Joint Legislative Public Hearing on 2018-2019 Executive Budget Proposal: Topic Local Government Officials/ General Government - Testimonies

Hearing event notice and video:



 2  ----------------------------------------------------
 3             In the Matter of the
            2018-2019 EXECUTIVE BUDGET
                GENERAL GOVERNMENT
 5  ----------------------------------------------------
 6                           Hearing Room B                                                    
                             Legislative Office Building
 7                           Albany, New York
 8                           February 5, 2018
                             10:10 a.m.
11           Senator Catharine M. Young 
             Chair, Senate Finance Committee
             Assemblywoman Helene E. Weinstein
13           Chair, Assembly Ways & Means Committee
15           Senator Liz Krueger 
             Senate Finance Committee (RM)
             Assemblyman Robert Oaks
17           Assembly Ways & Means Committee (RM)
18           Senator Diane J. Savino
             Vice Chair, Senate Finance Committee
             Assemblyman Michael Benedetto
20           Chair, Assembly Cities Committee
21           Assemblyman B. Magnarelli
             Chair, Assembly Committee on Local Governments
             Senator Simcha Felder
23           Chair, Senate Committee on Cities
24           Senator Kathleen A. Marchione
             Chair, Senate Committee on Local Government


 1  2018-2019 Executive Budget
    Local Government Officials/
 2  General Government
 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           Assemblywoman Nicole Malliotakis
12           Assemblywoman Rebecca Seawright
13           Assemblyman Robert Carroll
14           Assemblyman Walter T. Mosley
15           Assemblywoman Nily Rozic
16           Senator Brad Hoylman
17           Assemblyman Erik M. Dilan
18           Assemblyman David Buchwald
19           Senator Brian Benjamin
20           Assemblyman Luis Sepulveda
21           Assemblyman Félix Ortiz
22           Senator Kemp Hannon
23           Assemblyman Sean M. Ryan
24           Senator James Tedisco


 1  2018-2019 Executive Budget
    Local Government Officials/
 2  General Government
 4  PRESENT:  (Continued)
 5           Senator Andrea Stewart-Cousins
 6           Assemblyman Christopher S. Friend
 7           Assemblyman John T. McDonald, III
 8           Assemblyman Ron Castorina, Jr.
 9           Assemblywoman Shelley Mayer
10           Senator Thomas D. Croci
11           Assemblywoman Patricia Fahy  
12           Assemblyman Steven Otis
13           Senator Elaine Phillips
14           Assemblywoman Monica P. Wallace
15           Assemblyman Edward C. Braunstein
16           Assemblyman James Skoufis
17           Senator Brian Kavanagh
18           Assemblyman Dan Stec
19           Assemblyman Michael Blake
20           Senator John E. Brooks
21           Assemblywoman Crystal D. Peoples-Stokes
22           Assemblywoman Carrie Woerner
23           Senator Fred Akshar


 1  2018-2019 Executive Budget
    Local Government Officials/
 2  General Government
 4                   LIST OF SPEAKERS
 5                                   STATEMENT QUESTIONS
 6  Honorable Bill de Blasio 
 7  City of New York                       9         28
 8  Scott M. Stringer 
 9  City of New York                     209        221
10  Honorable Kathy M. Sheehan
11  City of Albany                       256        271
12  Honorable Lovely A. Warren
13  City of Rochester                    300        306
14  Honorable Mike Spano
15  City of Yonkers                      317        331
16  Honorable Ben Walsh
17  City of Syracuse                     352        360
18  Honorable Corey Johnson
19  New York City Council                371        388
20  Stephen J. Acquario
    Executive Director
21  NYS Association of Counties          429        442
22  Barbara Van Epps
    Deputy Director
23  NYS Conference of Mayors
     and Municipal Officials             450        464


 1  2018-2019 Executive Budget
    Local Government Officials/
 2  General Government
 4                    LIST OF SPEAKERS, Cont. 
 5                                  STATEMENT  QUESTIONS
 6  Gerry Geist
    Executive Director
 7  Supervisor Dennis M. Powers 
    Town of Elma, Erie County
 8  Association of Towns of
     the State of New York               466      474
    George Latimer
10  County Executive
    Westchester County                   485      491
    Blair Horner
12  Executive Director
    New York Public Interest 
13   Research Group (NYPIRG)             503      509
14  Beth Finkel
    State Director
15  David McNally
    Director, Government Affairs 
16  AARP New York                        512      518
17  Katelyn Wright
18  New York Land Bank Association       525      531
19  Elena Sassower
20  Center for 
     Judicial Accountability             534




 1                 CHAIRWOMAN WEINSTEIN:  Good morning, 

 2          everyone.  I'm Helene Weinstein, chair of the 

 3          New York State Assembly's Ways and Means 

 4          Committee and cochair of today's hearing.  

 5                 Today we begin the eighth in a series 

 6          of hearings conducted by the joint fiscal 

 7          committees of the Legislature regarding the 

 8          Governor's proposed budget for fiscal year 

 9          2018-2019.

10                 The hearings are conducted pursuant to 

11          the New York State Constitution and the 

12          Legislative Law.  Today the Assembly Ways and 

13          Means Committee and the Senate Finance 

14          Committee will hear testimony concerning the 

15          Governor's budget proposal for local 

16          governments.

17                 I will now introduce the members from 

18          the Assembly, and Senator Young in a few 

19          moments will introduce the Senate Finance 

20          Committee members.  And our ranker, 

21          Assemblyman Bob Oaks, on Ways and Means will 

22          introduce the members from his conference.

23                 So let me just -- I'm not sure if 

24          anybody snuck in.  But we have, from the 


 1          Assembly, our Cities chair, Assemblyman Mike 

 2          Benedetto; our Local Governments chair, 

 3          Assemblyman Magnarelli.  We have 

 4          Assemblywoman Rozic, Assemblyman Cusick, 

 5          Assemblyman Carroll, Assemblywoman Nolan, 

 6          Assemblywoman Seawright, Assemblyman Mosley, 

 7          Assemblyman Sepulveda, Assemblyman Ortiz, 

 8          Assemblyman Buchwald and Assemblyman Ryan.

 9                 Mr. Oaks?  

10                 ASSEMBLYMAN OAKS:  Yes, we also have 

11          Assemblywoman Malliotakis and Assemblyman 

12          Castorina.

13                 SENATOR KRUEGER:  Hi.  I'm Senator Liz 

14          Krueger, on behalf of Cathy Young, who's 

15          running a little late.  

16                 We have with us today the chair of the 

17          Local Government Committee, Kathy Marchione; 

18          the chair of the Cities Committee, Simcha 

19          Felder; Brian Benjamin, Roxanne Persaud, 

20          Gustavo Rivera, Kemp Hannon, Elaine Phillips, 

21          Diane Savino, and Brad Hoylman.

22                 CHAIRWOMAN WEINSTEIN:  Before 

23          introducing our first witness, I'd like to 

24          remind all of the witnesses testifying today 


 1          to keep your statement within your allotted 

 2          time limit so that everyone can be afforded 

 3          the opportunity to speak.  And particularly 

 4          for the witnesses whose testimony has been 

 5          submitted in writing, you'll be made a part 

 6          of the record.  And those that emailed it, 

 7          likewise.  So there's no reason to read your 

 8          testimony verbatim.  In fact, we'd prefer a 

 9          summary as we move forward.  

10                 And just a reminder to both members 

11          and witnesses to keep your eye on the clock 

12          so that everyone has an opportunity to ask 

13          questions.

14                 We did send a notice around to the 

15          Assembly members noting that the mayor needed 

16          to leave at 1 p.m., so let's try and get as 

17          close to that goal as possible.

18                 Senator Young, Senator Krueger already 

19          introduced the members.  But do you have some 

20          opening remarks?

21                 CHAIRWOMAN YOUNG:  Good morning.

22                 MAYOR DE BLASIO:  Good morning.

23                 CHAIRWOMAN YOUNG:  The roads were a 

24          bit dicey coming from the western regions of 


 1          the state, so I apologize for being a couple 

 2          of minutes late.  

 3                 But I do want to welcome you, Mayor.  

 4          So glad to have you here this morning, bright 

 5          and early, and very much look forward to your 

 6          testimony.

 7                 MAYOR DE BLASIO:  Thank you.

 8                 CHAIRWOMAN WEINSTEIN:  So Mayor de 

 9          Blasio, the floor is yours.

10                 MAYOR DE BLASIO:  Thank you, Chair 

11          Weinstein and Chair Young, so much.  I want 

12          to thank also the ranking minority members 

13          Senator Krueger and Assemblyman Oaks, and I 

14          want to thank the leaders of this 

15          Legislature, Assembly Speaker Heastie, 

16          Majority Leader Flanagan, Senate Democratic 

17          Conference Leader Stewart-Cousins, IDC Leader 

18          Klein, and Assemblymember Minority Leader 

19          Kolb.  My thanks to all the members here as 

20          well today.  

21                 And I'm joined by two key members of 

22          my team, our new director of the Office of 

23          Management and Budget, Melanie Hartzog, and 

24          our new Director for State Legislative 


 1          Affairs Simonia Brown.  

 2                 I want to begin by thanking the 

 3          Legislature on behalf of all 8.5 million 

 4          New Yorkers.  Over the past four years, 

 5          New Yorkers have seen change happen quickly, 

 6          and that is thanks in large measure to our 

 7          work with this Legislature.  Together we have 

 8          given 70,000 children a strong Head Start in 

 9          life through pre-K for all, together we've 

10          helped people throughout the five boroughs to 

11          stay in the neighborhoods they helped to 

12          build, and together we've saved lives and 

13          prevented tragedies by expanding Vision Zero.  

14          Together we have certainly made New York City 

15          safer, stronger and fairer.  

16                 Now I want to turn to the city's 

17          fiscal year 2019 preliminary budget, which I 

18          presented last week, and it included some 

19          important but modest new investments.  And 

20          these were undertaken with one singular goal 

21          in mind, to make New York City the fairest 

22          big city in America.  

23                 These investments include $200 million 

24          for heating upgrades to the 20 New York City 


 1          Housing Authority developments most in need, 

 2          $12 million for the rollout of body-worn 

 3          cameras to all NYPD officers on patrol -- one 

 4          year ahead of schedule -- and $7 million for 

 5          additional staff to implement new tenant 

 6          harassment prevention laws enacted in 

 7          partnership with the City Council.  

 8                 As always, our budget is balanced and 

 9          based on careful management of our resources, 

10          which is particularly important given what we 

11          are seeing in Washington.  Without further 

12          action from Washington, federal policies 

13          could have a minimum of a $700 million 

14          negative impact on our fiscal '19 New York 

15          City budget.  This includes the cuts to DSH, 

16          or Disproportionate Share Hospital payments, 

17          that would cost our Health & Hospitals 

18          Corporation $400 million annually; a 

19          corporate tax rate cut in the new tax law 

20          that will make the Low-Income Housing Tax 

21          Credit less valuable -- that will add about 

22          $200 million a year in capital dollars to our 

23          bottom line, making affordable housing 

24          production more expensive.  And the new tax 


 1          law eliminates a form of bond refinancing we 

 2          use to save money.  The estimated cost will 

 3          be $100 million a year.  

 4                 There are also negative consequences 

 5          for our residents' bottom line.  The new tax 

 6          law of course caps the state and local tax 

 7          deduction and eliminates the personal 

 8          exemption.  This means hundreds of thousands 

 9          of New Yorkers, most earning less than 

10          $100,000, will pay more taxes.  And I want to 

11          commend the Governor for trying to find ways 

12          to blunt the effects of the new tax law, and 

13          I look forward to working with him and all of 

14          you on solutions.  

15                 In addition to the tax law, we are 

16          also anticipating a new budget proposal from 

17          the Trump administration in the coming weeks, 

18          and that will likely be as painful as the 

19          last one.  

20                 Now I want to turn to the Governor's 

21          Executive Budget.  Last year I made the point 

22          that New York succeeds when New York City 

23          succeeds, and vice versa -- and that is even 

24          more important now.  There are key items in 


 1          the Executive Budget that are positive for 

 2          our state and our city.  

 3                 I've been speaking for years about the 

 4          urgent need for election reform.  All 

 5          New Yorkers should be glad that early voting 

 6          and same-day registration are in the 

 7          Executive Budget, and I want to applaud the 

 8          Assembly Democratic Conference's past work on 

 9          this issue.  Exercising the fundamental right 

10          to vote is just too difficult in our state, 

11          and 2 million New Yorkers, 1 million of them 

12          in the city, aren't even registered.  I urge 

13          the Legislature to include early voting and 

14          same-day registration in the enacted budget, 

15          and please also include other critical 

16          reforms:  No-excuse absentee ballots, 

17          electronic poll books, and preregistration 

18          for 16- and 17-year-olds.  

19                 It's also important that the DREAM Act 

20          is in the Executive Budget, given what's 

21          happening in our country.  And New York State 

22          can lead by example by helping all of our 

23          students.  And I urge you to include the 

24          DREAM Act in the enacted budget.  


 1                 On criminal justice, we are pleased 

 2          that the Governor included bail reform and 

 3          speedy trials in his Executive Budget.  This 

 4          will help reduce the population in city jails 

 5          and accelerate our efforts to close Rikers 

 6          Island.  

 7                 For the first time in 85 years, we 

 8          have made it the city's policy to close 

 9          Rikers Island for good, but to do so we need 

10          to reduce the number of people incarcerated.  

11          The city has taken prudent steps to reduce 

12          our jail population by 21 percent already in 

13          the last four years, bringing the number of 

14          incarcerated people to under 9,000.  We have 

15          achieved this by driving crime to historic 

16          lows, reducing arrests for low-level 

17          infractions, and making a $20 million annual 

18          investment in supervised release and 

19          case-delay mitigations.  And we are now able 

20          to close the first of the nine jails on 

21          Rikers Island; that will happen in June.  

22                 I also support ending money bail, and 

23          I think we should go further, letting judges 

24          factor risk to public safety into bail 


 1          decisions for all cases, while providing them 

 2          the tools to minimize racial biases.  

 3                 I would urge you to pass another 

 4          helpful legislative change that's not in the 

 5          Executive Budget.  This would allow city 

 6          prisoners serving less than a year to earn 

 7          reduced sentences for good behavior like they 

 8          can in state jails.  In addition, I would 

 9          urge the state to move state-supervised 

10          parolees in city jails who violate parole 

11          into available space in state correctional 

12          facilities.  

13                 The changes I have just outlined would 

14          help reduce our jail population by another 

15          1800 people per day, bringing us closer to 

16          our stated goal of 5,000.  

17                 Another key element in the closure 

18          plan is the construction of necessary 

19          borough-based jails.  Design-build authority 

20          for the construction of local correctional 

21          facilities would help speed the construction 

22          timeline.  

23                 We're also improving the culture 

24          inside of the jails.  Our corrections 


 1          officers are receiving new professional 

 2          development and support, and all inmates in 

 3          our jails now receive five hours a day of 

 4          therapeutic vocational and educational 

 5          programming.  We've reduced the number of 

 6          people in punitive segregation by 80 percent, 

 7          and ended it for women and those under 

 8          21 years old.  

 9                 And this spring, through our Jails to 

10          Jobs program, everyone who leaves jail 

11          following a city sentence will be offered a 

12          transitional job.  

13                 Now I'd like to talk about another 

14          critical step in closing Rikers Island which 

15          is removing 16- and 17-year-olds.  And I want 

16          to thank you all for your historic vote to 

17          enact Raise the Age.  But I'm concerned that 

18          the fiscal '19 Executive Budget makes this an 

19          unfunded mandate by providing zero guaranteed 

20          funding.  This will cost the city at least 

21          $200 million per year.  

22                 The city is working hard to comply 

23          with this mandate.  We're renovating two 

24          facilities -- Crossroads in Brownsville, 


 1          Brooklyn, and Horizon in Mott Haven in the 

 2          Bronx.  For additional capacity, we need the 

 3          Ella McQueen Juvenile Reception Center in 

 4          Ocean Hill, Brooklyn, transferred to the 

 5          city.  I urge you to help make this happen.  

 6          We cannot meet the October 1st deadline 

 7          without this center serving as our intake 

 8          facility.  

 9                 The Executive Budget also defunds the 

10          city's juvenile justice facilities under the 

11          Close to Home program.  This cut undermines 

12          this signature reform designed to keep kids 

13          closer to their families, and it will cost 

14          the city $15.3 million in fiscal '18 and 

15          $31 million in fiscal '19.  

16                 Now I'd like to discuss a number of 

17          areas of concern in the Governor's Executive 

18          Budget.  I made it clear that the city should 

19          not be required to pay half of the MTA Subway 

20          Action Plan.  Our current contribution to the 

21          MTA is one big reason why.  

22                 New York City residents, workers, 

23          businesses and government contribute nearly 

24          70 percent of the MTA's total revenues, more 


 1          than $10 billion annually.  City government 

 2          alone makes an enormous investment in the MTA 

 3          already.  This is comprised of $900 million 

 4          annually in direct funding and a further 

 5          $900 million in in-kind contributions 

 6          including services by the NYPD, homeless 

 7          outreach efforts, and debt service.  This 

 8          represents a $200 million increase from last 

 9          year.  

10                 And in 2015, the city committed 

11          $2.5 billion to the MTA capital plan -- the 

12          largest general capital contribution in 

13          history.  

14                 But it's clear the MTA needs a 

15          long-term dedicated revenue source.  I have 

16          proposed a millionaire's tax to pay for 

17          infrastructure and for the Fair Fare 

18          Initiative, half-priced MetroCards for 

19          lower-income New Yorkers.  I urge that this 

20          proposal be included in the enacted budget.  

21                 A recent panel report commissioned by 

22          the Governor proposed a form of congestion 

23          pricing that would serve as a dedicated 

24          revenue source.  I was pleased to see East 


 1          River Bridge tolls removed and to see the 

 2          inclusion of block-the-box automated 

 3          enforcement.  

 4                 I also support the panel's focus on 

 5          commercial and for-hire vehicles.  I urge the 

 6          Legislature to consider expediting a 

 7          surcharge on for-hire vehicles and an added 

 8          surcharge on taxis for the MTA.  This would 

 9          even the levels of surcharge on both types of 

10          vehicles and address the MTA's immediate 

11          budget requests.  

12                 If there were a congestion pricing 

13          plan, there are several measures critical for 

14          New York City residents:  One, a requirement 

15          that all proceeds are invested in mass 

16          transit projects in the five boroughs only, 

17          and two, the City of New York needs the 

18          ability to sign off on transit projects and 

19          priorities.  

20                 Also, any pricing scheme for passenger 

21          vehicles should take the needs of New Yorkers 

22          with hardships into account, including 

23          low-income New Yorkers and those with 

24          disabilities.  


 1                 Now I want to focus on some areas of 

 2          concern when it comes to the MTA in the 

 3          Executive Budget.  The first is a quote, 

 4          unquote, value-capture proposal that would 

 5          grant the MTA the power to raid our property 

 6          taxes on properties within a one-mile radius 

 7          of certain projects.  This proposal would 

 8          cost billions and blow a hole in the city's 

 9          budget, forcing us to cut back on essential 

10          services like police, sanitation and 

11          education.  This should be a concern for 

12          every local government.  

13                 I was encouraged by the Governor's 

14          recent comments that portrayed this as a 

15          choice for the city, not a mandate.  I would 

16          urge you to remove this provision from the 

17          enacted budget altogether.  

18                 Another MTA proposal in the Executive 

19          Budget that would devastate city finances is 

20          the mandate that the city pay all capital 

21          costs for the New York City Transit 

22          Authority.  That means tens of billions of 

23          dollars in new capital obligations.  And it 

24          is based on the false premise that the city 


 1          is legally responsible for paying New York 

 2          City Transit's capital costs.  Sixty-five 

 3          years of statutory provisions, lease 

 4          agreements, and funding history prove 

 5          otherwise.  I respectfully request that you 

 6          reject this proposal.  

 7                 Now I'd like to turn to the topic of 

 8          education.  Bringing equity and excellence to 

 9          the city's school system has been the core 

10          mission of my administration.  With your 

11          help, we're making sweeping reforms designed 

12          to ensure every child in every grade in every 

13          neighborhood fulfills their potential.  These 

14          include giving our kids a great start with 

15          pre-K, working to bring all students to 

16          reading level by third grade, and offering 

17          advanced placement courses to all high school 

18          students.  

19                 The proposed $248 million increase in 

20          education aid in the Executive Budget falls 

21          short of the increases in previous years, and 

22          short of what the city needs to continue to 

23          bring equity and excellence to our schools.  

24          Since 2008 the city's share of education 


 1          spending has increased to 56 percent from 

 2          49 percent, while the state's share has 

 3          declined to 36 percent from 41 percent.  

 4                 Over two years, with your help, we 

 5          increased the Fair Student Funding average 

 6          from 88 percent to 91 percent by raising it 

 7          for 787 schools.  Today, all Community and 

 8          all Renewal Schools are at 100 percent.  And 

 9          I want to note any school that leaves Renewal 

10          status remains a Community School at the 

11          100 percent level.  

12                 But the state Campaign for Fiscal 

13          Equity obligation still has not been 

14          fulfilled.  If the state fulfills its CFE 

15          commitment, we will use that funding to get 

16          every school to 100 percent by fiscal '22.  

17                 Especially problematic in the 

18          Executive Budget is a provision that gives 

19          the State Division of Budget a virtual veto 

20          on school district spending.  This could lead 

21          to arbitrary decisions and could jeopardize 

22          the Equity and Excellence vision that we know 

23          is working.  We join the State Education 

24          Department and school districts statewide who 


 1          are concerned about this measure, and we ask 

 2          that you do not tie up much-needed resources 

 3          for our students through added layers of 

 4          bureaucracy.  

 5                 The Executive Budget also shifts a 

 6          variety of charter school costs to New York 

 7          City alone.  In fiscal '19, these costs 

 8          amount to more than $144 million currently 

 9          borne by the state.  The costs are comprised 

10          of $120 million from the elimination of state 

11          reimbursement for supplemental basic tuition 

12          to charter schools, and $24 million from a 

13          proposed cap in reimbursement for the rental 

14          costs paid to charter schools.  

15                 The state made a commitment to fund 

16          the additional tuition and a portion of the 

17          rental support in the past.  The state should 

18          continue to pay those costs rather than 

19          placing an unfunded mandate on the city.  

20                 The Governor's Executive Budget would 

21          also make an arbitrary funding cut of 

22          $65 million in fiscal '19 to special 

23          education.  Last year this funding supported 

24          200,000 special ed students.  And at a time 


 1          when the city is making significant 

 2          investments in our child welfare system, the 

 3          state proposes to cap reimbursements for 

 4          state child welfare funding.  The cap is 

 5          aimed just at New York City and has a 

 6          potential impact of $64 million in fiscal '18 

 7          and $129 million in fiscal '19.  And this 

 8          would harm our efforts to keep kids with 

 9          their families and out of foster care.  

10                 Now I'd like to turn to the 

11          homelessness crisis.  We've made 

12          unprecedented efforts to address 

13          homelessness, including access to counsel for 

14          all New Yorkers in housing court; outreach to 

15          street homeless through HOME-STAT, the most 

16          comprehensive outreach program of any major 

17          city in the country; and working towards a 

18          smaller, borough-based shelter system.  

19                 And we are seeing progress.  We have 

20          moved 60,000 New Yorkers from shelter to 

21          permanent housing.  And we know HOME-STAT is 

22          working.  Since 2015, we have moved nearly 

23          1500 people off the streets who have not 

24          returned to the streets.  Rather than 


 1          proposing to withhold city shelter funding, 

 2          the state should support our outreach 

 3          efforts.  

 4                 The state's Executive Budget also cuts 

 5          $9 million from the city's rental assistance 

 6          program for working families, LINC 1.  This 

 7          will literally make it harder for 1800 

 8          New Yorkers in shelters to find permanent 

 9          housing, and I urge the Legislature to 

10          restore this cut.  

11                 Before I conclude, there are just a 

12          few issues not in the budget that we think 

13          deserve your attention.  One, design-build 

14          has accelerated dozens of state 

15          infrastructure projects and saved taxpayers 

16          billions.  New York City's taxpayers deserve 

17          the same advantage.  

18                 Here are two examples of projects that 

19          we could complete more quickly and 

20          efficiently if we had this design-build tool:  

21          One, the major rehabilitation of the BQE 

22          triple cantilever that 15,000 large trucks 

23          pass over on a typical day.  And two, the 

24          installation of crucially needed new boilers 


 1          in public housing developments.  

 2                 While we're on the topic of public 

 3          housing, my administration came into office 

 4          dedicated to reversing decades-long 

 5          disinvestment, and we have made unprecedented 

 6          investments, including $1.9 billion in 

 7          capital spending for roof replacement, 

 8          benefiting 179,000 residents, facade repair 

 9          at 364 buildings, and security improvements 

10          at the 15 most dangerous developments that 

11          have yielded a much safer environment.  

12                 This winter we added $200 million in 

13          capital to upgrade heating systems at the 

14          20 developments with the most severe heating 

15          problems.  This will add up to a total 

16          capital investment by the City of New York of 

17          $2.1 billion, which is unprecedented in the 

18          history of the city.  Now I'm asking for your 

19          support in matching the city's $200 million 

20          investment in heating systems.  

21                 We're also investing $9 million in 

22          capital and $4 million in expense for rapid 

23          response teams and mobile boilers to address 

24          the immediate heating crisis and to keep our 


 1          residents warm.  In addition to our capital 

 2          investment in NYCHA, the city has made 

 3          $1.6 billion in investments in operating 

 4          expenses.  

 5                 One other important issue that is not 

 6          in the Executive Budget, Civil Rights Law 

 7          Section 50-a, which prohibits the disclosure 

 8          of personnel records of law enforcement or 

 9          other uniformed personnel without a court 

10          order or an employee's written consent.  We 

11          have introduced a bill that would allow the 

12          NYPD to post all pertinent disciplinary 

13          information, a summary of the judge's 

14          decision, and the police commissioner's final 

15          determination on the NYPD website at the 

16          conclusion of an administrative disciplinary 

17          process.  I urge you to support this bill.  

18                 Finally, I want to mention the city's 

19          critical lifesaving speed camera program that 

20          you worked so hard to pass expires this 

21          year.  Let's not just extend it, let's expand 

22          it and loosen location restrictions to cover 

23          all the streets surrounding our schools.  

24                 I want to thank you all for what we 


 1          have done together for the great work that 

 2          you have done in support of the people of 

 3          New York City.  I want to thank you for the 

 4          partnership.  And as I begin a new term, I 

 5          want to say I look forward to four more years 

 6          of working together.  

 7                 Thank you, Madams Chair.

 8                 CHAIRWOMAN WEINSTEIN:  Thank you, 

 9          Mayor.

10                 Before we move on to questioning, I 

11          just wanted to say we've been joined by 

12          Assemblymembers Dilan, Braunstein, Blake and 

13          Aubry.

14                 And now to our Cities chair, 

15          Assemblyman Benedetto.

16                 ASSEMBLYMAN BENEDETTO:  Mr. Mayor, 

17          good morning, and thank you again for being 

18          here.

19                 I notice in your testimony you address 

20          design-build, and you mention in your 

21          testimony the BQE project.  Which as I 

22          understand it -- and confirm for me if I'm 

23          wrong -- if it's not done fairly quickly, it 

24          just has to begin, and you will not have the 


 1          opportunity to use design-build.  Am I 

 2          correct in that assessment?

 3                 MAYOR DE BLASIO:  Yes, we have to move 

 4          soon on the BQE.  It's one of the most vital 

 5          arteries in the entire city.  And that triple 

 6          cantilever area needs work in the next few 

 7          years.  But unless design-build authority is 

 8          given to the city, we would be doing that 

 9          work in a much slower and more costly fashion 

10          than necessary.

11                 ASSEMBLYMAN BENEDETTO:  And according 

12          to your testimony, you're talking 15,000 

13          large trucks.  It's my understanding, without 

14          this project getting going, trucks will have 

15          to be banned from the BQE and sent into local 

16          streets, causing quite a mess in those 

17          streets.  Am I correct on that one too?

18                 MAYOR DE BLASIO:  I think you're 

19          correct.  And there's no other way to say it, 

20          that there's literally no good alternative to 

21          the BQE, given the amount of volume it 

22          handles, which is crucial for the whole city 

23          and state.  And if we can't fix it properly, 

24          if the work takes a lot longer than it has 


 1          to, we're talking about all that traffic 

 2          having to go somewhere.  It's either going to 

 3          congest our highways further, or it's going 

 4          to end up in some cases on local streets, 

 5          which is the worst of all situations.

 6                 ASSEMBLYMAN BENEDETTO:  It's going to 

 7          take a lot longer than it has to.  Can you 

 8          give me an estimate on without design-build 

 9          how long it will take and how long you would 

10          take if you do use design-build?  

11                 MAYOR DE BLASIO:  I want to be 

12          exacting, and I'll check our budget director.  

13          Do you have that handy?  Otherwise, we will 

14          come back with it quickly.  

15                 We're going to come back with that 

16          quickly.  We want to make sure we have the 

17          accurate number for you.

18                 ASSEMBLYMAN BENEDETTO:  No problem.

19                 And also the second part of that will 

20          be the cost saving.  Do we have an estimate 

21          on the cost saving using design-build?  

22                 MAYOR DE BLASIO:  We will get both the 

23          cost savings -- I think they're working on it 

24          as we speak, Assemblymember -- cost savings 


 1          and the time.

 2                 ASSEMBLYMAN BENEDETTO:  Lastly on the 

 3          design-build issue, some of the problems 

 4          we've had getting design-build passed stem 

 5          from objections from trade unions, objections 

 6          from women- and minority-owned businesses not 

 7          being included.  Can you lastly address that 

 8          issue?  What has the city done to make that 

 9          more palatable, if you would?

10                 MAYOR DE BLASIO:  Assemblymember, 

11          the -- first of all, although I'm familiar 

12          with some of the objections, I would say 

13          considering that the state grants itself this 

14          own capacity, as a matter of consistency, our 

15          city is 43 percent of the state's population, 

16          we're obviously one of the engines of the 

17          state economy.  So I would immediately say if 

18          those issues were resolved enough so that the 

19          state could give itself the authority, it 

20          seems only fair to give the city the 

21          authority as well.

22                 Obviously we want to work with the 

23          labor community and with minority- and 

24          women-owned businesses.  We have a 30 percent 


 1          MWBE procurement goal now in New York City 

 2          that we are very aggressively pursuing.  

 3          We've had other instances where we sat down 

 4          with those constituencies to work out ways to 

 5          make these new approaches work better for 

 6          them.  I would happily do that.

 7                 But we have to save the taxpayers a 

 8          huge amount of money, and we have to speed up 

 9          our capital projects.  There's tremendous 

10          frustration when those projects drag on.  And 

11          I think we can do that while also being fair 

12          to labor and to MWBEs.

13                 Now, I want to make sure I've got this 

14          right.  We believe, in the case of the BQE 

15          cantilever specifically, that design-build 

16          authority would shave two years off the 

17          construction of that project -- two full 

18          years, the difference of having the BQE open 

19          and fully functional versus shut down in that 

20          area.  

21                 The savings of this one project would 

22          be $113 million.  For the city as a whole, 

23          design-build authority could mean many 

24          billions of dollars, but this one project, 


 1          $113 million.

 2                 ASSEMBLYMAN BENEDETTO:  I would think 

 3          that the taxpayers of the City of New York 

 4          would be very grateful at saving over 

 5          $100 million.  And in particular, the 

 6          residents of the areas in Brooklyn that will 

 7          be inundated with trucks during the course of 

 8          this construction would be very happy too.

 9                 Switching to congestion pricing, 

10          proposals have been out there about tolling 

11          bridges, about doing sensors just to charge 

12          fees going south of 60th Street or so.  It's 

13          my impression that you are against the first 

14          but seem to accept the second.  Can you 

15          clarify on that?  

16                 MAYOR DE BLASIO:  I've said 

17          consistently that the two previous major 

18          plans on congestion pricing -- the one put 

19          forward by Mayor Bloomberg of give or take a 

20          decade ago, and the one by Move NY -- to me 

21          did not address core issues of fairness to 

22          the outer boroughs and making sure that 

23          resources would be appropriately spent in the 

24          city and particularly in the outer borough 


 1          areas that would be bearing the brunt of the 

 2          cost.

 3                 This new proposal by the commission is 

 4          fundamentally different, and I think better 

 5          for that reason, because it does not toll the 

 6          bridges.  There are many, many issues that 

 7          still have to be resolved and lots of detail 

 8          we don't have yet in terms of this commission 

 9          proposal.  

10                 My central concern now is that any 

11          action taken, any potential action on 

12          congestion pricing must include a lockbox for 

13          the money to be spent only on New York City 

14          subways and buses.  Assemblymember, you would 

15          recognize my concern.  You know a lot of the 

16          history here.  That if there is not such a 

17          provision, we will not have an assurance of 

18          where that money goes, we will not have an 

19          assurance it will solve the problem it is 

20          theoretically intended to address.

21                 We're also deeply concerned about -- 

22          if we're going to support anything like that, 

23          that there be city sign-off on the things 

24          that are being chosen to be priorities for 


 1          spending.

 2                 So right now I have said it's a step 

 3          in the right direction, it's an improved 

 4          proposal compared to past proposals, but a 

 5          lot of unanswered questions, particularly on 

 6          guarantees on how the money will be spent.

 7                 ASSEMBLYMAN BENEDETTO:  Points 

 8          well-taken.  Thank you, Mr. Mayor.

 9                 You mentioned in your testimony in 

10          regards to congestion pricing a certain 

11          fairness in it and taking the needs of 

12          New Yorkers with hardships.  One of the items 

13          I've been suggesting is possibly a variable 

14          rate as opposed to one single charge.

15                 So for instance, people from the outer 

16          boroughs or even from Upper Manhattan who 

17          want to come into the tolled district at 

18          night, after 7 o'clock, to go to the theater, 

19          to go to the night life, on weekends when 

20          they want to apprise themselves of the 

21          museums and the cultural benefits of New York 

22          City, could possibly be allowed in those 

23          off-peak hours to come in at a reduced rate.  

24                 Your opinion, sir?


 1                 MAYOR DE BLASIO:  Well, I haven't 

 2          heard that proposal previously.  I think it's 

 3          a commendable one and one that we'd certainly 

 4          want to talk to you about.

 5                 I would also say on the issue of 

 6          hardship that my concern immediately is for 

 7          folks who are lower-income and may need to 

 8          use their cars for a variety of reasons, 

 9          including for medical appointments.  We know 

10          how much the medical community is based in 

11          Manhattan.  I think it's important to be 

12          sensitive to that fact.  Some people have no 

13          choice but to go to those appointments.  How 

14          are we going to accommodate them and also 

15          think about the needs of people with 

16          disabilities?  

17                 So I think the big picture here is 

18          your idea and all these other issues have to 

19          be addressed, need to be very carefully 

20          looked at.  For such a proposal to be viable, 

21          in my view, it has to address these issues.  

22          And most particularly, we have to know where 

23          the money is going.

24                 ASSEMBLYMAN BENEDETTO:  Mr. Mayor, in 


 1          my closing moments here I would be remiss if 

 2          I don't pay attention to some of my local 

 3          issues, two in particular.

 4                 The great City of Co-op, okay -- a 

 5          wonderful place to live and a fine example of 

 6          Mitchell-Lama housing -- there is a 

 7          controversy there about a monopole that is 

 8          going up.

 9                 MAYOR DE BLASIO:  Excuse me, a what?

10                 ASSEMBLYMAN BENEDETTO:  I'm told that 

11          that is the technical term for it, a 

12          monopole, a tall structure that holds an 

13          outdoor advertising structure.  

14                 While most of these structures are 

15          fairly low, 20 feet or so, this one is going 

16          to be 260 feet.  How could they do this?  

17          Because the zoning has never been changed 

18          since the existence of Freedomland, which 

19          Co-op City sits on that particular site.

20                 And so he's allowed to build a 

21          260-foot pole to put this outside neon LED 

22          advertising that's going to shine brightly 

23          throughout the Bronx, and I guess to notify 

24          people flying in planes passing by.  


 1                 If there's anything the city can do to 

 2          look into that, we would greatly appreciate 

 3          it, sir.

 4                 MAYOR DE BLASIO:  We will certainly 

 5          look into it.  That is not something I've 

 6          heard previously, Assemblymember.  We'll look 

 7          into it and get back to you.

 8                 ASSEMBLYMAN BENEDETTO:  There you go.  

 9          There you go.  

10                 And lastly, look into Ferry Point 

11          Park, okay?  It needs to be taken care of.  

12                 Thank you, Mr. Mayor.  Thank you, 

13          Madam Chairman.

14                 MAYOR DE BLASIO:  Thank you.  

15                 CHAIRWOMAN WEINSTEIN:  Thank you, 

16          Assemblyman and Mayor.

17                 Senator Young.

18                 CHAIRWOMAN YOUNG:  Thank you, 

19          Assemblywoman.  

20                 And our next speaker on the Senate 

21          side is our chair of the Senate Standing 

22          Committee on Cities, and that's Senator 

23          Simcha Felder.  Senator?

24                 SENATOR FELDER:  Thank you.  


 1                 Good morning.

 2                 MAYOR DE BLASIO:  Good morning.

 3                 SENATOR FELDER:  As I look at you, 

 4          Mr. Mayor, and at your staff, they're saying 

 5          there's no way he can ask a softball question 

 6          this morning.  And where are his props?  I 

 7          don't --

 8                 CHAIRWOMAN YOUNG:  Excuse me, Senator 

 9          Felder.  

10                 Could you please put 10 minutes on the 

11          clock?  He is a chairman.  He actually gets 

12          10 minutes.  Thank you.  

13                 SENATOR FELDER:  I'm sorry.  Thank 

14          you.  Thank you for coming to my defense.  I 

15          appreciate it.

16                 (Laughter.)

17                 SENATOR FELDER:  Well, now that I have 

18          another 10 minutes -- 

19                 (Laughter.)

20                 MAYOR DE BLASIO:  You can get some 

21          props now.

22                 (Laughter.)

23                 SENATOR FELDER:  I really just wanted 

24          to say thank you, thank you.  An issue that's 


 1          very personal to me and many of my colleagues 

 2          as well as to you, the needs of special-needs 

 3          children and their families -- all I can say 

 4          is thank you.  Because there's a lot of work 

 5          that still needs to be done, but thanks to 

 6          you and the angels -- I repeat that word.  

 7          Karin Goldmark doesn't like it, but she as 

 8          well as Deputy Mayor Laura Anglin, I'd been 

 9          working with, more recently, Sherif 

10          Soliman -- I don't want to leave anyone out.  

11          But really these are heroes and heroines on 

12          behalf of the children and families with 

13          special needs.  So I can't thank you enough.  

14                 And thank you -- the second thank you 

15          was for the commitment to build -- work 

16          together with me to build a playground, they 

17          call it a Playground for All Children -- 

18          there's one in Queens -- which allows 

19          children with disabilities to be able to 

20          use -- you know, they usually don't go to the 

21          parks, there's nothing that they can do 

22          there.

23                 So it's two thank yous.  And I would 

24          request from Senator Young that you owe me 8½ 


 1          minutes.

 2                 Thank you.

 3                 MAYOR DE BLASIO:  Senator, I want to 

 4          just say thank you for your kind words about 

 5          the team, but also thank you for having led 

 6          the charge.  That helped all of us to do a 

 7          better job in terms of making sure we were 

 8          addressing the needs of our children and 

 9          their families.

10                 You're right, we've still got more to 

11          go, but I've talked to a lot of parents and I 

12          know we're making progress.  And I've said to 

13          everyone this is about serving each child, it 

14          should never have been about saving money, 

15          which we all know once upon a time it was.  

16          It should be about serving each child.  You 

17          will see that the amount we're spending on 

18          special ed continues to rise, but for a good 

19          reason.  

20                 And all I can say is in addition to 

21          thank you, we would deeply appreciate your 

22          help in making sure that the proposed state 

23          cuts to special education could be mitigated.  

24                 Thank you.  


 1                 CHAIRWOMAN YOUNG:  Thank you.  

 2                 And as usual, Senator Felder got to 

 3          the heart of the problem very quickly.  So 

 4          thank you for that.

 5                 CHAIRWOMAN WEINSTEIN:  I'd be remiss 

 6          if I didn't say ditto to my good friend 

 7          Simcha Felder's remarks.

 8                 We've been joined by Crystal 

 9          Peoples-Stokes, and we've moved to 

10          Assemblyman Magnarelli, chair of our Local 

11          Governments Committee.

12                 ASSEMBLYMAN MAGNARELLI:  Good morning, 

13          Mayor.

14                 MAYOR DE BLASIO:  Good morning.

15                 ASSEMBLYMAN MAGNARELLI:  Thank you for 

16          coming to the hearing.  

17                 I just have two relatively general 

18          questions, but -- you've given us in your 

19          remarks how the Executive Budget in some 

20          respects affects New York City, but what 

21          aspects of the Executive Budget have the 

22          largest or the most impact for you in 

23          New York City?

24                 MAYOR DE BLASIO:  Most impact in what 


 1          sense, Assemblymember?

 2                 ASSEMBLYMAN MAGNARELLI:  Well, have 

 3          they been accounted for in your budget?  

 4                 MAYOR DE BLASIO:  Oh, yes.  And when 

 5          we presented our proposal, our preliminary 

 6          budget, we had the state Executive Budget to 

 7          work from.  

 8                 Now, obviously we know a lot of these 

 9          issues remain to be resolved.  But we treated 

10          the proposal from the state as the binding 

11          document to begin, and we did include that in 

12          our assumptions.

13                 ASSEMBLYMAN MAGNARELLI:  Can you make 

14          any kind of a determination on what would be 

15          the --

16                 MAYOR DE BLASIO:  The overall impact?

17                 ASSEMBLYMAN MAGNARELLI:  Yeah.

18                 MAYOR DE BLASIO:  It's over 

19          three-quarters of a billion dollars negative, 

20          unfortunately.

21                 As I mentioned, on the federal side 

22          right now we're looking at, just from what's 

23          already happened at the federal level, 

24          700 million, because the DSH program has 


 1          lapsed and because the tax bill was passed, 

 2          before we even treat the question of the 

 3          continuing resolutions, and who knows what's 

 4          going to happen there.

 5                 On the state side, when you take the 

 6          immediate cuts, which are approximately 

 7          400 million, the different programmatic cuts, 

 8          when you take the unfunded mandate around 

 9          Raise the Age -- and again, I emphasize how 

10          much we agree with this Legislature on Raise 

11          the Age, but we do belive it's important it 

12          be funded -- that's about 200 million.  

13                 So those, in addition to other areas, 

14          would take us over three-quarters of a 

15          billion dollars in negative impact.

16                 ASSEMBLYMAN MAGNARELLI:  Okay.  But 

17          those are federal --

18                 MAYOR DE BLASIO:  I'm sorry, state.  

19          No, I'm saying in terms of state programmatic 

20          cuts -- I mentioned the special ed, the child 

21          welfare, homelessness.  We've got, right 

22          there, 400 million.  Another 200 million for 

23          the cost of having to implement Raise the Age 

24          without state support.  


 1                 And again, there are additional items 

 2          I could bring forward to you, but the working 

 3          estimate right now based on the Executive 

 4          Budget from the state is over $750 million in 

 5          negative impact on the city budget.

 6                 ASSEMBLYMAN MAGNARELLI:  And in many 

 7          of these things -- I'm chair of Local 

 8          Governments, which would mean all of our 

 9          communities across the state.  But many of 

10          our cities are going to be facing the same 

11          things, am I correct, only in a different 

12          proportion?  

13                 MAYOR DE BLASIO:  In terms of impact 

14          on localities?

15                 ASSEMBLYMAN MAGNARELLI:  Yes.

16                 MAYOR DE BLASIO:  Yes, in some cases 

17          absolutely.  In other cases, no.  Some of the 

18          specific cuts are directed only at New York 

19          City.  Others are for localities all around 

20          the state.

21                 So first of all, I would say, you 

22          know, thinking in terms of the needs of my 

23          colleagues all over the state, we think we 

24          would all say every mayor, every town 


 1          supervisor would say unfunded mandates are 

 2          dangerous to all of us.

 3                 But I would also note that some of 

 4          these are very specific to New York City, 

 5          even in instances where other jurisdictions 

 6          received funding and they were held harmless.

 7                 ASSEMBLYMAN MAGNARELLI:  We'll have to 

 8          look into that.

 9                 I have a question on education.  The 

10          Executive proposes a change to the 

11          reimbursement rates for summer special 

12          education funding.  How will this impact your 

13          ability to provide services and programs to 

14          the vulnerable youth that utilize that?

15                 MAYOR DE BLASIO:  You know, the cut to 

16          special education worries us tremendously.  I 

17          mentioned the fact that it reaches a huge 

18          number of children in our city.  And per the 

19          previous dialogue with Senator Felder, we 

20          have struggled for years to finally catch up 

21          and handle appropriately the needs of our 

22          special education kids.  I think in the past 

23          those needs were not given the respect they 

24          deserved, again, for cost-savings reasons.  


 1          And I don't believe that was appropriate as a 

 2          parent, let alone as a public servant.

 3                 Our point here is the funding that is 

 4          threatened reaches a huge number of 

 5          special ed kids, particularly on the services 

 6          we provide for them during the summer.  That 

 7          continuity is very important for a number of 

 8          special ed children.  And I'm confused why 

 9          this was singled out for a cut, given that 

10          there I think is a growing consensus that 

11          special education is an area where we all 

12          need to do more.

13                 ASSEMBLYMAN MAGNARELLI:  I agree.  

14                 Thank you, Mr. Mayor.

15                 MAYOR DE BLASIO:  And thank you, 

16          Assemblymember.  Just one clarification.  I 

17          want to make sure I'm precise.  And Simonia 

18          rightfully has handed me a helpful note.

19                 When we did our budget presentation, 

20          we proposed our budget with a clear public 

21          acknowledgement of all the threats coming 

22          from Washington, all the issues that we're 

23          facing in the state budget.  We didn't factor 

24          in final numbers because of course both of 


 1          those, the issues have still not been fully 

 2          rectified.  We don't know what's going to 

 3          happen on those DSH payments ultimately, even 

 4          though right now they've been canceled.  

 5          Obviously you all and your colleagues are 

 6          going to adjudicate the Governor's Executive 

 7          Budget.

 8                 So we noted what the impact would be, 

 9          we did not put it as specific line items yet.  

10          But again, that combined potential negative 

11          impact is 1.5 billion.

12                 ASSEMBLYMAN MAGNARELLI:  Something you 

13          would have to readdress --

14                 MAYOR DE BLASIO:  Unquestionably, at 

15          the time of our executive budget, which comes 

16          after the state acts.

17                 ASSEMBLYMAN MAGNARELLI:  Okay, thank 

18          you, Mr. Mayor.

19                 MAYOR DE BLASIO:  Thank you.  

20                 CHAIRWOMAN YOUNG:  Thank you.  

21                 Okay, I'm going next.  So again, 

22          welcome, Mr. Mayor.  And I have several topic 

23          areas that I'd like to go through today, but 

24          first I'd like to start with the property tax 


 1          cap.  

 2                 And every local government and school 

 3          district except New York City has been 

 4          subject to the property tax cap since 2012.  

 5          And it's been extraordinarily effective in 

 6          helping taxpayers all around the state, with 

 7          the exception of New York City.  Since the 

 8          enactment of the cap, property taxes outside 

 9          of New York City have grown by an average of 

10          just 2.2 percent per year, less than half the 

11          average annual growth from 2000 to 2010.  So 

12          the brakes have been put on those tax hikes.

13                 Since the enactment of the cap, 

14          New York City's property tax levy has grown 

15          at an average of 6.2 percent per year.  Given 

16          the significant growth in property taxes, 

17          wouldn't New York City residents and 

18          businesses benefit from the property tax cap?

19                 MAYOR DE BLASIO:  Madam Chair, I know 

20          you believe deeply in what you're saying, and 

21          I also believe deeply it's the wrong 

22          direction for New York City.  Here's my 

23          central argument.

24                 First of all, the reason that you see 


 1          that increase is not because of a rate 

 2          increase.  In fact, in the four years of my 

 3          administration we have not increased property 

 4          tax rates, nor will we.  And this new budget, 

 5          once again, does not increase property tax 

 6          rates.  And I am a homeowner myself, and I 

 7          remember the property tax rate increases of 

 8          the past, and they're not happening on my 

 9          watch.

10                 Part of that increase that you're 

11          talking about is because values have 

12          continued to improve in New York City.  And 

13          as a homeowner I can say that's a good thing, 

14          even though I did not for a moment miss the 

15          fact that people have to deal with the 

16          challenge of their taxes.

17                 But here is where it, in my view, is 

18          necessary for us to set the course that we're 

19          on now.  I'll give you a key example.  

20                 Working with the City Council, we 

21          added 2,000 more police officers on patrol.  

22          That was directly a root cause of the fact 

23          and an incentive to make the changes that we 

24          have made in public safety.  Putting those 


 1          2,000 more officers on patrol allowed us to 

 2          implement neighborhood policing and allowed 

 3          us to create a much stronger counterterrorism 

 4          capacity.  It is one of the reasons we're now 

 5          the safest big city in America.

 6                 CHAIRWOMAN YOUNG:  But Mr. Mayor --

 7                 MAYOR DE BLASIO:   My point --

 8                 CHAIRWOMAN YOUNG:   -- I was asking 

 9          about property taxes, so if we could get back 

10          to that.  You talk about the fact that values 

11          have improved.  And so basically what's gone 

12          on in the city is that you have not raised 

13          taxes per se, but you have increased property 

14          values and assessments.  And so since the 

15          levy has increased by the levy growth factor 

16          under the -- no.  So the levy has increased 

17          by $6.8 billion more than it would be if we 

18          had imposed a property tax cap.  So why 

19          wouldn't city residents and businesses want 

20          their property taxes to be $6.8 billion 

21          lower?  

22                 And I will remind you of your own 

23          testimony today that says "there are also 

24          negative consequences for our residents' 


 1          bottom lines."  This is your testimony.  "The 

 2          new tax law caps the state and local tax 

 3          deduction and eliminates the personal 

 4          exemption.  That means hundreds of thousands 

 5          of New Yorkers, most earning less than 

 6          $100,000 will pay more taxes.  I commend the 

 7          Governor for trying to find ways to blunt the 

 8          effects of the new tax law, and I look 

 9          forward to working with him and the 

10          Legislature on solutions."

11                 So you are saying in your testimony 

12          that the new federal tax law hurts property 

13          taxes in the City of New York, yet you say 

14          that you cannot put in place a property tax 

15          cap.  Isn't there a disconnect there?

16                 MAYOR DE BLASIO:  No.  We did not 

17          choose the new federal tax law.  I think it 

18          was a huge mistake for the country and for 

19          this state.  We are going to work with the 

20          Legislature and the Governor to see how we 

21          can blunt the impact.  I'm very hopeful we 

22          can find a way to do that.

23                 But Madam Chair, to my previous point.  

24          If we were to pursue the course of action 


 1          that you recommend, we would not have been 

 2          able to put those 2,000 more officers on 

 3          patrol.  We would not have been able to make 

 4          the investments that are working in terms of 

 5          public safety, education, and a number of 

 6          other areas.

 7                 I think it's just a fundamental 

 8          recognition that New York City is working 

 9          today -- our economy is working, we're safer, 

10          our schools are getting better -- because we 

11          made those investments.  If we put a property 

12          tax cap on, we would not only not be able to 

13          make those investments, we would have to lay 

14          off a very large number of public employees 

15          who are providing very good service to the 

16          people of this city, and we believe that's 

17          the wrong direction for our city.

18                 CHAIRWOMAN YOUNG:  How many billions 

19          do you have in a surplus or reserves for the 

20          city?  

21                 MAYOR DE BLASIO:  The surplus right 

22          now is approximately $5.5 billion if you 

23          combine our general reserve plus our capital 

24          stabilization reserve and our employee health 


 1          benefit reserve.  That last one, I will note, 

 2          is against much, much bigger liabilities 

 3          going forward.

 4                 CHAIRWOMAN YOUNG:  So you really do 

 5          have quite a surplus.

 6                 But I want to switch now to school 

 7          funding and performance.  The Senate Finance 

 8          Committee has been analyzing the Governor's 

 9          proposal, and actually it provides more than 

10          80 percent of the 2018-2019 Foundation Aid 

11          increase to high-needs school districts, 

12          including New York City.  What percentage of 

13          the increased Department of Education funding 

14          in the city's preliminary budget do you 

15          expect would go to individual high-needs 

16          districts?  

17                 We're aware that there are 1600 

18          individual schools within the New York City 

19          system.  There are many high-needs school 

20          districts.  So how much of the budget would 

21          you expect to go to those high-needs schools?  

22          Because this Legislature and the Governor 

23          have prioritized high-needs schools in the 

24          formula, and I'm very hopeful that the city 


 1          does the same.

 2                 MAYOR DE BLASIO:  We have been 

 3          prioritizing high-need schools in a number of 

 4          ways, Madam Chair.  And I can get you a 

 5          breakout of all of them, beginning with our 

 6          focus on Renewal Schools and Community 

 7          Schools, continuing with everything we're 

 8          doing with the pre-K and 3-K programs, which 

 9          disproportionately help high-need schools.  

10          The Advanced Placement Initiative 

11          disproportionately helps high-need schools.  

12          We can aggregate all of those and show you 

13          how they affect the higher-needs schools.  

14                 But all of this has been about trying 

15          to reach a number of schools that bluntly 

16          were not invested in in the past and now are 

17          getting much greater investment because of 

18          each of these initiatives.

19                 CHAIRWOMAN YOUNG:  So the state 

20          identifies school districts as high-need 

21          based on student demographics and local 

22          wealth.  And how does the city identify 

23          individual schools as high-need?

24                 MAYOR DE BLASIO:   I'm not familiar 


 1          with the specific formula, but I'm happy to 

 2          get it for you.

 3                 CHAIRWOMAN YOUNG:  Well, if you could 

 4          get it to us, what factors are used in making 

 5          the determination.  

 6                 And we also would need approximately 

 7          how many or what percentage of city schools 

 8          do you currently consider to be high-need.  

 9          Do you know?  

10                 MAYOR DE BLASIO:   I'll get that.  

11          I'll make sure we're using the exact numbers 

12          with you.

13                 CHAIRWOMAN YOUNG:  Thank you.  Could 

14          you provide a list of those schools?  

15                 MAYOR DE BLASIO:  Yes.

16                 CHAIRWOMAN YOUNG:  That would be very 

17          helpful.

18                 So how much funding per pupil does the 

19          city currently provide its high-need schools 

20          from state and local resources, and how does 

21          this compare to its lower-need schools?

22                 MAYOR DE BLASIO:  Again, Madam Chair, 

23          I think the simple way to look at this is 

24          that we have been working across the entire 


 1          school system, 1.1 million-plus kids, to 

 2          improve the schools across the board, every 

 3          type of school.  Which is why we have higher 

 4          graduation rates, higher test scores, 

 5          et cetera.

 6                 Our major programmatic thrusts, which 

 7          have been huge areas of investment -- 

 8          although many of them are universal, like 

 9          pre-K and 3-K, they disproportionately 

10          support high-need schools.  Certainly, again, 

11          Community Schools and Renewal Schools do 

12          that.  We will provide you the breakout of 

13          each of those investments and how they affect 

14          those schools.  

15                 But unquestionably, because the Equity 

16          and Excellence vision is about addressing the 

17          lack of funding in the past to those very 

18          schools, we have spent four years trying to 

19          right that wrong of the past.

20                 CHAIRWOMAN YOUNG:  So I have a 

21          question about why doesn't the Fair Student 

22          Funding formula place more of a weighting on 

23          poverty.

24                 MAYOR DE BLASIO:  I'm sorry, I'm not 


 1          following.

 2                 CHAIRWOMAN YOUNG:  So it's my 

 3          understanding the Fair Student Funding 

 4          formula doesn't place a lot of significance 

 5          or weighting on poverty.  Could you please 

 6          explain that for us?  

 7                 MAYOR DE BLASIO:  I'm not sure on that 

 8          interpretation, so let me see if my colleague 

 9          wants to jump in or if we need to come back 

10          on that.  We'll come back to you on that.

11                 CHAIRWOMAN YOUNG:  Okay, thank you.  

12                 There was recently a Chalkbeat 

13          article, and it said that only about 

14          one-fifth of the Department of Education's 

15          budget is allocated through the Fair Student 

16          Funding formula.  And if that's the case, why 

17          doesn't the city allocate more funding 

18          through that formula?  

19                 MAYOR DE BLASIO:  First of all, 

20          obviously we have a huge set of mandates that 

21          we operate under, and that's one of the first 

22          elements of how we fund.  And we have 

23          contractual obligations to our workforce.  

24          There's a whole set of things that go beyond 


 1          the question of that formula.  

 2                 But again, it's a question, Madam 

 3          Chair, of how we change our schools for the 

 4          better.  For example, I believe for decades 

 5          there was not enough focus on early childhood 

 6          education.  I believe this was a structural 

 7          problem.  This is not something the formula 

 8          would have addressed.  We addressed it on a 

 9          citywide basis.  

10                 It's quite clear there were vast 

11          inequities between schools.  So for example, 

12          some schools had numerous Advanced Placement 

13          courses, others had none whatsoever.  This 

14          was true for decades.  We did not think and I 

15          do not believe that's something you leave up 

16          to individual schools to resolve.  That 

17          requires a citywide policy to address.  We 

18          created those policies and we distributed the 

19          resources accordingly.  

20                 The formula is one piece of how we 

21          address equity and improve our schools, but 

22          there are other pieces as well.  And we've 

23          made sure to give them substantial support.

24                 CHAIRWOMAN YOUNG:  Thank you.


 1                 I came across this article recently.  

 2          It says "Filthy New York City School 

 3          Cafeterias Rife with Rodents and Bugs," from 

 4          a report.  Could you please address that?

 5                 MAYOR DE BLASIO:  I'm sorry, I could 

 6          not hear that last part. 

 7                 CHAIRWOMAN YOUNG:  The headline:  

 8          "Filthy New York City School Cafeterias Rife 

 9          with Rodents and Bugs," according to a 

10          report.  Could you please address that 

11          situation?  

12                 MAYOR DE BLASIO:  Absolutely.  Both my 

13          kids went to New York City public schools, it 

14          wasn't that long ago they left, and they 

15          spent a lot of time in those cafeterias, so I 

16          take very personally the notion that any 

17          cafeteria is not up to the health standards 

18          it should be.  

19                 We looked into that.  There's 

20          definitely work to do.  Most of those 

21          instances were singular, were addressed 

22          immediately.  But my mandate to our team is 

23          to continue to improve the quality of our 

24          cafeterias, and that anything that we need to 


 1          put resources into to make sure they're 

 2          healthy and safe, we will do.

 3                 CHAIRWOMAN YOUNG:  I assume that a lot 

 4          of those schools with cafeteria problems are 

 5          high-needs schools, so I would urge you to 

 6          make sure that those schools are properly 

 7          funded.

 8                 How does the city identify failing or 

 9          underperforming schools?  What metrics do you 

10          use?  

11                 MAYOR DE BLASIO:  A number of 

12          different metrics -- attendance, graduation 

13          rates, standardized testing.  A host of 

14          metrics are looked at.  We believe in 

15          multiple measures to determine the status of 

16          each school.  Obviously we work with the 

17          State Education Department in terms of 

18          determining some of the schools that need 

19          particular help.  This is work we do 

20          constantly.  And the goal, of course, is to 

21          improve every school regardless of its 

22          status.  

23                 CHAIRWOMAN YOUNG:  How many failing 

24          schools do we have in the city?  


 1                 MAYOR DE BLASIO:  Again, it depends 

 2          on -- there are several definitions out 

 3          there.  The Renewal School program has been 

 4          the central area that we've focused on.  I 

 5          don't -- with deepest respect to you, 

 6          Madam Chair, I don't look at them as failing, 

 7          I look at them as schools that need to be 

 8          fixed and were invested in in the past.

 9                 That program began with 94 schools, 

10          but that number has been declining each year 

11          as we have either closed or consolidated some 

12          of the schools, or now a number of the 

13          schools will graduate out of the program.

14                 CHAIRWOMAN YOUNG:  Thank you.

15                 A question on the failing schools -- 

16          or the ones that you don't consider to be 

17          failing but underperforming.  Are they more 

18          heavily concentrated in any community, 

19          districts or boroughs?  Is it heavily 

20          concentrated in any particular community or 

21          borough?

22                 MAYOR DE BLASIO:  They are spread 

23          across the city.  There's clearly some 

24          correlation to where historically there's 


 1          been underinvestment in communities, there's 

 2          no question about that.

 3                 But in the end, it is an individual 

 4          matter.  We have schools literally within a 

 5          few blocks of each other where one is doing 

 6          very well and one still needs more work.  We 

 7          have schools that again are coming out of 

 8          that Renewal School program with great 

 9          progress, others that we have decided are not 

10          making enough progress and need to be closed.

11                 So yes, of course there's a broad 

12          correlation to less advantaged communities, 

13          but it is by no means a broad brush.

14                 CHAIRWOMAN YOUNG:  Thank you.

15                 How many of these schools have been 

16          failing for 10 years or more?  Because you 

17          say you're taking a lot of action steps, but 

18          it's my understanding quite a few have been 

19          considered to be failing schools for a long 

20          time.

21                 MAYOR DE BLASIO:  We can give you the 

22          updated figures, given the ones that we've 

23          closed or consolidated or are about to close 

24          in June.  I don't know the measure, because 


 1          obviously I've only been in office for four 

 2          years, so I don't know what happened in the 

 3          previous six years with each of those 

 4          schools.  But we can give you the profile of 

 5          them easily.

 6                 CHAIRWOMAN YOUNG:  Thank you.  

 7                 I have a lot of questions about MTA 

 8          and NYCHA, but I will come back for Round 2.  

 9          Thank you.

10                 CHAIRWOMAN WEINSTEIN:  Thank you.  

11          We've been joined on the Assembly side by 

12          Assemblyman Skoufis and Assemblyman Weprin.  

13                 Now to Assemblyman Cusick for 

14          questions.

15                 ASSEMBLYMAN CUSICK:  Thank you, 

16          Chairwoman.  

17                 Mr. Mayor, thank you for being here.  

18          Thank you for testifying before this 

19          committee every year.  It's greatly 

20          appreciated by the members here.  

21                 I want to ask also about the property 

22          tax issue.  You know, you and I over the 

23          years have had this discussion about the 

24          property tax cap.  You and I disagree on it.  


 1          But over the years, you have said that there 

 2          will be a comprehensive tax reform plan set 

 3          forth by your administration focusing on the 

 4          assessments.  

 5                 We have a bill in the Assembly that 

 6          would focus on forming a commission that 

 7          would look at the process of the assessments.  

 8          I don't think any of us have residents that 

 9          don't believe we should pay for services.  I 

10          think what the gripe is is that many folks 

11          just want to know what the process is and how 

12          their money is being taken and used for these 

13          services.  And right now I can tell you, from 

14          personal experience, there isn't that 

15          confidence from the residents that they know 

16          how the system works, how they're charged for 

17          their taxes.  

18                 And so I just wanted to ask, are we 

19          anywhere closer to this tax reform commission 

20          or process that you had set forth last year 

21          at this budget hearing?

22                 MAYOR DE BLASIO:  Absolutely.  We've 

23          obviously been very focused in the last weeks 

24          on preparing the preliminary budget and 


 1          preparing for this testimony.  But certainly 

 2          very soon we'll have a further announcement 

 3          on the next steps on the property tax reform.  

 4          It's absolutely needed.  I'm committed to it.  

 5          We're going to move on it.  We're going to 

 6          need the help of the Legislature and the 

 7          City Council to address it.

 8                 Assemblymember, you know I've had 51 

 9          town hall meetings.  I think I've been asked 

10          the question at 51 of them, so --

11                 ASSEMBLYMAN CUSICK:  Fifty-one times 

12          at my town hall.

13                 MAYOR DE BLASIO:  There you go.  

14                 And what I've said also is in addition 

15          to creating more transparency and consistency 

16          across all five boroughs and all 

17          neighborhoods, we ultimately have to be 

18          roughly revenue-neutral to be able to 

19          continue providing the support we do.

20                 And I think you're right that your 

21          constituents and many other constituents 

22          don't see yet the kind of consistency and 

23          transparency they want.  What I hope they are 

24          seeing more of is what the impact of the 


 1          dollars spent is.  Certainly crime reduction, 

 2          improvements in schools, repaving -- I know 

 3          it's a personal favorite.

 4                 ASSEMBLYMAN CUSICK:  Yes, repaving's 

 5          big.  And people do see it.  But they do get 

 6          frustrated because -- the assessments just 

 7          went out last month.  And I don't know about 

 8          my colleagues, but the phones in my district 

 9          office have been all about the increase in 

10          what they call the property tax.  They don't 

11          know the difference.  And so that's why I 

12          think it's important.  

13                 I know -- I don't want you to make 

14          news right here, but maybe you can't for my 

15          sake.  But can we get a definite timeline, a 

16          date as to when a report will be issued?  

17          Because that would make a lot of residents 

18          feel a little better about this process.

19                 MAYOR DE BLASIO:  I'm going to be 

20          careful, because the day we announce the 

21          vision I want to make sure everything is 

22          ready.  

23                 I can tell you when I say very soon, I 

24          mean very soon.  It's time to do it.  We had 


 1          to get through the budget process first.  So 

 2          I won't make specific news, but I will tell 

 3          you it's coming and it's going to be 

 4          something that addresses these issues that 

 5          you and I have discussed.

 6                 And I would remind you, I understand 

 7          the frustrations people feel, I assure you.  

 8          My constituents talk to me about them too at 

 9          those town hall meetings and many other 

10          places.  It is because of the increase in 

11          values in our homes, which per se is a good 

12          thing.  I understand the challenge that comes 

13          with it.  

14                 At the same time, it's very important 

15          that there has not been a rate increase.  

