Regular Session - March 29, 2001
3961
NEW YORK STATE SENATE
THE STENOGRAPHIC RECORD
ALBANY, NEW YORK
March 29, 2001
10:03 a.m.
REGULAR SESSION
SENATOR RAYMOND A. MEIER, Acting President
STEVEN M. BOGGESS, Secretary
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P R O C E E D I N G S
ACTING PRESIDENT MEIER: The
Senate will come to order.
I ask everyone present to please
rise and join me in repeating the Pledge of
Allegiance.
(Whereupon, the assemblage recited
the Pledge of Allegiance to the Flag.)
ACTING PRESIDENT MEIER: In the
absence of clergy, may we bow our heads in a
moment of silence.
(Whereupon, the assemblage
respected a moment of silence.)
ACTING PRESIDENT MEIER: Reading
of the Journal.
THE SECRETARY: In Senate,
Wednesday, March 28th, the Senate met pursuant
to adjournment. The Journal of Tuesday, March
27th, was read and approved. On motion,
Senate adjourned.
ACTING PRESIDENT MEIER: Without
objection, the Journal stands approved as
read.
Presentation of petitions.
Messages from the Assembly.
3963
Messages from the Governor.
Reports of standing committees.
Reports of select committees.
Communications and reports from
state officers.
Motions and resolutions.
Senator Bruno.
SENATOR BRUNO: Mr. President, it
is, five minutes after 10:00. Is that
correct, Mr. President.
ACTING PRESIDENT MEIER: Yes, it
is, by the clock in the corner, Senator.
SENATOR BRUNO: Thank you. I
need verification of whatever takes place here
in the chamber. I look around, and I see a
lot of empty chairs in this chamber. And the
members are elected to represent their
constituency by being in their chairs when
we're in session.
And we have a lot of interesting
bills. We have a budget to put in place. We
have a lot of interesting questions to be
asked and interesting answers to those
interesting questions.
So I am asking any of the members
3964
that are in their offices to get to this
chamber. We have a rather lengthy agenda.
We're going to be here until we finish that
agenda, whatever hour that may relate to.
So for those that are trying to
catch planes and trains and cars, I would not
make any specific plans unless you have a
private charter service to take you wherever
you want to go that are standing by.
So, Mr., President having said
that, I believe that there is a privileged
resolution by Senator Stafford -- oh, it's by
Senator Goodman. And Senator Goodman would
like to have the title read, and we would like
to move for its immediate passage. And for
those members that aren't going to have the
privilege and the pleasure of voting for it,
it will be their loss, Mr. President, and they
will be so recorded.
ACTING PRESIDENT MEIER: The
Secretary will read the title.
THE SECRETARY: By Senator
Goodman, Legislative Resolution Number 1088,
honoring Judge Franklin R. Weissberg upon the
occasion of his retirement from the New York
3965
State Court of claims.
ACTING PRESIDENT MEIER: The
question is on the resolution. All those in
favor signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Opposed,
nay.
(No response.)
ACTING PRESIDENT MEIER: The
resolution is adopted.
Senator Bruno.
SENATOR BRUNO: Mr. President, I
believe there's a privileged resolution by
Senator Nozzolio. I would ask that the title
be read and move for its immediate adoption.
ACTING PRESIDENT MEIER: The
Secretary will read the title.
THE SECRETARY: By Senator
Nozzolio, Legislative Resolution Number 1087,
commending Frances T. Barbieri upon the
occasion of her designation by the Seneca
Falls Women's Coalition as its Woman of the
Year on March 31, 2001.
ACTING PRESIDENT MEIER: The
question is on the resolution. All those in
3966
favor signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Opposed,
nay.
(No response.)
ACTING PRESIDENT MEIER: The
resolution is adopted.
Senator Bruno.
SENATOR BRUNO: Mr. President, I
think there are three privileged resolutions
at the desk by Senator Morahan. I would ask
that their titles be read and move for their
immediate adoption.
ACTING PRESIDENT MEIER: The
Secretary will read the titles.
THE SECRETARY: By Senator
Morahan, Legislative Resolution Number 1098,
commemorating the 50th Anniversary of Orange
County Community College, to be celebrated
March 31, 2001.
By Senator Morahan, Legislative
Resolution Number 1099, commending Dr. Marvin
Shapiro upon the occasion of his designation
for special recognition by the American Red
Cross in Greater New York on April 1, 2001.
3967
By Senator Morahan, Legislative
Resolution Number 1100 commending Neil Berg
upon the occasion of his designation for
special recognition by the American Red Cross
in Greater New York on April 1, 2001.
ACTING PRESIDENT MEIER: The
question is on the resolutions. All those in
favor signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Opposed,
nay.
(No response.)
ACTING PRESIDENT MEIER: The
resolutions are adopted.
Senator Bruno.
SENATOR BRUNO: Mr. President,
can we at this time take up the
noncontroversial calendar.
ACTING PRESIDENT MEIER: The
Secretary will read the noncontroversial
calendar.
THE SECRETARY: Calendar Number
105, by Senator Balboni, Senate Print 862, an
act to amend the Civil Practice Law and Rules.
SENATOR CONNOR: Lay it aside,
3968
please.
ACTING PRESIDENT MEIER: Lay it
aside.
THE SECRETARY: Calendar Number
250, by Member of the Assembly Lentol,
Assembly Print Number 5305, an act to amend
the Judiciary Law and the Penal Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
252, by Senator Skelos, Senate Print 399, an
act to amend the Family Court Act and the
Criminal Procedure Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
258, by Senator Farley, Senate Print 2838, an
act to amend the Banking Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
268, by Senator McGee, Senate Print 3089, an
3969
act to amend the General City Law and others.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
274, by Senator Libous, Senate Print 2900, an
act to amend the Tax Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
283, by Senator Morahan, Senate Print 514A, an
act to amend the Highway Law.
SENATOR CONNOR: Lay it aside,
please.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
286, by Senator Kuhl, Senate Print 3071, an
act to amend the Vehicle and Traffic Law.
SENATOR CONNOR: Lay it aside,
please.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
3970
298, by Senator Bonacic, Senate Print 2275, an
act to amend the County Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
300, by Senator Kuhl, Senate Print 2491, an
act to amend the General Municipal Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
301, by Senator LaValle, Senate Print 2589, an
act to amend Chapter 554.
SENATOR CONNOR: Lay it aside,
please.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
302, by Senator Padavan, Senate Print 2774, an
act to amend the General Municipal Law.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
3971
314, by Senator Seward, Senate Print 3653, an
act to amend the Insurance Law.
SENATOR CONNOR: Lay it aside,
please.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
328, Assembly Budget Bill, Assembly Print
Number 1301A, an act making appropriations.
SENATOR CONNOR: Lay it aside.
ACTING PRESIDENT MEIER: Lay the
bill aside.
THE SECRETARY: Calendar Number
331, by the Assembly Committee on Rules,
Assembly Print Number 8316, an act to amend
the Military Law.
SENATOR CONNOR: Lay it aside,
please.
ACTING PRESIDENT MEIER: Lay the
bill aside.
Senator Bruno, that completes the
reading of the noncontroversial calendar.
SENATOR BRUNO: Mr. President,
can we now take up the controversial calendar,
starting with Calendar Number 331.
3972
ACTING PRESIDENT MEIER: The
Secretary will read Calendar 331.
THE SECRETARY: Calendar Number
331, by the Assembly Committee on Rules,
Assembly Print Number 8316, an act to amend
the Military Law, in relation to military
funds.
SENATOR CONNOR: Explanation.
SENATOR BRUNO: Is there a
message of necessity at the desk?
ACTING PRESIDENT MEIER: Yes,
there is, Senator.
SENATOR BRUNO: Move we accept
the message.
ACTING PRESIDENT MEIER: All
those in favor of accepting the message of
necessity signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Opposed,
nay.
(No response.)
ACTING PRESIDENT MEIER: The
message is accepted. The bill is before the
house.
SENATOR CONNOR: Explanation.
3973
ACTING PRESIDENT MEIER: Senator
Padavan, why do you rise?
SENATOR PADAVAN: I wish to speak
on the bill, if I may. However, I defer to
the distinguished chairman of the Finance
Committee.
SENATOR STAFFORD: Same time, if
you'd like to speak -
SENATOR PADAVAN: No, no, I defer
to you, Senator.
SENATOR STAFFORD: What I'll do,
just before I yield, is very quickly, very
quickly -- because we're certainly not going
to let things drone on. And I know, Mr.
President, you're going to enjoy this today
because we're going to be brief, all of us.
What this bill does, it extends
various provisions of law that would otherwise
expire or become inoperative on March 31,
2001, to ensure the continuation of various
programs and fiscal management provisions for
the 2001-2002 fiscal year, and enacts
provisions proposed for 2001 and 2002 that
require authorization.
In other words, we're passing these
3974
billings for the continuation of government.
It's a pleasure to yield to the
Senator from -- Brooklyn? Queens.
ACTING PRESIDENT MEIER: Senator
Padavan.
SENATOR PADAVAN: He just moved
me. But that's all right. I was born in
Brooklyn, so I don't mind that at all.
Thank you. Thank you for your
courtesy, the Senator from Plattsburgh or
thereabouts.
Mr. President, I will try and be as
brief as the distinguished chairman of the
Finance Committee, but there are a few things
I would like to say relevant to this bill.
First, all the aspects of this bill
obviously make sense, except one. Certainly a
continuation of the Loft Laws, which I always
supported, makes a great deal of sense. It's
unfortunate that their continuation will only
be for three months, when we'll have to
revisit their concerns, which are very valid.
But the expansion of Quick Draw,
provided courtesy of GTech for the State of
New York, is something which I do feel is a
3975
major mistake. The people of this state are
not clamoring for us to continue Quick Draw.
Quite to the contrary. Every major newspaper,
from the New York Times in the City of New
York to the Buffalo News, in editorials and
stories, has come out in opposition to
continuing Quick Draw, for very valid and
cogent reasons.
Civic organizations and religious
organizations throughout the state, from the
Catholic Conference to the Saratoga Chamber of
Commerce, have come out in opposition to
continuing Quick Draw.
I'd like to talk just briefly about
the economics of the issue. The average
amount of revenue that Quick Draw has produced
is $125 million annually.
Whatever the amount, I think we're
all sophisticated, and our constituents are
even becoming more sophisticated, in coming to
the conclusion that that does not translate
into more aid to education.
However, in the process, Quick Draw
takes out of the economy a half a billion
dollars. A half a billion dollars. Now, if
3976
someone had a proposal before us labeling it
economic development and said we have a way of
putting a half a million dollars into the
economy in goods and services and the jobs it
produces and the local, state, and city and
county tax revenues that it produces, we would
say, Great, let's do it.
We're doing the reverse here. That
half a million dollars is coming out of the
economy. A lot of it is going to GTech. And
they're not in New York, they're in Rhode
Island. If you know anything about that
outfit in terms of their history, you know how
sleazy it is. Six percent goes to the vendor.
We've heard some talk about jobs
being lost if we don't continue Quick Draw.
There are 3200 outlets. If you divide the
total handle of a half a billion, the average
comes to about $9,600 per outlet. And I've
visited many of them. Obviously, not all
3200. And wherever I have gone, without
exception, there is not a new employee
handling Quick Draw. It's the waitress in the
bar and tavern, it's the bartender, it's the
clerk.
3977
And they're losing money by this,
those individuals. Because when somebody puts
$20 down to make a purchase, and part of that
goes to that video crack terminal up on the
wall, it doesn't help the person who handed
them the card to fill out. There are no tips
associated with that money. So they lose on
the deal.
And virtually all of them that I
spoke to said they're annoyed by it. Yes, for
the owners of some of those establishments, it
a revenue, it's a little gravy, it's a little
icing on the cake. But it's certainly not
economic development by any stretch of the
imagination.
I think it's clear that the
economics do not justify this by any measure.
And economists have written on this issue at
great length, and I won't bore you with who
they are and where they are, but they are
people in institutions, academic institutions
across the country.
Now, there are three studies that
address this issue, two of them generated by
entities, agencies here in New York State.
3978
The Office of Mental Health is the most
recent. They commissioned an independent
study done by a nationally renowned expert in
this field, Dr. Volberg. The results of that
study were quite compelling. Just a couple of
the highlights.
Quick Draw is played
disproportionally by minorities and those
least able to afford it. 30 percent of the
people wagering on Quick Draw are in income
brackets under 25,000. And all you have to
do -- it doesn't take a rocket scientist or
economist or a Ph.D. to see where those
outlets are. They are in low-to-low
middle-income communities. They're not on
Park Avenue, Fifth Avenue or any place like
it. They prey upon people who can least
afford to be enticed into gambling.
The study also shows that when that
type of activity is combined with alcohol,
which is the case in the bars, there is less
tendency on the part of the individual to use
good judgment. And so people are losing their
paycheck, their welfare payment and the like,
all for the sake of benefiting a few.
3979
The other study was done by our New
York State Council on Problem Gambling. Their
conclusions, independent, were exactly the
same. The low-income people with their
propensity to be enticed into this game, the
connection to alcohol, the abuse, the negative
aspects of the entire issue.
Nationally, we're all familiar -
I'm sure you are, because they were doing
their work for a couple of years or more -
the National Gambling Impact Study Commission,
a bipartisan commission made up of individuals
on both sides of the gambling issues of this
nation. And they came out with a number of
recommendations.
And the recommendation on the top
of the list was that states should withdraw,
whenever possible, convenience gambling, and
certainly not add any more. And that's what
Quick Draw is, convenience gambling. And they
gave all the reasons in great detail, not just
here in New York but elsewhere in this nation.
So we have three studies done
independently, each one coming up with the
same conclusions, but we're smarter than all
3980
of them, because we're going to continue.
We're going to continue today -- I'm very
realistic, this bill will pass -- continue to
move forward for several more months without
taking this opportunity of saying let's stop.
Why was there a sunset? The logic
was that let's evaluate the effect of Quick
Draw on the people of New York State and see
whether or not we should continue it. But we
have had that evaluation, in great detail.
And I could bore you all morning on it, but I
won't. Yet we're ignoring it. We're just
simply ignoring it.
So, Mr. President, although I
support every other aspect of this bill, I do
draw the line on Quick Draw. And when it
comes time to vote, I will vote no.
ACTING PRESIDENT MEIER: Senator
Connor, why do you rise?
SENATOR CONNOR: Mr. President,
on the bill.
ACTING PRESIDENT MEIER: Senator
Connor, on the bill.
SENATOR CONNOR: Later I'll
address other aspects of this, but I do want
3981
to address Quick Draw myself, because I share
Senator Padavan's views about this particular
game.
With respect to, for example,
casino gambling, one can certainly argue the
deleterious effects versus economic
development. Generally, where there are
casinos, people invest large amounts of money
in hotels, they employ large numbers of
people, both in the gaming floors and in the
hotel and restaurant adjuncts to it. I know
you can debate whether or not it hurts other
restaurants that are already there. If you
look at Atlantic City, it killed the
restaurant business outside of the hotels that
had gambling. But clearly, there's
significant investment involved in that.
Quick Draw amazes me because, you
know, GTech readily supplies the TV and that
little ball just keeps bouncing every whatever
it is, 90 seconds or so. And I made an
observation over the past years, without -
and I appreciate Senator Padavan's diligent
collection of objective studies. But I don't
need those. I live in Brooklyn. I live in
3982
Brooklyn Heights. It's considered an upscale
neighborhood, has several taverns and inns.
And you cannot find anywhere within the
confines of that neighborhood, although there
be maybe eight or 10 different restaurant
bars, saloons-type places, you cannot find the
game of Quick Draw. When you're selling a
pint of Guinness for $5.50 or a mixed drink
for $7.50, you really don't want your
bartender wasting his time taking Quick Draw
action. You want the person that lays the $20
on the bar to spend it on food and beverage
and the bartender or waiter or waitress wants
an appropriate tip on that.
This game just doesn't make it in
upscale neighborhoods. I once saw a map of
Manhattan of where the locations were. And
the places on the East Side and West Side that
are regarded as upscale, upper middle class
and wealthy neighborhoods, certainly they have
plenty of restaurant bars, saloons, the types
of outlets that have Quick Draw. You cannot
find a game.
I don't think there's customer
demand, number one. Because the clientele is
3983
not into a dollar and a dream, they're not
into a fantasy. That kind of fantasy that you
can beat the odds obviously appeals to people,
working class and poor people. We understand
why it does. Because it does offer an
illusory solution to a lot of economic
problems that those people have. But I say
illusory because we all know the odds on these
games are against it. No real professional
gambler or real gambler would ever play it,
because the odds are so prohibitively against
the player.
We've seen Quick Draw expire for a
few months in a past budget impasse. I can't
say that I disagree with the idea of keeping
it going if the alternative is well, it will
go down for three months but then come back.
The real problem about Quick Draw is Quick
Draw could never pass a straight-up vote in
this house, by my count -- and I think I count
pretty well, and I think Senator Padavan
counts very well. It could never pass. If we
had a straight up or down vote on Quick Draw,
it would lose. It would lose in this
Legislature.
3984
Yet what we're confronted with in
this bill, and the whole reason we have Quick
Draw, because it was in a big budget bill, is
the overpackaging. I understand compromise is
what makes legislation happen. And I
understand in compromise there's something you
want and there's something I certainly very
much want in here, an extension of the Loft
Law, although I'd prefer a permanent one. You
get something you want, you get that sugar
cube, and then you have the poison pill in
there, something you don't want, something
that couldn't pass but for its packaging.
It almost -- the packaging,
frankly, that we've fallen into defies, defies
the constitutional -- and I know it's been
deemed to be precatory -- language that says
bills should deal with a single subject.
Because they don't deal with a single subject,
and yet we get this packaging.
And as I say, I'm sure in other
legislatures there are bills that have the
good with the bad. But we've frankly overdone
it here. And we've frankly overdone it with
procedures. We've overdone it with procedures
3985
in both houses that make it impossible to
amend the bill on the floor. You know, unlike
other legislatures, unlike, frankly, more
respected legislatures -- I'm called to mind
what I'm reading every day this week in the
newspaper about the United States Senate and
the McCain-Feingold bill, how it is being
shaped by the membership through amendments,
amendments that fail, amendments that delete
provisions, amendments that add provisions.
That's how legislative bodies work in most
places. The members have the final say, they
have that final say on the floor by
amendments. Any member -- majority,
minority -- can offer an amendment. If a
majority of the members accept it, it goes
into the bill. If a majority reject it, it's
finished if a majority want to excise the
bill.
We're watching that legislative
process, the one we teach our children in
civics class, unfolding right now in
Washington on that very subject, a contentious
subject, obviously a politically charged
subject, one of great public interest. And
3986
the final bill is being molded on the floor by
all the members voting on a series of
amendments and motions.
We don't allow that here in Albany.
And I say here in Albany because it's not just
this house. But I suggest that if we had that
kind of procedure, if amendments weren't just
automatically slapped down by both majorities
as somehow an affront to the majorities -
which it's not. Amendments should reflect the
wills of the members. I suggest that if that
were the case, then we'd be debating right now
the Padavan amendment to delete the Quick Draw
provision in this bill. And perhaps when we
finally have a complete budget bill, a similar
amendment to delete Quick Draw. And if we
were a real legislature, it would pass in this
house and Quick Draw would fail here, because
it doesn't enjoy support.
And, Mr. President, it really calls
into question the nature of what we have done
in New York, both houses, with what was our
representative democracy. Because our
representative, our Republican form of
government said that the ultimate decisions
3987
should be made by the people's representatives
on the merits and the majority of members
wins.
And we're not going to solve this
problem today. As I say, I like the sugar
cube in here. I suppose I have to swallow the
pill, the poison pill of Quick Draw. But
there is something wrong. We ought to all, my
colleagues, in a nonpartisan, bipartisan way,
examine what we have been about. And I'm not
casting any blame. This isn't something
anybody invented this year or last year or ten
years ago or twenty years ago. But over the
decades of the last century and now,
unfortunately, into the first years of this
one, we are accepting of what became a trend,
became the facts of life. Amendments can't
happen, they can't pass. Now you can barely
make them. You can't get a straight-up vote
on it from any member.
I remember in this house when
members of the Majority advanced amendments,
and one of them actually passed once because
the majority of the members agreed with it. I
haven't seen that -- I didn't understand what
3988
a historic day that was. It was my second
week here, and there was an amendment, there
was a vote. I was against it, but it passed.
Everybody is going [gasp]. I said, What's the
matter? It passed. An amendment has never
passed, not in 30 years.
I thought that was rather peculiar.
I thought it was rather peculiar that that was
the reaction. What do you mean, it hasn't
passed in -- you know, I took civics, I read
Robert's Rules, I watched the Congress from
the galleries when I was in college and law
school. People offered amendments. Sometimes
they passed; sometimes they failed. And it
was a big shock to me to learn in the New York
State Legislature amendments didn't matter,
they could never pass. Well, there was that
exception. It passed.
I don't see what's wrong with it.
I think that's the way you make laws. In
public, with the lights on, in the chamber
with the public watching. That's the way it's
supposed to be. Look at Congress. Look at
the U.S. Senate. For all the faults in
Washington, they're making laws the way the
3989
people think their democratic form of
government ought to operate.
Thank you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Onorato, why do you rise?
SENATOR ONORATO: I'd like to
know -
ACTING PRESIDENT KUHL: Senator
Onorato, I've started a list up here.
SENATOR ONORATO: You have a
list? Okay.
ACTING PRESIDENT KUHL: Yeah, I
have a list. I'll put you on the list. So
far Senator Larkin, Senator Dollinger, and
Senator Brown are ahead of you, and Senator
Duane is also being added to the list.
The chair recognizes Senator
Larkin.
SENATOR LARKIN: Thank you, Mr.
President. I rise in support of the
legislation and specifically to address the
issues of Quick Draw.
I've heard people say that Quick
Draw really doesn't do anything except it
promotes gambling, it hurts those that can
3990
least afford it. There are over 3,000 outlets
in the State of New York, as Senator Padavan
pointed out. Most of them are upstate. And I
hear people say that it has nothing to do with
economics. Well, I have a sheet of paper
here, many of them from across the state,
attesting to what the Quick Draw shutdown last
year cost.
In Saratoga, during that three-year
[sic] period, one restaurant lost $30,000 and
laid off three people. In Senator Skelos's
district, one facility lost $9,000, just in
sales of food. This is not gambling money
they lost, but they lost it in sales of
beverages and food. And a number of people
were laid off.
When we talk about economics, we
start to realize that these people shut down
many of their businesses, their hours were
reduced, and that related to less income for
the State of New York. Last year there was
$146 million taken in in Quick Draw. That
part of it was part of our budget last year of
how much was going into aid for education.
Now, when we say we want to cut
3991
these programs out, we also have to start to
look at where are we going to get the money.
These are viable businesses. Are we saying to
these businesses: Shut down your business, we
don't need you? We understand that all of
these businesses pay a business tax, their
employees pay a tax. And the revenue that
they receive and the revenue that goes to the
state keeps a vital small business going.
And I cannot understand why we can
keep knocking something. People are going to
gamble in one shape or form no matter what
happens today in this world. But here we are,
we're saying to a business that we asked to
invest. Some of them invested 25,000 and
30,000. Because at the last go-round we made
changes and we said, so much of your business
has to be devoted to food. If you don't meet
that requirement, you're not going to have
your license. Many of them invested that
25,000 or 30,000 or $40,000. And when we shut
them down, they had no place to go for the
revenue. They had to go to a bank and borrow
the money to pay their mortgage for upgrading
their facility to meet the demands of the
3992
State of New York, and then the State of New
York shut them down.
And here we are again only
extending this for three months. We should
extend it. We should extend it for a minimum
of two to three years. And, yes, we have
studies. And we'll always have studies to
find out about what people do with gambling.
But here we have an industry where we ask
people to invest 25,000, 35,000, $40,000 of
their own money in order to participate in a
program that the State of New York approved
of. And what happened? They lost, and they
lost.
