18 interests of time. And in the testimony

19 that's before you, there's a section that

20 refers to it, where it's "Comments on the

21 Pending 2017/18 State Budget."

22 I'll start by presenting to you some

23 net positive actions for county government

24 submitted by our governor, Andrew Cuomo. The

453

1 first area of positive policy, from our

2 perspective, is the option to use

3 design-build. NYSAC supports the Governor's

4 proposal for granting counties the ability to

5 use design-build contracts. This proposal,

6 in our opinion, makes common sense and can

7 lead to enhanced procurement savings but,

8 more importantly, efficiencies. To maximize

9 this proposal, we strongly encourage you to

10 extended this authority to the City of

11 New York.

12 The second benefit I would like to

13 present to you is to update the state's

14 Internet sales tax collection.

15 Some economists are estimating that

16 e-commerce will reach nearly 10 percent of

17 all retail sales nationwide by the end of

18 2017. The state desperately needs to update

19 its sales tax collection system to keep up

20 with the changes in the retail marketplace.

21 Counties in New York support the Governor's

22 proposal to improve the sales tax collection

23 system. The budget proposal will help

24 streamline sales tax collection practices,

454

1 reduce the burdens on small vendors, and

2 improve compliance.

3 These taxes are already owed under

4 state law, and sales tax is the number-one

5 source of revenue for nearly half of

6 New York's county governments, with more than

7 one-quarter of all local sales tax being

8 shared with other municipalities in the

9 county.

10 These improvements recognize the

11 changing retail marketplace and will provide

12 more stability in sales tax collections for

13 the state and its local governments while

14 enhancing fairness in the overall retail

15 market that supports locally owned and

16 operated New York businesses.

17 The third provision of net positive

18 benefit to New York's counties is under the

19 911 communications section. The Executive

20 Budget proposal includes legislation to

21 extend the 911 public safety surcharge from

22 contracted, which are postpaid, cellphone

23 devices to prepaid devices. Often when you

24 walk into a retail store today, you can no

455

1 longer get a contract cellphone. It is

2 largely prepaid cellphone contracts. Our

3 system simply hasn't kept up -- our laws

4 haven't kept up with the changes in

5 technology.

6 This is absolutely essential to ensure

7 all those who benefit from the e-911 system

8 contribute its appropriate share. The

9 legislation would require sellers to collect

10 a surcharge on the sale of each prepaid

11 wireless communication service or device sold

12 within the state. The market shift from

13 contract plans to prepaid wireless, which is

14 currently not subject to the surcharge, is

15 leading to a steady decline of revenues.

16 The surcharge currently imposed on

17 postpaid wireless service is $1.20 on each

18 device per month. Under Governor Andrew

19 Cuomo's proposal, the surcharge would be

20 extended to the sale of each prepaid service

21 or device at the rate of 60 cents per retail

22 sale that is $30 or less, and $1.20 per

23 retail sale over $30.

24 I'd like to thank Assemblyman John

456

1 McDonald for spearheading this issue in the

2 New York State Assembly during the 2016

3 legislative session. And we are grateful for

4 the Governor to include this proposal in this

5 year's budget.

6 The next benefit I'd like to express

7 our support for is reforms to Early

8 Intervention. Counties strongly support

9 needed reforms to the Early Intervention

10 program. Counties support reforms requiring

11 insurers to pay for benefits covered by the

12 child's health insurance policy, to abide by

13 existing prompt pay requirements, and to

14 increase reimbursement from third-party

15 insurers. These issues have been ongoing for

16 years, and the state's counties and their

17 taxpayers will benefit from these reforms.

18 Counties greatly support the

19 additional $30 million in funding to address

20 the heroin and opioid abuse crisis that

21 plagues our state.

22 I'd like to now turn your attention to

23 cost shifts in the state budget. The

24 Governor's proposed budget calls for a

457

1 reduction of $21.8 million, or a 4.6 percent

2 reduction in community college base aid from

3 the state. With the enrollment growth of the

4 recession and the enrollment decline

5 post-recession, community colleges have

6 basically returned to 2008 enrollment, and

7 state aid levels are forcing us to operate as

8 though we are still in 2008.

9 With respect to free college tuition,

10 we are expressing a concern with the proposal

11 that mainly applies or focuses on state

12 four-year free college tuition. And the

13 impact on counties and community colleges as

14 a consequence of this action could penalize

15 the state's counties and the community

16 college system.

17 With respect to indigent defense, I'd

18 like to commend the State Legislature for

19 taking the bold action in a bipartisan

20 unanimous vote during the 2016 legislative

21 session to begin a multiyear phaseout of the

22 county contribution in funding and

23 administering indigent defense in the State

24 of New York. This is the state's

458

1 constitutional responsibility. You stood up

2 for the people of this state. That

3 legislation was vetoed, and the legislation

4 that's before you is simply inadequate.

5 The Governor's proposed budget

6 provides no new funding for the 52 counties

7 not subject to the Hurrell-Harring

8 settlement. Instead, the budget requires the

9 Office of Indigent Legal Services to submit a

10 plan by the end of 2017 that lays out a

11 strategy for expanding the terms of the state

12 settlement for the rest of the counties

13 across the state. Under this proposal the

14 counties, not the state, must up-front any

15 expansion costs, and the state may reimburse

16 those costs they deem necessary to extend

17 these reforms.

18 It is important to note that this

19 proposed reimbursement model is only

20 applicable to expanded services, and nothing

21 is allocated for the current base cost

22 counties are funding on this program,

23 $380 million annually. We can and should do

24 better.

459

1 Finally, the Governor's budget does

2 not address the recently enacted state-issued

3 eligibility standard guidelines which

4 commence on April 1, 2017. Even if we did

5 nothing this session with reforming indigent

6 defense, the expanded guidelines will blow up

7 our programs all across this state, given the

8 costs necessary to fund these expanded

9 guidelines, which now will cover families

10 below 250 percent of the federal income level

11 for poverty. Some counties have reported

12 that almost every resident in their county

13 will become eligible once this standard is

14 effective.

15 Because of these shortcomings,

16 counties do not support the Governor's

17 indigent defense proposal. We strongly

18 encourage the Legislature to revisit the

19 unanimously passed indigent defense

20 legislation from last year. And if the

21 Governor's proposed expansions stay in the

22 budget, we ask that at the very least you

23 prefund the county costs of any new expansion

24 in services.

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1 With respect to human services cost

2 shifts, under the Foster Care Block Grant the

3 pending budget before you includes some

4 significant cost shifts which we have not

5 seen from this State Legislature or this

6 Governor in years. The Governor is proposing

7 cost shifts from the state to the counties

8 under the Foster Care Block Grant. The state

9 is proposing to lower its current funding

10 percentage from the 54 percent presently to

11 50 percent. When asked why the change, the

12 answer was simply: "We think it should be

13 equal, 50/50." We are opposed to these cost

14 shifts.

15 Under Title XX allocation, the state

16 budget proposes a shift in how counties can

17 use Title XX funding by mandating that

18 $23 million must be used for childcare

19 services. NYSAC also opposed this proposal.

20 With respect to raising the age of

21 criminal responsibility, counties have

22 supported the public policy goals of raising

23 the age of criminal responsibility from 16 to

24 18 for nonviolent offenses, but we have also

461

1 consistently raised concerns about the cost

2 of these actions. And the county district

3 attorneys have also raised concerns about

4 their responsibility with this policy change

5 as well.

6 The Governor's proposed budget again

7 calls for the Raise the Age, but it has been

8 modified from prior years. The Governor's

9 latest proposal no longer provides

10 100 percent state reimbursement of all new

11 costs incurred by the counties to implement

12 this proposal. Therefore, NYSAC cannot

13 support this proposal with the removal of

14 this 100 percent reimbursement guarantee in

15 earlier versions.

16 Two other items of concern. Under

17 public health, counties oppose the

18 Executive's recommendation to consolidate 39

19 public health appropriations into four pools

20 and to reduce the funding for each pool by

21 20 percent. These are the Article 6 public

22 health streams that counties use on behalf of

23 the state.

24 Other items of concern are also

462

1 contained in the budget testimony that you

2 have before you, but I would like to conclude

3 by discussing the shared services referendum

4 proposal.

5 Counties have implemented shared

6 services and governmental efficiency programs

7 for decades, and we will continue to do so.

8 As we highlighted earlier, counties have

9 constrained spending significantly to ensure

10 taxpayers receive effective and efficient

11 service delivery. Governor Cuomo has long

12 crusaded to promote greater intergovernmental

13 partnerships between and amongst the local

14 governments.

15 We support this crusade. In fact,

16 counties submitted $882 million in shared

17 services and government efficiencies plans

18 under the legislation championed by this

19 Governor and approved by this Legislature

20 just a couple of years ago. These

21 initiatives are currently being implemented

22 for county budget years 2017, 2018, and 2019.

23 While we continue to aggressively

24 pursue shared services and improved

463

1 government operations, we do believe that

2 more can always be done and we should never

3 settle for the status quo. To this end, we

4 look forward to working with Governor Cuomo

5 and the State Legislature to identify the

6 appropriate mechanism to foster greater

7 cooperation amongst the local governmental

8 jurisdictions and our school districts.