16          It's very important that there's no plan for 

17          a rate increase.  And it's important that 

18          compared to the rest of the state, our 

19          property tax levels are still much, much 

20          lower.  The estimate is New York City 

21          property tax levels are three to four times 

22          lower, proportionally, than in the rest of 

23          the state, and that's crucial.

24                 ASSEMBLYMAN CUSICK:  Right.  Yeah, I 


 1          understand that.  But most people that we 

 2          represent don't understand that when the 

 3          assessment goes up, that it isn't a property 

 4          tax increase.  So that's why it's urgent that 

 5          we do move forward and get this reform going.  

 6          And I'm glad to hear that it's happening 

 7          soon.  Hopefully "soon" means this year, 

 8          because --

 9                 MAYOR DE BLASIO:  Unquestionably this 

10          year.  And we are going to need -- I want to 

11          emphasize we're definitely getting started 

12          this year.  We're going to need a lot of work 

13          and a lot of help here to act on the elements 

14          of the plan we put together.  And so our 

15          job -- I believe my job as mayor is to bring 

16          all the strands together into one final plan 

17          with all of the legislative proposal attached 

18          to bring here.  Obviously, that's when a lot 

19          of hard work happens here to go through it 

20          and to get to a final outcome.

21                 ASSEMBLYMAN CUSICK:  Great.  I see my 

22          time is up.  Thank you.

23                 CHAIRWOMAN YOUNG:  Thank you.  

24                 We've been joined by Senator Tom Croci 


 1          and Senator James Tedisco.  

 2                 And our next speaker is Senator Kathy 

 3          Marchione, who is chair of the Senate 

 4          Standing Committee on Local Government.

 5                 SENATOR MARCHIONE:  Thank you.  

 6                 Thank you for your testimony, 

 7          Mr. Mayor.

 8                 MAYOR DE BLASIO:  Thank you.

 9                 SENATOR MARCHIONE:  One of the things 

10          you talked about was a goal of reducing your 

11          jail population to 5,000.  My question is 

12          taken into consideration for those 

13          reductions, I hope, is the public safety of 

14          letting out people from jail who are there 

15          because they've done wrong --

16                 MAYOR DE BLASIO:  Yes.

17                 SENATOR MARCHIONE:  -- and have 

18          jeopardized public safety to the rest of your 

19          community.

20                 So can you tell me about, you know, 

21          your goal of letting them out?  What about 

22          the goal of public safety?

23                 MAYOR DE BLASIO:  Senator, it's the 

24          number-one job of all of us in public life.  


 1          And I'm very proud of the fact that because 

 2          of the extraordinarily work of the men and 

 3          women of the NYPD and their community 

 4          partners, we are literally the safest big 

 5          city in America.  We have brought down major 

 6          crime categories to the lowest level since 

 7          the 1950s.  The last time we had this few 

 8          homicides in New York City was 1951.  

 9                 Extraordinary progress has been made, 

10          and we intend to continue it.  Commissioner 

11          O'Neill believes fundamentally that we will 

12          continue to reduce crime, while at the same 

13          time with new approaches that we find are 

14          working very, very effectively.  Compared to 

15          four years previous, in 2017 we had 100,000 

16          fewer arrests, while we had greatly reduced 

17          crime at the same time.

18                 So we think we can reduce jail 

19          population while protecting the people of the 

20          city.  The vast majority of the problem with 

21          reducing jail population is with nonviolent 

22          offenders and the sheer time it takes in the 

23          state-governed court system for people to 

24          move through their trial process while 


 1          incarcerated on Rikers Island.  Also the 

 2          problem that people end up in there because 

 3          of a bail matter, even though they've done a 

 4          nonviolent offense.

 5                 The legislation before the 

 6          Legislature -- I know there's different 

 7          versions, but all aiming at the same goals of 

 8          speedier trials and reducing the burden of 

 9          bail -- that alone would have a hugely 

10          positive impact on our efforts to close 

11          Rikers Island, but we believe would not 

12          compromise public safety at all.

13                 SENATOR MARCHIONE:  Okay.  I'm limited 

14          to one time, so I have a number of questions 

15          for you.

16                 If that's the case, you've increased 

17          your NYPD by 2,000 --

18                 MAYOR DE BLASIO:  Two thousand 

19          officers on patrol, yeah.

20                 SENATOR MARCHIONE:  -- additional 

21          officers, if crime is going down.  And our 

22          Governor has found it necessary to send many 

23          New York State Troopers from their upstate 

24          posts to New York City.  Can you tell me why, 


 1          if your crime is going down, why these 

 2          measures are necessary?

 3                 MAYOR DE BLASIO:  Well, obviously, 

 4          Senator -- I say it with deepest respect to 

 5          the question and to the Governor -- that is a 

 6          question for the Governor.  Those decisions 

 7          that he has made and the State Police have 

 8          made are theirs.  Sometimes they've been 

 9          matters that have been discussed with NYPD, 

10          other times not.  

11                 I think of course the question is 

12          where are there areas of sensitivity, 

13          particularly in terms of antiterror efforts.  

14          Some of those targets obviously are in the 

15          city, and that would be a logical area to 

16          reinforce.  But I am clear about the fact and 

17          respect the fact that there's only so many 

18          resources to go around, and there's huge 

19          areas of the state that need that help and 

20          coverage too.

21                 So we feel very confident in the 

22          efforts of the NYPD to protect our city.  

23          We're very sensitive on antiterrorism, and 

24          obviously we do need some partnership with 


 1          the state.  But I can't answer the rationale 

 2          for all of those actions.

 3                 SENATOR MARCHIONE:  So you believe you 

 4          have enough of your own police force to be 

 5          able to handle New York City pretty much on 

 6          your own.

 7                 MAYOR DE BLASIO:  Unquestionably there 

 8          are, again, some areas where we do not have 

 9          jurisdiction -- the airports and the railroad 

10          stations are obvious examples -- that we 

11          assist with and we're happy to assist with in 

12          every way.  Those areas cannot be uncovered, 

13          Senator.  I know you'd agree with that.  They 

14          cannot be uncovered, and we don't have 

15          jurisdiction to provide the ongoing 

16          protection.

17                 With those exceptions put aside, and 

18          you're talking about New York City as a 

19          whole, I have total confidence in NYPD's 

20          ability to protect New York City.

21                 SENATOR MARCHIONE:  Thank you.  

22                 I noticed in your testimony, which I 

23          thought was very interesting, there's a 

24          heroin epidemic throughout the country, yet 


 1          your testimony is silent on heroin.  Do you 

 2          believe that the monies that you're receiving 

 3          from the state are wholly adequate for the 

 4          heroin epidemic, for you to be able to fight 

 5          the heroin epidemic in New York City?  

 6                 MAYOR DE BLASIO:  We -- it's a major, 

 7          major priority in New York City.  We have 

 8          absolutely borne the brunt of the opioid 

 9          epidemic, as have many parts of the country.

10                 In fact, not only have we made major 

11          new investments, whether it's on the policing 

12          side or the treatment side or the prevention 

13          side of the equation, we announced recently a 

14          lawsuit against the opioid makers and 

15          distributors, hoping to achieve money damages 

16          that will allow us to put more money into 

17          prevention and treatment.

18                 There's endless need.  Very good 

19          question, Senator.  It's not for lack of 

20          interest, it was in the interests of brevity 

21          and also, honestly, that we're trying to 

22          focus on the areas that I believe are most 

23          problematic in the state budget that we're 

24          asking for your help in addressing, where 


 1          there are specific cuts, and focusing on the 

 2          area of education, where we see this change 

 3          in the funding that we think has a huge 

 4          impact.  

 5                 We absolutely could use more state 

 6          support to address the opioid epidemic.  But 

 7          we are going to, in the meantime, do 

 8          everything we can with city resources to 

 9          fight the problem.

10                 SENATOR MARCHIONE:  Okay.  Good.  

11          Because I know upstate that's a very serious 

12          issue, is funding, relative to being able to 

13          help our residents.

14                 MAYOR DE BLASIO:  And one other 

15          thing -- I'm sorry, Senator, to interrupt.  

16          When we composited recently when we announced 

17          the lawsuit, we checked all spending we were 

18          doing annually related to opioids.  It's over 

19          half a billion dollars when you include 

20          policing, jails, treatment by our Health + 

21          Hospitals Corporation, and other matters.  

22          Right now the city is spending over half a 

23          billion.  So you can imagine what a strain 

24          that is, and obviously we would appreciate 


 1          more support.

 2                 SENATOR MARCHIONE:  Also you said in 

 3          your testimony -- I'm just interested in this 

 4          myself -- that you are going to -- everyone 

 5          who leaves jail following a city sentence 

 6          will be offered a transitional job.  Where 

 7          are they offered a job, and for what's the 

 8          length of time?  

 9                 MAYOR DE BLASIO:  My memory is it's a 

10          three-month transitional job.  And this is 

11          for folks who have been sentenced.  So on our 

12          jail system, a number of people are awaiting 

13          trial and then there's a small but meaningful 

14          number of people who have been sentenced to 

15          less than a year.  That's the requirement to 

16          be in city jails.  If you've been sentenced, 

17          it can only be up to a year.  After that, 

18          you'd have to be in a state prison if it were 

19          a higher sentence.

20                 For those folks sentenced less than a 

21          year -- by definition they have done lesser 

22          offenses and nonviolent offenses -- we offer 

23          them, working with a number of nonprofit 

24          organizations, an opportunity to have a work 


 1          experience immediately out of jail, because 

 2          we want to get them refocused on work, 

 3          refocused on being a part of mainstream 

 4          society.  Also the chances of getting a job 

 5          after that are greatly magnified if someone 

 6          can apply for a job while having one.  

 7                 And we believe this investment will 

 8          greatly reduce recidivism, helping us to 

 9          bring down the jail population, also saving 

10          the taxpayers a lot of money. 

11                 SENATOR MARCHIONE:  It sounds like a 

12          good program.  I just wondered whether they 

13          were going on the city payroll afterwards, 

14          but you've answered that.  You said no --

15                 MAYOR DE BLASIO:  No.

16                 SENATOR MARCHIONE:  -- they're at 

17          not-for-profits.

18                 One other thing -- and I have a few 

19          minutes left -- you talked about wanting to 

20          have early voting.  Every statistic that I've 

21          seen, and perhaps you could share your 

22          statistics with me, state that early voting 

23          doesn't really give a lot of -- any 

24          additional voting, but it does come with a 


 1          price tag.  And I'm surprised that your 

 2          testimony didn't request that the state 

 3          provide the additional funds, as that is also 

 4          an unfunded mandate.  

 5                 And I've heard throughout the 

 6          testimony -- and I understand, I'm a local 

 7          government person myself for over 30 years.  

 8          I get those unfunded mandates.  I'm just 

 9          surprised, Mayor, that you weren't concerned 

10          about this being an unfunded mandate.

11                 MAYOR DE BLASIO:  That's a very fair 

12          point, Senator.  

13                 And honestly, my fervor to get the 

14          reform comes first in this case.  I'm very 

15          quick to note when there is an unfunded 

16          mandate.  But I think on a basic matter of 

17          democracy, before we even talk about how to 

18          pay for it, the most important point is 

19          making it easier for people to participate.  

20                 To think that there's 2 million people 

21          in our state who are not participating, who 

22          are eligible right this moment, not even 

23          registered -- and we know that is directly 

24          connected to how difficult it is to vote.  We 


 1          see much better participation levels in 

 2          states that have early voting, for example, 

 3          and same-day registration.

 4                 So honestly, to me, it's not first and 

 5          foremost a financial issue, it's more a 

 6          question of helping to strengthen our 

 7          democracy.

 8                 SENATOR MARCHIONE:  Thank you.  I 

 9          just -- I'd appreciate those statistics if 

10          you have them, because I have --

11                 MAYOR DE BLASIO:  We'll get those for 

12          you.

13                 SENATOR MARCHIONE:  -- I have 

14          statistics that prove otherwise.

15                 But thank you so much for answering my 

16          questions.

17                 MAYOR DE BLASIO:  Thank you.

18                 CHAIRWOMAN WEINSTEIN:  Thank you.

19                 Assemblyman Castorina.

20                 ASSEMBLYMAN CASTORINA:  Thank you, 

21          Mr. Mayor.  Always appreciate you coming up 

22          here, and appreciated your testimony today.

23                 I have a couple of questions.  I'll be 

24          brief.  The federal Tax Cuts and Jobs Act 


 1          created an unanticipated tax-revenue windfall 

 2          for New York if New York state does not 

 3          decouple portions of our tax code from the 

 4          federal tax law.  Specifically, taxpayers 

 5          would see a $1.5 billion tax increase on 

 6          their state personal income taxes.  

 7                 How does New York State conforming to 

 8          federal tax law impact New York City's income 

 9          tax receipts?  And also, New York City would 

10          see additional income tax revenue if the 

11          state doesn't change the law.  What are you 

12          estimating that these receipts will be?

13                 MAYOR DE BLASIO:  Well, we actually 

14          looked at this -- I appreciate the question 

15          very much, Assemblymember.  We looked at this 

16          a little differently.  

17                 We believe that that burden placed on 

18          our taxpayers by ending the deductibility -- 

19          which as you know has been in place since 

20          1913 -- we believe it was a huge mistake and 

21          decided not to recognize that new revenue.  

22          So you do not see it in our preliminary 

23          budget, because it's our intention to work 

24          with the state to find a way to blunt the 


 1          impact and hopefully allow people to not pay 

 2          a higher level than they would have had 

 3          deductibility still been there.

 4                 So we do not note it as new revenue.  

 5          We believe fundamentally that if we all work 

 6          together, we can find a way to protect those 

 7          taxpayers, and then there would not be new 

 8          revenue.

 9                 ASSEMBLYMAN CASTORINA:  Mr. Mayor, 

10          just -- I want to make a statement real 

11          briefly.  In fairness to the millions of 

12          people that are now seeing more money in 

13          their paycheck, their take-home pay, I don't 

14          necessarily believe that they would feel that 

15          it's a mistake.

16                 MAYOR DE BLASIO:  Well, I'm sorry -- 

17          just to be clear -- I'm sorry to interrupt.  

18          On that one piece, I think it's strongly 

19          believed -- this is a bipartisan consensus in 

20          this state -- that the loss of deductibility 

21          was a mistake.  I'm just -- we can debate the 

22          other fine points of the bill, but I would 

23          argue that one has been a bipartisan 

24          consensus in New York State.


 1                 ASSEMBLYMAN CASTORINA:  Thank you, 

 2          Mr. Mayor.

 3                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 4                 Before we move to the Senate, I just 

 5          wanted to note that Speaker Heastie is 

 6          keeping an eye on our proceedings from the 

 7          corner there.

 8                 CHAIRWOMAN YOUNG:  Thank you.  

 9                 Our next speaker is the ranking 

10          member --

11                 MAYOR DE BLASIO:  Good morning, 

12          Mr. Speaker.

13                 SPEAKER HEASTIE:  How are you.

14                 MAYOR DE BLASIO:  Good to see you.

15                 CHAIRWOMAN YOUNG:  Oh, okay.  Our next 

16          Senate speaker is Senator Roxanne Persaud, 

17          who is ranking member on the Cities 

18          Committee.

19                 SENATOR PERSAUD:  Thank you.  

20                 Good morning, Mr. Mayor.  It's always 

21          great to see you here in Albany --

22                 MAYOR DE BLASIO:  Good morning.

23                 SENATOR PERSAUD:  -- and in the 

24          district.  You were in my district a couple 


 1          of days ago talking about 3-K for all.  I 

 2          appreciate what you're doing for the kids in 

 3          Brownsville in particular.

 4                 You talked about Crossroads and Ella 

 5          McQueen.  I just want to touch on that.  

 6          There's a concern in Ocean Hill-Brownsville 

 7          that with your intentions to open Ella 

 8          McQueen and expand the Crossroads, at the 

 9          same time you're closing -- DOE is proposing 

10          to close the only high school in Ocean 

11          Hills-Brownsville.  The people of Brownsville 

12          don't feel that should be, you're looking at 

13          the criminal element while taking away the 

14          only high school.

15                 So, you know, we met with your staff 

16          last week and we're asking you to look at 

17          that.  Because I think while you're looking 

18          to open criminal justice centers, one is just 

19          two blocks away from the only high school, 

20          and the other is six blocks away.  So I'd 

21          just ask you to look into that.

22                 MAYOR DE BLASIO:  Senator, if I may 

23          say, when you're right, you're right.  We 

24          believe that that plan that we originally put 


 1          forward related to the school -- which was 

 2          based on some real solid numerical challenges 

 3          that we're seeing in that school.  But we 

 4          believe that community leaders, yourself 

 5          included, raised very good points about ways 

 6          that we could approach the situation, so 

 7          we're going to put that original plan on 

 8          pause, restart with the community, and see 

 9          what we can do to strengthen that school and 

10          move forward for another year with that 

11          school and see if we can give it a deeper 

12          turnaround.

13                 As you know, the vision of the Renewal 

14          School program was to invest heavily for 

15          three years.  And we've seen some that we do 

16          not believe can be turned around, that we are 

17          closing, or some that we already closed or 

18          merged.  

19                 This school had a mix of results, but 

20          there were real concerns.  The communities 

21          raised excellent points that we want to honor 

22          by adding a year and adding some additional 

23          investment and seeing if we can get it to be 

24          sustainable on a long-term basis.  


 1                 SENATOR PERSAUD:  Thank you.

 2                 I also want to commend you and the 

 3          NYPD for, you know, your emphasis on 

 4          community policing.  And when we're talking 

 5          about New York City being the safest city 

 6          it's been in a number of years, I appreciate 

 7          that.  And I hope that the precincts -- I 

 8          cover seven precincts -- will be allocated 

 9          the resources they need to continue to fight 

10          crime, so that we are going to continue 

11          talking about a decrease in crime for many, 

12          many years to come.

13                 I also want to talk about the MTA.  As 

14          you know, the people of Canarsie have 

15          presented you with, you know, a fabulous 

16          folder of signatures.

17                 MAYOR DE BLASIO:  A very large number 

18          of signatures.  I remember.

19                 SENATOR PERSAUD:  A very large number 

20          of signatures.  We are committed to that.

21                 With the closure of the Canarsie Tube 

22          for the rebuilding, and you know the L train, 

23          there will be less L train service for the 

24          people of Canarsie and other areas -- we're 


 1          hoping that you will look into bringing the 

 2          ferry service to Canarsie.  As you know, the 

 3          ferry service has been very successful in the 

 4          areas that you've opened it.  You reached the 

 5          1 million rider threshold faster than anyone 

 6          anticipated.  

 7                 Can we count on your commitment to 

 8          really looking into bringing the ferry 

 9          service to that area of Brooklyn?  Because it 

10          will be the only other alternative that we 

11          have.  

12                 MAYOR DE BLASIO:  So Senator, just a 

13          quick framing on this.  The initial ferry 

14          expansion will go into the summer, when we're 

15          going to add a line in Soundview in the 

16          Bronx.  And we're going to add another line 

17          on the East Side of Manhattan.  Then once 

18          those are all in place, I have said very 

19          publicly we will make the decisions on the 

20          next potential set of lines.  

21                 Now, we have real budgetary matters we 

22          have to look at.  It's very much caught up in 

23          what happens here with the state budget and 

24          what happens in Washington.  But there's been 


 1          a number of nominations.  Certainly Staten 

 2          Island, southern Brooklyn, northeastern 

 3          Queens, a number of places have said please 

 4          consider ferry service for us.  So this 

 5          summer we're going to come back with an 

 6          answer once we've seen what happens on the 

 7          budget front.

 8                 The second point I'd make is where 

 9          there's exceptional situations, like the L 

10          train closure, I think you make a good point.  

11          We need to look at that as a particular need 

12          for a particular period of time, and we will 

13          do that as well.  I'm not going to commit 

14          yet, but we're going to certainly put that 

15          into the calculation as a major factor that 

16          has to be considered for the people of 

17          Canarsie.

18                 SENATOR PERSAUD:  Thank you again.  

19          Thank you very much.

20                 CHAIRWOMAN WEINSTEIN:  Thank you.  

21                 Assemblywoman Malliotakis.

22                 ASSEMBLYWOMAN MALLIOTAKIS:  Good 

23          morning, Mr. Mayor.  It's so nice to be able 

24          to ask you a question without Bo Dietl 


 1          interrupting.

 2                 (Laughter.)

 3                 MAYOR DE BLASIO:  Yes, we're so much 

 4          civiller when it's just us together.

 5                 ASSEMBLYWOMAN MALLIOTAKIS:  With 

 6          regards to the property taxes that we were 

 7          discussing here today -- and I add my voice 

 8          to those of my colleagues -- that when we 

 9          talk about the increase in spending that the 

10          city has put forth, from $70 billion, 

11          roughly, in the last year of Mayor Bloomberg 

12          to now looking at over $80 billion, that's 

13          putting a tremendous burden on property 

14          taxes.  And as you know, a third, roughly, of 

15          the city's revenue comes from that.

16                 But to highlight some of the 

17          inequities, I happened to bring my property 

18          tax bill.  I happened to bring yours as well.  

19          But the point --

20                 MAYOR DE BLASIO:  How convenient.  

21                 (Laughter.)

22                 ASSEMBLYWOMAN MALLIOTAKIS:  You have 

23          to have exhibits, right?  Mine, a $559,000 

24          home.  I pay roughly $5,400 in property 


 1          taxes.  You have a $1.6 million home; you pay 

 2          roughly $3500 in property taxes.  So I am 

 3          paying, you know, $2,000 more for a home 

 4          that's valued at about a third.

 5                 And that is really what this issue is 

 6          about.  It's the inequity of the effective 

 7          tax rate.  Where, for example, in your 

 8          district, which you pay the least effective 

 9          tax rate, it's 1.05 percent.  And 

10          unfortunately for me in my district, my 

11          council district, I pay the -- I'm sorry, I 

12          pay the highest, at 1.05 percent.  You pay 

13          the least, at 0.33 percent.  

14                 So that is why the property tax 

15          commission is so important.  I'm glad that 

16          over the summer you've agreed to do that.  

17          I've offered my assistance in any way I can 

18          to support this, because I think it is 

19          something for all of our constituents that is 

20          very important.

21                 My question is regarding the property 

22          tax levy.  You've testified here today that 

23          the tax rate has not gone up, and it hasn't 

24          gone up.  And I agree with you there.  


 1          However, what has gone up is the property tax 

 2          levy, which is what you as mayor and the City 

 3          Council members have control over.  

 4                 And so in 2015, that levy went up 

 5          6.14 percent.  In 2016, it went up 6.88 

 6          percent.  In 2017, it went up 6.83 percent.  

 7          In 2018, it's 7.49 percent.

 8                 Now, you as the mayor and the City 

 9          Council members have control over that levy.  

10          And why do you keep increasing it every year, 

11          and what can we anticipate for the fiscal 

12          year 2019?  Because cumulatively, it has gone 

13          up over the last four years 37.71 percent, 

14          which is an additional $7 billion on property 

15          tax homeowners.  And that's -- that is 

16          something I think that is upsetting to a lot 

17          of people across the city, particularly those 

18          who are paying that higher effective tax rate 

19          such as those in my district.

20                 MAYOR DE BLASIO:  Assemblymember, just 

21          let me break that into a couple of quick 

22          pieces.

23                 The inconsistency among neighborhoods 

24          makes no sense, has to be addressed.  It's 


 1          something about our current tax law that 

 2          doesn't account for the reality of our lives 

 3          today.  And that's why we will have a process 

 4          very soon.  And we will need your help, and I 

 5          appreciated your offer to help.  I will 

 6          certainly take you up on that, because we 

 7          have to get to a more consistent and 

 8          transparent system.

 9                 I've tried to be honest with people, 

10          and I find that New Yorkers appreciate blunt 

11          honesty.  And again, I've said it at 51 town 

12          hall meetings.  I've explained, first of all, 

13          this is based on rising property values, 

14          which none of us like the tax impact, but we 

15          do appreciate that our property values go up.  

16          And second, that our property tax levels are 

17          proportionally much lower than the rest of 

18          the state.

19                 But really it comes down to what are 

20          we providing people for the money that they 

21          are contributing.  And I have to tell you, 

22          you know, a lot of that, you're right, 

23          there's been a substantial increase in the 

24          budget.  One of the reasons why was at the 


 1          end of the  Bloomberg administration, none of 

 2          our city workforce, pushing on towards almost 

 3          400,000 people, none of them were under 

 4          contract.  Some of them had years and years 

 5          when they weren't under contract previous.  

 6          All of that had to be accounted for.

 7                 So we were all left to make up for 

 8          that, which we've done now.  But that did 

 9          increase the budget greatly.

10                 ASSEMBLYWOMAN MALLIOTAKIS:  And I 

11          appreciate that.  I'm sure that if you and I 

12          both sat down with the budget, I'm sure there 

13          would be differences in what we would like to 

14          eliminate or we'd like to add.  

15                 But it doesn't take away from the fact 

16          that the city as well as the state needs to 

17          live within its means.  And the issue here is 

18          that the levy, which the city -- without a 

19          property tax commission, without any action 

20          from the state -- you and the City Council 

21          alone have control over that property tax 

22          levy.  And you've chosen to increase it year 

23          after year to a point where it's a cumulative 

24          increase of 37 percent.  That's $7 billion 


 1          more that we're seeking from the taxpayers.  

 2                 So I ask if you would consider 

 3          freezing that levy, or at least a cap -- 

 4          which had been suggested here, and we of 

 5          course have legislation, which you've 

 6          opposed, unfortunately.  But I really think 

 7          at least for a year, can you look at perhaps 

 8          capping that levy to a reasonable rate to 

 9          give -- until we complete this commission 

10          study and find a better solution to revise 

11          what has been an outdated law?  We both 

12          agree, 1981, it's outdated, the housing stock 

13          has changed, times have changed.  

14                 But we do need some type of relief 

15          until that commission is in place.  And I 

16          think by freezing or capping the property tax 

17          levy, that's the way to do it for now.  

18                 Thank you.  

19                 MAYOR DE BLASIO:  I respect the 

20          question.  Obviously I respect the idea 

21          you're putting forward.  I don't agree.  

22                 And the reason is that my job is to 

23          protect the safety of the people of this 

24          city, my job is to make sure schools are 


 1          getting better, roads are being paved, 

 2          everything we're doing.  People demand those 

 3          services rightfully.  And if we're going to 

 4          look at the overall dynamics of the property 

 5          tax, we should do it all of a piece.  We 

 6          should put all the pieces together and do it 

 7          properly.  So that's how I believe is the 

 8          right way to proceed.

 9                 Again, people very much -- when I talk 

10          to them about the specific things we could 

11          not do if we changed our approach to property 

12          tax, consistently I hear from my constituents 

13          they do not want us to cut back on the 

14          services we provide to the people of the 

15          city.  In fact, wherever I go, and I know you 

16          both would agree with me, you've been at the 

17          same town hall meetings, people are demanding 

18          more services.

19                 So I would argue the right way to 

20          approach this is with an overall effort to 

21          reform the property tax system.

22                 ASSEMBLYWOMAN MALLIOTAKIS:  Well, 

23          certainly --

24                 CHAIRWOMAN WEINSTEIN:  Thank you.


 1                 ASSEMBLYWOMAN MALLIOTAKIS:  Thank you 

 2          very much.  I appreciate it.

 3                 CHAIRWOMAN YOUNG:  Thank you.  

 4                 Our next speaker is Senator Brian 

 5          Benjamin.

 6                 SENATOR BENJAMIN:  Thank you, 

 7          Mr. Mayor, for being here this morning.  

 8                 I want to start off with Rikers 

 9          Island.  First, I want to thank you for your 

10          specificity in your testimony in regards to 

11          some of the things that need to be done to 

12          reduce the population.  I have a few 

13          questions.

14                 First, how many state parolees are 

15          currently housed in Rikers Island for 

16          technical violations?  

17                 MAYOR DE BLASIO:  I have to get you 

18          the exact number.  The state parolees -- 

19          wait, I've been handed the exact number, look 

20          at that.

21                 SENATOR BENJAMIN:  Fantastic.

22                 MAYOR DE BLASIO:  Six hundred thirty 

23          on an average day.  

24                 So let's clarify this, that these 


 1          are -- because parole is handled by the 

 2          state, systematically.  The parole violation 

 3          under the state domain still ends up with the 

 4          individual being in the city jail.

 5                 We're saying if the state were to take 

 6          responsibility for those 630 people on an 

 7          average day, relevant to the state's own 

 8          parole program, that would reduce Rikers' 

 9          population about 15 percent, just that one 

10          action.

11                 SENATOR BENJAMIN:  Gotcha.  Okay.  

12                 A second question is if there's 

13          anything missing.  I mean, I know sometimes 

14          you have to truncate these testimonies.  But 

15          is there anything missing in terms of ideas 

16          that you have that the state can do, in 

17          addition to all these other ones that you 

18          provided to us this morning?

19                 MAYOR DE BLASIO:  Well, these, 

20          Senator, would be hugely important.  I mean, 

21          number one would be the bail reform and --

22                 SENATOR BENJAMIN:  Speedy trial.

23                 MAYOR DE BLASIO:  Yeah, the speedy 

24          trial.  I mean, right there you're talking 


 1          about shaving off a substantial amount of 

 2          time in our effort to close Rikers.

 3                 I don't think there's any one factor 

 4          more important than that.  So literally, for 

 5          those -- and I know you're one of them -- who 

 6          passionately want to see the speediest 

 7          possible timeline, I've said -- we've had 

 8          detailed conversations -- I want the 

 9          speediest possible timeline too, but I'm 

10          always going to be blunt and honest with the 

11          people about what we see it as at this 

12          moment.

13                 If this Legislature were to pass bail 

14          reform and speedy trial, it would be the 

15          single biggest factor in reducing the 

16          timeline for closing Rikers, unquestionably.  

17          But obviously the parolee issue is a very big 

18          deal and would be a very helpful piece of the 

19          equation.  

20                 And we will continue to delineate -- I 

21          mean, right now the state has facilities in 

22          the city.  We would like to be able to work 

23          with the state on those facilities more 

24          productively.  There's many things we could 


 1          do.  But number one is the legislation.

 2                 SENATOR BENJAMIN:  Sure.  So let me 

 3          just ask -- as you know, you have proposed 

 4          closing Rikers in 10 years, or committed to 

 5          that.

 6                 MAYOR DE BLASIO:  Yes.

 7                 SENATOR BENJAMIN:  I have introduced a 

 8          piece of legislation to close Rikers in three 

 9          years.  Obviously, there's a time delta 

10          between the two of us.

11                 My question for you is, let's imagine 

12          a world where we were able to pass every 

13          single thing that you've asked for in this 

14          testimony, including design-build.  What 

15          would you say would be a reasonable 

16          timetable, assuming all this gets passed, 

17          that we can close Rikers?  I would imagine it 

18          would be less than 10 years. 

19                 MAYOR DE BLASIO:  Unquestionably it 

20          would be less than 10 years.  So --

21                 SENATOR BENJAMIN:  Okay.  Do you have 

22          a sense of timing of what you think?

23                 MAYOR DE BLASIO:  Well, let me give 

24          you a few points very quickly.  I mean, 


 1          you're talking about now major structural 

 2          change that we would love and we would 

 3          appreciate and it would make a huge 

 4          difference.  Design-build, that we can't do 

 5          on our own; the parolees, we can't do on our 

 6          own; speedy trial, we can't do on our own; 

 7          bail reform, we can't do on our own.

 8                 If you did the whole package, you're 

 9          immediately talking about taking years off 

10          the process.

11                 SENATOR BENJAMIN:  Any sense of years?  

12                 MAYOR DE BLASIO:  I want to be 

13          careful, because I want to do the math with 

14          the team and come back with something very 

15          specific.  Unquestionably, multiple years.  

16          And that's huge in this process.

17                 We are aggressively moving with the 

18          City Council on the land use process to 

19          create the four new facilities.  Land use 

20          process, you know plenty about it.  Right 

21          there, that books in a certain amount of 

22          time, and then construction books in a 

23          certain amount of time.  But those pieces are 

24          going to move as aggressively as allowed 


 1          under the law.  That alone, we know that's 

 2          the physical requirement.  And honestly, that 

 3          is more than three years just because we know 

 4          what it takes to build major buildings in 

 5          New York City even under the most expedited 

 6          timelines.

 7                 But if the state would act on all 

 8          those pieces, it would be a game changer and 

 9          at minimum take off several years.  And I can 

10          come back with you on what exactly we would 

11          project.

12                 SENATOR BENJAMIN:  So possibly five.

13                 MAYOR DE BLASIO:  I don't want to -- 

14          again, I want to be careful not to put words 

15          in my own mouth.

16                 SENATOR BENJAMIN:  I understand.  I 

17          understand.  I understand.

18                 MAYOR DE BLASIO:  Years plural, 

19          unquestionably.

20                 SENATOR BENJAMIN:  Gotcha.  So I've 

21          got a quick question on education.  

22                 So one of the schools in my district, 

23          Wadleigh Secondary School, runs from 6 to 12.

24                 MAYOR DE BLASIO:  Which one, sir?


 1                 SENATOR BENJAMIN:  Wadleigh Secondary 

 2          School.

 3                 MAYOR DE BLASIO:  Wadleigh, yes.  Yes, 

 4          I know it.  I've been there.

 5                 SENATOR BENJAMIN:  It is a Community 

 6          Renewal school, and it's getting all the fair 

 7          funding, fair state funding.  

 8                 Unfortunately, in the 6th to 8th grade 

 9          levels, proficiency in reading and math have 

10          not improved over the years.  So two 

11          questions to that.  

12                 Number one is, if you noticed -- and 

13          particularly in these schools that get this 

14          extra funding, if you notice that there's not 

15          performance, you know, who's held 

16          accountable, I guess.  You know, at what 

17          point do you say, listen, this superintendent 

18          or this principal is not performing and they 

19          need to be removed or terminated or some new 

20          thing has to come into place?  That's number 

21          one.  

22                 The second thing is as you look for a 

23          new schools chancellor, how are you taking 

24          into considering their focus on issues like 


 1          student performance and making sure that as 

 2          we do things like Community Renewal 

 3          schools -- which I totally agree with -- that 

 4          there is some sort of accountability as it 

 5          relates to schools that have been chronically 

 6          underperforming?  

 7                 MAYOR DE BLASIO:  It's an excellent 

 8          question.

 9                 So it certainly will be and has been a 

10          major factor in how we choose a new 

11          chancellor.  I'm convinced the Renewal 

12          initiative was the right thing to do.  And we 

13          said from the beginning we believe the number 

14          of schools could graduate, and we're seeing 

15          that now.  We believe some other schools, 

16          given enough work and investment, might take 

17          a little longer but can get there.  We 

18          believe that's playing out.  

19                 But from the beginning we also said if 

20          you make that kind of investment in a 

21          concentrated way and a school doesn't come 

22          around, some just don't have capacity to 

23          improve past a point, then we'll close them 

24          or we'll merge them, which we've been doing.


 1                 SENATOR BENJAMIN:  How do you know if 

 2          it's an issue between the school or the 

 3          leadership?  I mean, how do you decide --  

 4                 MAYOR DE BLASIO:  It's an excellent 

 5          point.  And I've talked to the chancellor 

 6          case by case in a number of situations about 

 7          each school and what we assessed.  In some 

 8          cases we did feel that there was a leadership 

 9          problem.  In other cases, we did not.

10                 Many times you've seen with the 

11          Renewal Schools a change of leadership.  And 

12          many times you've seen also a deep 

13          superintendent involvement.  A superintendent 

14          typically has many, many schools they cover 

15          in a district, so a single historically 

16          troubled school not turning around as quickly 

17          as we want, I'm not sure that would be the 

18          only way we'd think about that 

19          superintendent.  But that superintendent 

20          clearly bears some responsibility.  But most 

21          especially we look at the principal.  Some 

22          principals have done an outstanding job 

23          turning around troubled schools.  Others have 

24          not, there's been some major personnel 


 1          changes.  

 2                 At the end of the day, we're going to 

 3          look at all of it.  We're not afraid to make 

 4          those personnel changes.  We've made a lot of 

 5          them -- as you know, right down to the level 

 6          of teachers.  Since I came into office, we've 

 7          helped over 2,000 teachers to find a 

 8          different profession because they were not 

 9          doing as well as we would have liked for our 

10          kids.  So it's always factored in.

11                 In the case of Wadleigh, I know the 

12          history.  We think pieces of that program are 

13          viable long-term, other things need to 

14          change.  We'll have more to say on that soon.  

15          But that's one I've definitely been directly 

16          involved with.

17                 SENATOR BENJAMIN:  Thank you, 

18          Mr. Mayor.

19                 MAYOR DE BLASIO:  Thank you.  

20                 CHAIRWOMAN WEINSTEIN:  Thank you.  

21                 Our Education chair, Cathy Nolan.

22                 ASSEMBLYWOMAN NOLAN:  Thank you, Madam 

23          Chair and colleagues.  It's been a continual 

24          struggle in all the years that I'm up here to 


 1          remind members and the folk that we educate 

 2          over -- several million children in our 

 3          state, the vast majority in public school, 

 4          but over a million of them are in the City of 

 5          New York.  The next largest school district, 

 6          Buffalo, is a little over 30,000.  Most 

 7          school districts of the close to 700 in our 

 8          state educate about 5,000 -- many of them, 

 9          about 5,000.  I had more people at my high 

10          school.  We had 6,000 in the high school I 

11          attended.  

12                 So the scale of the city schools and 

13          the -- more children go to schools in 

14          trailers in New York City that in many -- 

15          they're, for example, the size of many of the 

16          school districts on, say, Long Island.  

17                 So the challenges for the city are 

18          very, very great.  And in all the years I'm 

19          here, it's only in recent years that the 

20          state has really come close to doing its 

21          proper share of funding.  

22                 So what I would like the mayor to talk 

23          a little bit about is the role that 

24          Foundation Aid plays in righting that 


 1          balance, in addressing those problems.  

 2                 I would also point out some of the 

 3          comments today -- we've worked very closely 

 4          on things like a cafeteria bill.  The 

 5          information in some of that story came out of 

 6          a bill that we worked on under your 

 7          leadership, so that parents would have more 

 8          information.  The same with Renewal Schools, 

 9          the same with the reauthorization of mayoral 

10          control last year.  

11                 There is a vast and overwhelming 

12          amount of information available about every 

13          city school online, very easily available.  

14          One of the advantages of mayoral control in 

15          the last 15 years has been the centralization 

16          of that information.  When I started, you 

17          could not get that information.  Now that 

18          information is available.  

19                 But the main thrust of this hearing 

20          for me, and all the hearings that I've 

21          attended under five mayors, is to get -- 

22          obviously, as chair of Education, I want to 

23          have a statewide focus.  I want the formula 

24          to reflect the neediest kids, the special ed 


 1          kids.  But I also, as someone from Queens -- 

 2          we haven't even had anybody from Queens talk 

 3          yet, so I want to make sure I make the local 

 4          shout-out.  But I think, as someone from the 

 5          city and a long-time observer of the Albany 

 6          scene, we have over a million children.  We 

 7          have never really gotten what I believe they 

 8          should get.  

 9                 So the role of Foundation Aid and the 

10          Campaign for Fiscal Equity was critical in 

11          starting to reverse that dynamic.  But I 

12          would like you to address it a little more -- 

13          there's only a sentence in the testimony --  

14          and talk a little bit more about what this 

15          budget does that might hurt city schools.  

16          Because in the past, we've had a few 

17          opportunities -- unfortunately, the 

18          compromises that go on up here, and I felt 

19          that city schools were unfairly hurt.  

20                 So I would like to hear you talk about 

21          a little bit about that and talk a little bit 

22          more about the million students that attend 

23          school in New York City.  And then remind 

24          people that the next largest district is 


 1          30,000, and most districts are much smaller 

 2          than that.  

 3                 MAYOR DE BLASIO:  You're absolutely 

 4          right, Assemblymember.  And in fact there are 

 5          more kids in New York City public schools 

 6          than there are of people in some states of 

 7          the union, that's the sheer magnitude of it.

 8                 And there was historic underinvestment 

 9          in our schools.  The Campaign for Fiscal 

10          Equity case was decided by the Court of 

11          Appeals.  It wasn't gray, it was a clear 

12          decision mandating the state -- not just for 

13          the City of New York, but for other cities 

14          around the state and for rural areas as well 

15          that were not getting their fair share.  

16                 I would argue that not only do we have 

17          a legal obligation as a state to live up to 

18          the CFE decision, but also in terms of 

19          preparing our kids for the 21st century, it's 

20          the best investment we're going to make for 

21          the future of our state.

22                 What does it mean in terms of the 

23          city, as you asked?  Well, first of all, 

24          you're right, there's a huge amount of 


 1          information we put forward.  This is an 

 2          advantage of mayoral control, is everything 

 3          is concentrated and focused.  There's one 

 4          person held accountable, that's me.  And we 

 5          provide a huge amount of information to the 

 6          state and publicly available online about all 

 7          that we're doing.

 8                 On what we would do if we were getting 

 9          the levels of funding mandated under the CFE 

10          decision, we would address the fair funding 

11          formula immediately.  That would be one of 

12          the most important priorities that we would 

13          have.  If we saw the kind of increases that 

14          were mandated under the CFE decision, we 

15          would close that gap on fair funding.  We'd 

16          be able to do that in just a few years and be 

17          done forever.  Every school would be at the 

18          100 percent level.  I know there's a lot of 

19          passion on that issue amongst your 

20          colleagues.  Help us to get there.

21                 The gap that you asked about right now 

22          is over $200 million compared to what we 

23          expected just based on recent years' 

24          funding -- not even compared to what it would 


 1          be if CFE were fully implemented.  So if we 

 2          could get back to the kind of funding we saw 

 3          in previous years, we would immediately 

 4          invest that in addressing fair funding.  If 

 5          we got to the levels mandated by CFE, we 

 6          could wipe out the gap and have all schools 

 7          funded at the 100 percent level.

 8                 ASSEMBLYWOMAN NOLAN:  And then the 

 9          proposals on some of the charter school 

10          funding, how does that hurt the City of 

11          New York?  

12                 MAYOR DE BLASIO:  It hurts us because 

13          it is the epitome of an unfunded mandate.  

14          This is money that was mandated by the state 

15          that the state used to contribute toward.  

16          Now the state is backing away from the 

17          contribution while raising the requirements 

18          under the mandate.  

19                 So you heard the numbers I referred 

20          to.  This is becoming very, very substantial 

21          money.  And this is not -- you know, the city 

22          certainly didn't ask for these additional 

23          mandates.  But if the state wants to put them 

24          on, then it's incumbent, in my view, on the 


 1          state to add the funding to go with it.  

 2          Hundreds of millions of dollars.  

 3                 By the way, again, if you're talking 

 4          about a devotion to addressing the fair 

 5          funding, then get rid of that unfunded 

 6          mandate, and that's another way that would 

 7          help us continue to make efforts on fair 

 8          funding.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.

10                 CHAIRWOMAN YOUNG:  Senator Hannon.

11                 SENATOR HANNON:  Thank you very much.  

12                 Thank you very much, Mr. Mayor.  

13          Appreciate your patience and your articulate 

14          presentation.

15                 I noticed in your written testimony 

16          you made scant mention of the healthcare 

17          system in New York City, mentioning only an 

18          Obama-era change in disproportionate share 

19          payments.  But I would like to know what the 

20          city is doing in its commitment to moving 

21          forward with now H+H, because those hospitals 

22          form a core of healthcare in the city, and it 

23          has not been objectively sustained in the 

24          past few years -- not just your 


 1          administration, but your obligation really 

 2          now in going forward.

 3                 MAYOR DE BLASIO:  Senator, I 

 4          appreciate the question very much, and thank 

 5          you for your kind comment.  I would say this.  

 6                 You're absolutely right that we need 

 7          to put our public hospitals on a sustainable 

 8          footing.  Our new president of our public 

 9          hospitals, of H+H, has immediately taken the 

10          reins with the goal of taking the 

11          transformation plan that's been begun and 

12          deepening it.  

13                 We've said very clearly we'll make 

14          major cost reductions through attrition, that 

15          we have to update the entire apparatus, we 

16          have to make it more appealing to a larger 

17          customer base.  

18                 I've been clear about the things we 

19          won't do.  We're not going to close major 

20          facilities, we're going to repurpose them, 

21          because we think there's a tremendous amount 

22          of need that we can address in a smarter way.

23                 We're not doing layoffs of members of 

24          labor unions who have been serving the city, 


 1          but we are transferring people, retraining 

 2          people.  We're doing a number of other things 

 3          to reduce costs.  But it could never --

 4                 SENATOR HANNON:  Have you made that in 

 5          terms of the timetable?  Is there an 

 6          announced program to do that?

 7                 MAYOR DE BLASIO:  Yes.

 8                 SENATOR HANNON:  I've heard the same 

 9          thing when you had the prior head of H+H come 

10          in, and then he left when apparently none of 

11          that was able to be done.

12                 MAYOR DE BLASIO:  Well, no, I wouldn't 

13          say -- Senator, I would argue that he did 

14          make -- Mr. Raju made major reforms that 

15          helped us to create more of a pathway to 

16          sustainability.  

17                 And, you know, a few years ago the 

18          city had to put very substantial resources in 

19          just for the solvency of Health + Hospitals.  

20          We have not had to do that this year.  The 

21          financial situation has stabilized.

22                 The danger now, the biggest danger is 

23          what will happen with the DSH payments, first 

24          and foremost, and then any potential danger 


 1          in terms of Medicaid cuts up ahead from the 

 2          federal government.  But if those problems 

 3          can be averted, we're in a much more stable 

 4          place because we did a lot of attrition.  I 

 5          will say under Mr. Raju and then under the 

 6          interim leader, Stan Brezenoff, we moved out 

 7          a lot of personnel to reduce costs and we 

 8          began a lot of the restructuring.  Mitch Katz 

 9          is now going to take it to the next level, 

10          and you're going to see additional 

11          restructuring.  

12                 But we have no illusions, Senator, 

13          that the previous way of doing things was 

14          acceptable.  It was not sustainable, your 

15          word is the exact right word.  We're making 

16          major changes.

17                 SENATOR HANNON:  We agree.  

18                 Maybe we don't agree on the next 

19          topic, which is getting the subways to run.  

20          In your testimony you talked about trying to 

21          say that you don't have capital obligation 

22          commitments from the City of New York, and 

23          you go through the long history.  Well, I've 

24          gone through that history also and I think 


 1          the city does have capital obligations as 

 2          well as has obligations to what we're trying 

 3          to do for operating expenses.  

 4                 And I really have to disagree with 

 5          your statement in your testimony that you 

 6          don't have the capital obligations.  

 7          Mr. Lhota has pointed out you still own the 

 8          subway, even though it's operated by the MTA 

 9          under lease.

10                 But we need to get a commitment out of 

11          this going forward.  I have constituents -- 

12          we're probably out of the outer boroughs, out 

13          near Long Island, but they depend on the 

14          subway as much as anybody else who uses it.  

15          And you made -- in your own testimony you 

16          said 70 percent of the riders are New York 

17          City residents.  Well, we got the other 

18          30 percent, and they count on it too.

19                 MAYOR DE BLASIO:  I'd absolutely agree 

20          with that point.  And we want to make sure 

21          that there's a fair resolution for the subway 

22          situation.  Now, that 70 percent I referred 

23          to is where all the revenue is coming from, 

24          New York City taxpayers and New York City 


 1          government making contributions right now.  

 2          And I remind you of the $2.5 billion that we 

 3          added in capital -- not because we had a 

 4          legal mandate, we did not.  We made a choice 

 5          to do that.

 6                 Look, I would argue, Senator, that we 

 7          saw an evolution over 65 years that 

 8          regardless of the underlying ownership 

 9          structure, what's happened is the State of 

10          New York has come to control the MTA -- the 

11          decision-making, the budget, all elements of 

12          the MTA reality.

13                 We are willing to work, as we do very 

14          productively in some areas -- for example, 

15          Select Bus Service has been a collaboration 

16          between the city and the MTA.  We both fund 

17          it, it's been very effective.  But that's 

18          been where there's been a fair 

19          decision-making process and specific goals 

20          we've agreed to.  But we do not agree --

21                 SENATOR HANNON:  My point is when it 

22          came to redoing subway stations, you guys 

23          were going to veto it, and you got the MTA to 

24          delay it.  That shows that you have a certain 


 1          amount of power there, like a vote, and you 

 2          can control these things if you want.  

 3                 But it's not so much the legal 

 4          obligation -- which I would contend in the 

 5          middle of it we had to change, because the 

 6          city almost went bankrupt in the '70s.  Had 

 7          to change.  So we've continued from there.  

 8          But I think it's more of the policy 

 9          obligation that the city and the state faces 

10          to make sure the system works so we can 

11          maintain a great viability in the economy.  

12          And I don't find the mutual commitment to 

13          that that's necessary.

14                 MAYOR DE BLASIO:  Senator, let me -- 

15          with all due respect to the point you made 

16          about that specific vote, where we were in 

17          the minority but we believe that the plan 

18          that was offered did not address the 

19          essential problem, which is the subways not 

20          running on time and not being reliable.

21                 SENATOR HANNON:  I think you had the 

22          veto power.  Is that not correct?

23                 MAYOR DE BLASIO:  Again, on that vote 

24          we were in the minority.  We stated a 


 1          position which I stand by, that the spending 

 2          by the MTA should focus on the fundamental 

 3          operations of the subways, not the platforms, 

 4          not other extraneous matters, but getting the 

 5          subways to work on time.  We do not have a 

 6          controlling vote on that board.

 7                 The fact is, we've made major 

 8          contributions, we put a lot of money into the 

 9          MTA right now, directly from the city 

10          government and also through our taxpayers and 

11          our residents.  We made that capital 

12          contribution.  

13                 But the notion that the overall 

14          capital costs would suddenly be foisted on 

15          the city and the state continues to control 

16          the MTA apparatus -- that is a fact, that 

17          Mr. Lhota was appointed by the Governor.  

18          That's abundantly clear.

19                 SENATOR HANNON:  Mr. Mayor, we have a 

20          $30 billion capital program.  The state's 

21          putting in about 30 percent, the city's 

22          putting in about 9 percent.  I think the 

23          difference, the disparity, is enormous.  

24                 I think it's not so much the numbers, 


 1          though.  It's the commitment to do it, 

 2          improve the system, make it move forward so 

 3          we don't have a summer of hell.

 4                 MAYOR DE BLASIO:  Senator, again, your 

 5          arguments are -- I respect them, I understand 

 6          the logic.  I only ask that you hear my 

 7          logic.

 8                 One, 65 years of experience tells us 

 9          the truth.  The city is not legally 

10          responsible for those capital costs.  We're 

11          responsible for education, public safety, 

12          sanitation, a whole host of things, but we're 

13          not responsible for the capital costs of the 

14          MTA.  

15                 Second, we are very concerned about 

16          the outcome.  We would like to see a good 

17          outcome.  We have contributed previously 

18          voluntarily.  That's what that 2.5 billion -- 

19          that was not based on any specific legal 

20          requirement we did that.  We did that because 

21          we thought it was a fair situation to 

22          contribute to.

23                 But now that we're talking about the 

24          long-term needs of this agency, again, we may 


 1          disagree but we've put forward -- I've 

 2          certainly supported, with a number of members 

 3          of the Assembly and the Senate, have 

 4          supported the notion of a millionaire's tax 

 5          with the Fair Fare attached as the best way 

 6          to move forward.  Others disagree.

 7                 We are going to work with this 

 8          Legislature very collegially toward whatever 

 9          is the right long-term solution.  But there 

10          must be, I believe, at the end of this 

11          session a long-term funding mechanism for the 

12          MTA.  That's in all of our interests.  But 

13          that does not answer the fundamental question 

14          of how decisions are currently made in the 

15          MTA.  The City of New York does not -- there 

16          may be a few narrow areas where we 

17          structurally have some power, but in terms of 

18          the MTA board, ultimately we don't.  We don't 

19          decide the budget, we don't decide the 

20          leadership, we don't decide the direction, we 

21          don't decide the spending priorities.

22                 So I would just caution that I think 

23          those realities are quite clear that -- but 

24          of course we want to be at the table with you 


 1          to determine a solution.  We absolutely want 

 2          a solution.  And it must be a long-term 

 3          funding mechanism.

 4                 SENATOR HANNON:  Then you're going to 

 5          need suggestions, and not the millionaire's 

 6          tax, which probably isn't even alive on 

 7          arrival, being dead at the beginning.  So we 

 8          need many more suggestions than we've heard.

 9                 MAYOR DE BLASIO:  And we -- my team 

10          and I will sit at the table with members of 

11          the Legislature throughout this session, 

12          because I would argue by June 30 this issue 

13          has to be resolved for the long term for all 

14          of us, and we will work with the Legislature, 

15          both houses, Democrat and Republican alike, 

16          to help achieve that solution.  We're 

17          absolutely ready to do that.

18                 I remind you we -- in the proposal on 

19          the millionaire's tax -- and I understand 

20          ideologically there are some real 

21          differences, potentially.  But I do want to 

22          say working with members of the Senate and 

23          Assembly, we did structure it just to be 

24          directed at New York City residents, to try 


 1          and respect the fact it's a New York City 

 2          problem, we're looking for New York City 

 3          resources to solve the problem, in that case 

 4          through taxation.  But if that is not what 

 5          ultimately is going to win the day, we will 

 6          work with this Legislature on other options.

 7                 SENATOR HANNON:  Thank you.

 8                 MAYOR DE BLASIO:  Thank you.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10                 We've been joined by Assemblywoman 

11          Wallace and Assemblyman Dan Stec.  

12                 And to Assemblyman Buchwald for a 

13          question.

14                 ASSEMBLYMAN BUCHWALD:  Thank you, 

15          Madam Chairwoman.

16                 And thank you, Mr. Mayor, for being 

17          here, as always. 

18                 A week and a half ago at one of these 

19          hearings I gave MTA Chairman Joe Lhota an 

20          opportunity to interpret some of your 

21          remarks, and you'll be happy to learn that he 

22          passed on the opportunity.  But I'd like to 

23          ask --

24                 (Laughter.)


 1                 MAYOR DE BLASIO:  He's a gentleman.

 2                 ASSEMBLYMAN BUCHWALD:  I'm sure.  

 3                 But I'd like to ask you the question 

 4          directly.  Mr. Mayor, you've urged, including 

 5          today, that assurances be given that revenues 

 6          raised through any Manhattan car-pricing zone 

 7          go to New York City subways and buses.  Can 

 8          you help the State Legislature to understand 

 9          the implications of that request?  

10                 Are you saying that the money 

11          collected from transportation needs to be 

12          dedicated to transportation?  Which is a 

13          principle I very much agree with.  Are you 

14          saying that you're opposed to even a small 

15          percentage of funding going to the roads and 

16          bridges of New York City?  Or are you saying 

17          that you are opposed to any of the new 

18          revenue going to the MTA's commuter 

19          railroads, despite the fact that a 

20          significant percentage of the money raised 

21          will come from residents of the suburbs of 

22          New York City, and the fact that the better 

23          the service on Long Island Railroad and 

24          Metro-North Railroad, the less congestion 


 1          there will be in New York's central business 

 2          district?

 3                 MAYOR DE BLASIO:  Assemblymember, I 

 4          understand the arguments you make, of course.  

 5          But I would like to refer to a point that the 

 6          Senator made before, that folks who come into 

 7          the city from the suburban counties -- and we 

 8          value them, we appreciate them, all they do 

 9          for the city.  And we think the city does a 

10          lot for the metropolitan area; we're all in 

11          this together.  But they depend on our buses 

12          and subways every single day as well.

13                 I would argue that the money raised 

14          should be singularly focused on buses and 

15          subways.  And the reason I'd argue that, we 

16          have tremendous other needs infrastructure- 

17          wise.  The City of New York is putting a huge 

18          commitment into our roads and bridges.  We 

19          have, I think the fact is, over a hundred 

20          bridges that are over a hundred years old in 

21          New York City.  So we have massive 

22          infrastructure needs.  

23                 Our hope and prayer is to address that 

24          through eventually some kind of bigger 


 1          federal infrastructure plan.  I think it's 

 2          the only way viable to do that on a 

 3          sustainable basis.

 4                 But in terms of the needs of the MTA, 

 5          which I think is core to the future of the 

 6          city and the state, we've got to fix this 

 7          system once and for all.  And we only do that 

 8          with a consistent revenue infusion and a 

 9          focus on the fundamentals -- the signals, the 

10          electronics, the basics that allow the subway 

11          system to run.  That's where the money needs 

12          to go.  

13                 And look, we also know there are parts 

14          of the outer boroughs that are still 

15          profoundly underserved by mass transit.  We 

16          can't be a functioning city of, right now, 

17          almost 8.6 million, on the way to 9 million 

18          as early as 2030.  We can't function if we 

19          don't spread the mass transit more widely.  

20                 So I would argue that is the fair way 

21          to approach it and that that will also 

22          benefit a number of suburbanites as well.

23                 ASSEMBLYMAN BUCHWALD:  Mr. Mayor, I 

24          appreciate those remarks.  Obviously I think 


 1          I'm arguing for it to be spread more widely, 

 2          of course, as well.  And if I were to concede 

 3          the point, which is no doubt true, that 

 4          suburbanites make use of the subways and 

 5          buses in New York City, would you also be 

 6          willing to concede the point that New York 

 7          City residents make use of the commuter 

 8          railroads as well, not least to 

 9          reverse-commute but also to travel within the 

10          city, but also that New York City businesses, 

11          of course, are also reliant on having folks 

12          use the commuter railroads to get to their 

13          places of employment.

14                 MAYOR DE BLASIO:  I would concede the 

15          fact while noting the matter of degree.  I 

16          think the number of city residents that use 

17          the commuter railroads is obviously much 

18          smaller than the number of suburbanites who 

19          use our subways and buses.  But of course 

20          there's interchange both ways.  We're all in 

21          this together.  By no means do any of my 

22          comments underestimate that we need better 

23          mass transmit for the entire metropolitan 

24          region for all of our good.  


 1                 But I think if we don't fix the subway 

 2          system long-term, then our lifestyle and our 

 3          economy is undermined for all of us.  And 

 4          that's why I think it's job one.

 5                 ASSEMBLYMAN BUCHWALD:  Thank you very 

 6          much, Mr. Mayor and Madam Chairwoman.

 7                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 8                 CHAIRWOMAN YOUNG:  Thank you.  

 9                 Senator Savino.

10                 SENATOR SAVINO:  Thank you, Senator 

11          Young.

12                 Thank you, Mayor, for your testimony.

13                 And since I only have five minutes, 

14          I'm going to try and do this quickly.  

15                 So first off, I share your concerns 

16          about the effects of the child welfare cuts, 

17          the loss of Close to Home funding and the 

18          effect it will have on the implementation of 

19          the Raise the Age.  Tomorrow is the Human 

20          Service budget hearing, so I assume we will 

21          be weighing in very heavily with the state 

22          agencies to try and explain how they think it 

23          makes sense.  

24                 There's some discrepancies about Close 


 1          to Home, but there's one thing I know.  In 

 2          2012 when it went into effect, we had 900 

 3          young people at Rikers Island.  Today there's 

 4          only 170, because we turned a lot of kids 

 5          around through Close to Home.  So I just want 

 6          to echo my support for that.

 7                 I'm not going to reiterate the 

 8          comments about property taxes, although I did 

 9          get my own bill recently and it says my house 

10          is worth $500,000.  There is nothing in that 

11          house worth $500,000, including me, 

12          Mr. Mayor.  So this begs -- you know, this 

13          commission really does need to come forward.

14                 I think Senator Hannon covered a lot 

15          of what I wanted to say about the MTA.  But I 

16          wish that we could come to some resolution.  

17          The Subway Action Plan is so critical to the 

18          immediate need while we search for the 

19          long-term solution.  Whether it's the Fix NYC 

20          proposal or the Move NY plan, which I've been 

21          supportive of, we need to find a real 

22          solution to it that has city and state 

23          working together.  Because after all, they 

24          are city residents and state residents as 


 1          well who are suffering because of the delays 

 2          on these trains.

 3                 One issue I would like your help with 

 4          with respect to the MTA -- you may not recall 

 5          this, but five years ago you stood at a 

 6          subway station with myself and Assemblyman 

 7          Cusick, and we introduced legislation based 

 8          on the rise in subway sex crimes.  That 

 9          number continues to go up.  As we speak, 

10          they're up 51 percent since last year.  The 

11          NYPD does a great job on it, but we passed 

12          the legislation -- that you helped me 

13          draft -- in the Senate five times.  So if you 

14          could use your considerable influence with 

15          some of the members of the Assembly to try 

16          and get it out of the Assembly, it's 

17          critically important to safety in the 

18          subways.

19                 And finally, I want to shift to an 

20          authority that you do have full control over, 

21          and that is the New York City Housing 

22          Authority.  My staff spends more time talking 

23          to Brian Honan -- I see him back there -- 

24          than they probably do to their own family 


 1          members.  

 2                 I represent 20 different housing 

 3          developments -- 14 in Coney Island, six in 

 4          Staten Island, and there are others in Staten 

 5          Island that are equally represented by 

 6          Senator Lanza.  The conditions of the 

 7          New York City Housing Authority, as you know, 

 8          are deplorable, whether it's the lead paint 

 9          scandal or mold in apartments or broken 

10          elevators or the boilers or whatever the case 

11          may be.

12                 And I've seen the back-and-forth about 

13          who's responsible for what.  The State of 

14          New York may -- and I'm not going to deny 

15          that over the years, there was a 

16          disinvestment first on the federal level, the 

17          state did not put enough in.  But we are 

18          trying with $300 million over the last two 

19          years.  We need to know what's going to 

20          happen with that money and how people are 

21          going to begin to see improvements in the 

22          conditions that they live in.  Whether 

23          it's -- cleaning the hallways would be a 

24          great step for some of the developments, to 


 1          repairing roofs and windows, the conditions, 

 2          again, that people live in are deplorable.  

 3          And we would not allow any other landlord in 

 4          the City of New York to get away with that.  

 5                 So I'm hoping that you can give me 

 6          some explanation of what we're planning to do 

 7          with the money the city is sending, the money 

 8          that the city's putting in, and how we're 

 9          going to see improvements in the lives of the 

10          people who live there.  

11                 MAYOR DE BLASIO:  So, Senator, thank 

12          you very much for all your comments.

13                 On this point -- and look, I've spent 

14          a lot of time talking to residents of public 

15          housing over the years in public service.  

16          I've spent a lot of time in those buildings.  

17          I have no illusions about the extent of the 

18          problem.  As you know, for quite a while we 

19          cited the figure that we determined at the 

20          beginning of the administration of 

21          $18 billion needed to bring all those 

22          buildings up to the quality levels the 

23          residents deserve.  That number is likely 

24          going up.  Some other estimates have been as 


 1          high as $25 billion.

 2                 We've got to be honest with people, 

 3          and I do think residents understand and 

 4          appreciate this point.  You cannot make up 

 5          for that magnitude of disinvestment over many 

 6          decades with, you know, immediate actions.  

 7          It's just not going to be everything we want 

 8          it to be.

 9                 Now, the fact that the city -- unlike 

10          any time frame in the past, the city has 

11          committed now 2.1 billion in capital funding, 

12          1.6 billion in expense funding.  No one ever 

13          saw anything like that before, that kind of 

14          level of commitment.  We're going to continue 

15          that.  We're very committed to it, very 

16          devoted to it.  It is leading to really big 

17          changes.  

18                 The capital commitment means 900 to 

19          1,000 roofs will be fixed, and that will 

20          address the mold issue in those buildings.  

21          Obviously the new commitment we've made on 

22          boilers means for the 20 most troubled 

23          commitments, they're going to get not just 

24          boilers, but whole buildings have to be 


 1          redone to allow the heating systems to work.  

 2          It's a massive undertaking.

 3                 There's an immediate thing that would 

 4          help, an immediate action that would help.  

 5          We do have a proposal still before the state, 

 6          it's now been months, for the $200 million 

 7          for boilers and elevators.  It's still not 

 8          been moved on by the executive branch.  We 

 9          would really appreciate your help in getting 

10          those resources to move.  

11                 But the answer is, you know, when we 

12          came in, we tried to jettison a lot of the 

13          broken policies of the past.  We ended the 

14          payments by NYCHA for policing, which made no 

15          sense.  We ended the tax payments, the PILOT 

16          payments that NYCHA made to the City of 

17          New York.  We put forward a faster repair 

18          schedule, which we're adhering to.  We 

19          obviously improved the public safety dynamic 

20          in a number of developments.  We're going at 

21          the roof problem and the facade problem on a 

22          huge level.  It's endless, honestly, but we 

23          intend to keep doing it and to make it 

24          better.


 1                 And look, we have a new general 

 2          manager.  I don't know if you've ever worked 

 3          with Vito Mustaciuolo, but he is -- 

 4                 SENATOR SAVINO:  I know him well.

 5                 MAYOR DE BLASIO:  He's a living legend 

 6          in this city government, and we're thrilled 

 7          that he was ready to step into this role.  I 

 8          think he's going to help us to make some 

 9          major improvements as well.  

10                 But this will be -- every day I'm 

11          mayor we're going to be working on this, 

12          because we're talking about decades of 

13          mistakes that we're trying to make up for.

14                 SENATOR SAVINO:  I had a long 

15          conversation with Vito on Friday.  I first 

16          questioned his sanity for taking on this 

17          role.  But he is definitely prepared and 

18          ready to do it.

19                 Just one final point on NYCHA.  I met 

20          with the chair two weeks ago in my office, 

21          and she expressed to me this concern about 

22          senior housing and that NYCHA would like to 

23          get out of the business of managing the 

24          senior developments.  I'm not sure if that's 


 1          an actual policy proposal or that's just her 

 2          own thing, but I think it's something worth 

 3          looking into.  Some of the senior 

 4          developments might benefit from an 

 5          alternative managing style, perhaps with a 

 6          social service component.  Many of our 

 7          seniors who are living alone quite frankly 

 8          should no longer be alone.  You come into 

 9          senior housing at 65, but many of them live 

10          into their late 80s.  Many of them are -- 

11          since there's very little social services in 

12          these buildings, there's -- some of them are 

13          hoarding, they're suffering from dementia, no 

14          one visits them.  And so I think it's worth a 

15          look at perhaps taking care of these 

16          properties separately from the overall asset.