Most of these in this paper that I
have said it took them two to three, four,
five months to just get back even, not make
profit. What we're doing here in extending
this is saying, to those that we asked to be a
partner with us in helping us raise revenue so
we increase aid to education, We're going
giving you a small tip. And that tip is for
three months.
ACTING PRESIDENT KUHL: Senator
Paterson, why do you rise?
3993
SENATOR PATERSON: Mr. President,
would Senator Larkin yield for a question?
ACTING PRESIDENT KUHL: Senator
Larkin, do you yield to a question from
Senator Paterson?
SENATOR LARKIN: I'll yield for a
question.
ACTING PRESIDENT KUHL: The
Senator yields to a question.
SENATOR PATERSON: Senator, on
the issue, the economic issue that you just
discussed, what I heard Senator Padavan say
was that there were 3200 outlets, the vendor
got 6 percent, he took the $500 million and
divided it, and he said that each facility
averaged receiving $9,600.
So what he was saying was that
$9,600, much of it being replacement money -
in other words, entertainment money that was
spent on Quick Draw that probably would have
been spent somewhere else in the facility,
that there really wasn't enough to accommodate
any new employees.
So on the upward side of the
bell-shaped curve, I would think that there
3994
might be a few facilities that might have lost
money. But if we're going to make an argument
that this is economically feasible, wouldn't
we understand that it would have been the
majority of these facilities, not the
exceptions, that we're saying employed people
and made money? What I heard from you were a
couple of exceptions, a restaurant in the
district that Senator Skelos represents and
some facilities upstate that you cited. But I
didn't hear anything that was clear and
convincing relating to the majority of the
facilities, that they were actually losing
money and not employing people.
So my question to you is, do you
have any systemwide information that refutes
what Senator Padavan is saying?
SENATOR LARKIN: Mr. President,
Mr. Paterson, I took about 70 locations spread
out across the state, from Buffalo to Montauk
Point, including New York City, and we asked
the question of "What was the impact on your
core business?" And the impact here: My
lunch business, in one place here -- Fulton
County -- was off 50 percent. I have lost an
3995
average of 2,000 in lunch and dinner trade.
My sales for the entire shutdown were
decreased by 20,000. My shutdown cost of
$15,000 to $25,000 lost in food and beverages.
By business lunch was off 30 percent. My food
and beverage for lunch and dinner was off
20 percent. Overall business was lower than
20 percent. Food and beverage decreased by
17 percent. Late-night business and hotel
guests disappeared, a loss of 30 percent in
sales at the bar. Sales decreased by 20,
25 percent. 30 percent decrease in food and
beverages. 20 percent decrease in food and
beverages. 25 percent decrease in food and
beverages. Shutdown almost ruined my
business, I have not fully recovered today.
I could continue.
This is all over. This is New York
City, this is Suffolk County, Nassau County,
the home of our leader, Saratoga County,
Depew, which is Senator Dale Volker's. You
name it, it's there.
The idea of it is that this is
economic to them. This is their livelihood.
Some of these places are two and three and
3996
four people running it. When they close out,
they close out of business, and there's no
place else to go. I interviewed approximately
35 to 40 people in the last two months. And
some of the people that are working there,
some of the women, right in my own district,
they said this is the difference in having
icing on the cake for my family. One woman
said: I send my two children to a Catholic
elementary school, and the tips from what I
make at a facility -- without naming it -- is
great. It allows me to send that child at my
pleasure to this parochial school.
Another one said: I have a
retarded child, and this allows me to do
things that I would never done. Because when
they're there, I'm here from 10:00 in the
morning till 3:00 in the afternoon.
Another one said: I put my
children on the bus at 8 o'clock, I go there
at 10:00, I'm home when my children come home.
It allows me to buy the things that are
essential because my husband doesn't have
enough income coming in.
This is part of economics. This is
3997
part of some of their livelihoods. And I have
to go about that back to what I said before,
Senator Paterson. We in this chamber and in
the other chamber specifically put in
provisions at the request of some people, as
Senator Padavan is well aware, that they had
to have so much of their space, so much of
their revenue devoted to food. They did that.
And then we turned off the lights. And when
we turned off the lights, they had a mortgage
of 25,000 or 30,000 and yet here you're seeing
people saying I lost business and I lost
revenue.
I think -- I believe -- I don't
think, I know that this money that we are
taking in is part of that enormous package
that many people want to add to the increase
in aid to education. And if you take this
146 million away, you take that away from an
education outlet, you take it away from a
businessman. And what do you do with some of
these people who had that mortgage of the
25,000 or 30,000 spread over four or five or
six, seven years, we're turning their light
off, and yet we're telling them to pay the
3998
freight.
ACTING PRESIDENT KUHL: Senator
Paterson.
SENATOR PATERSON: Mr. President,
on the bill.
ACTING PRESIDENT KUHL: Well,
Senator Paterson, Senator Larkin had the
floor. And there was a list going. Senator
Dollinger was next, along with about seven
other Senators behind that.
SENATOR PATERSON: Oh, I'm sorry,
Mr. President.
ACTING PRESIDENT KUHL: So if
they would all like to yield to you to speak
on the bill, that is fine.
SENATOR PATERSON: No, I don't
want to owe them all, Mr. President. I'll
come back later.
ACTING PRESIDENT KUHL: Next on
the list is Senator Dollinger.
Senator Duane, why do you rise?
SENATOR DUANE: Mr. President, I
was hoping that Senator Larkin would yield for
a question.
ACTING PRESIDENT KUHL: Senator
3999
Larkin, do you yield to a question from
Senator Duane?
SENATOR LARKIN: A question.
ACTING PRESIDENT KUHL: Senator
Larkin yields to a question, Senator Duane.
SENATOR DUANE: I'm wondering if
the Senator believes that perhaps the income
of some of these taverns would be improved if
we were legislating the opening of a brothel
or a place to sell joints or crack or
something, if that would increase the business
of some of these taverns.
SENATOR LARKIN: Senator Duane,
would you please speak a little louder? I
can't hear you over here.
SENATOR DUANE: Mr. President,
maybe we should quiet down the chamber.
ACTING PRESIDENT KUHL: Senator
Duane.
SENATOR DUANE: I'm wondering if
the Senator believes that if we were, instead
of legislating Quick Draw, which some of us
call video crack, if instead we were
legislating the legalization of -- instead of
that kind of gambling, if we were allowing
4000
brothels or the selling of marijuana or crack
in some of our taverns, if that would perhaps
increase their business as well.
SENATOR LARKIN: Senator, I don't
think that's part of the question. The
question we're addressing is Quick Draw.
We're not addressing others.
SENATOR DUANE: Well, we're
talking about vices like gambling, aren't we,
Senator?
SENATOR LARKIN: Senator, I'll
ask the question on Quick Draw. The other
part of your question doesn't pertain to what
I'm responsible for.
ACTING PRESIDENT KUHL: Senator
Onorato, did you have a question of Senator
Larkin?
SENATOR ONORATO: If Senator
Larkin would yield to a question, please.
Senator, you mentioned quite a
number of statistics here about how many bars
and grills and whatever were losing money
because of -- to my knowledge, most of these
businesses were already in existence. They
did not open specifically for the purpose of
4001
having a video Quick Draw machine installed
into their premises.
The restaurateurs also claimed that
when we passed the no-smoking ban in
restaurants, that they were all going to lose
money and go out of business. All of the
restaurants that I frequent with the
no-smoking ban have not gone out of business
and have adapted to the rule.
So I don't believe that the fact
that they don't have a Quick Draw machine in
their establishment is going to close them
down in any way shape or form.
But beside that point, what other
little bit of extra money that some of them
may be making, there's also the probability
that Quick Draw is almost like a video game.
And it's brought into not only bars and
grills, but in really fine restaurants around.
And I've seen children getting involved in
this Quick Draw. And it's one of the quickest
way for them to get involved in gambling.
It's the slippery slope to becoming a
gambler's anonymous or a gambling alcoholic or
whatever you want to call them, addicted to
4002
gambling.
And then the overall problem, we
probably cause more debt for some of the
services that we have to provide to these
gamblers who don't bring their money home to
their families. Is there any part of the
Quick Draw money -- you say it's going for
education. What part of is going to cure the
gamblers that are addicted to this gambling
scheme?
SENATOR LARKIN: I don't know if
it's coming directly out of this pocket,
Senator. But there are funds that go to a
Gambling Anonymous -- I don't know if that's
the correct term in here. But we have an
agency here in the state that receives money
in order to educate people against bad
problems of gambling. And it's a whole
society effort on it.
SENATOR ONORATO: One more
follow-up question.
ACTING PRESIDENT KUHL: Senator
Larkin, do you continue to yield to Senator
Onorato?
The Senator continues to yield.
4003
SENATOR ONORATO: Again, in view
of the fact that Quick Draw is so very closely
related to a video game, can you actually not
believe that there is a very, very serious
problem that children would be more
susceptible to getting involved in this game?
Because I know we're supposed to
have the machine in the clear visibility of
the bartender or whoever it is to keep an eye
on it. But we all know that that's virtually
impossible to do, because when a bartender is
mixing drinks and it's crowded, he doesn't
have the time to go over and look, or could
care less about it.
SENATOR LARKIN: Well, I don't
know that that's -- that may be true in
Queens, but in the facilities that I visited,
it doesn't hold true. There are no children
that I ever see near the Quick Draw machines.
And when you look at the rules and
regulations that come out of the lottery
division to the operators of the Quick Draw,
they're specifically informed of what they can
and can't do, and the fines. And they've
terminated Quick Draw when they found out that
4004
there was a violation.
So what I'm saying is that this is
monitored, we have peopled in the lottery
division that go out on a regular, routine
basis, unannounced, unannounced. And some of
the Quick Draw operators complain about it:
They come in here at lunchtime, they come in
here at suppertime, they come in when our
busiest time is.
That's fine with me, because then
they're observing that facility operating
Quick Draw to ensure that they're complying
with the rules and regulations of the Lottery
Division.
ACTING PRESIDENT KUHL: Senator
Dollinger, why do you rise?
SENATOR DOLLINGER: On the bill,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Dollinger, on the bill.
SENATOR DOLLINGER: I know that
we've sort of jumped this appropriations bill
into a discussion of Quick Draw. My views on
it are well-known. But I have to add one
thing to what Senator Larkin said.
4005
Senator Larkin I think made a very
cogent and powerful presentation that people
needed Quick Draw in their facility in order
to be able to continue to survive. I would
suggest to Senator Larkin that that is the
exact problem that Senator Padavan and I have
been talking about since the day we first
heard the words "Quick Draw." That what we
now have is we now have restaurant addicts.
We now have bar addicts. They're addicted to
Quick Draw. They have to have it in order to
be able to make money, so Senator Larkin says.
That's the whole point. The whole
point is we have now taken not just the people
who play but the taverns that are selling it,
and we've addicted them. What are we doing
with gambling? We're taking not only the
people who are paying the price by throwing
their ten or twenty dollars over the counter
that they shouldn't be paying -- and they're
not going to win any money, because this game
has odds that are enormously stacked against
the bettors.
So we've created a dependency on
the part of the bettors, and now we've created
4006
a dependency on the part of the industry. How
many more people are going to be infected with
the virus of gambling in New York State
because we think it's okay?
And we've gone around the state and
told gamblers it's okay to play Quick Draw.
And now we've gone to tavern owners and said
it's okay to sell this product, you can make
money selling it. And now they're hooked on
it. Now we've got businesses that are hooked
on it, we've got people that are hooked on it.
This is the whole problem with
addiction to gambling. This is what Senator
Padavan fought against from the start, that
exactly the argument that Senator Larkin would
make. That is, businesses now say they need
gambling. Well, they're as addicted as the
people who are playing the game.
I would suggest that that's a
fallacy built on an improper assumption and
that the nature of gambling is exactly that,
it becomes addictive, it becomes destructive,
and it's going to eat away at the fiber of
New York.
I would suggest to Senator Padavan
4007
that the other thing that he needs to do is to
look outside the United States in order to
determine the real nature of gambling
problems. He talked about the presidential
study about gambling. Let me call to mind two
other studies, both of them from outside the
United States.
One comes from the University of
New South Wales in Australia. What it says is
that the three elements relevant to gamblers
irrespective of what their background is, the
most important determinative, the most
important determinant to the incidence of
pathological gambling, people who become
addicted to gambling, it's tied to the number
of available gambling outlets.
The more places you have to gamble,
the more you encourage pathological, addictive
gambling. We know the consequences of that
disease. We know what they are. We know how
it erodes family incomes and can tear families
apart. We know it's connected to domestic
violence. We know it's connected to family
deterioration. And yet the evidence is the
more outlets we have, the more we increase the
4008
problem. Why we would have 3200 outlets for
Quick Draw is absolutely unfathomable.
The last piece I would just
mention, again, Senator Padavan, look outside
the United States at a study from Toronto,
Ontario. The government of Ontario has
committed itself both to Quick Draw and to
casinos. And what do they tell you? They
tell you that the incidence of gambling is
actually related to psychological deficits.
There's a study that ties it to attention
deficit hyperactivity disorder, a well-known,
well-established psychological condition.
And what it says is that this
disease, this psychological problem, leads to
impulsivity and the difficulty of sustaining
attention. And it further says that
gambling -- for people who have this problem,
gambling impulses are poorly controlled and
chronic boredom, depression, and low
self-esteem, which are all symptoms of this
disease, are relieved by the stimulus and
reward of gambling.
We may be actually exposing those
who are psychologically unprepared for
4009
gambling, we may be actually taking people who
have a physical limitation and we may be
exposing them to gambling, which is only going
to accentuate their physical limitation or
psychological disorder.
We all know that gambling preys
upon people. We all know it can be addictive.
I think it's an absolute national shame that
we may be actually feeding an addiction of a
population that has a psychological deficit
that leads them to this kind of impulsive
gambling.
We are continuing to walk down a
road that leads to nowhere. We are continuing
with Senator Larkin, who properly represented
the potential impact on the industry of
entertainment and the tavern industry. But I
would suggest that they are addicted, a
significant portion of our population is
addicted. And why we would continue to not
only allow this out in the marketplace but we
instead promote it, we take the imprimatur of
the State of New York and we say that this is
not only okay, it is good. It is something
that the state Legislature thinks is good.
4010
I would suggest, Mr. President, we
have to stop sending that message to anyone in
this state that gambling of this nature is
good. It is not good. It is bad, it is
destructive, it eats away at the fiber of our
families, it creates an addiction in our small
tavern owners and restaurants. And under
those circumstances, Mr. President, I would
say we need to get off this road immediately,
erect a big stop sign right in the middle of
the road, and say stop this game now.
I will be voting in the negative on
this entire budget appropriation, simply
because if we don't send that message, we
consign a whole group of people in this state
to a continuing mystery.
ACTING PRESIDENT KUHL: Senator
Brown, why do you rise?
SENATOR BROWN: Mr. President, I
would like to speak on the bill.
ACTING PRESIDENT KUHL: Senator
Brown, on the bill.
SENATOR BROWN: Like Senator
Padavan and others that have spoken, I too
have some concerns about Quick Draw. And
4011
while I'll be speaking on other elements of
the emergency language bill, I want to speak
to Quick Draw right now.
I represent the 57th district,
which is Buffalo, Niagara Falls, Grand Island,
and the City of Tonawanda. My parents live in
the district that's represented by Senator
Malcolm Smith. And I went to junior high
school in the district that is represented by
Senator Padavan. This morning when I came in,
I got a memo from Senator Padavan which
outlines some of his concerns on Quick Draw,
and I took the time to read the memo.
And I appreciate Senator Padavan
for his concern to take the time to do this
kind of work, because it is clear that this
game, Quick Draw, is unlike many other games
of chance, unlike many other lotteries and
forms of gaming that exist in this community.
Quick Draw is highly addictive, highly
addictive. And as Senator Padavan pointed
out, it affects the least among us, the
poorest among us, the poorest in our
communities who can least afford to be
involved in this form of gaming.
4012
Now, as Senator Padavan pointed
out, the average income per vendor across the
state, out of 3200 outlets, is only $9,375.
So we're not talking about tremendous economic
impact to businesses. But the people that
play Quick Draw generally earn less than
$25,000 annually.
Now, this Quick Draw -- the thing
that gave us the ability to create Quick Draw
in 1995, as part of the legislation that
created it, the Division of Lottery was
required to conduct an evaluation in
conjunction with the Office of Mental
Health -- and Senator Padavan has cited the
study -- to look at the participants of this
game. And the study concluded that this game
is hurting people.
So one would infer from what we did
in the legislation in 1995 to actually take a
look at Quick Draw, it meant that if it was
not working, if people were getting hurt, we
would look at reevaluating what we were doing
with Quick Draw. Now is the time for us to
reevaluate. People are getting hurt. This
isn't helping the people who are playing Quick
4013
Draw. They're addicted to the game. They're
spending money that they can't afford to
spend, and in many cases families are being
hurt.
Senator Larkin talked about the
positive economic impact upstate. Well, prior
to being elected to the Senate, I represented
a city council district that was about
90 percent African-American. And I can tell
you, there is no positive economic impact of
Quick Draw on the city council district that I
represented. In fact, right now, if you
walked around some of the streets in that
district, you could see grown men on the
street, grown men sitting in bars playing
Quick Draw, depressed because they can't find
jobs. Not that they're lazy, not that they
don't want to work. But the economic boom
that was enjoyed by downstate, by New York
City, just bypassed many part of upstate. And
Buffalo, the City of Niagara Falls are a
couple of those examples of places that were
bypassed and a couple of examples of places
that are being hurt by games like Quick Draw.
So I appreciate Senator Padavan for
4014
his stance, for his research, for his taking
the time to stand up on principle and say to
us that with respect to Quick Draw we're going
in the wrong direction.
And a lot of things that we're
doing I think don't help some of the
communities that need the help the most in
this state. Just recently, we watered down
the impact of the Empire Zones, the Empire
Zones that were designed to help urban
communities, communities where economic
opportunity had bypassed people, where
businesses weren't growing and where jobs
weren't being created. And we just gutted
that program, and we're extending the benefits
of that program to communities that might not
need it as much as those that were originally
designed to benefit from that Empire Zone
program.
And so now today, by rote, and
Senator Padavan, when he spoke, said in spite
of the evidence that argues against the
continuance of Quick Draw, we're going to
continue it anyway. So by rote, we're just
going to move forward.
4015
Well, Senator Padavan, I want to
say to you that I took the time to read what
you sent, and I took the time to listen to
what you had to say. Now, I'm not going to
say to you that I'm opposed to all forms of
gaming. And in fact, in the future I will
probably be sponsoring legislation to allow
gaming to come to parts of upstate.
Because some of my constituents are
asking for gaming, particularly in the City of
Niagara Falls, where just across the border,
in Niagara Falls, Ontario, that community is
taking in about a billion dollars annually on
gaming and tourists are crossing the border
and going to Niagara Falls, Ontario, as
opposed to Niagara Falls, New York. But that
kind of game is not as insidious as the Quick
Draw game. Evidence shows that it's not
hurting people and hurting families in the way
that Quick Draw does.
So, Senator Padavan, I've heard
you, I'm listening, and I share your concerns.
Thank you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Onorato was next on the list. I don't see him
4016
in the chamber.
Senator Duane, why do you rise?
SENATOR DUANE: Thank you, Mr.
President. I was hoping the sponsor would
yield.
ACTING PRESIDENT KUHL: Senator
Stafford is carrying the debate. I don't see
him in the -- well, he's in the back of
chamber. If you want to wait a minute, we'll
ask him.
SENATOR STAFFORD: It's a
pleasure to yield.
ACTING PRESIDENT KUHL: Senator
Stafford yields to a question, Senator Duane.
SENATOR DUANE: Thank you. I'm
wondering why we are only doing an emergency
bill now instead of actually doing budget
bills for 2002.
SENATOR STAFFORD: Mr. President,
is the Senator asking, in other words, why
aren't we doing a budget?
SENATOR DUANE: Why are we not
doing the 2002 budget today, why are we doing
emergency bills?
SENATOR STAFFORD: It would take
4017
some time to explain this. There are many
vagaries and vicissitudes. Because of course
we have, shall I say, a political climate here
that we're working with. I've been here long
enough so that I understand these climates. I
would share this -- and I say this very
sincerely, not at all attempting to make light
of the serious question that you asked. This
house, the Majority, is more than anxious to
sit down and negotiate, on the anvil of
discussion, sensitivity, concern and
understanding. If the party across the
Capitol on the second floor -- would that be
the north side? -- on the north side -- that's
right, because that's the south; right? If we
do not find cooperation, concern,
understanding, and sensitivity there, then we
find we aren't able to use that anvil of
discussion and hammer out a budget that is
needed.
And this Majority wants to sit
down, wants to start, is frustrated, is
concerned and, as I say, more than willing to
do our job.
ACTING PRESIDENT KUHL: Senator
4018
Duane.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question
from Senator Duane?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Can you tell me
why the conference committees have not met yet
on the 2002 budget, which might have meant
that we didn't have to do this emergency bill?
SENATOR STAFFORD: Conference
committees -- as we all know, the conference
committees meet when one house passes a bill,
the other house passes a bill -- when we have
a situation where the bill has been passed.
And again, as -- I always receive
excellent counsel, as you can tell from my
presentations. I don't take any credit for
them whatsoever, it's the people that work
with us, which is always the case.
We need to really sit down and
4019
first decide and agree what is available to
make a budget. Up in my area, we say make a
budget, make budget. Down here, I -- we work
on a budget.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
The Senator continues to yield.
SENATOR DUANE: It's my
understanding that -- I know we've passed a
budget, the Assembly has also passed a budget.
So indeed, we are ready to have the conference
committees. So I'm wondering why there's been
a delay, since both sides have passed their -
SENATOR STAFFORD: This is -- my
counsel hit the nail right on the head and
explained, and now I'm attempting to explain
that before we can sit down with conference
committees, we have to have an agreement on
what's available.
SENATOR DUANE: Then through you,
Mr. President, if the sponsor would continue
to yield.
4020
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: When was the last
meeting between the finance people of both
houses and the Governor's finance people to
try to come up with that revenue amount?
SENATOR STAFFORD: These meetings
are constant. And the last meeting was two
days ago.
SENATOR DUANE: And through you,
Mr. President, if the sponsor would continue
to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
The Senator continues to yield.
SENATOR DUANE: Has any
consideration been given to setting up a
conference committee to decide what the
revenue is?
SENATOR STAFFORD: Well, I'm not
sure that's the job of the conference
committees or a conference committee. We have
4021
to have -- you know, a budget -- see, we make
policy here in the Legislature. That is, we
think we do. Sometimes we don't quite meet
our goal, but we work on it. And when it
comes to avails, that is strictly -- not
strictly, but it's really crunching the
numbers and finding out what we have with the
revenues, with the revenues, and then
realizing what we have available, the avails.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: But is there
anything that prevents us from having a
conference committee to set the revenue?
SENATOR STAFFORD: Well, I would
say that -- you know, I do my best not to be
political. Not to be political. Now -
SENATOR DUANE: Me too. Me too.
SENATOR STAFFORD: Now, every
4022
couple of years you'll find I get a little
political, like all of us here, but I try not
to. And I try not to point fingers. I try
not to point fingers. But again, I have to
refer to that north side of the Capitol on the
second floor for the reason.
ACTING PRESIDENT KUHL: Senator
Duane.
SENATOR DUANE: Through you, Mr.
President, did you -- just to clarify. Not to
be political, but do be factual, do you mean
the Assembly or the Governor?
SENATOR STAFFORD: Well, the
second floor -- did I say second floor? Oh,
correction. Thank you. Thank you very much.
You know, it's amazing what fatigue will do.
(Laughter.)
SENATOR STAFFORD: You wore me
down yesterday, and now I'm trying to get a
second wind. But let me correct that. I
can't believe I said the second -- anyway,
third floor. North side of the Capitol. And
thank you for the correction. And I stand
corrected.
SENATOR DUANE: And through you,
4023
Mr. President, if the sponsor would continue
to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR DUANE: I would be
remiss, though, if I didn't ask whether or not
there was an agreement between the Senate and
the Governor, though, on the revenue estimate.