9 So with that said, I'll stop the

10 prepared testimony. Thank you very much for

11 this opportunity as well.

12 CHAIRMAN FARRELL: Thank you.

13 Questions? Mr. McDonald.

14 ASSEMBLYMAN McDONALD: Thank you,

15 Mr. Chairman.

16 And Steve, it's good to see you once

17 again.

18 MR. ACQUARIO: Thank you.

19 ASSEMBLYMAN McDONALD: I have various

20 questions, so just hang onto the wheel here.

21 I think last year there was, at least

22 from some of the county executives I work

23 with, concerns about a change that we had

24 made in the Legislature about the salary of

464

1 district attorneys, that we increased it and

2 there was no funding to follow it. I think

3 we've had a pretty good track record the last

4 several years of trying not to increase

5 unfunded mandates.

6 Is that still a concern? I know you

7 have hundreds and hundreds of concerns, but

8 is that still a concern of your membership?

9 And what's the value of that?

10 MR. ACQUARIO: There are many concerns

11 from the counties' perspective. But to

12 answer your direct question, it's about a

13 million dollars, just slightly over,

14 $1.6 million. It's not even a rounding

15 error, as has been thrown around recently in

16 this town. But it's a million dollars.

17 It's a matter of principle. Look, for

18 the past 50 years the State of New York, when

19 it has adjusted the salary, which is

20 enforcing the state's Penal Law on behalf of

21 the people of the State of New York -- that's

22 the charge of the district attorney. There's

23 no greater case for when the state mandates a

24 local government salary to go up, that it pay

465

1 for it. And for the past 50 years, you have

2 done that.

3 We don't understand why you have not

4 done that -- but another increase is coming

5 in 2018 as well for the same district

6 attorney salary. So we do ask that the state

7 act now. The Senate has passed this

8 legislation in the past. We hope that the

9 Assembly will follow suit, incorporate it

10 into the terms of the State Budget. While it

11 is nominal in cost, its important is great.

12 ASSEMBLYMAN McDONALD: Let's jump on

13 to the 911 funding. You talked about the

14 move towards prepaid cards, which obviously

15 we all agree with. And obviously there's a

16 reasonableness to what the Governor has

17 proposed in regards to the value of the card

18 and therefore the tax.

19 In regards to the actual revenue

20 that's raised, there's been a lot of

21 discussion in the past about what percentage

22 actually flips over, for lack of a better

23 term, to the counties, particularly for Next

24 Gen 911. What is the position of the

466

1 counties on that one?

2 MR. ACQUARIO: Well, I'd like to call

3 on David Lucas in a minute to help me with

4 some of the numbers. But presently I believe

5 that counties are receiving about

6 $75 million, plus $10 million for the public

7 safety answering points consolidation. But I

8 think that phases out and we're really

9 looking at a $75 million pot presently, under

10 the current collection of the $1.20 by the

11 state.

12 Most of that fund should be coming

13 back to us. I don't know how much is

14 collected in total. Dave?

15 MR. LUCAS: Close to $180 million is

16 collected statewide, and we end up with about

17 $85 million of it.

18 MR. ACQUARIO: Presently.

19 ASSEMBLYMAN McDONALD: So $180 million

20 is collected, $85 million goes back to the

21 counties.

22 MR. LUCAS: And we do support the

23 Governor's current proposal to extend this to

24 prepaid. Because just as in the sales tax

467

1 Internet process, we're losing because the

2 marketplace has shifted and our tax base

3 doesn't keep up.

4 As we read the proposal -- we're

5 double-checking -- it appears that the state

6 is keeping all of the money from the shift to

7 prepaid. They do allow us at the local level

8 to extend our surcharge to the prepaid, but

9 it appears that they're not raising the grant

10 levels that are coming back for 911 services.

11 So the state will ultimately keep even more

12 money than they are currently today. So

13 we're trying to get clarification from the

14 Executive on that.

15 ASSEMBLYMAN McDONALD: I would just

16 make a comment in regards to the college

17 tuition, particularly community colleges.

18 You know, I think everyone likes the

19 concept of free college, although there's a

20 lot of wrinkles that go along with that. But

21 I do philosophically have an issue with the

22 fact that the state hasn't maintained its

23 commitment for a long period of time. We

24 proposed a cut here on the FTE aid, and still

468

1 we're talk about moving off in a different

2 venture. One would argue that if we actually

3 kept up our commitment, maybe we wouldn't be

4 having to have this discussion about free

5 college and our students wouldn't be seeing

6 such exorbitant tuition.

7 And the only other thing I wanted to

8 mention on the shared services initiative, I

9 don't know if I really understood your

10 position. I mean, I understand a position

11 that, hey, we've been doing this, we've been

12 doing shared services for a period of time,

13 we continue to work with our municipal

14 partners -- but I guess the way I see this is

15 being set up is that the chief administrative

16 officer of the county is basically us, and is

17 in charge. And I don't know if I agree with

18 that philosophy.

19 Do your county executives really

20 relish this opportunity to be kind of leading

21 this charge on what could be a little bit of

22 a fractionalized process?

23 MR. ACQUARIO: Well, we welcome the

24 opportunity to work with our local

469

1 governments. We are totally supportive of

2 enhanced shared services. We completely

3 support government efficiencies.

4 The plan that's presently before you

5 is technically flawed and should be rejected.

6 Do county officials see themselves as a

7 convener of this process? They are open to

8 doing that, in partnership with their local

9 governments, in cooperation with their local

10 governments. The need for a referendum of

11 this magnitude, in our estimation, in some

12 instances is a ministerial action. That's an

13 MOU executed between two local government

14 chief elected officials. That's why they're

15 elected. So whether or not there's a need

16 for a referendum to disturb the people with

17 their precious time, I don't know if that's

18 the case yet.

19 ASSEMBLYMAN McDONALD: Thank you.

20 Thank you, Mr. Chairman.

21 CHAIRMAN FARRELL: Further questions?

22 CHAIRWOMAN YOUNG: Thank you very

23 much. Senator Marchione would like to ask

24 some questions.

470

1 SENATOR MARCHIONE: Thank you.

2 First of all, I'd like to say thank

3 you for your concise testimony. To have it

4 broken down the way you did made it very

5 understandable where the counties stand.

6 Although the county executives have never

7 been shy in telling us how much of their

8 budget is because of the mandates that we at

9 this level have sent down to them.

10 I know -- and you didn't discuss it

11 today, but I know you've asked for a state

12 911 board. What do you envision the mission

13 of that board to be?

14 MR. ACQUARIO: I'm very glad that you

15 raised that question. We have discussed this

16 with Assemblyman McDonald in the past about

17 the need, when we were discussing the

18 surcharge. And we believe that the present

19 mechanism that the state distributes the

20 cellular surcharge is contrary to federal

21 intention.

22 Therefore, we believe that there's a

23 better way to distribute the funds from the

24 state that are collected on cellular devices.

471

1 And a way to do that would be to create a

2 state e-911 board, which would be a better

3 mechanism to distribute it to the counties,

4 to retain some for the state operations if

5 they need it for public safety purposes. But

6 the cellular surcharge, by federal law, is

7 supposed to go for e-911 services, and that

8 has not been the case. So we do think a

9 board would help with the distribution of the

10 funding.

11 SENATOR MARCHIONE: Thank you. That's

12 all I have.

13 MR. ACQUARIO: Thank you.

14 CHAIRMAN FARRELL: Thank you. Thank

15 you very much.

16 SENATOR KRUEGER: Do you have

17 questions?

18 CHAIRWOMAN YOUNG: Oh, sorry, we've

19 been joined by John Brooks.

20 SENATOR BROOKS: Hi, I just want to

21 ask a question on the shared services

22 agreement. You've been doing that for an

23 extended period of time, and that's

24 anticipated in the '17 and '18 budgets going

472

1 forward.

2 MR. ACQUARIO: Yes.

3 SENATOR BROOKS: Can you think of any

4 huge area that's been overlooked in that

5 process, or something that the state should

6 help and assist in a consolidation effort?

7 MR. ACQUARIO: I think the ability for

8 the local governments to come together and --

9 retiree health insurance, in health

10 insurance, is -- we are precluded from doing

11 so under Article 47 of the Insurance Law.

12 The amount of capitalization that is

13 required -- the statute was put in place

14 30 years ago. And during its tenure of

15 existence, one county and its municipalities

16 came together, a few years ago in Tompkins

17 County.

18 The present statute is outdated,

19 antiquated. With the new health insurance

20 options that are available, local governments

21 in Western New York, local governments in the

22 Capital District, right here in Schenectady,

23 are interested in working together with their

24 counties in health insurance.

473

1 And the other area is in workers'

2 compensation and the ability to have

3 deductible plans provided so we can have a

4 public-private partnership with the workers'

5 comp carriers and taxpayers to help fund the

6 workers' compensation liability.

7 So workers' compensation and health

8 insurance would be two areas where I think we

9 could use help.

10 SENATOR BROOKS: Thank you.

11 MR. ACQUARIO: Thank you again.

12 CHAIRWOMAN YOUNG: I think we're all

13 set, so thank you for the great testimony.