17                 MAYOR DE BLASIO:  It's a very fair 

18          point.  It's not a policy matter, I think 

19          it's a legitimate question and a legitimate 

20          concern that you raise and the chair raised 

21          about we have to examine different approaches 

22          going forward.

23                 But I want to emphasize, because I get 

24          asked this wherever I go, we are adamant 


 1          about public housing remaining public.  We'll 

 2          never accept any kind of privatization 

 3          scheme.  That doesn't mean we can't work with 

 4          other management approaches that still could 

 5          be helpful while maintaining public ownership 

 6          and control.

 7                 On the senior point, we have a bigger 

 8          challenge in New York City -- and the whole 

 9          state, the whole country -- that we are going 

10          to have a bigger senior population than ever 

11          before.  We really don't have the policies in 

12          place for it.  We're going to try in the 

13          coming months to start to put together more 

14          comprehensive planning for a more senior 

15          city.  

16                 But I think the point you make is a 

17          really good one, that there's a lot of 

18          seniors who would really benefit from being 

19          more supported and more connected.  And 

20          smaller things, too, like one of the things 

21          we announced in the preliminary budget, a 

22          very small initiative but one that we think 

23          will help a lot, to help seniors who have 

24          extra space in their apartment or their home 


 1          and are willing to rent that space out, to 

 2          match them with someone appropriate so that 

 3          they benefit from that income but also 

 4          someone who can do chores for them.  It's a 

 5          really interesting kind of communal approach 

 6          to the reality of a more senior city.  And 

 7          we're excited about what that might allow us 

 8          to do.

 9                 SENATOR SAVINO:  Thank you.  I'm out 

10          of time, but thank you for your comment.

11                 CHAIRWOMAN WEINSTEIN:  Thank you.  

12                 Assemblymember Ortiz.

13                 ASSEMBLYMAN ORTIZ:  Thank you, Madam 

14          Chair.  

15                 And good afternoon, Mr. Mayor.  And I 

16          thank you for being here with us and for your 

17          testimony.

18                 Before I start my few questions, I 

19          just would like to make a quick statement by 

20          thanking you for hurricane relief and helping 

21          the people of Puerto Rico and having the 

22          police department, the fire department, and 

23          workers from the City of New York to really 

24          go to Puerto Rico -- and I do believe they're 


 1          still there in Puerto Rico, some of them, 

 2          going back and forth, for --

 3                 MAYOR DE BLASIO:  Yes.

 4                 ASSEMBLYMAN ORTIZ:  And on behalf of 

 5          the people of Puerto Rico, I would like to 

 6          really say thank you to you.  Thank you very 

 7          much.  

 8                 MAYOR DE BLASIO:  Thank you.  And we 

 9          will maintain long-term commitment to the 

10          people of Puerto Rico.

11                 ASSEMBLYMAN ORTIZ:  Thank you.  

12                 I have a couple of questions regarding 

13          the -- I'm going to go first to the MTA.  

14          What percentage of the funding of the MTA is 

15          city, state and federal?

16                 MAYOR DE BLASIO:  I can't speak to the 

17          federal or the state.  As I told you, in 

18          terms of direct funding from the city and our 

19          people, it's approximately $10 billion 

20          annually.  And again, it's about 70 percent 

21          of MTA revenue comes from either the people 

22          of New York City or people working in 

23          New York City or the city government 

24          directly.


 1                 ASSEMBLYMAN ORTIZ:  The City of 

 2          New York is projecting a surplus of 

 3          $5-plus-billion for this year.  We are 

 4          talking about the congestion pricing as we 

 5          speak.  I remember in my days in OMB -- I 

 6          spent a lot of time in OMB -- when Ed Koch 

 7          would say to us, go there and find out more 

 8          revenue.  And we would do this analysis, and 

 9          we'd come up with analysis of new ideas, new 

10          revenue producers for the City of New York, 

11          expecting that that will be used for social 

12          services, for education and so on and so 

13          forth.  

14                 One of my biggest fears and concerns 

15          about the congestion pricing is that once we 

16          do that, I want to make sure that that money 

17          will be earmarked for the purpose and the 

18          objective of what we are planning to do, and 

19          use that money wisely.  Would you agree?

20                 MAYOR DE BLASIO:  I agree a hundred 

21          percent, Assemblymember.

22                 And, you know, someone said to me the 

23          other day there's all sorts of history of the 

24          public being asked to do things and promised 


 1          that the money would be used one way and 

 2          then, lo and behold, the money gets used a 

 3          different way.

 4                 That would be a situation that would 

 5          be very damaging, if any kind of revenue 

 6          plan -- whether it's my preferred option, 

 7          which is millionaire's tax, or if people 

 8          prefer congestion pricing or any other plan, 

 9          if we all agreed on a revenue vision and then 

10          woke up to find the money went elsewhere.  

11          You know, I've raised the concern in the past 

12          that some money that was focused and 

13          dedicated for the MTA unfortunately was 

14          migrated to other needs.  I think that hurt 

15          the MTA.  We don't want to see that happen 

16          again.

17                 So my fundamental belief is whatever 

18          revenue package is put together for the MTA, 

19          that money must be earmarked for New York 

20          City subways and buses.  The need to fix our 

21          subway system and our bus system is massive.  

22          And again, it's the core of the regional 

23          economy.  You can make this argument in very 

24          human terms.  So many of our constituents -- 


 1          and you and I are Brooklynites, we live very 

 2          near to each other.  You know, we know how 

 3          much of the lives of our constituents depend 

 4          on subways and buses that run effectively.  

 5                 But literally, if you want to be more 

 6          economic in your thinking, the entire 

 7          regional economy hinges on our subway and bus 

 8          system.  So that's where the money needs to 

 9          be dedicated.  It needs to be a lockbox.  

10          There need to be guarantees, legally binding 

11          guarantees against that money migrating out 

12          of city mass transit needs and, you know, God 

13          forbid it migrated to other budgetary needs 

14          elsewhere.  Whatever happens here has to come 

15          with real guarantees.

16                 ASSEMBLYMAN ORTIZ:  I just would like 

17          to echo my colleagues on the issue of NYCHA.  

18          As you know, I represent Red Hook Houses, 

19          which is one of the largest New York City 

20          Housing complexes in the City of New York.  

21                 One of the issues that I have is you 

22          mentioned about $200 million for -- moving 

23          forward for 20 developments.  Is Red Hook 

24          part of that 20 developments?


 1                 MAYOR DE BLASIO:  We can get you the 

 2          list.  

 3                 And that is -- I want to emphasize 

 4          that we've already put hundreds of millions 

 5          of dollars into new heating systems previous 

 6          to some of the challenges we face this 

 7          winter.  You know that a lot of this came to 

 8          the fore because we had some of the coldest 

 9          temperatures in decades for a few weeks.

10                 So the new investment that we put in 

11          the budget is 200 million to focus on those 

12          20 big developments with the biggest 

13          problems.  But previously, we had already put 

14          in hundreds of millions, and it's something 

15          we'll be committed to for the long haul.  

16                 I can get you a list; I don't know 

17          specifically about Red Hook Houses, but I can 

18          get you a list. 

19                 ASSEMBLYMAN ORTIZ:  I'm looking at the 

20          clock very quick.  Just very quick, to 

21          finalize.  I also would like to ensure that 

22          as we're moving forward with the BQC that we 

23          also pay attention to the BQE.  

24                 And I also -- I have written a letter 


 1          to the commissioner asking for air quality 

 2          monitoring as a result that -- as you know, 

 3          we have a lot of asthma, bronchitis.  And if 

 4          you go to P.S. 1, P.S. 314, P.S. 506 -- and 

 5          now we changed the number -- 971, 

 6          Telecommunication, and P.S. 29 in 

 7          Henry Street, the incidence of asthma in 

 8          their schools are higher than the people that 

 9          are on the other side of Fourth Avenue, as a 

10          result of the emission that is coming out.  

11                 So I hope that you can direct some of 

12          your folks to work with me very close to put 

13          air quality monitoring in the Sunset Park 

14          area, including the BQE.  Thank you.

15                 MAYOR DE BLASIO:  Appreciate it.  

16          Thank you.

17                 CHAIRWOMAN WEINSTEIN:  Thank you.  

18                 Senate?  

19                 CHAIRWOMAN YOUNG:  Senator Croci.

20                 SENATOR CROCI:  Thank you, Mr. Mayor.  

21          Appreciate your testimony here today.

22                 I represent the Third Senate District 

23          on Long Island, Suffolk County.  And as 

24          you're no doubt aware, we've had tremendous 


 1          challenges and very violent killings by 

 2          MS-13.  It's only because of the hard work of 

 3          local law enforcement and federal partners 

 4          that we've been able to really turn the tide 

 5          and bring to justice individuals who are 

 6          suspected of committing some of these 

 7          killings.  

 8                 I'll say, full disclosure, that I've 

 9          had the opportunity to work with the NYPD 

10          over the years and recently toured the 

11          academy under Commissioner O'Neill.  I'm 

12          aware of your work, not only counterterrorism 

13          and our security here, but also abroad, the 

14          NYPD and their work abroad.  So I'm extremely 

15          satisfied that we have the very, very best I 

16          would say models in leadership and in their 

17          profession in the NYPD.

18                 I am concerned about the ongoing flow 

19          of heroin that comes -- of course it's not 

20          produced here in the United States, but it 

21          does flow through our state and out to our 

22          island.  The close cooperation between the 

23          federal authorities and our local law 

24          enforcement has been, as I said, essential in 


 1          combating this.  The Governor, our Governor 

 2          in September of last year put forward an 

 3          executive order which detailed how state law 

 4          enforcement could cooperate with federal law 

 5          enforcement.  I was wondering if you have any 

 6          executive orders which limit the ability of 

 7          federal law enforcement and city law 

 8          enforcement to cooperate.

 9                 MAYOR DE BLASIO:  So thank you very 

10          much for the comments you made about the 

11          NYPD.  And we pride ourselves on the kind of 

12          cooperation with all law enforcement 

13          entities.  

14                 Part of what has happened in the fight 

15          against terror that has been a great success 

16          is the deepening relationship between the 

17          NYPD and the FBI and all the members of the 

18          Joint Terrorism Task Force.  Not so long ago, 

19          there were some disconnects there.  

20          Unfortunately, in other parts of the world we 

21          see disconnects between different law 

22          enforcement levels and entities, but here we 

23          actually have achieved a very high level of 

24          coordination in fighting terror.  It's been 


 1          one of the reasons that so many plots have 

 2          been foiled.  And we always want to work with 

 3          our colleagues in all counties of the state 

 4          in continuing that work.  

 5                 On the question of cooperation with 

 6          the federal government, again, if you're 

 7          talking about antiterror, it's exceptional.  

 8          If you're talking about the obvious question 

 9          of immigration, we have a city law in fact -- 

10          it's not an executive order, it's a city 

11          law -- that delineates the form of 

12          cooperation.  There's 170 serious and violent 

13          offenses where we do cooperate.  And we 

14          believe that's the right approach.  

15                 We obviously -- look, I would 

16          differentiate the two pieces very distinctly.  

17          When it comes to fighting crime and fighting 

18          terror -- and you're exactly right, that that 

19          gang is a horrendous affront to the people of 

20          this -- of our city, of your county and the 

21          whole country.  We're going to fight them at 

22          every corner.  

23                 On the question of some of the 

24          national environment and the specific 


 1          approach that we've seen ICE take in some 

 2          cases, we disagree with some of the specific 

 3          actions they've taken and the approach 

 4          they've taken.  We still will follow our own 

 5          law, obviously, in terms of cooperation, but 

 6          there's other areas where we have a 

 7          disagreement, most notably on asking people 

 8          documentation status.  

 9                 And this is something Commissioner 

10          O'Neill feels very strongly about, 

11          Commissioner Bratton felt strongly about 

12          before him.  And to be fair and to show it's 

13          bipartisan, it was a policy that Mayor 

14          Giuliani had in place, just as I do, that the 

15          NYPD will not ask documentation status 

16          because we must maintain open communication 

17          with all immigrant communities, and we have 

18          millions of immigrant New Yorkers.  

19                 So just to say that's something we 

20          feel adamantly about, and we do have a 

21          difference with the federal government, but 

22          there are still obviously areas where we 

23          cooperate.  And particularly in the fight 

24          against terror, we have close, close 


 1          cooperation.  

 2                 SENATOR CROCI:  So I would categorize 

 3          what has been happening in my community and 

 4          the individuals perpetrating it, it's not 

 5          simply a criminal organization, but the 

 6          tactics they use are akin to some of the most 

 7          successful terrorist groups.  And we refer  

 8          to it as narcoterrorism, which I think is a 

 9          more accurate way to describe it.

10                 I would just like to follow up to ask, 

11          has the City of New York received from the 

12          Department of Justice or Homeland Security or 

13          any other federal agency any notices that you 

14          could be in jeopardy of losing federal 

15          monies?  We've seen recently a very public 

16          one about road signs, but this is far more 

17          important to me.  And I'd like to know if the 

18          federal government has put you on notice that 

19          there could be holes in your budget this year 

20          that the Legislature should be aware of.

21                 MAYOR DE BLASIO:  Oh, absolutely.  And 

22          this has now been going on for a year.  And 

23          it refers to the Byrne grant program --

24                 SENATOR CROCI:  And what's that 


 1          amount, sir?

 2                 MAYOR DE BLASIO:  Say again?

 3                 SENATOR CROCI:  What's the amount that 

 4          could be in jeopardy?

 5                 MAYOR DE BLASIO:  We're going to check 

 6          right now the exact amount.  But the threat 

 7          remains.  There has not been a specific 

 8          budgetary action taken, but the threat has 

 9          been reiterated many times and our answer 

10          remains consistent.  We believe we are 

11          functioning 100 percent within federal law 

12          and within the recent decision of the 

13          Supreme Court in 2012, and we're doing what 

14          is appropriate to protect our city.

15                 You know, again, if this ever ends up 

16          coming to loggerheads, we'll go into court to 

17          resolve it.  But we feel very strongly that 

18          our position is in compliance with both 

19          federal law and our city law.

20                 SENATOR CROCI:  So this is 

21          specifically your reading of 8 USC 1324, 

22          which talks about harboring?  

23                 MAYOR DE BLASIO:  I'm not a lawyer, so 

24          you'll forgive me, I can't quote the chapter 


 1          and verse.  But again, we've --

 2                 SENATOR CROCI:  But there is some 

 3          recognition that there could be a legal 

 4          problem if you're citing that you may have to 

 5          go to court to rectify it.

 6                 MAYOR DE BLASIO:  This emanates from 

 7          the president's executive order early in the 

 8          administration.

 9                 SENATOR CROCI:  Sir, the federal law 

10          has been in place for decades.  It's still 

11          there.

12                 MAYOR DE BLASIO:  Again, forgive me 

13          when I say something that's not lawyerly, 

14          because I'm not a lawyer, I'm just trying to 

15          do the logic pattern.  

16                 You know, the initial -- the initial 

17          difference was put down through the executive 

18          order.  We said at the time we still believe 

19          that everything we've been doing is 

20          consistent with federal law and city law.  

21          There's been several letters since with the 

22          threats you referred to.  We continue to 

23          maintain our position.  We have not seen any 

24          funding cut off.  The funding is specifically 


 1          funding for the NYPD.  But it has not been 

 2          cut off to date.

 3                 CHAIRWOMAN YOUNG:  Thank you.

 4                 SENATOR CROCI:  Thank you, sir.

 5                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

 6          Carroll.

 7                 ASSEMBLYMAN CARROLL:  Thank you, Madam 

 8          Chair.  

 9                 Good afternoon, Mayor de Blasio.  

10          Thank you for being here and answering all of 

11          our many, many questions.

12                 I would like to go back to the MTA and 

13          I would like to ask you to kind of more 

14          broadly explain your views on congestion 

15          pricing and whether or not you've spoken with 

16          the Governor or anyone from the state about a 

17          congestion pricing plan, and what things 

18          would you need to see in a congestion pricing 

19          plan to support it?

20                 MAYOR DE BLASIO:  I've had numerous 

21          conversations with the Governor on this 

22          topic, both before this proposal came out and 

23          since.  I've been consistent about that 

24          lockbox point.  It's the single greatest 


 1          concern I have right now.  

 2                 Previously, I would have said that the 

 3          older proposals we saw related to congestion 

 4          pricing immediately put particular demands on 

 5          the people of Brooklyn and Queens, which is a 

 6          clear majority of New Yorkers -- it's 5 

 7          million people, almost -- without any 

 8          guarantees in return of investment in the 

 9          mass transit needs of the people of Brooklyn 

10          and Queens.

11                 This new plan is a step forward 

12          because by taking the bridges out of the 

13          equation, it does a better job of addressing 

14          that central concern.

15                 We still don't see answers on some of 

16          the hardship issues I've raised, which I 

17          think are legitimate.  You will know from 

18          your district, which I have the honor of 

19          living in, that there are plenty of people 

20          who are not well off who have reasons they 

21          have to go into the core of Manhattan, for 

22          medical appointments and other matters.  We 

23          need to think about how we handle that.

24                 But the biggest issue right now for me 


 1          is the guarantee, and a legally binding 

 2          guarantee, that any money derived from a 

 3          congestion pricing system would be spent on 

 4          subways and buses in New York City.

 5                 I think you understand my concern, 

 6          that we've seen money in the past move away 

 7          from its intended purpose.  If government is 

 8          not obligated to keep that money focused on 

 9          the needs of the MTA and the people of 

10          New York City, I fear the money might be used 

11          for other purposes.

12                 So that's what I would argue.  We all 

13          need to work on it together, and we're ready 

14          to work closely with this Legislature to 

15          figure out something that would be fair.  

16          That's the most central concern.  There's 

17          also a host of details.  We don't actually 

18          have a full proposal or a full piece of 

19          legislation.

20                 ASSEMBLYMAN CARROLL:  Well, I mean I 

21          think we can agree that yes, we don't have 

22          the exact details, but the broad strokes of 

23          some form of congestion zone south of 

24          60th Street.  And if you cross the East River 


 1          bridges and don't access either the West Side 

 2          Highway or the FDR Drive, that you would pay 

 3          a fee.  And then for-hire vehicles would have 

 4          an additional surcharge in that zone, at 

 5          least during major business hours Monday 

 6          through Friday, and possibly on weekends.  

 7          That that is the general broad strokes of 

 8          that plan.  And do you support those broad 

 9          strokes?  

10                 And I think just taking into account 

11          that, you know, Comptroller DiNapoli in 

12          November of 2017 put out a report that said 

13          the 2020-2024 capital plan of the MTA will 

14          most likely see a larger shortfall than the 

15          2015-2019 capital plan, which was over 

16          $15 billion.  So we could see a -- and 

17          considering that still that capital plan has 

18          a $7 billion shortfall, we could see upwards 

19          of a $20 billion shortfall.  We need a direct 

20          revenue stream.  

21                 And would you support those broad 

22          strokes of 60th Street, coming into the 

23          central business district, excluding if you 

24          get on to the FDR or West Side Highway?


 1                 MAYOR DE BLASIO:  A couple of things, 

 2          and I will answer your specific question.  

 3          But I just have an important frame.

 4                 I still believe the single most 

 5          important and equitable approach to raising 

 6          the resources we need for the long-term MTA 

 7          is the millionaire's tax.  I don't -- 

 8          respectfully -- and you're the experts, 

 9          you're the people that do the ultimate 

10          voting.  But I don't buy the conventional 

11          wisdom of what is viable here in Albany and 

12          what's not viable.  I'm going by what I think 

13          is the best outcome, it's the most 

14          progressive form of taxation, it's obviously 

15          renewable.  I think the Fair Fare is a really 

16          important idea in terms of ensuring that 

17          lower-income New Yorkers can get around and 

18          get access to opportunity.  So I still think 

19          it's the single best way to address the 

20          problem.  

21                 If you say to me, okay, let's look at 

22          congestion pricing models, this model is the 

23          best I've seen to date.  And I think that's 

24          progress.  I'm much more comfortable with it 


 1          than I was with the previous proposals.

 2                 I have not seen enough detail to be 

 3          fully comfortable, because the devil really 

 4          is in the details.  The broad strokes, if you 

 5          have a limited zone and if you do not include 

 6          the bridges, that certainly makes some sense 

 7          to me.  I think the notion of the for-hire 

 8          vehicles being treated equally is crucial, 

 9          taxis and all other forms of for-hire 

10          vehicles being equally responsible for 

11          producing some of the revenue for the MTA.  

12          And setting that at the right dollar figure 

13          is crucial.

14                 But you will understand that I -- you 

15          know, I'm not -- on behalf of 8.5 million 

16          people, I'm not going to buy into a plan 

17          until it's fully articulated with all of the 

18          ramifications and until I see that the money 

19          will be devoted -- in a legally binding 

20          fashion will be devoted to the subways and 

21          buses in New York City.

22                 So my answer is:  Clearly a step in 

23          the right direction.  I'm ready to sit at the 

24          table with anyone and see if we can work 


 1          together to get it to be something we can all 

 2          agree on, but I want to be careful about 

 3          those details.

 4                 CHAIRWOMAN WEINSTEIN:  Thank you.

 5                 CHAIRWOMAN YOUNG:  Thank you.  

 6                 Our next speaker is Senator Hoylman.

 7                 SENATOR HOYLMAN:  Good morning, 

 8          Mr. Mayor.  I know you've been patiently 

 9          awaiting my question, but --

10                 MAYOR DE BLASIO:  You're a pillar of 

11          patience.

12                 SENATOR HOYLMAN:  Yes, yes.  I 

13          basically have two quick areas, subways and 

14          schools.  

15                 First, thank you for your 

16          open-mindedness on congestion pricing.  I 

17          represent largely the congestion pricing 

18          zone, so you could call me the Senator from 

19          the congestion pricing zone if you want.

20                 But my constituents -- and I don't 

21          want you to ignore this part, the hardship 

22          that might be placed on them.  I'm very 

23          supportive of congestion pricing, but we have 

24          to understand that there might be some folks 


 1          who will drop their cars off at 60th Street.  

 2          So we should be looking at things like 

 3          residential parking, like the last plan a 

 4          decade ago considered.

 5                 Also we want to ensure that we look at 

 6          other vehicles, not just the for-hire 

 7          vehicles but tour buses.  There's been a 

 8          tripling of double-decker tour buses in 

 9          Manhattan since about 2003.  They add to a 

10          lot of congestion too, so we need to figure 

11          out how to deal with them.

12                 My specific question, though, is just 

13          a legal point.  Do you think that a home-rule 

14          message is required for congestion pricing?

15                 MAYOR DE BLASIO:  Putting aside, 

16          again, that I'm not a lawyer, I think as a 

17          general rule, you know, the vast majority of 

18          things that affect the City of New York, of 

19          course we want that kind of process.  We've 

20          got to be very careful, when actions are 

21          taken up here, that they represent the 

22          interests of 8.5 million, almost 8.6 million 

23          New Yorkers.

24                 What I'd like to see here is a very 


 1          collegial process where we all work together 

 2          fashioning whatever proposals.  Again, I 

 3          state my devotion to the millionaire's tax.  

 4          There might be entirely different ideas 

 5          beyond the millionaire's tax and congestion 

 6          pricing that should be looked at.

 7                 But the very point you make -- and it 

 8          gets back to what Assemblymember Carroll was 

 9          saying, part of why I always say the devil is 

10          in the details is you just raised a crucial 

11          point right there:  What happens to the folks 

12          who live along that border?  And then does 

13          that have a domino effect that we have to 

14          address?  We don't want to deal with that 

15          after the fact, we want to deal with it 

16          up-front in a policy.

17                 So there has to be close coordination, 

18          in my view, between the Legislature and the 

19          city in determining whatever policy it is, 

20          and a home rule is one of the ways to 

21          guarantee that.

22                 SENATOR HOYLMAN:  And on the schools 

23          issue, I really do applaud your leadership --

24                 MAYOR DE BLASIO:  Wait, I'm going to 


 1          give you a historical point.  Our new state 

 2          affairs director will weigh in.

 3                 NYC DIRECTOR BROWN:  The 2008 bill on 

 4          congestion pricing did need a home rule.

 5                 SENATOR HOYLMAN:  Yes.  I didn't know 

 6          if you had changed your --

 7                 MAYOR DE BLASIO:  We think that's a 

 8          good precedent.

 9                 SENATOR HOYLMAN:  On schools, thank 

10          you for your leadership over the last four 

11          years.  As a public school parent, I 

12          appreciate the direction, the lowering of the 

13          temperature in the public schools, which 

14          previously were fraught with much more 

15          political dissension.  

16                 What is the impact of this shift that 

17          you note in your testimony of $144 million 

18          worth of costs currently borne by the state 

19          to the city to support charter schools?  

20          What's going to be the practical impact on 

21          the DOE budget?

22                 MAYOR DE BLASIO:  I will start and 

23          then turn to Melanie.

24                 Look, it's not only the immediate, 


 1          it's the slippery slope.  When there's an 

 2          unfunded mandate that grows, you wonder where 

 3          it's going.  So our budget director can talk 

 4          to you about the pure dollar impact, which is 

 5          very substantial.  But I would also note our 

 6          concern here is that this is -- you know, the 

 7          charter school community now serves about -- 

 8          almost 10 percent of our kids.  It's very 

 9          substantial if costs continue to be shifted.  

10          At the same time, I understand why people 

11          here are saying let's go farther on fair 

12          funding.  That's an immediate contradiction, 

13          because we'd like to take state resources and 

14          put them into fair funding, but we can't if 

15          we keep receiving additional unfunded 

16          mandates.  

17                 Could you speak to the numbers?  

18                 SENATOR HOYLMAN:  Before you answer, I 

19          wanted to ask you about the selection of the 

20          new chancellor, which is so important to 

21          obviously parents.  The citywide and 

22          Community Education Councils have requested 

23          some sort of role in at least interviewing 

24          the candidates who you're going to be 


 1          meeting, and maybe providing some input.  Is 

 2          that something you'd commit to in some 

 3          fashion?

 4                 MAYOR DE BLASIO:  I respect the 

 5          concern.  You know, I used to be a community 

 6          school board member in the old structure, and 

 7          I think very highly of the folks who serve on 

 8          the CECs.  We want to work closely with them.  

 9          I don't think it's appropriate in a personnel 

10          decision to sort of crowd-source it, you 

11          know.  I think you have to handle such an 

12          important decision -- this is someone going 

13          to govern over a $25 million budget and be 

14          responsible for 1.1 million kids.  That has 

15          to be done very sensitively, very carefully.  

16                 We'll always welcome suggestions, but 

17          a decision like that has to be done --

18                 SENATOR HOYLMAN:  I don't think 

19          they're looking to vet your decision, I think 

20          they're just looking to provide input and 

21          give you their assessment.

22                 MAYOR DE BLASIO:  I would welcome and 

23          I always have welcomed -- it's very personal, 

24          since I had a similar role myself -- ideas.  


 1          If there's names that people want to put 

 2          forward, or specific characteristics, I would 

 3          always welcome that.  And anything that could 

 4          be done on that.  

 5                 Just on the numbers, hold on one 

 6          second.  Go ahead.

 7                 BUDGET DIRECTOR HARTZOG:  So on the 

 8          charter school impact, it's $120 million for 

 9          tuition, and the balance is for leases.  And 

10          essentially it equates to what would be an 

11          unfunded mandate, meaning we have to maintain 

12          the tuition and the lease payments for the 

13          schools.  And it would be very difficult for 

14          us to do that and maintain it without hurting 

15          instruction.  

16                 SENATOR HOYLMAN:  Thank you.

17                 CHAIRWOMAN WEINSTEIN:  Thank you.  

18                 Assemblyman Weprin.

19                 ASSEMBLYMAN WEPRIN:  Thank you, Madam 

20          Chair.  

21                 Good afternoon, Mr. Mayor.  Thank you 

22          for coming up, as you do each and every year, 

23          and spending probably more time than you'd 

24          like to spend in Albany since you've been in 


 1          office.

 2                 As you know, I chair the Corrections 

 3          Committee in the Assembly and I work very 

 4          closely with your administration.  And I want 

 5          to commend you on recent accomplishments of 

 6          reducing the population at Rikers Island to 

 7          below 9,000 individuals, which you referred 

 8          to earlier, and also the initiative that 

 9          you've launched to help keep women out of 

10          jail.  

11                 But I've noticed that there has been 

12          some challenges with efforts to reduce 

13          violence, specifically slashings and 

14          stabbings at Rikers Island.  And as you know, 

15          I currently have a bill in the Assembly which 

16          would allow the use of ionizing body scanners 

17          at Rikers, which is supported by the city as 

18          well as by a number of advocacy groups, 

19          including the Osborne Association and the 

20          Fortune Society.  

21                 Could you comment about, first, why 

22          these scanners are needed and also some of 

23          the safeguards that the city has committed 

24          to, or will commit, in order to prevent the 


 1          overuse of these scanners?

 2                 MAYOR DE BLASIO:  Thank you, 

 3          Assemblymember.  And thank you for your 

 4          leadership on this issue.  

 5                 Yes, we need these scanners, there's 

 6          no two ways about it.  We have to drive down 

 7          any form of violence, any and all forms of 

 8          violence in our correction system.

 9                 Let's be blunt.  One of the problems 

10          is contraband and weapons getting into the 

11          facility.  Both are related to violence.  And 

12          we don't have the best modern technology 

13          being employed to stop that.  We've done a 

14          host of other things, and many of them have 

15          worked.  We have now cameras, internal 

16          security cameras throughout the facilities.  

17          We have more rigorous screening procedures.  

18          We have a lot of investigatory activity.  And 

19          you know a number of people have been 

20          arrested and prosecuted who unfortunately 

21          broke the laws and rules.

22                 But we don't have modern scanners, and 

23          it's hurting our ability to keep people 

24          safe -- our correction officers and inmates.  


 1          So we have to have them.

 2                 Now, there's been valid concerns 

 3          raised about health.  We have worked with our 

 4          Department of Health to address those.  I 

 5          believe that the protocols we're talking 

 6          about now fully address the health concerns.  

 7          But I would argue that not only have we 

 8          effectively answered those concerns, but the 

 9          absence of scanners is causing a clear and 

10          present danger and a different kind of health 

11          concern that's called violence, and it's 

12          unconscionable to let it continue.  

13                 So I beseech you and your colleagues 

14          to please help us this session get this bill 

15          passed so we can finally put those scanners 

16          in.

17                 SENATOR HANNON:  Mr. Mayor -- 

18          Mr. Mayor -- Mr. Mayor, I just want to point 

19          out the Senate has passed my bill to do 

20          exactly that, because we agree with you.

21                 MAYOR DE BLASIO:  Great minds think 

22          alike, Senator.  Thank you.  Bipartisan 

23          cooperation here.  Thank you.  

24                 ASSEMBLYMAN WEPRIN:  We'll look 


 1          forward to working with you, Mr. Mayor, on 

 2          getting it done this year.

 3                 One other topic along the correction 

 4          area.  I visited Rikers Island several times, 

 5          but I've also had the opportunity to visit 

 6          some of the alternatives to incarceration and 

 7          diversion programs, some actually very close 

 8          to my Assembly district in Queens, as well as 

 9          others in Manhattan and other boroughs.  

10                 When I visited each of these places, I 

11          noticed that in addition to an atmosphere of 

12          hope, there was a large focus on providing 

13          community support, addiction and mental 

14          health treatment and other services to give 

15          individuals what they needed to stay out of 

16          jail.

17                 As a large proponent of strengthening 

18          family and community ties and supporter of 

19          ATI and diversionary programs, I'm curious to 

20          hear more about some of the city's recent 

21          efforts to expand behavioral health services 

22          and other supports for people looking to stay 

23          out of jail.

24                 MAYOR DE BLASIO:  Well, thank you for 


 1          that, Assemblymember.

 2                 We believe fundamentally that these 

 3          are smart investments.  We know, first of 

 4          all, tragically, in our correction system 

 5          about 40 percent of the folks incarcerated 

 6          have some identified mental health challenge.  

 7          The big initiative we've undertaken, of 

 8          course, is the Thrive NYC initiative that my 

 9          wife, Chirlane, leads.  And the goal there 

10          going forward is to identify these problems 

11          as early as possible, even going as early as 

12          pre-K, and address them so those individuals 

13          never end up in the criminal justice system 

14          to begin with.

15                 But since that will take some time, we 

16          know there's a lot of mental health 

17          challenges, we think that addressing them in 

18          the here and now actually will reduce 

19          recidivism.  It's one of the pieces of our 

20          effort to reduce the number of women who end 

21          up in our jails and to reduce recidivism 

22          among women.  We think there are specific 

23          mental health supports that would be greatly 

24          valuable, and we focused in particular on 


 1          inmates who have children.  

 2                 But across the board, I think we have 

 3          missed the opportunity -- you know, whenever 

 4          government comes in contact with someone and 

 5          we have a chance to get them the help they 

 6          need, that should be considered a precious 

 7          opportunity.  Unfortunately, the protocol in 

 8          the past, whether it was for corrections or 

 9          police or education, was not to seize that 

10          moment.  

11                 Right now, Corrections made a sea 

12          change, NYPD as well, in terms of a lot more 

13          training in how to handle mental health 

14          situations, and then a lot more supports that 

15          are provided that they can connect people to 

16          right away.  And that's the model we're 

17          working on.

18                 ASSEMBLYMAN WEPRIN:  Well, I 

19          appreciate that, and I look forward to 

20          working with you on those programs as well.  

21          Thank you.

22                 CHAIRWOMAN WEINSTEIN:  Thank you.

23                 CHAIRWOMAN YOUNG:  Thank you.  

24                 Senator Kavanagh.


 1                 SENATOR KAVANAGH:  Thank you, Madam 

 2          Chair.  

 3                 And thank you, Mr. Mayor, for your 

 4          testimony.  And also Ms. Hartzog and 

 5          Ms. Brown, congratulations on your relatively 

 6          new appointments and thank you for being here 

 7          today.

 8                 So you've spent a lot of time on the 

 9          MTA today and I'm not going to -- with my 

10          five minutes, I'm not going to repeat a lot 

11          of that, just to say that I share your 

12          commitment to ensuring that we find a way to 

13          balance the needs of the city and the state 

14          in terms of finding a full funding solution, 

15          and really ultimately the goal is to fully 

16          fund the aspects of the capital plan that are 

17          necessary to ensure that the system is in a 

18          high state of repair and also that we serve 

19          many constituencies that are underserved by 

20          the system.

21                 Similarly, I know there's been quite a 

22          bit of dialogue on the BQE design-build 

23          question.  It runs through my district.  And 

24          I was happy to be joined by just about all of 


 1          the Senators in Staten Island and Brooklyn of 

 2          both parties in calling for design-build to 

 3          be part of this budget so that we can get it 

 4          done and join the city in making sure that 

 5          the contracting documents that have to go out 

 6          this spring include -- can factor into 

 7          design-build authorization.  And that will 

 8          be a continuing dialogue here.

 9                 I want to focus on public housing a 

10          little more.  You had a dialogue a moment ago 

11          with Senator Savino, who for the record I 

12          think is worth every penny of the $500,000 

13          capital investment in housing her in her 

14          district that she mentioned.

15                 But just the -- many of us in Albany, 

16          including members of the IDC and members of 

17          my conference and certainly members of the 

18          Assembly Democratic Conference have been 

19          calling for a number of years now for a 

20          $500 million investment by the state each 

21          year in NYCHA.  And yet we've seen 

22          $100 million that was carefully constructed 

23          so it couldn't be used for major capital 

24          needs, and another $200 million that was 


 1          welcome that was primarily for boilers and 

 2          elevators last year -- and no new money at 

 3          all in this year's budget.

 4                 So I'd like to, if you would, just 

 5          speak -- you've taken a different path and 

 6          the city has put a very substantial amount of 

 7          money into NYCHA.  I just want to understand, 

 8          this is a federal authority, a federally 

 9          created program.  The federal government had 

10          primary responsibility for a long time.  Can 

11          you just talk about why you think the city 

12          and the state should be investing city and 

13          state capital dollars in NYCHA?

14                 MAYOR DE BLASIO:  Absolutely.  And I'm 

15          happy to call you Senator.  I don't know if 

16          I've had a chance to use the title yet, so 

17          congratulations again.

18                 SENATOR KAVANAGH:  Thank you.

19                 MAYOR DE BLASIO:  Yeah, this is the 

20          single strongest element of affordable 

21          housing in New York City.  400,000 people 

22          live in public housing.  It's the size of 

23          many major American cities.

24                 And look, the model was created to be 


 1          federally funded, you're exactly right.  But 

 2          the fact that the federal government walked 

 3          away from that, and the fact that the state 

 4          government has had a very limited role, does 

 5          not negate the fact that this is 400,000 

 6          human beings who are part of the backbone of 

 7          New York City.  

 8                 These are working people, these are 

 9          salt-of-the-earth folks who, you know, many 

10          of them are public workers and many of them 

11          are people who have been in their 

12          neighborhoods their whole lives and are part 

13          of keeping neighborhoods strong even in the 

14          tough times.  So we've got to be committed to 

15          the long-term needs of public housing.

16                 By the way, many other cities that 

17          destroyed their public housing stock, they 

18          lived to rue the day, because now they have 

19          experienced gentrification and they end up 

20          with communities that have no economic 

21          balance and there's no place for working 

22          people.  So we've got to protect it.  

23                 The immediate option, I agree with 

24          your point that the best thing would be an 


 1          ongoing state commitment, and someday to 

 2          renew the federal commitment.  But in the 

 3          absence of that, specifically to match the 

 4          $200 million capital commitment we've made 

 5          for new boilers and heating systems, and to 

 6          finish the previous funding -- as you said, 

 7          that original $100 million, we still have not 

 8          seen some of that money.  That's three years 

 9          ago, if my memory serves.  And then the more 

10          recent $200 million we still have not gotten 

11          approval on, even though that proposal has 

12          been in the hands of the executive branch for 

13          now over two months.

14                 So right there, getting us the 

15          previously allocated funding and matching the 

16          $200 million we're putting into heating would 

17          be a very, very helpful step.  

18                 SENATOR KAVANAGH:  Great, thank you.  

19                 Just on a more parochial issue, 85 

20          Bowery, it's a building in my district where 

21          29 families and 95 people, including 17 

22          children, were vacated by the Buildings 

23          Department for safety concerns.  Your office 

24          and the relevant city agencies, as well as 


 1          the State HCR, have been involved.  I think 

 2          it's fair to say there was some chaos in the 

 3          initial vacate process that may have been 

 4          avoidable with better communication in 

 5          advance from the city to the tenants.  But 

 6          we've got ongoing concerns, that we need to 

 7          ensure that the landlord is making the 

 8          repairs that are necessary to get people back 

 9          into their homes and that the residents have 

10          their rights protected, and their services.

11                 Just a two-part question.  First, 

12          would you commit to us to work once the, you 

13          know, sort of this -- beyond this problem, 

14          whether we can talk about what the protocol 

15          ought to be when you're doing a vacate order, 

16          especially in places where there might be 

17          language barriers for people understanding 

18          what's going on?  

19                 And secondly, do we have your ongoing 

20          commitment that the administration will 

21          continue to work with us until all of these 

22          people are back in their homes?

23                 MAYOR DE BLASIO:  Want to start on 

24          this?


 1                 NYC DIRECTOR BROWN:  Sure.  This 

 2          definitely is an issue that the agencies 

 3          involved have been working on daily.  There's 

 4          regular conversations that happen currently 

 5          between the tenant association and the city.  

 6          So this is something that we're definitely on 

 7          top of.

 8                 The goal is absolutely to return this 

 9          building to safe and habitable homes for 

10          people to live in.  And I think yes, we 

11          should talk about, you know, after, 

12          after people are allowed to get back in their 

13          homes, we should talk about tenant harassment 

14          and all those different things.

15                 MAYOR DE BLASIO:  Yeah.  And I would 

16          say that your point is very well taken, 

17          Senator.  We need to perfect a model here.  

18          Because you're right, this was not handled 

19          the way we would ideally want it to, and the 

20          left and the right hand weren't coordinated, 

21          and it's one we have to do better on.  We're 

22          going to have these kind of problems because 

23          of the actions of some landlords -- not the 

24          majority of landlords, but some landlords who 


 1          don't do the right thing.  And we have to be 

 2          smarter about how we handle the aftermath of 

 3          that.

 4                 SENATOR KAVANAGH:  And I would just 

 5          note that the city was very responsive.  We 

 6          had requested that these families be -- they 

 7          had originally been located in a hotel that 

 8          was quite distant from their community, and 

 9          they were all relocated.  There is now a 

10          hotel available that's very nearby the 

11          current building.  So we appreciate the work 

12          on an ongoing basis.  

13                 But, you know, sometimes our 

14          priorities change as we go forward.  So we 

15          just want to join you in staying on top of 

16          this.

17                 CHAIRWOMAN YOUNG:  Thank you.

18                 MAYOR DE BLASIO:  Thank you.  

19                 CHAIRWOMAN YOUNG:  Our next speaker is 

20          Senator Rivera.

21                 SENATOR RIVERA:  Hello, Mr. Mayor.  I 

22          only have five minutes, so I'll get right to 

23          it.  A few of the questions have been asked 

24          already, but I wanted to talk about a couple 


 1          of things that we have not spoken about.  

 2                 First, as far as education is 

 3          concerned, I'm sure that you were, as the 

 4          rest of us were, horrified to read the story 

 5          about what happened in M.S. 118 last week.  

 6          It was related to the teacher who was 

 7          teaching a class on slavery and thought it 

 8          necessary to walk over the back of black 

 9          students.  

10                 So I wanted you to talk a little bit 

11          about maybe that case specifically, but more 

12          importantly about the need for culturally 

13          competent teachers and some of the training 

14          that needs to happen.  That's one of the 

15          things, so let's go with that first. 

16                 MAYOR DE BLASIO:  Yeah, that was a 

17          deeply troubling incident.  I just want to 

18          say it does not reflect the values of this 

19          city nor of what we teach our teachers to do.  

20          And we're going to investigate that fully, 

21          because we need to know how anything like 

22          that could have happened and where that got 

23          missed.  Because if anybody was suggesting to 

24          do such a thing, it should have been vetoed 


 1          immediately.  But we don't have all those 

 2          facts yet.  But a very troubling and 

 3          unacceptable situation.

 4                 SENATOR RIVERA:  What is your plan as 

 5          far as the -- I mean obviously this is not 

 6          something that happens all the time, 

 7          thankfully.  But what is your plan about -- 

 8          as far as training teachers to make sure -- 

 9          or just at least setting up something so that 

10          we can assess whether anybody's even thinking 

11          about doing craziness like this, so it does 

12          not happen?  

13                 MAYOR DE BLASIO:  I do think this is 

14          an extreme rarity, and I think that's a good 

15          sign that it's an extreme rarity.

16                 The training that we now do, because 

17          we have greatly expanded professional 

18          development time, includes cultural 

19          sensitivity and teaching for a multicultural 

20          environment and antibias training.  That's 

21          part of what we do.  It's something that we 

22          will continue to deepen over time.

23                 But, you know, I think one of the 

24          things that really is enunciated -- the 


 1          chancellor talks about this a lot -- is we 

 2          have to be a positive model as a school 

 3          system.  In a country that's really grappling 

 4          with these issues right now, we have to be a 

 5          very positive model as a school system 

 6          respecting all kids and backgrounds.  And in 

 7          general, I think we're doing that, but we're 

 8          putting some real emphasis on that in the 

 9          professional development process.

10                 SENATOR RIVERA:  I'd like to follow up 

11          later on some of the specifics as far as what 

12          you're trying to do, but I want to move on to 

13          another one related to health.  

14                 Specifically, Senator Marchione 

15          earlier talked about the opioid crisis.  And 

16          I certainly know that it has been a focus of 

17          yours, certainly has been a focus of mine in 

18          the time that I've been here.  But I wanted 

19          to ask about a specific policy in particular, 

20          supervised injection facilities.  Just last 

21          week there was a bill that was introduced by 

22          Assemblymember Rosenthal which seeks to 

23          establish them in the State of New York.  And 

24          I'm aware that there is a study by the 


 1          Department of Health and Mental Hygiene that 

 2          was looking into the feasibility of this.  

 3          Can you tell us when that report will be 

 4          released?

 5                 MAYOR DE BLASIO:  That's still being 

 6          discussed between the different agencies.  

 7          The Department of Health is involved, NYPD is 

 8          involved.  That's something we will be 

 9          addressing soon.  And I always say to people 

10          when I say "soon" I mean soon, or I wouldn't 

11          use that word.  I don't have a date certain, 

12          but it's something that, you know, is almost 

13          to the point where we can talk about it 

14          publicly.  Very complex matter, as you know.

15                 SENATOR RIVERA:  Indeed.

16                 MAYOR DE BLASIO:  Very -- a proposal 

17          that obviously is a serious one and an 

18          approach utilized in some other places in the 

19          world.  But we really want to analyze the 

20          information we're receiving, both with the 

21          Health Department and NYPD, and then come out 

22          with some public analysis.

23                 SENATOR RIVERA:  I look forward to the 

24          release of that report.  I, along with many 


 1          of my colleagues, strongly believe that 

 2          addiction is a public health issue, not a 

 3          criminal justice one, and I want to make sure 

 4          that we go down that road and, as we address 

 5          addiction concerns, that we do so across the 

 6          board in all communities, not just with 

 7          doctors' kids, but certainly in every 

 8          community, particularly those that have been 

 9          impacted by opioid addiction and overdoses 

10          before.

11                 Last but not least -- I only have a 

12          have a minute -- last week we had Joe Lhota 

13          here for about five hours, as you heard 

14          earlier.  One of the questions that I asked 

15          him, I termed it a radical rejiggering, that 

16          was me trying to be alliterative.  But the 

17          core question is the percentage -- I was 

18          trying to get something out of him that I did 

19          not get out of him, and it had to do with how 

20          much -- as far as capital costs are 

21          concerned, the way that historically -- more 

22          specifically, the percentage that the city 

23          covers now and, in the new proposal, what is 

24          the percentage that the city would be asked 


 1          to cover, and he didn't give me one.  

 2                 I figured that you folks have done the 

 3          numbers based on what you're seeing in the 

 4          budget proposal.  So if you have any of that, 

 5          if you could share it with us, I'd appreciate 

 6          it.  

 7                 And thank you for being here, 

 8          Mr. Mayor.

 9                 MAYOR DE BLASIO:  Just to make sure -- 

10          thank you.  Just to make sure I understand 

11          fully what you're saying, if you're referring 

12          to the proposal in the Executive Budget --

13                 SENATOR RIVERA:  That is correct.  And 

14          the way it would change what has been 

15          historically the responsibility of the city 

16          as it relates to capital costs for the MTA 

17          and what this would do to change it.  

18                 As far as percentage, if we say a 

19          hundred -- right now, say it covers 30 -- I 

20          don't know what it is, right -- but 30, 70 

21          for the state.  This would change it to what?  

22          If you have that.  

23                 MAYOR DE BLASIO:  I'm going to start 

24          broadly and then pass to Melanie.


 1                 The -- look, it's a sea change to talk 

 2          about going from what the law -- and I 

 3          emphasize, the state law itself, state law -- 

 4          and everything we've seen in practice for 

 5          65 years makes abundantly clear that the city 

 6          is not responsible for the capital costs.  

 7          The capital costs are huge.  You know, 

 8          ultimately -- and given what Mr. Lhota I 

 9          think has rightfully said about the future of 

10          the MTA, you're talking about tens of billion 

11          of dollars in shifted expenses, which is an 

12          insupportable number.  That's before you even 

13          talk about the value capture.

14                 So one thing I'm going to ask our 

15          budget director to do is to give you a sense 

16          of it.  I mean, if we lost tens of billions 

17          of dollars, what that would do to all the 

18          other areas in our capital budget.

19                 BUDGET DIRECTOR HARTZOG:  Well, I mean 

20          the value capture alone in terms of property 

21          taxes is taking away billions of dollars from 

22          us.  And so just -- it would essentially wipe 

23          out many of our critical projects that we 

24          currently have budgeted, as you said before, 


 1          Mr. Mayor, in infrastructure.  

 2                 And it also affects our operating 

 3          revenues in terms of our expense budget as 

 4          well.  It's not just capital, it also affects 

 5          our expenses.  Property taxes support our 

 6          operating budget.  

 7                 MAYOR DE BLASIO:  Right.  I'd just add 

 8          very quickly that I think when the value 

 9          capture idea was put out, I think it sounded 

10          an alarm for localities all over.  The notion 

11          that any action could be taken to reach into 

12          their local revenue, into their property tax 

13          revenue, is very dangerous for many reasons.  

14          That money is the day-to-day expense money 

15          for police, fire, sanitation, schools.  You 

16          take away that money, you're going to see 

17          cuts in those areas.  

18                 On the capital side, what does tens of 

19          billions mean?  You know, as I've said in all 

20          these town hall meetings, and so many of you 

21          have been there, we would not be doing new 

22          school construction, we would not be doing 

23          additional work on roads and bridges, we 

24          would be doing repaving, we would not be 


 1          doing the affordable housing program if we 

 2          lost that kind of level of money.  All of 

 3          these new initiatives that people have 

 4          demanded would have to be suspended.  There's 

 5          no way we could pay for them.

 6                 CHAIRWOMAN YOUNG:  Thank you.

 7                 Mr. Mayor, I want to go back to the 

 8          MTA funding issue.  And as was pointed out by 

 9          Senator Hannon, the 2015-2019 MTA capital 

10          plan totals about $30 billion.  And of this 

11          total, $8.64 billion, or 28.9 percent, will 

12          be contributed by the state, and only 

13          $2.492 billion, or 8.3 percent, will be 

14          contributed by the city.

15                 Now, you today have said several times 

16          that the city is not legally responsible for 

17          the capital costs for the MTA.  I would say 

18          to you, Mr. Mayor, that those statements are 

19          not correct.  Let me refer you to the law.  

20          Chapter 200 of the Laws of 1953 originally 

21          created the New York City Transit Authority 

22          and provided that the operation of the city 

23          subway system be provided by the authority 

24          pursuant to a master lease.


 1                 Within the original chapter, the city 

 2          was explicitly responsible for all capital 

 3          costs for projects having a period of 

 4          probable usefulness of five years or more,  

 5          which would include all major capital 

 6          construction.  That funding obligation and 

 7          authority to approve remain in place to this 

 8          very day.  

 9                 Subsequently, legislation was passed 

10          to provide that the city Board of Estimate -- 

11          which is now you, Mr. Mayor -- needs to 

12          approve capital costs exceeding $5 million.  

13          This did not diminish the city's 

14          responsibility, but ensured that the city 

15          would be able to approve projects and costs 

16          necessary for the system, since you are 

17          responsible.

18                 So based on the law, would you explain 

19          to us why you feel it's appropriate for the 

20          state to commit 3.5 times the city's own 

21          capital commitment in order to fund primarily 

22          city-centered transit investments?

23                 MAYOR DE BLASIO:  Madam Chair, deepest 

24          respect, absolutely disagree with your legal 


 1          interpretation.  This is something our 

 2          corporation counsel --

 3                 CHAIRWOMAN YOUNG:  I'm reading from 

 4          the law, Mr. Mayor.

 5                 MAYOR DE BLASIO:  Excuse me?

 6                 CHAIRWOMAN YOUNG:  I'm reading from 

 7          the law.

 8                 MAYOR DE BLASIO:  Again, respectfully, 

 9          you're reading from the law and then adding 

10          your interpretation, which we all do.  

11                 And I would argue to you, my 

12          corporation counsel has looked at the same 

13          exact law, and we also looked at 65 years of 

14          practice, and we come to a very different 

15          conclusion.  

16                 This obviously is an issue that could 

17          have come up at any time in the last 65 

18          years.  It has not.  And I think it hasn't 

19          for a reason.  Because the power to make the 

20          decisions devolved to the state.  Mr. Lhota 

21          was here; Mr. Lhota was named by the 

22          Governor.  There was no consultation with me 

23          in that process.  I had no vote in that 

24          process.  The budget was determined without 


 1          any involvement of the city.  Let's face it, 

 2          the state has been running the MTA for 

 3          decades now.

 4                 And the reality is that the city is 

 5          responsible for a whole host of areas that we 

 6          must provide for the people of the city -- 

 7          public safety, education, et cetera.  There's 

 8          no safety net.  I think we can honestly say 

 9          at this point in history, if there was a 

10          crisis in the economy or there was a massive 

11          cutoff in federal aid, which is a real 

12          conceivable possibility, the state would not 

13          be in a position to help the city any longer.  

14          We are on our own to determine our own fiscal 

15          future, which is we're trying to protect the 

16          interests of over 8.5 million people and the 

17          economy of the whole state by keeping 

18          reserves in place.

19                 But right now the reality is we do not 

20          make the decisions for the MTA and we have 

21          not been held liable, legally or otherwise, 

22          for the capital costs.

23                 That notwithstanding, we have 

24          contributed in a variety of ways.  And we 


 1          look forward to cooperating on a long-term 

 2          solution to the problem.  We think there are 

 3          long-term solutions we could all agree upon.

 4                 BUDGET DIRECTOR HARTZOG:  And I would 

 5          just add that the state has not funded as 

 6          much as the city historically.  In terms of 

 7          the MTA's overall capital plan, between 1982 

 8          and 2014 the state was at 5 percent and the 

 9          city was at 7 percent, and we're now at 

10          8.3 percent.

11                 CHAIRWOMAN YOUNG:  Thank you for that.  

12          And I would say that the state has had to 

13          step in over the years, I agree with that, 

14          due to failures on the city's part.  But at 

15          the end of the day, the city legally is 

16          responsible for capital costs.  

17                 And, Mr. Mayor, you have raised the 

18          tax levy over and over and over again.  You 

19          said today that you have a $5 billion 

20          surplus.  And I don't understand why the city 

21          can't contribute more toward the capital 

22          costs.  You say yourself how much people 

23          depend on an operating subway and bus system, 

24          how crucial it is to people's lives.  And I 


 1          would ask that the city reconsider and follow 

 2          the law and contribute more toward capital 

 3          costs and operating costs of the subway 

 4          system.

 5                 MAYOR DE BLASIO:  Senator, I've tried 

 6          to be very consistent about the fact that we 

 7          want to work together on a solution.  We 

 8          believe, with the MTA's existing resources, 

 9          they can address the immediate problem if 

10          they would allocate money to the greatest 

11          needs.  We also believe that the money that 

12          was taken out of the MTA budget should be 

13          returned to it.  It's a substantial amount of 

14          money.  And we believe that we can work 

15          together on a long-term funding source.  That 

16          would be the best solution for all of us.

17                 CHAIRWOMAN YOUNG:  Thank you.  

18                 I just want to switch over to the 

19          New York City Housing Authority now.  And I 

20          thought it might be -- you know, we should 

21          look at -- it would be instructive and we 

22          should look at a timeline.  

23                 So just going over it, on December 17, 

24          2014, Politico New York reported on an audit 


 1          released by City Comptroller Scott Stringer 

 2          which accused NYCHA for potentially missing 

 3          $692 million in federal dollars due to 

 4          widespread mismanagement of the authority.  

 5          It failed to meet specific guidelines in the 

 6          application process -- and by that I mean the 

 7          city -- regarding hot water heaters, 

 8          upgrading lighting, replacement of outdated 

 9          heating plants, and so on.  

10                 On November 17, 2017, the New York 

11          Daily News reported that two top NYCHA 

12          managers were forced to submit their 

13          resignations while a third manager was 

14          demoted.  The resignations and demotions of 

15          managers Brian Clarke, Luis Ponce and Jay 

16          Krantz, respectively, were in response to 

17          their knowing that lead paint testing was not 

18          being conducted in apartments, and they are 

19          lying to HUD officials.

20                 On November 19, 2017, the New York 

21          Daily News reported that the Department of 

22          Investigations slammed NYCHA for systematic 

23          mismanagement following a probe which 

24          determined NYCHA had failed to perform 


 1          required lead inspections in these 

 2          departments and lied.

 3                 DOI commented, "This is the fourth 

 4          time in less than two years that DOI has done 

 5          an investigation that has found systemic 

 6          mismanagement at NYCHA that put tenants at 

 7          risk."

 8                 Previous reports by the DOI found that 

 9          NYCHA was not properly inspecting smoke 

10          detectors in apartments, was not performing 

11          proper elevator maintenance, and did not have 

12          a system in place to prevent violent 

13          criminals from living on NYCHA premises.

14                 On January 8, the New York Post 

15          reported on City Comptroller Scott Stringer's 

16          response to the NYCHA mismanagement.  And 

17          according to Mr. Stringer, NYCHA may have 

18          used inadequate criteria to select boilers to 

19          replace those in 2016 as part of a five-year 

20          capital plan.

21                 On January 9, the New York Post 

22          reported that $100 million in capital funding 

23          was set aside for NYCHA in 2016 but was not 

24          used for boilers.


 1                 On January 22nd, the New York Daily 

 2          News reported that NYCHA General Manager 

 3          Michael Kelly announced his resignation.  

 4          Kelly was involved in NYCHA's attempts to 

 5          conceal its lead paint inspection failures, 

 6          which were done for a year, from both current 

 7          tenants and the public.

 8                 For more than a year, both Shola 

 9          Olatoye and the city were aware that 

10          department lead testing was not being 

11          conducted and, subsequently, both local law 

12          and HUD regulations were being violated.

13                 On January 27th of this year, the 

14          New York Daily News reported that a Bronx 

15          jury reached a $57 million verdict against 

16          NYCHA.  Tiesha Jones' daughter registered 

17          dangerous levels of lead in her blood after 

18          living in a lead-tainted NYCHA apartment.  

19          Tiesha's daughter Dakota, four years old in 

20          January of 2010, registered a level of 

21          45 micrograms per deciliter in her blood.  

22          The acceptable level is 5 micrograms.  

23                 Obviously, lead exposure can greatly 

24          affect the neural development of children and 


 1          cause development delays.  The results of 

 2          Dakota's individual education plan placed her 

 3          in special education.

 4                 Comments.  Tiesha's comments were:  "I 

 5          was mortified.  They, NYCHA, sent me a letter 

 6          every year stating that there's no lead in 

 7          the apartment.  Here I was thinking I was 

 8          safe taking care of my children."  

 9                 On January 28th, the New York Daily 

10          News reported that the New York City public 

11          advocate, Letitia James, had called upon you, 

12          Mayor de Blasio, to remove Olatoye as the 

13          head of NYCHA because of her lying under 

14          oath.  Residents have reported that no heat 

15          or running hot water has been available this 

16          winter.  Mayor de Blasio has said that 

17          Olatoye will stay as the head of NYCHA 

18          because of the good she has done through the 

19          improvement of agency finances and quickness 

20          of repairs.

21                 And in fact, Mr. Mayor, on "Good Day 

22          New York" you praised Olatoye, saying:  "When 

23          you look at the head of an organization that 

24          has steadily, consistently improved, a very 


 1          troubled organization, guess what, she needs 

 2          to stay for the good of those residents."  

 3                 And finally, on January 31st, the 

 4          New York Post reported that David Farber, 

 5          NYCHA's general counsel and executive vice 

 6          president for legal affairs, was stepping 

 7          down.  The New York City Department of 

 8          Investigation released information that NYCHA 

 9          certified to the U.S. Department of Housing 

10          and Urban Development that mandated lead 

11          paint testing was completed throughout the 

12          4200 NYCHA apartments, and NYCHA knew that 

13          was inaccurate.  And Shola Olatoye, the 

14          authority chairwoman, remains at the head of 

15          NYCHA.

16                 So a very basic but burning question 

17          is, Mr. Mayor, why is Shola Olatoye still at 

18          NYCHA?

19                 MAYOR DE BLASIO:  Madam Chair, you 

20          listed a number of items, and I want to note 

21          that some of them are media accounts, some of 

22          them are audits by elected officials.  And I 

23          respect all elected officials but may not 

24          agree with all the conclusions of their 


 1          audits.

 2                 There are some real issues.  We've 

 3          been very open about those real issues.  But 

 4          those issues, particularly when it comes to 

 5          the question of lead, predate this 

 6          administration and predate this chair at 

 7          NYCHA.  When she found out what had happened, 

 8          she took the steps to address it.  Now there 

 9          have been full inspections, twice, of all 

10          appropriate apartments, and there's been full 

11          remediation.

12                 So the fact is that is a problem we 

13          inherited that's now being addressed.  The 

14          fact is that the agency was on the verge of 

15          bankruptcy, and she created a plan to right 

16          the ship and put it on a firm financial 

17          footing, that she created a plan with her 

18          colleagues to make repairs happen much more 

19          quickly, to fix roofs better -- and go down 

20          the list -- to improve public safety.  In a 

21          number of developments, the increase in 

22          public safety is striking.

23                 I'm not for a moment going to miss the 

24          fact that something went wrong on the lead 


 1          paint issue.  I'm not happy about it.  It was 

 2          not handled the way I would have liked.  But 

 3          the solutions have been put in place and 

 4          we've been open about the mistakes.  So I 

 5          stand by her because she has achieved a lot 

 6          for 400,000 people and she will continue to.

 7                 CHAIRWOMAN YOUNG:  But Mr. Mayor, you 

 8          say that these are problems that predated 

 9          recent history.  But the Department of 

10          Investigation determined that NYCHA failed to 

11          conduct the mandatory safety inspections for 

12          lead paint over four years, beginning in 

13          2013.  And also that there were reports filed 

14          to the federal government that falsified the 

15          information and said that NYCHA did indeed do 

16          those inspections.

17                 MAYOR DE BLASIO:  Madam Chair, this 

18          has been covered time and time again, and 

19          we've been working with the United States 

20          Attorney on this issue for almost two years.  

21          So I'm happy to say what I've said publicly 

22          many times.  In 2013 there was a different 

23          mayor and there was a different chair of 

24          NYCHA.


 1                 CHAIRWOMAN YOUNG:  But this is over 

 2          four years, the past four years.

 3                 MAYOR DE BLASIO:  It's a true 

 4          statement.  But I want to affirm the point.  

 5          It is a true statement that the local law was 

 6          violated in the previous administration, that 

 7          the inspections were stopped and the 

 8          remediation effort was stopped.  That should 

 9          never have happened.  

10                 It's also a true statement that when 

11          we came into office and the chair came in and 

12          her staff came in, they did not recognize 

13          that that discontinuity had occurred.  When 

14          it became apparent to them, they alerted the 

15          federal government immediately.  All this has 

16          been documented.  The federal regional 

17          administrator has said, on record, it's true 

18          that as soon as NYCHA understood the 

19          situation, they reported it to the federal 

20          government.

21                 CHAIRWOMAN YOUNG:  But don't the 

22          people who live in NYCHA apartments deserve 

23          better?  I mean, we've had these issues that 

24          have stacked up over the years.  They're in 


 1          unsafe conditions, conditions that are 

 2          detrimental to their health and well-being, 

 3          conditions where there's crime in these 

 4          housing units or housing facilities.  Don't 

 5          they deserve better than that?  

 6                 And I think that someone ultimately 

 7          needs to be held accountable for that.  So I 

 8          don't understand why, you know, you seem to 

 9          be laying the blame on everybody else.  But 

10          there's an old saying the buck stops here.  

11          And why isn't Shola Olatoye being dismissed?

12                 MAYOR DE BLASIO:  You know, Madam 

13          Chair, respectfully, you've evinced some 

14          information about NYCHA, but I every day 

15          serve the people of my city.  I've spent a 

16          lot of time in public housing.  I know a lot 

17          of people who live in public housing.  I've 

18          seen the improvements that she's been able to 

19          achieve.  And I respectfully think it is very 

20          reductionist to add certain facts up and say 

21          someone needs to be dismissed even though 

22          they're getting a lot of good work done for 

23          the people they serve.  

24                 And there have been problems.  When 


 1          you run a facility -- excuse me, a set of 

 2          facilities as big as NYCHA with decades of 

 3          disinvestment, of course there's problems.  

 4          But, you know, you mentioned public safety.  

 5          Respectfully, Madam Chair, if you looked at 

 6          the facts, you would see how that public 

 7          safety has greatly improved in NYCHA in the 

 8          last four years.  And the chair has worked 

 9          closely, Chair Olatoye has worked closely 

10          with the NYPD to achieve that change, and I 

11          believe the NYPD are the leading experts in 

12          public safety in this nation.  They will 

13          affirm to you how much progress has been made 

14          in public safety in NYCHA.

15                 CHAIRWOMAN YOUNG:  Respectfully, 

16          Mr. Mayor, I think you're defending the 

17          indefensible.  

18                 But at this point I'll turn it over to 

19          Senator Krueger.

20                 SENATOR KRUEGER:  Thank you.

21                 Thank you, Mr. Mayor.  

22                 So 8.5 million people.  I live there.  

23          Most people actually think the city is doing 

24          quite well -- our economy, our public safety, 


 1          our schools and, despite continuing problems 

 2          with housing and public housing, even seeing 

 3          improvements there.

 4                 So sometimes I think you come up here 

 5          and you might get a little bit of a different 

 6          perception from people who don't spend their 

 7          lives in the City of New York.

 8                 But I want to ask you specifically 

 9          about the changes from the federal tax reform 

10          and the proposals the Governor's task force 

11          made about possible ways to address the new 

12          dilemma for people living in high property 

13          tax, high local and state tax areas.  And 

14          certainly many sections of New York City fall 

15          into that category.

16                 So do you have a position on some of 

17          the Governor's task force proposals; i.e., a 

18          payroll tax math deduction model or the 

19          charitable contribution for school and local 

20          income tax proposal?

21                 MAYOR DE BLASIO:  I'll start and pass 

22          to the budget director.