SENATOR STAFFORD: Well, I don't
think that we should look for agreement there
until those of us on the second floor have
really worked things out. And of course
that's the job right now, for us to pass a
budget -- did I say second floor again? Well,
I don't believe that. I've got to get ahold
of myself.
The third floor. It's up to those
of us on the third floor to do our job. I
apologize.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
4024
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: Can you tell me
when the extender bill was drafted?
SENATOR STAFFORD: Yes. The
staff that drafted this -- we were all there.
And it was drafted last Thursday, the 22nd of
March. That's when it was drafted.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Is it within the
realm of possibility that while the Finance
staff was working on the extender they could
have in fact been working on the 2002 budget?
SENATOR STAFFORD: Well, you
know, I -- now, we had a question like that,
Mr. President, when we said does it cost more
really to have an extender, are we spending
time where we should spend on something else.
4025
I think -- and I don't mean to make light of
extenders, and I don't mean to say that this
minibudget isn't important. But we have a
great deal of faith, admiration and also
understanding of the work our staff does. And
I have to say I don't believe these -
drafting this minibill or extender taxes them.
And I don't think it takes away from any work
that needs to be done.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: I want to be
clear that I have no doubt that the Assembly
is equal in blame to the lateness of the
budget. But we are responsible, really
responsible for our own side of the street
only, and I'm wondering whether or not the
sponsor believes that it might be a good idea
for us all to work through the weekend, since
4026
Sunday is April 1st, to try to meet that
budget deadline, or to give up our holiday
vacations and Holy Day vacations to try to get
the job done for the people of the State of
New York, if we are -- if we should be willing
to make that offer.
SENATOR STAFFORD: Well, I would
emphasize that staff will be working until we
have a budget passed. And as far as the north
side of the third floor, I'm always reminded
of what an old gentleman used to say to me
that lived up the Adirondacks. He said you
can lead a horse to water, but you can't make
him brush his teeth.
(Laughter.)
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
The Senator yields, Senator Duane.
SENATOR DUANE: I am wondering,
though, whether it might not be prudent for us
to actually make that offer, that we would be
willing to forgo our time off and spend most
4027
of our waking hours working on the budget
until it's done, even if that means giving up
a weekend or giving up time off that we have
around holidays and Holy Days in the next
couple of weeks. Again, only being
responsible for our own side of the street, if
we would be willing to make that offer.
SENATOR STAFFORD: Mr. President,
I would assure all here in the Senate with me
that we will be in touch with the staff who
are working. And as a matter of fact, I
assure you, if I don't call Mr. Lackman, he
will call me. And I assure you, it's more
than once during the weekend. And also, he
has my cell phone and insists that I carry
that with me when I go back to my district
when I do.
So there is constant communication,
work is being done, and we just have to stay
with it.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
4028
SENATOR STAFFORD: Yes. Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: I'm wondering if
the Finance chair, though, today -- and again,
just being responsible for our own house, for
our own side of the street -- would be willing
today to make that offer to the other parties
involved in the budget and say we're willing
to stay and get it done, if we could make that
offer to them today.
SENATOR STAFFORD: Mr. President,
I would emphasize that there has to be
communication so that -- you could make any
offer. I don't think we should make offers
that aren't realistic. I would say this, that
if we could just sit down and agree on the
parameters as far as avails are concerned, we
then could take steps toward getting a budget
passed.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
4029
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: Could not the
Finance chair today pick up the phone and dial
the north side, third floor, and say, We're
willing to stay and work, how about you? Is
it not possible for us to make that overture
today?
SENATOR STAFFORD: Well, Mr.
President, I could do that. Anyone could do
that.
SENATOR DUANE: Through you, Mr.
President, may I do that?
ACTING PRESIDENT KUHL: I don't
think Senator Stafford has answered your
question entirely. I'm going to give him the
opportunity to finish his answer.
SENATOR STAFFORD: Mr. President,
to continue, the point was made about the
germaneness and exactly what we're debating
here. And I think we are going a bit afield.
But I certainly will answer this question.
And I think that there has to be a
communication, the parameters of avails
4030
established, before we're going to be able to
take any steps which are useful.
SENATOR DUANE: Mr. President,
I'm sorry, I just -- I could not hear that.
There's some noise in the chamber. Could the
sponsor repeat his answer?
SENATOR STAFFORD: The Assembly
has already gone home.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Could not the
Assembly be called back into session?
SENATOR STAFFORD: That's of
course a question -- Mr. President, I would
urge that we stay on the bill here. I think
I've attempted to answer and will again state
that we have to have agreement on avails and
have to understand where our parameters are if
we're going to establish communication and
4031
have some meaningful work done.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: What would happen
if this extender bill didn't pass?
SENATOR STAFFORD: I think it
would be very serious. I was going to say
something light, and I shouldn't on that
question. It would be very, very serious.
Government would not continue. And it
would -- I could name a hundred things that
would not be functioning. And we would, I
think, find that it was irresponsible not to
pass this bill.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
4032
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: More or less
irresponsible than not actually passing the
2002 budget bill?
SENATOR STAFFORD: Excuse me?
SENATOR DUANE: More or less
irresponsible -
ACTING PRESIDENT KUHL: I don't
think the Senator understood your question,
Senator Duane. Maybe you'd like to speak to
the Senator directly so he hears you. But I
don't think he understood your question.
SENATOR DUANE: More or less
irresponsible than not paying the 2002 budget?
SENATOR STAFFORD: One man's
ceiling is another man's floor, often. As
I've often said here. You know, sure, we need
another budget. Or not -- excuse me. Sure,
we need a budget. But on the other hand, we
need to continue government. And of course I
think we should do it.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
4033
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: Has the State
Comptroller weighed in on this extender bill?
SENATOR STAFFORD: The State
Comptroller -- of course this is a legislative
branch. I'm sure we're always pleased to have
the communication, have input from any agency,
anybody in government. But we're not aware of
any -- I'm not aware of any actual input in
this bill.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: I'm hoping that
the Senator could describe the details of the
4034
waiver of jury sequestration that's in this
extender.
SENATOR STAFFORD: I couldn't
hear that. Would you repeat the question,
please.
ACTING PRESIDENT KUHL: Senator
Duane, would you repeat the question for
Senator Stafford.
SENATOR DUANE: If the sponsor
could give us the details of the waiver of
jury sequestration. I'm having trouble saying
that word, sequestration. Like filtration,
only sequestration?
SENATOR STAFFORD: This is
extended for three weeks, Mr. President.
SENATOR DUANE: But through you,
Mr. President, if he could just describe what
it is.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question
from Senator Duane?
SENATOR STAFFORD: Mr. President,
even the staff has taken pity on me. And they
said just read what that says. So that's what
I'll do.
4035
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR STAFFORD: It extends for
three weeks the authority of judges to suspend
the requirement for jury sequestration in
certain cases.
And, Mr. President, am I being
asked what jury sequestration is?
ACTING PRESIDENT KUHL: I don't
believe that was the question, Senator.
Senator Duane, do you ask Senator
Stafford to yield to another question?
SENATOR DUANE: Another question.
I'm going to move on to a different area.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: I'm wondering if
the sponsor could tell us why it was decided
to put Quick Draw extender in this bill as
if -- you know, to describe what is the
emergency and why it's just mushed into this
emergency extender.
4036
SENATOR STAFFORD: Mr. President,
you find in government, we have legislation.
And this is what we have before us. And we
find that legislation has often various
sections and we accomplish various goals. One
of the goals of this bill is to pass the
provision that you referred to. And that is
why.
And it's been explained very well
by Senator Larkin and I believe other Senators
here today just how important this provision
is to businesses in various parts of the
state, and it does raise $4 million a week.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DUANE: Is it really an
emergency to provide for snowmobile trails? I
mean, what is that money really used for? And
would it be, you know, a catastrophe if that
4037
money wasn't in the emergency -
SENATOR STAFFORD: Mr. President,
I wish I could answer that question, because
that is something that I'm very, very
concerned about and is very near and dear to
the people of the North Country. But I can't,
because it's not in this bill.
SENATOR DUANE: Oh.
ACTING PRESIDENT KUHL: Senator
Duane.
SENATOR DUANE: My apology. I
thought that the snowmobile trail thing was in
this bill.
And I also just wanted to ask if
any thought had been given -
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question
from Senator Duane?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: -- on something
that's very important to me and people in the
South Country. I'm wondering if there's been
any thought about presumptive eligibility for
4038
inmates, presumptive eligibility for Medicaid
once they've been released from prison.
SENATOR STAFFORD: Mr. President,
I think that's something we're all concerned
about, but that's not in this bill.
SENATOR DUANE: Thank you. Thank
you.
ACTING PRESIDENT KUHL: Senator
Lachman, why do you rise?
SENATOR LACHMAN: Mr. President,
I rise to speak briefly on Quick Draw. And
through you, Mr. President, with the
permission of the distinguished chairman of
the Finance Committee, I would have a question
or two for him afterwards.
ACTING PRESIDENT KUHL: Would you
like to have him yield to a question first?
SENATOR LACHMAN: Well, they're
unrelated.
So I just very quickly would like
to say that I would like to slowly withdraw
from Quick Draw, after having commended
Senator Frank Padavan for his memorandum and
his position. And I also regret that I cannot
vote the way I want to vote on the issue of
4039
Quick Draw, because it is part of an extender
bill that has many excellent aspects of it.
Now, one of the excellent aspects
to this is the extension for four years of the
MTA tax surcharge. But I do have now a couple
of questions, through you, Mr. President, for
the distinguished chairman of the committee.
ACTING PRESIDENT KUHL: Senator
Stafford, would you yield to a question from
Senator Lachman?
SENATOR STAFFORD: Mr. President,
I certainly yield.
And you find yourself reacting
various ways when you're doing this, and I
felt I was a little quick yesterday with the
Senator who is asking the questions. Exactly,
there were two. So I apologize and I yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR LACHMAN: Mr. President,
there is no need for Senator Stafford to
apologize for anything. I respect him and
admire him and his ability.
But I do have a couple of
questions, with your permission, Mr.
4040
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR LACHMAN: Okay. Since
the MTA tax surcharge extension is the longest
extension we have in this emergency language
bill -- I believe it's four years. The other
extensions are for one year, two years, or
three years -- wouldn't we be better off,
Senator, in having a permanent extension of
this surcharge? I say this because I have
been informed that the financial markets would
feel that this would be better for the MTA in
the long run, especially in the support of MTA
bonds.
SENATOR STAFFORD: Mr. President,
I would answer it in two ways here. First,
we're having the extension for four years
because the MTA has to put out paper. And
there has to be a financial stability.
Now, if it was made permanent, it
would affect insurance companies, and they
would be paying more insurance -- more taxes,
excuse me. I'm slow today. More taxes.
SENATOR LACHMAN: You're doing
4041
very well. I appreciate it.
Mr. President, through you, can -
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR LACHMAN: Am I correct in
asserting that the financial markets, however,
would prefer to have a permanent surcharge
which would enable to secure more adequately
the MTA bonds in this area?
SENATOR STAFFORD: It's very
complicated. And it's -- and I know you're
familiar with financial paper, and I am to a
degree. And I hear exactly what you're
asking, and it's right on target. The problem
is it would affect insurance companies here in
New York because of retaliatory taxes that we
have in other states.
So we have to try to balance here.
And most financial houses -- or the financial
houses understand the four-year extension.
SENATOR LACHMAN: Mr. President,
through you, would the distinguished Senator
4042
and chairman of the Finance Committee continue
to yield?
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to a question from
Senator Lachman?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR LACHMAN: I know that you
have this information and that your staff,
well-equipped, has the information. But I
would like to know how much this surcharge
would bring to the MTA in the following fiscal
year, in terms of dollars.
SENATOR STAFFORD: You know that
my staff has good roots.
SENATOR LACHMAN: I know him
vaguely.
SENATOR STAFFORD: And the
answer, right from there, is $530 million.
SENATOR LACHMAN: Mr. President,
through you.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
The Senator continues to yield.
4043
SENATOR LACHMAN: Is this
approximately the same amount that the
surcharge has generated during this present
fiscal year?
SENATOR STAFFORD: Mr. President,
it would be about the same. Possibly a little
bit more.
SENATOR LACHMAN: Mr. President,
on the bill.
Thank you kindly, Senator Stafford.
ACTING PRESIDENT KUHL: Senator
Lachman, on the bill.
SENATOR LACHMAN: With
reservations in some areas, and with
difficulty in accepting certain provisions,
such as the Quick Draw provision -- but as I
explained to Senator Padavan yesterday before
his memorandum arrived, there's more to gain
from this than to lose from this. However, I
would hope that the chairman, the
distinguished chairman of the Finance
Committee, and his distinguished advisors
would look into the possibility of having a
permanent surcharge, which I have been led to
believe by outside sources is what the
4044
financial community actually desires and would
be able to support MTA bonds more adequately
than having surcharges for three or four
years.
I support this legislation. Thank
you.
ACTING PRESIDENT KUHL: Senator
Onorato, why do you rise?
SENATOR ONORATO: Will Senator
Stafford yield to a question?
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield a question from Senator
Onorato?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR ONORATO: Senator, I'm a
little perplexed about the Loft Law. It has
nothing to do with any finance, it doesn't
bring any money in. It's not a budget bill.
And why would we only be extending
it -- it's expiring on March 31st of this
year. We're subjecting a great number of
people to a great deal of anxiety by not
extending -- we're extending everything else
4045
around for three years, four years. Why is it
part of a budget bill rather than a just
straight-out bill, an extender?
SENATOR STAFFORD: Mr. President,
my esteemed and distinguished colleague
from -
SENATOR ONORATO: Queens. I live
near Frank Padavan.
SENATOR STAFFORD: -- from
Queens -- I can remember when there were farms
in Queens -- is perplexed with the Loft Law.
What do you think people who live where we
have all the deer and bear, what do you think
we are?
But on a serious note, the house on
the north side, on the third floor, had this
as a proviso if we were going to continue
government.
SENATOR ONORATO: Are you
implying -
ACTING PRESIDENT KUHL: Senator
Onorato, are you asking Senator Stafford to
yield for another question?
SENATOR ONORATO: Yes.
ACTING PRESIDENT KUHL: Senator
4046
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
SENATOR ONORATO: Are you
implying that the Assembly only requested a
three-month extender rather than a full
extender, the way we do with any other
rent-controlled apartment?
SENATOR STAFFORD: Mr. President,
I think that, as so many times I find it that
way, very often I ask a question and I know
the answer once I've asked the question.
SENATOR ONORATO: I don't know
the answer to that, and that's why I'm asking.
I am surprised that we're only extending it
for a couple of months when everybody knows
that we do all of these kind of plans for two
or three years.
SENATOR STAFFORD: The proviso
was for three months.
ACTING PRESIDENT KUHL: Senator
Onorato?
SENATOR ONORATO: Thank you.
ACTING PRESIDENT KUHL: Senator
Breslin, why do you rise?
SENATOR BRESLIN: Mr. President,
4047
will the sponsor yield for a couple of
questions?
SENATOR STAFFORD: Mr. President,
now I also have an opportunity to share with
my esteemed and distinguished colleague from
Fort Orange that I was a little quick
yesterday, and I certainly apologize. And now
it gives them a -- my colleagues an
opportunity to be quick with me.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR BRESLIN: Not at all, Mr.
President. My distinguished friend and
colleague, no apology needed.
And I had a couple of questions
relating to jury sequestration. And first of
all, it appears to be that they've
distinguished between more serious crimes,
Class A felonies and B and C violent felonies.
Can you tell us why there's a distinction
between the nature of crimes?
SENATOR STAFFORD: First, I'd
point out to my colleagues here, Albany used
to be called Fort Orange. That's important.
SENATOR BRESLIN: It was named
4048
after the club, I believe.
SENATOR STAFFORD: Now I have my
esteemed colleague -- I think I know the
answer, but let me see whether I'm right or
not.
The answer is quite complicated,
but I'll make it simple because that's the
only way I can do it. There are negotiations
going on right now as far as the issues you
had referred to, and they asked for a
three-week extension here to see what can get
worked out, when we'll have sequestration,
when the judges will be doing it. And that's
what's going on right now.
SENATOR BRESLIN: One or two
additional questions.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield to a
question from Senator Breslin?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR BRESLIN: Since the
initial enactment in 1995 of the sequestration
statute, if you will, has there been any cost
4049
savings? And if, so how much?
SENATOR STAFFORD: I remember
that, again, Senator Breslin's question is
about cost savings. And they have been large.
And they hope that they will be continued in
these negotiations.
ACTING PRESIDENT KUHL: Senator
Breslin.
SENATOR BRESLIN: Through you,
Mr. President, how large?
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR BRESLIN: Bigger than a
bread basket?
SENATOR STAFFORD: You don't want
to start that with him.
SENATOR BRESLIN: I have no
further questions.
SENATOR STAFFORD: Yes.
SENATOR BRESLIN: Thank you.
ACTING PRESIDENT KUHL: Senator
Paterson is not in the chamber.
Senator Hassell-Thompson is on the
list. Senator Montgomery, do you wish to be
put on the list?
4050
SENATOR MONTGOMERY: Yes.
ACTING PRESIDENT KUHL: All
right, Senator Montgomery is added.
Senator Hassell-Thompson, why do
you rise?
SENATOR HASSELL-THOMPSON: If the
Senator would yield to a question, Mr.
President.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to a question from
Senator Hassell-Thompson?
The Senator yields.
SENATOR HASSELL-THOMPSON: Thank
you, Senator. We have heard consistently the
last couple of days that both yesterday's bill
and today's language bill contain items of
emergency, of an emergency nature that
requires that we do these extensions. So I'd
like to ask, Part C, Section 36 on the
Department of Health Medicaid payments for
inmates, can you tell me why this has been
included in the emergency language bill?
SENATOR STAFFORD: Mr. President,
we're in the process of going back to the
federal government claiming benefits for those
4051
you had referred to. Therefore, we want to
continue this for three weeks so we can
continue that process.
SENATOR HASSELL-THOMPSON: If the
Senator would continue to yield, Mr.
President.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR HASSELL-THOMPSON:
Senator Stafford, I understand that to be true
of many of the proposals that we're
discussing. But this is a new proposal. And
I'm not clear how we can be collecting or
requesting funds for a proposal that is new.
This is a new initiative.
SENATOR STAFFORD: Mr. President,
you want to maximize the federal dollars for
all of these programs; therefore, you go back
and see if we can get the qualifications set
and get the funds and get more money for the
state.
SENATOR HASSELL-THOMPSON: If the
4052
Senator would continue to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR HASSELL-THOMPSON: Thank
you. Through you, Mr. President. Then the
answer to that is that we have a window of
opportunity in which we are trying to capture
these dollars even though they are new dollars
and a new initiative?
SENATOR STAFFORD: The window of
opportunity is really to continue this
process.
SENATOR HASSELL-THOMPSON: To
continue the process of a new initiative?
SENATOR STAFFORD: Pardon me.
Yeah, going to the federal government, going
back two years and trying to get funding for
the benefits you've referred to.
SENATOR HASSELL-THOMPSON: If the
Senator will continue to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
4053
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR HASSELL-THOMPSON: Does
the Legislature have to approve new federal
maximization plans such as this Medicaid
payment for inmates prior to an agreement on
the budget?
SENATOR STAFFORD: Once we get
the money, Mr. President, then it would have
to be appropriated.
ACTING PRESIDENT KUHL: Senator
Hassell-Thompson.
SENATOR HASSELL-THOMPSON:
Through you, Mr. President, if the Senator
would answer that again. I wasn't -- I'm not
clear on the answer.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to another question
from Senator Hassell-Thompson?
SENATOR STAFFORD: Yeah, I yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR HASSELL-THOMPSON: I'd
like -- I'm sorry, I was asking if you would
4054
repeat your answer. I didn't understand the
answer to the question.
SENATOR STAFFORD: As I often
point out here, when the state gets any funds
in revenue, federal government, fees,
anywhere, before it can be spent, we have to
appropriate the money.
ACTING PRESIDENT KUHL: Senator
Hassell-Thompson.
SENATOR HASSELL-THOMPSON: Yes,
Mr. President, if the Senator will continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: THE
Senator continues to yield.
SENATOR HASSELL-THOMPSON: That's
the heart of my question, Senator. If you
will, through you, Mr. President, we are not
appropriating. This is a new initiative. My
question was, are we trying to capture a
window of opportunity, which is the reason
that you have put a new proposal into an
emergency language bill?
4055
SENATOR STAFFORD: My answer is
yes.
SENATOR HASSELL-THOMPSON: Thank
you. Thank you, Senator.
Through you, Mr. President, if the
Senator will continue to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR HASSELL-THOMPSON: Thank
you. Senator, do you or your staff have an
analysis of the fiscal benefits to counties as
it pertains to the Medicaid payment for
inmates? And if so, what is this dollar
amount? What do you assess?
SENATOR STAFFORD: We don't have
a county breakdown, but I'm sure we can get
that material if you'd like it. The state
number is $15 million.
SENATOR HASSELL-THOMPSON: Thank
you, Senator.
Mr. President, if the Senator would
yield to just another question on the Child
4056
Health Plus.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR HASSELL-THOMPSON: My
understanding is that last year the Governor
vetoed this bill. Thank you, Senator.
Through you, Mr. President. Last
year when the bill was proposed, the Governor
vetoed a provision for the inclusion of
emergency services for the Child Health Plus.
Are we supporting that ambulance service
amendment in this bill?
SENATOR STAFFORD: Ask the
question again, please. I can't hear.
SENATOR HASSELL-THOMPSON: Okay,
Senator. Last year, when we proposed the
continuing of the Child Health Plus program,
there was a provision that was in that bill
that asked for ambulance services to be
included. When the Governor vetoed that bill,
it was not -- I'm asking, is that provision
included in this year's proposal?
4057
SENATOR STAFFORD: Anything that
was vetoed wouldn't be in here. Because if
you analyze it, as I've said now for the last
two days, this does not make new policy, this
just continues government from last year's
budget. I said that a number of times.
ACTING PRESIDENT KUHL: Senator
Hassell-Thompson.
SENATOR HASSELL-THOMPSON: Mr.
President, if the Senator will continue to
yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR HASSELL-THOMPSON: Thank
you. Senator, but isn't that a contradiction
to what you just said in terms of the new
initiative? Even though it is a window of
opportunity, it's still a new initiative.
SENATOR STAFFORD: Now, again,
make sure that my patience isn't taxed here.
SENATOR HASSELL-THOMPSON: Okay.
SENATOR STAFFORD: So let's -- I
4058
see some eyes coming up here. That's good.
So we're all communicating.
The initiative is a program to
maximize the federal government's payments to
the state. That has nothing to do with last
year's budget or a policy. That's a program
that it's already in effect. It's already
being done. It's being continued.
ACTING PRESIDENT KUHL: Senator.
SENATOR HASSELL-THOMPSON: Mr.
President, through you, if the Senator will
continue to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield to a
question from Senator Hassell-Thompson?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR HASSELL-THOMPSON: It is
not my intent to try yours or anyone else's
patience. But it is my intent, Senator, if
you will, I'm just trying to get some
information. And I'm not trying to be
contradictory, but I'm trying to understand.
I asked the question about the
4059
ambulance and -- only because it was a part of
last year's proposal. If the answer to that
is no, that's one thing. But when we talk
about the windows of opportunity that are
available to maximize federal reimbursement,
this is also a federal reimbursement. And
that's the only reason I'm asking the question
the way I am.
SENATOR STAFFORD: That's the
reason, Mr. President, I'm answering the way I
am.
SENATOR HASSELL-THOMPSON: Okay.
If the Senator will yield for one more
question.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to one more question?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR HASSELL-THOMPSON:
Through you, Mr. President, there have been
changes in the federal regs that allow us to
bill for Medicaid and some other Medicaid
initiatives which help us to maximize. Is it
our intent -- I'll ask the question this way.
4060
It is our intent with this Child Health Plus
to do that, and could we not extend it further
than June 30th of this year?
SENATOR STAFFORD: Of course, we
have the opportunity, Mr. President, to pass
really whatever legislation we desire to.