14 Look forward to working with you.

15 MR. ACQUARIO: Thank you, Senator.

16 CHAIRMAN FARRELL: Thank you.

17 Gerry Geist, executive director,

18 Association of Towns of the State of

19 New York; Bill Moehle, supervisor, Town of

20 Brighton, Monroe County; Ed Theobald,

21 supervisor, Town of Manlius, Onondaga County;

22 and Rebecca Haines, town clerk, Town of

23 Ellery, Chattanooga -- how do you pronounce

24 it?

474

1 CHAIRWOMAN YOUNG: Chautauqua.

2 CHAIRMAN FARRELL: Thank you,

3 Chautauqua.

4 CHAIRWOMAN YOUNG: Chautauqua County.

5 MR. GEIST: Mr. Chairman, Madam

6 Chairwoman, thank you for inviting our

7 association tonight to present our

8 perspective on the Governor's 2017 Executive

9 Budget. My name is Gerry Geist. I'm the

10 executive director of the Association of

11 Towns. And with me to my far left, as you

12 said, is Supervisor Bill Moehle, Town of

13 Brighton, Monroe County. Next to me on my

14 immediate left is Rebecca Haines, town clerk,

15 Town of Ellery, Chautauqua County. And on my

16 right, Ed Theobald, supervisor, Town of

17 Manlius, Onondaga County.

18 We want to express our sincere

19 gratitude to the State Legislature for the

20 monies towns received through the PAVE NY and

21 BRIDGE NY programs. We especially are

22 grateful for your continued support for

23 infrastructure improvements and looking at

24 clean water and our aging water system.

475

1 I would like to strongly urge you to

2 increase AIM funding and to increase CHIPS.

3 Particularly with AIM, we have not had an

4 increase in eight years, and now we are faced

5 with its elimination.

6 Rather than commenting on the budget

7 in detail, which we did in our written

8 remarks, I want to focus on the importance of

9 town government and the efficiency with which

10 towns provide services and manage their

11 affairs. I have three elected town officials

12 with me who will give you specific examples

13 of just that.

14 But before I turn the microphone over

15 to them, I want to comment on the way towns

16 have been unfairly and incorrectly singled

17 out as a major factor in rising property

18 taxes.

19 The Governor's repeated misstatements

20 and characterizations that towns cause high

21 property taxes are unfair and inaccurate.

22 The fact of the matter is towns constitute

23 only 11 percent of the property tax levy.

24 Furthermore, the Governor's proposal

476

1 to make AIM funding contingent on

2 consolidation and shared services is not only

3 an affront to towns, but is also an attempt

4 to usurp authority from the State

5 Legislature. Introducing a plan that ties

6 AIM funding to a voter referendum on shared

7 services creates a lacuna which ensnares

8 everyone.

9 This stark and unrealistic approach

10 fosters a miasmic feeling among many

11 New Yorkers, especially when the record is

12 clear: Towns are great stewards of the

13 public tax dollars, and sharing services is

14 what we do best and we'll continue to do so.

15 If the Governor's plan is adopted, the

16 partnership between local government and the

17 state will be irreparably harmed. However, I

18 think we can work together to come up with a

19 better solution. For example, creating

20 incentive programs that reward municipalities

21 for adopting true savings and other

22 efficiencies with getting additional funding

23 would better serve everyone in this great

24 state.

477

1 Working together requires everyone

2 involved to understand the role that towns

3 play in the fabric of New York. I am asking

4 the Governor and the members of the State

5 Legislature to join me in visiting our towns

6 and their officials. Let's learn firsthand

7 how we've been doing shared service programs

8 and saving taxpayer dollars.

9 And with that, I'd like to turn it

10 over to our people who are on the ground, our

11 elected officials, to share some of their

12 thoughts.

13 First, Town Clerk Rebecca Haines.

14 TOWN CLERK HAINES: Thank you, Gerry.

15 First off, I would like to say thank

16 you so much for your time and your attention.

17 You're fellow elected officials in the State

18 of New York, and I know how hard you work. I

19 know my own Senator, my own Assemblyman, are

20 examples of the time you put in, and I can't

21 even imagine being in your shoes.

22 So with that, I would say my name is

23 Rebecca Haines and I am the town clerk and

24 tax collector for the Town of Ellery, and

478

1 that's in Chautauqua County. I also serve as

2 the fourth vice president for our Association

3 of Towns.

4 Now, approximately two weeks ago the

5 Governor introduced the Countywide Shared

6 Services Property Tax Savings Plan as part of

7 his 2017-2018 Executive Budget proposal,

8 which among other things requires each county

9 to develop a property tax savings plan for

10 shared and efficient services among local

11 governments within the county.

12 And I know we all can agree that this

13 is a great idea. We're all for saving money

14 and sharing, and I think you'd be

15 hard-pressed to find a locality that wouldn't

16 agree with that. But the Governor's

17 suggestion that a county plan is needed to

18 solve the real property tax problem, that the

19 work that I do with the residents of the town

20 can be done at a county level, is just not

21 so.

22 Towns are already streamlined and

23 efficient. My office is a perfect example.

24 I'm not only the town clerk, I'm the tax

479

1 collector. I'm very busy this time of year,

2 as I'm sure all of you who come from local

3 government know -- but some things are

4 important enough to call me away from my

5 office, and this is one of them.

6 I am -- under default, the town clerk

7 is the tax collector in many areas, but in

8 fact in some areas it's not. But really,

9 65 percent of town clerks collect taxes. And

10 many also collect school taxes.

11 When it comes to my residents, I'm a

12 clearinghouse. I'm there for my residents.

13 If they need me, they call me. They have my

14 home phone number. They know where to reach

15 me. I'm a member of my community. I make

16 every effort to meet with them if I can't be

17 in the office for some reason. And at this

18 time of year, there's only one thing that

19 would call me out of my office, and that

20 would be to come over here.

21 When it comes to tax savings at our

22 level, that's not what we need. We need tax

23 relief from higher up. The governments at

24 our level are efficient, and they're working

480

1 together. Let's be frank. The towns are not

2 the problem. The real drivers behind high

3 property taxes in New York are cuts to aid to

4 municipalities, real property tax exemptions,

5 and state and federal policies that are

6 required to be implemented and financed at

7 the local level.

8 Now, to illustrate, my own town tax

9 bill. I have a number of properties; I chose

10 one of them. My town tax bill, including a

11 fire district tax, is only 10 percent of my

12 overall tax bill. So you can see that my

13 town tax is not an issue for me. And it's

14 not for most people.

15 A major contributing factor to higher

16 property taxes is the number of exempt

17 properties in the state, the value of which

18 is astounding. As highlighted in the recent

19 Gannett News series, 31 percent of New York's

20 land value is tax-exempt. I couldn't believe

21 that number. To me, that's just incredible.

22 This takes $866 billion off the tax

23 rolls. And I said it correctly, billion with

24 a B. That's huge. In less than 20 years,

481

1 religious exemptions have nearly doubled,

2 from $14 billion in 1999 to $26 billion in

3 2015.

4 Even though tax-exempt properties do

5 not pay taxes, they still receive services.

6 And if they're not paying for those services,

7 it falls to Joe and Jane Taxpayer, it falls

8 to all of us in this room to pay for that.

9 As a result of the number of exempt

10 properties throughout the state, local

11 governments are forced to shift the tax

12 burden. We recognize that some exemptions

13 are constitutionally derived, but the courts

14 have expanded those ideals to the detriment

15 of homeowners, small businesses, and farmers.

16 We know you have looked into this in the

17 past, and we would like to work with you to

18 address this and begin to solve the real

19 property tax problem in the state.

20 And as far as my testimony goes, that

21 sounds kind of negative, and I don't mean it

22 as such. I just want to highlight some of

23 our issues at our local level.

24 But one thing that I have to say is

482

1 that I am totally in favor of the Part F of

2 the revenue Article 7 legislation authorizing

3 partial payments of taxes. My area has a lot

4 of senior citizens and quite a few low-income

5 people, and they could really use this

6 relief. It would be great for them. I know

7 it has to be tweaked in different areas, but

8 I think listening to town residents and

9 people countywide, at least over in

10 Chautauqua County, they would welcome this

11 because they could pay their taxes in partial

12 payments and we could add a surcharge. We

13 could also, at a local level, limit the

14 number of payments. And it would all work

15 together to help us help our residents, and

16 everybody would benefit from that.

17 So in closing, I would like to say

18 thank you very much for your time. I

19 appreciate it very much, and it's a pleasure

20 to be here.

21 CHAIRWOMAN YOUNG: Thank you.

22 MR. GEIST: Supervisor Theobald.

23 SUPERVISOR THEOBALD: Yes. Good

24 evening. And yes it is, it is evening.

483

1 First I would like to thank the Senate

2 Finance Committee, Madam Chair; Assembly Ways

3 and Means Committee, Chairman Farrell; and

4 distinguished legislators for giving me the

5 opportunity to speak with you today on behalf

6 of the Association of Towns.

7 As Executive Director Geist stated, I

8 am town supervisor for the Town of Manlius,

9 and we are the third largest town by

10 population in Onondaga County, out of 19

11 towns. We have around 32,000 residents, with

12 which we have three villages: Minoa, not to

13 be confused with Mineola, we have

14 Fayetteville and Manlius. We also have two

15 school districts and one town police

16 department -- which, by the way, was

17 consolidated with the three villages and town

18 in 1985, under then Town Supervisor Richard

19 Lowenberg.

20 My concerns, which I would like to

21 address today, is Part 4 of the budget named

22 Countywide Shared Services Property Tax

23 Savings Plan, which I believe the title is a

24 misnomer. There's no real proof that this

484

1 directive will give any tax savings to our

2 residents the way it is structured.