23                 You know, one, we're committed to work 

24          with the Governor and work with the 


 1          Legislature because we think the removal of 

 2          deductibility was a huge mistake.  Two, we do 

 3          think there's a way -- although we're the 

 4          first to say it, we have not seen -- working 

 5          together, we haven't found the perfect 

 6          formula.  I would argue the more positive 

 7          option is around payroll tax, but let me have 

 8          the budget director jump in there.

 9                 BUDGET DIRECTOR HARTZOG:  Thank you.  

10                 We are very supportive of the payroll 

11          tax and of the state's effort to look at an 

12          unincorporated business tax.  As you know, we 

13          have one in New York City.  We have been in 

14          communication with the state on how to best 

15          to do that and working with them.  Lots of 

16          complications on how that would actually get 

17          implemented and done at the state level.  But 

18          overall, as the mayor said, we'd be very much 

19          supportive and also are very supportive of 

20          trying to figure out how we decouple the 

21          impact of the personal income tax so that 

22          it's not a hit as much on single filers 

23          especially.

24                 SENATOR KRUEGER:  And this was also 


 1          raised before, and I think you partly 

 2          answered the question.  So the Governor's 

 3          value capture, I drove across from the 

 4          Lincoln Tunnel -- I was in New Jersey for a 

 5          shiva, drove across the Lincoln Tunnel, and 

 6          my GPS said you're now a mile from Second 

 7          Avenue.  And I was basically on 10th Avenue.

 8                 So in his proposal that any time there 

 9          would be an MTA major project of $100 million 

10          or more -- which is pretty much all MTA 

11          projects, as far as I can tell -- that they 

12          could capture 75 percent in the increased 

13          property tax assessments for anything within 

14          a mile.  And I'm thinking from Manhattan --

15                 BUDGET DIRECTOR HARTZOG:  Which would 

16          essentially cover most of Manhattan, yes.

17                 SENATOR KRUEGER:  It's pretty much all 

18          of Manhattan.  And then it's forever, and 

19          it's not even dedicated to the area where the 

20          impacts are being felt.

21                 BUDGET DIRECTOR HARTZOG:  That's 

22          correct.

23                 SENATOR KRUEGER:  So you said billions 

24          before.  Have you actually tried to do like 


 1          just one example projection if they -- I 

 2          don't know, I'm hoping very much in my 

 3          lifetime we continue the Second Avenue subway 

 4          beyond 63rd heading south.  So even if you're 

 5          just looking at one or two additional 

 6          extensions of just one subway line, it seems 

 7          that we could be sucking property tax money 

 8          away from the city at an incredible rate.

 9                 BUDGET DIRECTOR HARTZOG:  Yes.  I 

10          mean, I don't think we even need to do an 

11          estimate on that.  If you just looked at 

12          Second Avenue subway, I could tell you it 

13          would probably rate at least over $3 billion 

14          of impact to us.

15                 SENATOR KRUEGER:  And has anybody ever 

16          done a final tally on the 7 Line model?  

17          Because that was an actual agreement to pay 

18          for the 7 Line with increased property value 

19          assessment.  Although that was an area where 

20          we were going to be significantly expanding a 

21          new part of the city that didn't have a lot 

22          going for it, and even then we ended up 

23          cutting out one or two of the stops.

24                 So has somebody in the city done an 


 1          evaluation of who paid what for that project?

 2                 BUDGET DIRECTOR HARTZOG:  Yes.  And I 

 3          would have to get back to you on the 

 4          particulars of that.  But I think that's a 

 5          clear example where we did have an agreement 

 6          with the state on value capture without 

 7          having it written into actual law that it 

 8          would happen in this way.

 9                 MAYOR DE BLASIO:  And Senator, just to 

10          say that I think that's the crucial point, 

11          that these are specific agreements that 

12          should be reached case by case.  To legislate 

13          them is dangerous.  

14                 And by the way, again, I would say 

15          localities all over the state would share my 

16          concern that if there's a Pandora's box 

17          opened here where the state can reach into 

18          local revenue or local property tax 

19          decisions, it's very dangerous.  

20                 But if you say here's an option, 

21          here's an opportunity, can we find a way to 

22          do it together, yeah.  But not on the basis 

23          of state law, it should be on the basis of 

24          two jurisdictions trying to find mutual 


 1          benefit.

 2                 SENATOR KRUEGER:  And I raised when 

 3          Joe Lhota was here that in fact I was part of  

 4          the discussions that were completed in the 

 5          East Midtown rezoning, where there were 

 6          commitments for money for MTA needs, but a 

 7          worked-out agreement between the city, the 

 8          MTA, the community and the recognition that 

 9          there were going to be wins and losses in 

10          rezoning East Midtown, and that many 

11          different things needed to be addressed.  

12                 And I would think that would be true 

13          in any significant structural changes.  

14                 MAYOR DE BLASIO:  That's right.  And 

15          that was a very thorny, complicated reality, 

16          but we got there.  We all found a way to get 

17          to an agreement, and it's the right model.

18                 SENATOR KRUEGER:  Thank you.

19                 CHAIRWOMAN WEINSTEIN:  So pretty close 

20          to on time, the time promised, for government 

21          work.  Mr. Mayor, thank you for all the time 

22          you've spent with us and responding to all 

23          our questions.

24                 MAYOR DE BLASIO:  Thank you very much 


 1          to everyone.  Take care.

 2                 CHAIRWOMAN YOUNG:  Thank you.

 3                 CHAIRWOMAN WEINSTEIN:  Next we'll be 

 4          hearing from New York City Comptroller Scott 

 5          Stringer.

 6                 (Discussion off the record.)

 7                 CHAIRWOMAN WEINSTEIN:  So, Scott, I 

 8          think people have quietly left the room.  I 

 9          don't think it had anything to do with you.

10                 But whenever you're ready, feel free.

11                 NYC COMPTROLLER STRINGER:  Thank you.

12                 For those of you who stayed, you are 

13          in for some riveting testimony, so consider 

14          yourselves lucky.

15                 But I do want to start off and thank 

16          you, Chair Young and Chair Weinstein, and 

17          members of the committee and the Legislature, 

18          for having me here today.  

19                 And Helene, on a personal level I want 

20          to congratulate you for being a history-maker 

21          and now being chair of Ways and Means.  So 

22          congratulations.

23                 You know, in these challenging times 

24          it's great to be with friends and colleagues 


 1          who share the belief that our New York values 

 2          will withstand the headwinds coming from 

 3          Washington.  I'm joined here today by my 

 4          deputy comptroller for budget, Preston 

 5          Niblack, and our director of 

 6          intergovernmental relations, Dylan Hewitt.  

 7                 I know from my 13 years of service in 

 8          Albany that this marks only the beginning of 

 9          the budgeting process.  And I welcome the 

10          opportunity to speak about the implications 

11          of the Governor's proposed Executive Budget 

12          for New York City.  

13                 I look forward to working with all of 

14          you to reach a budget that will advance 

15          New York as a leader in the fight for 

16          fairness and opportunity for all and not just 

17          some.  

18                 First off, we've seen some important 

19          progress from the Governor and the Senate and 

20          Assembly working together.  At the end of 

21          last year, our state minimum wage rose to 

22          $13 per hour in New York City, on its way to 

23          $15 at the end of 2018.  This will ultimately 

24          benefit 1.5 million city residents, boosting 


 1          wages by more than $10 billion.  

 2                 New York's paid family leave program 

 3          took effect on January 1st of this year.  

 4          This milestone finally eliminates the 

 5          impossible choice between keeping a job and 

 6          caring for a loved one.  

 7                 Thanks to your achievements last year, 

 8          New York will no longer treat our adolescents 

 9          as adults in the criminal justice system and 

10          subject them to the deplorable conditions in 

11          our city jails.  

12                 Through the Excelsior Scholarship 

13          program, more high school students have a 

14          real shot at a college degree.  And with the 

15          expansion of the state's childcare tax 

16          credit, more middle-income parents can afford 

17          to work and live in New York.  

18                 These are all important 

19          accomplishments for New Yorkers, and you 

20          should be very, very proud.  Going forward, 

21          we must build on these accomplishments to 

22          ensure we foster an economy in which every 

23          New Yorker has a fair chance to get ahead.  

24          But we cannot do so without recognizing that 


 1          this president and this Congress are 

 2          determined to punish states like ours, by 

 3          crippling our economic competitiveness and 

 4          our legacy of progressive leadership.  

 5                 They have, as Governor Cuomo put it, 

 6          launched a missile at the heart of the 

 7          state's economy with the federal tax bill.  I 

 8          want to reiterate the difficulties of meeting 

 9          this challenge, and that cannot be 

10          underestimated.  But it's our responsibility 

11          to homeowners and taxpayers across the state 

12          to ensure state and local governments can 

13          fulfill their functions despite this assault 

14          by the federal government.  Whether you live 

15          in a high-tax state or a low—tax state, it's 

16          our schools, our enforcement agencies, and 

17          our social services that impact lives.  And 

18          while we wait for the federal tax bill to be 

19          repealed, we must focus on protecting our 

20          own.  

21                 You can do that by supporting 

22          decoupling of state income taxes from the 

23          federal cap on deductions.  Further, the 

24          state should allow New Yorkers to continue 


 1          itemizing their state tax deductions, even if 

 2          they take the standard deduction on their 

 3          federal return.  And if Congress does not fix 

 4          the carried-interest loophole that allows 

 5          investment fund managers to pay lower taxes 

 6          than teachers, well, New York should take the 

 7          lead.  

 8                 Now, the federal tax bill was only the 

 9          first clap of thunder in this brewing storm. 

10          When President Trump releases his budget, the 

11          safety net we've worked for decades to 

12          strengthen in New York will again be at risk. 

13          The city's Housing Authority, which is home 

14          to more than 400,000 New Yorkers, or 

15          5 percent of the city’s population, relies on 

16          the federal government for 60 percent of its 

17          budget.  Our public hospital system requires 

18          hundreds of millions of dollars in federal 

19          aid to continue to serve the uninsured, and 

20          that population is likely to grow even larger 

21          with the end of the individual mandate.  

22                 The budget that Trump proposed last 

23          year would have blown an $850 million hole in 

24          our city budget -- at least.  Now, we're 


 1          fortunate that these cuts have not yet 

 2          materialized, but the threat has by no means 

 3          disappeared.  As Republicans in Congress 

 4          pledge to cut healthcare and vital services 

 5          for our most vulnerable, I ask that you 

 6          ensure the state budget protects our core 

 7          values.  

 8                 Now, first, our students are our 

 9          future, and I cannot emphasize enough the 

10          need to continue investment in our public 

11          schools and pre-K programs.  I hope you will 

12          keep us moving in the right direction towards 

13          ensuring the quality public education that is 

14          guaranteed by the Campaign for Fiscal Equity 

15          decision.  I would also ask you to reject 

16          cost shifts for summer school special 

17          education programs and child welfare services 

18          in New York city.  

19                 And it's time to build upon your 

20          accomplishments with Raise the Age and 

21          continue to fund the Close to Home 

22          initiative.  Close to Home has allowed us to 

23          move juveniles from upstate facilities to the 

24          city, surrounded by their families and 


 1          communities, where they should be.  The 

 2          Executive Budget completely eliminates 

 3          funding for this important program, and I 

 4          urge you to restore the $30 million for Close 

 5          to Home.  

 6                 We also must make it easier for all 

 7          New Yorkers to participate in our democratic 

 8          process by curbing barriers to voting.  In 

 9          2014, only 25 percent of registered New York 

10          City voters cast a ballot.  This is a 

11          national embarrassment.  The Executive Budget 

12          calls for adopting early voting in New York, 

13          which many other states have already done, 

14          but does not allocate the resources to fund 

15          it.  I urge you to truly invest in the future 

16          of our democratic process by adopting early 

17          voting and fully funding it.  

18                 It's also high time we end the chaos 

19          and soaring costs of up to four elections a 

20          year, and combine our state and federal 

21          primaries.  

22                 Today I also ask that you support the 

23          Governor's bold agenda to overhaul the 

24          state’s bail laws.  I also urge you to join 


 1          me in calling for a ban on commercial bail 

 2          bonds.  My office issued an analysis that 

 3          found that these private, for-profit actors 

 4          are extracting as much as $27 million every 

 5          year from those who can least afford it.  

 6          They are unnecessary for the function of our 

 7          justice system, and they come at a great 

 8          expense, both to the accused and the public. 

 9          We found the cost of detaining people who 

10          could not afford bail reached $100 million 

11          last year.  

12                 The Governor has also proposed 

13          examining the benefits and challenges of 

14          legalizing recreational marijuana.  Our 

15          neighboring states are moving forward on 

16          legalization, and so should New York.  Not 

17          only is marijuana an untapped revenue source 

18          for the city and the state, but the 

19          prosecution of marijuana-related crimes has 

20          had a disproportionate impact on black and 

21          Hispanic communities for too long.  But I 

22          will say, if you're gonna toke it, tax it.  

23                 And let's also end the lifetime 

24          disenfranchisement of those with criminal 


 1          convictions.  Once you've served your time, 

 2          it's time to bring you back into society -- 

 3          and that includes the ability to exercise 

 4          your most fundamental civil right.  

 5                 Let's also end the marginalization of 

 6          our fellow New Yorkers who live in public 

 7          housing.  My office's audits and 

 8          investigations have uncovered innumerable 

 9          problems in NYCHA.  The decades of federal 

10          disinvestment in public housing are at the 

11          root of the problems.  The city must step up 

12          financially to help preserve this critical 

13          affordable housing from irreversible decline.  

14                 But we cannot do it alone, and the 

15          state must partner with us to protect the 

16          over 400,000 residents of NYCHA from leaking 

17          roofs, broken elevators, and freezing 

18          temperatures.  

19                 And finally, I want to address the 

20          MTA.  Our mass transit system is the power 

21          grid of New York City’s economy, and we 

22          cannot afford to continue the dysfunction.  

23          My office has documented the economic and 

24          human costs of the deterioration of our 


 1          subway system.  As delays on the subways 

 2          reached new highs this summer, we found that 

 3          nearly three-quarters of riders were late to 

 4          work because of transit problems.  Thirteen 

 5          percent of riders lost wages.  We found that 

 6          the total cost of subway delays adds up to as 

 7          much as $389 million per year in lost wages 

 8          and productivity for our city economy.  Our 

 9          economic success is literally built on top of 

10          the subways.  Let's not throw that investment 

11          away.  

12                 So let me be clear to all of you.  I 

13          support the emergency action plan put forward 

14          by Chairman Lhota, and I believe the city 

15          should step up and pay its fair share of the 

16          cost.  You see, we're not looking for a 

17          handout.  It's time to look to the future, 

18          not the past, and it's time to work together. 

19          As we move forward, we must employ complete 

20          transparency in how emergency funds are used.  

21          And then we must come up with new, permanent 

22          funding solutions for the MTA.  No option 

23          should be off the table.  

24                 Now, first, I've suggested a new 


 1          $3.5 billion Transportation Bond Act as part 

 2          of the solution.  The last bond act, in 2005, 

 3          allowed the MTA to buy 1,500 new train cars 

 4          and a new fleet of buses.  That meant fewer 

 5          breakdowns and fewer delays for riders.  

 6                 Another proposed funding stream is the 

 7          congestion pricing proposal from the Fix NYC 

 8          task force.  Their plan represents a new 

 9          approach.  See, in the past, leaders have 

10          looked at congestion pricing with a 

11          Manhattan-centric perspective, and only 

12          considered the cost of congestion to the 

13          central business district.  This proposal 

14          acknowledges that we must first address the 

15          transit needs of residents of all five 

16          boroughs.  I agree.  

17                 My office recently published a 

18          comprehensive review of our city's bus 

19          system.  We found that our buses are the 

20          slowest in the nation, and many routes are 

21          misaligned with the city’s changing 

22          commuting patterns.  We cannot ask residents 

23          of Canarsie or Parkchester or Queens Village 

24          to face a choice between driving and paying 


 1          the congestion charge every day, or taking up 

 2          to three buses that will take them 2 hours to 

 3          get to work.  We need a system that works for 

 4          everyone.  

 5                 We also can and should explore value 

 6          capture as a mechanism to build and maintain 

 7          a world-class transportation infrastructure. 

 8          But I cannot support enabling the MTA to 

 9          unilaterally take city property taxes through 

10          so-called special transportation districts.  

11          And I feel confident that none of us who have 

12          served at the local level can support giving 

13          someone else control over our taxes, and I 

14          urge you to reject this proposal.  

15                 And let's dispense with the idea that 

16          somehow New Yorkers are not paying our fair 

17          share of the costs of the subways and buses. 

18          Through fares and tolls, taxes and subsidies, 

19          New York City residents contribute well over 

20          $10 billion annually to the MTA.  Now, we're 

21          willing to pay our fair share, as long as we 

22          get a fair return.  I think that's fair and a 

23          win for all.

24                 So in conclusion, I feel confident in 


 1          this Legislature's ability to advance a fair 

 2          and balanced budget despite the challenges 

 3          and uncertainties we face from Washington.  

 4          New York must continue to push forward 

 5          without leaving any of our people behind.  

 6          Let us instead work together -- cities, 

 7          counties, and state, legislative and 

 8          executive branches -- to protect our values 

 9          and maintain New York as a fair and equitable 

10          home to all of our people.  

11                 Thank you again for the opportunity to 

12          testify, and I'm happy to answer any 

13          questions you may have.

14                 CHAIRWOMAN WEINSTEIN:  Thank you.

15                 And for our first questions, 

16          Assemblyman Weprin.

17                 ASSEMBLYMAN WEPRIN:  Thank you, Madam 

18          Chair. 

19                 Great to see you, Comptroller 

20          Stringer.  And great to see my friend Preston 

21          Niblack, who as you know -- he must be a 

22          great asset for you, because I know of his 

23          good work when I was chair of the Finance 

24          Committee in the City Council and he was our 


 1          director.  And, you know, he -- very 

 2          innovative and has some great ideas, and I'm 

 3          glad he's been part of your team for a while 

 4          now, I guess.

 5                 NYC COMPTROLLER STRINGER:  Did he tell 

 6          you to say this?

 7                 (Laughter.)

 8                 ASSEMBLYMAN WEPRIN:  Actually, we 

 9          hadn't discussed it.

10                 As chair of the Corrections Committee, 

11          I appreciate your comments on bail.  No one 

12          should have to -- no decisions should be made 

13          on whether somebody can afford bail or not 

14          afford bail.  And obviously we all know, you 

15          know, of the Kalief Browder case, the poster 

16          child for bail reform.  And I'm hoping that 

17          we'll be able to do it this year.

18                 As far as the MTA is concerned, I know 

19          it's no surprise to you that I'm against 

20          congestion pricing.  I like the if you can 

21          toke, tax it.  I think if we can develop a 

22          tax revenue stream from legalizing marijuana 

23          or certainly with medical marijuana, 

24          expanding it, I think that could be another 


 1          potential revenue stream for the MTA.

 2                 What's lacking -- and I know you've 

 3          been a strong advocate in the past, and I 

 4          don't want to hear the answer, you know, that 

 5          I've heard from other people that it can't be 

 6          done.  I still think the fairest revenue 

 7          stream would be a nonresident income tax, or 

 8          what we commonly used to refer to as the 

 9          commuter tax.  And I know you've been up here 

10          many times over the past four years and 

11          urging the adoption of the commuter tax.

12                 I would not want to abandon that.  And 

13          I think as we discuss the MTA crisis, I think 

14          we should rediscuss putting back a 

15          nonresident income tax with a dedicated 

16          stream to the MTA, because that of course is 

17          a progressive tax, it's a fairer tax.  People 

18          that, you know, live outside of New York City 

19          but work in New York City take public 

20          transportation on a daily basis, benefit from 

21          police, fire, sanitation, et cetera.

22                 So I would hope you wouldn't forget 

23          about rearguing for that commuter tax or 

24          nonresident income tax.


 1                 NYC COMPTROLLER STRINGER:  Well, I -- 

 2          you know, when I served with many of you in 

 3          the Assembly, I voted against eliminating the 

 4          income tax.  I do think it's fairer that 

 5          people beyond New York City who work in 

 6          New York City who use our services leave 

 7          something in the pot on the way out of the 

 8          city so we can better fund police and 

 9          sanitation services.  

10                 I think that's one option.  I think 

11          we've lost $5 billion or so since we 

12          eliminated the commuter tax.  Actually, since 

13          that time, I think back to 1999, the city's 

14          never really been whole.  I think there were 

15          different points where we've really suffered 

16          financially because we don't have that 

17          revenue stream.

18                 But again, all of these ideas, whether 

19          it's a bond act for the MTA, looking at 

20          different congestion resources, this is the 

21          time now when we really have to structurally 

22          change the way we finance the subway system, 

23          the way we think long-term about creating new 

24          funding streams.  


 1                 One idea that we've put forth has 

 2          been, as it relates to public housing, a 

 3          $400 million pot of money that should come 

 4          from Battery Park City so that we can fund 

 5          some of the capital needs at NYCHA.  The 

 6          Governor and I support that; we need the 

 7          mayor to commit to help us on the Battery 

 8          Park City Authority Board.

 9                 But this is what legislating, I think, 

10          is all about.  Let's put our ideas on the 

11          table and let's come back and make things 

12          better.

13                 ASSEMBLYMAN WEPRIN:  Okay, thank you.

14                 SENATOR KRUEGER:  Thank you.

15                 Senator Brian Kavanagh.

16                 SENATOR KAVANAGH:  Thank you.

17                 NYC COMPTROLLER STRINGER:  Senator.

18                 SENATOR KAVANAGH:  How are you, 

19          Mr. Comptroller.  Thank you for being here.  

20          It's always good to see you on that side of 

21          the table.  I know you spent a lot of years 

22          on this side.

23                 And my decision to stay has nothing at 

24          all to do with the recommendations of my 


 1          staffer, Mr. Stern, who I think you're also 

 2          familiar with.

 3                 NYC COMPTROLLER STRINGER:  Is he here?

 4                 SENATOR KAVANAGH:  He's not here, but 

 5          he's monitoring the proceedings online.

 6                 NYC COMPTROLLER STRINGER:  I look 

 7          forward to seeing him on Twitter.

 8                 SENATOR KAVANAGH:  Yes.

 9                 So I just wanted to follow up on -- 

10          you know, we had a -- I think you were in the 

11          room for much of the mayor's testimony and 

12          the ongoing dialogue about public housing 

13          funding.  And we concluded that segment of 

14          the hearing with some questions from one of 

15          my colleagues on the other side of the aisle 

16          about whether NYCHA is managed in a manner 

17          that is -- you know, should entitle it to the 

18          kind of support that a lot of us think the 

19          state ought to be investing.

20                 And you and your office -- I've heard 

21          it said, actually, that your office has done 

22          more audits of NYCHA than any of your 

23          predecessors.  So as someone who has spent a 

24          lot of time trying to understand the 


 1          management issues at NYCHA and trying to hold 

 2          that agency accountable, I think your 

 3          perspective is particularly valuable, and 

 4          particularly your perspective that 

 5          notwithstanding those concerns, we ought to 

 6          be investing additional funding.  In your 

 7          testimony you say that the state ought to be 

 8          a partner in that.

 9                 Can you just talk us a little bit 

10          through that?  You know, the ongoing 

11          management concerns and your conviction that 

12          nonetheless we should be putting real capital 

13          behind NYCHA.

14                 NYC COMPTROLLER STRINGER:  I'm happy 

15          to talk about NYCHA because NYCHA does, as I 

16          mentioned, represent 5 percent of our 

17          population.  

18                 You know, going back to 1938 when 

19          LaGuardia created public housing, it was not 

20          about housing for poor people, it wasn't the 

21          poor people housing.  NYCHA really 

22          represented a ticket to the middle-class.  

23          Even back then, an apartment that rented for 

24          $100 a month was really the beginning of 


 1          getting your family lifted to the middle 

 2          class.

 3                 Growing up in Washington Heights back 

 4          in the day, there was no difference between 

 5          playing in Dyckman Houses or around the 

 6          corner where we lived.  NYCHA became part of 

 7          our community.  And when you think about the 

 8          open space and the way NYCHA was constructed, 

 9          it really got us away from the crunch of 

10          tenements and into a new form of housing.  

11                 We know the story.  The federal 

12          government mistakenly divested from NYCHA, 

13          the state has not paid its fair share, and 

14          the city for the most part has failed the 

15          NYCHA residents because of poor management.  

16          This has gone on for way too long.

17                 The reason I've conducted more audits 

18          of NYCHA than all the comptrollers combined 

19          in modern history is because I want to focus 

20          on preserving and protecting the residents of 

21          NYCHA.

22                 So I think the issue is poor 

23          management, less managerial vision.  I think 

24          that the antiquated way we look at how to 


 1          manage the services, the repairs, the 

 2          roofing, the broken windows at NYCHA is all 

 3          part of poor management, structural 

 4          mismanagement.  And the question for me is 

 5          less about who to blame, what individual -- 

 6          but rather, we need to almost take NYCHA 

 7          apart in order to rebuild it.  So I'm less 

 8          concerned about playing the "should Shola 

 9          stay or should Shola go" blame game.  The 

10          federal investigation will bear out those 

11          issues related to some of that.

12                 The real question is, what do we do to 

13          change the management structure to provide 

14          the services we need?  I mentioned the 

15          Battery Park City Authority funding.  We have 

16          to create new revenue streams, so let's look 

17          at that Battery Park City funding.  There's 

18          three of us who sit on that board right now:  

19          The mayor, the comptroller, and the governor.  

20          If we all three vote for earmarking 

21          specifically some money to NYCHA -- 

22          $400 million, $40 million over 10 years -- we 

23          will fundamentally begin saying to the state 

24          legislature and everyone who will listen, we 


 1          are creating a revenue stream.  That hasn't 

 2          happened in such a long time.

 3                 Second, we need to professionalize 

 4          this agency and think more boldly about how 

 5          we rebuild the agency so we can better 

 6          service the tenants.  NYCHA's got to publicly 

 7          tell us about their plan, their long-term 

 8          plan, not keep it a secret, and then we all 

 9          have to dig in.

10                 So there's a lot that we have to do 

11          with NYCHA.  It's a real challenge because if 

12          we fail, many of these tenants are going to 

13          end up in our homeless shelters.  And as you 

14          know, 62,000 people, or 61,000 plus 24,000 

15          children, are now in shelter.  And we are 

16          finding that many of those come from NYCHA.

17                 SENATOR KAVANAGH:  So I appreciate 

18          your approach.  And I would just note that a 

19          lot of my tenant leaders in my district join 

20          you in not focusing on the personalities, 

21          that many of them maintain support for the 

22          existing leadership, but obviously while 

23          we're facing a lot of these frustrating 

24          concerns.


 1                 NYC COMPTROLLER STRINGER:  But -- and 

 2          by the way, we as elected officials can't 

 3          just complain, right?  We have to come up 

 4          with specific ideas so that we can come to 

 5          the table and solve these problems.  And 

 6          that's why I haven't been out there on that 

 7          whole issue, because I'm like, you know, 

 8          tenants are more concerned about getting the 

 9          boilers in place, fixing the problems, 

10          instead of -- you know, once you're in the 

11          blame game, then that kind of absolves you 

12          from offering specifics.  And I want to see 

13          us with a real agenda now.

14                 SENATOR KAVANAGH:  I look forward to 

15          working with you on that.  

16                 And also just note that I may have 

17          some thoughts on the Battery Park City 

18          question in my new capacity.

19                 But I thank you for all your work on 

20          keeping the system accountable and in 

21          supporting the resources we need.

22                 NYC COMPTROLLER STRINGER:  Thank you.

23                 CHAIRWOMAN WEINSTEIN:  Thank you.

24                 Assemblyman Carroll.


 1                 ASSEMBLYMAN CARROLL:  Thank you, Madam 

 2          Chairwoman.  

 3                 Good afternoon, Comptroller Stringer.  

 4          It's good to see you here in Albany.  

 5                 First I wanted to commend you and your 

 6          office on two things that you have done 

 7          recently.  The first is to commit to 

 8          divesting in fossil fuels in our city pension 

 9          funds over the next five years.  I think that 

10          is so important to our environment.  And it 

11          leads to my first question, which is has your 

12          office done any studies on pollution due to 

13          congestion in New York City and how that 

14          affects city residents, especially under the 

15          guise of the new congestion pricing plans 

16          that have come out that could possibly reduce 

17          emissions from vehicles by as much as 

18          20 percent in the central business district?

19                 NYC COMPTROLLER STRINGER:  You know, 

20          we haven't specifically done that audit, but 

21          we're certainly thinking about it.  And let 

22          me tell you, part of the announcement I made 

23          with Mayor de Blasio on beginning the process 

24          of divestment has been through the lens of 


 1          being a fiduciary.  

 2                 You know, I just came back from days 

 3          at the U.N. as we talked and wrestled with 

 4          climate change, with asset managers and 

 5          people nationally and globally, about making 

 6          sure that the investments we have with these 

 7          companies, we don't -- we're concerned 

 8          because a lot of those investments in those 

 9          companies, we're worried that we're going to 

10          see stranded assets, it's going to cost the 

11          pension fund.  The Paris Accord plays a 

12          significant role despite the fact that Trump 

13          actually spurred what's happening on the 

14          planet.

15                 So we are beginning a process, but 

16          it's a process through the lens of making 

17          sure that first and foremost we protect the 

18          retirement security of our teachers, 

19          firefighters, city workers.  

20                 There's an op-ed in the Daily News by 

21          the Manhattan Institute that just totally 

22          basically mixes up their false analysis of 

23          where we are with our pension fund, and I'm 

24          here to tell you that the pension fund is 


 1          strong, it's managed well.  I commend the 

 2          trustees, who constantly think about our 

 3          asset allocation.  The results speak for 

 4          themselves.  We're actually hitting our 

 5          actuarial targets over the long run.  And I'm 

 6          very proud of the Bureau of Asset Management 

 7          and the work that we're doing.  

 8                 We've reformed the pension fund since 

 9          I've been in office in a way that we haven't 

10          seen in a very long time.  But we also have 

11          to look at how we think about not just the 

12          survival of our planet, but also the survival 

13          of our pension fund.

14                 ASSEMBLYMAN CARROLL:  And then to 

15          follow up on that, I just want to commend you 

16          for coming out for what I think is just a 

17          pragmatic, prudent statement, which is to 

18          have the city fund its portion of Chairman 

19          Lhota's Subway Action Plan.  I think it is so 

20          important, as you just said, that we fund 

21          this action plan now while we're figuring out 

22          amongst ourselves how we're going to find 

23          long-term revenue streams so that the MTA can 

24          be funded into the future.


 1                 NYC COMPTROLLER STRINGER:  Well, look, 

 2          this is -- I respectfully disagree with the 

 3          mayor.  There's a lot that we can argue about 

 4          over the last 10, 15, 20 years about who 

 5          didn't fully fund the MTA.  You know, I know 

 6          that the state has had a real divestment plan 

 7          for the MTA.  We didn't fund it like we 

 8          should, and we're paying the cost of that 

 9          now.  

10                 But I do believe that the city should 

11          have skin in the game on the emergency plan, 

12          and I do believe that we should share that 

13          cost with the state.  I think that there 

14          should be an MOU so that we're sure that the 

15          money that the city allocates actually goes 

16          to city projects, with a timeline and a 

17          transparency.  I think this is something that 

18          can be negotiated between the mayor and the 

19          governor and the legislature.

20                 But I will tell you, as the city's 

21          chief financial officer, this city is 

22          literally built around a subway grid.  And to 

23          not fully fund a plan that keeps our subway 

24          system running is a very, very dangerous 


 1          game.  Part of what we saw back in the '70s 

 2          and '80s was just how precarious the system 

 3          was back then.  And then the people before us 

 4          understood that you have to continue to fund 

 5          it because the stakes have never been higher.

 6                 And I want to thank you for thinking 

 7          out of the box on these issues.  You and I 

 8          have talked about this.  We have got to come 

 9          up with a plan.  The city has to help.  We 

10          have to put politics aside, because this is 

11          the one area that we will catch ourselves in 

12          a very dangerous situation, especially if the 

13          economy slows down.  Let's fund the Lhota 

14          plan and then look long-term as to how we 

15          create a financial package to fully fund the 

16          system.

17                 ASSEMBLYMAN CARROLL:  Thanks so much.

18                 CHAIRWOMAN WEINSTEIN:  Thank you.

19                 SENATOR KRUEGER:  Thank you.

20                 Senator Diane Savino.

21                 SENATOR SAVINO:  Thank you, Senator 

22          Krueger.

23                 Good afternoon, Comptroller.  

24                 I also want to say thank you for your 


 1          willingness to support the idea that the city 

 2          should have some skin in the game on the 

 3          Subway Action Plan.  I agree with you, and I 

 4          also think that the mayor is somewhat wrong 

 5          on this issue.  

 6                 I want to turn your attention to two 

 7          things.  One, I also am happy to see that you 

 8          support adult-use marijuana.  That's the 

 9          appropriate term now.  We don't call it 

10          recreational anymore, we're trying to rebrand 

11          it.

12                 It might be helpful, though, because 

13          the Governor has indicated that he's going to 

14          create some sort of a commission or a task 

15          force.  I think it's going to be through the 

16          Department of Health.  We'll hear more about 

17          it next week.  What I don't think that 

18          they're going to do is they'll really look at 

19          the issue and see how adult use marijuana has 

20          been implemented in other states.  So perhaps 

21          your office, since you have an interest in 

22          it, might want to take a look at it.

23                 What we've seen in California is if 

24          you allow localities to impose their own tax 


 1          on top of the state tax, the price goes 

 2          through the roof and it kind of defeats the 

 3          purpose of a legal regulated market.  So if 

 4          you could take a look at that and maybe offer 

 5          some opinion, that might be helpful in the 

 6          broader discussion.  

 7                 But I want to take you back to NYCHA, 

 8          because as you've stated publicly, your 

 9          office has investigated or audited NYCHA more 

10          than any other comptroller I think in the 

11          city's history, and that's a good thing.

12                 So did they share with you, during the 

13          course of these audits, the problems that we 

14          were facing with lead paint inspections, or 

15          was that not brought to your office's 

16          attention when you were doing these audits?

17                 NYC COMPTROLLER STRINGER:  Because of 

18          the DOI and federal investigation, I don't 

19          want to address those specific issues.  

20          Because, you know, when you have the feds and 

21          DOI in a situation, we are very cautious, if 

22          that's the right word, in terms of not 

23          getting in the middle of something that could 

24          potentially be criminal or likewise.  


 1                 So I just want to be respectful to 

 2          that ongoing investigation.  You know, I'm 

 3          not here to make headlines when something 

 4          like that is going on.  And that's what I 

 5          said, let's see what the outcome of the 

 6          federal investigation is before we get ahead 

 7          of ourselves.

 8                 So I can tell you that the reason 

 9          we've now done nine audits of NYCHA is 

10          because we need to document and go in and 

11          look at these issues.  So some of the audits 

12          we've been able to do, we looked at the 

13          backlogged repairs, 55,000 unanswered tickets 

14          and why that was happening.  We went in and 

15          looked at the inventory of NYCHA.  We found 

16          that basically people were walking in, taking 

17          anything they want from the storage bins.  

18          Some guy named X, we haven't identified him, 

19          would sign "Mr. X" and take out all the, you 

20          know, faucets or the refrigerators or 

21          whatever they were taking out of NYCHA.  

22                 And the audits go on and on.  And what 

23          has really struck me is that we as a city 

24          have got to go in and figure out a management 


 1          system based on those audits.  And I think 

 2          NYCHA has been very slow to just come clean 

 3          and say yes, we're a mess, we're a mess 

 4          because we're not funded.  That's true.  But 

 5          we also are managing NYCHA the same way we've 

 6          managed it for the last 30, 40 years -- and 

 7          it's not working.  And it has to change.

 8                 SENATOR SAVINO:  Thank you for that.

 9                 I think you may not be -- I don't know 

10          how closely you guys track state legislation.  

11          But June 19th of 2017 the Senate passed 

12          unanimously a bill that was sponsored by 

13          Senator Klein that would institute a monitor, 

14          an independent monitor for NYCHA, to address 

15          some of these very things that get uncovered 

16          in audits that your office does, that in fact 

17          there is just tremendous mismanagement.  

18                 Another piece of legislation that he's 

19          been pursuing is to develop a repair 

20          certificate program -- I don't know if you're 

21          familiar with that --

22                 NYC COMPTROLLER STRINGER:  I am 

23          familiar.

24                 SENATOR SAVINO:  Yes.  So do you have 


 1          an opinion on that legislation or the way it 

 2          would work?  And for those who don't know, it 

 3          would essentially grant credits to developers 

 4          who are seeking up-zoning, because the city's 

 5          up-zoning large sections.  And Staten Island, 

 6          as you know, the North Shore is up for 

 7          up-zoning.  And in exchange for the 

 8          preferential up-zoning, they would have to 

 9          commit to do major repairs in some of our 

10          NYCHA developments to kind of fix the 

11          backlog.

12                 NYC COMPTROLLER STRINGER:  So I 

13          understand the Senator's frustration and the 

14          need or the want to say, hey, look, we need 

15          somebody from the outside pushing.  But I 

16          think really, at the end of the day, the 

17          administration, the city, or -- and I don't 

18          mean this to focus on anyone personally, 

19          because I think the mayor is right to say 

20          that, look, this has been a problem for 

21          multiple administrations.  

22                 This is something the city must 

23          tackle.  And I can only say to you that we're 

24          going to continue not to be the monitor, but 


 1          we will continue to work with the legislature 

 2          and community leaders to make sure that we 

 3          continue to go into NYCHA to lay out what the 

 4          problems are and work closely with you.

 5                 Also, this year Dylan Hewitt is going 

 6          to be spending more time working with the 

 7          Legislature, Senators and Assemblymembers, so 

 8          that as part of our role we can give you the 

 9          knowledge on a regular basis about some of 

10          the work we're doing so you can take a look 

11          at what you think you need to look at.  And 

12          we'll be happy to work with you.

13                 SENATOR SAVINO:  Thank you.

14                 And I'm out of time, but I just want 

15          to make a point.  I see up in the audience 

16          Mark Halperin with the elevator operators.  

17          It might be helpful if the comptroller's 

18          office took a look at the number of elevator 

19          accidents and the danger in installing and 

20          maintaining as we pursue legislation to 

21          create a license for elevator mechanics and 

22          people movers in the State of New York.

23                 NYC COMPTROLLER STRINGER:  Well, we 

24          have worked on those audits and those issues.  


 1          And again, we'd be happy to work with them 

 2          and with you on these issues.

 3                 SENATOR SAVINO:  Thank you.

 4                 SENATOR KRUEGER:  Thank you.

 5                 Senator Brian Benjamin.

 6                 SENATOR BENJAMIN:  Mr. Comptroller.

 7                 NYC COMPTROLLER STRINGER:  Good to see 

 8          you up here.

 9                 SENATOR BENJAMIN:  How are you, sir?

10                 NYC COMPTROLLER STRINGER:  Good, sir.

11                 SENATOR BENJAMIN:  Thanks for coming.

12                 First I want to say that I want to 

13          commend you and your staff, you've been an 

14          activist comptroller in the good sense.  I 

15          guess I want to start off by saying that.

16                 NYC COMPTROLLER STRINGER:  Thank you.

17                 SENATOR BENJAMIN:  Let me ask you a 

18          couple of questions.

19                 Number one, as was mentioned earlier, 

20          you've led the efforts to divest New York 

21          City from the fossil fuel industry, but 

22          you've also led the city to divest -- the 

23          comptroller's office to divest from private 

24          prisons, is that correct?


 1                 NYC COMPTROLLER STRINGER:  Yes.

 2                 SENATOR BENJAMIN:  And one of the 

 3          questions I have for you on that is one of 

 4          the things that I've looked to do on this 

 5          level, I've introduced a bill to require that 

 6          the state pension fund divest from private 

 7          prisons as well.

 8                 One of the feedbacks that I've 

 9          received is that there's a sense that maybe 

10          trying to sort of initiate that is meddling, 

11          it's almost sort of trying to tell the 

12          comptroller to do this or do that.

13                 What was your rationale for divesting 

14          from private prisons with the New York City 

15          pension fund, and what would be your 

16          recommendation to other pension funds as it 

17          relates to that decision?

18                 NYC COMPTROLLER STRINGER:  Well, I 

19          know you care passionately about this issue, 

20          and for good reason.  

21                 You know, when I was a state 

22          legislator, I was always struck that people 

23          would want to get prisons located in their 

24          district not as a way of reducing crime, but 


 1          because in the '90s prisons were built 

 2          upstate as a way of creating economic 

 3          activity.  So you would build a prison in 

 4          18 months and literally you would create a 

 5          whole economy around a prison.

 6                 There were others, there were those of 

 7          us who said don't build a prison, build 

 8          schools and daycare programs and after-school 

 9          programs, because we don't want our children 

10          from downstate shipped upstate as a way of 

11          continuing this prison population surge 

12          upstate as an economic development tool.

13                 We now know that building prisons 

14          upstate was a financial disaster upstate and 

15          made no sense.  But it hasn't stopped.  Now 

16          we actually have people who invest in private 

17          prisons, and these are the new ICE detention 

18          facilities.  These are the new -- these are 

19          the new detention centers that actually are 

20          turning a profit for investors, and I think 

21          that is abhorrent.  

22                 And when we set about divesting, we 

23          first and foremost looked at what the 

24          implication would be for our pension fund.  


 1          And a lot of people said to me, why don't you 

 2          just get out of the private prisons today?  

 3          And I had to close my ears to that and begin 

 4          a process of careful analysis that we could 

 5          get out of private prisons from the pension 

 6          fund, but do it with the highest fiduciary 

 7          standards so no harm would come to the people 

 8          whose money we protect, which is our 

 9          retirees.  It took us two years, and we were 

10          able to pull out $48 million.  

11                 So anytime you have a divestment, you 

12          must do it in a careful way.  And sometimes 

13          the data may tell you you can't.  

14                 There's another philosophy, another 

15          tactic that we employ, with the shares we own 

16          on behalf of our retirees, is we also engage 

17          with companies.  So for example, our 

18          boardroom accountability project, where we 

19          have now worked with pension funds around the 

20          country, we are now looking at corporate 

21          boards that are all male, all pale -- hate to 

22          say it, somewhat stale -- and we want more 

23          diversity, more people of color, more women 

24          on those corporate boards.  


 1                 Our engagement has been a national 

 2          success story because we are now using the 

 3          power of our shares to go to those companies 

 4          and say your value will be enhanced if you 

 5          create more diversity at the corporate board 

 6          level.  And we are having national success.

 7                 And so you have to be nimble in your 

 8          strategies.  And the one thing I would 

 9          caution with your bill is that you need to 

10          allow the State Comptroller the ability to 

11          look at these issues through the lens of 

12          being a fiduciary.  So the last thing, you 

13          know, I need -- and sometimes this happens 

14          with our City Council -- is you don't want 

15          10 bills telling the State Comptroller what 

16          to do.  I really just want to say that, even 

17          though I understand the urgency that you 

18          bring to this, because you've been such a 

19          great leader.  You need to make sure that 

20          there's the separation of letting the sole 

21          trustee of the pension fund, Tom DiNapoli, do 

22          his work on behalf of the retirees of the 

23          state.

24                 SENATOR BENJAMIN:  Great.  I just want 


 1          to follow up on that, because I thought I did 

 2          do this by asking -- giving him a year.  But 

 3          it sounds like a year -- do you think there 

 4          should be timetables set in legislation on 

 5          these kind of things?  Or it should be if you 

 6          ask for divestment, you should sort of assume 

 7          that the comptroller, state comptroller -- in 

 8          your case, city comptroller -- that time 

 9          constraint would be complicating?  

10                 I guess that's my question, are time 

11          constraints a good idea or a bad idea, in 

12          your opinion?

13                 NYC COMPTROLLER STRINGER:  You know, I 

14          think that's a smart question.  The way I've 

15          approached it -- look, you know, not a week 

16          goes by that Liz Krueger hasn't tweeted me on 

17          fossil fuel divestment.  Right?  But I don't 

18          tweet back at her.  Or somebody will have a 

19          rally and say, I want you to divest from 

20          fossil fuel because politically, you know, 

21          they want to get out in front of it.

22                 I literally don't look at those 

23          tweets.  Or I guess I did with Liz Krueger's, 

24          since I'm mentioning it today.


 1                 (Laughter.)

 2                 NYC COMPTROLLER STRINGER:  But we have 

 3          a fiduciary standard that we have to meet.  

 4          And sometimes, look, it's hard.  Because 

 5          whatever your personal opinion is, as 

 6          comptroller, you know, you run a -- for us, 

 7          the fourth largest public pension fund in 

 8          America, 14th largest in the world.  The 

 9          things that you do have big ramifications on 

10          the global economy.

11                 And so I just wanted to say to you, 

12          the work that we're going to do together, I 

13          would just ask you to remember our fiduciary 

14          standard and just appreciate how we have to 

15          comport ourselves.  Because at the end of the 

16          day, my first responsibility is to that 

17          teacher, that city worker.  These pensions 

18          are not a lot for retirement security.  I'm 

19          proud to tell you that over the last four or 

20          five years, we've hit our actuarial target of 

21          7 percent.  The money, the way we've 

22          stabilized the pension fund, the way we've 

23          done the back-office work is always about 

24          pension reform.  The trustees have now 


 1          created one investment meeting.  This is all 

 2          the work that we do.  It's not going to get 

 3          you a headline.  No one's ever going to 

 4          report it.  But it's the -- it's our sworn 

 5          responsibility to look at it this way.

 6                 SENATOR BENJAMIN:  Okay.  If you could 

 7          share those standards, thank you.

 8                 SENATOR KRUEGER:  Thank you.

 9                 And the Assembly's being quiet this 

10          afternoon, so I'm the last questioner. 

11                 Thank you very much, Mr. Comptroller, 

12          for coming to Albany.

13                 And yes, I carry the adult-use 

14          legalized marijuana bill as well as the 

15          fossil fuel divestment bill.  So just for the 

16          record, we're not so big on the toking, 

17          because actually the burning of it in your 

18          lungs is still the problem.  So other forms 

19          of legal adult-use recreational marijuana.  

20          And yes, tax them.

21                 Do you have a projection on how much 

22          the state budget proposal would lose the City 

23          of New York?  Because all tied into the 

24          discussion of should the city deliver on the 


 1          MTA money, should the city do this, it seems 

 2          to me you have to answer the other half of 

 3          the equation:  What are we cutting from the 

 4          City of New York's budget in the state 

 5          budget?  

 6                 And for some reason, no one asked the 

 7          mayor, so I'm asking whether you know the 

 8          amount.

 9                 NYC COMPTROLLER STRINGER:  So what I 

10          would say is, you know, a budget document is 

11          a set of priorities.  So you could argue that 

12          every time you fund X, you can't fund Y.  And 

13          so that is for your deliberations.  And 

14          certainly the mayor and the City Council will 

15          come up with their own set of priorities.  

16                 What my role is, simply, is to say 

17          what happens if we don't fund the MTA?  And I 

18          think I've made the case that this is very 

19          critical.  

20                 I do think, given the money in the 

21          city's budget, the potential surplus, I think 

22          this is a wise investment to immediately work 

23          to create that state-city match.

24                 But going forward, I think that we 


 1          have an overall issue, which is once we get 

 2          the emergency out of the way, or the 

 3          emergency funding, Senator, we have a whole 

 4          lot of discussion about what's the best way 

 5          to sustain our transportation system.  And I 

 6          think through a combination of some of the 

 7          congestion pricing ideas, the bond act that I 

 8          think would go a long way to get us the money 

 9          we need if we passed a bond act sooner rather 

10          than later, we can have that infrastructure 

11          money.  And that is what I think we should 

12          work on.

13                 I will work with you to get you the 

14          data you need in terms of the city costs.  

15          But I would also argue that our investment 

16          would end up coming back to us in the form of 

17          people getting to work on time.  One of the 

18          reports I did shows that given the mess 

19          today, we're losing $380 million a year 

20          because of lost wages, because of transit 

21          delays.  So if we invested $400 million in 

22          the first year, we're probably going to see a 

23          rate of return on that pretty soon and pretty 

24          quickly.


 1                 SENATOR KRUEGER:  And I wasn't trying 

 2          to get a gotcha out of you, because I don't 

 3          disagree on the need to prioritize MTA 

 4          issues.  But I do think it's important for 

 5          everyone to be aware that if the Governor's 

 6          budget proposal is going to cut 600 million 

 7          to 750 million out of revenue to the city 

 8          that it's been receiving, that that has to be 

 9          factored in when you say should we put 

10          another 400 million into the MTA.  You need 

11          to look at, you know, the totality of it.

12                 Have you had a chance to look at the 

13          various tax reform proposals that the 

14          Governor's tax reform task force, or whatever 

15          they call themselves, proposed as a way to 

16          address the changes in federal tax law and 

17          the impact that would have on New Yorkers who 

18          pay disproportionately high property, 

19          personal and state taxes?  Do you have an 

20          opinion on any of those proposals?

21                 NYC COMPTROLLER STRINGER:  So in the 

22          near term, I do believe that we should 

23          decouple from federal provisions that would 

24          have an immediate impact on New York's tax 


 1          burdens.  

 2                 And I do think that the Governor's 

 3          proposals require further study, but it's 

 4          certainly a study that we have to begin.  

 5          Because I do think, you know, what he is 

 6          proposing is complex.  It could, you know, 

 7          produce another set of winners and losers in 

 8          the scheme of the budget.  He's talking about 

 9          legal challenges that are possible.  

10                 I don't have yet a specific analysis.  

11          You know, what we usually do is once the 

12          mayor proposes his budget, once we come to 

13          Albany, in the next couple of weeks we'll 

14          offer our own analysis of the New York City 

15          budget and also some of the outstanding 

16          issues in Albany.  So if you give me a 

17          chance, we're going to be doing that in the 

18          next couple of weeks.

19                 SENATOR KRUEGER:  Great.  I think that 

20          would be very helpful to at least understand 

21          the impacts specifically on the 

22          residents of --

23                 NYC COMPTROLLER STRINGER:  And by the 

24          way, you know, I come here recognizing that 


 1          this city, our city, gives billion more to 

 2          the state and the federal government than we 

 3          get back.  And we should recognize that.  And 

 4          I come here to say, you know, this city 

 5          contributes so much to the state economy, be 

 6          very careful what you do to us because at the 

 7          end of the day it causes more harm beyond the 

 8          city.  And I would caution -- that's why I've 

 9          always come here and said, How dare you take 

10          away our revenue-sharing.  And the hundreds 

11          of millions of dollars we lost over the 

12          couple of years, that means we generate less 

13          tax revenue because you've now cut out our 

14          ability to multiply the money that we get to 

15          the city.

16                 SENATOR KRUEGER:  Thank you very much.  

17                 Assembly.

18                 CHAIRWOMAN WEINSTEIN:  Thank you for 

19          being here today.  And look forward to 

20          continued conversations on so many of these 

21          issues with you.

22                 NYC COMPTROLLER STRINGER:  And best of 

23          luck to you, Madam Chair.

24                 CHAIRWOMAN WEINSTEIN:  Thank you.


 1                 NYC COMPTROLLER STRINGER:  And thank 

 2          you, colleagues.

 3                 CHAIRWOMAN WEINSTEIN:  Next we'll be 

 4          hearing from Kathy Sheehan, the mayor of the 

 5          City of Albany.  

 6                 ASSEMBLYMAN OAKS:  Just as we're 

 7          preparing, we've been joined by Assemblyman 

 8          Chris Friend.

 9                 MAYOR SHEEHAN:  Good afternoon.

10                 SENATOR KRUEGER:  Good afternoon.

11                 MAYOR SHEEHAN:  Are you ready for me 

12          to begin?  Great.

13                 I want to thank Chairpersons Young and 

14          Weinstein for inviting me to speak with you 

15          about the City of Albany today.  I also want 

16          to thank the Senate Finance Committee and the 

17          Assembly Ways and Means Committee and the 

18          other members of the Senate and Assembly who 

19          are present, along with members of our 

20          Capital City delegation, our Assemblymembers 

21          Pat Fahey and John McDonald as well as 

22          Senator Neil Breslin, who work closely with 

23          the City of Albany with respect to various 

24          issues and initiatives, but in particular our 


 1          financial challenges.  

 2                 I want to thank you again for 

 3          supporting the $12.5 million in Capital City 

 4          funding that was in the Governor's budget 

 5          last year.  This funding -- provided as new, 

 6          unrestricted aid, and not as a spinup -- 

 7          allowed for the City of Albany to avoid 

 8          borrowing against our future.  This year the 

 9          City of Albany seeks a permanent 

10          $12.5 million in funding for the 

11          Capital City.

12                 I would love to come to this body and 

13          talk about infrastructure and economic 

14          development and many other issues that impact 

15          our city, talking about opportunities to 

16          create further partnerships with New York 

17          State.  However, because the inequity in 

18          unrestricted aid continues to exist, I am 

19          forced to return here every year to request 

20          equitable state funding, something that every 

21          other municipality in the State of New York 

22          is guaranteed from the moment the Governor's 

23          budget is released.

24                 We are seeking to ensure that the 


 1          Capital City can provide services that we 

 2          know are essential for the tens of thousands 

 3          of people who come here to work every day, 

 4          many of them in this building and in this 

 5          plaza.

 6                 The cost of maintaining roads and 

 7          sidewalks and of providing police, fire, and 

 8          emergency services to accommodate and protect 

 9          these workers and visitors falls to our 

10          residents.  Providing this level of service 

11          while being denied our fair share in state 

12          aid is not fair, and it is not sustainable.  

13                 No other city in New York State is 

14          forced to endure this situation every year.  

15          Our residents, our police officers, our 

16          firefighters and all of our hardworking 

17          employees deserve better than to deal with 

18          this process year after year from their state 

19          government.  We simply cannot ask our 

20          residents, businesses, and taxpayers to carry 

21          a larger burden simply because they chose to 

22          make the Capital City home.

23                 Every year around this time I am asked 

24          by homeowners and business owners alike 


 1          whether they will have to sell their house or 

 2          close their business because they are worried 

 3          that we will not receive the $12.5 million in 

 4          Capital City funding that we use to balance 

 5          our budget every year.

 6                 If the City of Albany state funding is 

 7          cut by $12.5 million and we are forced to 

 8          place that burden on taxpayers, every 

 9          property owner would receive a 22 percent 

10          property tax increase -- or we would have to 

11          make cuts to public safety that would result 

12          in fire engines being taken out of service 

13          and the ending of our community policing.  

14                 New York State employs thousands of 

15          workers in the City of Albany.  Many, many, 

16          many of those workers commute to the city 

17          from our surrounding affluent suburbs.  We 

18          also host tens of thousands of visitors who 

19          come here to conduct business with and lobby 

20          state government.  

21                 As you will see in Slide 5 of the 

22          handout I provided, our largest employers 

23          other than the state and municipal government 

24          and the school district are Albany Medical 


 1          Center, St. Peter's Hospital, Albany Stratton 

 2          VA Medical Center, Albany Memorial Hospital, 

 3          SUNY University at Albany and the Center for 

 4          Disability Services.  These organizations 

 5          enjoy tax exemptions that the City of Albany 

 6          is bound to recognize and is barred by the 

 7          federal and state government from removing.

 8                 On Slide 6, I have provided a map that 

 9          shows just how widespread the amount of 

10          tax-exempt property in the city is, and 

11          identified for you the large parcels of land 

12          across the city that are owned by New York 

13          State and its various agency and authorities.  

14          As you can tell, the wide variety of colors 

15          on this map show a large portion of 

16          tax-exempt properties, and the burden on our 

17          taxpayers is astounding.  

18                 As noted on Slide 7, Albany has the 

19          most tax-exempt property out of any upstate 

20          city with at least 50,000 residents -- 

21          64 percent of the property in the city is 

22          tax-exempt; 58 percent of that the tax-exempt 

23          property is owned by the State of New York.  

24          And while it is often pointed out to me that 


 1          we receive a payment from New York State 

 2          under Section 19A of the Public Lands Law, 

 3          this payment is just 0.36 percent of the 

 4          value of the state's property.  

 5                 And I also want to point out that 

 6          every municipality in New York State is 

 7          entitled to payments under Section 19A of the 

 8          Public Lands Law for property taken off the 

 9          tax rolls by the state.

10                 As a city of dozens of unique 

11          neighborhoods, our homeowners and residents 

12          in those neighborhoods bear a 

13          disproportionate burden of our tax levy.  As 

14          noted on Slide 8, the City of Albany 

15          residents, who own approximately 24 percent 

16          of the value of the property in the city, pay 

17          60 percent of the tax levy.  And even more 

18          challenging for economic development, 

19          businesses that own just 12 percent of the 

20          value of property in our city bear the other 

21          40 percent of our tax levy.  This crushing 

22          tax burden is our number-one challenge to 

23          economic development.

24                 Your state capital truly is treated 


 1          like no other large city in New York State.  

 2          As you will see on Slide 9, we have the 

 3          lowest amount of AIM per capita received of 

 4          any of the other upstate cities with a 

 5          population of at least 50,000 residents.  Our 

 6          AIM is $128.84 per capita, compared with 617 

 7          for Buffalo, 494 for Syracuse, and 419 for 

 8          Rochester.

 9                 This inequity is also patently obvious 

10          when you look at our city and the school tax 

11          levy in actual dollars compared to Utica, 

12          Rochester, Syracuse, and Buffalo on Slide 9.  

13          The City of Albany's total city and school 

14          tax levy is the second largest, and just 

15          $2 million from being the largest -- again, 

16          in actual dollars.  I'm not talking about 

17          per capita.  And it's higher than Utica, 

18          Rochester, and Syracuse, all cities that 

19          receive between two and almost four times as 

20          much AIM per capita as the City of Albany.

21                 This inequity is even further evident 

22          when reviewing AIM as a percentage of our 

23          total tax levy.  As you can see on Slide 11, 

24          Albany's AIM as a percentage of our total tax 


 1          levy is just 7.31 percent, almost four times 

 2          less than Utica, seven times less than 

 3          Rochester, 10 times less than Syracuse, and 

 4          more than 16 times less than Buffalo.

 5                 On Slide 12 we have provided a chart 

 6          that shows the tax levy per capita versus AIM 

 7          per capita in Albany, Utica, Rochester, 

 8          Syracuse, and Buffalo.  By showing that our 

 9          residents pay more than three times the 

10          property taxes per capita but receive four 

11          times less AIM than Buffalo -- or even almost 

12          twice as much in property taxes per capita 

13          but receive half the AIM of Utica -- I 

14          believe there is no clearer picture of the 

15          unfair position the City of Albany 

16          taxpayers are put in year after year.

17                 This information demonstrates to you 

18          that our residents, our businesses, and our 

19          taxpayers are bearing a significantly 

20          disproportionate burden with respect to 

21          property taxes, because of the large amount 

22          of tax-exempt property in our Capital City 

23          and because of the inequity in AIM.  

24                 And I'm not suggesting that these 


 1          municipalities do not need the AIM they 

 2          receive.  I provide this information because 

 3          I think it is critically important to 

 4          understand what grave impact this inequity is 

 5          having on the City of Albany.  The reality 

 6          for our city is that people living in some of 

 7          the poorest census tracts in the region are 

 8          bearing the burden for the state's refusal to 

 9          provide AIM at even half the level that it 

10          provides to other cities.

11                 I want to stress that our ask is to 

12          get us to half.  We are not asking for AIM at 

13          the same level as even the City of Utica.  As 

14          you will see in New York State Comptroller 

15          DiNapoli's fiscal stress score chart, which 

16          we provide on Slide 13, Albany is still only 

17          one of two cities in the state that is under 

18          significant fiscal distress.  Comptroller 

19          DiNapoli, being here in Albany, understands 

20          the challenges and how we got to where we 

21          are.

22                 Prior to my administration, the City 

23          of Albany depleted our rainy day fund.  The 

24          fund, Comptroller DiNapoli recommends, should 


 1          be equal to approximately 10 percent of our 

 2          municipality's annual budget.  For the City 

 3          of Albany, that means our rainy day fund 

 4          should be 17.6 million.  However, at the end 

 5          of 2016, it was less than a third of the 

 6          recommended size.  We should have been in a 

 7          position to grow our fund but not cut our 

 8          budget to reduce the State of New York's 

 9          well-deserved aid to our city.

10                 As you can see on the chart provided 

11          on Slide 14, the City of Albany's fund 

12          balance at the end of 2016 was smaller as a 

13          percentage of expenditures compared to the 

14          same cities that receive more AIM per capita:  

15          Syracuse, Rochester, Buffalo, and Utica.  

16          Again, I understand and appreciate the 

17          difficult task every city faces in balancing 

18          their budgets year after year.  However, I 

19          think it's important to note that the City of 

20          Albany is facing a state funding cut and 

21          being directed to increase our rainy fund at 

22          the same time, the only city in New York 

23          State facing that predicament.  

24                 And so what does this all mean?  This 


 1          inequity not only impacts our competitiveness 

 2          across New York State, it impacts our 

 3          competitiveness right here in the Capital 

 4          Region.  I shared this example with you last 

 5          year, but I believe it bears repeating.  As 

 6          noted on Slide 15, several places in Albany 

 7          that we see our legislators enjoying dinner 

 8          are Cafe Capriccio and Jack's Oyster House.  

 9          Please continue to do so.  

10                 However, many members also go to 

11          establishments like Blu Stone Bistro and The 

12          Cheesecake Factory, located in the Town of 

13          Colonie, just across the line from Albany.  

14          The tax bill on Wolf Road is 60 percent lower 

15          than the tax bill paid here in the City of 

16          Albany -- 60 percent.  An inequity exists 

17          where you can locate just across the city 

18          line and significantly reduce your tax 

19          burden.

20                 When I came to this body four years 

21          ago, I promised that with an additional 

22          $12.5 million I would drive efficiency and 

23          cost savings for our city budget.  I told you 

24          at the time that I did not believe that we 


 1          were doing all that we could to be good 

 2          stewards of taxpayer dollars.  I told you 

 3          that we needed to invest in technology.  I 

 4          told you that we could do better, and I 

 5          promised to do better, and I delivered on 

 6          that promise.  From my first budget in 2015 

 7          to my most recent budget in 2018, we have 

 8          absorbed multi-million-dollar interest 

 9          arbitration awards, we have settled every 

10          union contract, we have managed higher 

11          healthcare costs, and the growth over those 

12          four years was just .02 percent.  I'll repeat 

13          that:  .02 percent.

14                 If we had followed New York State and 

15          capped growth by 2 percent annually since 

16          2015, our budget would be almost $11 million 

17          more than it is today.  

18                 Not only have we held the line on 

19          growth since I became mayor -- as you see on 

20          Slide 16, we have cut millions of dollars 

21          from our city budget over the past two years.  

22          My 2018 budget included a $600,000 decrease 

23          over the previous year, marking two 

24          consecutive years where I have cut the budget 


 1          from the previous year for the first time in 

 2          more than 60 years.  I am not aware of any 

 3          other municipality of our size in the state 

 4          that has done the same.

 5                 This is important to note, because 

 6          over the past two years we have cut to the 

 7          bone.  And any additional cuts will have 

 8          adverse effects on the level of service 

 9          residents, businesses, and visitors have come 

10          to expect.  Cuts should not reduce the 

11          liability of New York State to its Capital 

12          City.  Cuts should benefit the taxpayers who 

13          already bear an unfair and inequitable burden 

14          compared to other large cities.  

15                 It is also important to touch on an 

16          additional development since we met last 

17          year.  As noted on Slide 18, in May of last 

18          year we received a report of the PFM Group's 

19          review of the City of Albany's finances.  In 

20          2016 and 2017, we worked with PFM Group and 

21          the New York State Budget Office to develop a 

22          three-year plan for the city.  During this 

23          review, the need for significant revenue was 

24          acknowledged and validated.  Again, the 


 1          budget you passed last year acknowledged this 

 2          reality by including $12.5 million for the 

 3          City of Albany.

 4                 We have taken several of PFM Group's 

 5          recommendations and implemented them in our 

 6          2018 budget.  These initiatives include 

 7          reorganizing nearly every department, 

 8          including the Department of Administrative 

 9          Services; greater centralization; and 

10          improved internal administrative functions.  

11          We have centralized payroll, we have 

12          eliminated duplicative processes, and we have 

13          continued to work with the county to find 

14          opportunities for us to cut further expenses.  

15                 We expect to see further benefits in 

16          2018 from our fleet vehicle maintenance plan.  

17          We are continuing on a plan to purchase our 

18          own streetlights, which would reduce our 

19          operating expenses, and we are working with 

20          Albany County to include a countywide 911 

21          dispatch, purchasing, payroll, and records 

22          management system.  

23                 But these savings will need to absorb 

24          increases in health insurance and personnel 


 1          costs and to continue to contain our city 

 2          budget.  The premise that these savings 

 3          should be used to reduce the state's 

 4          equitable payment of unrestricted aid is a 

 5          standard that no other city in the state is 

 6          held to.  Aid is not being cut for other 

 7          cities as they find opportunities to save 

 8          money and find other revenue opportunities 

 9          within those municipalities, and Albany 

10          should not be asked to do that.

11                 Four years ago I could understand 

12          skepticism about whether the City of Albany 

13          was part of the problem.  At this point it is 

14          inconceivable to me that it is still a 

15          question, based on what we have been able to 

16          achieve over these last four years.

17                 Again, I thank you for the support 

18          you've provided to this Capital City funding 

19          in the past.  I urge you to make this 

20          $12.5 million in Capital City funding 

21          permanent, and not force the taxpayers of the 

22          City of Albany to bear the burden of a state 

23          aid cut to our Capital City.

24                 Thank you.


 1                 CHAIRWOMAN WEINSTEIN:  Thank you.

 2                 We've been joined by Assemblywoman Pat 

 3          Fahy and Assemblyman John McDonald.  

 4                 And to our Local Government chair, 

 5          Assemblyman Magnarelli.  Questions?  Yes.

 6                 ASSEMBLYMAN MAGNARELLI:  Welcome 

 7          again, Mayor.

 8                 MAYOR SHEEHAN:  Thank you.

 9                 ASSEMBLYMAN MAGNARELLI:  It's always 

10          good to see you, and I love to hear your 

11          passion, I really do.