Hopefully it's good legislation. As far as
this particular provision, this is what was
sent up, this is what is there to continue the
program for three months.
And as a matter of fact, I now go,
to try to answer completely here, to that
house on the third floor on the north side,
and that house did not want to go more than
three months. We were willing to go more than
three months, and the Governor was willing to
go more than three months.
SENATOR HASSELL-THOMPSON: You
say the Governor -- you said we were willing
to go longer?
SENATOR STAFFORD: Yes.
SENATOR HASSELL-THOMPSON: But
you did not get that agreement from our
northern neighbors on the third floor?
SENATOR STAFFORD: Right.
4061
SENATOR HASSELL-THOMPSON: Thank
you, Mr. President. Thank you, Senator.
ACTING PRESIDENT KUHL: Senator
Paterson, why do you rise, sir?
SENATOR PATERSON: Mr. President,
if Senator Stafford would yield for a
follow-up question.
ACTING PRESIDENT KUHL: Senator
Stafford?
SENATOR STAFFORD: I will yield
to Senator Paterson for one follow-up
question.
ACTING PRESIDENT KUHL: The
Senator yields to one question.
SENATOR PATERSON: Senator, I'm
just trying to get an idea of what the policy
is that's guiding us in this particular
situation. For instance, it's been he
suggested that we raise the coverage in Child
Health Plus -- I was just listening to your
conversation with Senator Hassell-Thompson -
from 250 percent within the poverty line to,
say, 300 percent, and we're not doing it in
this particular extension.
However, what Senator
4062
Hassell-Thompson properly pointed out, and I
thought it was kind of interesting, is that we
did make a policy change with respect to the
national regulations regarding Medicaid so
that we are going to be, as she pointed out,
taking the full hundred percent refund from
Medicaid to cover inpatient hospitalization of
inmates.
So what I'm just -- my general
question to you is, what is the difference
between the policy that we enact and the
situation such as you described earlier where
we wouldn't go back and insist that we get the
ambulance coverage for Child Health Plus,
which was something that everybody here agreed
upon and was vetoed?
Now, I can understand -- don't get
me wrong, I can understand that in a
three-week period that we don't want to get
into a fight with the Governor about an issue
on which he's already made policy. But I'm
just trying to get your idea of where's the
line between new policy and continuation.
SENATOR STAFFORD: I think the
difference here is very, very clear. One is
4063
working toward a program that's already being
done, and the other is changing policy.
Now, Senator Paterson I'm sure
understands that.
ACTING PRESIDENT KUHL: Senator
Paterson.
SENATOR PATERSON: Mr. President,
on the bill.
ACTING PRESIDENT KUHL: Senator
Paterson, on the bill.
SENATOR PATERSON: Well, this is
a language bill, and it's tied to policy. And
so all I'm seeking is a little consistency.
What I would interpret from Senator
Stafford is that where a change in policy
vis-a-vis another government -- meaning the
federal government -- gives us an opportunity
to vest in something that we didn't have last
year, that we would not eschew the opportunity
to do that. We wouldn't wait until we
actually passed the budget to enact it now.
And that in those situations
regarding specific policy changes for which we
have eminent control -- that being the issues
of Child Health Plus expansion of coverage,
4064
and also the ambulance services, which are
very important and which I think everyone in
this house knows that we need -- but still, I
guess what Senator Stafford is saying, and I
guess what I will adhere to at this point, is
that we're going to be unable to do it at this
particular time. Maybe later on in the year.
I'm sure Senator Stafford agrees, or he'd be
jumping up right now to point it out to me.
On the bill, other than that, Mr.
President, just to finish a conversation
earlier, the balance, to me, on the issue of
Quick Draw is very important. We would not
want to be making situations so easy for many
of our constituents that they take
opportunities that are going to inure to their
detriment and be playing this game where the
odds are hopelessly against them and they are
likely to be hurt from that actual process.
Senator Larkin did point out that
we require that the facilities engage in a
certain amount of restaurantism and that there
has to be a certain percentage of their profit
that is derived from food service before we
let them get allowed. But what I would
4065
admonish to Senator Larkin, even though I'm
going to vote for the bill, is that there are
a lot of areas where that may appear to be the
case but actually is not. And I see them to a
great deal in my district.
And the fact that Senator Padavan
pointed out that 30 percent of the individuals
who are going into these places are doing this
in minority neighborhoods, where sometimes the
desperation and squalor conditions of life
have caused people to feel that they have to
take chances that they ordinarily might not
take, is something that we have to take a
closer look at.
In situations where we have to
spend money to actually get to the point where
you're gambling, such as in the major casinos,
and a person that loses a great deal of money
can really do it in a recreational fashion,
that it's not going to affect their daily
intake of food or paying rent or those human
services that are vital, that's a little
different.
And I'm not sure where exactly that
line is, and I wasn't able to continue the
4066
questioning too much to find that out. But I
will vote for it in the hope that we will
always continue to observe and scrutinize the
situation further.
Thank you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Schneiderman, why do you rise?
SENATOR SCHNEIDERMAN: Thank you,
Mr. President. Through you, if the sponsor
would yield for a few questions.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to a question from
Senator Schneiderman?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR SCHNEIDERMAN: The first
area that I want to ask about relates to the
Lower Manhattan Revitalization Plan. I gather
that that is covered in Part H of the proposed
bill; is that correct?
SENATOR STAFFORD: Once again, it
is a three-week extender of existing law, an
existing program.
SENATOR SCHNEIDERMAN: Through
4067
you, Mr. President. But is my understanding
correct, that that's covered in Part H of this
proposed bill?
SENATOR STAFFORD: I can't hear,
Mr. President.
ACTING PRESIDENT KUHL: Your
point is well-taken.
Can we have a little quiet in the
chamber, please. We've got members and staff
talking.
SENATOR SCHNEIDERMAN: My
question once again, through you, Mr.
President, is I gather that the Lower
Manhattan Revitalization Plan extender is
addressed in Part H of the bill before us; is
that correct?
SENATOR STAFFORD: Well, do you
have the legislation there, Mr. President?
SENATOR SCHNEIDERMAN: I have the
legislation here.
SENATOR STAFFORD: Good.
SENATOR SCHNEIDERMAN: The reason
I'm asking this question is that -
SENATOR STAFFORD: Does it say H?
SENATOR SCHNEIDERMAN: H.
4068
SENATOR STAFFORD: Good.
SENATOR SCHNEIDERMAN: Okay. Now
we're getting somewhere. Thank you.
Through you, Mr. President, if the
sponsor will continue to yield.
ACTING PRESIDENT KUHL: Senator
standard, do you continue to yield?
SENATOR STAFFORD: Right.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR SCHNEIDERMAN: And the
reason for this question is that in reading
Part H, it's not clear to me that all of the
components of the program are included in it.
And I just wanted to make sure that my
understanding of what precisely is being
extended is correct.
Is the Lower Manhattan Energy
Program extended for three weeks?
SENATOR STAFFORD: The answer is
yes, Mr. President.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, the Lower
Manhattan Residential Conversion Program -
which, again, I just don't see any reference
4069
to, and I want to make sure that is being
extended as well.
SENATOR STAFFORD: The complete
program, Mr. President, is being extended.
SENATOR SCHNEIDERMAN: If the
sponsor will continue to yield.
ACTING PRESIDENT KUHL: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT KUHL: The
sponsor continues to yield.
SENATOR SCHNEIDERMAN: And once
again, I gather this is a three-week extender.
This is a program that has many, many private
contracts that arise because of the
commitments made through this program. And
stability, as I'm sure the sponsor knows, is
often as important or more important than tax
reductions.
What possible reason is there not
to extend this program for a longer period so
that commercial uncertainty does not undermine
the financial benefits it seeks to provide?
SENATOR STAFFORD: Well, once
again, Mr. President, we get back to
4070
responsibilities here at this moment. We all
wish that we could get the cooperation on the
north side. But it's necessary to pass this
for three weeks. And as a matter of fact, I'm
advised that for this particular provision, it
was only asked that we extend it for three
weeks.
SENATOR SCHNEIDERMAN: Through
you, Mr. President, I'm not sure I understand.
It was only asked by who? North side, south
side, east side, west side?
SENATOR STAFFORD: By the
greatest city in the world with a population
over 5 million.
ACTING PRESIDENT KUHL: Senator
Schneiderman.
SENATOR SCHNEIDERMAN: I
appreciate the fact that that excludes
Plattsburgh, Fort Orange.
Let me move to another area very
briefly. Through you, Mr. President, if the
sponsor will yield for one more question.
ACTING PRESIDENT KUHL: Senator
Stafford, do you yield to one more question?
SENATOR STAFFORD: Yes.
4071
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR SCHNEIDERMAN: This is a
question that actually I probably will just
talk on the bill and then invite your
comments.
You mentioned earlier that this
legislation does not change policy, it just
continues government. Once again, as I was
attempting to do yesterday with another piece
of legislation, I am concerned that there's a
very important area of government funding that
is not being continued. And it raises a
concern that in fact a policy change is taking
place. Can you explain why funding for
Superfund remediation, the funds for which
have expired as of the end of this month, is
not included in this extender?
SENATOR STAFFORD: I think once
again, Senator, you know the answer. In fact,
I know you know the answer, because I have a
lot of confidence in your -- anyway, I'll
continue.
The answer is, of course,
additional funds will be required for the
4072
Superfund in the next budget, and this will be
of course included in the next budget.
SENATOR SCHNEIDERMAN: Thank you,
Mr. President. On the bill.
ACTING PRESIDENT KUHL: Senator
Schneiderman, on the bill.
SENATOR SCHNEIDERMAN: I
appreciate the sponsor's answers. However, I
do not think that in this area he is being
properly advised. My understanding -- and
we've had recent contact with the Department
of Environmental Conservation on this issue -
is that as of March 31st, at state-funded
sites, we are not going to have sufficient
funds to continue remediation proceedings.
We have 766 sites in the State of
New York where no remediation has taken place.
146 of these are Class 2 sites, meaning that
they're very, very serious. Cleanup is in
various stages of progress at a lot of these
sites. There are investigations underway. In
some cases, investigations have been completed
and records of decision, or RODs, have been
issued.
There is not enough money, and I
4073
urge that before we do another extender, the
appropriate distinguished and skilled
personnel in Senate Finance get in touch with
DEC and make sure that we do extend the funds
necessary for this.
One aspect of this that's
tremendously important is when you have a
polluter on the hook for a Superfund site, the
State has leverage and negotiation by saying
we have the funds to come in and we'll do the
cleanup, and then we'll charge you. And this
charge is always very high. We're losing that
leverage. April 1st, we don't have that
leverage anymore.
And this is a tremendous issue. It
has been set as one of the highest priorities,
if not the highest priority, by the
environmental groups for this year's
legislation session. And I would urge a
careful examination of whether or not it's not
necessary in this extender. And sadly, I'm
afraid we have to face the fact that this may
not be the last extender this year. And that
that's something I hope we will be able to
address.
4074
Thank you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Bruno, why do you rise?
SENATOR BRUNO: Mr. President,
how long have we been debating this particular
calendar?
ACTING PRESIDENT KUHL: Debate on
this bill, I'm informed by the desk, started
at 10:08. So it's about two hours and one
minute ago.
SENATOR BRUNO: Then, Mr.
President, according to Rule IX, Section 3-D,
I would move that we close debate and move the
question.
ACTING PRESIDENT KUHL: All those
in favor signify by saying aye.
SENATOR CONNOR: Party vote in
the negative.
SENATOR BRUNO: Party vote in the
affirmative.
ACTING PRESIDENT KUHL: The
Secretary will call the roll, record the
party-line votes. Announce the results.
(The Secretary called the roll.)
THE SECRETARY: Ayes, 21. Nays,
4075
34. Party vote.
ACTING PRESIDENT KUHL: The
debate is closed.
The Secretary will read the last
section.
THE SECRETARY: Section 3. This
act shall take effect immediately.
ACTING PRESIDENT KUHL: Call the
roll.
(The Secretary called the roll.)
ACTING PRESIDENT KUHL: Senator
Connor, to explain his vote.
SENATOR CONNOR: Thank you, Mr.
President.
I will be voting in favor of this
because, as I said before, there are some
ameliorative provisions in here. I wouldn't
want to see the Loft Law expire as it did a
few years ago and leave loft tenants
unprotected for months. As my colleagues who
were here then may recall, we ended that
session that year sometime in warm weather, I
don't remember if it was June or July, with
the loft tenants sitting up there, having been
at risk of being evicted for several months,
4076
and the final bill we did, late that evening
or I think it was a Saturday afternoon, in
fact, was the loft renewal.
So -- but my question is this.
What's the Loft Law got to do with the budget?
Why couldn't we have been dealing with the
Loft Law for the last three months that we've
been up here so we could do a permanent
extender or a three-year or four-year,
whatever it is?
I am also glad that the Lower
Manhattan extension is happening. It's only
three weeks. I hope we have the real thing.
I was the sponsor of the Lower Manhattan
Commercial Revitalization program in this
house. My colleague and the Assemblyman for
Lower Manhattan, the Speaker, in the other
house, was the sponsor there. I hope we could
take up that and do the amendments in the
future.
For those reasons, Mr. President, I
vote aye.
ACTING PRESIDENT KUHL: Senator
Connor will be recorded in the affirmative on
the bill.
4077
Senator Padavan, did you wish to be
recorded in the negative on this bill?
SENATOR PADAVAN: Yes.
ACTING PRESIDENT KUHL: Okay.
Senator Morahan?
Senator Paterson, to explain his
vote.
SENATOR PATERSON: Thank you, Mr.
President. Being that I represent an area of
Manhattan and am very familiar with the
problems of loft tenants, I certainly
appreciate the fact that we are going to grant
the extension. But I agreed with what Senator
Onorato said, that since it isn't going to
entail any financial encumbrance to the state,
that we might have extended it a little bit
more.
Senator Connor's memory is the same
as mine. It was a Saturday afternoon.
Actually, it was July 13, 1996, when we
actually passed the budget that particular
year, and we had to come back on the 10th just
to extend the life of the loft tenants' rights
a few days until we could actually pass the
budget.
4078
So knowing that we've gone down a
road before, as Senator Connor ably pointed
out, it really would be a good time to address
it right now.
The other issue about the language
of this bill, the specifics between what was
actually policy and what is actually
continuation of what goes on in our previous
budgets of this sort, wasn't entirely clear to
me. But I'm relieved enough that I can cast a
vote in the affirmative.
ACTING PRESIDENT KUHL: Senator
Oppenheimer, to explain her vote.
SENATOR OPPENHEIMER: If I may,
Mr. President.
There have been about 20 studies
done now concerning adolescent gambling. And
we know that there has been a large increase
in the number of young people starting at age
12 who are now participating in the Quick Draw
gambling. We also know from this study, from
these studies -- as I said, about twenty
different studies -- that the majority of
12-year-olds now say that they have already
gambled.
4079
My concern is now and always is and
will be with the children. And to think that
because this is encompassed in a single bill I
am voting for this is distressing to me -
ACTING PRESIDENT KUHL: Senator
Oppenheimer, in the affirmative.
SENATOR OPPENHEIMER: -- because
it's the wrong way to go. But I'll be voting
yes on the bill, because there are too many
provisions that cannot be permitted to elapse.
ACTING PRESIDENT KUHL: Senator
Oppenheimer, in the affirmative. Senator
Stachowski, to explain his vote.
SENATOR STACHOWSKI: Mr.
President, I rise to explain my vote. There's
obviously some extenders here. It's a
cut-and-dried situation. And I think it's
important to note that we would lose millions
of dollars if we didn't extend these things,
particularly in jury sequestration we would
lose money. And I know that the Loft Law is
very important to the people that live there.
And the Armory piece would lose money. Just
about every piece would lose money if we
didn't extend it.
4080
And Quick Draw obviously would lose
money. But in the area of Quick Draw, you
would think that since we only make 25 percent
of the revenue for education, and education is
the reason we supposedly have it, and it
raises $470 million to $500 million a year,
somebody else is making a lot more money than
New York State and the Education Department.
And the sad part is that it's going out of
state, and not only out of state, but out of
the country, because that company is not
even -- it's a British company. So it's kind
of interesting that we would be helping them
out so much.
If we're going to do gambling, we
might as well be honest about it and do a
casino gambling legislation piece, do a
revenue stream out of that legislation that
would go to education and make considerably
more money for the state. And at the same
time, you could have a stream of money that
would at least help support work with problem
gamblers that we're developing through all
these various revenue sources that we're
finding to support education.
4081
I think it would be much more up
front, it would be a better way to do it. I'm
sure that it would be just as hard to pass as
this, but I'm sure you could find some big
bill to stick it in. And maybe we could get
casino gaming going and at least give the
people an opportunity to vote for it. But if
we were going do that, do a revenue stream for
education and problem gambling, it would make
a lot more sense than doing this. Obviously
the rules are twisted. People are supposed to
watch so kids don't use it. Everybody's been
in a facility that has it where the father is
sitting with his son or his daughter and
letting her pick out the numbers she wants to
play, and they're watching the board. And
that's technically an illegal betting, but
nobody enforces it.
And there's other places that are
supposed to have a certain amount of food
revenue, and they don't do that either, and
nobody goes and enforces that either, unless
somebody happens to pick that place out. Then
Schenectady will send somebody down, they'll
take that place out. And they might be doing
4082
all the rules, but for some reason they had a
reason to take them out.
So I just wanted to throw those few
comments in about Quick Draw, since I didn't
get an opportunity to speak earlier. The fact
is, we need to do this extender. The various
pieces are too important. The amount of money
lost would be too great. Last time I guess we
didn't extend Quick Draw because there was a
commitment to cover the money. But this time
the houses would have to make up the money.
They don't want to do $3 million a week, so
we're doing an extender. Hopefully by the
time this extender is over we'll at least be a
little bit forward on doing the budget, and
not just another extender.
I vote yes.
ACTING PRESIDENT KUHL: Senator
Stachowski, you're voting yes?
SENATOR STACHOWSKI: Yes.
ACTING PRESIDENT KUHL: Okay.
Senator Stachowski will be recorded in the
affirmative.
Senator Santiago, to explain her
vote.
4083
SENATOR SANTIAGO: Thank you.
I'd like to address -- thank the sponsor for
the Loft Law. He forgot Brooklyn. I think
that people in Manhattan are going to be
covered, I think through the 30th. And
hopefully at some point they will have a
permanent residence protection, is the word
I'm looking for.
But at this point I'd like to
remind everyone that Brooklyn, in the section
that I represent, there are approximately 55
buildings that are about 2,000-plus people
who, as we speak, are not covered under this
extender. I will support this legislation,
but I do with the understanding that there
will be legislation before this house that I
hope that everyone will take into
consideration in the same way that we're
taking this one into consideration, and to
vote in the affirmative when Brooklyn is
covered as well.
ACTING PRESIDENT KUHL: Senator
Santiago will be recorded in the affirmative.
Senator Smith, to explain her vote.
SENATOR ADA SMITH: Thank you,
4084
Mr. President. I have a reluctance to vote
for this bill, based on the havoc that Quick
Draw has wrought in our communities,
especially communities that are poor and of
color. However, based on the need for the
extenders for the -- that we've granted for
the Loft Law -- and I too have the same
concerns as my colleague from Brooklyn,
Senator Santiago, that we will work something
out that will benefit those people who are not
presently covered so that they will be able to
remain in their homes that they have -- they
may have taken these buildings and made them
into something habitable, and they should have
the right to remain there. Because of this, I
too will be voting in the affirmative.
ACTING PRESIDENT KUHL: Senator
Smith in the affirmative.
Senator Stavisky, to explain her
vote.
SENATOR STAVISKY: To explain my
vote, Mr. President.
One of the most frustrating
questions that I'm asked at community forums
is education. I thought lottery money was
4085
going for education. Now, as Senator
Stachowski indicated, 25 percent of the Quick
Draw money is allocated for education,
approximately $120 million or so. It seems to
me that this is the wrong way to raise scarce
education dollars. And instead, as I said
yesterday, we should be implementing Judge
DeGrasse's decision instead.
I am very much opposed to lottery
money, to the Quick Draw and to other forms of
quick fixes. However, there are so many good
parts that are necessary -- the child health
insurance, and all of the other aspects, that,
Mr. President, I wish to be recorded in the
affirmative.
ACTING PRESIDENT KUHL: Senator
Stavisky in the affirmative.
Senator Dollinger, to explain his
vote.
SENATOR DOLLINGER: Thank you,
Mr. President.
There's an old line, I guess it
comes from business -- we often talk about
running this house as a business -- and it's
very simple: Bad process, bad result. This
4086
is a bad result.
This is an ugly bill. This is a
bill that is born of a type of politics based
on hostage taking. How do we get a bill
through? How do we get all the affirmative
votes? We take the Loft Law hostage. How do
we get Quick Draw through the State Senate
when we know that it would never pass, that
the majority of members in this house would
vote against it? We take it hostage. We take
everything hostage. We throw it into this
big, ugly bill and then ask people to support
it.
Mr. President, I'm going to vote
no. I think that it's time to draw the line
on Quick Draw. I'm fascinated, Senator
Padavan, you were absolutely correct when you
started off talking about Quick Draw five
years ago. The first people to get addicted
were problem gamblers in our taverns. The
second group of people to get addicted were
tavern and restaurant owners who now say to
us, We need that revenue, we need the fix.
And you know what the third group
is, Senator Padavan? It's the 61 members of
4087
this house who are now saying, We need that
$125 million, we're fixed, we need our fix of
Quick Draw. I would suggest, Senator Padavan,
with clairvoyance you predicted this a long
time ago. The continuing taint of addiction
to Quick Draw gambling has gone near and far
throughout this state, and it is now present
in this chamber. I think that's a disgrace to
this state.
I think that I have to vote against
the tyranny of hostage-taking, the tyranny of
bad result, the tyranny of an ugly, ugly
budget process that today, by voting for this
bill, we only make the ugliness acceptable. I
am unwilling to do that, Mr. President. I
vote no.
ACTING PRESIDENT KUHL: Senator
Dollinger will be recorded in the negative.
Senator Schneiderman, to explain
his vote.
SENATOR SCHNEIDERMAN: Thank you,
Mr. President.
I join Senator Dollinger and others
in their sentiments about Quick Draw. I
honestly do not understand how this game,
4088
which is identical to games that are played in
Las Vegas casinos, doesn't violate New York
State's constitutional limitations on
gambling. I guess it was litigated. I'm not
sure how this possibly squeaked through.
There are other things in this bill
that I think are essential for us to extend,
so I'm going to vote yes while holding my
nose. However, I do think that the political
nature of this bill is clearly demonstrated by
the differences in the dates for the
extenders. The notion that the Lower
Manhattan Commercial Revitalization Program
should only be extended until April 22nd, the
Loft Law until June 30th, the MTA surcharge
for four years -- this is a political
document. It is not simply an extension of
essential financing for the government of the
State of New York.
And I think it is a shame that we
are not more distressed in this house at being
here approaching the deadline, with so little
work being done on the budget, and everyone
just sort of milling around casually. This is
not what we should be doing here. This sort
4089
of delay costs tens of millions of dollars to
the people of the State of New York.
And we could at least show a little
bit of concern, a little bit of shame at
having failed again. Finger pointing at the
other house or at the Governor I don't think
really is what we should be about. We should
be trying to fix this process. It's a flawed
process. I will vote yes, but I hope we can
do something soon to fix the overall budget
process.
ACTING PRESIDENT KUHL: Senator
Schneiderman will be recorded in the
affirmative.
Senator Montgomery, to explain her
vote.
SENATOR MONTGOMERY: Yes, Mr.
President, briefly. I'm just quite disturbed
and totally in agreement with Senator Padavan
on what he I think appropriately refers to as
video crack. This is something that is not
good. Certainly the state should not be
sponsoring it and supporting it and using it
as a means of revenue.