3 As opposed to this top-down approach,

4 I recommend that we continue our bottom-up

5 approach which we have been providing to our

6 residents -- tax savings consolidation proven

7 over many years, such as the townwide police

8 consolidation I mentioned earlier.

9 We also work closely with the

10 sheriff's department in the county. The

11 sheriff was at one time the DeWitt chief of

12 police, a neighboring municipality. His

13 undersheriff we work closely with was a

14 captain on our police department. When he

15 retired, he became one of our board members,

16 and now he's undersheriff with the county.

17 We have a very good working

18 relationship with him and our police chief,

19 Marlowe, and they've been working together

20 for shared services in such things as special

21 forces and other things we're looking into.

22 Six years ago, we successfully

23 renegotiated a snowplow contract between

24 Onondaga County and the towns, working

485

1 closely with our county legislators and

2 county executive's office, and which is

3 coming up for renewal this year.

4 Five years ago, with the combined

5 efforts between our four fire departments --

6 there are three protection districts and one

7 district -- we successfully implemented an

8 organizational consolidation program where

9 they would work together, in cooperation with

10 the fire chiefs, with joint purchasing, a

11 shared equipment program, and training for

12 firefighters, just to name a few.

13 A few weeks ago, when we had a major

14 snowstorm, I happened to look out my window

15 in Minoa, and a town snowplow went flying by.

16 So I asked our highway superintendent, "What

17 was that all about?" And he says, "Oh, yeah,

18 their DPW supervisor, Tom, called me because

19 one of their plows broke down, so they needed

20 one. We loaned them ours for the day."

21 Now, try not to be shocked when I

22 mention this. Do they stay stop the presses

23 anymore? I don't even know if that's

24 popular. But just reaching out to our

486

1 neighboring municipality to help, there

2 was -- there was -- where am I here? Sorry.

3 Reaching out to our neighboring municipality

4 for help, I cannot imagine this type of

5 process in helping -- there were no lawyers

6 involved, no contracts involved, and this

7 was -- I can't imagine the county doing this

8 as efficiently as we did with the highway

9 department or any DPW, for that matter.

10 To wrap this up, I just wanted to

11 mention the Town of Manlius's fiscal

12 concerns. There really aren't any. We,

13 along with all of the other 18 towns in the

14 county, have the lowest ratings with the New

15 York State Comptroller's fiscal stress

16 monitoring system. Our town's average growth

17 in tax rate has been under 2 percent for the

18 last 15 years, and in fact in the last two

19 years we've actually reduced our tax rate.

20 And this with the unfunded mandates that we

21 have to deal with each budget year.

22 We were also under the 2 percent tax

23 cap -- again, a misnomer, as we all know --

24 which was actually 0.68 percent last year.

487

1 And in 2016, our budget was also under the

2 tax cap but, due to the infrastructure work

3 in one of our drainage districts, that put us

4 over the top. Again, that's why I think we

5 should look at major infrastructure work like

6 school districts do; they should not be

7 included in the Governor's current tax

8 program.

9 So I really think that Albany needs to

10 get, you know, their house in order before

11 they continue to control towns' and villages'

12 fiscal responsibilities by forcing

13 consolidation programs with the county.

14 Thank you.

15 MR. GEIST: Supervisor Moehle, to wrap

16 this up.

17 SUPERVISOR MOEHLE: Thank you.

18 Good evening. Thank you, Chairman

19 Farrell, Chairwoman Young, all of the

20 Assemblymembers and Senators that are here.

21 Thanks for sticking it out. I know it's been

22 a long day.

23 I'm Bill Moehle. I'm the supervisor

24 of the Town of Brighton in Monroe County.

488

1 Brighton is a suburb of Rochester which has a

2 population of about 37,000. I will take

3 Assemblymember Otis's advice and cheerlead a

4 little bit for my town as well. That

5 population of 37,000 grows to about 100,000

6 every day, or at least every weekday. We are

7 the home of Monroe Community College, and we

8 are increasingly, as the University of

9 Rochester expands, the home of more and more

10 of the university. Between those two

11 institutions, there are over 30,000 students,

12 and those are two of the very largest

13 employers in Monroe County.

14 Brighton is a thriving and a diverse

15 community. But we're an inner-ring suburb,

16 and we have an infrastructure that in many

17 cases dates back to the 19th century. And we

18 also have residents that expect a high level

19 of government services, as I think all of our

20 constituents do. We certainly appreciate the

21 support and the assistance that we've

22 received from the state over the years in

23 providing that level of service.

24 I applaud the Governor for his goal of

489

1 ensuring that local governments operate in an

2 efficient manner. I think everyone in local

3 government, and frankly in state government,

4 believe that's their goal every day when we

5 go into work. However, because local

6 government truly is the government that is

7 closest to the people, it is also the

8 government that is most responsive to local

9 needs.

10 In Brighton, at least, we look every

11 day for ways to provide services more

12 efficiently. And by using state-authorized

13 special improvement districts, we're doing so

14 in a way that ensures that only those

15 residents that receive certain governmental

16 services are being charged for those

17 services.

18 Now, we've all heard about the

19 10,000-plus local governments. Mr. Baynes

20 and NYCOM debunked that notion earlier. But

21 by that count, Brighton would have 121 local

22 governments in addition to the Town of

23 Brighton itself. But I want to put a face to

24 those local governments, because we are

490

1 using -- as I mentioned before, we are

2 using -- those are special improvement

3 districts, and we are using them to provide

4 services efficiently. But again, to make

5 sure that only the people that receive

6 services are paying for them.

7 Our 121 districts include 53 refuse

8 districts, 26 street lighting districts,

9 18 sidewalk snow-removal districts, seven

10 sidewalk districts, four pure water

11 districts, four sewer districts, two park

12 districts, two neighborhood improvement

13 districts -- a creature unique to the town of

14 Brighton -- and a business improvement

15 district, an ambulance district, and a fire

16 protection district.

17 Now, that sounds like a lot, but the

18 reality -- and it is, but the reality is

19 those are not separate governmental entities.

20 None of those entities have their own

21 separate administrative staff. They're all

22 engaged in providing services traditionally

23 provided by local government. But again,

24 because we use special improvement districts

491

1 to provide those services, they're being paid

2 for by the people that receive them -- in

3 some cases townwide, but in most cases by a

4 very much smaller portion of the population.

5 And in fact I believe that the

6 formation and the existence of those special

7 improvement districts is actually the purest

8 form of grassroots democracy. Nearly all of

9 those districts have been formed under

10 Article 12 of the Town Law of the State of

11 New York, which allows residents of the town

12 to petition their town board to establish a

13 district. The petition must be notarized,

14 must be signed by property owners owning at

15 least 50 percent of the assessed value of

16 property in the proposed district, and

17 50 percent of the resident owners.

18 I see Senator Marchione smiling.

19 You've lived that, I know, in your term, and

20 there may be others of you.

21 But before that district can be

22 formed, we must also hold a public hearing to

23 give residents, not just those who live in

24 the district, but any resident the

492

1 opportunity to weigh in.

2 But these are community residents,

3 neighborhood residents that have come to us

4 and said "Please, tax us."

5 (Laughter.)

6 SUPERVISOR MOEHLE: And I know that's

7 hard to believe. "Please, provide this

8 service. I want you to charge me for that

9 service."

10 And why do they do that? Because

11 they're coming to us asking us to provide a

12 service that frankly they can't easily

13 provide for themselves.

14 I talked about 53 refuse districts a

15 moment ago. Well, let me explain how that

16 came to be and what that means for us. Those

17 53 refuse districts have nearly 4,000

18 homeowners belonging to them. Each one of

19 those homeowners is paying a district charge,

20 to have their refuse picked up for a year, of

21 just over $200 a year. Why do we have so

22 many of them? They've been formed over time,

23 over many years, long -- I've been supervisor

24 for five years, so for many years before I

493

1 became supervisor.

2 But neighborhoods have come to us

3 asking for those refuse districts, as many as

4 400 in a neighborhood and one as small as

5 seven. We've kept those individual

6 neighborhood districts that have been

7 petitioned for. We've not consolidated them,

8 frankly so that smaller refuse haulers that

9 may not be able to serve the entire town

10 would still feel they can bid and keep the

11 bidding competitive.

12 Now, currently Waste Management does

13 have the contract for the entire -- for all

14 of those districts, all 53 districts. At

15 just over $200 a year, that's a savings per

16 property owner of $150 over the rack rate, if

17 you will, the Waste Management list price for

18 individual homeowners that don't live in a

19 district that get on the phone, call Waste

20 Management, "How much would it cost to

21 provide the service?"

22 Four thousand homes, $150 a year

23 savings, $600,000 a year that the Town of

24 Brighton is saving our taxpayers, our

494

1 property owners, just by using these refuse

2 districts.