12                 I do have questions -- I really don't 

13          want to get into it too much.  I think you've 

14          kind of spelled out your position pretty well 

15          this morning, or this afternoon.  But in the 

16          back of my mind -- and I think it's for some 

17          questions that I should talk to you about 

18          personally in the sense of exactly if we're 

19          comparing apples with apples with some of the 

20          other cities across the state.  

21                 I don't think there's any question in 

22          my mind that our cities across New York 

23          State, whether it be Albany, Rochester, 

24          Buffalo, Syracuse, are all in need of 


 1          additional funding.  But I do want to get 

 2          into a couple of other things that deal with 

 3          the Local Governments Committee and what 

 4          we've been doing over the past year, 

 5          particularly what you mentioned at the end of 

 6          your remarks on shared services.  

 7                 There was a provision in the budget 

 8          last year that called for a meeting to take 

 9          place among all municipalities within the 

10          county.  Did that take place in Albany?  And 

11          what was the outcome of it?  

12                 MAYOR SHEEHAN:  Yes, it did, and we 

13          submitted a report that was supposed to be -- 

14          that was handled at the county level.  That 

15          was the way that the legislation was drafted.  

16          So it was the county's responsibility to 

17          collect all of that information and provide a 

18          report identifying opportunities to the 

19          state.

20                 ASSEMBLYMAN MAGNARELLI:  Did you find 

21          that meeting or deliberations -- did you find 

22          that helpful, not helpful?  How did it go?

23                 MAYOR SHEEHAN:  Well, in Albany County 

24          we meet on a quarterly basis, even prior to 


 1          the legislation, to talk about opportunities 

 2          for cost savings and sharing.  And I know 

 3          that some of the Hill Towns have worked with 

 4          the county to handle DPW issues.  And the 

 5          county has taken over plowing in certain of 

 6          the towns.  We certainly work very closely 

 7          with the county and piggyback on purchasing 

 8          opportunities.  

 9                 And the big project that we have 

10          undertaken with the Albany County sheriff is 

11          a consolidated dispatch 911, where the 

12          technology now provides a platform that would 

13          make it feasible for us to create one 

14          dispatch center for the county.  And that is 

15          the project that we are working on.  

16                 At this point in time, we've been 

17          successful in getting some of the 

18          intermunicipal grant funding to help fund the 

19          work that's being done to we hope make that 

20          happen.  We want to really be able, in 2019, 

21          to be operational with that dispatch.

22                 ASSEMBLYMAN MAGNARELLI:  So -- but 

23          outside of that, do you feel that the process 

24          was a good one?  Did you feel that it's 


 1          something that we should do on an annual 

 2          basis?  The Governor is looking for it again 

 3          in this year's budget.

 4                 MAYOR SHEEHAN:  I think that it's 

 5          helpful when we can work with the county to 

 6          identify opportunities.  And so every county 

 7          has slightly different forms of government.  

 8          We have a strong county legislature form of 

 9          government in Albany County, and so as far as 

10          working with the county executive, it really 

11          needs to be not just the county executive in 

12          Albany County, but also that legislative body 

13          needs to be actively engaged, so that when we 

14          arrive at opportunities for savings that 

15          there's support within the legislature for 

16          that.  

17                 But certainly this is something that 

18          we have to do.  For us, the 2 percent tax 

19          cap -- you know, we can't raise property 

20          taxes more than we've raised them.  So we're 

21          constantly looking at opportunities for us to 

22          share services.  When we have positions that 

23          open up, the first thing we do is go and look 

24          at the county and say, Does the county have 


 1          someone that does this job already for the 

 2          county?  And is there a way we can contract 

 3          with the county to provide this service to 

 4          the City of Albany when a position becomes 

 5          open?  

 6                 ASSEMBLYMAN MAGNARELLI:  So you're 

 7          doing that.

 8                 MAYOR SHEEHAN:  Yeah.  Absolutely.

 9                 ASSEMBLYMAN MAGNARELLI:  So just to 

10          boil this all down, it's not a bad idea.

11                 MAYOR SHEEHAN:  No.  It's never a bad 

12          idea to talk.

13                 ASSEMBLYMAN MAGNARELLI:  Okay.  It's 

14          not a bad idea to do it on an annual basis 

15          and to sit down and try to see if there's 

16          anyplace that shared services could come into 

17          play.

18                 MAYOR SHEEHAN:  Right.  I think where 

19          the challenge comes in is the formulas with 

20          respect to where the savings fall, and that's 

21          an area where I think that allowing the 

22          municipalities to really look at this and 

23          strategize through it, it allows us to have a 

24          collaborative conversation.  


 1                 As opposed to the county -- you know, 

 2          we're all looking to cut, but in some 

 3          instances for the county to increase its 

 4          payroll might actually benefit everybody.  So 

 5          we don't want the county to be penalized, for 

 6          example, for taking on the dispatchers.  It 

 7          increases their head count, but it's actually 

 8          providing a savings countywide and within the 

 9          municipalities that are participating in it.

10                 So that's where it would be helpful to 

11          have a little more flexibility with respect 

12          to where those savings end up falling.

13                 ASSEMBLYMAN MAGNARELLI:  Okay.  Thank 

14          you.

15                 As far as the shared services, you 

16          mentioned a little bit about some of the 

17          barriers to doing it, and we talked about the 

18          legislature being more involved on the county 

19          side in order to get things done.  Is there 

20          anything else that you can see forming 

21          barriers to sitting down and discussing 

22          shared services?

23                 MAYOR SHEEHAN:  I don't pretend to 

24          know all the ins and outs of it, but I know 


 1          that there are still some challenges with 

 2          respect to looking at a healthcare model, a 

 3          health insurance model that the county would 

 4          be the policyholder and the municipalities 

 5          could purchase their healthcare through the 

 6          county.  And I know that that's been 

 7          something that's been raised at the various 

 8          meetings with respect to the purchase of 

 9          healthcare where I still think either there's 

10          a misunderstanding or there may actually be 

11          some barriers that are still in place to 

12          being able to do that.

13                 ASSEMBLYMAN MAGNARELLI:  Correct me if 

14          I'm wrong, but I think last year you talked 

15          about some of the efficiency grants that you 

16          were able to get.  I think Albany was one of 

17          the only cities, I remember, that actually 

18          got some of the grants that had been in the 

19          budget for a number of years.  

20                 Are you still getting monies, and do 

21          you think that those grants were helpful?

22                 MAYOR SHEEHAN:  Absolutely.  You know, 

23          it takes a lot to plan the process, for 

24          example, of consolidating 911.  We have to 


 1          ensure that we have access to our 

 2          information, we have to ensure that we are 

 3          going to be able to provide the same level of 

 4          service, we have to negotiate with our unions 

 5          with respect to a change -- if there's going 

 6          to be a change in their employer.  

 7                 And so that takes planning, and 

 8          everybody has day jobs.  So this grant 

 9          funding allows us to bring the resources in 

10          to help us do that planning.

11                 ASSEMBLYMAN MAGNARELLI:  One final 

12          question.  Something that came up in the 

13          Governor's budget this year is this fiber 

14          optic wireless facilities and the state 

15          basically taking over the licensing of the -- 

16          what do they call it?  The small cells.

17                 What's your take on that?

18                 MAYOR SHEEHAN:  Well, we've entered 

19          into an agreement with one of the small cell 

20          carriers.  We think that that is important 

21          revenue, so again -- we have to sit down and 

22          we have to talk.  We have to look at what's 

23          happening with the different revenue sources, 

24          particularly with respect to utilities, so 


 1          that as we -- if this technology truly 

 2          becomes the next generation and cable goes 

 3          away, now you have a cable franchise fee that 

 4          the cities are collecting that they are 

 5          not -- if we don't have access to the small 

 6          cell revenue, then that's a loss of revenue.  

 7          You know, in the City of Albany, that's well 

 8          over a million dollars.

 9                 ASSEMBLYMAN MAGNARELLI:  And am I 

10          correct, the Governor's budget basically says 

11          that the state would collect whatever that 

12          fee would be for the small cells?

13                 MAYOR SHEEHAN:  It's my understanding 

14          that they're -- yeah.

15                 ASSEMBLYMAN MAGNARELLI:  According to 

16          my understanding.

17                 MAYOR SHEEHAN:  Yeah.

18                 ASSEMBLYMAN MAGNARELLI:  But -- okay.  

19          All right.  Well, thank you very much, and 

20          it's always good to see you.  Thank you for 

21          coming.

22                 MAYOR SHEEHAN:  Thank you.

23                 SENATOR KRUEGER:  Senator Kathy 

24          Marchione.


 1                 SENATOR MARCHIONE:  Good afternoon, 

 2          Mayor.

 3                 MAYOR SHEEHAN:  Good afternoon.

 4                 SENATOR MARCHIONE:  Just a little bit 

 5          on shared services.  Certainly you know that 

 6          the Governor's plan to permanentize the 

 7          shared-service plans removes the state match 

 8          for any shared-service savings resulting from 

 9          any approved plan -- that last year, of 

10          course, the match was in the budget.

11                 What effect do you think the removal 

12          of the state match has on effectively 

13          achieving any shared services under now this 

14          proposed permanent program?

15                 MAYOR SHEEHAN:  Well, I know that 

16          there had been some concern expressed on the 

17          county level with respect to the impacts of 

18          shared services.  So if the county is going 

19          to be taking on more services and that 

20          benefits the municipalities, then the way 

21          that the formula works within the tax cap, 

22          the counties at least perceive it as the 

23          county being punished -- maybe that's too 

24          strong of a word -- but potentially punished 


 1          for taking on a city service.  Or a town 

 2          service.  

 3                 And so I think that's where it would 

 4          be helpful to have some more flexibility, and 

 5          I know that there have been some meetings at 

 6          the staff levels to sort of walk through some 

 7          examples of that.  And one of the areas, 

 8          because we're looking at this consolidated 

 9          911 and this consolidated dispatch, I think 

10          it's going to provide a good opportunity to 

11          show what the impact can be if the -- if 

12          we're not able to work through that in a way 

13          that the county isn't penalized for taking on 

14          a service that the city currently takes on.  

15                 You know, we're looking to pay the 

16          county for that service.  But again, it's 

17          going to increase the county's expenses and 

18          decrease an expense on the part of the city.

19                 SENATOR MARCHIONE:  Okay.  Still in 

20          shared services, the Governor's plan on 

21          shared services also continues the procedure 

22          whereby any member of the shared-services 

23          panel that does not vote for a proposed 

24          shared-services plan must provide a detailed 


 1          statement justifying their opposition vote.  

 2                 Such a requirement exists nowhere 

 3          else, that we're aware of, in law, to require 

 4          an elected official to have to justify why 

 5          they don't support a proposal.  What are your 

 6          thoughts regarding the continuation of this 

 7          requirement, now that the program would 

 8          become permanent in law?

 9                 MAYOR SHEEHAN:  Again, I think that 

10          from the standpoint of shared services, it's 

11          really important to look at what we're 

12          accomplishing.  And it's not just in Albany 

13          County; I know that it's happening in 

14          Rensselaer County, in Schenectady County.  

15          These conversations are ongoing.  

16                 And with respect to the work that 

17          we're doing, you know, I've looked at other 

18          cities' budgets when I was putting together 

19          my testimony, and if you look at the 

20          growth -- or really the lack of growth -- in 

21          those budgets, I think you see across the 

22          state that municipalities have grown at a 

23          much smaller rate than the state because we 

24          have had to do more with less.  


 1                 And so, you know, of course I'm a 

 2          local elected official, I want as much 

 3          independence and autonomy as I can have, and 

 4          I think that we ultimately have to answer to 

 5          the people who elect us and ensure that we 

 6          are advocating for what we think is best for 

 7          the residents who we represent.

 8                 SENATOR MARCHIONE:  Thank you.  I 

 9          agree with you, Mayor.  

10                 But one of the real concerns, again, 

11          on this program that I haven't heard you talk 

12          about is it's an unfunded mandate at this 

13          point.  Last year it was not.  Last year 

14          there were some real benefits behind the 

15          shared-services program, that you could reap 

16          benefits on what you're doing.  There was 

17          also an added benefit encouraging localities 

18          to get together.  And now, you know, now it's 

19          permanent, but there's no money.   

20                 And, you know, if it's a duck, it's a 

21          duck.  And to me it's an unfunded mandate, 

22          that you are now going to be facing one more.  

23          And I hear this all the time, so certainly I 

24          have that concern for you.


 1                 SENATOR KRUEGER:  Thank you.

 2                 Assembly?

 3                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

 4          McDonald.

 5                 ASSEMBLYMAN McDONALD:  Thank you, 

 6          Madam Chair.  

 7                 Mayor, good to see you.  Thank you for 

 8          your report, very illustrative.

 9                 A couple different things.  I'm 

10          actually going back to the tax cap question, 

11          shared services -- and I've asked this to a 

12          lot of elected officials, it's not just you.  

13          But it's true, you know, it's very difficult 

14          for local leaders to actually put a 

15          shared-services initiative together.  You 

16          have to work with your labor staff and the 

17          whole nine yards.  And one of the 

18          disincentives that I'm seeing -- I think you 

19          referenced this -- is that, you know, you 

20          transfer a service -- say you transfer 

21          dispatch to Albany County.  You have your tax 

22          cap lowered, you're almost penalized.

23                 Now, some people will say, Well, 

24          listen, they're not providing the service, 


 1          they should give up something.  But do you 

 2          have a suggestion of -- is there a sweet spot 

 3          in the middle or someplace where we can get 

 4          to a compromise?  Because I find if we're 

 5          going to be discussing making this shared 

 6          services initiatives a permanent thing -- 

 7          which I know, I used to go to the same 

 8          meetings you used to, and we do meet 

 9          quarterly -- we don't want to discourage -- I 

10          think it's becoming a barrier, to be honest 

11          with you, the tax cap, I think in that 

12          aspect.

13                 MAYOR SHEEHAN:  And again, from the 

14          standpoint of the tax cap, the practical 

15          answer for the City of Albany is -- I mean, 

16          it doesn't matter.  Until this $12.5 million 

17          is fixed, I don't have the luxury of even 

18          thinking about having an opportunity to raise 

19          taxes to the full amount of the cap.  Nor do 

20          I think that that's the right answer.  

21                 But I think from the standpoint of, 

22          you know, looking at opportunities to save 

23          money, that we have to grow within our means.  

24          But the means that Albany is provided is like 


 1          no other city.  And so when I look at what we 

 2          have accomplished and what we can accomplish 

 3          if we pursue shared services, none of that 

 4          negates the need to fix this gap that's been 

 5          filled with gimmicks and with spinups and 

 6          with borrowing from the future.  

 7                 And so I'd love to come here next year 

 8          having this $12.5 million permanently fixed 

 9          and then to be able to talk about other 

10          initiatives that I think can help provide our 

11          city -- to be on a track where we're not 

12          talking about unrestricted aid anymore, we 

13          are talking about how do we grow within our 

14          means.

15                 ASSEMBLYMAN McDONALD:  The next part 

16          is -- actually, Assemblymember Fahy's asking 

17          this question too, but she had to run back to 

18          a committee meeting -- the fiscal stress 

19          score, you're in the above 65 percent in 

20          2017.  Where was the city the year or two 

21          before?

22                 MAYOR SHEEHAN:  So this was our second 

23          year in a row of being in significant fiscal 

24          stress.  We were slightly better this year 


 1          than we were the previous year.

 2                 ASSEMBLYMAN McDONALD:  Right.

 3                 MAYOR SHEEHAN:  We didn't fall into 

 4          that category until we had spent the last of 

 5          our fund balance, which happened with the 

 6          budget that I inherited.

 7                 ASSEMBLYMAN McDONALD:  Which is 

 8          remarkable considering the contracts that you 

 9          had to settle.  And I know everybody deals 

10          with them, but they were laboring for a long 

11          period of time -- and also you controlled -- 

12          you decreased your spending, for lack of a 

13          better term.

14                 The PFM report came out, I think, 

15          after the budget last year, or somewhere in 

16          between?

17                 MAYOR SHEEHAN:  It was as we were 

18          preparing our budget.

19                 ASSEMBLYMAN MCDONALD:  So where -- did 

20          it call for a continued stream of state aid?

21                 MAYOR SHEEHAN:  So -- it did.  There 

22          was a table in it that suggested that through 

23          increasing our taxes every year the full 

24          2 percent -- which we all know that the 


 1          2 percent isn't really 2 percent -- and 

 2          charging additional fees to our taxpayers, 

 3          that we could reduce the need from 

 4          $12.5 million to a smaller number.  

 5                 And I would submit to you, again, no 

 6          other city is being asked to do that.  Their 

 7          AIM is their AIM.  And whether we're able to 

 8          repurchase our street lights and realize 

 9          savings in our utility expenses, those are 

10          dollars that we know are going to have to 

11          fund future interest arbitration awards or 

12          hopefully contract settlements with our 

13          unions, as well as the continued increase 

14          that we see in healthcare costs.  

15                 You know, these are all things that we 

16          have to manage too.  But to somehow say that 

17          the City of Albany, for every dollar it 

18          saves, it's got to give it to the state -- 

19          and no other city is being asked to do 

20          that -- is what I am here saying has to end.

21                 ASSEMBLYMAN MCDONALD:  I don't 

22          disagree with you on that, particularly since 

23          most of what you deal with is mandated by us 

24          here at the state.


 1                 My last question, and it kind of goes 

 2          into the apples-and-apples and 

 3          oranges-and-oranges question, a lot of people 

 4          say:  Well, listen, you're in Albany, this is 

 5          where state government is, that's where all 

 6          the jobs are.  What's your response to that?

 7                 MAYOR SHEEHAN:  You know, I love being 

 8          the Capital City.  I love having all of you 

 9          here, I love that issues are debated here and 

10          that you have really, really smart people 

11          working in your agencies doing really 

12          innovative and exciting things.  

13                 But the reality is that most of the 

14          people who work in this complex don't live in 

15          the City of Albany.  They live in our more 

16          affluent suburbs where they pay lower 

17          property taxes, where they're not in areas 

18          where they have high concentrations of 

19          poverty, high concentrations of social 

20          services -- and so the burden is falling to 

21          the residents of this city.  

22                 We don't have a commuter tax.  We 

23          share sales tax countywide based on 

24          population.  So this burden is falling to the 


 1          people who can least afford to bear that 

 2          burden.  

 3                 And that is why I again implore you, 

 4          and I have implored the Governor, to fix 

 5          this.  This was not a problem that he 

 6          created, this was not a problem that was 

 7          created -- you know, this is a problem that 

 8          has existed for years, but it's been dealt 

 9          with in multiple ways.  It's time to just fix 

10          it.

11                 ASSEMBLYMAN McDONALD:  Thank you.

12                 CHAIRWOMAN WEINSTEIN:  Thank you.

13                 SENATOR KRUEGER:  Senator Diane 

14          Savino.

15                 SENATOR SAVINO:  Thank you, Mayor 

16          Sheehan.  

17                 I just have one question, because I've 

18          always found this perplexing that the host 

19          city is essentially not being compensated.  

20          Do you have an idea of how much money the 

21          State of New York would have to pay you in 

22          property taxes if they were a property 

23          taxpayer?

24                 MAYOR SHEEHAN:  You know, we've 


 1          actually looked at if they would just pay us 

 2          1 percent of the value of all the property, 

 3          and it would be well over $12.5 million.  It 

 4          would be probably -- I think it's an 

 5          additional $24 million.  That's just 

 6          1 percent.

 7                 I'm sure that my staff has done that 

 8          calculation, but -- and I'll get it to you.  

 9          We'll shoot it to you.

10                 SENATOR SAVINO:  I'd be curious to 

11          know.

12                 MAYOR SHEEHAN:  Yeah.

13                 SENATOR SAVINO:  And the other states 

14          where the capital is in a city, do they have 

15          the same experience?  Or does this happen in 

16          Trenton, in Sacramento, in --

17                 MAYOR SHEEHAN:  There are a number of 

18          states that do provide special capital city 

19          funding to their capital cities.  

20                 You know, there are others -- Columbus 

21          is a great -- is a good model.  In Columbus, 

22          in Ohio, you can annex.  So Columbus just 

23          annexed its way.  Right?  Everyone in Colonie 

24          and Guilderland and Bethlehem loves to hear 


 1          me say this -- they really don't, no.  But I 

 2          scare them when I say that.

 3                 I mean, if we were to just annex our 

 4          surrounding suburbs, we would be able to grow 

 5          our tax base and the problem would be much 

 6          smaller.  But clearly in New York State 

 7          that's not a realistic option.

 8                 SENATOR SAVINO:  Because I think it's 

 9          outrageous that the City of Albany gets 

10          shortchanged so much, and I'm often surprised 

11          that you only ask for $12 million, because 

12          quite honestly it seems like a very unequal 

13          relationship.

14                 MAYOR SHEEHAN:  It does, and I will 

15          say that that is probably for me one of the 

16          most frustrating and challenging things.  

17          Because I love a challenge, and I was willing 

18          to challenge our city and my staff and our 

19          leadership team to do better, and we did.  

20          And we have.  But the $12.5 million is 

21          $12.5 million, and it probably should be 

22          more.  And if I could be criticized by our 

23          residents, it would be that it's only 12.5.  

24                 But I'm confident that with that 


 1          $12.5 million, and with the focus that we've 

 2          had on economic development and on growth, 

 3          that we can be on a path to sustainable 

 4          growth, reasonable growth going forward.

 5                 SENATOR SAVINO:  And finally, on that 

 6          point, I know when I first got here there was 

 7          talk of the new convention center, and at one 

 8          point it looked like it would never happen, 

 9          and now it's here.

10                 MAYOR SHEEHAN:  It is.

11                 SENATOR SAVINO:  So the new convention 

12          center, new hotels, is that producing the 

13          type of economic activity that you had hoped 

14          for?

15                 MAYOR SHEEHAN:  We're starting to see 

16          investment, we're starting to see new small 

17          businesses pop up.  But again, that growth in 

18          our tax base is what we're going to need to 

19          equalize our tax base so that we don't have 

20          this disproportionality that's impacting our 

21          business community in particular.  

22                 And so, you know, there's the Harriman 

23          campus, there's often been talk about 

24          developing that campus, that's moved nowhere.  


 1          The 8-acre parcel downtown still has not been 

 2          developed.  The state does seem to be moving 

 3          forward with freeing that up for development.  

 4                 But again, growing our tax base -- 

 5          those are things that, you know, again, as a 

 6          new hotel goes up in the City of Rochester, I 

 7          don't see them being asked to subtract from 

 8          their AIM, on their unrestricted aid, the 

 9          value of that new hotel.

10                 SENATOR SAVINO:  Thank you.

11                 SENATOR KRUEGER:  Thank you.

12                 I think I'm the last one.

13                 CHAIRWOMAN WEINSTEIN:  Yeah.

14                 SENATOR KRUEGER:  Thank you.

15                 So every year when you testify I ask 

16          you, What did Albany do to apparently have no 

17          friends in this town?  Which is ironic, 

18          because you pull out these numbers about how 

19          little you get per capita from AIM, and it's 

20          sort of breathtaking to me that we continue 

21          to have this story every year, and more even 

22          that everyone else who's getting AIM doesn't 

23          go, Wait a second here, why is Albany being 

24          punished?


 1                 Do you have any idea how, 

 2          historically, you ended up with such a low 

 3          AIM formula per capita?

 4                 MAYOR SHEEHAN:  You know, we just 

 5          celebrated William Kennedy's 90th birthday in 

 6          a wonderful celebration at City Hall.  And he 

 7          is a wonderful fiction writer, but there is a 

 8          certain amount of, I don't know, historical 

 9          fiction that's true about what William 

10          Kennedy has written about the City of Albany, 

11          a city that he has described as full of 

12          political wizards and wonderful scoundrels.

13                 But I do know that, you know, the 

14          former head of the Democratic Committee used 

15          to run some pretty amazing cockfights, and 

16          maybe somebody lost some money in one of 

17          those.

18                 (Laughter.)

19                 MAYOR SHEEHAN:  But in all 

20          seriousness, this dates back to maybe a 

21          different time, a time when most of the 

22          people who worked here did live here, a time 

23          when we didn't see the concentration of 

24          poverty in our cities that we see in our 


 1          cities now.  

 2                 But what I do know is that the past is 

 3          the past, and it's time for us to fix this 

 4          inequity permanently.

 5                 SENATOR KRUEGER:  I agree with you, 

 6          absolutely.  I've also -- I was looking at 

 7          what some other cities are doing when they 

 8          have such a large amount of their property 

 9          owned or controlled by not-for-profits and 

10          government.  So Boston has PILOTs where they 

11          get $32 million a year from what they call 

12          the eds and the meds, the colleges and the 

13          medical centers.  And Pittsburgh's had a 

14          history of that, and a few other cities 

15          around the country.  

16                 I wonder whether you've ever explored 

17          that here in Albany.

18                 MAYOR SHEEHAN:  We have.  One of the 

19          first things that I did when I became mayor 

20          was I brought in the heads of all of our 

21          large institutions, our nonprofit 

22          institutions -- and so we do have voluntary 

23          PILOT payments, certainly not on the scale as 

24          Boston.  


 1                 Our largest university is the 

 2          University at Albany, which will not pay a 

 3          PILOT payment.  And our smaller universities 

 4          are struggling, our smaller colleges are 

 5          struggling financially, but we have been 

 6          successful in partnering with our hospitals, 

 7          with the Port, and with Fuller Road 

 8          Management -- although that's not going to 

 9          continue -- that owns SUNY Poly.  We've also 

10          had one of our hospitals pay for a traffic 

11          study that we would otherwise had to pay for.  

12                 So we're working very closely with our 

13          not-for-profits to work with them.  They know 

14          that the strength of the city really impacts 

15          the strength of their businesses as well, and 

16          their employees, so they have been willing to 

17          help us at this point through voluntary PILOT 

18          payments.

19                 SENATOR KRUEGER:  Thank you very much, 

20          Ms. Mayor.

21                 MAYOR SHEEHAN:  Thank you.

22                 SENATOR KRUEGER:  Thanks for coming.

23                 CHAIRWOMAN WEINSTEIN:  Thank you for 

24          being here.


 1                 MAYOR SHEEHAN:  Thank you.

 2                 CHAIRWOMAN WEINSTEIN:  As a quick 

 3          question, actually -- I was just wondering, 

 4          you know, I know we had some press 

 5          conferences together calling for the passage 

 6          of the zombie laws of vacant and abandoned -- 

 7          and I'm just wondering how -- I know it's 

 8          just a short period of time, but how that is 

 9          helping the City of Albany.

10                 MAYOR SHEEHAN:  Again, another issue I 

11          would have loved to have come to talk to you 

12          about for a much longer period of time.  But 

13          I will say that we were successful in getting 

14          funding for a position -- again, our 

15          challenge is our operating budget -- through 

16          the Attorney General's office to pay for a 

17          person whose job it is to identify and have a 

18          plan for each and every vacant building in 

19          this city.  

20                 That person has completed their vacant 

21          building inventory.  We're using the software 

22          that the Attorney General's office funded, 

23          and we have the ability now -- we've graded 

24          each of the buildings, we know the condition 


 1          that they're in.  We were able to use some 

 2          HUD funding that we have that was a loan 

 3          repayment, we're providing a million-dollar 

 4          pool for grants for vacant buildings.  We're 

 5          working with the Land Bank, and it is my 

 6          priority for 2018.  I am going to be holding 

 7          myself accountable.  

 8                 We have the inventory now, it's 1,044.  

 9          A year from now, it needs to be a number less 

10          than that and we need to have these buildings 

11          back into a plan, either for reuse or in some 

12          cases, unfortunately, there will be some 

13          demolitions.

14                 CHAIRWOMAN WEINSTEIN:  Thank you for 

15          that.

16                 MAYOR SHEEHAN:  Thank you.

17                 CHAIRWOMAN WEINSTEIN:  Thank you for 

18          being here.

19                 MAYOR SHEEHAN:  Yes.  It's going very, 

20          very well.

21                 CHAIRWOMAN WEINSTEIN:  Great.

22                 Next we'd like to invite Mayor Lovely 

23          Warren, the mayor of the City of Rochester, 

24          to come address the committee.


 1                 MAYOR WARREN:  Good afternoon, 

 2          Chairwoman, Chairwoman Weinstein, members of 

 3          the Ways and Means and Finance Committees, 

 4          other members of the Senate and Assembly.  

 5          Thank you for the opportunity to address this 

 6          panel on behalf of the residents of the City 

 7          of Rochester.  I am joined today by my budget 

 8          director, Chris Wagner.  

 9                 I am proud to lead the City of 

10          Rochester in a time of growth. We're creating 

11          more jobs, safer and more vibrant 

12          neighborhoods and better educational 

13          opportunities.  Our downtown is thriving, and 

14          our neighborhoods are making a comeback.  

15                 I have just begun my second term as 

16          mayor, and over the next four years I will be 

17          focused on providing economic equality for 

18          all of Rochester’s residents, not just a 

19          select few.  

20                 The City of Rochester prides itself on 

21          being a good steward of the taxpayer's 

22          dollars, so much so that we received two bond 

23          rating upgrades in recent years.  We support 

24          and have consistently complied with the 


 1          state's property tax cap, and have a strong 

 2          record of consolidation and shared services.  

 3                 As is the case every year, the City of 

 4          Rochester is beginning its budget process 

 5          with a significant deficit.  This year we 

 6          begin the budget process with a $47.6 million 

 7          all-funds gap.  As we do every year, we face 

 8          tough decisions as we strive to protect the 

 9          services that are a lifeline for so many, 

10          while also continuing to move our city 

11          forward.  

12                 But we simply cannot cut our way to 

13          prosperity.  I am well aware that the state 

14          is facing its own budgetary challenges, so I 

15          did not come here today with a long list of 

16          requests.  Instead, I am here to ask the 

17          state to protect our existing revenue 

18          streams, particularly when it comes to our 

19          aid to municipality funding, the gross 

20          receipts tax, and capital funding for key 

21          projects.  

22                 To put my requests into context, I ask 

23          you to consider the following.  The City of 

24          Rochester receives 88.2 million in AIM aid 


 1          from the state each year.  However, we are 

 2          required to pay 119.1 million as a 

 3          maintenance of effort to the Rochester City 

 4          School District.  Rochester is the only 

 5          upstate city whose maintenance of effort 

 6          exceeds the AIM aid that we receive, and that 

 7          deficit is $30.9 million.  This also means 

 8          that Rochester gives up 68 percent of its tax 

 9          levy to the school district, leaving just 

10          32 percent available to support police, fire, 

11          libraries, recreation, and other critical 

12          city services.  

13                 Further cuts to Rochester AIM aid 

14          would drastically impact our ability to 

15          provide residents with these services.  In 

16          addition to maintaining our AIM aid and 

17          asking for more, I want to stress why 

18          alternative revenue streams, including the 

19          gross receipts tax, are so crucial for us.  

20                 Rochester has seen a 56 percent 

21          decline in its annual gross receipts tax 

22          revenue, from over $11 million to just over 

23          5.  That is $6 million that would go a long 

24          way towards helping the citizens of 


 1          Rochester.  Even though the New York State 

 2          Department of Taxation and Finance agrees 

 3          that such revenues are subject to the tax, 

 4          many energy service companies, or ESCOs, do 

 5          not pay it.

 6                 The state can fix this situation once 

 7          and for all by enacting legislation to 

 8          clarify that ESCO revenues associated with 

 9          the sale of gas and electric falls within the 

10          scope of GRT.  And the proposed elimination 

11          of the ESCO exemption from the sales tax 

12          provides some relief, but does not address 

13          the overall receipts tax issue.  

14                 In addition, I ask that you include 

15          cellular services within the scope of this 

16          tax.  Both New York State in its excise tax 

17          and New York City in its gross receipt tax 

18          have changed their respective statutes to 

19          deem cellular service revenue as taxable.  

20          Two bills have been introduced that would 

21          resolve both issues.  

22                 I would also like to voice my support 

23          for the proposal to require marketplace 

24          providers to collect sales and use taxes on 


 1          goods sold to New York residents online.  

 2                 Another revenue stream that is being 

 3          threatened deals with municipalities' ability 

 4          to manage and monetize wireless facilities in 

 5          public rights of way.  Article VII, Part F of 

 6          the transportation, economic development, and 

 7          environmental conservation bill would harm 

 8          our city by giving private companies more 

 9          control over installation of 

10          telecommunications equipment in our city.  

11          Not only does this bill restrict the recovery 

12          of fees to far less than the city's actual 

13          costs, but it strips the city of its ability 

14          to manage the right-of-way and regulate 

15          facilities and equipment through its zoning 

16          regulations.  

17                 This bill poses a substantial threat 

18          to public safety, the integrity of our 

19          neighborhoods, and the public purse.  I am 

20          asking legislators to stand up for 

21          municipalities by opposing this measure.  

22                 Rochester would not be where it is 

23          today if it were not for the support of our 

24          state legislators, and I would like to thank 


 1          you, especially Rochester's state delegation, 

 2          for your continued investment.  I would also 

 3          like to ask for your support of provisions in 

 4          the Governor's proposed budget that stand to 

 5          benefit our city.  

 6                 Governor Cuomo's capital spending 

 7          plan, for example, includes much-needed 

 8          funding that will help us boost tourism, 

 9          drive our economy, and create jobs.  The 

10          proposed photonics attraction fund will 

11          bolster Rochester’s reputation as the 

12          photonics capital of the world.  

13                 We also have significant capital 

14          needs, including our convention center, the 

15          Blue Cross Arena, and other public 

16          infrastructure, which we will continue to 

17          work with the Governor and our state 

18          delegation to advocate for.  

19                 And lastly, the Governor's proposals 

20          to restore childcare funding, help our youth 

21          find meaningful employment, and reduce the 

22          risks of lead paint exposure, among others -- 

23          and expand broadband access -- will ensure 

24          that our youngest citizens get off to the 


 1          very best start in life.  

 2                 Thank you for your time and attention 

 3          today, and I'd be happy to take any questions 

 4          that you may have.

 5                 CHAIRWOMAN WEINSTEIN:  Thank you for 

 6          being here today.  

 7                 Assemblyman Magnarelli.

 8                 ASSEMBLYMAN MAGNARELLI:  Thank you, 

 9          Madam Chair.

10                 Mayor, thank you very much for being 

11          here today.

12                 MAYOR WARREN:  Thank you.

13                 ASSEMBLYMAN MAGNARELLI:  Always good 

14          to see you.

15                 MAYOR WARREN:  Good to see you as 

16          well.

17                 ASSEMBLYMAN MAGNARELLI:  I'm going to 

18          ask basically the same questions I asked the 

19          mayor of Albany.  What about our shared 

20          services and what we've been doing over the 

21          past year?  Have you had the opportunity to 

22          meet with Monroe County officials and all of 

23          the other municipalities in Monroe County to 

24          come up with a plan, and how did that go this 


 1          year?

 2                 MAYOR WARREN:  Yes, we met, and we 

 3          came up with a plan, and that plan was 

 4          submitted through the county.  

 5                 Rochester is very unique, because many 

 6          years ago we did a lot of the consolidations 

 7          that many other cities are starting to do 

 8          now.  So when you look at our libraries, 

 9          we've already consolidated our library 

10          infrastructure.  When you look at our 911, 

11          we've already consolidated 911.  We 

12          consolidated our sewers with the County of 

13          Monroe as well.  

14                 And so there's not much that we can do 

15          additionally than what has already been done.  

16          Social services, the Department of Health, 

17          all of that was consolidated many years ago.  

18          There's not much consolidation that we can do 

19          today that hasn't already been done as it 

20          pertains to cost savings for the city or for 

21          the county.

22                 ASSEMBLYMAN MAGNARELLI:  But you said 

23          there was a plan.  So there must have been 

24          something.


 1                 MAYOR WARREN:  Well, most of it was 

 2          with the towns which would -- you know, 

 3          benefit some of the towns.  

 4                 But as it pertains to consolidations 

 5          with the city, one of the things that we've 

 6          done with one of our local towns, which is 

 7          the Town of Brighton, is we provide them with 

 8          our firefighter services, and that has worked 

 9          pretty well.  

10                 We can probably do a little bit more 

11          of that, but when it comes down to the larger 

12          consolidations, we've already done those.  

13          And so it wouldn't necessarily benefit us any 

14          more to do consolidations.

15                 ASSEMBLYMAN MAGNARELLI:  So do you 

16          believe that this is a good idea that you 

17          continue on an annual basis, or do you feel 

18          that it's not worthwhile for Rochester?

19                 MAYOR WARREN:  I believe that we have 

20          to be at the table, being that we are the 

21          city of the county -- the center of the 

22          County of Monroe and we work with all of our 

23          other towns and municipalities.  So we 

24          definitely have to be at the table.  


 1                 But when it comes down to the larger 

 2          ability to save dollars, taxpayers' money by 

 3          consolidating, those consolidations have 

 4          already been done as it pertains between the 

 5          city and the county.  Now, there are things 

 6          that the county can do with the towns that 

 7          may -- the plan shows, go a long way.  But as 

 8          it pertains to the City of Rochester in 

 9          consolidations with the county, there's not 

10          much that we can do outside of providing some 

11          additional fire services or police services.

12                 ASSEMBLYMAN MAGNARELLI:  Okay.

13                 Are you currently within the 2 percent 

14          tax cap?

15                 MAYOR WARREN:  Yes.

16                 ASSEMBLYMAN MAGNARELLI:  Okay.  But do 

17          you feel that that's a good thing or a bad 

18          thing?

19                 MAYOR WARREN:  Well, we are sort of in 

20          a position where we have significant poverty 

21          in the City of Rochester, as you heard from 

22          the mayor of Albany -- 

23                 ASSEMBLYMAN MAGNARELLI:  Same thing.

24                 MAYOR WARREN:  And because of that, 


 1          and the fact that we have to pay 

 2          $119.1 million to our school district, 

 3          $30 million less than we receive in AIM aid, 

 4          we get ourselves in a situation where we 

 5          can't tax our way out of this.  Where 

 6          68 percent of our tax dollars are 

 7          automatically going to our school district, 

 8          we're providing for fire, police, 911, DSS 

 9          services, libraries, recreation -- it's out 

10          of the rest of those dollars that we're able 

11          to receive in grants and other things.  

12                 And so we're caught between a rock and 

13          a hard place.  We need the state to put a 

14          real formula together as it pertains to AIM 

15          aid, or to at least allow us to do -- or do 

16          what you do for other cities like Syracuse 

17          and Buffalo, which is cover 100 percent of 

18          their school aid that they provide to their 

19          school districts.

20                 ASSEMBLYMAN MAGNARELLI:  Not 

21          100 percent, I can tell you that.  Okay?

22                 MAYOR WARREN:  Well, the amount of AIM 

23          aid that they receive from the state covers 

24          the amount that they provide to their school 


 1          district, whereas Rochester, the amount of 

 2          money that we receive in our AIM aid does not 

 3          cover the amount that we give to our school 

 4          district.

 5                 ASSEMBLYMAN MAGNARELLI:  Probably 

 6          something that we should discuss later.

 7                 MAYOR WARREN:  Okay.

 8                 (Laughter.)

 9                 ASSEMBLYMAN MAGNARELLI:  Fiber optic 

10          wireless facilities.  You mentioned it in 

11          your remarks.

12                 MAYOR WARREN:  Yes.

13                 ASSEMBLYMAN MAGNARELLI:  I take it we 

14          don't have to belabor the point.  You're not 

15          for this idea.

16                 MAYOR WARREN:  No.  This would be very 

17          detrimental to our city.

18                 ASSEMBLYMAN MAGNARELLI:  I got it.  

19                 Thank you very much.

20                 MAYOR WARREN:  Thank you.

21                 CHAIRWOMAN WEINSTEIN:  Senate?

22                 SENATOR KRUEGER:  Senator Diane 

23          Savino.

24                 SENATOR SAVINO:  Thank you, Senator 


 1          Krueger.  

 2                 Good afternoon, Mayor. 

 3                 I want to follow up on that, because I 

 4          was looking at the Article VII, Part F with 

 5          respect to the small cell fee.  So can you -- 

 6          how would it be detrimental to Rochester?  

 7          Because if you read the Governor's proposal, 

 8          it sounds pretty good.  You establish a 

 9          statewide model where you don't have these 

10          wide differences in the costs -- as like in 

11          Buffalo, they instituted a $2,000-per-line 

12          fee as opposed to what -- I think the 

13          Governor's proposing $200.  

14                 So it's a little confusing, and I 

15          think we all agree that we want to expand 

16          mobile broadband across the state as much as 

17          we can so that we can have 5G everywhere.  

18          Why would it be harmful to the City of 

19          Rochester?

20                 MAYOR WARREN:  For a couple of 

21          reasons.  The City of Rochester a long time 

22          ago went into an agreement with Fibertech, 

23          and so a lot of the fiber has been laid in 

24          our community that we utilize through that 


 1          agreement.  Basically this proposal will be 

 2          detrimental to that agreement and supercede 

 3          that agreement that we currently already 

 4          have.

 5                 The second thing that is a problem is 

 6          that we will lose control over public 

 7          infrastructure.  The light poles and other -- 

 8          the other amenities that these particular 

 9          telecommunications companies would use 

10          utilize what the public infrastructure -- we 

11          would not be able to charge for them.  We 

12          would not be able to make sure that when they 

13          go in and they tear up our roads, that they 

14          replace them with actual -- the right 

15          materials.  Or when they go into our 

16          sidewalks and tear them up, that they replace 

17          them to the standard that is above quality 

18          for our citizens.  But also the products that 

19          they actually put on a light post, that they 

20          be in compliance with our zoning rules and 

21          regulations.  

22                 We've had a number of -- in the last 

23          couple of years, a number of 

24          telecommunications companies that have come 


 1          in that have wanted to put up big boxes on 

 2          these particular light poles.  Neighbors have 

 3          been very, very upset about it.  And through 

 4          our zoning policies, we've been able to 

 5          regulate that.  

 6                 And also we've been able to charge a 

 7          fee, and so it's a revenue stream for us that 

 8          we would not be able to collect in -- if this 

 9          legislation were to pass.

10                 SENATOR SAVINO:  Thank you for that 

11          explanation.  

12                 Is there any concern on your part 

13          though that -- it seems the feds are prepared 

14          to come in and act to rein in fee structures 

15          to prevent these wide swings in fees by 

16          various municipalities.  Are you concerned at 

17          all that they may come in and supersede what 

18          the state's trying to do anyway?

19                 MAYOR WARREN:  Well, I think that it's 

20          always a concern.  But to take away local 

21          control is a problem.  At the end of the day, 

22          the city is responsible for the 

23          infrastructure.  And when you have 

24          individuals that can come in and cut a line 


 1          into your road that you just repaired without 

 2          any concern or regard for your rules and 

 3          regulations, that's a problem.  When they can 

 4          tear up your sidewalks and not put in quality 

 5          new sidewalks, then that's a problem.  

 6                 As you know with -- as we've also been 

 7          able to see with climate change, in the 

 8          fluctuation in temperature, what we replace 

 9          these -- the infrastructure that they tear 

10          up, it's very important, and we need to be 

11          able to charge those telecommunication 

12          companies for what they're doing in the 

13          public right-of-way.  

14                 That right-of-way belongs to the 

15          public, and we have a responsibility to make 

16          sure it's safe and to make sure that they're 

17          replacing the product with good quality 

18          infrastructure that can last us into the 

19          future.

20                 SENATOR SAVINO:  Have you shared your 

21          concerns with the Governor's office?  And are 

22          the mayors, are they all -- and I know you 

23          all talk to each other, you know, when we're 

24          not looking.  Is this a concern that exists 


 1          across most of the municipalities?  

 2                 It was interesting, the mayor of the 

 3          City of New York didn't mention it, but it's 

 4          possible they never got around to it.

 5                 MAYOR WARREN:  Yes, this is something 

 6          that NYCOM is going to talk about as well.  

 7          We have talked to the Governor's office about 

 8          this, and we will continue to talk to the 

 9          Governor's office and to everyone that will 

10          listen, that this will be -- as currently 

11          written will be detrimental to cities and 

12          their infrastructure and their ability to, of 

13          course, get revenue from these 

14          telecommunications departments or businesses 

15          that are doing business in our community.

16                 SENATOR SAVINO:  Thank you.

17                 SENATOR KRUEGER:  Thank you.

18                 Assembly?  Any?

19                 Well, then, thank you so much for 

20          coming to testify.

21                 MAYOR WARREN:  Thank you.

22                 SENATOR KRUEGER:  And our next speaker 

23          up is the Honorable Mike Spano, mayor of the 

24          City of Yonkers.


 1                 Good afternoon, and welcome. 

 2                 MAYOR SPANO:  Good afternoon.

 3                 Good afternoon, Senator, Chairwoman 

 4          Young -- I know that I saw Chairwoman 

 5          Weinstein a moment ago -- Assemblywoman 

 6          Shelley Mayer, certainly my good friends and 

 7          colleagues, the members of the Yonkers 

 8          delegation that are here.  Now I'd say thank 

 9          you for welcoming me here.

10                 Over the last six years, Yonkers has 

11          demonstrated that we can meet our challenges  

12          head on.  I believe Governor Andrew Cuomo and 

13          the State Legislature are very familiar with  

14          the gritty and can-do attitude that is known 

15          of Yonkers residents.  We have challenges, we 

16          know that.  We do our best to take them on 

17          head on, and we usually come out ahead of 

18          them.

19                 We are tough because, let's face it, 

20          we really don't have any other options.  I 

21          applaud Governor Cuomo and his recent budget 

22          proposal that contains creative and 

23          progressive initiatives to combat potential 

24          devastating effects to the New York taxpayers 


 1          due to the recent federal tax plan.  And 

 2          working together with all of you in the 

 3          Legislature, I am confident New York will 

 4          combat the assault on our hardworking men and 

 5          women in our state.

 6                 Despite the obstacles that have been 

 7          placed in front of us, Yonkers will continue 

 8          to succeed.  For example, in 2012 when I 

 9          first sat before you as a new mayor of our 

10          city, Yonkers' public schools graduation rate 

11          was at 72 percent.  Just last week, it was  

12          reported that Yonkers public schools are now 

13          graduating -- I would say a dramatic 

14          improvement by double digits, over -- it was 

15          a 14 percent increase, still the highest 

16          among the Big 5 city school districts, and 

17          that is remarkable.  And we know that our 

18          improved numbers can be attributed to the 

19          support of our Governor and certainly of all 

20          of you, and we thank you.

21                 This year in his Executive Budget 

22          Governor Cuomo proposed an increase in 

23          education Foundation Aid, especially to those 

24          high-need school districts, and it's a great  


 1          start and we are thankful for that.  And 

 2          while we take pride in what we've 

 3          accomplished, we can't ignore staggering 

 4          statistics that still confront us.   

 5                 In 2010, the Yonkers public schools 

 6          had to make devastating cuts to the district 

 7          due to the lack of funding, and over 

 8          400 teachers were given pink slips.  The 

 9          district has yet to recover from the blow and 

10          struggles to properly educate and serve the 

11          students of Yonkers to the best of its 

12          abilities.

13                 Over the years, you've heard me speak 

14          of the startling deficiencies that Yonkers 

15          schools face due to necessary cuts in 

16          services.  If you don't mind, I'll run 

17          through this all over again:  12 percent of 

18          our students are learning English for the 

19          first time, and 17 percent of our students 

20          have disabilities.  These are high numbers, 

21          and we need the staff and the services to 

22          meet their needs.

23                 For starters, we need psychiatrists, 

24          social workers, and school counselors in 


 1          every school.  We need art, music, and 

 2          technology to be part of every student’s 

 3          educational experience.  We need modified and 

 4          junior varsity sports offered to all Yonkers 

 5          students.  We need prekindergarten supported 

 6          every year by state mandate, not just offered  

 7          when grant funding is available. 

 8                 We are deficient with the current 

 9          resources provided to us, and yet our 

10          district’s enrollment continues to grow -- 

11          and mind you, the only one of the Big 5 

12          outside of New York City that is growing.  In 

13          fact, in the last year, Yonkers public 

14          schools have absorbed the needs of 

15          122 additional students who were displaced 

16          from other states or their native country due 

17          to earthquakes, hurricanes, or other 

18          life-threatening or life-altering events.  

19          These students come traumatized by their 

20          experience, and many have disabilities.  And 

21          most of the students from Puerto Rico and 

22          Mexico are English language learners. 

23                 Our students, staff -- the 

24          administration and students feel the stresses 


 1          in our district.  My hope today is that 

 2          you'll continue to understand them as well. 

 3                 Despite the lack of resources, our 

 4          high school graduation rate is improving, but 

 5          it pales in comparison to our neighbors that 

 6          are close by to us, neighbors like Scarsdale 

 7          or Bronxville or Eastchester, who are all 

 8          graduating their students in the 97 to 

 9          99 percentile.

10                 There are two educational systems in 

11          our state, one for the haves and one for the  

12          have-nots.  Why should a student's zip code 

13          or what side of the river they live on 

14          determine whether or not they have access to 

15          a library, to enough guidance counselors, to 

16          adequate special education to overcome a 

17          learning disability, or to sports and 

18          extracurricular activities?  It is time that 

19          we recognize our constitutional duty to 

20          provide an adequate education for every child 

21          in the state, and  that means ending the 

22          divide between wealthy and non-wealthy 

23          districts.  

24                 A major issue for Yonkers is that we 


 1          do not receive the full amount of Foundation 

 2          Aid based on the 2007 formula.  Foundation 

 3          Aid payable, which is what a district 

 4          actually receives, is less than the 

 5          Foundation Aid formula prescribed by the 

 6          legislation.  Legislation has been introduced 

 7          each year to reduce the spread between the 

 8          formula and actual payable.  But for Yonkers, 

 9          whose enrollment increases every year, these 

10          annual fixes have not kept pace with the 

11          shortfall, while other Big 4 cities outside 

12          of New York City with stable or declining 

13          enrollment do not face this problem.  

14                 Let me just illustrate this to you.  

15          In 2015, the difference between the formula 

16          and what Yonkers will actually get was 

17          $37 million.  This year, that has grown to 

18          $43 million.  The intention of the 

19          legislation is to reduce the gap, but the 

20          exact opposite is happening.  In fact, had 

21          the shortfall been reduced by the same 

22          percentage in Yonkers as it has in other 

23          districts since 2015, our schools would be 

24          receiving $14 million more just in this 


 1          budget. 

 2                 So this year I have -- as I have done 

 3          in years past, I am asking for the 

 4          Legislature and the Governor to consider the 

 5          extraordinary needs of Yonkers' public 

 6          schools and provide our district with the 

 7          additional resources for our kids.

 8                 Also, the other thing that we've 

 9          talked about over the last couple of years is 

10          our need to revisit the environment in which 

11          our students learn.  I've come here now three 

12          years in a row to speak to you about the 

13          physical conditions of our schools.  I've 

14          outlined for you the deplorable environments 

15          in which many of our students are required to 

16          learn in.  I told you that our schools are 

17          4,500 seats over capacity for a district of 

18          27,000 students, that nine of our schools are 

19          over 100 years old, that our children are 

20          forced to learn in converted basements and 

21          cafeterias, that many of our libraries no 

22          longer function as they were intended to 

23          because they are being used as classroom 

24          space due to overcrowding.  


 1                 Simply put, there continues to be a 

 2          capacity and infrastructure crisis in 

 3          Yonkers.  And after many meetings with you, 

 4          your staff, the State Board of Education, 

 5          members of the administration, it's clear 

 6          that you realize the crisis.  And last year 

 7          you passed the double MCA bill for the new 

 8          schools only in last year's legislative 

 9          session, along with the Yonkers Joint Schools 

10          Construction Bill that you passed a year 

11          before, and I appreciate it.  But I have to 

12          say it's still not enough. 

13                 The double MCA will only cover part of 

14          the construction of the three new schools 

15          we've outlined, and Yonkers taxpayers' share 

16          remains at $153 million.  On top of that, no 

17          law even comes close to addressing the other 

18          38 schools that need to be rebuilt or 

19          addresses the 15 percent overcapacity of our 

20          schools and the deplorable conditions in 

21          which our children have to learn.  The bottom 

22          line is that even with the new schools 

23          legislation, Yonkers alone cannot afford to 

24          rebuild these schools.  


 1                 The New York State Legislature did the 

 2          right thing when they decided to start 

 3          rebuilding the schools of Buffalo, Rochester 

 4          and Syracuse, and we applaud that.  We think 

 5          that's a good thing.  They had desperate 

 6          needs, and the state rightfully supported 

 7          those needs.  I know I may sound redundant, 

 8          but it's Yonkers' turn.  

 9                 Yonkers receives just $12.3 million in 

10          school building aid.  That comes out to about 

11          $462 per pupil, while our peer cities are 

12          receiving anywhere between $900 to $3,000 per 

13          student, depending on the district.  

14          Meanwhile, Yonkers is the only district that 

15          has seen increased enrollment, while other 

16          big cities have remained flat or are 

17          decreasing.  Yonkers clearly is put at a 

18          disadvantage. 

19                 It’s also important to note that 

20          Yonkers is at 92 percent of its 

21          constitutional taxing authority, which means 

22          that our taxpayers don't have the ability to 

23          cover the debt to borrow for this type of 

24          reconstruction. 


 1                 While authorizing a School 

 2          Construction Board and the double MCA for 

 3          three new schools was very important in 

 4          assisting us in rebuilding our schools, it is 

 5          still completely inadequate considering the 

 6          overwhelming needs and the costs that are 

 7          required.  I will be requesting an increase 

 8          in our aid ratio, from 70 to 98 percent.  

 9          This 98 percent ratio is the same ratio that 

10          has been approved to our peer cities to help 

11          upgrade their schools, and we applaud you for 

12          doing this.  And I'm just asking that you 

13          consider this for Yonkers students as well.  

14                 We've touched upon the needs of our 

15          schools, but we also must not neglect the 

16          costs of running the largest city in the 

17          Hudson Valley.  Despite Yonkers' growing 

18          economy and strong revenues, our budget grows 

19          exponentially each year to pay for union 

20          contracts, pensions and healthcare costs.  

21          Yonkers' municipal budget in the fiscal year 

22          2018-2019 will grow by $19 million.  That 

23          growth does not consider any additional 

24          personnel, any additional investments, or 


 1          addressing our aging infrastructure or even 

 2          any of our capital needs.  

 3                 Additionally, workers' compensation, 

 4          employee and uniformed retirements are all up 

 5          100 percent in the last 10 years.  

 6          Seventy-five percent of our budget pays for 

 7          our workforce.  We are happy to provide for 

 8          them, but we can't afford these costs and at 

 9          the same time stay under the tax cap.  Our 

10          only option will be to cut services, which 

11          will have a negative impact on the quality of 

12          life of our residents. 

13                 How do we address this?  Well, it 

14          starts with Aid to Municipalities.  Over the 

15          years, municipalities have taken a hit when 

16          it comes to AIM funding.  In the proposed 

17          2019 Executive Budget, Yonkers is expected to 

18          receive $108.2 million in municipal aid -– 

19          the same amount received for the last eight 

20          years.  

21                 Plus we must remember that the Yonkers 

22          property taxpayers pay more in its 

23          maintenance of effort for their local school 

24          district as compared to other big cities.  I 


 1          hate to pit us against other cities, I really 

 2          don't like to do that, but I just think that 

 3          just so you understand the numbers -- you 

 4          know, because you look and see Rochester is 

 5          very similar to Yonkers in terms of size and 

 6          enrollment.  

 7                 So if you took -- just so you know, 

 8          Yonkers provides $246 million to its school 

 9          district, that's our maintenance of effort.  

10          Our three sister cities combined -- Buffalo, 

11          Rochester, Syracuse combined -- contribute 

12          $255 million to their respective districts.  

13          So imagine, Yonkers taxpayers nearly 

14          contribute as much to the schools as three of 

15          New York's big cities combined.  

16                 On top of Yonkers contributing more to 

17          its schools, it is receiving less from 

18          New York to help fund those schools as 

19          compared to other cities.  AIM, formerly 

20          known as revenue sharing, was created by 

21          New York State's Legislature to recognize 

22          that the state has a partnership with its big 

23          cities to address the unique needs of their 

24          urban populations. 


 1                 But if you look at just the last five 

 2          years, Yonkers taxpayers have sent New York 

 3          State an additional $267 million via personal 

 4          income tax or sales tax.  In fact, today 

 5          Yonkers sends close to 25 percent more to the 

 6          state than it did five years ago. And during 

 7          that time, AIM has remained flat.  

 8                 And if you were to provide us just the 

 9          2 percent growth that you provide the state 

10          budget, we should have received another 

11          $31 million in cumulative aid over the last 

12          five years.

13                 So over the last six years of my 

14          administration, we have been frugal with our 

15          spending.  We've instituted hiring freezes, 

16          we've increased revenues, we've merged 

17          departments -- five different departments, 

18          with the Board of Education, with your 

19          help -- and we are narrowly approaching our 

20          constitutional taxing limit.  And I think 

21          it's fair to say our taxpayers are at their 

22          limits as well.  

23                 Ultimately, we are doing more with 

24          less.  I believe this year will be my most 


 1          challenging budget I've ever had as mayor of 

 2          Yonkers.  In the face of flat AIM aid and the 

 3          rising cost that we are seeing, we really are 

 4          without options.  So now it's time to 

 5          increase AIM funding and to revive the 

 6          partnership between the state and the cities. 

 7                 You know, Yonkers has come a long way 

 8          in the last six years.  Yonkers is a city on 

 9          the move.  We are a city that people move to 

10          rather than move from, with hundreds upon 

11          hundreds of new homes under construction.  We 

12          are a city that is gaining jobs rather than 

13          losing them, as nearly $2 billion in private 

14          investment has resulted in hundreds of new 

15          permanent jobs.  

16                 With the help of our great Governor, 

17          with the help of all of you in the 

18          Legislature, we've improved the fiscal 

19          outlook of our city, and today Yonkers' bond 

20          ratings are the highest it's been in 

21          generations.  Graduation rates are up, crime 

22          is down, and the people are starting to 

23          change the way they view of our city.  

24                 I look forward to continuing to work 


 1          with you and the Governor as we try and shape 

 2          a budget that we hope will help address some 

 3          of the needs of ours and many of the other 

 4          big cities in New York. 

 5                 Thank you.

 6                 SENATOR KRUEGER:  Thank you.

 7                 Assembly first.  Assemblymember 

 8          Shelley Mayer.  

 9                 ASSEMBLYWOMAN MAYER:  Thank you, 

10          Mr. Mayor, and thank you for being here, of 

11          course.  And congratulations on the 

12          significant improvement in graduation rates.  

13          And overall in our schools, it's really a 

14          great story.

15                 I know Dr. Quezada was here last week, 

16          and I recognized his -- it's slightly 

17          different.  But with respect to school aid, 

18          do you know if there was a status quo budget 

19          on the school side given the Governor's 

20          anticipated -- what the Governor has in his 

21          school aid run as proposed?  What would be 

22          the shortfall, from your perspective, from a 

23          status quo budget on the school side for what 

24          you need to continue next year?


 1                 MAYOR SPANO:  We have John Liszewski, 

 2          who's the finance commissioner.

 3                 ASSEMBLYWOMAN MAYER:  Yes, thank you, 

 4          John.

 5                 FINANCE CMR. LISZEWSKI:  Good 

 6          afternoon, Assemblywoman.

 7                 MAYOR SPANO:  Hi.

 8                 FINANCE CMR. LISZEWSKI:  We're looking 

 9          now at about a $40 million shortfall in our 

10          status quo budget on the Board of Education 

11          side.

12                 ASSEMBLYWOMAN MAYER:  Okay.  I would 

13          ask that -- I know Dr. Quezada came with the 

14          beginnings of testimony, and I know the PTA 

15          is coming next week.  I think it's important 

16          that we get the backup documents so we can 

17          make the most compelling case for, as you've 

18          argued, why we need more than the Governor 

19          proposed, which of course we will push for.  

20          But we need the documentation to show that 

21          this shortfall is so significant.

22                 FINANCE CMR. LISZEWSKI:  Yeah.

23                 ASSEMBLYWOMAN MAYER:  So that would be 

24          helpful.


 1                 FINANCE CMR. LISZEWSKI:  We will 

 2          provide that for you.

 3                 ASSEMBLYWOMAN MAYER:  Okay.

 4                 Secondly, on the issue of full-day 

 5          pre-K, which you highlight in your 

 6          testimony -- which I think you'll find strong 

 7          support here that there should be funding for 

 8          full-day pre-K throughout the state, and that 

 9          Yonkers should not be dependent on federal 

10          grants one year and state grants another 

11          year.  Would you know the status of our 

12          full-day pre-K funding for next year if we do 

13          not get additional state aid?

14                 FINANCE CMR. LISZEWSKI:  We're in 

15          jeopardy, Assemblywoman, for about 

16          $2.5 million.

17                 ASSEMBLYWOMAN MAYER:  That would be to 

18          continue our existing full-day pre-K, which, 

19          I believe, does not serve every child who 

20          seeks it.  We don't have the capacity to 

21          serve every child, as I understand it.

22                 FINANCE CMR. LISZEWSKI:  That's 

23          correct.

24                 ASSEMBLYWOMAN MAYER:  So 2.5 million.  


 1          Okay.

 2                 With respect to the rebuilding of 

 3          Yonkers schools -- and credit to you and my 

 4          colleagues and the Governor's office for 

 5          working with us on getting part one and two 

 6          done, which took a lot of work, as you 

 7          know -- I just wondered, what is your 

 8          intention with respect to the Joint School 

 9          Construction Board and the beginning of their 

10          work?  Because it will -- and I would 

11          slightly disagree, I think it would allow 

12          them to at least move forward on some of the 

13          renovations to existing schools as well as 

14          rebuilding the three new schools that are 

15          anticipated.

16                 MAYOR SPANO:  Assemblywoman, I 

17          actually think we do agree on this one.  I 

18          think that we do need to move forward with 

19          it.  I didn't move forward with it initially 

20          because I wanted to make sure the Governor 

21          was going to sign the double MCA bill.

22                 ASSEMBLYWOMAN MAYER:  Right.

23                 MAYOR SPANO:  So that held us up a 

24          little bit.  But I do agree that we have to 


 1          move forward with the building of those three 

 2          schools, because it's critically important to 

 3          deal with the infrastructure needs.

 4                 At the same time, we're going to have 

 5          to operate on a parallel course where we're 

 6          going to look to see if we can gain either 

 7          some federal grants or state grants, working 

 8          with the Governor's office to try and find 

 9          some additional shots in the arm -- maybe 

10          even if it's a block grant, that will help 

11          offset the local cost, the local cost of -- 

12          you know, that would be somewhere around 

13          $154 million.

14                 ASSEMBLYWOMAN MAYER:  Yeah, for the 

15          city's share.

16                 MAYOR SPANO:  Yes.  But every time we 

17          raise -- every time we borrow $30 million, 

18          it's 1 percent of our property tax levy.  So 

19          as you can imagine, if we're at 92 percent of 

20          our constitutional taxing limit and I haven't 

21          even borrowed for -- to build a firehouse, to 

22          purchase police cars or fire trucks or 

23          anything else that we have in our needs, that 

24          needs to be met -- we're rubbing up awful 


 1          close to that constitutional taxing limit.  

 2          And that's a scary place to be, so that 

 3          affects everything.

 4                 So yeah, we're going to -- but we are 

 5          going to operate, we're going to fill that 

 6          board very, very shortly.  That board has a 

 7          tremendous -- as you know, it has a 

 8          tremendous amount of power.

 9                 ASSEMBLYWOMAN MAYER:  Right.

10                 MAYOR SPANO:  And so we didn't want to 

11          put it in place without really having 

12          knowledge that we can move forward with a 

13          plan.

14                 Phase one, we can move forward with 

15          it, but we're still going to need some 

16          additional help.  We're going to operate as 

17          if we have it and then request it as we move 

18          forward.

19                 ASSEMBLYWOMAN MAYER:  I understand 

20          that.  We'll have some offline 

21          conversations --

22                 MAYOR SPANO:  Yeah.

23                 ASSEMBLYWOMAN MAYER:  -- I'm sure as 

24          we move ahead.


 1                 Lastly, on your point on the municipal 

 2          budget, up by 19 percent -- I know I'm 

 3          running out of time, but just it would be 

 4          helpful if you could provide some of the 

 5          baseline numbers that drive up the increase 

 6          by that much without the additions, and I 

 7          appreciate that.  But it wouldbe useful for 

 8          us to see what are the drivers that do that, 

 9          as you know --

10                 MAYOR SPANO:  Absolutely.

11                 ASSEMBLYWOMAN MAYER:  Certainly in the 

12          Assembly we have supported increases in AIM, 

13          and I'm sure we will continue to do so in our 

14          one-house.  We're going to need the Governor 

15          to come along.

16                 MAYOR SPANO:  If I might -- indulgence 

17          for your time -- when we came on board, we 

18          had a lot of contracts for a couple years 

19          out, three, four years out.  And eventually 

20          it became they were, you know, seven years 

21          out.  

22                 In an effort to keep our contracts as 

23          affordable as possible, we asked for some 

24          concessions from the unions.  They gave us 


 1          some, they did.  I mean, they gave us greater 

 2          payments into their health insurance, at 

 3          least for newbies.  But the one thing they 

 4          gave us which was really important was zeroes 

 5          up front.  Those three or four zeroes up 

 6          front saved the local taxpayer about 

 7          $150 million.  And so that's $150 million we 

 8          never could have afforded.  And so -- but in 

 9          getting those zeroes on the back end -- or on 

10          the front end -- on the back end, you know, 

11          we're sitting at 4 and 5 percent.

12                 On budgets that are 10-year budgets, 

13          10-year contracts, about 2 percent, right?  

14          So now we're at this point, what we have to 

15          pay moving forward.  That's why we're seeing 

16          this increase.  And I don't really have the 

17          ability to go back to the taxpayers, because 

18          we frankly -- we've raised about every tax we 

19          can raise.  And there's nothing more I can 

20          really get from the taxpayer except to come 

21          back with a budget that's going to have cuts.

