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

1 BEFORE THE NEW YORK STATE SENATE FINANCE
AND ASSEMBLY WAYS AND MEANS COMMITTEES
2 ----------------------------------------------------
JOINT LEGISLATIVE HEARING
3 In the Matter of the
2018-2019 EXECUTIVE BUDGET
4 ON LOCAL GOVERNMENT OFFICIALS/
GENERAL GOVERNMENT
5 ----------------------------------------------------

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

8 February 5, 2018
10:10 a.m.
9

10 PRESIDING:

11 Senator Catharine M. Young
Chair, Senate Finance Committee
12
Assemblywoman Helene E. Weinstein
13 Chair, Assembly Ways & Means Committee

14 PRESENT:

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

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

21 Assemblyman B. Magnarelli
Chair, Assembly Committee on Local Governments
22
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
2-5-18
3

4 PRESENT: (Continued)

5 Assemblyman Michael J. Cusick

6 Senator Roxanne J. Persaud

7 Assemblyman David Weprin

8 Assemblywoman Catherine T. Nolan

9 Assemblyman Jeffrion L. Aubry

10 Senator Gustavo Rivera

11 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
2-5-18
3

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

24

1 2018-2019 Executive Budget
Local Government Officials/
2 General Government
2-5-18
3

4 LIST OF SPEAKERS

5 STATEMENT QUESTIONS

6 Honorable Bill de Blasio
Mayor
7 City of New York 9 28

8 Scott M. Stringer
Comptroller
9 City of New York 209 221

10 Honorable Kathy M. Sheehan
Mayor
11 City of Albany 256 271

12 Honorable Lovely A. Warren
Mayor
13 City of Rochester 300 306

14 Honorable Mike Spano
Mayor
15 City of Yonkers 317 331

16 Honorable Ben Walsh
Mayor
17 City of Syracuse 352 360

18 Honorable Corey Johnson
Speaker
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
24

1 2018-2019 Executive Budget
Local Government Officials/
2 General Government
2-5-18
3

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
9
George Latimer
10 County Executive
Westchester County 485 491
11
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
President
18 New York Land Bank Association 525 531

19 Elena Sassower
Director
20 Center for
Judicial Accountability 534
21

22

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,

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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

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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?

102

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

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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.

104

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

105

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

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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

107

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

108

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

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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

110

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

111

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

112

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

113

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,

114

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

115

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

116

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

117

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

118

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

119

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,

120

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

121

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

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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

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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.)

124

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

125

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

126

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

127

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.

128

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

129

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

130

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

131

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

132

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

133

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

134

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.

135

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

136

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

137

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

138

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

139

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.

140

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

141

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 --

142

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?

143

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

144

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

145

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

146

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

147

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

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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

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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

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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

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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

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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

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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

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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

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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?

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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

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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

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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

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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

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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

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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,

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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

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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.

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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

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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

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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.

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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

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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

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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

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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.

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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

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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

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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

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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

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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

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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?

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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

178

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

179

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

180

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

181

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

182

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

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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

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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.

185

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,

186

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

187

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.

188

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

189

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

190

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

191

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

192

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

193

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

194

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.

195

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

196

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

197

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

198

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

199

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.

200

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

201

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

202

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,

203

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

204

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

205

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

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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

207

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

208

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

209

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

210

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

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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

212

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

213

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

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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

215

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

216

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

217

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

218

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

219

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

220

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

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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

222

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

223

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.

224

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.

225

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

226

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

227

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

228

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

229

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

230

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.

231

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.

232

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

233

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

234

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.

235

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

236

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

237

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

238

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.

239

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

240

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

241

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

242

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.

243

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?

244

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

245

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.

246

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.

247

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

248

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.

249

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

250

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

251

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

252

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.

253

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

254

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

255

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.

256

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

257

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

258

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

259

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

260

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

261

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

262

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

263

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

264

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

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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

266

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

267

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

268

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

269

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

270

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.

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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

272

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

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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

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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

275

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.

276

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

277

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

278

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

279

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.

280

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

281

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

282

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.

283

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.

284

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,

285

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

286

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

287

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

288

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.

289

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

290

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

291

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

292

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

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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.

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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?

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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

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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.

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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.

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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

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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.

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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

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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

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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

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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

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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

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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

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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

307

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.

308

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.

309

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,

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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

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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

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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

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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

314

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

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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

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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.

317

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

318

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

319

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

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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

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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

322

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

323

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.

324

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.

325

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.

326

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

327

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

328

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.

329

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

330

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

331

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?

332

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.

333

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.

334

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

335

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

336

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.

337

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

338

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

339

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.

340

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

341

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,

342

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

343

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

344

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.

345

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

346

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?

347

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.

348

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,

349

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,

350

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 --

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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.

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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

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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

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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.

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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

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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

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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

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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

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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

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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?

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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

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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

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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

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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,

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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.

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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

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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

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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.

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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

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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

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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:

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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

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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

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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

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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

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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

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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,

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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

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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

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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,

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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

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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

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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

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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

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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

386

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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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

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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

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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

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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

401

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.

402

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

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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

404

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

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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

406

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

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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

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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.

409

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

410

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

411

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

412

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.

413

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

414

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

415

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

416

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.

417

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

418

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?

419

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

420

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

421

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.

422

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

423

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

424

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.

425

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

426

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

427

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.

428

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.

429

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,

430

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

431

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.

432

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

433

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.

434

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

435

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.

436

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

437

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

438

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

439

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

440

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.

441

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.

442

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?

443

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

444

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.

445

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.

446

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

447

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

448

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

449

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

450

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.

451

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

452

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

453

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.

454

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

455

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

456

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

457

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

458

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

459

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

460

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

461

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

462

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,

463

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

464

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,

465

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?

466

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

467

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

468

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

469

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

470

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

471

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

472

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

473

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.

474

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

475

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

476

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

477

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 --

478

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.

479

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

480

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

481

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

482

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?

483

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

484

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.

485

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.

486

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.

487

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.

488

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

489

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

490

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.

491

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.

492

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

493

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

494

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

495

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

496

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

497

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

498

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

499

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

500

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.

501

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.

502

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.

503

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 --

504

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

505

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

506

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

507

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

508

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.

509

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,

510

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 --

511

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

512

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

513

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

514

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

515

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.

516

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

517

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,

518

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.

519

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?

520

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,

521

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

522

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

523

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

524

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

525

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

526

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

527

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

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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.

529

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

530

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

531

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

532

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

533

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

534

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,

535

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.

536

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

537

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/

538

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

539

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

540

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.

541

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.)

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