3 And I would note that every time our

4 residents come to us asking us to form

5 another refuse district -- and they continue

6 to do that -- we spread the word. Other

7 types of districts, sidewalk snow-removal

8 districts, 25 bucks a year. A lot cheaper

9 than getting the high school student down the

10 street to shovel your walk, if they remember

11 to show up.

12 But we still encourage residents to

13 form these districts, even though every time

14 we do, it counts against our tax cap. So at

15 some level you could say it's against our

16 interest. Well, that's not why we're in

17 office. We're there to serve our residents.

18 We're saving them money.

19 I do want to touch on one other

20 example. And again, I'll thank

21 Assemblymember Otis, because you asked about

22 other types of cooperation. And in Brighton

23 and in Monroe County, one of the ways we've

24 been operating cooperatively for many years,

495

1 long before the more recent talk about

2 consolidating services -- and we may be the

3 exception. I know we're the exception. Not

4 a lot of counties do this. But Brighton and

5 the other towns in Monroe County plow state

6 highways in Monroe County, county highways in

7 Monroe County. We have intermunicipal

8 agreements. In Brighton we plow 41 lane

9 miles of state highway, many more lane miles

10 of county highway.

11 The Governor has suggested that not

12 every town needs a $300,000 truck. I will

13 say that we bought those trucks for a lot

14 less than $300,000. But we do need them.

15 And not only do we use them on our streets,

16 but when we're driving down those county

17 highways, those state highways on our way to

18 our neighborhood, it would be inefficient to

19 raise the plow. We plow those streets. We

20 keep them clean. And we save the state

21 having to buy those snowplows of their own.

22 That's just one example of how we are

23 working in Monroe County and in the Town of

24 Brighton to operate efficiently and I believe

496

1 effectively. I appreciate your taking the

2 time to listen to us. And again, thank you

3 for your support over the years.

4 CHAIRMAN FARRELL: Thank you.

5 Senator?

6 CHAIRWOMAN YOUNG: I want to thank

7 everyone for your testimony today. And it's

8 great to hear from people on the front lines.

9 And I especially want to thank Rebecca

10 Haines, who is the great town clerk in the

11 Town of Ellery. And she gets the prize,

12 because I do believe she is the person who

13 came from the furthest away to testify during

14 the entire day of hearings. So I want to

15 thank you for that. And I want to thank you

16 for your commitment to the taxpayers and to

17 the community. And I want you to give my

18 regards, please, to Supervisor Johnson and

19 all of the town board and everybody back

20 home.

21 You know, it's very interesting to

22 hear people talk about shared services,

23 consolidations, and that sort of thing. And

24 I think what we know is that, upstate

497

1 especially, those efforts have been ongoing

2 for many, many years. And it's been out of

3 necessity.

4 I represent, as Rebecca knows, a lot

5 of smaller towns, very rural towns, and they

6 do not have large tax bases. So the point

7 about not having enough equipment maybe to do

8 a road project, these towns have gotten

9 together over the years to be able to get the

10 job done, work together efficiently. And I

11 know that they meet on a regular basis too,

12 also to find out creative ways that we can

13 address this issue.

14 So I appreciate, you know, some of our

15 suburban towns too coming today too, because

16 you've been doing the same sorts of things.

17 And I think what we've got to focus on, as

18 Rebecca I believe brought up, is more of a

19 carrot rather than a stick incentive for

20 localities to be able to come up with even

21 more creative ways to save the taxpayers

22 money. Because I think that's what it's all

23 about, obviously, is that we want to save the

24 taxpayers money. We want to be efficient.

498

1 We want to be lean and mean. But at the same

2 time, we need to be able to deliver those

3 services on the local level in the best

4 manner possible.

5 So if people have ideas, and we've

6 talked about these, about further things we

7 can do to incentivize localities to be able

8 to achieve this, I think we should.

9 You know, I think it's -- we don't

10 have a lot of dissolutions. But I will tell

11 you that in Chautauqua County right now, in

12 four days there will be a vote in Cherry

13 Creek, New York, as to whether to dissolve

14 the village there. And it will go to the

15 voters, which is appropriate. But I can

16 think of many different localities over the

17 years -- East Randolph, for example,

18 others -- that have decided it made sense not

19 to continue operating, it made sense to the

20 local community not to continue with another

21 layer of government. And so the people

22 decided.

23 And I think really that's what this

24 should be about, is letting the people decide

499

1 what's best for their communities, what

2 works, and how we can continue to deliver the

3 best services possible.

4 So I would encourage all of you, and

5 the association especially, to continue to

6 stay in touch with the Legislature. And if

7 you have ideas, especially as we go through

8 this budget process, to come up with new ways

9 that we should look at saving taxpayer money

10 but at the same time maintaining services,

11 please, please, please let us know.

12 MR. GEIST: Thank you, Senator.

13 SUPERVISOR MOEHLE: Thank you.

14 SUPERVISOR THEOBALD: Thank you.

15 TOWN CLERK HAINES: We appreciate it.

16 CHAIRWOMAN YOUNG: I think Senator

17 Marchione has a question.

18 SENATOR MARCHIONE: Thank you,

19 Senator.

20 I don't have a question, I just want

21 to say thank you. You know, listening to

22 both of the town supervisors, and the town

23 clerk, because I was both at one point -- at

24 different times, of course -- but it just

500

1 brings back such memories on how towns work

2 and how efficient they try to be and the

3 cost-saving measures that they implement.

4 And when asked about the Governor's

5 proposal, my first reaction was they've been

6 sharing services for years. And it's a

7 handshake, and you bring the equipment over,

8 and you're helping the fire company. You

9 just -- everybody works together. And you

10 are the government closest to the people, I

11 think with the most scrutiny on everything

12 that you do, and you work diligently, both at

13 home and at the office.

14 I just want to say thank you, and we

15 are here to assist you in any way that we

16 can.

17 MR. GEIST: Thank you, Senator.

18 SUPERVISOR THEOBALD: Thank you.

19 TOWN CLERK HAINES: We appreciate it.

20 CHAIRMAN FARRELL: Thank you. Yes?

21 ASSEMBLYMAN OTIS: I just want to

22 announce that John McDonald and I are sharing

23 services with questions. We've been doing

24 this, it's more efficient for everybody.

501

1 (Laughter.)

2 ASSEMBLYMAN OTIS: But I want to thank

3 all four of you for the texture that you've

4 given, each of you in your testimony, to how

5 the shared-service activities are going on

6 just on an ongoing basis, on a long-term

7 basis, and on an evolving basis as different

8 things occur.

9 Bill, a question for you about the

10 plowing. So are the county and the state

11 reimbursing you for any of that?

12 SUPERVISOR MOEHLE: Oh, yes.

13 (Laughter.)

14 ASSEMBLYMAN OTIS: Okay, glad to hear

15 it.

16 SUPERVISOR MOEHLE: It's an

17 interesting -- it's a formula that takes into

18 account even factors -- topography, and those

19 parts of the county that are closer to the

20 lake that receive more snow.

21 So it's a formula that we have worked

22 out for many, many years. And it's a classic

23 example. And it's a long range, but at the

24 same time we also have much more informal

502

1 lending agreements, as have been talked

2 about, where the different departments share

3 equipment back and forth. And most recently,

4 someone talked about a fire earlier. The

5 Town of Irondequoit just had a fire, but it

6 was a fire in their own highway barn. And

7 the towns, Brighton included, stepped up and

8 offered equipment to the Town of Irondequoit

9 to be able to continue plowing their streets.

10 But yes, it's a good working

11 relationship with the state and the county,

12 and it truly makes all the sense in the

13 world. And by the way, we have a similar

14 arrangement -- one of our main streets starts

15 in the Town of Brighton, then goes to the

16 Town of Pittsford for about a mile, and then

17 returns to the Town of Brighton. It would

18 obviously make no sense for Pittsford to take

19 their truck to the middle, so on a much

20 smaller basis, we do the same thing with the

21 Town of Pittsford -- plow that mile, and they

22 reimburse us as well.

23 ASSEMBLYMAN OTIS: I'm most impressed

24 that there's a lake effect factor in the

503

1 reimbursement formula. That's very

2 important.

3 So thank you, Mr. Chairman, and thank

4 all of you.

5 CHAIRWOMAN YOUNG: Thank you.

6 CHAIRMAN FARRELL: Thank you.

7 SPEAKERS: Thank you very much.

8 CHAIRWOMAN YOUNG: Oh, Senator Krueger

9 has a question.

10 SENATOR KRUEGER: I'm sorry. I do

11 appreciate everyone's time and testimony.

12 So I'm a big-city girl, from New York

13 City. So you finally gave me an

14 understanding of why all these special

15 districts. But I still want to test out one

16 theory with you.

17 Economy of scale. Couldn't you get

18 the better deal even if you just had one

19 negotiating entity to deal with the garbage

20 haulers?

21 SUPERVISOR MOEHLE: Perhaps. And

22 Senator, thank you, because you -- I recall

23 last year when we were here, you were most

24 engaged with us. And having lived in

504

1 Manhattan going to law school myself, towns

2 were not necessarily on my mind when I was

3 there, so I appreciate that.

4 It's something we've discussed. But

5 we did -- there are a number of local

6 family-owned, women-owned, independent refuse

7 haulers in the Rochester area. And our

8 concern has always been that those smaller

9 haulers might not have the scale to be able

10 to bid on the whole town, but they might be

11 willing to bid on the districts in the

12 eastern part of town, for example.