22                 The cuts will not be to -- at least I 

23          don't believe that we'll see significant cuts 

24          in education, because we'll continue our 


 1          maintenance of effort, as we should.  But on 

 2          the municipal side, you know, we'll have to 

 3          look at every avenue that we do, whether it 

 4          be police, fire, sanitation, parks and what 

 5          have you, trying to make ends meet.

 6                 I'm not asking -- I know we'll have to 

 7          make cuts no matter what.  But whatever 

 8          dollars we can get from the Legislature will 

 9          really help us mitigate those cuts so that 

10          they're not as devastating as we -- you know, 

11          we don't want them obviously to really affect 

12          the quality of life of the people that are in 

13          our city.

14                 ASSEMBLYWOMAN MAYER:  Thank you.  

15          Thank you very much, Mr. Mayor.  Thank you 

16          all.

17                 SENATOR YOUNG:  Thank you.

18                 Our next speaker is Senator 

19          Stewart-Cousins.

20                 SENATOR STEWART-COUSINS:  Good 

21          afternoon, Mayor.

22                 MAYOR SPANO:  Hi, Senator.

23                 SENATOR STEWART-COUSINS:  It's good to 

24          see you here.


 1                 I guess just to follow up again, 

 2          congratulations on the good work and the 

 3          progress that is happening within the school 

 4          district.  Superintendent Quezada was here 

 5          last week and certainly touted some of the 

 6          numbers, et cetera.  

 7                 Assemblymember Mayer asked a couple of 

 8          questions that I wanted to ask, but I did 

 9          want to reiterate to you how supportive 

10          certainly the Democratic Conference is as it 

11          relates to AIM funding, because we had called 

12          for doubling AIM funding in the last budget 

13          because we know how important it is for 

14          municipalities to receive additional funding, 

15          especially as we are trying to make sure that 

16          the tax cap is adhered to.  Additional 

17          resources would be helpful, so we will 

18          continue to push in that regard.

19                 I know that in the Governor's last 

20          budget there was a countywide shared services 

21          panel, and I know that you participated in 

22          that.  Was there any benefit to that?

23                 MAYOR SPANO:  You know, I'm glad you 

24          brought that up.  In the shared services at 


 1          least proposal -- and at least -- it's good.  

 2          It's a solid effort, it's something that we 

 3          should be doing.

 4                 The problem we have is that when 

 5          you're a big city like Yonkers -- like for 

 6          instance, the e911 system and the dispatch 

 7          system, we would work this out with the 

 8          county tomorrow if we could.  But we have 

 9          10 employees.  I don't think that they have 

10          anywhere near that.  You know, so it's not 

11          really -- so it's a merger.  It's us asking 

12          Westchester County to take on a project 

13          that's kind of bigger than what they 

14          currently do, and then the infrastructure 

15          that goes with it.  

16                 The infrastructure that we have 

17          invested in over the last couple of years, 

18          just in the time that I've been here, to keep 

19          the dispatch system and our 911 system up and 

20          operational -- and frankly, it's gone down a 

21          few times -- is in the millions.  

22                 I know that Westchester County, for 

23          instance, gets the e911 money.  We don't get 

24          any of that.  But it goes to Westchester, 


 1          they help offset their budgets, and we are 

 2          left with the cost of running a huge system.  

 3                 So we at the very tail end of the 

 4          Astorino administration talked with them 

 5          about a merger.  They seemed like they want 

 6          to talk about it.  I'm expecting that -- I 

 7          have a meeting with the new administration 

 8          coming up in the next couple of days, so 

 9          hopefully we'll revive that and start to talk 

10          about that again.

11                 But there are places that we can merge 

12          with the county.

13                 SENATOR STEWART-COUSINS:  Right.

14                 MAYOR SPANO:  We can merge with the 

15          county with human resources.  We can merge -- 

16          you know, there's big-ticket items that 

17          nobody wants to talk about.  You know, nobody 

18          wants to talk about merging their fire 

19          department with another fire department.  

20          Nobody wants to talk about merging their 

21          police department, everybody loves their 

22          police department.  Nobody wants to merge 

23          their school district.

24                 I think if we get -- I think the path 


 1          is right.  If we get to the low-hanging 

 2          fruit, we get to the places that maybe 

 3          aren't -- don't scream at you as much, even 

 4          in terms of DPW pickups, then I think that we 

 5          can start a process that will have a 

 6          long-term benefit for us.

 7                 The county proposal was a great start.  

 8          I think that there's a lot of work to do 

 9          there, I think that there's still yet a lot 

10          of communication that needs to happen, and I 

11          think a lot of -- frankly, I think a lot of 

12          people are still a little nervous about it 

13          because they don't want to give up their own 

14          identity.  

15                 But it's the only way we're going to 

16          be able to solve budget problems in our 

17          future, because Yonkers just cannot afford to 

18          sustain what it has.  And unless I come up 

19          with either additional revenues or you give 

20          us additional revenues, if I don't get one of 

21          those two, then I have to make cuts.  And so 

22          I think this is a smart direction to head in.

23                 SENATOR STEWART-COUSINS:  Great.  

24                 Just going back to the deficit and the 


 1          Board of Education.  So I think 

 2          Superintendent Quezada was saying it was 

 3          about 46 or 48 million, you're saying around 

 4          40.  So obviously it's important to, you 

 5          know, figure out what it is and the --

 6                 MAYOR SPANO:  Right.  Well, 

 7          considering we have one finance department 

 8          now.

 9                 SENATOR STEWART-COUSINS:  Yeah.  There 

10          are already different numbers, and the thing 

11          that -- and again, I'm not suggesting that it 

12          isn't still a huge issue, but I think that a 

13          lot of what Superintendent Quezada was 

14          speaking about related to the formula as it 

15          would have been before it was negated back in 

16          2009.  So I think our school district, as so 

17          many school districts, had the formula 

18          continued the way it was put in place in 

19          2007, there would have been this additional 

20          $40 million.

21                 MAYOR SPANO:  $43 million.

22                 SENATOR STEWART-COUSINS:  So I'm 

23          thinking that's probably part of the 

24          conversation.  


 1                 Again, we are certainly and always 

 2          continue to be supportive of, you know, what 

 3          we're doing in our school districts and 

 4          school districts all over that are really 

 5          trying to meet the needs and trying to, as 

 6          Yonkers is doing -- you know, has an 

 7          extremely diverse population -- and trying to 

 8          highlight the opportunities that we have to 

 9          make sure our kids get the education they 

10          need if only the resources were there.

11                 So, you know, again, if we get the 

12          documents, if we agree on a number, and if we 

13          all know that we will continue to fight, 

14          hopefully we will be able to bridge those 

15          gaps.

16                 MAYOR SPANO:  I know JJ's our acting 

17          budget director, he said that it's 

18          $46 million.

19                 SENATOR STEWART-COUSINS:  Forty-six is 

20          the -- yeah, that was the number.  

21                 Okay.  So we'll get the documents for 

22          that, then.  Okay, thank you.

23                 MAYOR SPANO:  Thank you, Senator.

24                 CHAIRWOMAN WEINSTEIN:  Assemblyman 


 1          Benedetto.

 2                 ASSEMBLYMAN BENEDETTO:  Good 

 3          afternoon, Mayor.  Thanks for coming.  Always 

 4          good to see you.

 5                 MAYOR SPANO:  Assemblyman.

 6                 ASSEMBLYMAN BENEDETTO:  I spent a 

 7          little bit of time with Mayor DeBlasio 

 8          talking about design-build, saving the city 

 9          taxpayers a lot of money by employing that 

10          process.

11                 The City of Yonkers, number one, do 

12          you have the authority to enter into 

13          contracts to do a design-build?

14                 FINANCE CMR. LISZEWSKI:  We do have 

15          the authority to do that, but because of the 

16          Fiscal Agent Act of 1976, Yonkers is unique 

17          in the way that it does have to do their 

18          construction.  We have to have the money in 

19          place before we could start the design-build 

20          phase of construction.  

21                 So it's a little bit different, and it 

22          goes back to that Fiscal Agent Act of '76.

23                 ASSEMBLYMAN BENEDETTO:  Do you ever 

24          have enough money to do design-build, then?


 1                 FINANCE CMR. LISZEWSKI:  We never have 

 2          enough money, Assemblyman.

 3                 ASSEMBLYMAN BENEDETTO:  Okay.  So you 

 4          don't have the ability to do it.

 5                 Okay, that's interesting.  Because 

 6          gee, maybe some adjustment should be made in 

 7          that to give you that, since it's such a 

 8          wonderful money-saving device.

 9                 MAYOR SPANO:  Yeah, one of the 

10          wonderful I guess legacies of me having a 

11          control board back in the '70s was that we 

12          were held to general accounting principles.  

13          New York itself is not held to general 

14          accounting principles, but we are, and it's 

15          in our bond covenants.  

16                 And that has -- it's good, I guess, 

17          for the taxpayers; of course it holds us to a 

18          higher standard.  But we don't have the same 

19          flexibility as most other communities do.  

20          And that is -- it just makes our jobs that 

21          much more difficult.

22                 ASSEMBLYMAN BENEDETTO:  I understand.

23                 MAYOR SPANO:  Okay.

24                 ASSEMBLYMAN BENEDETTO:  Thank you.


 1                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

 2          Magnarelli.

 3                 ASSEMBLYMAN MAGNARELLI:  Always good 

 4          to see you, Mayor.

 5                 MAYOR SPANO:  Always good to see you, 

 6          Assemblyman.

 7                 ASSEMBLYMAN MAGNARELLI:  Again, I'm 

 8          just asking the same types of questions I've 

 9          asked earlier today.

10                 You touched on shared services and the 

11          ability of Yonkers and Westchester to come 

12          together, and it sounds to me as if there's 

13          possibilities but they're in the future.  And 

14          you don't -- so how do you feel about the 

15          Governor's proposal?  I mean, he's put it in 

16          the budget last year, called everybody 

17          together -- did you do that?  Did you all --

18                 MAYOR SPANO:  We did.  And I think 

19          that's a good idea.  I think that was one of 

20          probably one of the best things anybody's 

21          ever done, was to force everyone together.  

22                 You know, when you're talking about a 

23          county like Westchester, where you have 

24          very -- you have some very affluent, 


 1          influential communities that have very 

 2          distinct personalities, and -- like distinct 

 3          and very -- I'm trying to think of the right 

 4          word.  But they like their identity.  And, 

 5          you know, when you start to merge certain 

 6          departments, identity starts to go away, 

 7          right?

 8                 ASSEMBLYMAN MAGNARELLI:  You know, if 

 9          you are similar in a lot of places.

10                 MAYOR SPANO:  Yeah.  Yeah, right.  I 

11          would imagine you have that same thing.

12                 But like I said before, it's not 

13          impossible.  Listen, we did it.  We were kind 

14          of forced to do it with the Board of 

15          Education.  We had a lot of people, even in 

16          our own city, who said no, no, no, you 

17          shouldn't merge the finance departments, you 

18          shouldn't merge human resources, you 

19          shouldn't merge legal, you shouldn't merge 

20          some of the other areas.  But we did it.  And 

21          it saved us $10 million annually.  And it was 

22          a good thing for the city moving forward.

23                 ASSEMBLYMAN MAGNARELLI:  So you think 

24          it's a good idea to have in the budget, 


 1          continue to do that on an annual basis?

 2                 MAYOR SPANO:  Absolutely.  It's a 

 3          discussion that must continue.  It takes a 

 4          lot of guts to have this discussion, but it's 

 5          something that has to continue.  We can be 

 6          very helpful because we're the big dog in the 

 7          county, so we could be very helpful in this 

 8          matter.  

 9                 I didn't feel that we had the same 

10          type of cooperation with the previous 

11          administration that we'll have with this one, 

12          but that remains to be seen.

13                 ASSEMBLYMAN MAGNARELLI:  There's this 

14          proposal in the budget about fiber optic 

15          wireless facilities and turning that over to 

16          the state for basically licensing purposes, 

17          and I just want your take on that.

18                 MAYOR SPANO:  Yeah, I don't really 

19          have a take right now.  I'm still trying to 

20          figure out what it all means to us.  I know 

21          that we have -- I know that we get a lot of 

22          money from this area, but what's it really 

23          mean to us?  I'm really not sure yet.  But I 

24          will get back to you at a time with just -- 


 1          with our opinion --

 2                 ASSEMBLYMAN MAGNARELLI:  Okay.

 3                 MAYOR SPANO:  As soon as we can talk 

 4          with our finance people.

 5                 ASSEMBLYMAN MAGNARELLI:  Fair enough.

 6                 Good to see you.  Thank you.

 7                 MAYOR SPANO:  Thank you.

 8                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 9          Thank you for being here, sorry I had to --

10                 MAYOR SPANO:  Thank you, Chairwoman 

11          Weinstein.  Congratulations, by the way.

12                 CHAIRWOMAN WEINSTEIN:  Thank you.  

13          Sorry, we had a Ways and Means Committee 

14          meeting, but I'll be sure to read up on your 

15          remarks.

16                 MAYOR SPANO:  Thank you very much.

17                 CHAIRWOMAN YOUNG:  Thank you, Mayor, 

18          for being here.

19                 MAYOR SPANO:  Nice to see you.

20                 CHAIRWOMAN YOUNG:  We truly, truly 

21          appreciate it.

22                 CHAIRWOMAN WEINSTEIN:  Thank you.

23                 Next we have Ben Walsh, the mayor of 

24          the City of Syracuse.


 1                 MAYOR WALSH:  Good afternoon.

 2                 CHAIRWOMAN WEINSTEIN:  Good afternoon.

 3                 CHAIRWOMAN YOUNG:  Good afternoon.

 4                 MAYOR WALSH:  Ready?

 5                 Well, again, good afternoon.  Thank 

 6          you, Chair Young, Chair Weinstein, members of 

 7          the legislative fiscal committees for 

 8          inviting me to these joint hearings to 

 9          discuss the 2018 New York State Budget.  

10                 Also hello to my friend Assemblyman 

11          Magnarelli.  Good to see you again.

12                 ASSEMBLYMAN MAGNARELLI:  Good to see 

13          you, Mayor.

14                 MAYOR WALSH:  My name is Ben Walsh.  I 

15          am the new mayor of the City of Syracuse.  I 

16          am grateful for this opportunity to speak 

17          with you today on behalf of the people of my 

18          city.  

19                 I am also appreciative of the ongoing 

20          support Syracuse receives from the State of 

21          New York and the Legislature.  I look forward 

22          to building on past cooperation and creating 

23          strong partnerships with our state partners 

24          as my administration puts in motion the 


 1          necessary policies to move our community 

 2          forward.  

 3                 Like many other mayors across 

 4          New York, some of whom you've heard from 

 5          today, I delivered my State of the City 

 6          address last week and I outlined a series of 

 7          initiatives that will strengthen the City of 

 8          Syracuse.  Fundamentally, the people of the 

 9          City of Syracuse must feel safe and secure, 

10          which is why I affirmed my commitment to 

11          ensuring our police and fire departments have 

12          the resources they deserve. 

13                 We must have infrastructure that is 

14          reliable, which is why we are investing in 

15          innovation while also maximizing capital for 

16          long overdue maintenance and upgrades.  We 

17          must make sure that everyone in our city has 

18          access to quality education and the 

19          opportunity to participate in economic growth 

20          and prosperity, especially in those 

21          initiatives originating in the public sector. 

22                 I also talked about how the 

23          transformational opportunity Syracuse has in 

24          the coming years surrounding the I-81 viaduct 


 1          project being led by the New York State 

 2          Department of Transportation.  As I continue 

 3          to advocate passionately for the removal of 

 4          the viaduct in favor of the community grid 

 5          option, we have begun the process of engaging 

 6          our partners in an effort to connect this 

 7          multi-billion-dollar project with 

 8          job-readiness education programs, along with 

 9          redevelopment strategies that will reunite 

10          and reinvigorate our city and the region in 

11          ways not seen since the Erie Canal.  

12                 I am here today to ask for your 

13          continued support as we embark on a journey 

14          to lead our city into its next great era.  

15                 Syracuse has faced consistent budget 

16          deficits in recent years and has relied on 

17          its fund balance to close the gap each year. 

18          Continuing on this path could lead to 

19          insolvency in a little more than two years.  

20          Broadly, there are three reasons for this.  

21          It's a story facing many other cities like 

22          Syracuse across the state and throughout the 

23          country -- again, as you've heard in previous 

24          testimonies today.  


 1                 First, the city’s ongoing revenue base 

 2          is stagnant.  We have not experienced growth.  

 3          Next, the city's second largest revenue 

 4          source -- state Aid and Incentive for 

 5          Municipalities, or AIM -- which is 

 6          $71.8 million, has not increased since 2010.  

 7          Based on the inflation rate in the same time 

 8          period, city costs have gone up about 

 9          12 percent.  We appreciate the Governor and 

10          the Legislature keeping AIM steady in recent 

11          years, but the challenge remains.  And third, 

12          the major areas of cost the city incurs are 

13          very difficult to control.  Labor costs, 

14          health care, pensions, utilities, waste and 

15          trash fees, all continue to go up. 

16                 When you look ahead, the prospect is 

17          daunting.  Syracuse is at a crossroads, and I 

18          am choosing the direction of cooperation and 

19          partnership to find solutions to the 

20          challenges we face.  Of course, we will do 

21          our part.  My administration is working with 

22          our state, county, and local partners to seek 

23          cost-cutting shared-service opportunities.  

24          We will work with our partners in labor to 


 1          find ways to save money and slow the growth 

 2          of costs in our union contracts.  

 3                 I have convened a Fiscal Summit 

 4          Advisory Committee, in partnership with 

 5          faculty at the Maxwell School at Syracuse 

 6          University, my alma mater.  We will bring the 

 7          best minds and ideas to the table to attack 

 8          our fiscal woes.  And we are working very 

 9          hard to make Syracuse an even more attractive 

10          place to do business, so that we can generate 

11          growth for greater city revenue and for 

12          prosperity for all in our city and our 

13          region. 

14                 I am here today because Syracuse needs 

15          your help.  More than ever before, we need 

16          our partners in state government to stand by 

17          our side.  I ask that you consider an 

18          increase in AIM this year, with a goal of 

19          returning to 2009 levels over the next few 

20          years.  That would mean about $13 million 

21          more for the City of Syracuse as we work to 

22          stabilize our fiscal shortfalls and provide 

23          the core services our community needs.  

24                 As we attempt to grow our way out of 


 1          our fiscal challenges in the long run, one of 

 2          the most effective state programs in 

 3          supporting economic development in recent 

 4          years has been the New York State Historic 

 5          Tax Credit Program.  When combined with the 

 6          federal tax credit, the state program has 

 7          supported some of Syracuse's most 

 8          transformational redevelopment projects, 

 9          including, most recently, the historic Hotel 

10          Syracuse.  

11                 I ask that you reauthorize and extend 

12          the program through December 31, 2024, and 

13          decouple it from the federal program to 

14          ensure maximum predictability and flexibility 

15          going forward.  

16                 We all are aware of the opioid 

17          epidemic across our country, and Central 

18          New York and Syracuse are not immune to this 

19          trend.  The Syracuse area has the highest 

20          rate of opioid overdose deaths in the 

21          six-county Central New York region, with more 

22          than 27 deaths per 100,000 population. 

23                 Onondaga County ranks third in the 

24          state for newborn drug-related-diagnosis 


 1          rate.  Our police, fire, and paramedics stand 

 2          on the front lines battling this epidemic, 

 3          and our schools, hospitals, and nonprofit 

 4          organizations see the tragic results of this 

 5          scourge on our community every day.  I 

 6          support the effort put forth in this budget 

 7          to institute a surcharge on opioid 

 8          prescription drugs, making that revenue 

 9          available to fight the epidemic.  

10                 I also ask that you consider sharing a 

11          portion of the opioid epidemic surcharge with 

12          local municipalities.  Revenue from this 

13          surcharge would help to offset the costs our 

14          city incurs everyday as we fight for the 

15          lives of our citizens and their well-being.  

16                 Before closing, I would also like to 

17          take this opportunity to express my support 

18          for NYCOM's 2018 legislative priorities which 

19          include but are not limited to the following.  

20                 The property tax cap, as we've heard 

21          about today, should be a true 2 percent cap, 

22          as opposed to being tied to inflation.  It 

23          should not include public infrastructure 

24          expenditures, and it should not include 


 1          Business Improvement District special 

 2          assessments.  

 3                 We also call on the state to increase 

 4          state funding for water and sewer 

 5          infrastructure. 

 6                 We call for an increase in state 

 7          funding for local highways through the 

 8          consolidated highway improvement program, or 

 9          CHIPS.  Also PAVE-NY, BRIDGE-NY, and the 

10          Extreme Winter Recovery programs. 

11                 Finally, we call to allow local 

12          governments to initiate legal proceedings to 

13          force mortgage holders to complete the 

14          foreclosure process or release their mortgage 

15          rights for abandoned properties, also known 

16          as zombie properties. 

17                 In closing, the City of Syracuse is in 

18          a precarious situation with looming deficits 

19          and stagnant revenues, but as I said at my 

20          inauguration, the outcome is not 

21          predetermined.  We will change course and 

22          work to put the city on a healthy fiscal 

23          path, but we need your help.  

24                 I look forward to working with all of 


 1          you to ensure the City of Syracuse and the 

 2          State of New York’s best days are still ahead 

 3          of us.  Thank you very much.

 4                 Questions?

 5                 CHAIRWOMAN WEINSTEIN:  Thank you.  

 6                 Mr. Magnarelli.  

 7                 ASSEMBLYMAN MAGNARELLI:  Well, first 

 8          of all, Mayor, I want to welcome you for the 

 9          first time here and thank you very much for 

10          taking the time out and coming to talk to us, 

11          okay?

12                 MAYOR WALSH:  Thanks for having me.

13                 ASSEMBLYMAN MAGNARELLI:  I know that 

14          you're in your first -- probably first 

15          30 days yet, right?

16                 MAYOR WALSH:  It's -- top.

17                 ASSEMBLYMAN MAGNARELLI:  Okay.  And 

18          what we've heard all today is basically the 

19          plight of cities.

20                 MAYOR WALSH:  Right.

21                 ASSEMBLYMAN MAGNARELLI:  And the 

22          amounts of monies that are needed.  Just for 

23          the sake of discussion here, how much of the 

24          city's properties are exempt?


 1                 MAYOR WALSH:  Just about 50 percent of 

 2          the total taxable property is exempt.

 3                 ASSEMBLYMAN MAGNARELLI:  I think what 

 4          people especially here that are listening to 

 5          this have to understand is that our cities, 

 6          because of what they are, are older cities.  

 7          They have the hospitals, the museums, the 

 8          libraries -- those are located within our 

 9          cities.  And all of those things are exempt.

10                 MAYOR WALSH:  That's right.

11                 ASSEMBLYMAN MAGNARELLI:  And so 

12          whether it be Albany, Rochester, or Buffalo, 

13          we're going to find that a great deal of 

14          those cities -- half the properties are 

15          exempt.

16                 MAYOR WALSH:  Thank you for pointing 

17          that out.

18                 ASSEMBLYMAN MAGNARELLI:  The other -- 

19          well, I'm just trying to kind of pull things 

20          together here, because I don't want to pit 

21          one of these cities against the other.

22                 MAYOR WALSH:  Yeah.

23                 ASSEMBLYMAN MAGNARELLI:  Because I 

24          think all of them are in the same boat, so to 


 1          speak.

 2                 MAYOR WALSH:  Agreed.

 3                 ASSEMBLYMAN MAGNARELLI:  All right.  

 4          The other problem is, and I think Mayor 

 5          Sheehan and Mayor Warren both mentioned it, 

 6          you know, their tax bases are poor.  And so 

 7          that the idea of raising taxes, even if they 

 8          could, because -- you're reaching your tax 

 9          limit, am I correct?

10                 MAYOR WALSH:  Correct.

11                 ASSEMBLYMAN MAGNARELLI:  You're 

12          reaching your debt limit, too.

13                 MAYOR WALSH:  Right.

14                 ASSEMBLYMAN MAGNARELLI:  So in other 

15          words, you can't tax, you can't borrow -- 

16          where are you going?

17                 All right, so listen.  I understand -- 

18          now I'll get into my usual questions, okay?

19                 MAYOR WALSH:  Sure.

20                 ASSEMBLYMAN MAGNARELLI:  Because I 

21          think the Governor has a good idea too.  I 

22          think it's imperative that municipalities 

23          start working together to get through these 

24          problems.  So even though you weren't mayor 


 1          last year, okay, do you feel that the 

 2          Governor's proposals to sit down on a yearly 

 3          basis, to sit with the municipalities in 

 4          Onondaga County and work out whatever you can 

 5          do for shared services is a good idea or a 

 6          bad idea?

 7                 MAYOR WALSH:  It's a good idea.  

 8                 I'd be remiss if I didn't acknowledge 

 9          my colleague Bob Andrews here, who's our 

10          director of intergovernmental affairs -- and 

11          shared services.  We added that on to his 

12          title.  

13                 It's something we take very seriously, 

14          and we've already met with county 

15          representatives about a dozen times in the 

16          first month.

17                 ASSEMBLYMAN MAGNARELLI:  So that 

18          that's a good thing, it's something that we 

19          should keep in the budget --

20                 MAYOR WALSH:  Yes.

21                 ASSEMBLYMAN MAGNARELLI:  -- on top of 

22          asking for more AIM, on top of asking -- by 

23          the way, you know, we just heard the mayor of 

24          Yonkers, and you should go back and see if 


 1          you can get double MCAs too for our schools.

 2                 MAYOR WALSH:  We'll be back for 

 3          Phase 3 with that very request.

 4                 ASSEMBLYMAN MAGNARELLI:  That, that -- 

 5          forget Phase 3.  I'm talking about Phase 2.

 6                 MAYOR WALSH:  Okay.

 7                 ASSEMBLYMAN MAGNARELLI:  What do you 

 8          think the barriers to shared services are in 

 9          Onondaga County?

10                 MAYOR WALSH:  I think it's a matter 

11          of -- we're really just beginning those 

12          conversations.  I think communication and 

13          dialogue will remove many of the barriers, 

14          but ultimately for those costs that we are 

15          looking to shift from the City of Syracuse to 

16          either Onondaga County or other 

17          municipalities, ultimately those are costs 

18          that are going to be incurred by those 

19          municipalities.  

20                 They have to be accounted for, whether 

21          it's through payment by the city or -- it was 

22          brought up earlier that the matching 

23          component of the state's initial program was 

24          helpful in that regard.  But ultimately, 


 1          it's -- again, for us, it's still early.  

 2                 So we're going to put it all on the 

 3          table, figure out where we think we can 

 4          identify opportunities, and we'll pursue 

 5          them.  So we can get back to you with more 

 6          specific feedback on that.

 7                 ASSEMBLYMAN MAGNARELLI:  The last 

 8          thing I wanted to ask you about, and I think 

 9          we touched upon it last week just a little 

10          bit -- I don't know if you had a chance to 

11          look into it.  But the fiber optic wireless 

12          facilities proposal that the Governor has, 

13          how does that affect Syracuse?

14                 MAYOR WALSH:  Yeah, we are still 

15          figuring it out.  I actually left -- when I 

16          left Syracuse today, our deputy mayor, Sharon 

17          Owens, was sitting down with corporation 

18          counsel to go through it.  We do have 

19          concerns.  

20                 You know, it is a revenue-generating 

21          opportunity, but we're still getting our head 

22          around it.  So we'll get back to you with 

23          some more specific feedback.

24                 ASSEMBLYMAN MAGNARELLI:  All right.  


 1                 Well, thank you, and good luck to you.

 2                 MAYOR WALSH:  Thank you.

 3                 CHAIRWOMAN YOUNG:  Thank you.

 4                 Senator Savino.

 5                 SENATOR SAVINO:  Thank you, Senator 

 6          Young.

 7                 Welcome, Mayor Walsh.  

 8          Congratulations.

 9                 I just want to focus on one piece in 

10          your testimony, because you're the only one 

11          who mentioned it.  Twenty-eight years ago I 

12          started as a caseworker in the city's child 

13          welfare system, the last time we were in the 

14          midst of a terrible drug crisis in the state.  

15          Then it was crack, now it's opioids.  

16                 One of the things we saw back then, 

17          though, was the number of children who were 

18          born with a positive toxicity to the cocaine 

19          or other drugs in utero, and it led to an 

20          explosion of the foster care system, not just 

21          in the City of New York but statewide.

22                 We're not seeing the same thing now 

23          with this crisis, and I've asked repeatedly 

24          of OCFS and localities:  Are we seeing an 


 1          uptick in the number of positive-tox births?  

 2          And you actually referenced it, you have that 

 3          sentence which says Onondaga County rates 

 4          third in the state for newborn drug-related- 

 5          diagnosis rates.  So somebody's tracking it, 

 6          in spite of me being told over and over that 

 7          there's no uptick in the number of calls to 

 8          the state's central registry.  

 9                 Are you seeing an increase also in 

10          those infants and their mothers being brought 

11          through the family court system, an uptick in 

12          foster care in Onondaga or in Syracuse?

13                 MAYOR WALSH:  I don't know the answer 

14          to that, but I can certainly find out.

15                 SENATOR SAVINO:  I would be 

16          interested, because it just seems to me -- it 

17          strikes me as odd that it's not happening --

18                 MAYOR WALSH:  Yeah.

19                 SENATOR SAVINO:  -- with the number of 

20          overdoses, the number of emergency room 

21          visits for people.  And it just seems to be a 

22          completely different type of drug crisis, and 

23          I'm puzzled as to why it is.  And I'm just 

24          curious to whether or not people are calling 


 1          in these cases at the rate that they probably 

 2          should.  Obviously we don't want to take 

 3          children away from their parents 

 4          unnecessarily, but there should be some 

 5          intervention, particularly preventive 

 6          services if nothing else.

 7                 So I'd appreciate if you could get 

 8          back to me -- 

 9                 MAYOR WALSH:  Absolutely.

10                 SENATOR SAVINO: -- about your 

11          experience in Syracuse.  

12                 And I'm going to ask again tomorrow 

13          when Sheila Poole is here from the Office of 

14          Children and Family Services.

15                 MAYOR WALSH:  Very good question.

16                 SENATOR SAVINO:  Thank you.

17                 MAYOR WALSH:  We'll get back to you.

18                 CHAIRWOMAN WEINSTEIN:  Thank you very 

19          much, Mayor --

20                 CHAIRWOMAN YOUNG:  I do have --

21                 CHAIRWOMAN WEINSTEIN:  Oh, I'm sorry. 

22                 Senator Young.

23                 CHAIRWOMAN YOUNG:  I was just going 

24          last.


 1                 So welcome, Mayor.  Congratulations on 

 2          your new post.

 3                 MAYOR WALSH:  Thank you.

 4                 CHAIRWOMAN YOUNG:  And how is your dad 

 5          doing?

 6                 MAYOR WALSH:  He's doing great.

 7                 CHAIRWOMAN YOUNG:  Is he?  Good.

 8                 MAYOR WALSH:  He's only giving me 

 9          advice when I ask for it, thankfully.

10                 (Laughter.)

11                 CHAIRWOMAN YOUNG:  Well, that's good 

12          to know.

13                 Just to follow up on Senator Savino's 

14          point, the Department of Health is keeping 

15          those statistics on infants being born to -- 

16          that are addicted to opioids, and Chautauqua 

17          County, unfortunately, is very high on the 

18          list too.  So I understand exactly what 

19          you're talking about.

20                 And those are only the infants that we 

21          know about.

22                 MAYOR WALSH:  Right.

23                 CHAIRWOMAN YOUNG:  And oftentimes what 

24          happens is infants -- for example, the 


 1          mother's addicted to heroin, infants are born 

 2          in the hospital, but they're sent home 

 3          because they don't display withdrawal 

 4          symptoms until a couple of days after they go 

 5          home.  Which is very dangerous for the 

 6          infants, because you have this combination of 

 7          a mother addicted to drugs, you have a 

 8          screaming baby that actually could die going 

 9          through withdrawal.  

10                 So some of the legislation that I've 

11          sponsored has to do with the testing of 

12          newborns.  We test them for 40 other things, 

13          and I believe that it would be a good 

14          intervention to get families into services 

15          earlier, detect any medical issue that a baby 

16          may be going through -- and not to have in 

17          mind prosecution, but it's intervention, 

18          really.

19                 I wanted to get your thoughts about 

20          that.  I know it's new -- it's something new 

21          that I just brought up.  But what would your 

22          thoughts be on such a program?

23                 MAYOR WALSH:  I think it's a great 

24          idea, and I would be happy to lend my support 


 1          to your efforts.

 2                 I appreciate it, Senator.

 3                 CHAIRWOMAN YOUNG:  Okay, thank you.  

 4          Thank you.  

 5                 Well, again, good luck with everything 

 6          that you're doing.

 7                 MAYOR WALSH:  Thank you.

 8                 CHAIRWOMAN YOUNG:  And we wish you 

 9          well, and we appreciate you coming today.

10                 MAYOR WALSH:  Thank you.

11                 CHAIRWOMAN WEINSTEIN:  Thank you for 

12          being here.  

13                 And we've been joined by Steve Otis 

14          and Carrie Woerner.  Did either of you have a 

15          question?  Okay.  

16                 Thank you so much, Mayor.

17                 MAYOR WALSH:  Thank you.

18                 CHAIRWOMAN YOUNG:  Thank you.

19                 CHAIRWOMAN WEINSTEIN:  Next we have 

20          Corey Johnson, speaker of the New York City 

21          Council.

22                 Hi.

23                 NYC COUNCIL SPEAKER JOHNSON:  Hi.

24                 CHAIRWOMAN WEINSTEIN:  


 1          Congratulations.

 2                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

 3          you very much.

 4                 Good afternoon, Chair Young -- 

 5          congratulations, Chair Weinstein -- and 

 6          members of the Finance and Ways and Means 

 7          Committees.  I'm Corey Johnson, the newly 

 8          elected speaker of the New York City Council, 

 9          and it is an honor to be in our state's 

10          capitol to discuss Governor Cuomo's Executive 

11          Budget for the state fiscal year 2018-2019.  

12                 Since I am new to my office, let me 

13          tell you just a little bit about myself.  I 

14          came to New York at the age of 19 carrying 

15          two suitcases and knowing two people, and 

16          from the moment I arrived in our great city, 

17          I knew that I belonged.  I was able to find a 

18          cheap place to live until I got on my feet 

19          and found my first job.  And for me, New York 

20          City is a place where a 19-year-old can 

21          arrive on a wing and on a prayer and on a 

22          dream, and hopefully still make it.

23                 I did not come from a rich family.  My 

24          mother, Ann, was my lunch lady at my local 


 1          school, and cleaned houses on nights and 

 2          weekends to make ends meet.  I was lucky, 

 3          there were 12 units of public housing in the 

 4          town that I grew up in, and we lived in one 

 5          of those 12 units of public housing.  So I 

 6          know that the social safety net works.  It 

 7          lifts up families, and it was a major 

 8          influence in getting me to where I am today.

 9                 I am a progressive.  That is no 

10          secret.  However, I did not seek office to 

11          indulge in polarization or political games.  

12          I took office to get things done, and I look 

13          forward to working pragmatically with the 

14          Governor and with both houses of the 

15          Legislature in service to the people of my 

16          city and this great state.

17                 Let me begin with our assessment of 

18          the total potential risk of the proposed 

19          state budget on New York City.  Our tally 

20          stands at $750 million.  That is a 

21          significant reduction in state spending, and 

22          it impacts predominately education and social 

23          services.  My testimony today will highlight 

24          proposals in these areas that I think will 


 1          have the most negative impact on New York 

 2          City residents and could set our city back 

 3          profoundly.  

 4                 As an elected official for the past 

 5          four years, and now as City Council speaker, 

 6          I know how well the city and state have 

 7          worked together in the past.  Through the 

 8          city's lobbying efforts and through 

 9          constructive dialogue, we have achieved great 

10          things.  For example, last year the age of 

11          criminal responsibility was raised to 17 

12          starting in October, and 18 the following 

13          October.  This was a major priority of the 

14          City Council, and we were pleased to see it 

15          enacted.  

16                 Additionally, constructive dialogue 

17          ultimately stopped proposed reductions to the 

18          general public health work reimbursements to 

19          local health departments that provide core 

20          public health services to vulnerable 

21          populations.  Public health, as you may know, 

22          is a key area of concern for me, and an area 

23          I have promised to give my undivided 

24          attention to.  I am HIV-positive.  I am the 


 1          only openly HIV-positive elected official in 

 2          the State of New York.  

 3                 Lastly, we were thrilled to see the 

 4          Excelsior Scholarship program established, a 

 5          first-in-the-nation program to increase 

 6          college access for thousands of students 

 7          across New York.  

 8                 And we know that we can reach mutually 

 9          positive agreements and make changes for the 

10          better through the budget process, and that’s 

11          why I'm here.  

12                 With respect to the MTA, fixing the 

13          subways is the greatest infrastructure 

14          challenge that New York City faces today.  

15          Make no mistake that the subway is the 

16          lifeblood of our economy, and failure to 

17          address this crisis will be disastrous.  It 

18          could be our undoing.  

19                 First, I'd like to thank the Governor 

20          for including funding in his budget that 

21          covers half of the cost of Phase l of the 

22          Subway Action Plan.  While I agree that New 

23          York City residents benefit greatly from the 

24          subway system, we are far from its sole 


 1          beneficiaries.  Tri-state residents from all 

 2          over the transit region use the subway when 

 3          they come to our city for work or for play. 

 4          Given the significant contribution the City 

 5          of New York and its residents already make to 

 6          the transit system, I strongly urge the state 

 7          to provide additional funding for the Subway 

 8          Action Plan in its final budget.  

 9                 With that said, any new funding stream 

10          must go directly to the MTA and must be spent 

11          efficiently, with clear timelines and 

12          appropriate oversight.  We need new, smart, 

13          sustainable revenue streams to fully fund the 

14          MTA's needs into the future.  One piece of 

15          that puzzle is congestion pricing.  We need 

16          congestion pricing this year, this session.  

17                 Unfortunately, there are two proposals 

18          in the Executive Budget to finance the MTA 

19          that are not helpful.  One requires New York 

20          City to make emergency appropriations to the 

21          MTA at the Governor's direction, and asks the 

22          city to fully fund the capital program of the 

23          New York City Transit Authority.  The second 

24          proposes to fund the MTA through the capture 


 1          of part of the property taxes in Midtown and 

 2          the Upper East Side of Manhattan.  Nice 

 3          neighborhoods certainly, Senator Krueger, but 

 4          they are not the only ones that benefit by 

 5          projects like the creation of a new tunnel 

 6          for the Long Island Railroad.  The MTA is a 

 7          regional agency that benefits areas far up 

 8          into the Hudson River Valley as well as out 

 9          east on Long Island.  

10                 While the city is trying to address 

11          its historically large capital needs through 

12          the New York City capital budget, let me 

13          address design-build.  During last year's 

14          state budget process, use of the design-build 

15          procurement method was authorized for 

16          counties outside of the five boroughs of 

17          New York City.  I heard the mayor of Yonkers 

18          answer a question from Assemblyman Benedetto.  

19          New York City faces soaring construction 

20          costs for its capital projects and the 

21          ability to use design-build procurement would 

22          lower these costs as well as dramatically 

23          reduce project time frames.  One project 

24          specifically is the cantilever on the BQE, 


 1          which is a huge project for the City of New 

 2          York in Brooklyn.  

 3                 Let me take a moment to discuss NYCHA. 

 4          I know Senator Young was asking questions 

 5          earlier about this.  NYCHA is home to over 

 6          400,000 New York State residents who are in 

 7          desperate need of funding to repair the 

 8          178,000 apartments in which they live.  The 

 9          city has responded to chronic federal 

10          underfunding of NYCHA by adding $262 million 

11          in our preliminary capital plan, for a 

12          five-year total of just under $1.4 billion. 

13          The state has not allocated any funding in 

14          the current budget for NYCHA, but has 

15          appropriated $200 million in the 2018 budget.  

16                 NYCHA's infrastructure needs continue 

17          to grow as it is aging infrastructure and 

18          falls deeper into a state of disrepair.  With 

19          likely federal cuts on the horizon, I urge 

20          the state to step up to the plate for our 

21          NYCHA families.  We have issues of mold and 

22          lead paint and boilers.  

23                 In addition to long-term funding for 

24          New York City subways and buses and the 


 1          approval of design-build, here are a few 

 2          other main areas of concern for the City 

 3          Council that really hit to the core of our 

 4          robust safety net.  

 5                 No significant actions to address the 

 6          potential DSH cuts impacting Health + 

 7          Hospitals -- disproportionate share of 

 8          hospital funding cuts; inadequate support on 

 9          homelessness prevention; lack of financial 

10          support for Raise the Age implementation; a 

11          reduction in Child Preventative Services 

12          funding; and insufficient school funding and 

13          unfunded education mandates. 

14                 An astounding 44 percent of 

15          New Yorkers are living at or near the poverty 

16          level -- 44 percent of New York City 

17          residents are living at or below that poverty 

18          line.  Almost half of New Yorkers.  According 

19          to the Mayor's Office for Economic 

20          Opportunity, about 20 percent of New 

21          Yorkers -- it's actually 22 percent, 

22          1.7 million New Yorkers -- are living in 

23          poverty.  One of every five people you see on 

24          the streets of New York City are living in 


 1          poverty.  However, without SNAP another 

 2          3.2 percent would be living in poverty.  

 3          Without housing assistance such as NYCHA, 

 4          another 5.8 percent would be living in 

 5          poverty.  Without income-tax-based programs 

 6          such as the Earned Income Tax Credit, another 

 7          3.9 percent would be living in poverty.  

 8                 As bad as poverty is now, it would be 

 9          far worse without a robust social safety net.  

10          That is why I have and will continue to 

11          champion for funding that will protect those 

12          who have the least.  Because we New Yorkers 

13          want to give everyone a chance.  We do not 

14          leave anyone out in the cold.  

15                 A significant part of the safety net, 

16          which is so important, is New York City 

17          Health + Hospitals.  H+H is under 

18          considerable financial strain.  

19          Unfortunately, the Executive Budget extends 

20          the current Medicaid Disproportionate Share 

21          Hospital, or DSH, distribution formula for 

22          one year.  If the federal government does not 

23          delay the cuts to DSH payments and the state 

24          maintains its current distribution formula, 


 1          H+H would lose $329 million this federal 

 2          fiscal year and $400 million in the next 

 3          fiscal year.  DSH constitutes H+H's primary 

 4          source of federal funding.  The state must 

 5          step in to maintain DSH funding if we lose it 

 6          at the federal level.  

 7                 Another significant part of that 

 8          safety net is supportive housing.   While the 

 9          City Council acknowledges the state's 

10          $20 billion five-year plan, which aims to 

11          build or preserve 112,000 units of affordable 

12          housing, this only includes 6,000 units of 

13          supportive housing.  We need more for the 

14          chronically homeless.  The reality is we need 

15          to do a lot more, and supportive housing 

16          units with on-site social services go a long 

17          way in bringing dignity and upward mobility 

18          to those living with mental illness, 

19          addiction disorders, and other severe health 

20          problems, such as HIV and AIDS.  I have been 

21          sober for 8 1/2 years.  This July I will be 

22          9 years sober, July 13th.  It's my biggest 

23          accomplishment in life.  I know how important 

24          it is to get clean and sober.  I got sober at 


 1          27 years old.  We need more supportive 

 2          housing for folks that are struggling right 

 3          now.  

 4                 In our state's history, we have 

 5          witnessed three New York New York agreements 

 6          that have been groundbreaking moments where 

 7          New York City and the state came together to 

 8          build over 10,000 units and prioritized the 

 9          most vulnerable homeless New Yorkers.  

10          Studies show that those units contributed to 

11          reduced use of shelters, hospitals, 

12          psychiatric centers and incarceration.  With 

13          the last agreement having been 13 years ago, 

14          it's time for New York City and the state to 

15          do it again.  And I know we had a program 

16          that was talked about in the last few years.  

17          I really want us to increase supportive 

18          housing for the folks that need it most.  

19                 Years ago the city and state supported 

20          a short-term rent subsidy program, the 

21          Advantage program, that provided rental 

22          subsidies for those coming out of shelter, 

23          and in 2011 the state withdrew its portion. 

24          When that program went away, the city and 


 1          state remained at odds and the number of 

 2          homeless New Yorkers increased dramatically 

 3          during that time frame.  

 4                 Homelessness is a crisis that shows no 

 5          sign of abating.  Every night, over 60,000 

 6          New Yorkers sleep in our shelter city -- 

 7          60,000.  And 23,000 of that 60,000 are 

 8          children.  The most successful model for 

 9          ending chronic homelessness is supportive 

10          housing, which pairs affordable housing with 

11          on-site social services for people with 

12          mental health and substance abuse issues.  

13          The plan to enhance supports for existing 

14          residential housing is welcome.  However, the 

15          $9.3 million cut to Living in Communities -- 

16          LINC -- rental assistance programs is 

17          completely counterproductive, and it will 

18          drive homelessness up even further in New 

19          York City.  

20                 The LINC program has allowed 

21          approximately 1,465 families and 5,098 

22          individuals to move out of shelter since 

23          fiscal year 2017.  LINC funds the difference 

24          between rents that working families in 


 1          shelters can afford and what the New York 

 2          City rental market demands.  It is a 

 3          successful model and a critical strategy for 

 4          ending homelessness, one the state should 

 5          continue to support.  

 6                 The State Executive Budget also 

 7          extends the reach of state bureaucracy into 

 8          the city's street homeless outreach programs. 

 9          The budget has a clause that allows OTDA to 

10          withhold funding from counties if 

11          homelessness-related programs are not up to 

12          their standard.  The city already works with 

13          OTDA for approval of homeless programs where 

14          the state provides support such as rental 

15          assistance and rapid rehousing.  The state 

16          provides no funds for homeless outreach.  The 

17          proposal is putting the cart before the 

18          horse.  

19                 The state's fiscal 2018-2019 Executive 

20          Budget includes $100 million for state and 

21          local costs related to implementation of 

22          Phase 1 of Raise the Age.  The Council 

23          appreciates the initial support from the 

24          state.  However, funding for subsequent 


 1          phases is unclear.  As an unfunded mandate, 

 2          the city could potentially be at a loss of 

 3          $200 million annually.  This, coupled with 

 4          the reduction of $31 million for the Close to 

 5          Home initiative, would be detrimental to 

 6          young people in New York City.  We need help 

 7          from the state to support much-needed reforms 

 8          that include both diversion programs for 16- 

 9          and 17-year-olds and residential placement 

10          services for juveniles.  

11                 Lastly in this area, I am also 

12          concerned with the proposal to cap the state 

13          reimbursement for preventive services for 

14          New York City only.  Preventive services are 

15          designed to help families keep their children 

16          safely at home and avoid foster care 

17          placements.  The total loss to the city would 

18          reach $130 million in fiscal 2019.  Given the 

19          progress we've made on reducing child 

20          fatalities and keeping families united, it is 

21          particularly worrisome that the state would 

22          actually cut back on funding.

23                 In the area of education, there are a 

24          number of concerns.  I know I only have a 


 1          minute left, so I'm going to breeze through 

 2          these.  We are still concerned about Campaign 

 3          for Fiscal Equity funding, and so I ask you 

 4          to continue to prioritize education funding.  

 5          The proposed increase of $247 million in aid 

 6          for our schools is $217 million less than the 

 7          projection in our city's budget.  We urge the 

 8          Legislature to fully fund CFE and ensure that 

 9          all students are offered a sound basic 

10          education as the Court of Appeals said they 

11          should have.

12                 The shortfall in Foundation Aid will 

13          be exacerbated by the plan to slash state 

14          support from summer education programs for 

15          special education students.  The Executive 

16          Budget would cut the state reimbursement rate 

17          and leave New York City schools with a 

18          $65 million budget hole next year.

19                 I'm going to keep moving on and say 

20          that -- I talk about CUNY in my testimony, if 

21          you could please look at that.

22                 And then lastly, I am concerned as 

23          well about the federal tax reform plan, the 

24          SALT deduction, how it's going to affect New 


 1          York City taxpayers who take the deduction.  

 2          1.3 million New York City residents took that 

 3          deduction last year.  That's about 31 percent 

 4          of all city taxpayers.  It saves the typical 

 5          taxpayer close to $10,000 in federal taxes.

 6                 Let me conclude by saying that as you 

 7          approach the 30-day amendment process, it is 

 8          my hope that there are adjustments that will 

 9          allow New York City to continue to provide 

10          much needed services to New Yorkers who need 

11          it most.  It must be a partnership to protect 

12          the most vulnerable amongst us, and we are 

13          here to offer our voice to the conversation 

14          on how we get that done.  

15                 Again, congratulations, Chair 

16          Weinstein, on this position.  You have done 

17          an amazing job for your district with your 

18          tenure here in the Assembly.  

19                 Senator Young, I look forward to 

20          working with you.  

21                 And to everyone else that's here for 

22          my testimony, I thank you very much and I'm 

23          happy to take your questions.  Also I 

24          acknowledge I'm joined by the City Council's 


 1          finance director, Latonia McKinney.

 2                 Thank you.

 3                 CHAIRWOMAN WEINSTEIN:  Thank you.

 4                 CHAIRWOMAN YOUNG:  Thank you, 

 5          Mr. Speaker.

 6                 Senator Savino.

 7                 SENATOR SAVINO:  Thank you, Senator 

 8          Young.

 9                 Thank you, Mr. Speaker.  Nice to say 

10          that, Mr. Speaker.  Congratulations, first, 

11          and welcome to Albany for your first budget 

12          address.

13                 I just want to focus on one or two 

14          things in the budget.  By the way, I agree 

15          with you on the cuts to Child Protective 

16          Services and Child Preventive Services, and I 

17          will speak extensively on that tomorrow with 

18          OCFS and the partner agencies, because you're 

19          right -- it's not just wrong for the City of 

20          New York, it's just wrong, period, 

21          particularly at a time when we know there's a 

22          greater demand for preventive services.

23                 Raise the Age, same issue.  Close to 

24          Home, we know it works, so we need to address 


 1          that.

 2                 I want to talk about NYCHA, though, 

 3          because one of the biggest issues that you're 

 4          going to have to deal with now as the speaker 

 5          of the City Council is what we do about what 

 6          is the largest housing development in the 

 7          country.  And I know some of your members, 

 8          particularly Ritchie Torres, he has been like 

 9          a dog with a bone on this.  He's been a great 

10          ally to myself and some of my colleagues in 

11          the Senate as we prepare legislation to try 

12          and address it.

13                 One of the things that we have 

14          proposed and the Senate passed unanimously on 

15          June 19th of this year was a bill that would 

16          require an independent monitor for NYCHA, 

17          because part of the problem is mismanagement.  

18          You know, it doesn't matter who you put in 

19          there, it's decades of, you know, this is the 

20          way it's always been done, and therefore we 

21          don't do anything differently.

22                 So I'm just wondering if you have any 

23          thoughts about an independent monitor.  I 

24          know Ritchie Torres stood with us and some of 


 1          your other colleagues in the City Council as 

 2          well who represent several developments.

 3                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

 4          you, Senator Savino, for welcoming me.  

 5                 And I am deeply concerned about the 

 6          state of NYCHA as well -- 178,000 apartments, 

 7          400,000 New Yorkers, some of the most 

 8          vulnerable New Yorkers.  And the City of 

 9          New York needs to do a better job.

10                 Now, I believe that the issues that 

11          plague NYCHA are much bigger than one person.  

12          So if the chair left tomorrow, the issues 

13          would still stand, whether it be mold, lead, 

14          boilers, any of those issues.  I know that 

15          the federal government, the feds, the U.S. 

16          Attorney for the Southern District, are 

17          involved in looking at some of these problems 

18          that have plagued NYCHA for a very long time.  

19          There needs to be better management.  Three 

20          top, actually four top NYCHA officials have 

21          left NYCHA in the last three months.  The 

22          general manager is leaving sometime soon, the 

23          new general manager, Vito Mustaciuolo from 

24          HPD, is a great guy who I have a lot of 


 1          confidence in.  We need to get NYCHA in the 

 2          right place.  And if that means a federal 

 3          monitor, that means a federal monitor.

 4                 Now, ultimately it's about 

 5          accountability, it's about responsibility and 

 6          it's about serving the residents who live in 

 7          NYCHA.  So no one should take this 

 8          personally.  This is about getting results on 

 9          behalf of the New Yorkers that need it most.

10                 SENATOR SAVINO:  Thank you.

11                 And the other question I wanted to ask 

12          you about, earlier today the mayor was, you 

13          know, aggressively asked about the city's 

14          property tax system.  And I know that many of 

15          the members of the council have signed on to 

16          a plan to I guess have a commission to study 

17          the way we arrive at property taxes.  Just 

18          this week, we all received our updated 

19          property tax assessments from the Department 

20          of Finance.

21                 NYC COUNCIL SPEAKER JOHNSON:  It's 

22          crazy.  It's crazy.

23                 SENATOR SAVINO:  I was quite shocked 

24          to find out that my house has increased 


 1          133 percent since last July.

 2                 NYC COUNCIL SPEAKER JOHNSON: 

 3          Congratulations.

 4                 SENATOR SAVINO:  And it's now, 

 5          according to them, it's worth a half a 

 6          million dollars.  I joked with the mayor and 

 7          said there's nothing in that house that's 

 8          worth a half a million dollars, including me.

 9                 (Laughter.)

10                 SENATOR SAVINO:  Ridiculous.

11                 But these are the kind of bills that 

12          people are getting.  So on the one hand when 

13          the city says we haven't raised the property 

14          tax rate, well, there's some truth to that.  

15          But the assessments are killing us.

16                 And there's also an inequality in the 

17          assessments, in that I pay more on my house 

18          than someone pays in Park Slope, where the 

19          house is certainly worth four times what my 

20          property is.

21                 So I'm hoping that you will show the 

22          leadership to fight this fight.  We're not 

23          suggesting that the City of New York should 

24          have to not collect property tax, but let's 


 1          take a good long look at this.  It's crazy 

 2          that our property taxes are going through the 

 3          roof, and we're not seeing what we feel we 

 4          should be getting back from the government.  

 5          And, you know, for years they've just pushed 

 6          it back and forth, said it's not our fault, 

 7          we didn't raise the rate, it's this crazy 

 8          formula that's in state law.

 9                 Well, we're all in this together.  

10          We're prepared to work towards coming up with 

11          a fairer system so that people have some 

12          faith in the money that's taken out of their 

13          pocket and utilized for whatever the city 

14          needs.

15                 NYC COUNCIL SPEAKER JOHNSON:  I agree 

16          with you a hundred percent.  The assessments 

17          are crazy.  They don't make any sense.  It is 

18          unequal.  I know that former Chief Judge 

19          Lippman and former Finance Commissioner 

20          Martha Stark have brought forward a potential 

21          case to look at the inequity in the property 

22          tax system in New York City.  

23                 Anything we want to do here, my 

24          belief, some of the guiding principles, we 


 1          need to fix the system, which is broken, and 

 2          to hopefully have it be revenue-neutral.  So 

 3          everyone might have to feel a little bit of 

 4          pain, or some even might feel a little bit of 

 5          pain more than others, but ultimately what we 

 6          do -- the council has to vote on this, so the 

 7          mayor can't do this on his own.  We will be a 

 8          full, respected, and equal partner as the 

 9          mayor looks to tackle this.  And the State 

10          Legislature has to play a role as well.  

11          Anything we have to do, you guys have to 

12          authorize.  So this conversation needs to be 

13          a conversation that is fulsome and inclusive, 

14          that includes all of you, who are going to 

15          have some role in this.  

16                 I am ready to sit down, have these 

17          conversations, look at the inequality in the 

18          property tax system.  People have called it 

19          the third rail.  You can't keep kicking the 

20          can down the road.  We have to take a look at 

21          it.  And I stand ready, willing and able to 

22          work with anyone in government to finally 

23          make some more sense out of this system.

24                 SENATOR SAVINO:  Thank you.


 1                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

 2          you, Senator.

 3                 CHAIRWOMAN WEINSTEIN:  Thank you.

 4                 Assemblyman Braunstein.

 5                 ASSEMBLYMAN BRAUNSTEIN:  Hello, 

 6          welcome to Albany.

 7                 My comments are very similar to what 

 8          Senator Savino said.  And all I can say is 

 9          I'm heartened by your answer that you're 

10          really willing to take on this challenge.  

11          Because you're right, it's been called the 

12          third rail of politics.  

13                 But in my district in Northeast 

14          Queens, the co-op owners that I represent pay 

15          some of the highest effective property tax 

16          rates of all of New York City.  And something 

17          needs to get done, and people have talked 

18          about it for years.  So I'm hopeful that 

19          you'll make good on your word and you and 

20          your colleagues will continue to pursue this.

21                 NYC COUNCIL SPEAKER JOHNSON:  And your 

22          local councilmembers who overlap in your 

23          district, whether it be Councilmember 

24          Grodenchik or Councilmember Lancman or 


 1          Councilmember Vallone, they have been very 

 2          vociferous about wanting to tackle this.  As 

 3          well as on Staten Island, Councilmember Rose, 

 4          Minority Leader Matteo, and Councilmember 

 5          Borelli, they've all talked about this as 

 6          well.

 7                 And I want to work with any members of 

 8          the council, regardless of party or 

 9          regardless of ideology, to get something done 

10          on this.  I'm serious about it.  And I look 

11          forward to continuing those conversations 

12          with members of the State Legislature.

13                 CHAIRWOMAN YOUNG:  Thank you.

14                 We've been joined by Senator John 

15          Brooks.  And Senator Krueger has some 

16          questions, I do believe.

17                 SENATOR KRUEGER:  Thank you.

18                 Nice to see you, Mr. Speaker.

19                 NYC COUNCIL SPEAKER JOHNSON:  Good to 

20          see you, Senator.

21                 SENATOR KRUEGER:  And nice to see 

22          somebody coming to visit Albany who says 

23          they're progressive, you'll see you get a 

24          different response up here sometimes to that 


 1          terminology.  

 2                 I appreciate your broad testimony on 

 3          so many issues today.  

 4                 Since you have to deal with the city 

 5          budget, there's been a lot of back and forth 

 6          earlier today -- I don't know how much you 

 7          were listening to versus doing other work -- 

 8          that if the city is facing hundreds of 

 9          millions of dollars in cuts proposed in the 

10          Executive Budget, but the city is also going 

11          to be asked for money for the emergency 

12          funding for the subway -- which many of us 

13          here from New York City actually think 

14          everybody needs to pony up; we just have to 

15          get the subway fixed -- do you think that 

16          it's fair to expect the city to lower the 

17          amount of the rainy day fund that it's 

18          holding out for itself in the absence of 

19          knowing what the feds are going to do?  

20          Because ultimately this is all about, you 

21          know, who's going to pay for what.  You 

22          outlined very well in your testimony so many 

23          places the state is reducing commitments to 

24          the city that it's made in the past.  And 


 1          when the mayor was here testifying earlier, 

 2          he said that he had $5 billion, I believe, in 

 3          a rainy day fund or surplus.

 4                 I worry that people think that that's 

 5          a lot of money when that's not necessarily 

 6          that much money in the face of federal 

 7          changes.  I'm just curious whether your staff 

 8          has been able to help you predict how we have 

 9          to think about that as well.

10                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

11          you for the question.  It's a really 

12          important question.  I know that Senator 

13          Young talked about this earlier with the 

14          mayor.

15                 I am not an expert, but I think we 

16          should look at what experts have said.  So 

17          the Citizens Budget Commission -- who has not 

18          been easy on the mayor and his budget the 

19          last four years -- they have said that our 

20          reserves need to be higher than they are.  So 

21          our $5 billion approximate amount of 

22          reserves, we, I think, have been prudent and 

23          responsible -- and the council played a role 

24          in this last year.  We asked the mayor to set 


 1          aside an additional $250 million.  Some money 

 2          went to the capital reserve program, another 

 3          amount of money went to the Retiree Benefits 

 4          Health Trust Fund.  And so we have been 

 5          trying to be prudent and responsible in 

 6          socking money away for when that rainy day 

 7          comes.

 8                 Now, I'm not sure we're at the point 

 9          where we should be raiding the reserves.  I 

10          don't think that's probably smart.  The 

11          comptroller of the City of New York, who 

12          testified earlier, the Citizens Budget 

13          Commission, other outside groups -- the IBO, 

14          the Independent Budget Office -- they've all 

15          said that our reserves need to grow even 

16          further.  I think some of them believe our 

17          reserves should be $8 billion, $9 billion 

18          when a real downturn comes and hits us.  

19                 I know the state is facing a 

20          $4.4 billion budget deficit, and I know 

21          difficult decisions will need to be made.  I 

22          don't think us dipping in right now to the 

23          reserves is the smartest thing.  

24                 There was an article this morning that 


 1          talked about how municipal bond rates are 

 2          going up, and the impact that is going to 

 3          have on bonds in New York City and on capital 

 4          projects in New York City.  I think we 

 5          continue to be prudent, not take money out of 

 6          the reserves -- but again, I have said it, I 

 7          think we should not rule out the city putting 

 8          more money into the subways.  I'm not ready 

 9          to say no to that.  I think it depends on a 

10          variety of things -- accountability, 

11          transparency, the prioritization of projects.  

12                 The city last week, the mayor's 

13          appointees on the MTA were able to reverse 

14          the decision related to station enhancements 

15          because they thought that wasn't the best way 

16          to spend capital dollars.  I don't think we 

17          should write a blank check to the MTA, or it 

18          will disappear somewhere.  I support 

19          congestion pricing.  That money should be put 

20          in the famous bad word of a lockbox so that 

21          the money is dedicated to the MTA.  

22                 We need to have a big conversation.  

23          And I think just saying no on money to the 

24          MTA is not a wise move.  The 6 million people 


 1          who take the MTA every single day do not care 

 2          who pays for it, they just want results.  Six 

 3          million people in the subways, 2 million 

 4          people on the buses.  No offense to Senator 

 5          Brooks or anyone else from Long Island, 

 6          300,000 people take Long Island Railroad 

 7          every day.  That is a fraction of the people 

 8          that use the MTA in the subways and buses.  

 9          They just want results.  

10                 So we shouldn't bicker and fight over 

11          how we get those results.  Let's create a new 

12          revenue stream with congestion pricing, let's 

13          get the city to potentially put more money 

14          in -- if there's accountability, and the city 

15          has a say in what the money would go 

16          towards -- and let's fix this problem.  It's 

17          the lifeblood of the New York City economy.  

18          It's the most egalitarian thing about 

19          New York City is the subway system.  

20                 SENATOR KRUEGER:  Thank you.

21                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

22          Carroll.

23                 ASSEMBLYMAN CARROLL:  Thank you, Madam 

24          Chair.  


 1                 Good afternoon, Speaker.  I just want 

 2          to follow up right on your train of thought 

 3          you just had about our subway system, about 

 4          funding a revenue stream for right now as we 

 5          come up with the solution for a long-term 

 6          revenue stream that could be congestion 

 7          pricing.

 8                 What do you see as the role of the 

 9          City Council in this process?  Are you going 

10          to put forward some form of resolution in 

11          favor of a congestion pricing plan that we in 

12          the State Legislature will have to take up 

13          either in the budget or later on in the 

14          legislative session?

15                 NYC COUNCIL SPEAKER JOHNSON:  So I 

16          don't -- thank you.  Good to see you, 

17          Assemblyman.  Thank you for being here.  

18          Thank you for the question.

19                 I don't say this to shirk my 

20          responsibilities or to be vague or play 

21          games.  I am not wedded to any particular 

22          details.  So if the State Legislature or 

23          individual members like Assemblyman 

24          Braunstein or like someone from Southern 


 1          Brooklyn or like someone from Central 

 2          Brooklyn has particular concerns for their 

 3          constituents about coming into the central 

 4          business district below 60th Street, over the 

 5          three East River bridges or through a 

 6          particular tunnel, and they have concerns, 

 7          whether it be low-income folks, medical 

 8          appointments, et cetera, I am flexible.

 9                 Ultimately, I believe congestion 

10          pricing has to have a variety of principles 

11          attached to it:  

12                 One, disincentivize cars from coming 

13          into Manhattan.  It is choking the city 

14          streets, it's bad for the environment, it's 

15          bad for quality of life, and it's bad for 

16          economic activity in the city as well.

17                 Two, I think we need to create a 

18          dedicated revenue stream for not just the 

19          subways but rapid bus transit and transit 

20          deserts in eastern Queens and Southern 

21          Brooklyn.  So we need to have a variety of 

22          principals involved.  

23                 If individual members of the Senate 

24          and Assembly and the Council have particular 


 1          specifics that they're concerned about, I'm 

 2          flexible.  So what that means is I don't 

 3          think it's my place to come to the 

 4          Legislature today with a baked plan.  You all 

 5          are still debating the specifics.  You all 

 6          are still listening to members who have 

 7          concerns.  I'm sure Senator Golden has 

 8          concerns.  I'm sure Senator Lanza has 

 9          concerns.  I'm sure members of the Assembly 

10          have concerns.  I want to respect those 

11          concerns and work with the Legislature on the 

12          specifics to come up with a plan that follows 

13          the principles that I just laid out.

14                 So I do not see passing a home-rule 

15          message early on.  I think we want to hear 

16          from you all and work with you all in a 

17          constructive and pragmatic manner to try to 

18          get something passed that will create 

19          revenue.

20                 ASSEMBLYMAN CARROLL:  As for the 

21          Subway Action Plan, would you support -- as 

22          long as the Governor gave assurances that the 

23          money that Commissioner Lhota has asked for, 

24          the 50 percent from the city -- if there were 


 1          assurances that that money would be spent on 

 2          the New York City subway system, would you be 

 3          fine with the city funding the 50 percent 

 4          that Chairman Lhota says they should?  