However, the parts of the budget -
4090
I certainly would not want to see us lose any
of the Child Health Plus benefits that are so
important to children in our state, and
families. And some of the other important
aspects. I have loft dwellers in my district;
I certainly would not want them to lose the
protection. And hopefully we by June can come
to an agreement on the Loft Law that certainly
does cover Brooklyn, as my colleague Senator
Santiago has indicated.
So for those reasons, despite the
fact that I feel that I'm swallowing this very
bitter pill, this video crack program, I'm
going to vote yes on this budget.
ACTING PRESIDENT KUHL: Senator
Montgomery in the affirmative.
Senator Onorato, to explain his
vote.
SENATOR ONORATO: Mr. President,
to explain my vote.
Mr. President, I too join with many
of my colleagues about the misgivings of
attaching nonbudgetary items to a budget bill.
But there are so many good things in here that
we know that we have a responsibility to, to
4091
make sure that the funding goes on for many of
the good aspects on here.
I hope that by June 30th, when the
Quick Draw is again presented, that it will be
presented on an individual basis so that we
will have an opportunity to vote against it.
Because I certainly don't approve of the Quick
Draw aspect that's in this budgetary extender.
And I hope that they also put on
the floor the loft bill on its own particular
merits, and not for a three-month extender.
Because while it's not a budgetary producer
for the state, it is certainly a budgetary
issue for those people who are living in those
loft buildings who are threatened with the
loss of their homes. That would be a
catastrophe, and it would have a tremendous
budgetary -- minus budgetary effect on their
lives.
I do vote reluctantly yes on the
budget.
ACTING PRESIDENT KUHL: Senator
Onorato in the affirmative.
Senator Hevesi, to explain his
vote.
4092
SENATOR HEVESI: Thank you, Mr.
President.
I too rise with great reservations
about the legislation that's before us. And I
think all of my colleagues here, and I truly
believe some of my colleagues on the other
side of the aisle are really distressed about
this process and the way it goes. Again,
we're in the situation where we're forced to
vote on something that should happen. We
should do these extenders not for political
reasons, just because it's the right thing to
do to keep the government functioning. I even
suggested last night that if we outlawed these
emergency appropriation bills, the political
incentive would be built into a system whereby
we'd never have late budgets.
But having said that, the fact that
we don't have that system in place, we're now
in a situation where we've got to do these
emergency extenders where -- which are a big
mishmash of different policy objectives with
different things thrown in there. And has
been articulated by a number of my colleagues,
there are things that have been put in here
4093
that would never pass this house were they to
stand alone as a separate piece of
legislation. And that is just disingenuous.
And I guess we shouldn't be surprised that
that being disingenuous is in any way
inconsistent with the disingenuous process
that we are currently engaged in. It actually
is perfectly consistent.
So having said all that, I'm
incredibly saddened and frustrated by this
process, though not surprised by it one bit,
in light of the need to carry on with the
policies and the payment for state employees
and the language that's built in here. I'm
going to vote for it, but again over the
strongest possible objections which I have and
many of my colleagues have to this horrible,
horrible process.
I vote aye.
ACTING PRESIDENT KUHL: Senator
Hevesi in the affirmative.
Senator Duane, to explain his vote.
SENATOR DUANE: Thank you, Mr.
President. Earlier today a Senator referred
to a woman whose husband doesn't bring home
4094
enough money and that's why she needs to work
and work in a place where they have Quick
Draw. But I think maybe one of the reasons
that her husband doesn't have enough money is
he might be throwing it all away on Quick
Draw. Because in fact that's what happens day
in and day out across the state, that people's
hard-earned money just get gambled away in
Quick Draw. It's one of the biggest shames of
the State of New York that we allow that to go
on.
I can't believe that we're doing
this bill today right before a real budget for
2002 should get done. I think it's a disgrace
that we don't have our act together in this
house, and I think it's horrendous that the
Assembly went home today without a budget in
place.
There was an agreement reached on
many items that are in this extender budget.
Well, if we can agree on that, then why can't
we agree on a real budget? I've said this
before. Many of us here come from bodies -
city councils, county legislatures -- where
the budget is done on time and balanced.
4095
Maybe we should get those three guys out of
that room and let those of us who have
experience balancing budgets go in and make a
budget. I know that there's several people
here who would volunteer to do that. I know
that I can do it, and I have confidence that
they can do it, but I've run out of confidence
that those three guys are going to be able to
do it. They certainly aren't going to get it
done on time. And that is just wrong. That's
just wrong.
We can put blame on the other side,
and certainly they deserve it. But really we
have to be accountable to ourselves for our
part in this. And we certainly haven't done
enough, because we don't have a budget on
time.
As I say, there are so many items
that we're agreed on in this extender, why
couldn't we have spent the time agreeing on
what the 2002 budget would look like? I think
it's a complete outrage that loft dwellers are
held hostage in this way. It is really wrong.
We don't hold people hostage in their homes in
any other circumstances in the State of New
4096
York like this. It is really wrong. It's
just plain wrong.
I represent probably more loft
tenants than anybody in this body. I believe
they've really enlivened and rejuvenated many
parts of the City of New York. They certainly
have helped make New York City a destination
which brings in lots and lots of good tourism
and tax dollars. That we should be doing this
to them is just plain wrong.
I know that those -
ACTING PRESIDENT KUHL: Senator
Duane, how do you vote?
SENATOR DUANE: -- people will
understand why -
ACTING PRESIDENT KUHL: Senator
Duane -
SENATOR DUANE: -- I'm casting
this vote -
ACTING PRESIDENT KUHL: Senator
Duane -
SENATOR DUANE: I'm going to vote
in the negative on this.
ACTING PRESIDENT KUHL: Senator
Duane will be recorded in the negative.
4097
Senator Gentile, to explain his
vote.
SENATOR GENTILE: Thank you. To
explain my vote, Mr. President.
Before I came to this chamber, I
would take a look at votes of representatives
in my area and would be astonished, be
astonished to know they voted yes or voted no
on particular pieces of legislation. And
certainly that also became an issue when I
became a candidate.
But, you know, I have to say,
having served in this chamber now for -- this
being my fifth year, I've come to understand
why some of those votes were yes or why some
of those votes were no, given the procedure
that we follow in this house where items are
lumped together in a kitchen-soup-type budget
bill and we're asked to vote yes or no. And
as Senator Connor so aptly described before,
we don't have the ability to present an
amendment to delete a portion of a
kitchen-soup-type bill, and therefore we
either have to vote yes on the whole bill or
no on the whole bill.
4098
And I look at my constituents and
consider that if I voted no on a bill of this
type, it could very well be said or an
argument could be made that I voted no for
Child Health Plus or I voted no on the Loft
Law, I voted no on some other very good things
that are in this extender. Unfortunately,
there are some very bad things in this
extender, as has been so aptly described by my
colleagues here in this conference. Yet I'm
forced, as many others are forced here, to
vote yes because of the good things in this
bill. The bad thing is the process by which
we put a kitchen-sink-type bill together and
say vote yes or no. And that is -
ACTING PRESIDENT KUHL: Senator
Gentile -
SENATOR GENTILE: -- the process
that I object to.
ACTING PRESIDENT KUHL: How do
you vote?
SENATOR GENTILE: I vote aye,
reluctantly.
ACTING PRESIDENT KUHL: Senator
Gentile will be recorded in the affirmative.
4099
Senator Sampson, to explain his
vote.
SENATOR SAMPSON: Yes, Mr.
President. I just want to explain my vote.
I just wanted to make note for the
record that I am against, as Senator
Montgomery said, video crack. But most of
all, I'm kind of dismayed because of the point
that the Loft Law does not protect the loft
tenants in Brooklyn. My clients who are
landlords in Manhattan, they're kind of
disappointed that it wouldn't be extended to
them, but my clients in Brooklyn who are
landlords who own lofts are very excited about
this extension. But, you know, I have to
advise them to be realistic in this situation.
I will vote for this bill. But
once again, I do not tolerate instances where
we have to pit one section of the borough
against another with respect to Brooklyn and
New York. But most of all, when it comes to
Quick Draw and video crack, as we may call it,
I'm totally against that. But maybe we should
take bets on whether or not we'll pass a
budget by April 1st. I wonder what the odds
4100
would be on that.
Thank you very much, Mr. President.
ACTING PRESIDENT KUHL: How do
you vote, Senator Sampson?
SENATOR SAMPSON: I vote yes.
ACTING PRESIDENT KUHL: Senator
Sampson will be recorded in the affirmative.
Senator Brown, to explain your
vote?
SENATOR BROWN: Yes, Mr.
President, to explain my vote.
This budget process, as I said
yesterday, is a bad one. I'm going to
continue to say that. Every chance I get, I'm
going to say that to my constituents. I'm
going to let them know how bad this process
is.
Like Senators Padavan, Connor, and
Dollinger, one of the things that I lament in
this extender is Quick Draw. I don't think it
works for people, I think it hurts poor people
in our state. When I look at the fact that
supposedly it's in there for economic
development purposes, as was mentioned on this
floor, it doesn't seem to be developing some
4101
of the more distressed areas of our state.
If I could, I would propose an
amendment to this bill. But I can't. The
kind of amendment that I would propose would
be to change the formula for how the money on
Quick Draw is paid out. I'd like to see money
go for business development and job creation
in urban areas and other distressed
communities as well as money going to programs
to help problem gamblers. So if we must have
Quick Draw, let's use the money more wisely
than we use it presently.
I probably will vote for this bill
even though I don't want to, because, as has
been said by colleagues, there are good and
needed things in this bill. One thing that I
would hate to see not continue is Child Health
Plus insurance for poor children and families
in this community.
So with great reservation and with
great trepidation over this process, I will be
voting in the affirmative, Mr. President.
ACTING PRESIDENT KUHL: Senator
Brown, in the affirmative.
Senator Bruno, to explain his vote.
4102
SENATOR BRUNO: I rise because
I'm listening to others explain their vote,
and I've been listening for two hours plus to
all of the discussion. I want to, Mr.
President, again, while I vote in the
affirmative on this, just remind the members
here that what we're doing is an alternative
to a budget. To keep the state going forward,
which is our job. To keep government
functioning.
We have no alternative before us,
Mr. President, because the Speaker and the
leadership in the Assembly, your colleagues,
refuse to deal in reality. We are prepared to
debate a budget in public this afternoon,
tomorrow, through the weekend, in public. We
have a procedure in place. But we don't have
that option. The Speaker and the leadership
and the Majority there in the Assembly are not
prepared to get engaged. Why? We're the
Legislature, which is our responsibility,
because the Governor will not guarantee a
veto-proof budget if we send him one between
the two houses.
Now, I have shared with the
4103
Speaker, privately and publicly, the
Governor's not going to do that when he has an
$8.3 billion, over the next several years,
proposal over and above the Governor's budget.
So it's a nonstarter, it's a no-brainer, it's
not reality, it's not prudent, it's not
fiscally responsible.
So you ought to use your
considerable influence to talk to the
leadership there to see if we can't do a real
budget, start the process today or tomorrow.
We're prepared to do that.
And, you know, you're right, there
are things in this emergency bill we'd rather
not have in it. You're right. But that's our
life. It's not all pure and holy and
sanctimonious.
I read in the paper today that for
the first time in a freshwater lake of any
size, they're going to use Eurasian milfoil.
Up in Lake George, in the esteemed Senator
Stafford's district. It's a chemical. And
they're talking about using that. Why?
Because it's a better alternative to the
Eurasian milfoil.
4104
You have to make choices. We are
voting for this because the large choice is
that we are continuing government inaction.
We are doing our jobs. And that's why we are
supporting what is before us, because it's all
that we have to support, Mr. President.
So again, I vote aye.
ACTING PRESIDENT KUHL: Senator
Bruno will be recorded in the affirmative.
Announce the results.
THE SECRETARY: Those recorded in
the negative on Calendar Number 331 are
Senators Dollinger, Duane, Morahan, and
Padavan. Ayes, 53. Nays, 4.
ACTING PRESIDENT KUHL: The bill
is passed.
Senator Bruno.
SENATOR BRUNO: Mr. President,
can we at this time take up Calendar Number
328.
ACTING PRESIDENT KUHL: The
Secretary will read.
THE SECRETARY: Calendar Number
328, Assembly Budget Bill, Assembly Print
Number 1301A, an act making appropriations for
4105
the legal requirements.
SENATOR CONNOR: Explanation,
please.
ACTING PRESIDENT KUHL: Senator
Stafford, an explanation of Calendar Number
328 has been requested by Senator Connor.
SENATOR STAFFORD: This -- it
doesn't appear that anyone wants to listen.
This bill is a bill that provides
for our debt service. And I might add it's a
bill through the years that's easy to explain
and always -
SENATOR CONNOR: Excuse me, Mr.
President. Point of personal privilege.
There's too much noise.
ACTING PRESIDENT KUHL: You're
absolutely right. You're only four or five or
six, maybe eight feet apart, and you can't
hear each other. You're absolutely right.
Let's take the conversations out of the
chamber. Staff, have seats, please. Members,
if you wish to exit, please exit. If you wish
to come in, please come in. But let's be
quiet.
SENATOR STAFFORD: That was
4106
rather shocking, Mr. President, that we have
to -
ACTING PRESIDENT KUHL: Well,
Senator, I apologize too, because I was having
my own conversation up here, some discussion
about the Final Four pool and getting into it.
I thought that was appropriate, so -- I'm just
kidding. Just kidding, of course.
Anyway, Senator Stafford for an
explanation.
SENATOR STAFFORD: Thank you, Mr.
President. I'll start over -- that door won't
stay closed. I don't know. I guess it's
the -- is it a full moon?
(Laughter.)
ACTING PRESIDENT KUHL: The next
full moon is April 7th, Senator Stafford.
SENATOR STAFFORD: Mr. President,
you keep track like I do.
On a serious note, this bill,
through the years, has been easy to explain,
as it is this year. And as I recall, it
usually passed with little or no discussion.
What this bill will do, it will
allow us to meet the existing legal
4107
requirements for the payment of state debt
service obligations during fiscal year
2001-2002. The bill contains all of the
Executive's recommended appropriation levels
for those purposes. The appropriation
authority totals $5.3 billion for the payment
of interest and principal on general
obligation bonds, contractual and lease
obligation payments of the state, and for
certain state entities.
ACTING PRESIDENT KUHL: Senator
Connor.
SENATOR CONNOR: Thank you, Mr.
President. And thank you -- through you, Mr.
President, my thanks to Senator Stafford and
the thanks of all my colleagues here for his
patient explanations, not just the one we just
heard, but throughout the day and yesterday
afternoon as well.
Back in past years when we had
these budget impasses, we didn't deal with the
debt service budget either until the whole
budget was resolved. And going back three or
four years ago, our former colleague Senator
Manny Gold, who was then the ranking Democrat
4108
on the Finance Committee, came upon the idea
that, you know, at least we ought to do the
debt service bill, because what choice do we
have? We have to pay our debts, we have to
pay the interest.
That, in his view and our view
then, was what Senator Stafford just
described. You take what the Executive sent
down for debt service, it's just a matter of
paying the bills that come due.
And to the great credit of the
Majority, and of Senator Bruno and Senator
Stafford, they took that idea, the other house
took it, and we've been doing that these past
few years. And it usually passed unanimously
in a minute or two, because we all took it at
its word. Nothing new in here, it's just debt
service. The view we all had is we're just
paying the tab that came due on past bond
issues and borrowings.
And, Mr. President, that's what I
believed yesterday, until I did something that
I truly confess I have never done before on a
debt service bill. I don't want to shock
anybody, but I read it. And I found out that
4109
it's not just paying the interest on past
debt. Bond issues that we all knew, some of
them frankly pretty shady back-door borrowings
under not just the last administration, but
this one.
There's more in this debt service
bill than just paying interest and principal.
There's appropriations in here, of hundreds of
millions of dollars for new debt. New debt.
And later, Mr. President, I'll address the big
picture on debt. But I learned about
something that I didn't know or understand:
COPs. And I don't mean police officers. I
mean a new device that sounds so familiar to
me as a resident of New York City in the early
'70s, a new device called certificates of
participation that has evolved in these past
years.
This is a page from an official
publication of the Division of the Budget that
reflects some uses of borrowing. These
so-called certificates of participation are
borrowings that we authorize and that indeed
in this bill before us we will be authorizing.
What do you borrow for? Oh,
4110
capital needs. You borrow for capital needs.
That's what they always say, capital needs.
Once upon a time -- and I know, Mr. President,
that Senator Marchi well remembers this -- and
he was ahead of his time when he was a
candidate for mayor -- and I'm proud to say he
was then my State Senator when I first moved
to Brooklyn -- and was pointing out these
problems. Regrettably, he wasn't taken
seriously. Because when you talk about debt,
Mr. President, you talk about borrowings and
all these fiscal matters, frankly, it's over
the public's head in a lot of ways. Seems
rather esoteric. Hundreds of millions,
billions, whatever it is, debt.
But, Mr. President, that's where
our responsibility as legislators comes in, to
read this and understand this and to be
fiscally prudent on behalf of the people we
represent and future generations. Because
runaway debt has a real impact. The runaway
borrowing to pay for day-to-day expenses by
the City of New York in the late '60s and
early '70s had a real impact. It cost our
schoolkids when the piper had to be paid and
4111
there had to be cutbacks in education. It
cost New York City public schools things that
they've never yet restored, like athletic
programs in the high schools and so on. It's
cost decades of our kids because of that
fiscal crisis.
We say we solved it. Yeah, we
solved it, the city didn't go bankrupt. But
we didn't solve it in the sense that we never
restored to 25 years' worth of high school
kids the opportunity to have real phys ed
classes, to have schools that weren't falling
down, because there was no ability to pay as
you go. In fact, there were cuts. It cost us
in ways -- in our parks, trees that are
irreplaceable died and they're not there now
for my kids to enjoy because we had to cut
back on parks budgets. It cost the citizens
in crime because the police department was cut
back to levels way, way back that they've only
recovered from, frankly, since we did Safe
Streets legislation under Mayor Dinkins, and
it's been carried out by Mayor Giuliani. And
we've got a handle on crime in the city. It's
down. But it cost us, that fiscal
4112
irresponsibility.
So, Mr. President, I feel obligated
to speak up and tell my colleagues something
they may not know. Certificate of
participation, it's a debt -- it's in the debt
service, in disbursements here. The COPs debt
service disbursements will rise from
$119 million up to $209 million, a 75 percent
increase over the current fiscal year.
And what is the Executive using
these certificates of participation, what's
this borrowing for? Photocopiers and imaging
systems, PCs and printers, upgrade switches.
Passenger vehicles, $24 million. We're
borrowing money, we're authorizing them to
borrow $24 million to buy passenger vehicles.
Okay, sounds like a car loan, Mr.
President. People borrow money to buy cars.
But you don't have a loan that lasts seven
years. You don't buy $24 million in passenger
vehicles that end up costing you in interest.
$3,908,000, you don't pay it back over seven
years. You don't pay -- you're not going to
use those vehicles for seven years. Why are
you borrowing and paying for them over seven
4113
years? That's what we're authorizing in this
bill.
The total tab here is about
$300 million. The total interest tab is
$99 million or so. These are rough numbers,
but it's here. Desktop computers, Internet
initiatives. What are we borrowing for this?
Furniture and other office equipment,
$8 million. We're borrowing and paying
interest?
The big fight about avails, the
Governor says, oh, I don't know, the surplus
is a billion, the Majority says it's a billion
and a half, the Assembly says it's 2 or
3 billion. But nobody doubts that we have
multihundreds of millions, well over a billion
in surplus.
So why are we authorizing in this
bill the Executive to borrow, for furniture,
$8 million? There's not enough money to go
out and buy for, the Unified Court System,
$8 million? By the way, OGS, the cars were;
the furniture is Unified Court System.
They've bought into this now too. The
Executive's been doing it for a few years.
4114
But we've been authorizing it in
this thing we put through before we ever do
the budget, and it's always on time, it's just
debt service. Well, it's not just debt
service. There's new debt in here. Hundreds
of millions of dollars for things that simply
are not, in my opinion, the kind of thing you
ought to borrow and pay back over seven years
with all the interest cost involved. I'm
looking here at about 90 some million dollars
worth of interest, to buy $300 million worth
of stuff that in my opinion we ought to just
go out and buy if they need it.
You know, PCs and printers,
personal computers and printers. Due to the
good influence of my children a few years ago,
I have a PC. I bought a PC back then, they
tell me it's junk now, they have new PCs. The
fact is, anybody who buys PCs knows they're
outdated in, what, three years? Three years
is pushing it. They're outdated before you
get it out of box, Mr. President. But you're
not going to keep using it seven years later.
Why are we going to be paying for it seven
years later, with interest?
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Mr. President, where are my
fiscally conservative colleagues? I'm not
passing blame. Nobody read this. This has
been slipped by us year after year after year,
under the guise of debt service, when it's new
debt and it's new debt for things that ought
to be paid as you go, particularly since we've
had budget surpluses these past years.
Now, I know, Mr. President, it's
not fashionable to talk about debt, debt,
debt. And I coined the phrase, and I admit
it, it's political. It's political. You
know, I've been called, oh, tax and spend
Democrats, tax and spend Democrats. Well,
frankly, frankly we have -- these past years,
in this Capitol, we have a new type of
political person. The borrow and spend
Republicans is what I call them, Mr.
President. I know it's labels. But we ought
to think about that.
We ought to think about that the
fact that, since Governor Pataki became
governor, that state-supported debt has
increased by 39 percent. We ought to think
about things like these gimmicks, this
4116
certificate of participation debt service
rising 75 percent in one year. The new
issuance rate is five times over -- the new
issuance rate on these certificates of
participation, five times what it was last
fiscal year. We're set to issue $308 million
in new COPs debt while retiring $204 million.
It's getting worse and worse and
worse. And we're letting it happen because,
oh, it doesn't seem big. Hundreds of millions
of dollars of debt for things like desks,
automobiles? It's just crazy. We ought to
just buy them. We have the money. Save the
interest. Who are we making rich here,
bankers? We're now going to pay all this
interest, tens of millions of dollars in
interest, to bankers for things that we could
buy -- frankly, Mr. President, that we could
buy pay as you go if they're really needed.
Mr. President, what is this
Legislature doing with its fiscal oversight?
Maybe we're fighting about these big things
and having late budgets because the three men
in a room -- I don't expect the three men in
the room to be looking at sheets like this and
4117
saying why are we buying desks and equipment
and borrowing? But somebody ought to be
looking in this Legislature. Mr. President,
maybe this 80 whatever it ends up -- $81
billion, $82 billion, $83 billion budget is
too big a job for three men in a room. Oh,
maybe we need to bang heads and get the
billions for school aid, right, and this and
that. But somebody is not scrutinizing a
couple of hundred million dollars here and
there.
I cannot believe that my colleagues
on either side of the aisle would ever vote to
incur seven years' worth of debt and interest
payments to buy these kind of items that ought
to just be purchased by OGS as part of their
normal bidding out of state appropriations,
pay as you go.
The big picture on debt -- the big
picture on debt, by the way, I know there used
to be that thing in Manhattan, that clock that
showed the national debt, spinning away.
Well, just a couple of years ago, it stopped
spinning the wrong way and started spinning
back the right way and lowering it. And for
4118
all the rhetoric, I remember when Ronald
Reagan -- a great president in many ways -
ran for office and talked about getting the
national debt under control. And under his
reign, it tripled or quadrupled, quadrupled,
to the trillions, without a big war or without
any reason in the past history of this country
we incurred debt.
And under President Clinton -
whatever you may fault him about, the first
administration in 60 or 70 years to halt the
growth of the national debt and to turn around
and start reducing it and produce federal
budget surpluses. And it meant a lot, Mr.
President.
I talked earlier about
consequences, about how Senator Marchi was
right and no one listened. And years later,
oh, the city almost crashed. And how real
people paid a real price for that in the
education of children, the safety of their
streets, the quality of their lives, the
quality of their housing and everything else.
Well, real people benefited from
that fiscally prudent Democratic eight years
4119
in Washington. Real people did. Because
instead of the bankers keep making more and
more in interest, there was money available to
focus on things like education and health care
and other things that we as a government ought
to be doing.