13 It is something we've discussed. We

14 might change to a -- you know, although it's

15 sort of a quadrant type. But over time they

16 truly have formed as individual

17 neighborhoods. They hear about the savings.

18 And of course we would have to go

19 through the state law consolidation process

20 to reduce the number of districts. So there

21 would certainly be time and effort engaged in

22 reducing them.

23 So it's been a, you know, comme ci,

24 comme Áa.

505

1 SENATOR KRUEGER: And how many staff

2 are there per district? Is there a way to --

3 SUPERVISOR MOEHLE: Oh, there's no

4 staff.

5 SENATOR KRUEGER: No staff.

6 SUPERVISOR MOEHLE: The

7 administration -- you know, the district, all

8 of the work -- I shouldn't -- no

9 administrative staff. I mean, obviously we

10 have drivers of the sidewalk snowplows that

11 are plowing not only our arterial streets,

12 which are paid by all of our taxpayers, but

13 our individual neighborhood.

14 But our -- the administrative staff

15 who gets on the phone and, you know, jangles

16 Waste Management if they fail to pick up a

17 house, or the sidewalk contractor if they

18 haven't fixed up -- those are existing Public

19 Works Department staff.

20 SENATOR KRUEGER: All right. Thanks.

21 MR. GEIST: Senator, thank you for

22 your continuing interest in these areas. I

23 just want to give you a quick little story

24 about shared services which has an

506

1 interesting story.

2 I was a town councilman in North

3 Castle, Westchester County, for 24 years.

4 And one of the things that I took great pride

5 in, we have volunteer fire departments, and a

6 group of citizens came to us and said, "We

7 want advanced life support." Well, our

8 current volunteer firefighters couldn't do

9 it. And we got a proposal to do that service

10 in our town; very prohibitive.

11 So we went and talked to our six

12 neighboring town supervisors, and we sat down

13 with them and said, "What if we do this

14 together with the local hospital?" We came

15 up with a plan that was 80 percent less from

16 the one plan if we did it ourselves.

17 And so we thought it was a great

18 benefit for our residents. And you know what

19 we had to do in order to do this? We had to

20 create a district, an ambulance advanced life

21 support district.

22 So to us, it's not just about programs

23 that save taxpayer dollars, it's also

24 providing services and sharing the cost so

507

1 your residents get a quality service at a

2 reduced rate. And sometimes you have to

3 create these districts to achieve those goals

4 under state law. And once again, it didn't

5 have any administrative staff, as Supervisor

6 Moehle pointed out.

7 We feel towns could be very creative

8 just like that, and just as the supervisors

9 and the town clerk have mentioned, in coming

10 up with strategies that really benefit the

11 residents and taxpayers of the State of

12 New York. And we believe our story just

13 hasn't been heard, and so it could be told

14 better and understood. But we believe we

15 really do a great job.

16 SENATOR KRUEGER: Thank you all very

17 much.

18 MR. GEIST: Thank you.

19 CHAIRMAN FARRELL: Thank you.

20 CHAIRWOMAN YOUNG: Thank you. Safe

21 travels.

22 CHAIRMAN FARRELL: League of Women

23 Voters, Barbara Bartoletti, legislative

24 director.

508

1 MS. BARTOLETTI: They're a hard group

2 to follow. Very well done.

3 Good evening. My name is Barbara

4 Bartoletti, and I am legislative director for

5 the New York State League of Women Voters.

6 I'm here tonight to talk to you about

7 an issue that I have been talking to you

8 about now for probably -- except for Senator

9 Brooks, and welcome, and the fiscal

10 committees -- for probably three decades.

11 The hour is very late, and you've all heard

12 me do this before. I will go over just a few

13 highlights. I'm going to be talking

14 specifically about the Article 7 bills

15 proposed in the Governor's budget on ethics.

16 I do want to just make you all aware

17 that the League would prefer that the

18 language was not, on this issue and several

19 others, was not in Article 7 bills in the

20 budget. We'd prefer that these issues be

21 taken up standing alone, in front of the

22 Legislature. And we do understand that

23 the -- both houses have addressed this in

24 some ways. The Assembly has passed many of

509

1 these measures. We do look perhaps to have

2 the Senate address them in the near future.

3 But I will highlight just a few of these

4 issues.

5 For your benefit, Senator, I will tell

6 you that the League is a multi-issue,

7 nonpartisan but political organization. We

8 have 51 leagues across New York State. And

9 if you have participated at your local level,

10 you have probably impacted our local leagues

11 in your area.

12 The first issue I'm going to just

13 highlight is that of outside income. We have

14 long urged that all outside income of state

15 legislators be subject to strict disclosure

16 requirements. All clients and services

17 should be disclosed if the matter involves

18 business before the state, whether or not the

19 legislator personally performed the services

20 or referred the client.

21 The League also now, we do have member

22 agreement and a new position dealing with and

23 supporting a percentage limit on outside

24 income, much like some of our other

510

1 good-government groups as well as how

2 Congress does address this issue.

3 We also have supported financial

4 disclosure, which is in the Article 7 bill,

5 disclosures for local elected officials.

6 Ensuring transparency at all levels of

7 government is, as you all know, crucial to

8 restoring the public's trust in its

9 government. Without strong safeguards to

10 limit the influence of money in the political

11 process, voter turnout -- something of course

12 that we care passionately about -- voter

13 turnout is diminished and the representative

14 character of our democracy is undermined.

15 The League supports this proposal but

16 also urges the Legislature to consider adding

17 strengthening procedures to JCOPE, the Joint

18 Commission on Ethics.

19 The other issue, of course, you've all

20 heard from me for a very, very long time is

21 the issue of campaign finance. Primarily one

22 of the things we've certainly worked hard to

23 accomplish is closure of the LLC loophole,

24 making it subject to existing contribution

511

1 limits for corporations and publicly

2 attributing these contributions back to their

3 source.

4 This one measure is an important step

5 toward reducing the influence of money in

6 politics in our state. We have long

7 supported stricter limits on contributions

8 to, and the use of, and in fact have called

9 for, over several decades, the banning of

10 what we consider housekeeping accounts.

11 You've all heard that from me also.

12 We consider that this housekeeping

13 account has been misused from its original

14 usage, and we hope that this can be

15 accomplished in the very near future.

16 Contribution limits. We've been

17 saying for a very long time that contribution

18 limits need to be lowered. Of all the

19 37 states in this nation that have

20 contribution limits, ours are by far the

21 highest.

22 The Governor's proposal of $25,000 in

23 housekeeping accounts we think is too high.

24 We, as I said, would prefer to ban it, but we

512

1 certainly would consider more reasonable

2 limits. But 25,000 is still too high.

3 We have advocated for public financing

4 of elections for a very, very long time. We

5 did -- as you know, the Governor a couple of

6 budgets ago -- I've been here for so long, it

7 may have even been last session, but I think

8 it was the session before -- where he did put

9 public financing in the budget. However, it

10 was for the single position of Comptroller.

11 And the Comptroller said, No, thank you,

12 which we supported, because we want it for

13 all elected officials. And it never, as you

14 know, did come to fruition at all.

15 We have recently gotten into,

16 following the latest scandal that has

17 happened here in New York, gotten into the

18 area of procurement, the bid rigging scandal

19 that all of you are very familiar with. We

20 do think that -- unlike the Governor -- the

21 auditing power should be returned to the

22 State Comptroller. That is where it belongs

23 and where it was for considerable time. We

24 think it would enhance the independent

513

1 oversight that is needed in that issue.

2 We support reforms that would

3 strengthen the Freedom of Information Law and

4 would help citizens have greater access to

5 pertinent government documents. While we

6 think the Governor's proposal is perhaps a

7 first step, it fails to include the

8 Governor's office and does not address other

9 barriers citizens face when they seek

10 information from our government. So if

11 you're going to include the legislative

12 branch, please do include the executive

13 branch.

14 I think the last thing I will just

15 make mention of is as all of you, I'm sure,

16 are aware, this is the year when we will all

17 vote in November on a constitutional

18 convention. In the 2016-2017 budget, the

19 Governor did put $1 million into the budget

20 for a constitutional convention commission.

21 He has failed to do so in this budget. We

22 have not actually -- we do intend to ask him

23 why. Because I go back to not only the 1997

24 convention, but back to Mario Cuomo, Governor

514

1 Cuomo's time, when he actually put forward

2 proposals dealing with the issues, a

3 commission dealing with specific issues that

4 might be addressed in a constitutional

5 convention.

6 Given the environment we currently

7 find ourselves in, we think it would be

8 remiss if we did not bring to your attention

9 the fact that we do need to have a

10 constitutional convention commission that

11 will set forward areas that it is felt need

12 to be addressed, whether it's -- we really

13 don't think the whole State Constitution

14 needs to be reopened. We would like to see

15 particular pillars, which is I think the word

16 that former Governor Mario Cuomo used.

17 But certainly we need to see enough

18 money to do education around that

19 constitutional convention question. And we

20 do think that there should be a preconvention

21 commission that would look at some of the

22 issues that might need to be looked at within

23 the Constitution.