 5                 NYC COUNCIL SPEAKER JOHNSON:  Well, 

 6          Chair Lhota called me the other day and 

 7          corrected me, because he read something in 

 8          the paper, and said we have already committed 

 9          to that.  So that commitment is there on that 

10          money being dedicated just to the subway 

11          system and no other part of the MTA -- not 

12          Metro-North, not Long Island Railroad or 

13          anything else.  

14                 But even then I can't say yes yet, 

15          because there needs to be greater 

16          accountability with the MTA.  You look at the 

17          cost overruns on East Side Access, which is 

18          going to serve very little people.  It's nice 

19          for the Long Island Railroad, customers that 

20          come in every day.  It doesn't serve a lot of 

21          people.  

22                 You look at the Fulton Center 

23          downtown, billions of dollars over budget.  

24          You look at the 7 train in my district; two 


 1          years behind schedule.  You look at a 

 2          potential L train shutdown, which is going to 

 3          affect a lot of people in Brooklyn and in 

 4          Manhattan.  Before the city can agree to put 

 5          money in, there needs to be tighter 

 6          standards -- deadlines, transparency, the 

 7          city having a say in the prioritization of 

 8          projects.  And the biggest thing of all is 

 9          the signal system.  I sat down with Ronnie 

10          Hakim and Joe Lhota.  They're great, they're 

11          talented, they're smart, they're dedicated 

12          public servants.  They are not putting enough 

13          money into the signal repairs.  That is the 

14          biggest issue that exists, more than subway 

15          upgrades.

16                 ASSEMBLYMAN CARROLL:  Well, you know, 

17          Speaker, that it's going to cost $20 billion 

18          to fix and update all the signals inside the 

19          system.  You know also that in the fall of 

20          2019, the MTA is going to release its next 

21          capital budget.  Currently, the State 

22          Comptroller has said that we should expect a 

23          budget shortfall in that capital budget 

24          upwards of $15 billion.  We don't even know 


 1          how much money they're going to spend on 

 2          signals, but clearly the system needs more 

 3          money.  I agree with you that it needs more 

 4          accountability, but I think we all know that 

 5          it needs more money and it needs it now.  

 6                 NYC COUNCIL SPEAKER JOHNSON:  Those 

 7          things are attached, though.  If you're going 

 8          to put more money in, there needs to be more 

 9          accountability.  I think both those things 

10          are connected.  

11                 The current plan on the signal system 

12          would not have the signals fixed until 2068.  

13          That is insane.  We'll all be dead -- not all 

14          of us, many of us will not be alive to see 

15          the signals upgraded.  It's unacceptable.

16                 ASSEMBLYMAN CARROLL:  I will still be 

17          alive.

18                 (Laughter.)

19                 NYC COUNCIL SPEAKER JOHNSON:  You'll 

20          still be alive.  You'll have a good pension 

21          by then, hopefully.

22                 It doesn't make any sense.  We need to 

23          do better.  I understand the cost is a lot.  

24          I understand the federal government has cut 


 1          back.  I understand all of these things.  

 2          It's an issue of priorities.  And to me, the 

 3          signal system itself is a bigger priority 

 4          than how a station looks when you walk down 

 5          inside of it.  I wish we could do both, but 

 6          if we're going to do one, it should be 

 7          signals.

 8                 ASSEMBLYMAN CARROLL:  Thank you.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10                 CHAIRWOMAN YOUNG:  Thank you, 

11          Mr. Speaker.  

12                 And first of all, congratulations.  

13          And I think you're a breath of fresh air, and 

14          it's good to have you here today.

15                 I wanted to get your take on the 

16          school system in New York City.  So had 

17          discussions with the chancellor, had 

18          discussions with the mayor about the 1600 

19          schools that comprise the New York City 

20          school system.  And I wanted to get your 

21          thoughts about funding of high-needs schools,  

22          because it's been very, very difficult for 

23          state government to get information from the 

24          city about where the funding is going.  


 1                 This year in the Executive proposal 

 2          there exists about $10.4 billion to be 

 3          allocated to New York City.  And the question 

 4          is, where is that money going exactly?  We're 

 5          not getting the reporting that we have 

 6          statutorily required from the city.  And so 

 7          there's a lot of concern out there about some 

 8          of the high-needs school districts that are 

 9          in some of the poorest areas of the city not 

10          getting the funding that they need.  

11                 Could you address that?

12                 NYC COUNCIL SPEAKER JOHNSON:  I want 

13          answers to those questions as well.  So, you 

14          know, I don't think it's an unreasonable 

15          thing to ask for transparency when it comes 

16          to how education dollars are being spent.

17                 One of the issues I would ask the 

18          State Legislature to look at, which I think 

19          you all could play a leading role in because 

20          of the amount of state aid that's given every 

21          year to the New York City public school 

22          system, is the level of segregation.  We have 

23          the most segregated school system in the 

24          United States of America.  That is shameful 


 1          and unacceptable.  

 2                 And many of the schools, Senator 

 3          Young -- Chair Young, that you are referring 

 4          to are probably some of the most segregated 

 5          schools, because they're some of the 

 6          lowest-income schools with lowest-income 

 7          families in the entire city -- pockets of 

 8          poverty.  Your zip code where you're born 

 9          should not determine the education that you 

10          ultimately receive.  

11                 It's not just about budget dollars, 

12          either.  It's about parental involvement, 

13          it's about a variety of other things like 

14          health outcomes and support in a community, 

15          integrating these things -- poverty reduction 

16          writ large.  So those are the issues, I 

17          think, that affect these things.  

18                 But asking for more transparency to 

19          understand how budget dollars are being 

20          spent -- you know, right now our budget is 

21          $88 billion.  Almost $30 billion of our city 

22          budget goes to the DOE.  

23                 So we always need more transparency.  

24          One thing I'm going to do as speaker is 


 1          through our own budget process we have units 

 2          of appropriation that are very large, 

 3          $300 million, $400 million that are put in 

 4          our municipal budget without any details.  

 5          I'm going to ask for details from the mayor 

 6          and from OMB when it comes to our own budget 

 7          process.  I don't know enough exactly about 

 8          what you're talking about, but it sounds 

 9          reasonable.

10                 CHAIRWOMAN YOUNG:  Thank you, 

11          Mr. Speaker.  

12                 And I think one of the common themes 

13          today has been about huge government 

14          bureaucracies and problems that exist.  So 

15          whether it's at NYCHA, whether it's within 

16          the school districts when you're talking 

17          about the lack of transparency -- which I 

18          agree with -- whether it's the MTA, which I 

19          also agree with you on that, we're talking 

20          about massive bureaucracies and it's very 

21          difficult to get to the root of the problem 

22          sometimes.  

23                 New York City government itself is a 

24          massive bureaucracy.  And you, as speaker, do 


 1          you have any plans to do some kind of 

 2          thorough review and vetting of how money is 

 3          spent just in general for city government?  

 4          Because you talk about the fact -- and 

 5          Senator Savino has been very vocal about this 

 6          also.  But we talk about the fact that while 

 7          the tax rate has not gone up in New York 

 8          City, the tax levy has gone up over and over 

 9          and over again.  So it's a shell game, it's a 

10          way to game the system.  And so the costs are 

11          getting heavier, people are suffocating under 

12          the burden of taxes in New York.  

13                 It seems to me that there should be 

14          some kind of review to see where you can find 

15          savings.  And I'm not saying you should cut 

16          vital programs like education or health or 

17          anything like that.  But we know that in 

18          every huge bureaucracy there exists waste.  

19                 So I wanted to get your thoughts about 

20          that.

21                 NYC COUNCIL SPEAKER JOHNSON:  So I 

22          have a few thoughts.  Thank you for the 

23          question, Chair Young.  It's a very, very 

24          important question.  


 1                 One thing I immediately did upon 

 2          becoming speaker is I created a new 

 3          subcommittee in our Finance Committee on 

 4          capital projects.  The city has a four-year, 

 5          $69 billion capital plan.  Four-year, $69 

 6          billion capital plan.  

 7                 So when we talk about the BQE 

 8          cantilever wanting design-build, when we talk 

 9          about siting community-based jail facilities 

10          in districts that are going to cost a lot of 

11          money, we need to have a capital committee 

12          that specifically looks at capital projects 

13          and has greater transparency, greater 

14          accountability, and to ensure projects and 

15          the money is being spent wisely.  

16                 I would not disagree with the premise, 

17          but I would reorient a little bit on 

18          something you said.  CUNY, Health + 

19          Hospitals, the MTA, NYCHA, and the Department 

20          of Education.  Those five huge bureaucracies 

21          or huge agencies that exist to serve millions 

22          of New Yorkers, I look at those five 

23          things -- I know there are only four legs on 

24          a stool, but as the five legs of a stool of 


 1          the social safety net in New York City.  A 

 2          robust and vital social safety net for the 

 3          poorest New Yorkers.  

 4                 And so for me, I'm here today to say 

 5          please don't cut the social safety net.  We 

 6          can look at ways -- we can look at 

 7          bureaucracy, we can have greater 

 8          accountability.  The mayor says that he's 

 9          getting $900 million in savings through 

10          agencies as part of our city budget.  We're 

11          going to have questions about that in our 

12          budget process starting in a month.  

13                 But when it comes to CUNY, NYCHA, H+H, 

14          Department of Education, and the MTA, they're 

15          the things that serve the poorest New 

16          Yorkers.  One in five New Yorkers is in 

17          poverty, one in five.  Forty percent, two in 

18          five, are below or at the poverty line.  

19          Please do not harm these vital, vital 

20          agencies that serve the least among us.

21                 CHAIRWOMAN YOUNG:  Thank you for that.

22                 And I also was very happy to hear that 

23          you would consider that the city should meet 

24          its statutory requirement of providing 


 1          capital funds to the MTA.  I think that's 

 2          critically important as we move forward.

 3                 And finally, I know that you said that 

 4          the problems at NYCHA far exceed just one 

 5          person, and I agree with that wholeheartedly.  

 6          However, you need to have trust that the 

 7          leadership in an agency is doing the right 

 8          thing.  And obviously there's an 

 9          investigation now being conducted by the 

10          federal government that the head of the NYCHA 

11          program actually falsified documents that 

12          certified that lead paint testing was done 

13          within NYCHA.

14                 So I believe that there has to be 

15          accountability and transparency, as you said.  

16          I believe that we need to have answers.  And 

17          a lot of poor people, as you pointed out, are 

18          depending on having a safe environment in 

19          which to live.  So we need to make sure that 

20          this bureaucracy is doing the right things.  

21          And I want to associate myself with Senator 

22          Savino's point that there should be a federal 

23          monitor to oversee NYCHA.  This has gone on 

24          for decades and decades.  It's only getting 


 1          worse.  We need to have something positive 

 2          happen.  

 3                 So I appreciate your comments too.

 4                 NYC COUNCIL SPEAKER JOHNSON:  Give us 

 5          some more money.  NYCHA needs it.  NYCHA 

 6          needs more money.

 7                 CHAIRWOMAN YOUNG:  Well, you know -- 

 8          you know what, we have given --

 9                 NYC COUNCIL SPEAKER JOHNSON:  You 

10          can't call for greater accountability and 

11          transparency without the requisite amount of 

12          support.

13                 CHAIRWOMAN YOUNG:  But here's the 

14          problem.  So the state has put in 

15          $300 million, right? 

16                 NYC COUNCIL SPEAKER JOHNSON:  In 

17          previous fiscal years.

18                 CHAIRWOMAN YOUNG:  Right.  And -- but 

19          right now, because it's being mismanaged, how 

20          can we be sure that the money is being spent 

21          correctly?  And so that's why I would suggest 

22          a federal monitor could go a long way in 

23          making sure that the system is accountable 

24          and transparent.


 1                 NYC COUNCIL SPEAKER JOHNSON:  I 

 2          understand.  But in the meantime, NYCHA 

 3          residents should not remain at risk by us not 

 4          stepping up to the plate.  The city has put 

 5          $1.9 billion over the last five fiscal years 

 6          into NYCHA, an additional $262 million 

 7          commitment in the upcoming fiscal year.  I 

 8          know you all put money in.  NYCHA needs more 

 9          money.  Please, we need more money.

10                 CHAIRWOMAN YOUNG:  But it needs 

11          responsible leadership too.

12                 NYC COUNCIL SPEAKER JOHNSON:  I don't 

13          disagree with that.  I'm not here to defend 

14          the chair.  She is supposed to come to a 

15          hearing tomorrow on boilers in front of the 

16          City Council.  I will be at that hearing for 

17          as long as the hearing lasts.  It's supposed 

18          to start at 10 a.m., it's supposed to go 

19          until 4 p.m.  Residents are coming, and NYCHA 

20          leadership is supposed to be there.  She said 

21          that she has jury duty tomorrow, so she might 

22          not be there.  That's unacceptable.  She has 

23          to be there.

24                 CHAIRWOMAN YOUNG:  That's good to 


 1          hear.

 2                 NYC COUNCIL SPEAKER JOHNSON:  So this 

 3          council, Councilmember Alicka Ampry-Samuel, 

 4          the new chair of the Public Housing 

 5          Committee, she has 27 public housing 

 6          developments in her district.  Councilmember 

 7          Ritchie Torres, who chaired the committee 

 8          previously, they're going to jointly cochair 

 9          that hearing tomorrow to look at the boiler 

10          problems and to talk about management issues 

11          in a broader way.  

12                 But please, Senator Young, Chair 

13          Young, I would ask you not to allow that to 

14          get in the way of us stepping up in the way 

15          we need to for NYCHA residents.  We need more 

16          money for these buildings.

17                 CHAIRWOMAN YOUNG:  Good luck with the 

18          hearing tomorrow.

19                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

20          you.  

21                 CHAIRWOMAN YOUNG:  It sounds very 

22          important.

23                 NYC COUNCIL SPEAKER JOHNSON:  Do you 

24          want to come?


 1                 CHAIRWOMAN YOUNG:  Unfortunately I 

 2          have to be -- well, not -- no.  

 3                 CHAIRWOMAN WEINSTEIN:  We have another 

 4          hearing.

 5                 CHAIRWOMAN YOUNG:  It's the most 

 6          wonderful time of the year, budget time in 

 7          New York State.  So fortunately, I have to be 

 8          here tomorrow.

 9                 (Laughter.)

10                 CHAIRWOMAN WEINSTEIN:  Thank you.  

11                 And we'll go to Assemblyman Benedetto, 

12          chair of our Cities Committee.

13                 ASSEMBLYMAN BENEDETTO:  Thank you, 

14          Madam Chair.  

15                 Speaker, congratulations.  And I wish 

16          you lots of luck.  You have a lot to deal 

17          with, especially with some of the members we 

18          sent down to you, many of us who contributed 

19          heavily to get them out of here.

20                 NYC COUNCIL SPEAKER JOHNSON:  I'm not 

21          going to tell Assemblyman Gjonaj you said 

22          that.  Councilmember Gjonaj, I mean.  

23                 ASSEMBLYMAN BENEDETTO:  Listen, I was 

24          talking briefly with the mayor as far as 


 1          congestion pricing.  Both of you seem to be 

 2          fairly on the same page with that.  I also 

 3          mentioned to him about what type of 

 4          congestion pricing will we have, and 

 5          basically will it be a single payer or will 

 6          it be a variable fee.  And I'll be interested 

 7          in your opinion on that.  

 8                 And in particular -- I'm not talking 

 9          about doctor's appointments and stuff like 

10          that, which is very important and must be 

11          considered, but I'm also talking about peak 

12          hours versus off-peak hours, after 7 o'clock 

13          for people who want to come for the night 

14          life in New York City, who -- weekends when 

15          families want to bring their kids into the 

16          city to see the museums and all the cultural 

17          advantages the city has.  

18                 It would be interesting hearing your 

19          opinion on that.

20                 NYC COUNCIL SPEAKER JOHNSON:  Again, 

21          Assemblyman, I'm not saying this to be vague 

22          or evasive in any way.  I am really open.  So 

23          I am open to a plan that would pass the State 

24          Legislature, I am open to a plan that would 


 1          address the individual concerns of City 

 2          Councilmembers related to their own 

 3          constituents and districts.  

 4                 And so I want to see something get 

 5          done.  I want it to get passed this year, 

 6          this legislative session.  My district, if 

 7          you'll indulge me for a moment, is fairly 

 8          large geographically.  My district includes 

 9          the neighborhoods of West Soho, Hudson 

10          Square, Greenwich Village and the West 

11          Village, Chelsea, Flatiron, Hell's Kitchen, a 

12          little bit of the Upper West Side, Columbus 

13          Circle, Times Square, the Theater District, 

14          the Garment District, Hudson Yards, the 

15          High Line, the Hudson River Park, Penn 

16          Station, Moynihan Station, Madison Square 

17          Garden, the Port Authority Bus Terminal, the 

18          Javits Center and the Whitney Museum.  The 

19          west side of Manhattan from Canal Street to 

20          63th Street.  Each one of us in the council 

21          represent 170,000 constituents.  The average 

22          daily population of my district is 

23          2.2 million people because of what's in my 

24          district.


 1                 Congestion is choking the streets of 

 2          New York City.  Seven days a week, from 

 3          6 a.m. until 11 o'clock at night.  It is bad 

 4          for business, it's bad for the environment, 

 5          it's bad for quality of life.  So anything 

 6          that can get us to disincentivize cars from 

 7          coming into Manhattan, to create a dedicated 

 8          revenue stream to the subways and buses in 

 9          New York City, I am open to working with you 

10          and your colleagues here in the State 

11          Legislature to see a plan get done.

12                 ASSEMBLYMAN BENEDETTO:  Thank you very 

13          much, sir.  Thank you, Madam Chairman.

14                 CHAIRWOMAN WEINSTEIN:  I just have a 

15          question to follow up on Mr. Benedetto.  

16                 So what do you attribute the increased 

17          congestion within your district or within 

18          Manhattan to these past few years?  

19                 NYC COUNCIL SPEAKER JOHNSON:  I think 

20          it's a variety of things.  

21                 One, I do believe that the for-hire 

22          vehicle industry has contributed 

23          significantly.  Uber, Lyft, Juno, all the 

24          other services.  If you look at the number of 


 1          new licenses that have been gained over the 

 2          last five years, it has been astronomical.  

 3          They're making a lot of money.  I know that 

 4          they have said they're open to -- and I think 

 5          this might be actually the easier piece of 

 6          congestion pricing, is putting an additional 

 7          surcharge on for-hire vehicles that would go 

 8          into the congestion pricing dedicated revenue 

 9          stream.  So I think that's one piece.  

10                 The second piece is tourism continues 

11          to grow in New York City, which is a good 

12          thing for our economy.  With tourism comes 

13          more tour buses.  So we have seen a huge 

14          increase in double-decker buses and tourism 

15          buses and interstate buses -- BoltBus, 

16          Megabus, these other -- Greyhound Bus, the 

17          Chinatown bus companies.  We've seen more of 

18          those come in.  

19                 You have companies like Amazon, like 

20          Fresh Direct, these other companies that have 

21          been huge and successful as well.  So on the 

22          streets of New York City, every day, Fresh 

23          Direct trucks, more UPS trucks, more FedEx 

24          trucks, because of the online retail 


 1          environment that we're living in now.  

 2                 And then generally, if you do not 

 3          disincentivize cars from driving into 

 4          Manhattan, they will drive into Manhattan.

 5                 So it's a combination of all of those 

 6          things, population growth.  Right now the 

 7          Department of City Planning in New York City 

 8          has now said we have just surpassed 

 9          8.6 million New Yorkers; as of today, we're 

10          up to 8.6 million.  They're now projecting by 

11          2030, in the next 12 years, we're going to 

12          pass 9 million New Yorkers.

13                 So it's all of those factors that has 

14          increased congestion and traffic in New York 

15          City.  And then there are other issues.  

16          Dilapidated Port Authority Bus Terminal, so 

17          you have buses on the streets who can't fit 

18          into the terminal.  You have Madison Square 

19          Garden, Penn Station, the PATH trains -- 

20          everyone coming into the city and wanting to 

21          use different ways to get around.  And when 

22          the subways are failing and not up to snuff, 

23          people then hop in a taxi or an Uber or some 

24          type of ride-share vehicle.  


 1                 So if we create a level of trust in 

 2          our mass transit system, we will get less 

 3          people to drive into New York City because 

 4          they will feel like, oh, we have reliable 

 5          mass transit.  The public doesn't have that 

 6          right now.  So on days when someone says, oh, 

 7          do I take the train or do I drive, many times 

 8          people don't want to be in a bad subway 

 9          system so they'll drive instead.  Or I'll hop 

10          in an Uber instead.  

11                 All of this comes back to us fully 

12          funding the MTA in the short term and having 

13          a long-term plan.  Which I think doesn't just 

14          mean the subways, it means in your district 

15          and in other districts in South Brooklyn, 

16          more reliable, rapid bus transit service and 

17          other express bus service, increasing those 

18          to give riders more possibilities.  

19                 CHAIRWOMAN WEINSTEIN:  You know, just 

20          listening to you describe some of the 

21          increase in congestion, very little of it 

22          seems to be from more of my constituents or 

23          others in Southern Brooklyn and parts of 

24          Queens coming in, but really the tremendous 


 1          increase in for-hire vehicles, the retail -- 

 2          the buses you talked about, the tour buses, 

 3          and the increase of trucks.  

 4                 So I would hope that we'd try and 

 5          concentrate on some of the causes of 

 6          congestion rather than something that's a 

 7          very wide approach that will be difficult for 

 8          people to agree upon.  

 9                 And you know, one thing that I 

10          noticed, my niece just started at Columbia 

11          University, so she was able to take -- she 

12          was trying to decide whether to take the 

13          train or -- it was late at night -- take the 

14          train and a bus to go to my mom on the -- who 

15          lives in Liz Krueger's district, and the Uber 

16          was only $2, the Uber pool was $2.  So why 

17          would she -- you know, and not just her, but 

18          why would people take the bus -- a subway and 

19          a bus when they could pay less money to ride 

20          in a car for half the time?  

21                 So I think we really need to focus on 

22          that, to make sure that we're not stealing 

23          riders from the subway system and revenues 

24          from the subway and bus system onto the ride 


 1          shares, and have a funding stream that can 

 2          help bring some riders back into the subway 

 3          and buses.

 4                 NYC COUNCIL SPEAKER JOHNSON:  I hear 

 5          you.  And I think that the for-hire vehicle 

 6          market we need to continue to look at in a 

 7          series of ways, because it has exploded and 

 8          been very, very successful in taking a big 

 9          share of folks that may use alternate means 

10          of transportation.  

11                 But I would respectfully say, Madam 

12          Chair -- and I have the deepest respect for 

13          you, and I know you are a huge advocate for 

14          your district, and I get it -- I would say 

15          that we still have to disincentivize cars 

16          from coming into Manhattan.  And it's not 

17          just about delivery trucks and for-hire 

18          vehicles, it's about cars generally coming 

19          into Manhattan.  

20                 And until you disincentivize in some 

21          way -- and again, I'm open.  If people need 

22          to come in to get to the FDR, don't toll the 

23          FDR or the West Side Highway.  Make those 

24          options on the outer ring free.  


 1                 I'm flexible.  I want to come up with 

 2          something that works.  But I don't want us to 

 3          rule out I think a very important part of 

 4          this in moving the plan forward.

 5                 CHAIRWOMAN WEINSTEIN:  Thank you.  And 

 6          thank you for being here today.

 7                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

 8          you very much, Madam Chair, Madam Chair.  

 9          Thank you all very, very much for having me.  

10          I look forward to working together in 

11          partnership and cooperation, with a level of 

12          pragmatism, to get things done for the people 

13          of New York City.

14                 CHAIRWOMAN YOUNG:  Thank you.  

15                 CHAIRWOMAN WEINSTEIN:  As do we.  We 

16          thank you.

17                 NYC COUNCIL SPEAKER JOHNSON:  Thank 

18          you.  

19                 CHAIRWOMAN WEINSTEIN:  Next, Steve 

20          Acquario, the New York State Association of 

21          Counties.

22                 MR. ACQUARIO:  Good afternoon.

23                 CHAIRWOMAN YOUNG:  Good afternoon.  

24                 CHAIRWOMAN WEINSTEIN:  Good afternoon.


 1                 CHAIRWOMAN YOUNG:  How are you?

 2                 MR. ACQUARIO:  Thank you.  Thank you.  

 3                 Good afternoon, members of the 

 4          New York State Legislature.  My name is 

 5          Stephen Acquario.  I'm the executive director 

 6          of the New York City Association of Counties.  

 7          I'm here on behalf of a unit of local 

 8          government in New York State called local 

 9          government.  

10                 In New York we have towns, villages, 

11          cities, and counties.  There are 62 counties, 

12          five of which are in the New York City area 

13          and 57 outside of New York City.  Governing 

14          in all levels of government these days is 

15          very challenging, the recent changes in the 

16          federal tax code being a prime example of 

17          what's happening to states like New York -- 

18          particularly cities like New York, but also 

19          to all areas of New York State and local 

20          government.  

21                 It's a pleasure to be with you, and I 

22          commend you for taking feedback from the 

23          communities.  I represent some views of our 

24          communities.  These are regional communities, 


 1          the counties -- a regional view, a regional 

 2          government.  You'll hear later this evening 

 3          from other units of local government, towns 

 4          and cities and villages.  And so it's a 

 5          pleasure to give the view of the regional 

 6          governments.

 7                 So on page 2 -- I'll be brief, I will 

 8          not be reading my testimony, in the interests 

 9          of what you've been going through all day 

10          long and in the interests of those that come 

11          behind me.  I will be brief and touch on a 

12          few issues.  

13                 On page 2, on the revenue side of the 

14          Executive Budget submitted by Governor Andrew 

15          Cuomo, is a proposal to modernize the state's 

16          sales tax collections.  Counties support the 

17          proposal in the Governor's budget, the second 

18          time that he has submitted this proposal to 

19          update the state's sales tax code in 

20          recognition of the changes in the economy and 

21          the retail marketplace.  The Governor's 

22          Internet Fairness Conformity tax proposal 

23          appropriately modernizes the state's tax code 

24          and will help level the playing field between 


 1          store owners in our communities and 

 2          internet-based retailers.

 3                 On page 3, e-commerce continues to 

 4          grow at about 15 percent per year, according 

 5          to the United States Census Bureau.  In 2017 

 6          it's likely that e-commerce sales will exceed 

 7          $450 billion nationally and account for 

 8          nearly 10 percent of all retail sales.  

 9          According to the state's Division of Budget, 

10          approximately $140 million in local sales tax 

11          owed under the state law for internet-based 

12          purchases are presently not collected.

13                 This update is long overdue.  It 

14          imposes no new taxes.  It injects more 

15          fairness into the retail marketplace.  It 

16          protects local jobs and eases the sales tax 

17          collection process for vendors.  The proposal 

18          will help preserve a key pillar of a local 

19          tax base, as sales tax is the number-one 

20          source of revenue for more than half of the 

21          57 counties.  Overall, counties pass through 

22          25 percent of sales tax revenues to other 

23          local governments to help them reduce their 

24          property taxes and pay for local services.  


 1                 We must level the playing field 

 2          between e-commerce and Main Street and mall 

 3          brick-and-mortar sales.  It's about 

 4          marketplace fairness.

 5                 Additionally, a second revenue 

 6          proposal advanced by the Governor, on 

 7          page 3 the Governor proposes to eliminate a 

 8          sales tax exemption that exists for energy 

 9          services corporations that was implemented 

10          nearly 20 years ago.  The change is expected 

11          to increase county sales tax collections by 

12          nearly $80 million if it's enacted by the 

13          Legislature.  This will help, again, reduce 

14          the pressure on local property taxes.  We 

15          appreciate your consideration of this 

16          proposal.

17                 On the expense side, counties and 

18          New York City continue to spend nearly 

19          $8 billion on Medicaid.  The state's Medicaid 

20          growth cap has successfully lowered county 

21          property taxes, but more needs to be done.  

22          The Medicaid growth caps have been a huge 

23          benefit for property taxpayers.  Without the 

24          3 percent annual growth cap implemented in 


 1          2005, and the zero percent growth cap 

 2          implemented in 2015, county property taxes 

 3          would be much, much higher today.

 4                 Counties have been able to keep 

 5          property taxes low because of these mandate 

 6          relief actions which have allowed counties to 

 7          keep the average annual growth rate in county 

 8          property taxes below the rate of inflation 

 9          since 2006.

10                 We are pleased that members of the 

11          Legislature continue today in 2018 to 

12          continue to show a strong interest in a 

13          continued takeover of local Medicaid costs.  

14          We welcome these legislative proposals, and 

15          we look forward to working with our state 

16          partners in making this a reality.

17                 On page 5, if the state's goal is to 

18          keep property taxes low -- and it appears 

19          that this is the state's goal -- then it's 

20          counterproductive to cost-shift to local 

21          governments.  And on pages 5 through 7 of the 

22          testimony we are highlighting either block 

23          grants or cuts that are detailed in our 

24          testimony.


 1                 On page 7 there is new Executive 

 2          authority of concern to county governments, 

 3          to local government.  Counties oppose the 

 4          Governor's proposal to continue his authority 

 5          to rescind state appropriations if federal 

 6          Medicaid funding falls by more than 

 7          $850 million or if other federal funding is 

 8          cut by a similar amount.

 9                 Counties believe a more open and 

10          deliberative process should be utilized when 

11          significant midyear funding cuts are enacted.  

12          It should be a completely open legislative 

13          process so that stakeholders and taxpayers 

14          are made aware of the consequences of budget 

15          cuts in their communities.

16                 The Governor is also proposing a 

17          second automatic budget-cutting authorization 

18          in an instance where the state's revenue 

19          projections fall $500 million or more below 

20          what was budgeted.  In this case, there is no 

21          provision at all for the State Legislature to 

22          be involved in deciding how these funding 

23          cuts would be imposed.  

24                 Also, considering that the state has 


 1          lowered their own revenue projections six 

 2          times in the last two years by a cumulative 

 3          $4.2 billion dollars, the likelihood of this 

 4          unilateral Executive Budget authority being 

 5          triggered is more likely than people might 

 6          think.  

 7                 For your information, a 1 percent 

 8          across-the-board cut to local governments is 

 9          the equivalent of hundreds of millions of 

10          dollars.

11                 On page 8 and page 9, and also on 

12          pages 15 to 19, there are certain criminal 

13          justice initiatives and public safety 

14          initiatives.  I'll just highlight a few.  

15                 On the bottom of page 8 to the top of 

16          page 9, for the third year in a row the 

17          state's required increase to district 

18          attorneys' salaries -- that under state law 

19          is tied to state judge salaries -- are not 

20          included in the state budget.  The state has 

21          historically paid for this.  This mandatory 

22          salary level to a county employee will again 

23          increase this year.  The state inaction costs 

24          counties $2 million per year.  


 1                 We strongly encourage the Legislature 

 2          to fully fund the state-mandated salary 

 3          increase in the final budget.  While this may 

 4          not seem to be a large amount of money when 

 5          in comparison to the state's $160 billion 

 6          budget, in some counties this increase alone 

 7          is equal to almost one-third of their entire 

 8          annual allowable tax cap growth last year.  

 9                 On page 16, the Governor proposes 

10          language to amend the Correction Law that 

11          currently provides for reimbursement to 

12          counties for both travel costs and a portion 

13          of salary costs for the transportation of 

14          what's called state-ready inmates.  This 

15          legislation eliminates the reimbursement 

16          related to personnel service costs.  

17                 However, the Department of Corrections 

18          and Community Supervision continues to 

19          reimburse strict transportation costs, but 

20          not personnel costs -- staff.  We ask the 

21          Legislature to reject this proposal and 

22          recommend that the state transfer parole 

23          violators held in county jails within 10 days 

24          to a state facility and pay reimbursement to 


 1          counties for any costs they incur for housing 

 2          state parole violators after 10 days in a 

 3          local jail.

 4                 On page 17, an important statute that 

 5          you passed last year on Raise the Age -- we 

 6          have been working very closely with the 

 7          Governor's office and other agencies involved 

 8          with raising the age.  Since this historic 

 9          law was signed into law, we are supportive of 

10          the Executive Budget proposal that includes 

11          $100 million to implement Raise the Age.  

12          However, we need further clarification on how 

13          this money will be appropriated.

14                 In addition, the state should de-link 

15          the adherence to the state's property tax cap 

16          as an eligibility requirement for full state 

17          reimbursement of costs incurred to implement 

18          this new state mandate.  The state should 

19          also consider, rather than reimbursing 

20          counties for their future debt service for 

21          newly constructed or renovated specialized 

22          secure detention facilities, fully funding 

23          the capital cost of these facilities up-front 

24          through the Dormitory Authority or other 


 1          state capital programs, including design and 

 2          construction services.

 3                 While there has been consistent  

 4          outreach by the Executive branch, the 

 5          regulations to implement this statute are 

 6          still not final, which has hampered the 

 7          construction or the renovation of new 

 8          facilities.  Counties remain highly concerned 

 9          about the ability to have the necessary 

10          number of new beds available across the state 

11          in the next eight months.  The state must 

12          seriously consider modifications to the 

13          state's procurement law, including the use of 

14          design-build and other waivers to expedite 

15          the construction of these facilities.  

16                 Back on page 10 -- and I'll get 

17          through this very quickly -- Election Law.  

18          If the the state enacts voting reforms, any 

19          resulting costs to counties for early voting, 

20          direct or indirect, should be paid for by the 

21          state to help impact the local property tax 

22          base.  

23                 On page 11, with respect to gaming, 

24          I'd like to just highlight the pending 


 1          decision by the United States Supreme Court 

 2          in Christie v. National Collegiate Athletic 

 3          Association and the impact should the federal 

 4          law be overturned.  On page 13, with the 

 5          Supreme Court case pending and its related 

 6          ramifications, the state should begin to 

 7          consider a framework -- and I know the 

 8          New York State Senate recently had a hearing 

 9          on this -- that protects the residents and 

10          governmental interests.  

11                 NYSAC would support a system that 

12          allows gaming facilities such as OTBs to host 

13          sports betting and further distribute this 

14          revenue to the local tax base.

15                 On page 14, NYSAC fully supports the 

16          Governor's proposal that links the state and 

17          local government judgment interest rates to 

18          the federal rates, which are currently below 

19          2 percent.  The current judgment interest 

20          rate in New York State is set in law at 

21          9 percent and was established in the 1970s 

22          during a period of very high interest rates.

23                 On page 20, countywide shared 

24          services.  The state should be required to 


 1          participate on any service-sharing panels, 

 2          since they have resources and assets that 

 3          could be drawn upon to help reduce the costs 

 4          for the taxpayers and therefore the property 

 5          tax burden in each of our counties.  

 6                 Shared-services proposals could 

 7          involve the state sharing its prison space, 

 8          office buildings, equipment, information 

 9          technology, records management systems, 

10          publicly-generated electricity, and other 

11          resources they may have available in our 

12          communities.  This would help to achieve more 

13          significant property tax savings than local 

14          partnerships alone can accomplish.

15                 For example, Allegany County recently 

16          entered into a multiyear shared services 

17          agreement with the State Department of 

18          Transportation that provides an avenue for 

19          sharing or lending equipment between the 

20          county and the state department.  This 

21          example demonstrates that it can be both 

22          cost-effective and mutually beneficial for 

23          the state to share services with local 

24          governments.


 1                 Finally, on the bottom of page 20, the 

 2          state should consider modifications to the 

 3          arcane requirements within the state's 

 4          property tax cap calculation that places 

 5          barriers to the most comprehensive shared 

 6          services reforms when functions are fully 

 7          transferred from one level of government to 

 8          another.  Currently, the one-size-fits-all 

 9          approach of cutting the local property tax 

10          base of the entity that loses a function does 

11          not consider a local budget circumstance and 

12          the ability of a smaller jurisdiction to 

13          absorb the loss of the tax cap growth.  The 

14          cap adjustment in these situations should 

15          allow entities that have given up a function 

16          to retain at least half of the value of the 

17          function transfer.

18                 Finally and lastly, easing 

19          restrictions for creating health insurance 

20          consortiums.  We are presently awaiting 

21          guidelines from the Department of Financial 

22          Services, new guidelines to foster and help 

23          local governments who wish to put together 

24          health insurance consortiums.  


 1                 Thank you.

 2                 CHAIRWOMAN WEINSTEIN:  Thank you.

 3                 Senate?  

 4                 CHAIRWOMAN YOUNG:  Thank you.  We've 

 5          been joined by Senator Fred Akshar, who has a 

 6          question.  Or two, maybe.

 7                 SENATOR AKSHAR:  Right.  Thank you, 

 8          Madam Chairwoman.  I appreciate it very much.  

 9                 Stephen, always good to be in your 

10          company and your team.  I want to publicly 

11          thank you for always providing me with help, 

12          of course, on all things relating to county 

13          government.

14                 One concurring message that I hear 

15          often when I am travelling in my Senate 

16          district in the Southern Tier -- twofold -- 

17          from the everyday New Yorker is that they're 

18          seeking property tax relief, and then from 

19          municipal leaders they're certainly seeking 

20          mandate relief.  

21                 So just a few questions.  What is your 

22          personal feeling about the property tax cap?  

23          Do you think that the cap has been 

24          successful?


 1                 MR. ACQUARIO:  I think the state's 

 2          focus on property taxes was the right one, 

 3          and the property tax cap has served a very 

 4          important and useful purpose for New Yorkers.

 5                 SENATOR AKSHAR:  So in 2012 when that 

 6          was implemented, long before I got here -- as 

 7          you well know, I'm only in my second year -- 

 8          during that conversation about the property 

 9          tax cap, there was a pledge to provide 

10          mandate relief.  Has Albany provided that 

11          mandate relief as proposed?  Or quite frankly 

12          as promised, rather.

13                 MR. ACQUARIO:  No, and things have 

14          gotten worse since the state imposed the 

15          property tax cap.  The pledge was to 

16          implement mandate relief to help reduce the 

17          cost of mandated programs in the communities.  

18          What the state did -- and we appreciate it 

19          sincerely, as do the local government 

20          officials -- was they capped future costs.  

21                 So it was cost avoidance -- that the 

22          state put in place a Medicaid cap, a new 

23          pension tier -- but there was never a law 

24          that was passed to begin to provide true 


 1          unfunded mandate relief.

 2                 SENATOR AKSHAR:  So from where you 

 3          sit, for the people that you -- the members 

 4          that you represent, is there any one single 

 5          issue that the people that you represent 

 6          would like to see the State Legislature do to 

 7          provide that true mandate relief?

 8                 MR. ACQUARIO:  Well, Medicaid is the 

 9          largest mandate.  It continues to consume 

10          nearly $8 billion -- $2 billion upstate, 

11          $6 billion in New York City.  But this is a 

12          very diverse state.  Wayne County, 

13          Cattaraugus County -- very different than 

14          Nassau, Suffolk, New York City.  

15                 We have very, very rural and aging 

16          populations in the Southern Tier, Western 

17          New York, all over the state.  In the North 

18          Country, there's very sparse populations up 

19          there.  For these communities to sustain the 

20          level of Medicaid contribution that they make 

21          and provide emergency public safety services, 

22          recruit emergency medical personnel for 

23          ambulance services, 911 services, is going to 

24          prove to be very, very difficult.  


 1                 The state should continue its focus to 

 2          help relieve the local share of Medicaid.  

 3                 SENATOR AKSHAR:  So if I suggested to 

 4          you that the state legislature, state 

 5          government as a whole took over the county's 

 6          share of Medicaid expense, would that sit 

 7          well with the members that you represent?

 8                 MR. ACQUARIO:  Absolutely.  The 

 9          proposal as it was enacted was the wrong one 

10          in the 1960s.  It should never have been the 

11          way it was enacted in the 1960s.  And in 

12          2018, 2020, the fact that we're paying 

13          $8 billion into a federal Medicaid program, 

14          it's just simply unsustainable.  

15                 Local programs will continue to 

16          suffer.  Our senior service programs, our 

17          ability to fix our roads and bridges, provide 

18          veterans' programs -- community-based 

19          programs will all suffer unless we can 

20          continue to focus on it.  

21                 It shouldn't be that we just want to 

22          cap the growth.  It should continue to be a 

23          focus on how can the state continue to 

24          address this at the local level.


 1                 SENATOR AKSHAR:  Well, I'm a firm 

 2          believer, if we feel so strongly about 

 3          something at the state level, if something is 

 4          so important to us, that we should be paying 

 5          for it.  

 6                 Now, I would add just one small caveat 

 7          to my previous question.  If the State 

 8          Legislature acted on something like this but 

 9          then said to all of the county executives and 

10          the respective chairs, legislators, so on and 

11          so forth, that that savings had to be passed 

12          on to the taxpayer dollar for dollar, do you 

13          think that that would also be received the 

14          same way?

15                 MR. ACQUARIO:  It's complicated.  The 

16          relationship of taxation to service and the 

17          mandated function between the two units of 

18          governments is very intertwined.

19                 There are largely two forms of revenue 

20          that we rely on, sales tax and property tax.  

21          But I think if it's reasonable for the state 

22          to assume that they are providing a benefit 

23          to the taxpayer to reduce that local share of 

24          Medicaid, then it is reasonable to expect a 


 1          return reduction in local taxation to help 

 2          the taxpayers of this state.  I think it's a 

 3          reasonable thing.

 4                 SENATOR AKSHAR:  So let me just -- 

 5          Madam Chairwoman, just one more question, if 

 6          I may.  With a savings like that or an 

 7          initiative like that, from your perspective, 

 8          how would the SALT deduction, the 

 9          conversation that everybody's having about 

10          SALT, how would that be affected, from your 

11          point of view?

12                 MR. ACQUARIO:  Well, first of all, I 

13          commend the Governor for protecting the 

14          interests of the state, and I commend the 

15          State Senate in enacting legislation recently 

16          in the past few weeks to implement state tax 

17          code changes.

18                 Whether it's -- we lost the ability to 

19          deduct our property taxes.  We lost the 

20          ability to deduct our property taxes, our 

21          income taxes up to 10,000.  So the state has 

22          begun efforts, putting in place programs to 

23          change the state's tax code, to create a 

24          payroll tax so that employers could deduct it 


 1          and employees would not be hurt, on a 

 2          voluntary basis.  

 3                 But what's left out of this discussion 

 4          is this complex area of the property tax and 

 5          how can we help the homeowners on Long Island 

 6          who pay the highest property taxes in the 

 7          United States.  And in Westchester.  

 8                 And on a per capita basis -- Senator, 

 9          in your district in Broome County and in 

10          Western New York, per capita -- and Wayne 

11          County is the highest per capita perhaps in 

12          the United States -- what's missing from this 

13          discussion is the property tax.  

14                 The easiest way to provide true, 

15          straightforward, meaningful, structural 

16          long-term property tax relief is to address 

17          it through unfunded mandates and to pick up a 

18          mandated function that the state is mandating 

19          on the local government.

20                 SENATOR AKSHAR:  I thank you for your 

21          input and your insight on this particular 

22          issue.  It is my hope that we can advance 

23          this issue and provide two things -- provide 

24          true mandate relief to the counties, and then 


 1          real true property tax relief to all 

 2          New Yorkers.  Thank you for your testimony.

 3                 MR. ACQUARIO:  Thank you, Senator.

 4                 CHAIRWOMAN YOUNG:  Thank you, Senator.

 5                 SENATOR KRUEGER:  Hi.  Listening to 

 6          your back and forth -- so just to 

 7          double-check, yes, we would like the state to 

 8          pick up the cost of Medicaid so that the 

 9          counties do not have to pay it.  I've always 

10          been a supporter of that.  But you're not 

11          proposing reducing services through Medicaid 

12          for people, because I heard you say that 

13          particularly in the upstate counties we have 

14          a lot of seniors and low-income people who 

15          are very dependent on these services.  Would 

16          that also be correct?

17                 MR. ACQUARIO:  That's correct.

18                 SENATOR KRUEGER:  Thank you.

19                 MR. ACQUARIO:  I'm not proposing that.  

20          Thank you.  

21                 SENATOR AKSHAR:  Neither am I.

22                 CHAIRWOMAN YOUNG:  Thank you.

23                 CHAIRWOMAN WEINSTEIN:  Thank you for 

24          being here.  And we do have your full 


 1          testimony, and we've actually shared it, as 

 2          all testimony has been shared with all the 

 3          members of the relevant committees as well as 

 4          the Ways and Means Committee.

 5                 MR. ACQUARIO:  Thank you.

 6                 CHAIRWOMAN YOUNG:  Thank you for all 

 7          of your input.

 8                 SENATOR KRUEGER:  Thank you.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10                 Next we have the New York State 

11          Conference of Mayors, Barbara Van Epps, 

12          deputy director.

13                 (Discussion off the record.)

14                 MS. VAN EPPS:  Good afternoon, 

15          Chairwoman Young, Chairwoman Weinstein, and 

16          members of the committee who have managed to 

17          stick it out for this long.  I greatly 

18          appreciate you being here.  I know it's been 

19          a long day.  

20                 I too am going to try desperately to 

21          summarize.  You have copies of the testimony, 

22          I won't go through the whole thing, but I'm 

23          just going to try to touch upon some of the 

24          high points.


 1                 I do want to start by talking about 

 2          the shared-services initiative, because it's 

 3          gotten a lot of attention.  Shared services 

 4          in general has gotten a lot of attention over 

 5          the last few years, and today there's been a 

 6          fair amount of focus on it.  

 7                 And we do spend the first couple of 

 8          pages of our testimony talking about this 

 9          initiative, and I just want to be clear.  

10          It's not that we don't think that getting 

11          together and talking as groups of local 

12          government officials is not worthwhile, 

13          because clearly it is.  What we're trying to 

14          say is we think local officials have been 

15          doing that for years.  

16                 We have proof that they have been 

17          doing that for years.  There's numerous 

18          shared-services arrangements that have been 

19          in place for decades.  So it's not that we 

20          don't think the initiative is worthwhile, we 

21          just don't think it has to be mandated at 

22          this point, especially when the money is 

23          going to go away after the first two years.  

24                 That state match money is only for 


 1          those initiatives that you are able to 

 2          implement in the subsequent year, and I would 

 3          argue that some of those proposals -- and 

 4          that's all they are right now, are 

 5          proposals -- you may not have the opportunity 

 6          to implement in the next two years, and then 

 7          that money goes away.

 8                 So it's not that we don't think it's 

 9          worthy of getting together and talking about 

10          share services.  But when you look at the 

11          results of the 34 plans that were put into 

12          place in 2017, and these -- I put the data in 

13          the testimony -- $128 million, or 62 percent 

14          of the $208 million estimated savings, is 

15          from one proposal.  And that's a proposal 

16          that has been a long time in the making.

17                 And then 74 percent of the total 

18          estimated statewide savings comes from just 

19          five of the remaining 389 proposals.  That 

20          doesn't mean these proposals are not 

21          worthwhile, because even the smaller 

22          proposals are probably something we should be 

23          thinking about.  

24                 All we are saying is that these 


 1          initiatives are tinkering around the edges of 

 2          property tax relief.  And we don't think that 

 3          this initiative by itself is a game changer.  

 4          So it's not that we don't think it's worthy, 

 5          we just don't think it needs to be mandated 

 6          at this time.  

 7                 So I wanted to address that, and we 

 8          can talk more about it if you'd like, 

 9          Assemblyman Magnarelli.

10                 What we do think is a game changer, 

11          though -- well, some things you can be doing 

12          prior to making this a permanent proposal in 

13          relation to shared services.  Number one is 

14          removing some of those barriers, and they are 

15          identified in that same Rockefeller Institute 

16          report.  

17                 The Governor has already started to 

18          talk about getting the Department of 

19          Financial Services to look at how to better 

20          facilitate the sharing of health insurance 

21          services, particularly through Article 47 of 

22          the Health Insurance Law.  We think that is 

23          worthy of looking at.  It will help a lot of 

24          our smaller communities.  


 1                 Every community in the state is 

 2          struggling with health insurance costs, so we 

 3          do think that is something that is worth 

 4          looking at.  We also strongly suggest that if 

 5          you're going to push this initiative, that 

 6          school districts have to be involved.  School 

 7          district property taxes are 70 percent, on 

 8          average, of the tax bill, so why would we not 

 9          require school districts to take part in this 

10          initiative?  Whether it's the school 

11          districts on their own working together -- 

12          because sometimes it doesn't work when school 

13          districts and local governments come 

14          together -- but somehow the school districts 

15          have to be required to participate.  We think 

16          that makes sense.

17                 And then finally, an issue that was 

18          brought up earlier by Assemblyman McDonald is 

19          this problem with the tax cap, that there's a  

20          disincentive there when you transfer a 

21          function from one community to another:  Your 

22          tax cap actually gets lowered.  If you're the 

23          local government that's giving up that 

24          service and giving it to another community to 


 1          take that service on for you, you actually 

 2          lose room underneath your tax cap.  And we 

 3          think that acts as an disincentive to shared 

 4          services.  

 5                 So I would say those things you can 

 6          focus on, and that will help make shared 

 7          services work even better than we think that 

 8          it already does.  But in terms of what we do 

 9          think is a game changer and what we do think 

10          makes a major difference in property taxes is 

11          an increase in AIM funding.  

12                 As you know, we have not gotten an 

13          increase in AIM funding in 10 years.  We have 

14          data that illustrate that when we do get 

15          increases in AIM funding, or when we did get 

16          increases in AIM funding, there were 

17          reductions in the property tax.  

18                 So we think that cities, towns, and 

19          villages -- and even the City of New York, 

20          who got completely wiped out of the program 

21          several years ago -- need to have a 

22          significant increase in AIM funding.  Just as 

23          annual increases in school aid help school 

24          districts comply with the tax cap, we need 


 1          annual increases in AIM funding to help us 

 2          comply with the tax cap.

 3                 Since 2008-2009, since the time we got 

 4          an increase in AIM funding, school aid has 

 5          increased by more than $5 billion, which has 

 6          well exceeded the rate of inflation.  And we 

 7          always like to point out that the amount of 

 8          the school increase in any given year exceeds 

 9          the entire amount of the AIM program, and we 

10          just think that local governments have to be 

11          given the same consideration.  And this newly 

12          imposed cap on the federal deductibility of 

13          state and local taxes makes AIM funding even 

14          more imperative.

15                 So once again, we are asking for your 

16          support in this regard.  You've heard it from 

17          all the big cities today:  AIM funding is an 

18          essential part of helping us reduce our 

19          property taxes.  

20                 We talk a little bit about the state 

21          share of funding municipal infrastructure.  

22          There has certainly been a greater emphasis 

23          put on infrastructure, everything -- roads, 

24          bridges, water, sewer.  We absolutely think 


 1          that's warranted and reasonable.  However, 

 2          you can see in our testimony that our 

 3          municipal needs far outweigh what has been 

 4          provided by the state.  

 5                 The $65 million that we got in 

 6          addition to the -- for the pothole money, if 

 7          you will, that was added to the CHIPS last 

 8          year was not put back in the budget this 

 9          year.  We would like to see that $65 million 

10          come back, and then even additional CHIPS 

11          money.  

12                 There's a huge amount of money, 

13          $2.5 billion over the next five years, 

14          dedicated to water and sewer infrastructure.  

15          The problem is there are so many programs 

16          that that money goes to, and we're not sure 

17          if a lot of the local governments that need 

18          it are even going to be able to access that 

19          money.  So we're actually suggesting that you 

20          look for something similar to the CHIPS 

21          program that you can run money through to 

22          give to local governments for their water and 

23          sewer infrastructure.

24                 I make a little plug for our arterial 


 1          maintenance in my testimony.  I won't talk 

 2          about that now, but that's the program where 

 3          cities take care of state roads.  And they 

 4          haven't gotten an increase in their 

 5          reimbursement rate in two decades, and we're 

 6          looking for an increase for that.

 7                 In terms of non-property tax revenues, 

 8          this is important to local governments, 

 9          particularly cities and villages who don't 

10          have a lot of non-property-tax-revenue 

11          options available to them.  It's really just 

12          the sales tax and the gross receipts tax.  So 

13          obviously we're very supportive of the 

14          Governor's proposal to have the internet 

15          sales tax, which would generate about 

16          $140 million in local sales tax revenue.  

17                 Obviously our cities and villages are 

18          sometimes subject to the county sharing 

19          agreements, but we think an increase like 

20          that will certainly trickle down to our 

21          communities.

22                 The other initiative that we strongly 

23          support is the proposal to eliminate the 

24          sales tax exemption on the transmission and 


 1          distribution of gas and electricity when 

 2          purchased by an ESCO.  

 3                 But I have to say that our bigger 

 4          issue with the ESCO is the one you heard 

 5          about today from the mayor of Rochester, 

 6          which is that the ESCOs are not paying the 

 7          local gross receipts tax.  Tax & Finance has 

 8          issued an opinion saying they should be 

 9          paying the local gross receipts tax, but they 

10          are not.  

11                 And in addition to the communities 

12          that are in the NYSEG and RG&E territory, 

13          NYSEG and RG&E have now taken the unique 

14          position that they aren't going to pay the 

15          local GRT if an ESCO is involved.  So they're 

16          not paying it on the distribution anymore 

17          anytime an ESCO is involved.  

18                 So we have seen very significant 

19          declines in our gross receipts tax revenues 

20          across the state, but particularly in those 

21          NYSEG and RG&E areas.  We went to the PSC, we 

22          have asked them for help with this.  We've 

23          gone to Tax & Finance, they told us it was a 

24          locally administered tax and they couldn't 


 1          help with this.  

 2                 So now we're asking you.  And 

 3          Assemblyman McDonald has put a bill in that 

 4          will hopefully address this issue.  But this 

 5          is a real concern.  And the same reasons why 

 6          the Governor rationalizes the proposal that 

 7          would have them eliminate -- or have them pay 

 8          the sales tax, those are the same reasons 

 9          they should be paying the local gross 

10          receipts tax as well, same rationale.

11                 I want to spend a little bit of time 

12          talking about the small cells language, 

13          because this is a huge issue for us.  You 

14          heard it from some of our city mayors today.  

15          This would negatively impact all 

16          municipalities by giving wireless providers 

17          unfettered access to our municipal 

18          right-of-way.  It's going to limit our 

19          application fees, it's going to limit our 

20          rental fees -- they put a shot clock in the 

21          language that we think is -- we are going to 

22          be unable to comply with.  

23                 We have some real concerns about this 

24          language.  We think what municipalities are 


 1          charging is the market value or 

 2          reflects actual costs.  We're not sure if 

 3          there's a one-size-fits-all solution that 

 4          will work to resolve this, but clearly the 

 5          language in this budget is not what we think 

 6          will help.

 7                 There's no state financial plan impact 

 8          as a result of this proposal.  So we would 

 9          strongly recommend, if this is something that 

10          people are interested in trying to work out, 

11          that we pull it out of the budget, maybe get 

12          all the relevant parties around the table and 

13          hopefully sit down and see what we can work 

14          out.  But the language that's in the budget 

15          right now we think will have significant 

16          negative impacts on the revenues for 

17          communities across the state.

18                 Just very quickly, the expansion of 

19          the state's MWBE requirement -- we are 

20          concerned about that.  It's not that we are 

21          not supportive of our minority- and 

22          women-owned businesses, but we think there 

23          are certain areas of the state where this 

24          will be impossible to comply with.  And we 


 1          also think that this will encourage the 

 2          awarding of contracts based on criteria other 

 3          than cost and the quality of the bid, which 

 4          obviously concerns us.

 5                 There's a local code enforcement 

 6          initiative in the Executive Budget which 

 7          would require our local code enforcement 

 8          officers to periodically inspect high-risk 

 9          lead paint areas in residential rental 

10          properties at certain times, and these 

11          certain times would include when you have to 

12          issue a certificate of occupancy, or in 

13          response to complaints.  

14                 This goes beyond what the local 

15          requirements are in state statute right now.  

16          We absolutely recognize the importance of 

17          dealing with lead paint, but this new 

18          requirement, because it would be a 

19          significant expansion, would also be what we 

20          consider to be an unfunded mandate.

21                 You talked ad nauseam this morning 

22          about the value-capture intercept of local 

23          property taxes that is happening with the MTA 

24          or was proposed to happen with the MTA board, 


 1          to intercept New York City property tax 

 2          revenue.  I just want to say that we 

 3          absolutely believe this is a violation of 

 4          local home rule, and we think it's a very 

 5          slippery slope to go down with local 

 6          governments.  And so we join the City of 

 7          New York in strongly opposing such an 

 8          unprecedented granting of power to a state 

 9          authority at the expense of a local 

10          government.

11                 One thing I don't think you heard 

12          about today that we're very happy about is 

13          there is a mandate relief proposal in the 

14          budget on the interest rate on judgments that 

15          would tie the interest rate on judgments to 

16          the market rate, as opposed to the fixed rate 

17          that it currently is at 9 percent.  We think 

18          that the requirement to pay interest on 

19          judgments is certainly fair and equitable, 

20          but having an unchanged fixed rate is not.  

21                 This will reduce delays, it will 

22          encourage appeals when you think you have a 

23          good case, and it also saves money for the 

24          state as well as local governments.  So that 


 1          is one proposal we are very supportive of.

 2                 CHAIRWOMAN WEINSTEIN:  Excuse me.  Can 

 3          you summarize the rest of remarks?

 4                 MS. VAN EPPS:  Yeah, yeah, my -- I'm 

 5          on my last issue.  

 6                 I just want to -- we agree with the 

 7          mayor of Syracuse's proposal about the opioid 

 8          surcharge.  We would love to see -- I think 

 9          that a portion of that should come to local 

10          governments.  They're on the front lines 

11          fighting this epidemic.  If you have to raise 

12          the surcharge to do that, we would certainly 

13          support that, because I know that's a 

14          financial plan, in fact, to give a portion of 

15          that to us.  

16                 And that's all I was going to touch 

17          upon.  

18                 CHAIRWOMAN WEINSTEIN:  Great.  Thank 

19          you.  

20                 Assemblyman Magnarelli, chair of our 

21          Local Governments Committee.

22                 ASSEMBLYMAN MAGNARELLI:  Well, I just 

23          wanted to say thank you for being here.  And 

24          I think that your comments are, you know, 


 1          self-explanatory at this point in time.  

 2                 You've heard what I've been asking 

 3          about, especially on shared services.

 4                 MS. VAN EPPS:  Yeah.

 5                 ASSEMBLYMAN MAGNARELLI:  I think it's 

 6          kind of obvious that the Governor continues 

 7          to push in that direction.  I understand your 

 8          comments, and we've talked about it before, 

 9          and I look forward to continue the 

10          conversations over the next couple of months.  

11          Okay?

12                 MS. VAN EPPS:  Yes, we do as well.

13                 ASSEMBLYMAN MAGNARELLI:  All right, 

14          thank you.

15                 CHAIRWOMAN YOUNG:  I don't think we 

16          have any questions, but we appreciate you you 

17          testifying today.

18                 MS. VAN EPPS:  Okay.

19                 CHAIRWOMAN WEINSTEIN:  Thank you for 

20          being here today.

21                 Next we have the Association of Towns 

22          of the State of New York, Gerry Geist, 

23          executive director.    

24                 MR. GEIST:  May I proceed?


 1                 CHAIRWOMAN WEINSTEIN:  Yes, please do.

 2                 MR. GEIST:  Good afternoon.  Thank 

 3          you, Madam Chairwomen.  My name is Gerry 

 4          Geist.  I'm the executive director of the 

 5          Association of Towns.  With me on my left is 

 6          Supervisor Denny Powers, from the Town of 

 7          Elma, County of Erie, our fifth vice 

 8          president.  And our chief counsel, on our 

 9          right, is Lori Mithen-Demasi.

10                 We are not going to read our 

11          testimony.  You all have it.  And I first of 

12          all want to thank all of you for continuing 

13          to understand and respect the importance of 

14          local government in New York State.  And I 

15          want to start off, speaking on behalf of our 

16          9 million New Yorkers who live in towns, that 

17          our voice is important.  And I want to touch 

18          on a couple of things.  

19                 With respect to the shared services, 

20          Supervisor Powers will talk about the local 

21          impacts, but I want to say two things about 

22          where we are.

23                 I want to acknowledge that the 

24          Legislature made some positive changes to the 


 1          Governor's proposal last year.  We welcome 

 2          that.  And it gave the towns a stronger voice 

 3          in the undoing process.

 4                 However, we don't believe the 

 5          Governor's new proposal should be accepted by 

 6          you folks, because we don't believe it should 

 7          be made permanent, because the program isn't 

 8          finished.  You've heard testimony that 23 

 9          counties have yet to submit plans, and we 

10          don't even know the -- the valuations haven't 

11          been conducted, the program hasn't been 

12          completed.  Before we make something 

13          permanent, let's study how it works and what 

14          we could do to make it better.

15                 However, by saying that, I would say 

16          this.  We could do a lot better spending this 

17          legislative year focusing on removing 

18          barriers to shared services instead of adding 

19          additional administrative layers -- unfunded 

20          mandates -- for this shared services program.

21                 I did testify earlier this year about 

22          one example, school crossing guards.  We 

23          can't do shared-services financial agreements 

24          with school districts because of impediments 


 1          to state laws.  So rather than making this a 

 2          permanent program, we want to come up with 

 3          finding positive ways to save taxpayers 

 4          money, and we think removing barriers makes 

 5          the most sense.

 6                 CHIPS and AIM.  Every year we come 

 7          here and the press reports it as Tin Cup Day.  

 8          We like to think today it's time for a 

 9          change.  Let's call it Support Local 

10          Government Day, because we do more for our 

11          residents, we're the closest government to 

12          the people, and we respond to their essential 

13          needs and services.

14                 We need an increase in AIM funding so 

15          we can reduce property taxes, and we need 

16          increases in CHIPS.  You all drive on our 

17          roads, you can see the potholes and 

18          crumbling.  We need real, permanent 

19          additional funding.  We haven't had it in 

20          years.  Please help us this year meet those 

21          goals.

22                 Now, you've heard some comments about 

23          this right-of-way that the mini cell 

24          infrastructure -- you know, into the 


 1          right-of-ways.  We have real concerns about 

 2          this because, first of all, it flies in the 

 3          face of home rule because it has limitations 

 4          with the permits and reasonable fees.  Not 

 5          only that, it bypasses local decision-making.  

 6          And because of these caps, it will also hurt 

 7          the property taxpayer because we won't get as 

 8          much revenue as we normally do.

 9                 And I ask you folks to look at how 

10          California treated this program last year 

11          when the California governor, Jerry Brown, 

12          opposed it and said this is not the right way 

13          to handle this problem, we should work 

14          collectively, not just outright eliminate the 

15          ability of local governments to work in this 

16          area.

17                 Also something to be considered in 

18          this area is the Highway Department, that 

19          some of these proposed regulations, you know, 

20          do away with the importance of the highway 

21          superintendent in controlling what happens in 

22          the right-of-way.

23                 So that's not -- this is not a good 

24          proposal for towns.  No pressing need for 


 1          this statewide policy yet.  

 2                 We do want to thank the Governor for 

 3          his proposal on the justice court reforms.  

 4          It will make it easier for shared services 

 5          between justice and consolidating courts.  

 6                 But there's a caution.  In his message 

 7          he also talked about planning and zoning and 

 8          giving the counties additional authority in 

 9          these areas without a lot of detail.  We 

10          think that that goes too far, it imperils 

11          home rule, and we ask you to be cautious when 

12          you review those proposals.  

13                 We would like to be part of the 

14          solution and help work out all these issues 

15          dealing with shared services in the future.

16                 Tax reform, property taxes.  We are 

17          very supportive and applaud the Governor for 

18          taking stands to protect all New Yorkers.  

19          But we want to make it a simple system so 

20          that it doesn't ask each municipality around 

21          the state to create its own charitable entity 

22          and having all this.  We think it should be a 

23          statewide policy rather than having 

24          individual towns try to do it alone.  We 


 1          think it can work.  We want to be a partner, 

 2          we want to be at the table.

 3                 One last thing and I'm going to turn 

 4          it over to Supervisor Powers, in the 

 5          interests of time.  

 6                 On the lead paint issue, we just heard 

 7          from NYCOM about that.  We are concerned 

 8          about imposing additional obligation on code 

 9          enforcement officers.  They don't have the 

10          training.  To get the extra training, it 

11          would cost money.  

12                 We're also concerned, honestly, about 

13          the liability of the town when we send out 

14          officials when they're working for 

15          essentially the State Health Department.  We 

16          are very concerned about the issue of lead 

17          paint, but we think this proposal is flawed 

18          and needs a lot of work.  We'd like to be 

19          part of the solution.

20                 And lastly, AOT, the Association of 

21          Towns, is celebrating its 85th anniversary 

22          this year.  We continue to train and educate 

23          our officials, and thank you for your past 

24          support and look forward to working with you 


 1          in this legislative year.  

 2                 And now, Supervisor Powers.

 3                 SUPERVISOR POWERS:  Thank you.  Thank 

 4          you, Gerry.  And thank you for allowing me to 

 5          address the Legislature today.  

 6                 Briefly, just a couple of comments and 

 7          then I would certainly like to have some 

 8          questions from the legislators as it pertains 

 9          to a local government, the Town of Elma in 

10          Erie County, population of roughly 11,300.  

11                 We've been sharing services for the 

12          last 50, 60 years.  We have an agreement with 

13          neighboring towns, whether it is a written 

14          agreement or just a handshake agreement, that 

15          we do recreation, we do the roads in the 

16          three municipalities adjacent to our town.  

17                 Sharing services we initiated about -- 

18          I think it was 2009 we started sharing an 

19          assessor with the neighboring town of 

20          West Seneca.  And since that point, several 

21          other towns in Erie County have taken it upon 

22          themselves to do just that, sharing 

23          assessing.  And it's a savings for both towns 

24          of West Seneca and Elma of about $50,000 a 


 1          year.

 2                 The Legislature would like to see, I 

 3          understand, a collaborative and inclusive 

 4          process.  And I think we do that at this 

 5          point.  We have a monthly meeting of the 

 6          Association of Erie County Governments that 

 7          meets, and we -- nonpartisan.  We discuss 

 8          shared services and have implemented several 

 9          of those.