Mr. President, our constituents
don't want us to make investment bankers,
investors, and bond counsels richer. They
don't view that as our job. They want us to
spend their tax money on their needs -
education, health care, providing dignity for
our senior citizens, prescription drugs. They
don't want us to pass their tax money over to
those who already have plenty.
And that's what we do when we incur
debt. We just got the census, Mr. President,
a couple of weeks ago. Good news, New York
grew. What did we come to, 18 million?
California is what, 32 million? Okay. Well,
the total net tax supported debt in California
is $21.67 billion. $21.7 billion, and they
have over 30 million people. New York State's
net tax supported debt is $37 billion and
growing. The Executive projections are by the
4120
end of next fiscal year it will increase by
$1.36 billion, 3.7 percent. That's before the
end of this fiscal year that we're now
entering on Sunday. We have far more debt
than California does.
And you know what the number-two
debtor in America is among states and
localities? New York City, at $31 billion.
New York State, $37 billion and growing. It
will be $38.4 billion by the end of the coming
fiscal year. New York City is at $31 billion.
And the state of California is at $21.7
billion. Massachusetts, $16 billion, New
Jersey, $14 billion, Florida, $13 billion,
Connecticut, $10 billion, Illinois,
$9 billion. MTA -- Metropolitan
Transportation Authority, state agency, $7.8
billion. More debt than all the rest of the
states but for the ones I've named. Then we
have Ohio, Washington, Pennsylvania, and
Texas. Oh, and the TBTA, Triborough Bridge
and Tunnel Authority, comes in at $5.4
billion, more than most of the other states.
And not to be forgotten, we get Georgia,
Maryland, Michigan, Virginia, Hawaii,
4121
Wisconsin, Kentucky. And guess who's next?
Nassau County, New York, $2.7 billion.
The top of the list nationwide,
New York State has New York State, New York
City, the MTA, the TBTA, and Nassau County.
We've had some great years
economically in New York. What's going to
happen when we don't? Who's going to pay the
piper? Debt service. Our localities, oh,
they're going to support us? The state gets
in trouble because of our debt growth, our
unrestrained debt growth, our revenues
suddenly go down? The sad part, Mr.
President, is if we hit tough years, if the
economy goes down and our revenues go down, we
still have to pay for tax cuts locked into law
that haven't kicked in, because we haven't
done them on a pay-as-a-you-go basis.
And we have to pay -- not the COPs,
not the certificates of participation. That's
something new we're authorizing in this bill.
But we do have to pay the nearly $5 billion in
interest and principal in the debt service
bill here. And then we have other obligations
in federal funds and so on. And we end up
4122
with a few billion dollars from which we can
extract whatever deficit we end up with in
some future year. And I have been here long
enough to see years where we were three and
four billion dollars in the hole. And you
have to take that out of not the $83 billion
or $82 billion budget, you have to take it out
of $7 billion or $8 billion that is really all
we have any real discretion over.
So what happens? The kids pay, the
parks pay, the senior citizens pay, education
pays, highways pay. In this debt service
bill, Mr. President, we are authorizing
borrowing of about $500 million for highways,
I believe. And elsewhere in there, we're
doing a dry appropriation, nearly
$300 million, while we're borrowing
$500 million for the same purpose. Hello, why
aren't we just eliminating that $300 million
of that borrowing and paying our tab?
The fact is that debt in New York
State -- and our State Comptroller has pointed
it out in reports year after year, his concern
for the level of debt in this state -- has
just run out of hand.
4123
Now, when I say that New York
State's tax supported debt is growing and will
grow to a total of $38.5 billion -- that's
just the state tax supported debt -- by the
close of this coming fiscal year, these are
the Executive's projections. Oh, what about
full faith and credit? What about the voters?
Of $38.5 billion in state tax supported debt,
only $4 billion of it have been approved by
the voters of this state. And it's no wonder,
Mr. President, that the last bond issues have
all gone down. But we don't listen to the
voters, and we subvert the constitution with
back-door borrowing. $34.5 billion of it is
back-door borrowing, borrowing it through
authorities, guaranteeing it with state tax
revenues, a practice that was rhetorically
condemned by everybody for decades, but we're
still doing it.
By the way, if you add what the
authorities borrow and owe, secured by their
own revenues, not by tax revenues, you're up
at about $100 billion. You're up at
$100 billion in state debt between our
authorities and our tax supported debt. A
4124
hundred billion. And that doesn't include
New York City, Nassau County.
Mr. President, we're being fiscally
foolish here. We're making a lot of
investment bankers, bond counsel and what have
you very, very wealthy, at the expense of the
future of our children and education.
Mr. President, I learned something
in that New York City fiscal crisis. Up until
then -- and I was younger then -- I thought,
I'm a very progressive -- actually, you could
call yourself a liberal then, Mr. President.
It was okay. And I thought, oh, well,
liberals borrow, we're going to do all these
great things with it. That taught me
something. If you're really progressive and
you care about the future and you care about
investments in the future, whether it's in the
environment, education, health care, providing
for seniors, meeting our responsibilities, our
social responsibilities to those in our
society who need it, then you must be fiscally
prudent. Because fiscal recklessness costs
those very people, those very people we are
all sworn to serve.
4125
And I am really disturbed about
this. I am disturbed that in past years,
based on a good idea that Senator Gold had -
let's do debt service right away, there's no
discretion in there. And I went along with
it, we all did, unanimously passed. Debt
service. As Senator Stafford said, Mr.
President, this is the Executive's debt
service proposal. We all take it at full
value. Well, we've got to pay that.
Well, there's stuff in here we
don't have to do. There's stuff in here that
isn't paying for past debt. There's new stuff
in here. There's new debt in here for things
like automobiles for OGS. What are we doing?
Why are we being rolled over by the Executive
this way? We're being rolled, Mr. President,
by the Executive. On the big picture we're
being rolled because this Legislature won't
get together and use the talents of all of its
members to produce a budget and then stand
behind it in a bipartisan way, stand behind
that budget in the face of the Executive.
That's the big picture, where we're being
cowed by the Executive. And in the little
4126
picture, we're swallowing a couple of hundred
million dollars in reckless, reckless
borrowing for things that should not be
financed, that nobody should make a nickel of
interest on.
Mr. President, it's really a
serious issue, this debt issue. And I'm kind
of glad, obviously -- why did I read it?
Because we've announced we want to fully
debate all bills. But I learned something
when I read it. I learned we're being had,
Mr. President. We're being had in this debt
service bill. We're being had on the issue of
debt. We're hearing from the Second Floor the
rhetoric, the rhetoric of fiscal
responsibility, and we're seeing the reality
of a 37 percent increase in debt.
When we already have, by far and
away -- on a per capita basis, it's more
disturbing where we've been and where we're
going. On a per capita basis, New York debt
per capita is $2,022 in 1999. Per capita.
That means every man, woman, child, and infant
in New York State, that's the per capita debt.
The national mean for per capita debt, $727.
4127
As a percentage of personal income,
as a percentage of personal income -- and I'm
only talking the state tax supported debt.
I'm not addressing New York City, Nassau
County, or the authority debt. I'm only
really talking about the $37 billion or
$38 billion, not the hundred-billion-dollar
tab that the authorities are running. On the
tax supported debt by personal income,
6.2 percent, 6.2 percent of our personal
income is encumbered this way.
If you look, Mr. President, at the
growth of state debt as -- in 1969 and '70,
state supported debt was 5.6 percent of
personal income. The interesting thing, Mr.
President, and where the rhetoric, where the
rhetoric never matches the reality, if you go
ahead, '74-'75, it was 6.5 percent. Now,
let's get to the infamous Cuomo years.
'81-'82, 3.8 percent. '83-'84, 3.8 percent.
3.5 percent in '84-'85. '85-'86, 3.4 percent.
'86-'87, 3.5 percent. The next year, 3.5
percent. Up until 1990, 3.5 percent. Yes, it
grew. In '90 and '91, 4.1 percent. And in
'91-'92, 5.1 percent. And then it took off,
4128
it took off. 1994-5, 5.9; 95-'96, 6.2. Then
6.3. Then 6.25 percent. 1999-2000,
6 percent.
The rhetoric doesn't match the
reality. As a percentage of personal income,
in these past years the percent has gone up,
the percent of our debt. Yet our revenues
have gone up, our -- the income of the state
has gone through the ceiling in those years.
Yet the percentage of that income that's
encumbered by debt has increased. That's the
reality, Mr. President. The rhetoric is all
politics. The reality is the numbers. It's
gone up.
State supported debt service as a
percentage of all funds. Now we do all funds
budget; right? Well, let's go back to some of
these Cuomo years. '86-'87, 2.5 percent. 2.5
percent, 2.5 percent, in the next years.
'89-'90 went to 3.5 percent. '90-'91 went to
3.2 percent. '91-'92, 3.7 percent. '93-'94,
3.9 percent. '94-'95, 4.1. Oh, now the
Pataki years. '95-'96, 4.4 percent. '96-'97
4.5 percent. '97-'98, 4.8 percent. '98-'99,
4.8 percent. '99-2000, 5 percent. And that's
4129
where we're stuck, 5 percent. Debt service is
five percent of all funds. It's gone up.
It's gone up. Gone up dramatically. It's
doubled. It's doubled. It's doubled since
1986. And the big jump has come since 1995.
Mr. President, we're going in the
wrong direction on debt. We've seen -- we've
seen this before in New York State. Indeed, I
talked about the New York City fiscal crisis.
Never forget, Mr. President, that at that time
the state tottered on the brink of insolvency
because of the full faith and credit -- or,
I'm sorry, the moral obligation bonds in UDC,
in which the investment public lost faith
because of the New York City crisis and some
other things. And indeed, it wasn't just, you
know, people talk. And the great Warren
Anderson, together with the people who were
here then, like Senator Marchi and the then
Speaker Steingut and Governor Carey, and they
saved New York City. And Senator Stafford
voted for it.
And the fact is, they saved New
York City because it was the right thing to
do. But they had to do that to save the state
4130
at the time, to save the fiscal integrity of
the state. And now we're headed down that
path. Runaway debt. Runaway debt, the
responsibility rests right here in this
Legislature, because it represents a lack of
self-restraint, lack of self-control, and a
lack of paying attention to details.
How can we approve this, Mr.
President, when there's $300 million worth of
borrowing for what ought to be ordinary
expenses, annual expenses? Why are we
authorizing the Executive to do this borrowing
and pay interest? Oh, the interest,
5.45 percent interest on all these COPs
borrowings. That's what we're going to pay
over seven years. So that the total payment
will just grow and grow.
Mr. President, more people should
read this bill. More people in this chamber
should understand it's not just routine debt
service. We're not just paying interest on
debts. More people should understand we're
actually making appropriations here to cover
new debt. New debt that we don't even know
we're allowing to be created. New debt for
4131
some of the very wrong things that you ought
to incur indebtedness for.
And, Mr. President, we really ought
to get a handle on New York's debt system. I
know we're going to hear from the Executive
that Standard & Poor's gave New York a
two-step upgrade. I know there are proposals
for constitutional amendments to cap debt and
do all sorts of other things and end back-door
borrowing. But all this back-door borrowing,
Mr. President, just didn't happen. This
Legislature authorized it all over the past
dedicate. This Legislature voted for it.
Sometimes you voted for it because it was in a
big, ugly bill as part of the budget, and you
had to make the Hobson's choices that my
colleagues have talked about when they
described their interest in preserving loft
tenant protection versus their disdain for
Quick Draw.
This debt is a product of the
dysfunctional budget process in New York
State. It is a product of compromises late in
the summer to finally get a budget. This
back-door borrowing is a compromise. One side
4132
or the other wants it because they need
spending in a dysfunctional -- this debt, Mr.
President, is a product of three men in a room
doing a budget. And I don't just say it's the
three men who are now in the room. It's a
product of that process, because a few years
back there were three different men in the
room with a budget, as Governor Pataki pointed
out in his first campaign for Governor.
This runaway debt is not just
because the Legislature lacks self-control,
it's because the Legislature has no control.
The rank and file members have no control over
this process anymore, as they once did. No
control over the process. It's dished up to
us late. It will clearly be very late this
year. I've heard, Mr. President, our Majority
Leader talking about, well, it won't get done
until September. Mr. President, those kinds
of things become self-fulfilling prophesies.
If you believe the budget won't be resolved
until August or September, you're probably
right. If you're one of the three men in the
room and you believe the budget won't be
resolved until August or September, Mr.
4133
President, regrettably, that person is
undoubtedly right. Because it's indicating a
willingness to get it done that late to get
what you want.
Mr. President, our dysfunctional
budget process isn't just, oh, the budget was
late but we'll pass it in August, we'll all
get paid, eventually school districts will get
their money. Yes, some agencies under local
assistance and so on will incur a little bit
of interest charges to carry them over. Some
school districts will be disrupted because
they couldn't plan properly. It's not just
that.
It's taking us into a terrible
hole, a terrible debt hole. Because at the
end of that process, there are so many quick
compromises that back-door borrowing, just
another half a billion, just another
600 million, just another billion and the
Governor gets to spend 500 million of it and
each Majority gets to spend 250 million of it,
and we'll tell you, yeah, it's for, I don't
know, capital programs, we'll tell you later
where it's going. That's what we've been
4134
doing.
And we're digging that hole deeper
and deeper and deeper. And the debt service
as a percentage of all funds has gone up and
up and up.
Mr. President, on this bill, I'd
ordinarily vote yes, because, hey, you know,
we borrowed this money, we have to pay the
interest. But since there are new
appropriations and new authorization in this
for new debt, for things like automobiles, I'm
going vote no, Mr. President. On this one,
I'm voting no.
ACTING PRESIDENT MEIER: Senator
Onorato.
SENATOR ONORATO: Will Senator
Connor yield for a question?
ACTING PRESIDENT MEIER: Senator
Connor, do you yield?
SENATOR CONNOR: Certainly.
ACTING PRESIDENT MEIER: Senator
Connor yields.
SENATOR ONORATO: You opened my
eyes today on something that I'm here 18 years
and I was never aware of this here. I was
4135
always under the impression that debt service
was for the money that we actually owed.
Now you're telling me here now that
we're actually borrowing money that's going to
take us seven years to be purchasing
automobiles, and we currently have somewhere,
depending on whose figures you use, anywhere
from a $2 billion to $5 billion surplus.
Why in God's name would we be
borrowing money when we have a surplus? I
mean, we wouldn't do that at home. If we have
money in the bank, we wouldn't go out and
borrow money where we got to pay 9 or
10 percent interest on it. What possible
justification is there for borrowing that kind
of money for those kind of expenses? I'd like
the rationale for it.
SENATOR CONNOR: Mr. President,
Senator Onorato asked the question. There is
no good rationale.
It's akin to a household that's in
debt that has three credit cards maxed, that
owes a big mortgage and a car loan. And, lo
and behold, a rich old uncle or a great-uncle
leaves them a couple of hundred thousand
4136
dollars. Do they pay off the mortgage? Do
they pay off the car loan? Do they pay off
the three credit cards? No. They actually,
because they have some money now in the bank,
get the three credit card companies to double
their line of credit, trade in the car and buy
a bigger car, with a bigger car payment, and
go spend the $200,000 the rich uncle gave them
and then start charging on the increased lines
of credit.
That's what the State of New York
has been doing, Mr. President.
ACTING PRESIDENT MEIER: Senator
Paterson.
SENATOR PATERSON: Mr. President,
if Senator Connor would yield to me for a
question.
ACTING PRESIDENT MEIER: Senator
Connor, do you yield to Senator Paterson?
SENATOR CONNOR: Yes, Mr.
President. I think I should learn what it
feels like to -- no, I'll be happy to answer a
question.
ACTING PRESIDENT MEIER: Senator
Connor yields.
4137
SENATOR PATERSON: Senator, you
talked about our colleague who served here for
a number of years and was your ranker on
Finance, and you were talking about Senator
Emanuel Gold and how he suggested this back in
'96, which was his first year as the ranker,
and in '97.
And let's go back to that first
budget, the first debt service we ever did.
In that, we passed the CFAP legislation, the
Continuing Enhancement Facilities Assistance
Program, $425 million, much of it for good
measures. $100 million of it went to
refurbish the Buffalo stadium, they've done
street lights, and they've also, you know,
paved the parking lot at the Little League and
that kind of thing. And those would be good
debts.
But the same office supplies and
little items that you could just buy with the
surplus which we had at that time got bought
the same way as this was. And here we are in
2001, we've just about half paid that off, but
the debt service for that allotment, which
really there were three ways that that
4138
allotment was distributed, the Governor
decided what to do with a third of it, the
Majority Leader got a third of it, the Speaker
got a third of it.
So here we are, we've about halfway
paid it back, we're about five years later,
and yet the debt service for that is going up.
So my question is, are you aware
that even in these original debt services,
that we thought we were just paying back the
debt and that you and I and Senator Gold and
Senator Onorato and a number of our colleagues
on the other side of the aisle relied on in
good faith, we were really relying to the
detriment of the taxpayers of the state?
Because here we are in many respects
refinancing a debt that goes to pay for
supplies that the money is sitting right
there.
Now, to be fair, the Governor has
talked about converting $60 million of that to
cash. But we as the Senate and Assembly
haven't even addressed it in our one-house
bills this session.
SENATOR CONNOR: Mr. President,
4139
Senator Paterson raises the point. This has
been going on these past few years. I have to
confess, I was not focused on it and unaware
of it. We did believe that debt service meant
for paying for debt that we were all aware of.
This practice, this practice,
though -- I mean, runaway debt is one issue.
You have to be able to handle paying that back
and look at the future consequences of it.
But the practice of paying for what should be
expense items in accounting terms, expense
items by capitalizing them, is a road to
disaster. It was a road to disaster in the
late '60s and early '70s for New York City,
and it's a road to disaster for the State of
New York.
ACTING PRESIDENT MEIER: Senator
Paterson.
SENATOR PATERSON: Mr. President,
one final question, I promise, for Senator
Connor.
ACTING PRESIDENT MEIER: Senator
Connor, do you yield?
SENATOR CONNOR: Thank you, Mr.
President. I'd be happy to.
4140
ACTING PRESIDENT MEIER: Senator
Connor yields.
SENATOR PATERSON: I want to ask
him, because I am shocked, I'm really appalled
when I hear that the largest debtor,
tax-sponsored debt in this country belongs to
New York State at $37 billion, when in fact we
have roughly, I'd say, three-quarters of the
population of California, who has $16 billion
less debt, and that the second on the list is
New York City at 31 billion.
Then you listed some states, I
guess you got down to number six or seven on
the list before you got to the Metropolitan
Transit Authority. Then you went down four or
five more states, and then you got to the
Triborough Bridge and Tunnel Authority. Then
you gave us a few more states -- some of them
were pretty large states, if I remember -- and
then you got down to Nassau County.
Just generally, if you were to add
up all those numbers, because it's all New
York, how would you assess in gross numbers
all of the debt that exists in the entity of
New York when you put together its local
4141
governments, its municipalities, and its other
institutions?
SENATOR CONNOR: Well, I think
what we're looking at here -- and I don't know
every locality, obviously, in the state. But
just adding up the big ones, through New York
City, and adding them to that number that -
the state-supported debt plus the authority
debt, which is about a hundred billion, we're
talking about here about roughly $150 billion.
And frankly, that's not including
any debt smaller counties may have, no debt of
any counties except for Nassau County. So
excluding all counties but Nassau County, it's
$150 billion. And it's virtually more than
all the other states in the United States
combined.
ACTING PRESIDENT MEIER: Senator
Stavisky.
SENATOR STAVISKY: Is there
somebody who can answer a question for me
concerning this bill, Mr. President?
SENATOR MARCELLINO: Mr.
President, Senator Stafford will be back in a
moment.
4142
ACTING PRESIDENT MEIER: Senator
Stavisky, would you like to wait for -
SENATOR STAVISKY: Perhaps
Senator Connor can answer the question for me.
ACTING PRESIDENT MEIER: Are you
asking Senator Connor to yield for a question?
SENATOR CONNOR: Mr. President,
why are they doing this to me?
ACTING PRESIDENT MEIER: Senator
Connor, will you yield to Senator Stavisky?
SENATOR CONNOR: I'd be happy to
yield, Mr. President.
ACTING PRESIDENT MEIER: Senator
Connor yields.
SENATOR STAVISKY: Senator
Connor, you spoke about -- Mr. President,
Senator Connor spoke about automobiles and
computers and the like. I wonder, Mr.
President, if Senator Connor can tell me what
the useful life is, the way we generally
figure out the number of years that we're
going to engage in a borrowing practice, for a
car.
SENATOR CONNOR: Yes, Mr.
President. For accounting purposes, an
4143
automobile is usually written down, so to
speak, over a five-to-seven-year period. But
from a fleet management standpoint, the
practice is usually to trade in cars, usually
no later than after three years because of the
economies involved in the trade-in at that
point and avoiding repairs and maintenance
costs that go up.
So while just for accounting
purposes they often carry it out over five to
seven years, the real fleet maintenance
practice is usually at three years.
And as I said, Mr. President, in
terms of computer equipment, furthermore, when
we're talking about PCs and things like that,
in my own personal experience, not just at
home but some other organizations that I have
responsibility for, one political organization
where I thought when I became leader six years
ago that, gee whiz, we're going to spend
$35,000 and have computers, and my people told
me about a year ago we need all new computers.
What happened to the other? And the answer is
they're really not very good more than three
or four years.
4144
So computers, generally businesses
are looking to upgrade after three or four
years.
SENATOR STAVISKY: Thank you, Mr.
President. I do have a question for Senator
Stafford.
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield for a question?
SENATOR STAFFORD: By all means.
SENATOR STAVISKY: I have two
questions, really. Just two questions.
Senator Stafford, I'm troubled by
what Senator Connor has spoken about, about
the increase in the borrowing in the sense
that we are in a sense appropriating money
here in this debt-service section of the
budget. Can you respond to the points that
Senator Connor raised?
SENATOR STAFFORD: I certainly
will. And I also would like to thank Senator
Connor for answering questions here in this
very, very difficult field. And I can see
that he understands how taxing this is, no pun
intended.
On a serious note, actually there
4145
is money made available to pay the debt, the
interest, but any authorization for what that
will be spent for has to be in the main budget
bill. So I think we should point that out.
Any new programs or any new authorizations,
anything new, any new cars or anything you're
going to buy.
SENATOR STAVISKY: But, Mr.
President, if the Senator would yield.
ACTING PRESIDENT MEIER: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: The
Senator yields.
SENATOR STAVISKY: Senator Connor
indicated that there were -- I don't have the
section that Senator Connor was referring to
in the bill, but apparently there are
appropriations for cars and computers and the
like.
SENATOR STAFFORD: Yeah, that's
exactly right. But that's already been
authorized in the previous budget. And
therefore, there are no new authorizations in
this budget.
4146
SENATOR STAVISKY: If the Senator
would yield for one last question.
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: He
yields.
SENATOR STAVISKY: On page 14,
the last page of this budget bill, there is
$95 million appropriation for a special
contractual obligation payment to the
Dormitory Authority. The Dormitory Authority,
as I understand it, assumed the contingent
obligation authority of that medical care
facilities -- I don't remember, it's an
acronym. How much has been used of that $95
million?
SENATOR STAFFORD: Before
answering exactly, I have to make this point
also. This will be a little inside for those
of us who have been here for a while. But
Senator Connor now can be the Harvey Strelzin
of the Senate. Harvey used to read every
single bill.
SENATOR CONNOR: In the bathtub.
4147
SENATOR STAFFORD: That's right.
SENATOR STAVISKY: No,
Assemblyman Strelzin announced on the Assembly
floor one day that he took a bill back to the
old DeWitt Clinton Hotel with him, he read the
bill in the bathtub, in a tub filled with hot
water, Mr. President, and Assemblyman Strelzin
announced that bill was so bad the bathwater
turned cold.
SENATOR STAFFORD: Harvey was
quite a fellow.
This is a dry appropriation.
(Laughter.)
SENATOR STAFFORD: I was serious.
A dry appropriation.