24 So with that, it's a very late hour, I

515

1 would thank you for your attention. I know

2 this issue is an issue we've all talked about

3 for a very long time, but again I thank you

4 for listening to us yet one more time.

5 Thank you.

6 CHAIRWOMAN YOUNG: Thank you.

7 CHAIRMAN FARRELL: Thank you.

8 Any questions? Mr. McDonald.

9 ASSEMBLYMAN McDONALD: Barbara, thank

10 you, as always. And you're a constant

11 fixture here at the Legislature, and when I'm

12 out in my district, so two for one.

13 MS. BARTOLETTI: Yes, you do. You do

14 represent me.

15 ASSEMBLYMAN McDONALD: That's right.

16 Exactly.

17 You know, when you talk about

18 contribution limits, I'm just curious. The

19 discussion has been primarily at the

20 statewide official position. Is there a

21 position on maybe legislators, on what

22 contribution limits they should be? Or is

23 mostly discussion focused at the statewide

24 level?

516

1 MS. BARTOLETTI: No, we actually have

2 said for a very long time that contribution

3 limits for legislators should be commensurate

4 with what the Congress holds as -- and I

5 think -- I believe it's $2,300, I think.

6 We do, however, recognize that under

7 Citizens United, the spiraling of campaign

8 finance has gotten totally out of control and

9 that it -- I think maybe Senator Brooks could

10 comment about how much his campaign cost him.

11 And it does vary in the different areas or

12 the state. But sooner or later, you're going

13 to have to be very, very wealthy in order to

14 serve the public.

15 And we think that would be

16 unconscionable for our democracy. We want

17 the pharmacists. We want the dairy farmer.

18 We want -- and I will tell you the

19 constitutional amendments, both of which the

20 Governor has included, we don't actually

21 agree with what -- in some of the

22 constitutional amendments -- we do not

23 support term limits for legislators. We do

24 support a four-year legislative span so that

517

1 you don't have to govern one year and run for

2 election the next year. We think giving you

3 about three years to govern would be a far

4 better and more efficient way to do state

5 government. And we do think that the ballot

6 box is the best term limits.

7 We are aware, of course, of what our

8 voter turnout has been in this state. We

9 think there are some barriers to voting that

10 if we broke down those barriers, we would

11 have a better voter turnout. But we do also

12 feel that people can't run for office anymore

13 unless you can guarantee that you can either

14 raise it from your private funds -- and that

15 excludes 90 percent of the New York

16 population.

17 So we would like public financing so

18 that people could run for office. But

19 barring that, which is a heavy lift, we would

20 certainly want to see contribution limits

21 come way down.

22 ASSEMBLYMAN McDONALD: Thank you.

23 Thank you, Mr. Chair.

24 MS. BARTOLETTI: I just would like to

518

1 comment too that Senator Marchione represents

2 me also.

3 CHAIRMAN FARRELL: Anyone else?

4 SENATOR KRUEGER: Always appreciate

5 your work, Barbara. Thank you.

6 MS. BARTOLETTI: Thank you so much.

7 CHAIRWOMAN YOUNG: Thank you, Barbara,

8 for coming in.

9 CHAIRMAN FARRELL: I liked that last

10 answer. Somebody finally understood. Term

11 limits are called the poll. Every two years

12 you get a limit.

13 MS. BARTOLETTI: Yes. You're

14 absolutely correct.

15 Thank you again.

16 CHAIRMAN FARRELL: Thank you.

17 To close, Elena Sassower, director,

18 Center for Judicial Accountability.

19 MS. SASSOWER: Thank you. Thank you.

20 Just a moment to set up, please.

21 My name is Elena Sassower. I'm

22 director and cofounder of the Center for

23 Judicial Accountability, which is a

24 nonpartisan, nonprofit citizens organization

519

1 that documents corruption in the judiciary --

2 and in particular, because we are based in

3 New York, corruption in the New York State

4 judiciary.

5 The situation is as bad as it is, and

6 it is because there has been no oversight by

7 the committees of the Legislature that are

8 charged with oversight responsibilities.

9 We're speaking now of the Assembly Judiciary

10 Committee and the Senate Judiciary Committee.

11 Obviously the primary policing mechanism in

12 this state is the Commission on Judicial

13 Conduct. The Assembly Judiciary Committee

14 has not held an oversight hearing of the

15 operations of the Commission on Judicial

16 Conduct since, I believe, 1987. The Senate

17 Judiciary Committee has not held an oversight

18 hearing of the Commission on Judicial Conduct

19 since 2009.

20 That was when Senator John Sampson

21 showed leadership that had been lacking from

22 all his predecessors and began what he

23 announced was going to be a series of

24 hearings on the Commission on Judicial

520

1 Conduct and the attorney discipline

2 disciplinary system. He held two, scheduled

3 the third, and then aborted the third and

4 continued no further. There were no -- there

5 was no investigation of the testimony that he

6 was presented with, the evidence supporting

7 it. There were no findings of fact. There

8 were no conclusions of law. The hearings

9 were aborted because the testimony and the

10 evidence supporting it was devastating of the

11 corruption of the state commission.

12 Now, likewise, there has been no

13 oversight by any committees of the

14 Legislature of judicial compensation, which

15 this Legislature vested in two commissions, a

16 commission on judicial compensation in 2011,

17 and thereafter in 2015, in a commission on

18 legislative, judicial and executive

19 compensation.

20 I'll go one step further. This

21 Legislature refused to oversee what was going

22 on and to examine the evidence presented to

23 it that these commissions had rendered

24 reports that were statutorily violative,

521

1 fraudulent, unconstitutional.

2 As a result, salary increases took

3 effect automatically by force of law. And

4 with it, district attorney salary increases,

5 because approximately 45 years ago, this

6 Legislature took from the counties their

7 authority to set the salaries of their

8 district attorneys, who are county officers

9 elected by the people of the counties. It

10 was vested in the state, the state took over

11 the setting of salaries, and the pretext

12 was -- or one of the justifications was that

13 enforcement of the Penal Law is a state

14 interest and therefore the state was going to

15 fix the salaries, going to correlate them

16 with judicial salaries so that they would be

17 high, they would attract the best and the

18 brightest.

19 And needless to say, there has not

20 been any oversight in all these years. Not

21 by the Judiciary Committees, not by the Codes

22 Committees, not by the Committees on Local

23 Governance of the Senate and Assembly, as to

24 how, if, the district attorneys are

522

1 discharging their function of enforcing the

2 Penal Law.

3 And there has been no examination of

4 the provision in the County Law that was

5 enacted to provide the counties with

6 reimbursements. Since the state was taking

7 over the setting of salaries, the counties

8 wanted some reimbursement. And so you have

9 County Law 700.8, 700.10, 700.11, as to which

10 there has been no oversight.

11 Now, this mess, this mess created by

12 the failure of the Legislature, with all

13 respect, to discharge its duties, is

14 presented in a lawsuit, a citizen taxpayer

15 action which I authored and of which I am the

16 individual plaintiff. It sets forth 10

17 causes of action. And the thread throughout

18 is the inaction, the dereliction, the

19 malfeasance of the committees of the

20 Legislature.

21 Why? Well, in part it's because the

22 committees have no budget. And that's

23 concealed by the Legislature's budget, which

24 only identifies funding for the Ways and

523

1 Means Committee and in past years, and

2 inferentially today, for the Senate Finance

3 Committee. But the reality is that there is

4 no funding for the committees. They have no

5 resources, just like the member offices.

6 When I call -- and I have called I think all

7 of your offices, and I've had conversations,

8 and I know that your staff doesn't have staff

9 to really do the heavy lifting, the

10 substantive work that needs to be done to

11 serve constituents.

12 Okay. There is a citizen taxpayer

13 action, 10 causes of action. It is addressed

14 to the unconstitutionality of the Legislative

15 Budget, Judiciary Budget, Executive Budget,

16 and a raft of statutory violations,

17 legislative rule violations that go into the

18 mess that becomes the budget.

19 The budget is off the constitutional

20 rails. And I have called your offices, and

21 I -- three weeks ago, I implored leadership

22 and the committee heads to meet with me,

23 because I saw what was happening in this

24 fiscal year. That all the violations, the

524

1 constitutional, the statutory, the rule

2 violations were repeating themselves in a

3 Groundhog Day fashion.

4 Why should that be? It's all laid out

5 in the lawsuit. There are lawyers galore in

6 the Senate and Assembly, including on the

7 committees. They know how to read a

8 pleading, the verified complaint, and to

9 examine the record. And the record

10 establishes an entitlement to summary

11 judgment to the plaintiffs. Again, the

12 budget is off the constitutional rails.

13 Now, what brings me here today to

14 testify at this hearing -- and I thank you.

15 And it's very late, and I recognize that you

16 want to get on with it. But this is a lot of

17 money. This is our government. The reason

18 why Albany is dysfunctional, the Legislature

19 is dysfunctional, has nothing to do with

20 whether there are full-time legislators or

21 part-time legislators, whether you earn

22 outside income or not, whether we have public

23 campaign financing or not. That is bogus.

24 Because there is no difference,

525

1 empirically -- I've interacted with members

2 of the Legislature for 25 years, and I can

3 tell you there's no difference between a

4 legislator who purports to be full-time or

5 one who has outside work. There's no

6 difference. The problem is that you don't

7 have the resources and you are emasculated by

8 rules.