10                 We also have a supervisor summit 

11          meeting held monthly in the Town of Elma with 

12          15 to 18 supervisors that attend that 

13          meeting.  And we, you know, banter back and 

14          forth about how we can help each other.  

15                 So we are doing everything we can to 

16          share services.  It is important.  I don't 

17          believe it should be made permanent, though, 

18          until it's fully evaluated.  As was 

19          previously stated, I think that there are 

20          initiatives, there's proposals out there that 

21          towns and villages have said they're going to 

22          do.  We'd like to see that those come to 

23          fruition before the Governor says making this 

24          thing permanent.  


 1                 So with that, I would entertain any 

 2          questions from the Legislature.

 3                 CHAIRWOMAN WEINSTEIN:  Thank you.

 4                 Assemblyman Magnarelli.

 5                 ASSEMBLYMAN MAGNARELLI:  Thank you 

 6          both, or thank you all of you for being here.  

 7          I appreciate your testifying here today.

 8                 Mr. Geist, the one thing that I want 

 9          to reiterate -- and you have testified before 

10          this year, so a lot of these things we've 

11          talked about already.

12                 MR. GEIST:  Yes, sir.

13                 ASSEMBLYMAN MAGNARELLI:  However, 

14          you've mentioned it twice, and it's something 

15          that I would like to hear from you on, and 

16          that's what regulations are impediments to 

17          shared services, whatever there is out there.  

18                 You know, a number of years ago I sat 

19          on a mandate relief committee or council that 

20          the Governor had put together, and I remember 

21          businesses telling me that there were so many 

22          regulations that were impeding their growth.  

23          And if we could get rid of them, that would 

24          be fine.  And I remember going all across the 


 1          state sitting at meeting after meeting after 

 2          meeting, and what I heard from was the school 

 3          districts.  And I got almost nothing in terms 

 4          of what are the regulations that are impeding 

 5          what we were trying to do or that were 

 6          creating the mandates at that point in time.

 7                 So what I would like to hear from you 

 8          is, show me what it is that you need relief 

 9          from and let's take a look at it.  I'm not 

10          going to promise you that we're going to do 

11          it, but on the other hand, I'd like to at 

12          least be able to know what are the 

13          impediments to shared services that you see.

14                 MR. GEIST:  Assemblyman, thank you for 

15          your question.  I know for years you've been 

16          talking about this, and we appreciate your 

17          commitment to trying to understand the 

18          process and trying to ameliorate these 

19          issues.

20                 I mentioned before about the school 

21          crossing guards.

22                 ASSEMBLYMAN MAGNARELLI:  Right.  

23          That's one.

24                 MR. GEIST:  And there's a great report 


 1          by Cornell University, "Barriers to 

 2          Intermunicipal Service."  I can leave that 

 3          with you --

 4                 ASSEMBLYMAN MAGNARELLI:  Okay.  That 

 5          will be a start.

 6                 MR. GEIST:  -- from Professor Warner.

 7                 The other thing I just want to share 

 8          with you, just -- if I can, it'll be real 

 9          quick.  In my town, we had a problem with the 

10          school district.  When I was a town board 

11          member, we wanted to create a shared wash bay 

12          facility that would take care of trucks for 

13          the highway department and for the school 

14          buses, to get the salt and other elements off 

15          of them.

16                 ASSEMBLYMAN MAGNARELLI:  Right.

17                 MR. GEIST:  It required a majority 

18          vote of the town board, which we did 

19          unanimously, but it required a separate 

20          plebiscite vote of the school board, and it 

21          didn't make it during -- on those budgetary 

22          years.  

23                 So we think that's an example where if 

24          the school board could have just voted 


 1          without a plebiscite, then that might have 

 2          made it easier and we could have saved all 

 3          the taxpayers money.

 4                 So that's another example that I would 

 5          like to give to the Assemblyman and the 

 6          committee to, you know -- we'll be more than 

 7          happy to share these ideas with you.

 8                 ASSEMBLYMAN MAGNARELLI:  I wish you 

 9          would, because these are things I'd like to 

10          really take a look at and see what we can do.

11                 MR. GEIST:  There are other ones, of 

12          course.  But we think that a lot of our folks 

13          would really -- this is what we hear from our 

14          members, that they really want these barriers 

15          removed, make it easy so we can do more.

16                 ASSEMBLYMAN MAGNARELLI:  Okay.  Thank 

17          you.

18                 CHAIRWOMAN YOUNG:  Thank you.

19                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

20          Buchwald.

21                 ASSEMBLYMAN BUCHWALD:  Thank you, 

22          Madam Chairwoman, and my constituent Gerry 

23          Geist, who I --

24                 ASSEMBLYMAN OAKS:  The mic is not --


 1                 ASSEMBLYMAN BUCHWALD:  It's still off?  

 2          All right, we'll give that one a try.  Thank 

 3          you, everyone, for your patience.  

 4                 I'd like to welcome everyone for your 

 5          testimony, but especially my constituent 

 6          Gerry Geist, who I had to walk out on a 

 7          meeting of the Local Governments Committee 

 8          earlier this year just before he was going to 

 9          testify.  So I'm glad I'm not making the same 

10          mistake twice.

11                 My questions first relate to shared 

12          services.  First, the written testimony 

13          refers to the legislative proposals to allow 

14          counties to open up their self-insured 

15          insurance plans to local towns and 

16          municipalities to participate.  I seem to 

17          recall that perhaps the Governor's included 

18          some version of this sort of proposal in 

19          his -- what he's put out there so far this 

20          year.  

21                 To what extent does the Governor's 

22          proposal match, in your understanding, the 

23          needs of towns?  

24                 MR. GEIST:  Thank you, Assemblyman.  


 1          It's a pleasure to appear with my Assemblyman 

 2          today as well.  And thank you for your great 

 3          service to our district and for the state.

 4                 To answer your question, yes, we are 

 5          very supportive of the Governor's initiative 

 6          in the healthcare -- anything we can do to 

 7          save money in a reasonable, pragmatic, 

 8          functional way, this is what our member towns 

 9          want to do.  And we're very supportive of 

10          those efforts.  So we would like to have that 

11          ability to do that.

12                 ASSEMBLYMAN BUCHWALD:  If I could also 

13          ask a big-picture generic question.  One of 

14          the challenges that occasionally I've met, 

15          and I'm sure a number of my colleagues have 

16          who are -- either because they have 

17          backgrounds in local government or just a 

18          passion for empowering local governments -- 

19          when it comes to unfunded mandates, obviously 

20          there are things that organizations like 

21          yours and the Conference of Mayors and others 

22          request, but we {inaudible} at individual 

23          towns.  And sometimes the feedback that we'll 

24          get from folks in individual towns focused on 


 1          reducing mandates is that, well, it's not 

 2          enough to just focus on the things that the 

 3          associations are pushing for, because what 

 4          matters to them on some level is what saves 

 5          money in their own town.

 6                 What work does your association do to 

 7          try to convey to your constituent member 

 8          towns that this is a collective endeavor, at 

 9          least on your part, let alone those of us who 

10          try to work on your behalf, to meet the needs 

11          of towns around the state so that -- you 

12          know, to provide legislators a feedback of 

13          "what have you done for me lately" isn't 

14          necessarily -- let's put it this way.  If 

15          each town is in it for its own self, you're 

16          not as likely to accomplish things as you 

17          would collectively, which of course is the 

18          purpose of your own organization.

19                 MR. GEIST:  That's a great question.  

20          One of the great things about my job as 

21          executive director, I can travel around the 

22          state.  And we do many, many training and 

23          education conferences a year.  Our largest 

24          one is coming up in two weeks.  And what we 


 1          do is we use that as an opportunity to hear 

 2          from our members about how we can work 

 3          together to present to you as a legislator 

 4          our platform and ideas to help.

 5                 You've been quite helpful in the area 

 6          of election reform, I just want to mention 

 7          this.  The Governor has talked about the 

 8          early voting process.  The only thing that I 

 9          want to -- it's in our testimony -- we're 

10          very supportive of your efforts.  We would 

11          like the state to start considering lowering 

12          the cost to localities for early voting by 

13          considering the adoption of things like the 

14          Oregon absentee ballot.  They don't have 

15          polls, and they just get a 92 percent voter 

16          turnout.  I think it's something that we have 

17          to be really -- to think outside the box.  

18          And I know you always have been looking for 

19          ways to save costs in special elections.  We 

20          thank you for that.

21                 The other thing we've been hearing 

22          about from our members collectively is the 

23          justice court fees for processing tickets.  

24          That fee hasn't been raised in years.  We 


 1          really do the state's work.  We're not asking 

 2          for the state to give us money back from 

 3          their surcharge, but we're asking for the 

 4          right to impose a small fee because we're -- 

 5          the cost of running those courts, the extra 

 6          requirements, the workload.  That's something 

 7          that we hear.

 8                 But to answer your question, we 

 9          carefully craft our message to the State 

10          Legislature based upon input from a very 

11          diverse membership.  You heard from 

12          Supervisor Powers; he's one of our team.  But 

13          we hear from all our constituents, and that's 

14          what we strive to do every day.

15                 ASSEMBLYMAN BUCHWALD:  If I could, for 

16          my last question, just with regards to the 

17          impact of federal tax reform and the loss or 

18          capping of state and local tax deductions.  

19          To what extent are your member towns open to 

20          being authorized to, in some form or another, 

21          collect property taxes through a new 

22          mechanism, say a charitable contribution or 

23          otherwise, in a way that would save your 

24          residents significant federal income taxes?  


 1                 MR. GEIST:  I thank you for that 

 2          question too.

 3                 As a resident of Westchester County, 

 4          according to the comptroller's report, the 

 5          average SALT deduction for a Westchester 

 6          resident is $51,000.  So this is a 

 7          significant issue not only for downstaters 

 8          but all people around the state.  And we're 

 9          very supportive of any effort to help people 

10          preserve their deductions.  Because honestly, 

11          if we don't do something, we're going to lose 

12          people out of the state, and property values 

13          are going to decrease, which would negatively 

14          impact our town budgets and schools.  

15                 So in specific answer to your 

16          question, we would be very supportive of 

17          creating an entity to -- whether it's a 

18          charitable fund -- to help people with their 

19          property taxes.  The only thing we ask for 

20          with that is it should be a statewide system 

21          so we don't have to create this on 932 towns 

22          and 500 villages.  We want it to be statewide 

23          and have the state be, as part of that 

24          legislation, be required within, say, 30 days 


 1          to remit the money to the appropriate school 

 2          district or municipal function.

 3                 I think it can be done.  If you 

 4          already look at the New York State income tax 

 5          form, you have to put your school district on 

 6          that form.  You know, there's a code.  Farm 

 7          Hills is 023 or whatever the number is.  So 

 8          it's a system in place, it's workable.  We 

 9          want to be a partner.  We want to work, we 

10          want to help.  And we really need to protect 

11          New Yorkers.  This -- changes in the tax law 

12          negatively impacts the entire State of 

13          New York, and we want to work to help 

14          ameliorate those risks.

15                 ASSEMBLYMAN BUCHWALD:  Thank you all.

16                 CHAIRWOMAN WEINSTEIN:  I think that's 

17          it.  Thank you so much for your testimony 

18          here today.

19                 CHAIRWOMAN YOUNG:  Thank you for 

20          coming.

21                 SENATOR KRUEGER:  Thank you very much.

22                 MR. GEIST:  Thank you.

23                 SUPERVISOR POWERS:  Thank you very 

24          much for your time and consideration.


 1                 CHAIRWOMAN WEINSTEIN:  So the next -- 

 2          for the next witnesses, we begin our policy 

 3          of asking people to summarize, in five 

 4          minutes, their testimony.  We have it.  We've 

 5          had it emailed to all of the members of the 

 6          Ways and Means Committee and the relevant 

 7          committees.  And that would also leave us 

 8          time to be able to ask questions.  

 9                 County Exec George Latimer, from 

10          Westchester County.  Welcome.

11                 SENATOR KRUEGER:  Welcome back.

12                 COUNTY EXECUTIVE LATIMER:  Good 

13          evening.  It's a pleasure to be back, at 

14          least for one session.  And as both 

15          Assemblymember Weinstein and Senator Young 

16          are conducting a very long and drawn-out 

17          process, I will bullet the report that you 

18          have in front of you, answer any questions if 

19          you have them, and then certainly am 

20          available at any future point in time to 

21          discuss any of these things.  

22                 I do appreciate you taking the time.  

23          And again, I'm very happy to be back with 

24          friends and colleagues.  


 1                 Westchester County is representative 

 2          of many of the 57 counties outside of 

 3          New York City.  I have a number of issues 

 4          that are addressed in this budget, to touch 

 5          on them very quickly.  I think the one that's 

 6          been -- and all of these have been discussed 

 7          already in the testimony of Steve Acquario, 

 8          and in many ways comparable to the 

 9          testimonies of the NYCOM and Association of 

10          Towns testimony.

11                 We're very interested, on the bottom 

12          of page 2, in whatever strategies are 

13          developed at the state to deal with the SALT 

14          deduction exemption.  Obviously, our county 

15          is going to be hit very hard, residents of 

16          our county are going to be hit very hard by 

17          this.  We understand that the state is 

18          looking at a variety of different creative 

19          ways to deal with this.  I do think it makes 

20          sense to do it on an as-broad-as-possible 

21          basis so that those of us in the county and 

22          any other government can plug into whatever 

23          that strategy is.  We look forward to what 

24          the Legislature might settle on in that area.


 1                 We wanted to highlight that in 

 2          Westchester County, our mass transit system, 

 3          our bus system, is the largest in New York 

 4          State outside of the MTA-New York City 

 5          transit system.  We have almost 30 million 

 6          riders each year, and 103,000 people every 

 7          weekday, and it does interface with the New 

 8          York City subway system and it does connect 

 9          into neighboring counties of Rockland and 

10          Putnam County.

11                 We have an annual STOA aid allocation 

12          of $56 million.  When we compare it to Nassau 

13          County, theirs is $67 million with a smaller 

14          system.  It puts us in the position of asking 

15          to try to make that allocation equal over the 

16          course of the next few years.  And our ask 

17          this year is an increase in STOA aid to 

18          Westchester of $5 million.  That does not 

19          make it directly equal, but we think it's 

20          justified by the ridership and the fact that 

21          our riders feed into the New York subway 

22          system and the Metro-North train system, both 

23          of which are important revenue streams in 

24          order to fund the greater MTA system.


 1                 On Raise the Age, obviously we're 

 2          working to implement the program that I had 

 3          the pleasure of voting with you for last 

 4          year.  We think it's very important.  If 

 5          DASNY has the ability to bond money and lay 

 6          money out up front, that would be very 

 7          helpful, because cash flow is an issue and 

 8          it's a little more difficult for us to be 

 9          able to do some of the things we need to do.  

10                 We have initiated conversations with 

11          Rockland County.  We intend to do the same 

12          with Putnam County, in this concept of shared 

13          services, to see if whatever we do on a 

14          capital basis would allow for equivalent 

15          facilities at other counties around us to 

16          also benefit from.  So it would be a 

17          shared-services approach.  We've yet to do 

18          that.

19                 We agree with NYSAC, and I understand 

20          there's some other alternative advice you've 

21          been given from other associations.  But we 

22          do think that the shared services panel 

23          program should be made permanent.

24                 Westchester did not aggressively go 


 1          into this program a year ago.  We intend to 

 2          do so this year.  And we think it's a matter 

 3          of necessity.  We really don't have the 

 4          ability to continue to fund things the way we 

 5          do.  And when we look with our towns and our 

 6          cities and our villages to try to find those 

 7          areas of shared services, we will try to be 

 8          as thorough and as aggressive as we can.  

 9                 But we want to be able to operate on a 

10          multiple-year projection.  So that if we 

11          think it's going to take a few years to find 

12          these savings, that we know that we have the 

13          reliability of the program being in place.

14                 The next bullet we highlight is the 

15          Joseph P. Dwyer Peer-to-Peer Mentoring 

16          Program for former servicemen and -women who 

17          suffer from posttraumatic stress disorder.  

18          The budget does not include funding for this 

19          critical initiative, and we ask that you 

20          restore the 2018 funding level for that 

21          program.

22                 There's much discussion about voting.  

23          Obviously early voting is a position that I 

24          have supported as an individual legislator 


 1          previously.  I support it in our current 

 2          capacity.  And our ask here is that if this 

 3          does in fact move forward, that there be 

 4          resources to fund it because it will make the 

 5          process of funding elections more expensive, 

 6          and that will not be able to be borne by the 

 7          county government on our own.

 8                 We support the closing of the internet 

 9          sales tax loophole, for reasons that were 

10          outlined already by prior speakers.  And it's 

11          not merely because we need the revenue.  We 

12          also think it creates a level playing field 

13          with the bricks-and-mortar businesses that 

14          are important contributors already to the 

15          sales tax, which is our number-two revenue 

16          behind property taxes.  And it also defines 

17          our downtowns and the viability of our 

18          communities to have bricks-and-mortar 

19          businesses operate.  And obviously on the 

20          internet you have a tremendous advantage of 

21          convenience that's built into it, but then 

22          the lack of taxation on that gives it a 

23          second advantage, so that we're seeing a 

24          significant shift.


 1                 Not in my report, but just to bullet, 

 2          we would support some of the testimony that 

 3          you heard from NYSAC.  We oppose the 

 4          redefinition of the "dark store" theory of 

 5          big box stores.  We would like to see you 

 6          restore the funding cuts to the community 

 7          college system, both the state and in our 

 8          case, our county are cofunders along with 

 9          tuition revenues for our community college.  

10                 The public health grant funding we 

11          hope will be restored as part of this 

12          process.  Restoration of funds for the 

13          transfer of state-ready inmates.  And also we 

14          support the Governor's reforms to Early 

15          Intervention programs.

16                  That is as fast a summary as I can 

17          give you, given the fact that you've been 

18          here all day and I have been through this 

19          with you before.  So if there are any 

20          questions, I'm happy to address them.

21                 CHAIRWOMAN WEINSTEIN:  Thank you.  

22                 Assemblyman Buchwald.

23                 ASSEMBLYMAN BUCHWALD:  Thank you.  

24                 And thank you, Mr. County Executive.  


 1          It's a pleasure to have you here on the other 

 2          side of the dais.

 3                 You referenced in your comments the 

 4          shared-services initiative.  Can you go into 

 5          a little bit more what would give our fellow 

 6          residents of Westchester County confidence 

 7          that more savings will be found this year 

 8          than last year?

 9                 COUNTY EXECUTIVE LATIMER:  Well, I 

10          think the first thing is attitudinal.  We 

11          think it's essential that we have those 

12          shared services.  And I've met with Suffolk 

13          County Executive Steve Bellone, who put out 

14          perhaps the most robust program for any of 

15          the large counties.  So we're trying to see 

16          exactly how they structured theirs and 

17          pattern on it.  

18                 What I would hope, at 100 miles an 

19          hour, is that we can create, to use a very 

20          bad analogy, a menu which would allow our 

21          local governments to look at the ability to 

22          connect with the county or with each other on 

23          a particular service, be it police services 

24          or back of the house accounting assessment 


 1          services, and have a price tag attached to 

 2          it.  And that price tag in theory would be 

 3          less than what they're paying now to do the 

 4          service on their own.  So in theory, it would 

 5          be a financial incentive to do this if we can 

 6          create that, analyze that and create that in 

 7          an intelligent fashion.  

 8                 I'm not particularly worried if at the 

 9          end of the day the county tax levy increases, 

10          if the aggregate between the town, village or 

11          city tax levy decreases because of this and 

12          the net result is less paid for by the 

13          taxpayer.  Then I'm not going to hold out 

14          just one level of government's tax levy as 

15          being the important one.  

16                 But to be honest with you, 

17          Assemblyman, we have a long way to go.  This 

18          is our 36th day in office.  And we know what 

19          our philosophy is, and now we have to try to 

20          make it real enough so that it has substance 

21          for the local governments to look at.  And 

22          then as we prepare, in essence, an amendment 

23          to the report that was done last year by 

24          Westchester County, then the state executive 


 1          branch will look at that and hopefully 

 2          they'll find it to be a more realistic 

 3          attempt, and hopefully that will allow us to 

 4          have the ability to tap into some of the 

 5          money that's been set aside in this budget to 

 6          support these initiatives.

 7                 ASSEMBLYMAN BUCHWALD:  I certainly 

 8          think -- I probably speak for my Westchester 

 9          state legislative colleagues saying that if 

10          there are things that the county and its 

11          constituent municipalities would like to do 

12          that current law doesn't allow, we're more 

13          than willing to have that dialogue with other 

14          constituent groups to make sure that our 

15          government is run as efficiently and 

16          productively as possible for the assistance 

17          of our county.  

18                 With that, thank you again for your 

19          time.  And Chairwoman, I yield back my extra 

20          time.

21                 COUNTY EXECUTIVE LATIMER:  Thank you.  

22          I appreciate that.  

23                 And I just wanted to say that I think 

24          what Assemblyman Magnarelli asked previously 


 1          is really the task of all of us who are in 

 2          local government now, to be extremely 

 3          specific when we come before the state 

 4          government about what we're asking for, that 

 5          that specificity be something that makes 

 6          logical sense and actually has dollars and 

 7          cents benefit to it.  I think that's a 

 8          realistic ask, and that's what our task is, 

 9          to try to do that for you and for my other 

10          colleagues who represent Westchester here in 

11          the State Legislature.

12                 SENATOR KRUEGER:  Thank you.  

13                 Senator John Brooks.

14                 SENATOR BROOKS:  Thank you, Madam 

15          Chairman.  

16                 First, congratulations and welcome 

17          back.

18                 COUNTY EXECUTIVE LATIMER:  Thank you.

19                 SENATOR BROOKS:  Throughout the 

20          presentations, there's a great deal of 

21          concerns that have been expressed about the 

22          new tax laws and the limitations on the SALT 

23          deductions.  You, Nassau and Suffolk in 

24          particular are in the unique position that 


 1          you're in the pot.  You're in a situation 

 2          where your taxpayers will be taking taxes on 

 3          their taxes.  

 4                 As you're looking at what you're doing 

 5          right now, recognizing where you are and 

 6          looking at changes you may feel are necessary 

 7          or services that must be improved in the 

 8          county, how is your situation now, knowing 

 9          you're already over the tax limit, impacting 

10          what you're doing?

11                 COUNTY EXECUTIVE LATIMER:  We think 

12          it's going to be devastating on us if nothing 

13          happens between here and when the full 

14          implementation of it is felt by individuals.  

15          I assume that will happen in April of next 

16          year when people file.  By then, their 2018 

17          tax situation is already locked in.  If 

18          nothing were to happen between now and then, 

19          I've heard estimates that it means a 25 

20          percent increase.  

21                 Now, it's hard to say.  Every 

22          individual is in a different tax set of 

23          circumstances.  And, you know, we do look at 

24          the very high level and there are plenty of 


 1          high-level earners in Westchester County that 

 2          may find that this plan helps them.  

 3                 But Westchester, despite the general 

 4          thinking of it being as wealthy as it is, we 

 5          have many, many middle class property 

 6          taxpayers who will be hurt by this.  

 7                 The ability to change tax policy 

 8          resides here in Albany.  And I don't 

 9          underestimate how complicated a process it 

10          is.  And I don't think it -- I mean, it's 

11          going to have the natural debate between 

12          houses and political parties and 

13          philosophies.  So what I have to project, 

14          Senator, is a willingness to plug into a 

15          system that you all think is best that you 

16          would create, and to try to be effective on 

17          that.  

18                 I took office on January 1st, which 

19          was the day of the new year, so we were not 

20          in a position to do anything about trying to 

21          structure ourselves to have early tax 

22          payments made by residents and so forth.  

23                 And the number of residents in 

24          Westchester County that turned out to pay 


 1          town taxes -- and different places allowed 

 2          for different other things to be paid; in 

 3          some cases, a school or a village partial 

 4          payment.  The amount of people that came out 

 5          to do that was a sign that a significant 

 6          number of our people understand how 

 7          devastating this is going to be.  

 8                 I have spoken with the county 

 9          executives Steve Bellone and Laura Curran, 

10          and I think, you know, given the size of our 

11          respective counties, everyone's going to be 

12          affected.  But it's going to hit us very 

13          hard.  As I think you can appreciate because, 

14          you know, you, like I, are out there talking 

15          to people every day, property taxes is 

16          overwhelmingly the number-one issue.  They 

17          don't complain as much about any other tax as 

18          they do their property taxes.  

19                 SENATOR BROOKS:  I think, you know -- 

20          I agree with you that we're absolutely going 

21          to have to make some fundamental changes in 

22          the way we're funding things.

23                 One of the proposals that's afoot now, 

24          as a kind of example, we are pushing for the 


 1          ability of fire departments and ambulance 

 2          companies to bill back for their services on 

 3          a direct response basis, with the objective 

 4          of then reducing the tax obligation to the 

 5          district to fund that.  And it will be a 

 6          pay-as-you-use-type situation.  

 7                 Do you agree that that kind of 

 8          concept, is that what we would be looking at 

 9          with some of these programs, to find ways to 

10          change the way we fund them based on who's 

11          using them?

12                 COUNTY EXECUTIVE LATIMER:  I mean, I 

13          think it would be very helpful.  The problem 

14          that we have is that we have, from community 

15          to community, a very different structure of 

16          how fire services are provided.  We have some 

17          all-volunteer fire departments which have 

18          very low tax impact.  We have some fire 

19          districts.  We have some professional fire 

20          departments that are agencies of municipal 

21          government, primarily in our larger cities.  

22                 And, you know, even though Suffolk 

23          County and Nassau are both larger counties in 

24          population than Westchester is, Westchester 


 1          has six incorporated cities, four of which 

 2          are fairly sizable in population, with 

 3          professional fire departments.  

 4                 So I think what you suggest is helpful 

 5          and can be used to help, you know, where it 

 6          is helpful.  But what we need is going to be 

 7          more across the board.  And whatever can be 

 8          done on the education side -- you know, 

 9          obviously we're not involved, as a county 

10          government, in K-12 education -- which I must 

11          say I miss because I enjoyed that policy area 

12          when I was here.  But the more broad-based 

13          areas of education, taxation and perhaps some 

14          of the services that we know we all have to 

15          provide equally well -- sewer treatment and 

16          things of that nature, you know, 

17                 And we're willing to work with you.  I 

18          have indicated locally that our county 

19          attorney and any of our individuals are more 

20          than happy to meet in Albany with the people 

21          that you have tasked with trying to determine 

22          this, and they will be in a position to help 

23          interpret how it would affect our county as 

24          an individual county.  


 1                 So we're willing to work with you on 

 2          it.  It's an interesting initiative.  

 3          Ultimately, between now and when your 

 4          Legislature goes out of session, you know, we 

 5          look forward to trying to find that right 

 6          answer to the Rubik's Cube.  

 7                 SENATOR BROOKS:  I share your concern.  

 8          Certainly on Long Island they're estimating 

 9          there's already 300,000 people that are over 

10          the limit on the $10,000 deductible for the 

11          property taxes.  I think for the fire service 

12          we've got to make changes, and billing is one 

13          of the ways.

14                 And I think as we look at school 

15          funding and the percentage of funding that 

16          you get in Westchester, what we see in Nassau 

17          and Suffolk, we're really going to have to 

18          reexamine what we're doing.  

19                 So I certainly, again, George, 

20          congratulate you and wish you well with this, 

21          but it's a challenge.

22                 COUNTY EXECUTIVE LATIMER:  Thank you.  

23                 CHAIRWOMAN WEINSTEIN:  Thank you.  

24                 Assemblyman Magnarelli.


 1                 ASSEMBLYMAN MAGNARELLI:  This has got 

 2          to be quick, George.  

 3                 I just want to say thank you very much 

 4          for coming back.  And congratulations.  I 

 5          wish you the very best and appreciate the 

 6          work that you do.  And get me that 

 7          information and we'll work on it together, as 

 8          we always have.  Thank you.

 9                 COUNTY EXECUTIVE LATIMER:  Thank you, 

10          Bill.  

11                 I can't tell you how happy I am to see 

12          you all here.  I have great respect for the 

13          work that you've done.  I've worked with each 

14          of you in some way, shape or form, with Bob 

15          across the aisle, and others.  And I have to 

16          go home and do other things for the next few 

17          months, but in many ways my heart's still 

18          here with all of you.

19                 CHAIRWOMAN YOUNG:  Thank you.

20                 SENATOR KRUEGER:  Thank you.

21                 COUNTY EXECUTIVE LATIMER:  Thank you 

22          very much.  

23                 CHAIRWOMAN WEINSTEIN:  Congratulations 

24          again.


 1                 Next we have New York Public Interest 

 2          Research Group, Blair Horner, executive 

 3          director.

 4                 MR. HORNER:  I guess it's good 

 5          evening, I'm sorry to say.

 6                 CHAIRWOMAN WEINSTEIN:  Yes.

 7                 MR. HORNER:  Good evening.  My name is 

 8          Blair Horner.  I'm the executive director 

 9          with NYPIRG.  With me is Brittanie Johnson, a 

10          policy associate and a senior at Brooklyn 

11          College.

12                 What you have in front of you is a 

13          long testimony, detailed.  Given the length 

14          of the testimony and the lateness of the day, 

15          we will briefly summarize some of the key 

16          points and gladly answer any questions.

17                 The way we've divvied it up is that 

18          I'll talk about some of -- we're reacting to 

19          the Governor's good government proposals in 

20          his budget.  I'll be talking about some of 

21          the ethics-related issues.  Brittanie will 

22          touch on some of the voting issues.

23                 CHAIRWOMAN WEINSTEIN:  Blair, just -- 

24          it's five minutes for both of you, so --


 1                 MR. HORNER:  Yes.  Yes.  I'm cranking 

 2          along.

 3                 CHAIRWOMAN WEINSTEIN:  Okay.

 4                 MR. HORNER:  For the past two weeks, a 

 5          former top aide to the Governor has been on 

 6          trial for corruption.  According to federal 

 7          prosecutors, he was a key figure in a bribery 

 8          scheme that included shaking down those 

 9          seeking government contracts for special 

10          treatment in exchange for campaign 

11          contributions of money for him and his 

12          associates.  The trial continues and the 

13          individual, of course, is presumed innocent.  

14                 But his trial, combined with others in 

15          recent years, offers unique insights into 

16          what ails Albany.  And when we look at it, we 

17          see four overarching problems that emerge 

18          when you review the totality of the 

19          corruption cases brought in New York.  So 

20          I'll go through each of the four and then 

21          turn it over to Brittanie.

22                 Problem one.  New York's limited 

23          liability company campaign finance loophole 

24          raises the risk of corruption.  The LLC 


 1          loophole, which treats each LLC as an 

 2          individual person for the purposes of how 

 3          much can be donated, has allowed some donors 

 4          to give well over a million dollars.  And 

 5          those donors often have business before 

 6          government.  

 7                 For example, in a trial against the 

 8          former Senate majority leader, one real 

 9          estate developer spent more than $10 million 

10          in campaign donations from 2005 to 2015, 

11          funneled through 26 different LLCs, LLCs that 

12          he controlled.  In return, the developer 

13          received tens of millions of dollars in tax 

14          benefits from the state.  

15                 What should be done?  LLCs should be 

16          treated like any other business entity and be 

17          subject to the $5,000 corporate campaign 

18          contribution limit.  All business entities 

19          should be required to disclose their 

20          controlling interests, and all subsidiaries' 

21          contributions should be aggregated into one 

22          overall limit.  That's in the budget.

23                 Problem two, allowing outside income 

24          for elected officials raises the risk of 


 1          corruption.  In many of the cases, the 

 2          opportunity to use one's public office for 

 3          private gain -- cashing in -- emerges as a 

 4          serious problem.  In the case of the former 

 5          Assembly speaker, it was well documented that 

 6          he was able to use his power to amass 

 7          millions of dollars in outside fees for 

 8          little work other than applying his power as 

 9          speaker.  

10                 Unfortunately, the speaker's case is 

11          not unique.  What should be done?  After the 

12          Watergate scandal, Congress reformed its 

13          system and placed limits on outside income 

14          for lawmakers.  In its report it concluded 

15          substantial outside income creates at least 

16          the appearance of impropriety and undermines 

17          public confidence.  

18                 That's sort of in the budget, but it 

19          only applies to the legislative branch.

20                 Problem three.  There's too great a 

21          risk of corruption in how New York awards 

22          government contracts.  That's part of the 

23          current investigation that's on trial now, 

24          where a Buffalo construction company was 


 1          alleged to have simultaneously paid for a 

 2          lobbyist $100,000 and then kicked in $250,000 

 3          in campaign contributions.  As a result, 

 4          according to the U.S. attorney, a huge 

 5          Buffalo Billion contract was steered to him.

 6                 What should be done?  The first step 

 7          would be to eliminate campaign contributions 

 8          from those receiving government contracts.  

 9          New Jersey has a law to do that, we think it 

10          would be a good model, we think the 

11          comptroller's powers should be expanded, as 

12          found in the DeFrancisco-Peoples legislation.

13                 Lastly, the lack of independent 

14          oversight.  We think the current ethics 

15          watchdog should be removed and a new one 

16          created.  New York was recently given an F in 

17          its ethics enforcement by a national think 

18          tank.  

19                 Now I'll turn it over to Brittanie, 

20          who will offer some comments on voting.  

21          Sorry, Brittanie.

22                 MS. JOHNSON:  As you know, New York 

23          State has consistently ranked near the bottom 

24          of the barrel in voter participation.  Of 


 1          course there are many reasons for that.  But 

 2          one that is correctly raised by the Governor 

 3          is the voting process.  

 4                 One, we urge you to support a 

 5          constitutional amendment to allow New Yorkers 

 6          to register and vote on Election Day.  As the 

 7          National Conference of State Legislators 

 8          describes it, there is strong evidence that 

 9          same-day and Election Day registration 

10          increases voter turnout.  Same-day 

11          registration states also tend to outperform 

12          other states in terms of turnout percentages.

13                 Many states that have implemented 

14          Election Day registrations have historically 

15          produced higher voter numbers, making changes 

16          hard to gauge.  Multiple studies place the 

17          effect between an increase of 3 to 7 percent, 

18          with an average of a 5 percent increase.

19                 Two, make it easier for New Yorkers to 

20          obtain absentee ballots.  Increased access to 

21          absentee ballots would likely mean increased 

22          voter participation from voters with work, 

23          school or childcare commitments who wouldn't 

24          currently qualify under the current law.


 1                 Three, adopt early voting for New York 

 2          State.  We are hopeful about the potential to 

 3          increase the opportunities for voters to 

 4          participate in elections and the possibility 

 5          of reducing lines and congestion on 

 6          Election Day through early voting.

 7                 And four, we support imposing 

 8          automatic voter registration upon receiving a 

 9          New York State driver's license, but it must 

10          be expanded to all other agencies.

11                 MR. HORNER:  Thank you for the 

12          opportunity to testify.  

13                 Any questions?  

14                 CHAIRWOMAN WEINSTEIN:  Senator Savino.

15                 SENATOR SAVINO:  Thank you, Blair, for 

16          hanging in there all day.  I was teasing you 

17          this morning and said, "Who are you here to 

18          frown upon today?"  Apparently all of us, but 

19          that's besides the point.

20                 I have a question about the voting 

21          reform stuff, because there's been some 

22          debate about if we adopt early voting, that 

23          there's a cost associated with it.  And no 

24          one can tell me what that cost would be, 


 1          because quite frankly the Boards of Elections 

 2          are open anyway, aren't they?

 3                 So what could we anticipate would be 

 4          in those increased costs?

 5                 MR. HORNER:  Well, the Governor's 

 6          budget I think estimates that it would be a 

 7          cost to localities of I think about 

 8          $6.5 million.  And it's primarily just the 

 9          mechanics of having the sites open so that 

10          people would go to the places and register to 

11          vote.

12                 SENATOR SAVINO:  Is he suggesting that 

13          the various polling sites be open?  I voted 

14          at P.S. 36 --

15                 MR. HORNER:  No, it's more limited 

16          than that.  But there would be places that 

17          you could go, and I don't remember off the 

18          top of my head how he structures it.  But 

19          there would be a limited number, I believe by 

20          population size -- it could be by county -- 

21          in terms of a place that you could go to 

22          early vote.

23                 SENATOR SAVINO:  And if we were to 

24          reform the absentee balloting process --


 1                 MR. HORNER:  That would help too.

 2                 SENATOR SAVINO:  I absolutely think 

 3          it's absurd that we actually press people 

 4          almost to become felons by using absentee 

 5          balloting, because -- and I'll just 

 6          briefly -- a few years ago we had a special 

 7          election in Staten Island for a congressional 

 8          race.  So it was a session day, myself and 

 9          all the other members, we voted by absentee.  

10          We just happened to get done early that 

11          night, and we were prepared to go down and be 

12          there for the results when we realized that 

13          if we did so, we might actually get ourselves 

14          in a lot of trouble because we signed an 

15          affidavit saying that we could not be present 

16          in the county on that day.

17                 So certainly we need to reform this 

18          absentee balloting thing if we want to 

19          increase it.  But is there a way to actually 

20          accomplish early voting with just duty-free 

21          absentee balloting?

22                 MR. HORNER:  Well, I mean that was 

23          the --  I believe the change for absentee 

24          ballots requires a constitutional change, so 


 1          that takes a little bit longer time.  You 

 2          have an election coming up pretty soon.  You 

 3          also have potential special elections.  

 4                 So yeah, I mean, you know, if you ask 

 5          me to rank priorities, I would say making it 

 6          easier for people to get absentee ballots 

 7          would be the best way to go of the two.  But 

 8          I don't think necessarily one precludes the 

 9          other.

10                 SENATOR SAVINO:  Thanks.

11                 CHAIRWOMAN WEINSTEIN:  Thank you.  

12          Thank you both for being here.

13                 MS. JOHNSON:  Thank you.

14                 MR. HORNER:  Thank you.  

15                 CHAIRWOMAN WEINSTEIN:  Next we have, 

16          from AARP, Beth Finkel, state director, and 

17          Bill Ferris, state legislative rep.

18                 MS. FINKEL:  We have a substitution 

19          for Bill Ferris.  David McNally is our 

20          director of government affairs.  So we're 

21          still well-outfitted, I think.  

22                 Anyway, thank you so much.  Good 

23          evening.  I appreciate your patience.  So 

24          we're going to do ours real quick for you, I 


 1          promise.

 2                 CHAIRWOMAN WEINSTEIN:  Thank you.

 3                 MS. FINKEL:  So first of all, thank 

 4          you, Senator Young -- I know who was here for 

 5          quite a while -- and Assemblymember Weinstein 

 6          and members of the committee.  So obviously 

 7          I'm Beth Finkel, state director for AARP.  We 

 8          are a social mission organization, and here 

 9          in New York State we have 2.6 million 

10          members.  Nationally, we have 38 million.  

11                 And a sampling of our volunteers are 

12          sitting behind me, and they've been pretty 

13          patient all day too, so I salute them.

14                 CHAIRWOMAN WEINSTEIN:  Hi.  Thank you 

15          for being here all day, watching.

16                 MS. FINKEL:  Yeah.  Yeah.  I'm here 

17          today for one main reason, and that's to urge 

18          your support for the Governor's Executive 

19          Budget proposal to create the New York State 

20          Secure Choice Savings program -- yay -- which 

21          would help working New Yorkers save for their 

22          financial futures.  

23                 Secure Choice is a voluntary 

24          enrollment payroll deduction Roth IRA.  It 


 1          would be available to private businesses that 

 2          don't currently offer a retirement savings 

 3          option to their workers.  But if they would 

 4          like to do so, they could voluntarily join 

 5          this program.  It would be administered by 

 6          the Deferred Compensation Board.

 7                 The Governor's proposal is similar to 

 8          legislation of the same name sponsored by 

 9          Senator Savino and Assemblymember Rodriguez, 

10          which has received very broad bipartisan 

11          support in both houses.

12                 This is about helping millions of 

13          working New Yorkers save their own money so 

14          that they can take control of their own 

15          financial futures and have a choice as they 

16          live and as they age.  It's also about 

17          offering small businesses a valuable benefit 

18          to attract and retain employees.  I'm going 

19          to say this later, but I'm going to say it 

20          again right now, it is voluntary for 

21          companies.  That's really important.  And 

22          there's negligible cost to companies, and 

23          I'll get to that in a second.

24                 In the surveys, we found that over 


 1          three-quarters of New Yorkers 50 and over 

 2          support this idea, and that nearly 

 3          three-quarters of small businesses in 

 4          New York State support this idea.

 5                 So we would really like to see 

 6          New York State take advantage of this 

 7          program.  Employer-provided pensions and 

 8          401(k)s are becoming a thing of the past.  I 

 9          think we can all acknowledge that.  Many 

10          small businesses in particular simply just 

11          can't afford to provide them anymore.  And 

12          they also were concerned about the fiduciary 

13          responsibility of creating their own plans 

14          and also the financial side of it.  This bill 

15          would do away with both of those pieces for 

16          them.

17                 Now, currently, over half of 

18          New York's private-sector workforce lacks 

19          access to retirement savings accounts through 

20          their employer.  That's over 3.5 million 

21          New Yorkers.  I think that's staggering.  So 

22          there's 3.5 million New Yorkers who go to 

23          work and they aren't able to save 

24          automatically in the workplace.  


 1                 And this is especially a big problem 

 2          for New Yorkers from communities of color.  

 3          More than two-thirds of Hispanic workers, 

 4          over half of African-Americans, and 

 5          60 percent of Asian-Americans in New York 

 6          lack access to an employer-provided 

 7          retirement plan.

 8                 Retirement incomes of these 

 9          communities are particularly lagging, with 

10          most retiring with incomes near the poverty 

11          threshold.  Lack of access to workplace 

12          retirement savings options is a prime example 

13          of disparities that not only AARP but the 

14          Hispanic Federation, the Asian-American 

15          Federation, the NAACP of New York, and the 

16          Urban League of New York have recently all 

17          joined together with us to try to address.  

18          And we've actually started a new initiative 

19          that we have called Disrupt Disparities.  And 

20          at the top of our list of recommendations is 

21          this workplace savings account.

22                 So I want to emphasize that Secure 

23          Choice, again, would be voluntary for the 

24          employer and the employee, requires no 


 1          employee match -- actually, they're not 

 2          allowed to match, according to the way the 

 3          bill is written -- and minimal employer cost.  

 4          It's just adding another line to the pay 

 5          stub.  And that would be -- we've done some 

 6          research on it, and the average would be, no 

 7          matter how many employees you have, around 

 8          $500 a year.  So we're really talking about 

 9          negligible costs here.  

10                 It would not rely on any ongoing state 

11          costs and would be portable for employees who 

12          would like to take it with them to other 

13          jobs.  

14                 And one more point here.  People who 

15          go to work every day and have it 

16          automatically deducted are 15 times more 

17          likely to save for their retirement.  So it's 

18          kind of like mom and apple pie.  So 

19          addressing this issue is especially 

20          important, especially as our population is 

21          aging.  

22                 Two more very quick things.  We are 

23          also asking for increased funding for 

24          Medicaid home and community-based services, 


 1          because these help the middle class stay in 

 2          their own homes and communities, and we need 

 3          to do that.  

 4                 And lastly, the Governor's Executive 

 5          Budget provides expanding the use of 

 6          telehealth.  We really applaud that, and we 

 7          hope that you could also add to that.

 8                 Thank you so much.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10                 Assemblyman Magnarelli.

11                 ASSEMBLYMAN MAGNARELLI:  Only because 

12          this -- I really haven't looked into this 

13          that much, this secure savings.  And I don't 

14          know exactly how it works.  But the monies 

15          end up coming to the state?

16                 MS. FINKEL:  No.  The state 

17          facilitates this retirement fund, then they 

18          choose a financial institution, much like 

19          529s work.  It kind of works the same way.  

20          You know, so people --

21                 ASSEMBLYMAN MAGNARELLI:  Where does 

22          the money go?  The employer pays the money -- 

23                 MS. FINKEL:  No, the employer pays 

24          nothing.  I'm sorry.  Sorry.


 1                 ASSEMBLYMAN MAGNARELLI:  No, listen, 

 2          out of the paycheck you're taking somebody's 

 3          money.  Where does that money go?  

 4                 MS. FINKEL:  It goes into the state 

 5          retirement savings program.  But that --

 6                 ASSEMBLYMAN MAGNARELLI:  Okay.  So the 

 7          state is administering the funds.

 8                 MS. FINKEL:  Through the --

 9                 MR. McNALLY:  They're facilitating the 

10          setup of the program.  It's going to act just 

11          like the deferred compensation plan.  Money 

12          goes to whoever is managing.  The money does 

13          not go to the state.  They are just setting 

14          up -- we're using the Deferred Compensation 

15          Board as the mechanism so we don't have to 

16          recreate it all.  But just like deferred 

17          compensation goes to -- T. Rowe Price, I 

18          think, manages their money, they'll be 

19          managing.  The state will not be managing the 

20          money.

21                 ASSEMBLYMAN MAGNARELLI:  Okay.  So I 

22          guess the only question I have is, then whose 

23          responsibility is it to make sure that that 

24          money is managed properly?


 1                 MS. FINKEL:  I guess through the 

 2          Deferred Compensation Board and the normal 

 3          responsibilities that they have held.

 4                 ASSEMBLYMAN MAGNARELLI:  All right.  

 5          So that would fall on the state.

 6                 MR. McNALLY:  No.  It's the 

 7          individual's responsibility to work with -- 

 8          it's just like the 529.  It's an IRA.  Right?  

 9          I mean, it's your responsibility to work with 

10          the money manager that's been selected to 

11          pick what you want to do.  There's no 

12          fiduciary responsibility by the state or the 

13          employer.

14                 ASSEMBLYMAN MAGNARELLI:  Okay.  It 

15          just got a little --

16                 MR. McNALLY:  Yeah.  No, it's a good 

17          bill.  It's exactly --

18                 MS. FINKEL:  Thank you for letting us 

19          clarify.

20                 ASSEMBLYMAN MAGNARELLI:  It sounds 

21          like a great idea, though.  I love to hear 

22          that --

23                 MR. McNALLY:  We really appreciate 

24          your questions at this late hour, 


 1          Assemblyman.  We appreciate it very much.

 2                 MS. FINKEL:  Very much so.

 3                 ASSEMBLYMAN MAGNARELLI:  We're still 

 4          trying to stay, you know -- look sharp, 

 5          anyway.

 6                 CHAIRWOMAN WEINSTEIN:  Senator Savino.

 7                 ASSEMBLYMAN MAGNARELLI:  Thank you 

 8          very much for waiting all this time.

 9                 SENATOR SAVINO:  Thank you.  And thank 

10          you, Beth and Bill, for all your work on 

11          this.  I know everyone's been here all day.  

12          You guys have been pushing this.  

13                 I've been carrying this bill for a 

14          couple of years now, along with Assemblyman 

15          Rodriguez.  We're happy to see the Governor 

16          adopt it.  And I think the question that the 

17          Assemblyman was trying to make clear was 

18          whether or not the state would be on the hook 

19          if the plans went under.  Just as we're not 

20          on the hook for the deferred compensation 

21          plan.  And that's an important point, unlike 

22          the pension system.  

23                 But Assemblyman Magnarelli, if you'd 

24          like, I will be more than happy to come and 


 1          talk to you until -- about this issue, 

 2          anytime.

 3                 Thank you again.

 4                 CHAIRWOMAN WEINSTEIN:  Assemblyman 

 5          Oaks.

 6                 ASSEMBLYMAN OAKS:  Yeah, just a couple 

 7          of questions.  

 8                 Are there, though, administrative 

 9          costs?  Would they come out at the deferred 

10          comp?  And again, maybe -- I see Senator 

11          Savino -- I don't know if you know the answer 

12          or she does.  

13                 In other words, there's got to be some 

14          administrative cost to doing this somewhere.

15                 MR. McNALLY:  Well, that's why we set 

16          it up with the Deferred Compensation Board.  

17          So all the administrative cost involved with 

18          setting of the program up -- it's already set 

19          up.  Just like deferred compensation, the 

20          fees and the -- from managing will come from 

21          the employee's contributions.

22                 ASSEMBLYMAN OAKS:  Okay.  All right.  

23          Thank you.

24                 The sense -- you raised some of the 


 1          questions of why -- or the number of people 

 2          not covered or the number of people that have 

 3          difficulty putting aside resources, people 

 4          living paycheck to paycheck, et cetera.

 5                 This in essence -- it may provide 

 6          something more accessible.  It doesn't 

 7          necessarily solve the problem of people not 

 8          having those dollars.

 9                 MS. FINKEL:  True.  But I think the 

10          important point here is that if it's 

11          automatically taken out of your paycheck, 

12          you're 15 times more likely to save for your 

13          retirement.  

14                 So yes, we know it's very difficult 

15          for people of lower income to be able to 

16          save.  But even in those cases, they can save 

17          as little as 1 percent, there's no -- you 

18          know, there's no minimum in there that they 

19          can take out, so --

20                 ASSEMBLYMAN OAKS:  And is there a 

21          maximum, or no?

22                 MS. FINKEL:  It goes according to the 

23          Roth IRA rules.  It's the same thing.  So I 

24          think it's $5500 a year is what the Roth IRA 


 1          states right now as the max.

 2                 MR. McNALLY:  But all the income 

 3          limits and the amounts are -- basically it's 

 4          setting up a Roth IRA for an individual.  Or 

 5          an individual setting it up through the 

 6          mechanism of the Deferred Compensation Board.  

 7          Much like employees of any taxing authority 

 8          in the state could do when that taxing 

 9          authority agrees to enter into a contract 

10          with the Deferred Compensation Board.  

11                 ASSEMBLYMAN OAKS:  So many of these 

12          things are available today through different 

13          options, but not in this manner.  One sense 

14          would be making it more -- one way to solve 

15          this would be doing what you're talking 

16          about.  And another way to do it would be 

17          perhaps to make existing efforts and IRAs, 

18          et cetera, in different plans that are 

19          available currently in the market more 

20          accessible to people as well.  

21                 But I appreciate your testimony.

22                 CHAIRWOMAN WEINSTEIN:  Thank you.

23                 SENATOR KRUEGER:  Thank you very much.

24                 CHAIRWOMAN WEINSTEIN:  Thank you very 


 1          much for being here.

 2                 Next, New York Land Bank Association, 

 3          Katelyn Wright, president.

 4                 MS. WRIGHT:  Thank you for your time 

 5          and for having us here this evening.  We're 

 6          really honored to be here, and we'll try to 

 7          keep it as brief as possible.  

 8                 I'm Katelyn Wright.  I'm the president 

 9          of the New York Land Bank Association and 

10          also the executive director of the Greater 

11          Syracuse Land Bank.  And I'm joined by 

12          Madeline Fletcher, who is the secretary of 

13          the New York Land Bank Association and the 

14          executive director of the Newburgh Community 

15          Land Bank.  

16                 And we represent the association, and 

17          there are 23 land banks throughout New York 

18          State now at this point.  

19                 So I'm going to -- we'll keep our 

20          remarks to five minutes.  Madeline is going 

21          to make her remarks, and then I'm just going 

22          to tie it into some of the testimony we heard 

23          earlier today.

24                 MS. FLETCHER:  So I'm going to just 


 1          sort of give you a little background of where 

 2          we are and how we got here, and then talk a 

 3          little bit about the requests that we're 

 4          making to you.

 5                 Knowing that the vacant property 

 6          problem far exceeds the capacity of any local 

 7          government or local real estate market 

 8          absorption, in 2011 the New York State 

 9          Legislature passed the Land Bank Act.  This 

10          bipartisan supported legislation enabled 

11          communities across the state to make 

12          strategic decisions about abandoned 

13          properties and to ameliorate the 

14          well-documented harms to public health, 

15          property values, economic development, and 

16          public safety created by this epidemic.  

17                 Since that time, 23 land banks from 

18          every corner of the state have made progress 

19          that exceeds even the most ambitious 

20          expectations in the areas of affordable 

21          housing, homeownership, open space 

22          preservation, and blight remediation.  To 

23          date, this work includes the acquisition of 

24          over 2,000 properties, the attraction of over 


 1          $75 million in private investment, and more 

 2          than $30 million in assessed value returned 

 3          to local property tax rolls.  

 4                 While some of the economic development 

 5          and housing dollars available through this 

 6          state initiative, like the consolidated 

 7          funding application, overlap with the mission 

 8          of land banks, often they are not directly 

 9          useful to land banks because of the type and 

10          scope of work that land banks undertake.  

11                 For example, our land bank in Newburgh 

12          does not typically act as a developer.  

13          Instead, we acquire title to vacant 

14          properties, hold that property while we raise 

15          capital to make targeted investments that 

16          ultimately yield developable, marketable 

17          property.  

18                 We invest heavily in things like 

19          environmental abatement, which are key 

20          deterrents for potential investors and 

21          homeowners alike.

22                 This has yielded a waterfall of 

23          improvements in our community.  Record 

24          building permits are being filed.  There have 


 1          been multiple local jobs created, and 

 2          high-quality housing opportunities have 

 3          resulted for residents that have been 

 4          economically and socially marginalized for 

 5          decades.  And for the $4.5 million we have 

 6          invested to date, we have a return of about 

 7          five-to-one for each dollar.

 8                 Land banking allows municipalities to 

 9          make systematic improvements to the way that 

10          they approach and purchase vacancies, 

11          including and especially zombie properties 

12          that linger in the wake of the foreclosure 

13          crisis.  As a result, land banks have been 

14          the beneficiaries of funds allocated by the 

15          New York State Office of the Attorney General 

16          from penalty dollars collected from the worst 

17          offending banks.  This early infusion of 

18          capital has allowed us to show results from 

19          our early start-up days.

20                 CHAIRWOMAN WEINSTEIN:  Are you both 

21          going to be speaking?

22                 MS. FLETCHER:  Just a quick -- yeah.

23                 MS. WRIGHT:  And we're both trying to 

24          keep it to five minutes combined.


 1                 MS. FLETCHER:  Yeah, we're trying to 

 2          keep it, together, to five minutes.  We're 

 3          watching the clock.

 4                 This early infusion of capital has led 

 5          us to show results from our early start-up 

 6          days, but these funds are dwindling and 

 7          there's no indication that additional funds 

 8          will be available.  

 9                 The New York State Land Bank 

10          association requests that the fiscal year 

11          2019 budget include $60 million for land 

12          banks, $50 million for capital funds and 

13          $10 million for predevelopment costs, to be 

14          apportioned by capacity and need.  

15                 This will yield a large return for 

16          each dollar and will enhance ongoing 

17          transformative state work, like downtown and 

18          upstate revitalization initiatives.  And this 

19          will also ensure that New York's vision of 

20          residents with opportunities in vibrant 

21          communities.

22                 I'll turn it to Katelyn.

23                 MS. WRIGHT:  So just to reiterate 

24          what's in our written testimony and what 


 1          Madeline just said, over the past five years 

 2          23 land banks across the state have been 

 3          deployed to address vacant and abandoned 

 4          properties and have really proven to be 

 5          powerful tools to deal with these eyesores in 

 6          our communities.  Every public dollar that's 

 7          gone into land banks has generated a return.  

 8          Generally, the model is working.  But we've 

 9          relied on funding from the Attorney General 

10          for the past couple of years, and there is no 

11          additional money committed to land banks 

12          beyond the end of 2018.  

13                 We are asking that the Assembly and 

14          Senate add funding into the next state budget 

15          to support land banks so that this tool can 

16          continue to work for our communities across 

17          the state, because there is no other 

18          long-term source of public funding to 

19          continue to support this.  

20                 You heard mayors talk earlier today 

21          about how cash-strapped our local 

22          governments are.  Blighted properties like 

23          this, they are an expenditure for local 

24          governments.  You'll see cities, counties and 


 1          towns spending money mowing lawns, picking up 

 2          trash, boarding them up.  So it's hurting 

 3          them on the expense side, and it's hurting 

 4          them on the revenue side as well, because the 

 5          presence of these blighted properties drags 

 6          down surrounding property values in 

 7          communities where, as Assemblyman Magnarelli 

 8          pointed out earlier, they already have very 

 9          few properties that are taxable in our 

10          cities.  And then those that are taxable, 

11          many of them are just not performing.  

12                 So we think this is an intervention 

13          that pays dividends for local and state 

14          government, and we want to see it keep going.

15                 MS. FLETCHER:  Thank you.  

16                 CHAIRWOMAN WEINSTEIN:  So Assemblyman 

17          Magnarelli.

18                 ASSEMBLYMAN MAGNARELLI:  First of all, 

19          I just want to say to both of you, thank you 

20          very much.  I know that you've been here the 

21          whole day.  So, you know, I really commend 

22          you for doing that.  

23                 Katelyn, you and I have talked many 

24          times.  I'm very much aware of what the land 


 1          banks do.  The only thing -- and we went 

 2          through this in Syracuse last year.  And, you 

 3          know, you're come to the state asking for 

 4          funds to be there, and yet the localities 

 5          need to step up as well.  Okay?  Because they 

 6          are benefiting from these.  And in the short 

 7          run and definitely in the long run, they will 

 8          make more money as these properties go back 

 9          on the tax rolls.  And that's what the whole 

10          land bank was supposed to be, eventually 

11          becoming self-sufficient, if I remember 

12          correctly -- not initially, and nobody ever 

13          said that.  But as you go down the line, that 

14          would be what the goal is.

15                 So first of all, I want to commend you 

16          and the association and what you're doing in 

17          all of these communities.  I think it's vital 

18          for our cities.  And so, you know, we will do 

19          the best we can for you going forward.  And 

20          thank you again for being here.  

21                 I don't have a question, okay.  So 

22          thank you.

23                 MS. WRIGHT:  Thank you.  And I think 

24          you're absolutely correct that land banks are 


 1          most successful when there's local buy-in.  

 2          So if this is something that's being debated 

 3          during the budget process, maybe some sort of 

 4          local match would be a logical thing to do.  

 5                 But you know how to find me, and I'm 

 6          available for questions after this.  I won't 

 7          keep you any longer.

 8                 CHAIRWOMAN WEINSTEIN:  Mr. Oaks.

 9                 ASSEMBLYMAN OAKS:  Through the 2018 

10          calendar year, you are -- there is some money 

11          funded.

12                 MS. FLETCHER:  Yes.

13                 ASSEMBLYMAN OAKS:  And you have some 

14          new land banks coming on, correct?

15                 MS. FLETCHER:  Correct.

16                 ASSEMBLYMAN OAKS:  You listed 17.  

17          There's more that were created, right, in 

18          last year's --

19                 MS. FLETCHER:  Right.  We're up to 23, 

20          at this point, of the 25 that we're allowed 

21          by the legislation.  

22                 And a lot of those are just coming 

23          online, so all of those don't even have the 

24          benefit of the funding that luckily Katelyn 


 1          and I in our organizations have benefited 

 2          from.  

 3                 So we're also looking at not just the 

 4          continuation of our work, but also sort of 

 5          funding for some of the newer ones that 

 6          aren't benefiting from the Attorney General's 

 7          community revitalization initiative dollars.

 8                 ASSEMBLYMAN OAKS:  Thank you.

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10                 MS. FLETCHER:  Thanks.

11                 CHAIRWOMAN WEINSTEIN:  Final witness, 

12          Elena Sassower.

13                 MS. SASSOWER:  Before I begin, I would 

14          like to hand up relevant portions of the 

15          New York State Constitution and the 

16          Senate-Assembly Legislative/Judiciary Budget 

17          Bill.  May I?  There's plenty.  

18                 Did you wish to set the clock?  I have 

19          10 minutes; correct?

20                 CHAIRWOMAN WEINSTEIN:  Five minutes.

21                 SENATOR SAVINO:  Everyone has been 

22          getting five.

23                 CHAIRWOMAN WEINSTEIN:  After the 

24          Public Protection hearing went over 13 hours, 


 1          there was a decision made by the joint 

 2          committees that the --

 3                 MS. SASSOWER:  I was notified that 

 4          there would be 10 minutes.  I've prepared 

 5          10 minutes.  I would appreciate --

 6                 CHAIRWOMAN WEINSTEIN:  No.

 7                 MS. SASSOWER:  Since I'm the last 

 8          witness, I would appreciate --

 9                 CHAIRWOMAN WEINSTEIN:  No.  I assume 

10          you heard the announcement that all of the --

11                 MS. SASSOWER:  It's an arbitrary 

12          announcement.

13                 CHAIRWOMAN WEINSTEIN:  -- all of the 

14          people who preceded you had --

15                 MS. SASSOWER:  My name is Elena 

16          Sassower, and I'm director and cofounder of 

17          the nonpartisan, nonprofit citizens' 

18          organization Center for Judicial 

19          Accountability that documents the corruption 

20          in the judiciary, facilitated and enabled by 

21          the legislative and judicial branches, which, 

22          when they are sued for their corruption, the 

23          judiciary then protects by throwing the 

24          lawsuits, by fraudulent judicial decisions.


 1                 This is the sound-bite synopsis of 

 2          what the record shows in the Center for 

 3          Judicial Accountability citizen-taxpayer 

 4          actions suing you for your grand larceny of 

 5          the public fisc and other corruption with 

 6          respect to the State Budget.

 7                 We purport to be a government of laws, 

 8          and our foremost law in New York State is the 

 9          New York State Constitution, which in its 

10          Article VII lays out the fashion in which the 

11          budget is to be fashioned and enacted.  

12          Because the Legislature and the Judiciary are 

13          separate government branches, they are given 

14          the independence to propose their own 

15          budgets, with the simple condition to that 

16          independence that their itemized estimates of 

17          their financial needs be certified.  

18                 Here are the Judiciary's 

19          certifications of its itemized estimates in 

20          two parts, one for its operating expenses, 

21          the other for its general state charges.

22                 Not included in the budgets, the 

23          operating funds budget and the general state 

24          funds budget, were reappropriations.  Those 


 1          reappropriations appeared only in their 

 2          single budget bill, which became Sections II 

 3          and III of the Governor's 

 4          Legislative/Judiciary Budget Bill.

 5                 The pages of appropriations that 

 6          amount to $57 million -- $57,300,000 -- do 

 7          not appear to be certified and must be 

 8          stricken by you pursuant to the 

 9          constitutional directive.  You have just 

10          found $57,300,000.  But that's not all, and I 

11          will help you recover more monies.

12                 The big money embedded in the 

13          Judiciary Budget, and concealed, are the 

14          judicial pay raises, for which there is no 

15          line item nor identification that you have 

16          the prerogative to abrogate and modify those 

17          increases.  But the evidence that you have 

18          had since 2011, and successively, is that the 

19          two state commission reports on which those 

20          judicial salary increases rest are 

21          statutorily violative, fraudulent, 

22          unconstitutional, and you must override them 

23          now.

24                 This year, in this Legislative/ 


 1          Judiciary Budget Bill, the salary increases 

 2          embedded are on the order of about 

 3          $60 million.  That includes the $14 million  

 4          or so for the current increase, which will -- 

 5          unless you override, will jack up the 

 6          judicial salaries for Supreme Court justices 

 7          to $207,000 a year.  That's not counting 

 8          nonsalary benefits -- pensions, health 

 9          insurance, the whole package that brings it 

10          up another $40,000.

11                 So I have now saved you a very 

12          substantial amount of money, but there's even 

13          more.  

14                 Once you override those judicial pay 

15          raises, you also can secure a clawback of 

16          $300 million that were expended by those pay 

17          raises.  This is a huge amount of money.  

18                 Now let's flip to the legislative 

19          budget.  The legislative budget is not 

20          publicly accessible; I had to FOIL for it.  

21          And I requested specifically the 

22          certifications.  I have the FOIL inquiry and 

23          what came out.  There is no certification.  

24          The entire legislative budget is not 


 1          certified.

 2                 Now, the reason it is not certified is 

 3          because it obviously is not an accurate 

 4          itemization of the financial needs of the 

 5          Legislature.

 6                 CHAIRWOMAN WEINSTEIN:  Thank you.

 7                 MS. SASSOWER:  It contains no general 

 8          state charges --

 9                 CHAIRWOMAN WEINSTEIN:  Thank you.  

10          Thank -- thank --

11                 MS. SASSOWER:  -- it contains no 

12          appropriations.  However --

13                 CHAIRWOMAN WEINSTEIN:  Thank you.  We 

14          have your written -- we have your --

15                 MS. SASSOWER:  One final statement, 

16          please.

17                 CHAIRWOMAN WEINSTEIN:  Okay.

18                 MS. SASSOWER:  One final statement, 

19          please.

20                 CHAIRWOMAN WEINSTEIN:  Sure.

21                 MS. SASSOWER:  In the Legislative/ 

22          Judiciary Budget Bill, there has been 

23          inserted in some mysterious way, in an 

24          out-of-sequence section in the back not 


 1          properly titled "Legislative 

 2          Reappropriations," 28 pages of legislative 

 3          reappropriations.  They appear to be many 

 4          tens and tens of millions of dollars.  Your 

 5          duty -- again, you have a legislative budget 

 6          that is not certified.  You have no general 

 7          state charges.  Where are they?  Have they 

 8          been certified?  You have reappropriations 

 9          here that have popped in without any 

10          certification.  Where do they come from?  

11          They must be stricken.  

12                 What you have is a budget bill that is 

13          replete with fraud, larceny of taxpayer 

14          monies.  Your duty is to take steps to 

15          investigate, to --

16                 CHAIRWOMAN WEINSTEIN:  Thank -- 

17          thank --

18                 MS. SASSOWER:  Okay.  These are penal 

19          law violations.

20                 CHAIRWOMAN WEINSTEIN:  We do have your 

21          -- the written submissions that you both 

22          mailed us and now have distributed.  Thank 

23          you for being here.  

24                 This concludes our hearing.


 1                 MS. SASSOWER:  Thank you.  And 

 2          needless -- needless to say --

 3                 (Inaudible; microphone off.)

 4                 CHAIRWOMAN WEINSTEIN:  You're welcome 

 5          to submit some additional material.  

 6                 Thank you.  This concludes the Local 

 7          Government Officials and General Government 

 8          Hearing.  Thank you.  

 9                 (Whereupon, the budget hearing 

10          concluded at 6:53 p.m.)