SENATOR STAVISKY: Could you
explain to me -- well, I know what -
SENATOR STAFFORD: Just a second.
SENATOR STAVISKY: While Senator
Stafford -- Mr. President, if I could explain
my concern, my interest in this bill, perhaps
I can explain a little bit -
SENATOR STAFFORD: What it is,
Mr. President, no cash will be used. It's
there in case it's needed, but it's not
4148
expected it will be used.
SENATOR STAVISKY: And none has
been spent up to now?
SENATOR STAFFORD: None has been
spent, no.
SENATOR STAVISKY: Mr. President,
on the bill.
ACTING PRESIDENT MEIER: Senator
Stavisky, on the bill.
SENATOR STAVISKY: The reason I
asked that question is that there's a hospital
in Queens that was categorized as a
depressed -- a distressed hospital, Flushing
Hospital. It eventually, if my memory is
correct, went into bankruptcy. And I was
curious as to whether any of the funds have
been used to help distressed hospitals such as
Flushing Hospital, and that was the thrust of
my question. And you've answered it, and I
thank you.
ACTING PRESIDENT MEIER: Senator
Schneiderman.
SENATOR SCHNEIDERMAN: Thank you.
Thank you, Mr. President. If the sponsor
would yield for a question.
4149
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield for a question?
SENATOR STAFFORD: Yes, Mr.
President.
ACTING PRESIDENT MEIER: The
Senator yields.
SENATOR SCHNEIDERMAN: I share
the concern that Senator Connor and others
have expressed here for the runaway debt for
the State of New York. And I note that in
addition to state-supported debt, there is a
serious problem with debt of New York's
authorities. Are you aware whether or not the
revenue of the Metropolitan Transit Authority
and the TBTA have increased over the last five
years or decreased?
SENATOR STAFFORD: They have been
increased gradually. I don't know the rate.
SENATOR SCHNEIDERMAN: Through
you, Mr. President, if the sponsor would
continue to yield.
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: In fact,
4150
my understanding is that in the case of the
MTA there has been an extraordinary increase
in revenues due to the increase in ridership.
Why is it, then, that the MTA's debt during
this period of an expansion of its revenue has
continued to grow?
SENATOR STAFFORD: I am very
pleased to answer that question, because we in
the North Country are very pleased that we are
making railroad cars and we are selling the
railroad cars to the MTA. They're automatic.
I think you'll find that, you know, just very,
very enjoyable.
That's the reason, I would suggest,
that there have been equipment purchases. And
we of course hope that we'll be able to
continue to improve the equipment for the MTA,
the rail equipment.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, if the sponsor
will continue to yield.
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: The
4151
Senator yields.
SENATOR SCHNEIDERMAN: And I note
that the North Country cars are also
graffiti-proof, which I think is a significant
contribution to our quality of life.
My concern, though, is why these
are being paid for with debt, increasing debt
during a period when operating revenues have
expanded significantly. The actual annual
budgets of the MTA, as far as state
appropriations, have in fact gone down. So
the debt has gone up even though the revenues
are increasing. Do you have any explanation
for that?
SENATOR STAFFORD: Now, this is
very sensitive which I am being about to say.
And I shouldn't go here. I shouldn't even
mention this. But someone who goes to work
and rides the MTA to work and from work, I
believe that costs $3.
Is that right, a dollar and a half?
Well, I take the subway all the time. It's a
dollar and a half. So that makes it -- is
that $3? Right. Right.
Now, some of my friends from
4152
upstate are scowling. I understand why.
Those who drive to work and come home, it's
very often, often, much more than that.
So I'm suggesting that the revenues
are such because we have such a very
reasonable fee there that we need to do what
we are doing in order to provide the equipment
that is necessary.
SENATOR SCHNEIDERMAN: Thank you.
Thank the sponsor for his answers.
I have another issue I want to
address. But let me -- I want to speak, if I
may, Mr. President, on the bill on this
subject.
ACTING PRESIDENT MEIER: Senator
Schneiderman, on the bill.
SENATOR SCHNEIDERMAN: Because I
do not know much of mountains, streams, and
valleys, but I know a lot from subways. In
fact -- and I urge our distinguished sponsor
to consider -- in the history of the United
States, there has never been a public
transportation system receiving as small a
state subsidy as the buses and subways of the
City of New York. The way to calculate this
4153
is to determine how much of the cost of riding
on the subways is borne at the farebox with
our token dollars, or in this case now our
Metrocard dollars. In the case of the buses
and subways of the City of New York, we are
paying for well over 80 percent of the cost.
That is half what the subsidies for the Long
Island Railroad are. Long Island Railroad
commuters only pay about 45 percent or 40
percent of the operating cost. Metro North
doesn't make out quite as well as Long Island,
but a lot better than the riders of the buses
and the subways of the City of New York.
What has been happening over the
last five years, and I think it is one of the
great disasters of public policy that -- along
with several others encompassed in this debt
support bill, is that the State of New York
has been taking our token dollars, reducing
the state's appropriations for the MTA, using
the money for other purposes so that MTA is
forced to borrow more and more and more. In
fact, we are now doing something which as far
as I'm aware has never been done by any
transit system in the history of the country,
4154
which is we are issuing bonds backed by token
dollars for operating costs. Not for capital
costs, for operating costs. We are mortgaging
our future.
And in fact, the revenue of New
York State's authorities, as our tax revenue
has in the last five years, has gone way up.
The great national boom, which sadly seems to
be coming to an end, along with the end of the
Clinton administration, has provided great
infusions of funds to our coffers and to the
coffers of the MTA, the TBTA, and other
authorities.
What have we done with the money?
We have spent it in a way that is as
irresponsible as anything you can imagine. We
have not cut the size of New York State's
government, we have not made some great
substantial improvement in the services we
provide to our constituents. We have had some
tax cuts which really have not had any
particular effect unless you're at the very,
very top of the tax brackets. And we have
gone further and further into debt.
If during the flush times we are
4155
borrowing more and more, what happens during
the recession? The Wall Street Journal today
has an article talking about private sector
lending, about banks and how during the boom
they allowed loans they would not otherwise
have allowed, how they've loosened their
criteria for lending, and what a disaster some
are now facing with the coming downtown in the
economy.
We do not have, under the Pataki
administration, an economic development policy
in this state. We have an economic disaster
policy. And I know that this is not just some
sort of liberal New York point of view,
because I received a report not long ago from
an organization that I don't usually find
myself in agreement with, and it criticized
the Pataki administration for the loss of
jobs, for the expanded debt, for the fact that
we've got all these increased revenues where
you can't tell what they're going for, and it
was a memorandum from Change New York.
Now, when Change New York's
analysis and my analysis is the same, I think
we have a fairly good -- we have a problem,
4156
yes. Thank you, Senator Balboni, for
acknowledging we have a serious problem in the
State of New York.
I urge that this sort of borrowing
and lending is a disaster for our children and
our grandchildren. It is not something that
we can -- we shouldn't be able to hold our
heads up and go back to our constituents and
say we have done this with the budget, in
spite of the fact that we've had years of
great, great infusions of revenue. We have -
at the same time our revenues have gone up,
we've gone further into debt than any state in
the history of the country. Our authorities
are going further into debt in spite of the
fact that their fareboxes are full and their
revenues have increased.
This is an economic disaster
policy. And we have to take some action here
in the house, which I understand has prided
itself on fiscal prudence in the past. And I
would urge that we try and give some reality
to that and not just scam our constituents and
scam the public and say we're fiscally prudent
when we're doing exactly the opposite.
4157
I have to say that after listening
to the debate here, I'm going to be
constrained to vote against this bill as well.
Thank you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Dollinger.
SENATOR DOLLINGER: Thank you,
Mr. President.
This particular piece of
legislation, from my point of view, is a bad
cartoon show. This is the worst kind of
cartoon show that we could put on the people
of the State of New York, because we're about
to do something that has very little
resemblance to reality and, frankly, I think
is a testament to one of my favorite cartoon
characters. This budget item paying for debt
should be called the Wimpy bill.
Why? Because you remember that
fabulous character from the cartoon show, J.
Wellington Wimpy? J. Wellington Wimpy was in
the Popeye cartoons. And remember what he
constantly said? Remember his claim to fame?
He said -- what did he say, Senator Stafford?
You saw the cartoons. I've seen the cartoons.
4158
His line was: I will gladly pay you Tuesday
for a hamburger today.
New York State has been buying
hamburgers by the droves, by the truckload.
We've bought cowherds of hamburgers. And
we're waiting for Tuesday to come. And in
this Legislature's point of view, Tuesday will
never come. We'll just keep buying
hamburgers, accumulating hamburgers, with the
notion that someday, some other Governor and
some other Legislature will have to start
paying them back when Tuesday arrives.
The wisdom of J. Wellington Wimpy
is still present today. Senator Connor talked
eloquently about the problem with borrowing,
about the danger of borrowing. And I would
just remind all of my colleagues in 1848,
after twenty years of doing what this
Legislature refuses to do, for almost 20 years
after the boom created by Erie Canal, the New
York State Legislature, the legislators who -
well, they didn't sit in this chamber, because
this building hadn't been built. But they sat
in this house, and they refused to impose
taxes. No taxes. Why? We will rely on debt.
4159
It's a wonderful thing to do. We can borrow
all this money, we don't have to raise taxes
to pay for expenses. As the state grew, the
state boomed. Everything was rosy. Until, of
course, the financial crisis of 1845, when the
State of New York virtually went bankrupt.
The wisdom of the voters in the
State of New York was eloquently spoken
because they asked to convene a constitutional
convention. They went to the convention and
they did one critically important thing. They
enacted an amendment to the constitution from
the people that said the State of New York can
only borrow through general obligation debt
secured by the full faith and credit of the
State of New York, and it may only do that
with voter approval.
That amendment, in my opinion, has
never been honored. That amendment has a
century of avoidance. The brilliant work of
Robert Moses, who started it, the brilliant
work of others who expanded it so that the
State of New York -- John Mitchell, the
brilliant work of John Mitchell, what a
wonderful idea. It's too bad later in life he
4160
went astray. But those men rebuilt the notion
that the State of New York could borrow
without voter approval, avoiding the
strictures of our constitution and avoiding
what the people told them they didn't want to
have happen.
I'm always astounded that this
Wimpy bill comes up. And every year we hear
discussion, and I -- with all due respect to
Senator Bruno, who talked about those horrible
practices of the past, we can't go back to
those horrible days in the late '80s and early
'90s when we were spending more money than we
were taking in. I would of course remind
Senator Bruno, since I have the votes in the
'90 budget, the '91 budget, and the '92
budget, that Senator Bruno and almost every
Republican in this chamber voted for every
single one of those budgets. And they voted
for every penny of debt.
This is not a problem that we can
proscribe to anybody but ourselves. We are
where we are today because the majority in
this house -- Democrats and Republicans -
mostly Republicans, since you control what
4161
goes on the table, what's there to eat. You
place the food on the table. And your
position has been, for the last two decades,
borrow as much as we want. Why pay for it
with cash? Why have to go to the people and
raise taxes to ask them to pay as we go?
Let's borrow money. We haven't borrowed
enough, let's borrow more. Let's keep going
until Tuesday comes.
And there's no question in my mind
that this Governor is the personification of
J. Wellington Wimpy, because debt in this
state has risen by almost 40 percent since
George Pataki became Governor and told us all
we're borrowing too much money. There
couldn't be a better personification of a man
who wants to get a hamburger today and wait
till Tuesday than the Governor of this state.
And I think for someone who campaigned against
increases in public debt to now be offering up
budgets, to be giving us messages to spend
more public debt, is an outrage and, frankly,
a breach of his projection to the people made
six or seven years ago.
I think that the time has come to
4162
recognize that Tuesday is right around the
corner. The Bluto of bad debt is at our door,
Mr. President, and I would suggest there's no
Popeye out there. This is not something, with
all due respect to Senator Stafford, where a
Popeye is going to show up at our doorstep,
down a can of spinach, and the problem will go
away. My guess is that it's about 10 o'clock
Monday night, Tuesday is a couple of hours
away, and here we are on the doorstep of this
enormous problem created by public debt, the
problem that the people thought they had
solved in 1848, the promise that was made more
than a century and a half ago that we continue
to breach every single day, Mr. President.
I think this bad debt is going to
swallow us. I think it's going to potentially
create an enormous problem for us. I can't
continue to borrow money this way. I know
Tuesday will come sooner than we all think.
And when it does, this state will be in
enormous, enormous trouble.
I will vote no, Mr. President.
ACTING PRESIDENT MEIER: Senator
Duane, do you rise to further torture the
4163
Popeye metaphor?
(Laughter.)
SENATOR DUANE: Through you, Mr.
President, I was rarely allowed to watch
television growing up, so I missed a lot of
those shows. Only "Leave It to Beaver" and
"Donna Reed," I think.
But on point, New York State has
nearly $40 billion in debt, of which the
voters have only approved about $4 million of
that debt. The rest of that debt has come
through a group of authorities -- the
Dormitory Authority, the Empire State
Development Corporation, the State of New York
Mortgage Agency, Housing Finance Agency,
Battery Park City Authority, Environmental
Facilities Corporation, Long Island Power
Authority, and the Energy Research and
Development Authority. There might even be
more than that, but those are the ones that
I -- I can't say I have a tremendous amount of
knowledge about them, but I have some
knowledge of them. I'm not sure that most
people in the state have very much knowledge
about these authorities.
4164
I recently went to my first meeting
of the PACB board, the Public Authorities
Control Board, where the other billions of
dollars are approved. And we did spend a lot
of time earlier today discussing the
terribleness of three people in a room doing
our year-by-year budget. But in fact, we have
vested the power to put our state $36 billion
into debt in just the hands of three people in
a room. In a meeting that took about 15
minutes, and probably would be shorter if I
hasn't asked some questions, billions of
dollars -- or maybe not billions of dollars
yesterday, but certainly tens of millions of
dollars were decided on. There was very
little detail given out about what the
projects were. No minutes were taken of what
was happening at the meeting. There's no tape
recording of what goes on there.
When I asked for addresses of some
of the companies that were getting funding
through the Empire State Development
Corporation, there was a lot of shuffling of
paper. There were a lot of "I'll get back to
you with that." And we were talking about
4165
giving them millions and millions of dollars
allegedly for job retention and job creation.
CBS was on the list, tire companies, chemical
companies. And some small businesses were on
the list as well.
I went on to ask how it is that we
measured whether or not they had actually done
their job retention or whether they created
jobs. And unfortunately, I would have
thought, by the way, that minutes of the
meetings from three years ago would have been
put on the table and then reports on how the
companies had fulfilled their obligations on
job retention and job creation would have been
put on the table. But they didn't have that
information. After a lot of sort of
harrumphing, I was told that I would be
provided with that information when reports
were done. Although it remains to be seen
whether I'll actually get to see those
reports, but hope springs eternal.
But three men in a room -- the
minority parties of the legislative bodies
don't get a vote. We can sit at the table,
but we're not allowed to vote -- make a
4166
decision about approximately $36 billion in
debt to the State of New York. Mind-boggling.
The Constitution of the State of
New York envisioned that the voters of the
State of New York would be approving what our
debt would be, and they approved approximately
$4 billion of that $40 billion. And sadly,
the millions of people who live in the State
of New York approved $4 billion, and three
people approved $36 billion. There's
something terribly wrong with this picture.
I'm not claiming that each and
every job-retention program is terrible or
that every program that says that it will
create jobs is terrible. I'm not saying that
using bond money to provide for clean water
around the state is a terrible thing. I mean,
that's what the Environmental Facilities
Corporation does. But I have to tell you, the
things that I saw in that one meeting and the
things that I've seen in the past are,
frankly, irresponsible and are really
mortgaging the future of our state.
To saddle the people of the State
of New York, and particularly the young people
4167
of the State of New York with this crushing
debt is just unconscionable.
Before I came here -- and I know it
was another administration, and I'm certainly
holding them accountable -- I think we like
sold the prisons to the Thruway or something
like that at one point. Nothing as terrible
as that happened yesterday. However, the
exact same system that allowed the state to
sell the state's prisons to the Thruway
Authority remains in place. I can't imagine
that the framers of the Constitution and the
voters who approved it ever imagined that
there would be that kind of abuse or, frankly,
the kind of abuse that allows three men in a
room to give away millions and millions of
dollars without even on the spot knowing what
the address of the company is or what they do
and what they want to use the money for.
These are difficult economic times
still in the State of New York. Our economy
is still not as diversified as it should be.
We may or may not be in for a very bad
economic time. And I've been through a few of
them already. I was working in the stock
4168
market in 1987, and I can tell you that was a
very bad time. I don't know what the future
holds. But whether times are going to be good
or times are going to be bad, $36 billion of
debt that's been approved by three men in a
room cannot be a fiscally responsible thing to
do.
I'm going to continue to serve on
the board, even though I don't have a vote, in
the hope that I can continue to bring
information to this body on what's really
going on there. Because we're talking about
the people's money. We would have lots more
money to spend on programs which help people
if we weren't saddled every year with paying
back interest and occasionally principal on
enormous debt.
So once again, I find myself faced
with a very difficult situation here on the
floor. Earlier today I had to vote on a
budget which contained really horrible things
in it -- some good things, but some terrible
things; it was just a continuation of last
year's budget -- when I think our time would
have been better spent working on the 2002
4169
budget. If we'd started working on that right
as this session began, we would be there.
We're not. It's embarrassing. I mean,
fortunately, or to our credit, we're still
here. I hear from our side of the aisle that
people would be willing to stay here and get
the budget done. Our colleague in the
Assembly on both sides of the aisle saw fit to
go home, I think that's a disgrace, without
even working on the 2002 budget.
So even though protections for
people I care about very deeply, loft tenants,
was in that, I voted against it because I
thought it was an outrage. And now I'm being
faced with another outrage. Billions and
billions and billions of dollars in debt that
we are just going to let go through,
$36 billion of that approved by three men in a
room. The people on this side of the aisle,
on one side of the aisle in the Assembly had
no voice in that how that $36 billion gets
spent. We're going to vote on that today.
We're going to continue to saddle
New Yorkers with debt. I realize that we have
to pay our bills. We don't want to default on
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this debt. We've boxed ourselves into a
corner. It's financially irresponsible, but
there's nothing else we can do about it. It's
going to be a tough decision for me to decide
how to vote on this, because I got to tell
you, it's really -- fiscally, it's just -
it's terrible, it's an outrage, it's
embarrassing.
It really hurts us when we go to
the market to try to float our bonds. We
really set the standard for irresponsibility
in terms of the level of debt which we have
foisted upon the people of the State of
New York. And not a lot of us -- I mean, many
of us -- and I don't want to guess what the
median age is in here, but for people younger
than the median age of the people in this
body, that's where the burden is to have to
pay off all this debt.
That we don't consider paying as
you go for a lot of things that aren't going
to last for the term of the debt that we're
putting out there is just completely wrong.
If a corporation did that, the shareholders
would revolt. I don't know why New Yorkers
4171
not only are not revolted by the way we deal
with debt in this state but don't revolt
against it.
You know, once again, I find
myself -- I mean, you understand how I feel.
This is incredibly frustrating. $40 billion
in debt, the voters approved about $4 billion
of that. The other $36 billion, three men in
a room. And we are mortgaging our future and
the future of this state that way. Shame on
us.
ACTING PRESIDENT MEIER: Any
other member wish to be heard on the bill?
Senator Stachowski.
SENATOR STACHOWSKI: If Senator
Stafford would yield to a couple of questions.
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield a question?
SENATOR STAFFORD: Always to my
colleague Senator Stachowski from Erie.
ACTING PRESIDENT MEIER: The
Senator yields.
SENATOR STACHOWSKI: Well, first,
like to revisit a question that Senator
4172
Stavisky asked and just ask for a little more
explanation, because I got confused by the
answer. And the question she asked was why
would we be borrowing money to buy cars now,
and the answer was that -- how can we do that,
and the answer was that it's from a previous
budget.
But my question was, would it be in
this year's budget? Because if it's in a past
budget, why wouldn't we just pay for the cars
with money we have since we have a surplus?
Why would we be borrowing money that we'd
paying for the next seven years for cars that
we had in last year's budget? That part I
didn't understand. Maybe you can explain
that.
SENATOR STAFFORD: Mr. President,
I want to compliment Senator Stachowski
because he got right to the heart of the
issue. And he's the one who usually says,
like me -- well, anyway, we're -- we're -
SENATOR STACHOWSKI: Simple guys.
SENATOR STAFFORD: We're the
same.
You know, it's a balance. It's a
4173
balance. Now, when I was growing up -- some
debate whether that has ever happened. But
anyway, I was told, you know, you pay for
things and you don't charge them. And I can
actually remember when people didn't have
mortgages. I can remember that.
Unfortunately, I am not one of them.
And it's a balance. You I think
will have to agree that it is an accepted
principle that you can have an asset and you
can spread out the payment and it makes it
possible to have that asset when you might not
be able to pay for it in full.
Now, you will find that that's very
much part of our economy nowadays. And it is
of course not good, like anything, if things
are overdone. But on the other hand, I think
you'll find that what we have done here is
acceptable and prudent. And what we have done
is taken assets, whether it's equipment, real
estate, and have spread out the payments.
SENATOR STACHOWSKI: Thank you,
Senator. I can remember my father didn't have
a credit card till he was about 70 because a
lot of the trips he would go on, the hotels
4174
wanted a credit card when you checked in.
SENATOR STAFFORD: I didn't have
one until I was 60.
SENATOR STACHOWSKI: And he would
always pay cash. And even though he had a
pocket full of cash, they wanted him to get a
credit card. So when he turned 70, he finally
got one. He gave in to public pressure. So
to speak.
But anyway, on the debt reduction
and reserve fund, we're putting $500 million
there, much of which, my understanding is, to
be used for some transportation projects this
year. At least that's what the Governor
inferred when he was talking about how he was
going to make up for the bond issue going
down.
And since that money is going to go
from there to pay for some highway and road
bridges financing, why wouldn't we just take
the money from the surplus that he's putting
there and just put it into the highway and
road bridge trust fund?
SENATOR STAFFORD: Mr. President,
we're interested in using more for hard
4175
dollars, there's no question about it.
And one other point on credit
cards. I have to point out that I don't know
whether any of you read The New Yorker. We
get that upstate. Does that go into the city?
And someone is walking into an office, and
they say "I just received my prerejection from
my credit card." So very interesting.
SENATOR STACHOWSKI: Well, back
to the question, if the Senator will continue
to yield.
It's still my understanding that
some of the money put into the debt reduction
and reserve fund is going to be used for
capital projects, mainly highway projects.
We're taking money out of the surplus and
taking it and instead of just putting it in
the budget and spending it, we're putting in
the debt reduction and the reserve fund and
then we're going to take it out and spend it
as highway money. What is the advantage of
doing it that way as opposed to just putting
it into the dedicated highway and road fund
and have the projects named?
SENATOR STAFFORD: Well, it's
4176
actually for projects in the future. And from
what I can see -- and again, looking at it
very simply, I don't really that see that much
of a difference myself.
SENATOR STACHOWSKI: Thank you,
Senator. And I don't mean to stay on one
thing too long or beat a dead horse, et
cetera, but is there -- let me rephrase that
part, since I think I understand part of your
answer, but I'd like to get a little other
part.
And that would be, is there any
advantage, if the Senator will still yield, to
putting the money in a debt -
ACTING PRESIDENT MEIER: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: I will.
SENATOR STACHOWSKI: -- reduction
and reserve fund rather than just putting it
directly into the transportation area where it
could be spent in the future anyway?
SENATOR STAFFORD: It just gives
us a choice of how we would do it in the
future. It's there for the future if we
needed it. We don't have the projects exactly
4177
pinpointed. And when we do, the funds will be
there. You could call it a small rainy day
fund.
SENATOR STACHOWSKI: Thank you.
The majority of the capital projects are going
to be financed through that fund. Is it going
to be only for -- the money we're going to use
out of that for capital projects? Let me
be -- if the Senator would continue to yield,
which I was a little premature in just
assuming you would.
SENATOR STAFFORD: Yes.