9 And Senator Krueger, who was one of

10 the champions of rule reform going way back,

11 essentially abandoned that issue. Of course

12 she waves the flag now and then. But she

13 knows how to be forceful and to show

14 leadership. It's the rules, it's the budget.

15 Okay, I want to conclude. And I am

16 available always to meet with you, to examine

17 how we move forward.

18 The tenth cause of action -- because

19 you have a problem now. You have a very

20 significant problem. The district attorneys

21 now, by reason of the statutory link, are by

22 $50,000, $60,000, $70,000, $80,000 -- maybe

23 even more -- the highest paid officers in the

24 counties, electeds in the counties. Other

526

1 than the judges, of course. In some counties

2 the package, with the pensions and health

3 insurance and all the rest of it, is about

4 $220,000 a year. This is upstate, Western

5 New York, where the median household income

6 is $40,000, $50,000, $60,000?

7 And this year, concealed in the

8 Judiciary Budget, although recognized by the

9 majority Yellow Book of the Assembly and

10 White Book of the Senate, there's going to be

11 an increase in judicial salaries. That's

12 going to go into increases this year for DAs'

13 salaries.

14 Your appropriation this year that

15 grants for district attorney salaries is

16 identical to the appropriation last year and

17 the year before. It's $4,212,000. You know

18 what happened last year. The counties were

19 clamoring for you to pass separate

20 legislation. You shouldn't be passing

21 separate legislation to funnel additional

22 salary reimbursement to the counties. You

23 should be severing the link. You should be

24 revisiting Judiciary Law 183-A to sever the

527

1 link.

2 And you should examine what is going

3 on with the appropriation item. Because you

4 have a law that defines the giving of

5 reimbursement. That's 700.10, 700.11. If it

6 needs to be amended, then you should be

7 amending it. Instead, in the appropriation

8 item, it identifies, notwithstanding, and

9 proceeds to violate. Not only does it

10 violate the provision giving reimbursement to

11 the counties, but it adds counties which

12 under Judiciary Law 183-A are not entitled to

13 compensation. And those are the counties

14 with under 40,000 people, excepting Essex

15 County, which is for some reason -- obviously

16 connections -- excluded in the statute.

17 The bottom line is that this is not a

18 judiciary or legislative appropriation. And

19 your duty under the Constitution -- and I

20 read from Article VII, Section 4: "The

21 Legislature may not alter an appropriation

22 bill submitted by the Governor except to

23 strike out or reduce items therein."

24 So you can't add -- if you want to add

528

1 on the increases this year as a result of the

2 judicial increases that are going to effect,

3 you can't add it here. You can only strike

4 or reduce.

5 Now, you already are on notice of the

6 tenth cause of action laying out the multiple

7 grounds on which the appropriation item last

8 year -- that is replicated identically

9 here -- suffers from all the same

10 constitutional, legal infirmities. What I

11 respectfully suggest -- because the only way

12 you can -- you can't add to it, you can't --

13 because of the court case, and I'm sure

14 you're familiar with the court case, a

15 consolidation of two cases, Silver against

16 Pataki and Pataki against Assembly and

17 Senate, you are constrained. You cannot

18 remove the language and keep the monetary

19 appropriation.

20 So the only thing that you can do is

21 strike that entire -- because what happens

22 under the Constitution, you know, is that

23 such an appropriation bill shall, when passed

24 by both houses, be a law immediately without

529

1 further action by the Governor.

2 Your duty with respect to the Aid to

3 Localities bill is to reduce appropriations,

4 strike appropriations, and then between the

5 Senate and Assembly, reconcile your bill and

6 it never goes back to the Governor.

7 There is no -- you have no business

8 with your one-house budget resolutions.

9 They're completely off the constitutional

10 rails. The Governor is out of it.

11 What you can do, I respectfully

12 submit -- I have a solution for you on this

13 issue. Under the Constitution, Article VII,

14 Section 3, you can have the Governor -- you

15 can request the Governor or heads of the

16 departments to appear before you, and you

17 can -- and the Governor additionally has

18 30 days within which to amend his bills. You

19 can give him notice that you want his 30-day

20 amendments to include a revision of this DA

21 salary reimbursement provision. He has

22 30 days he can do it as of right. After

23 that, he needs your leave.

24 And once he delivers something

530

1 acceptable to you, that is compliant with the

2 law -- because what you have here is not

3 compliant -- then you can include it in

4 whatever appropriation bill you're going to

5 enact. And as I said, under the

6 Constitution, it takes effect immediately.

7 It never goes back to the Governor. He's out

8 of the picture. All your to-do about we've

9 got to get an on-time budget -- it never goes

10 back to the Governor. The timeliness is in

11 your hands.

12 Thank you very much. I am of course

13 available to answer any questions.

14 There is one additional matter that I

15 feel constrained to bring up, and that is the

16 three FOIL requests that were part of the

17 tenth cause of action. If you notice, the

18 Aid to Localities budget bill begins with --

19 of course it announces at the top that the

20 bill is submitted by the Governor pursuant to

21 Article VII of the Constitution. Okay?

22 So -- but if you look at D, it says

23 "No monies appropriated by this chapter shall

24 be available for payment until a certificate

531

1 of approval has been issued by the Director

2 of the Budget, who shall file such

3 certificate with the Department of Audit and

4 Control, the chairperson of the Senate

5 Finance Committee, and the chairperson of the

6 Assembly Ways and Means Committee."

7 On September 1st, I filed a FOIL

8 request for such certificate by the director

9 of the Division of the Budget, filed with

10 you. The response came back from the Senate

11 and Assembly that you have no certificate of

12 authorization, of approval. And my FOIL

13 request to the Division of Budget and to the

14 Comptroller, well, they haven't produced

15 anything yet.

16 Now, as to the other two FOIL

17 requests, if you look at County Law 700.11,

18 it vests in the Comptroller the

19 responsibility to determine the

20 appropriations for each county by way of the

21 reimbursement.

22 Guess what? When I asked for the

23 Comptroller's determinations as to the

24 appropriations to be made to each county,

532

1 over the past -- I think I asked for the past

2 seven, eight, 10 years, the response came

3 back that the Comptroller -- the Comptroller,

4 whose responsibility it is to fix these sums,

5 he has no records.

6 The last FOIL request was for the plan

7 for counties that do not otherwise qualify

8 for reimbursement pursuant to Judicial Law

9 183-A, the plan that is supposed to be done

10 by the Criminal Justice Services and approved

11 by the budget director.

12 They delayed, they delayed, they

13 delayed. This is from July. I just got the

14 responses on Friday, and the responses show

15 that all they have done was to give to the

16 counties under 40,000 -- that do not qualify

17 for salary reimbursement, that are free to

18 set their DAs' salaries however way they

19 choose -- if they want to have a full-time

20 DA, they can have a full-time DA, and they

21 can fix the salary according to the local

22 conditions. There is no reimbursement to

23 which they are entitled.

24 Nonetheless, they have been given a

533

1 free ride. You're talking about five

2 counties that have, it would seem now for the

3 past 10 years or so, been -- okay, last

4 thing. I know. Last thing. Okay?

5 CHAIRMAN FARRELL: Thank you very

6 much.

7 MS. SASSOWER: One last thing. NYSAC

8 testified, and they passed a resolution. And

9 their resolution contains two

10 misrepresentations of a material nature. One

11 is "Whereas, for over 50 years, the state has

12 funded all salary increases that they imposed

13 on the counties." No. They have -- the

14 state has not paid -- if you look at the most

15 recent emendation of County Law 700.11, and

16 it's recited in the tenth cause of action, it

17 reimbursed the counties not fully, not a

18 hundred percent -- which is what they want,

19 and what has been snuck into the budget --

20 but the reimbursement statutorily was fixed

21 at between 36 and 42 percent.

22 The second misrepresentation. That is

23 material, because it affects how you view

24 this situation and your obligations. They

534

1 say, "Whereas, DAs are entitled to the

2 compensation they are owed pursuant to state

3 law for fulfilling the state constitutional

4 and statutory duties related to the

5 enforcement of the State Penal Law."

6 What committee of the Legislature has

7 ever held a hearing as to whether in fact the

8 DAs are discharging their duty? They are

9 not. And they are not discharging it

10 specifically with respect to the information

11 that was presented to them, each of them,

12 that the commission reports raising judicial

13 compensation, salaries, on which their DA

14 salary raises rest, are false instruments,

15 false filings, violative of a succession of

16 Penal Law provisions. They were all

17 presented with the information, with the

18 evidence, with the documentation, and --

19 CHAIRMAN FARRELL: Good night.

20 MS. SASSOWER: -- they've been sitting

21 on them.

22 CHAIRMAN FARRELL: Excuse me.

23 MS. SASSOWER: Thank you. Thank you.

24 CHAIRMAN FARRELL: Excuse me. You are

535

1 done.

2 MS. SASSOWER: Thank you, Chairman

3 Farrell.

4 CHAIRMAN FARRELL: Thank you very

5 much.

6 MS. SASSOWER: Thank you. Thank you.

7 I look forward to being of service to this

8 committee.

9 SENATOR KRUEGER: Thank you.

10 (Whereupon, the budget hearing

11 concluded at 7:22 p.m.)

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