SENATOR STACHOWSKI: I have to
ask, though, because I don't want the Acting
President to jump up and hit the gavel on me.
So if you would, the money we're
putting in that fund and we're going to do
capital projects, are they going to be only
transportation or might we use some of that
money for some other capital projects?
SENATOR STAFFORD: I've
received -- I'm getting a very -- there's a -
the answer here, it gives us some leeway. And
it's expected this will be for transportation.
But to answer your question
4178
directly, there is a possibility that it would
be used for other capital projects.
Possibility, can be, same thing.
SENATOR STACHOWSKI: If the
Senator would continue to yield.
ACTING PRESIDENT MEIER: Senator
Stafford, do you continue to yield?
SENATOR STAFFORD: Right.
ACTING PRESIDENT MEIER: Senator
Stafford yields.
SENATOR STACHOWSKI: Have the
overall debt service disbursement levels
behind these budget appropriations been
changed through the negotiations this year, if
there have been any? Or is this strictly
still the Executive projections?
SENATOR STAFFORD: It's more than
enough to cover the Executive projections.
And we have it there, as I say, so it will be
available for what is necessary.
SENATOR STACHOWSKI: If the
Senator would continue to yield.
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield?
SENATOR STAFFORD: Yes.
4179
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR STACHOWSKI: Can we
assume, then, since there is more than enough
to do that, there would still be a possibility
that either the amount there or some of the
projections could change as we go further down
the road in the budget process?
SENATOR STAFFORD: Mr. President.
Senator Stachowski has done his homework.
Yes.
SENATOR STACHOWSKI: Thank you.
On another area where we spoke
earlier about, where we have appropriations in
certain funds, as Senator Stavisky mentioned
the distressed hospital fund, and we have what
we call dry appropriations or zero
disbursements, is there a reason why we need
to have -- I can understand the hospital part,
because we have it in case we need it. But
say, for example, in the general obligation
serial bond redemption. And if the Senator
would yield, I will ask him a question on it.
ACTING PRESIDENT MEIER: Senator
Stafford, I believe there's a question on the
4180
way. Will you yield?
SENATOR STAFFORD: Yes.
SENATOR STACHOWSKI: There's a
question coming.
ACTING PRESIDENT MEIER: He
yields.
SENATOR STACHOWSKI: In the
general obligation serial bond area, there's
$225 million. And in payments of federal
arbitrage rebates, there's $15 million. Both
of those have zero disbursements. Is there
the potential for that much need, or do we
just have that much money there?
SENATOR STAFFORD: Mr. President,
there's always the potential. And Senator
Stachowski is also getting to the heart of
what some of us like to say here's how much
money there is, here's what we're spending,
here's what we left over.
The budgeting process, my friends,
gets very complex. And when they start -- we,
not they, we start talking about dry
appropriations and money won't be spent and we
have this included but this is not hard
dollars, to try to explain that, I go back to
4181
my very simple explanation that I suggested
yesterday about budgeting. And remember, you
and I always have simple explanations.
SENATOR STACHOWSKI: Absolutely.
SENATOR STAFFORD: You can't
always be sure exactly what is going to be
needed. Therefore, you construct the budget
in a certain way so that you allow for
contingencies and funds are there if
necessary.
To answer your question, that money
can be spent and it -- there's a potential for
any money to be disbursed that's in the
budget. Because remember, as I've explained
here, we're appropriating when we pass these
legislative bills.
SENATOR STACHOWSKI: Every so
often during the course of some of these long
debates, and if someone makes an exceptional
presentation, as I believe part of the things
that Senator Connor's -- they stood out to me.
And I thought the speech he made was very,
very well done and thought out.
SENATOR STAFFORD: What about
mine?
4182
SENATOR STACHOWSKI: Your answers
are always good. I don't mind you
interjecting. And I -- again, as Senator
Connor has thanked you, I always try to thank
you at the end of each bill for your courtesy
and your patience in dealing with all the
various questions that come from all the
various members, even when -- you try to stay
patient even when maybe we stray from the bill
that we're currently on, and you just try to
calmly bring us back to the bill we're on and
remind us we can't ask you questions, or
you -- we can ask, but you can't necessarily
answer questions about a bill that we're not
currently on. So I wanted to thank you myself
for that.
But in Senator Connor's
presentation, and we talked about how the debt
has grown, and he referred to the fact that
how people look to the black days of the Cuomo
administration, but the debt has grown
considerably since then.
And that being said, you know, the
Governor took great pride this year in saying
we got a debt credit rating increase from one
4183
of the raters. However, from Moody's, we
didn't get any increase. And I was just
curious, why do you think that Standard &
Poor's would give us a two-level increase and
Moody's would give us no increase, and would
you have an answer to that question? I don't
know. I'm curious myself. And that's really
why I'm asking.
SENATOR STAFFORD: Mr. President,
I would suggest Standard & Poor's is right and
would hope Moody's could get the right
information.
(Laughter.)
SENATOR STACHOWSKI: If the
Senator would continue to yield.
ACTING PRESIDENT MEIER: Senator
Stafford, do you continue to yield?
SENATOR STACHOWSKI: As much as I
enjoyed that, is there possibly a real answer
to that, or we don't know?
SENATOR STAFFORD: Well, I will
always try to answer Senator Stachowski. You
know, you and I, when it comes to any subject,
including this, we always know enough -- it's
like I was in school, I just sometimes
4184
couldn't think of it.
But I suppose they looked at the
information they had.
On a serious note, you have to
understand that professionals use their
judgment. I would point out that five years
of surpluses and the reserves we built up are
commendable, and Standard & Poor's took that
under consideration. And of course I can't
speak for anyone when they make professional
decisions.
SENATOR STACHOWSKI: Thank you,
Senator. If the Senator would yield, I've got
a -
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: He
yields.
SENATOR STACHOWSKI: I don't know
if you can answer this question or not, but
I'm going to pose it to you anyway. And it
would be more of a -- I don't know, you would
be guessing why or maybe thinking why. Either
way, yes or no, you would be projecting what
4185
you believed this person's reason would be.
But in the Governor's reform
package on borrowing and debt reform, he
outlaws or eliminates the use of caps. And
you would think that if he was going to put
that forward -- and we in the Senate supported
his package last year -- that it would have
been a good gesture on his part or a good
practice on his part not to come right back
the following year in the budget and use caps
anyway to pay for a lot of the things in the
budget. If you were trying to convince the
other house that we should eliminate these and
yet you continue to use them, how do you make
an argument that then maybe, you know, you're
not being sincere or -- I'm just saying what
the other house would think would think when
they see that he's still using them even after
he put them in his reform package, and he was
saying that I'm really serious about this
reform package, and obviously we were agreeing
with him, because we voted for that reform
package which would have eliminated the use of
those, and yet here they are again this year
in the debt service package, the -- another
4186
bundle of the use of those.
So would you think that he's just
using them because they're there, or do you
think it would have been a good idea if he
would have not used them this year because
he's trying to show in good faith to the
Assembly that he was really serious about his
debt reform package?
SENATOR STAFFORD: Well, I see
what Senator Stachowski is driving at. I
understand. So I'm going to try to give you
my opinion, my analysis. And I will try to,
as I often say, make a broad stroke with a
conceptual brush, and do it very, very
quickly.
But we go back to where we were six
years ago, and we went into or came into -
yeah, went into 1995 with a $5 billion
deficit. And we have now ended up that we do
have a surplus. I would remind everyone that
last year -- and I won't read them all off
here. We have them here. But we remember
what we did last year when we passed the debt
reform bill here in this house, which was
passed by the Assembly and was signed into
4187
law. We've come a long, long way.
And let me say this about this
package. It's very easy for any of us, any of
us to stand up and criticize debt and compare
New York with other states, with other
entities. And I would suggest to you that
New York is the Empire State, it's different
than any state to live in, it's the best state
to live in. We did have some major, major
problems six years ago. They have been
corrected.
But that's why we have the tourism
in New York. That's why it's -- it is the
capital of world. And I think sometimes we
forget that. It has the best city in the
world, as I've mentioned, with more than
5 million people. It's 8 million now, but we
have to watch the upstate cities, of course.
But you hear what I'm saying. And
we have to continue to be prudent, we have to
be careful. But I think we can't stand up -
and I won't use the word "demagoguery,"
because that's too strong a word. But we also
have to be reasonable when we look at our
overall picture. We are moving in the right
4188
direction, thanks to Governor Pataki, thanks
to the Legislature. And I would want none of
us to leave today without having a bright
opinion, a bright outlook about our state.
And I think you know what I'm
driving at.
SENATOR STACHOWSKI: Thank you,
Senator. I just want to make a brief
statement on the bill.
ACTING PRESIDENT MEIER: Senator
Stachowski, on the bill.
SENATOR STACHOWSKI: Just
briefly, if I were cynical -- and I'm going to
try not to be -- I would say, well, we were
$5 billion in the hole in that dark period,
and now we're $10 billion in debt with the
surplus. I don't know that these coincide,
but -- it's just coincidental, but those are
numbers.
I know we have to pay our debts. I
am disappointed -- and I don't say that the
Governor himself does his whole budget
package. But you'd think the people putting
it together for him would be aware that he
just proposed a law to say get rid of a
4189
certain practice, and then they come right
back and use it. And it's a practice that,
when you're in a surplus situation, you may
not have to be using.
So I get baffled by things like
that. And that's just me. And maybe I'm only
used to doing small economics. I'm not a
business guy, I just try to take care of my
own money, the little that I have. And I
don't even do so well at that. But I know how
to count and watch other people's money. And
it's kind of like some of the sports I
participate in. I love to play golf, I'm
terrible at it, but I can see what somebody
else is doing wrong, because I have a good eye
for somebody's else's athletic stuff. That
just happens.
But in this one, I'm not sure. I
think Senator Connor made a lot of good
points. There are some reasons to be
concerned. However, there is debt here that
we have to pay. I'm not sure yet how I'm
going to vote, because there might be a couple
more people that want to speak on this.
But I thank again Senator Stafford
4190
for his courtesy and his patience and his
effort to try to answer as best as he could
and with the help of his staff, who is also
very patient, and changing places and moving
back and forth and helping us to get the
answers we were looking for on this bill,
especially when everybody is trying to find
out as much as they can about this piece of
legislation.
Thank you.
ACTING PRESIDENT MEIER: Senator
Hassell-Thompson.
SENATOR HASSELL-THOMPSON: Thank
you, Mr. President, just -
ACTING PRESIDENT MEIER: Senator
Hassell-Thompson, if you'd just suffer an
interruption, the desk has a list going, as
was the practice. So if you'd like to be on
the list, please let the desk know.
SENATOR HASSELL-THOMPSON: I just
have one question which got lost in the
shuffling of paper. If you'll indulge me one
moment.
Thank you. Senator, will you
yield?
4191
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield?
SENATOR STAFFORD: Yes.
ACTING PRESIDENT MEIER: Senator
Stafford yields.
SENATOR HASSELL-THOMPSON: It's a
two-part question, through you, Mr. President.
Will we be revisiting this state
debt service during the final budget
negotiations? That's Part A. And if so, will
we be acting on a B print of this bill later
in the spring?
SENATOR STAFFORD: It won't be in
the budget bills per se, Mr. President. But
we can amend this bill. And through the
years, Mr. President, I've never seen a bill
that couldn't be amended. And the field we're
working in, I certainly would not be shocked
or surprised, you know, if there were
amendments due to the complexities.
SENATOR HASSELL-THOMPSON: Thank
you, Senator. Thank you, Mr. President.
Thank you, Senator.
On the bill.
ACTING PRESIDENT MEIER: Senator
4192
Hassell-Thompson, on the bill.
SENATOR HASSELL-THOMPSON: After
having come from a city whose budget was just
so small by comparison, to say that's this is
not an overwhelming experience for me would be
a lie.
But the thing that overwhelms me is
not the numbers, and it's not the issues. The
thing that overwhelms me continually is that
we establish increases in our debt and we
consider ourselves to be -- this house has
always been considered as the most fiscally
conservative, and yet we have gone way over
the top and we don't see a problem with the
fact that New York State, albeit that it is
the Empire State, that it is one of the most
marvelous states in the world -- it's the
state I was born in, the state I will die in,
hope to be buried in. It has all of the
positive attributes.
But it does not -- the parallel to
that is not that we have to be the greatest
expenders in the world. Particularly because,
as we look at the Constitution, which the
voters assume that the debt in which this
4193
state is incurring, that they have a real
participatory role. And if less than
10 percent of this debt is being voted on by
taxpayers, it just amazes me that we don't
have concern that we are doing something that
I perceive to be very duplicitous. And so I
just have to say that.
I too, like my colleagues, will
probably be forced to vote on the continuance
of this debt, and so I will be as guilty in
the participation of this duplicity as anybody
else. But I certainly hope that for the years
I plan to stay here -- and I plan to be
here -- that we will do a much better job in
terms of how we overhaul and how we really
review those items that we perceive to be
capital projects versus those things that we
just want to put in because they make us feel
good.
These are not all capital items.
And for us to be incurring this kind of debt
predicated on that is somewhat unconscionable.
But in the last couple of days, we've done
some other unconscionable things, so we'll
just add this one to our list.
4194
Thank you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Hevesi.
SENATOR HEVESI: Thank you, Mr.
President. Would the sponsor yield, please.
ACTING PRESIDENT MEIER: Senator
Stafford, do you yield to a question from
Senator Hevesi?
SENATOR STAFFORD: I won't get on
the phone anymore, I apologize.
SENATOR HEVESI: That's okay.
Mr. President, I was wondering if
the sponsor would be able to tell us whether
or not there is some kind of legal requirement
that would obligate the state or any public
authority operating within the state to
refinance any outstanding debt at favorable
interest rates in light of the fact that we
are now seeing a lowering of interest rates
because of the national economic climate.
SENATOR STAFFORD: Mr. President,
there's a good question, and it's something
that is often done. We do that periodically.
And I think the point is very well taken.
As far as any legal requirement, I
4195
don't know of any.
SENATOR HEVESI: Thank you.
Mr. President, on the bill.
ACTING PRESIDENT MEIER: Senator
Hevesi, on the bill.
SENATOR HEVESI: Thank you, Mr.
President. I think that gives us a decent
jumping-off point for the comments that I want
it make here today.
First of all, I believe that there
should be, on this particular issue, a
requirement that wherever possible, whenever
possible -- and probably the way to do this is
to set in statute a particular amount of time,
irrespective of the economic climate and
irrespective of the trend with which interest
rates are moving -- that anyone who is
involved with the issuance of debt must do a
review and analysis and attempt to refinance
that debt at favorable rates.
And by the way, you can do bad
refinancing also. And that reminds me a few
years back, the mayor of New York City tried
to do some bond refinancings to provide cash
infusion that would have extended the length
4196
of the debt, the life of the debt. Even
though it would have been at a more favorable
rate, the end product being that the total
amount of interest that the City of New York
would have wound up paying on that debt would
be millions of dollars more than what it was
going to pay based on the original debt
issuance.
So you got to be really careful in
the way you do this. But particularly in
light of the fact that now, because of our
national economic climate, the Federal Reserve
is under tremendous pressure to drop interest
rates, stimulate the economy and Wall Street,
that with that trend, it would be nice to have
the confidence in those issuing debt that they
would naturally take advantage of a favorable
market climate in order to go and do this.
But I don't have really the confidence in
these authorities or in the State of New York
just to do that without some kind of
institutional incentive. And so I really
think that we need to take a look in terms of
requiring them to do that.
On the broader issue, I honestly do
4197
not know how I'm going to vote on this bill.
I walked into the chamber today fully
intending to vote on this bill, and now I have
some major question marks in my mind. And I'm
not trying to be melodramatic here, I really
don't know how I'm going to vote on this bill.
And most of the reason for that is
because of what Senator Connor spoke about. I
think all of us here duly recognize that we've
got a tremendous, tremendous problem with the
way we are proceeding with our financing in
the State of New York. That in and of itself
gives real pause. But the state nonetheless
has the obligations to meet, irrespective of
the trend and the policies that we have set
out, even if those policies are not in the
best interests of the state.
What Senator Connor was talking
about this morning was a violation of some
fundamental principles in how you should do
public financing. And as I was listening to
him -- Senator Connor, that is -- I started
remembering back to the public finance courses
that I took in graduate school and some of the
fundamental rules that existed in terms of how
4198
you handle situations such as the ones that
we're confronted with now.
It's interesting to note, one of
the professors that I had was an expert in
bailing out municipalities and states that got
into trouble, major trouble, such as Newark,
New Jersey, New York City in the mid 1970s.
And this individual was therefore an expert in
not only how to get municipalities and other
municipal governmental entities out of hose
difficulties but, more importantly for our
purposes here, how to avoid getting into those
difficulties in the first place.
And the one fact, the one statistic
that really stands out here for me, because it
doesn't look on its face as if it's that
striking, because the numbers are small,
because they're expressed in percentages. But
when you examine them and extrapolate the
numbers out, you'll see how significant it is.
It is the statistic that since the early
1980s, the overall share of the state budget
that's spent on debt service has increased
from 3 percent to 5 percent. Okay, that is
tremendous. That is tremendous.
4199
And a trend upwards at all -
remember, we're not talking about the
aggregate numbers. You can hold your
percentages constant and your aggregate
numbers will increase because the size of the
government, the size of your revenue stream is
going to increase. The 3 percent to 5 percent
jump is extraordinary. It's billions and
billions of dollars.
And to really break it down for us
in terms of why this is such a problem, it
means simply this. There is less amount of
the pie as disposable revenue to spend on the
state's most pressing needs. Because the way
I see it, the way I see it, the debt service
portion, what we're doing to be voting on
today, it's not discretionary at all. We are
looked into that. The decisions that we make
on how we finance our projects in this state,
we're locked into. Everything else is
discretionary.
So debt service is the equivalent
for an individual as paying their mortgage.
You don't have a choice. And so the more your
mortgage costs or your rent or your car
4200
payment, the absolute essentials, the more
those costs increase, if your total income
stays the same or increases slightly,
everything else gets squeezed.
And that squeezing are the things
that we need to help the taxpayers of the
State of New York in their daily lives. We're
talking about education and all the other
things that are vitally important.
So we're in a really bad situation
here. And the one lesson that this professor
continually imparted to us as students in his
graduate public policy course was wherever you
possibly can, you do pay-as-you-go capital,
pay-as-you-go capital financing. It means you
don't go and borrow, wherever you can,
wherever you can, you go and pay for it. And
we're not doing that.
And Senator Connor pointed out in
his comments earlier that there is new
borrowing in here that does not fit any of the
real qualitative, structural integrity
parameters of how you do debt borrowing. And
what was he talking about? He was talking
about the fact that we're borrowing money to
4201
pay for computers and we're borrowing money to
pay for vehicles with a seven-year time period
where we're going to be paying -- I believe
the number Senator Connor indicated was
$3.9 million in interest on a debt load of
$24 million.
It's just -- it's stupid. I don't
know how else to categorize that. It's
really, really dumb. Notwithstanding the fact
that it seems that -
ACTING PRESIDENT MEIER: Excuse
me, Senator Hevesi.
Senator Skelos.
SENATOR SKELOS: Mr. President,
pursuant to Rule IX, Section 3-D, I believe
the two-hour limit on debate has expired. I
move that we close debate at this time.
ACTING PRESIDENT MEIER: All
those in favor of closing debate signify by
saying aye.
SENATOR PATERSON: Party vote in
the negative.
SENATOR SKELOS: Party vote in
the affirmative.
ACTING PRESIDENT MEIER: The
4202
Secretary will call the roll.
(The Secretary called the roll.)
THE SECRETARY: Ayes, 23. Nays,
34. Party vote.
ACTING PRESIDENT MEIER: Debate
is closed.
Senator Connor, why do you rise?
SENATOR CONNOR: On the roll
call, to explain my vote.
ACTING PRESIDENT MEIER: Read the
last section.
THE SECRETARY: Section 1. This
act shall take effect April 1.
ACTING PRESIDENT MEIER: Call the
roll.
(The Secretary called the roll.)
ACTING PRESIDENT MEIER: Senator
Connor, to explain his vote.
SENATOR CONNOR: Thank you, Mr.
President.
Numbers, numbers, numbers.
Certificates of participation, automobiles,
$24 million, interest, as Senator Hevesi
pointed out, total COPs, 300 million roughly,
total interest, $90 million, desks, furniture,
4203
computers, et cetera.
Numbers, numbers, numbers.
$40 billion in debt, the voters approved
$4 billion. Number that really ought to
concern us. New York State, 18,976,457
people. Tax-supported debt, $37 billion going
to $38.5 billion. New York City, 8,800,278
people. Debt, tax supported, $31 billion.
California, 33,871,648 people. 33 million,
almost 34 million people in California. Debt,
$21 billion. New York City, 8 million people,
$31 billion in debt. California, nearly
34 million people, $21 million. New York
State, nearly 19 million people, $37 billion.
Mr. President, these numbers not
only don't make sense, they're very, very
dangerous. I vote no.
ACTING PRESIDENT MEIER: Senator
Connor will be recorded in the negative.
Senator Paterson.
SENATOR PATERSON: Mr. President,
I vote no. The MTA doesn't even have any
people and it ran up as much debt as all but
five states on that list.
The comment I want to make is
4204
somewhat personal and somewhat reflective of
the neighborhood I represent, which is
95 percent African-American, Puerto Rican, and
Dominican. It's interesting, but how many
times have I had to listen to the radio or
read the newspaper and heard people who live
in my constituency, or people who look like
the people that live in my constituency,
blamed for our social services waste, for our
welfare waste, for problems related to
housing, for the upkeep of neighborhoods, for
the high crime rate.
And the funny thing is, if you
added up all of that money that the public is
wasting on these individuals who have been
stigmatized by the way we have been portrayed
in the media and written about and by word of
mouth, it doesn't even achieve a scintilla of
the amount of money that Senator Connor
pointed out that this state owes. And so when
I start thinking about who is responsible for
it, I really don't know too many people of
that ilk that are even involved.
And it just shows you what the
distraction has been and what the value of at
4205
times castigating groups of people has been
when our real financial problems, when our
real issues, when those who have been duped
into thinking that there's some kind of class
issue that causes us to have fiscal problems
as a state, when they find out what's
really -
ACTING PRESIDENT MEIER: Senator
Paterson, how do you vote?
SENATOR PATERSON: -- causing the
problem, we'd all vote no.
Thank you.
ACTING PRESIDENT MEIER: Senator
Paterson will be recorded in the negative.
Senator Oppenheimer, to explain her
vote.
SENATOR OPPENHEIMER: Thank you.
I'm not sure I agree with my colleague Senator
Hevesi that we should always do pay-as-you-go
financing, because I think there's a real need
for capital financing for things that go into
future generations where I do believe that
they should be sharing in the burden of those
costs.
I have to thank Senator Connor.
4206
Because I did not pick up this certificate of
participation. I did check it off, and I was
going to question what it was, but I did not
have the background. I thank him for that
background, because it's quite an eye-opener.
I was taught, when I was getting
my -- I think I said this on the Senate many
years ago. I was taught when I was getting my
M.B.A. from Columbia University that there
really were 11 Commandments, and the 11th
Commandment was "thou shalt not capitalize
expense items."
And it seems to me that computers
and desks and cars are not capital items, they
are items that more fall in the line of
maintenance. And therefore I think it is that
11th Commandment that we are breaking when we
are capitalizing those kind of expenses.
I must say that in my own private
life, I lead a very conservative financial
life, in that I don't believe in debt. I know
governments need debt, because obviously for
those big capital projects we have to have
debt. But to think of the inordinate amount
of money we are spending on interest when
4207
there are so many needs in this state -
ACTING PRESIDENT MEIER: Senator
Oppenheimer, how do you vote?
SENATOR OPPENHEIMER: -- it kind
of hurts me to spend that kind of money just
on interest.
I'll vote yes, because I don't know
how else we'll pay for our services.
ACTING PRESIDENT MEIER: Senator
Oppenheimer will be recorded in the
affirmative.
Senator Dollinger, to explain his
vote.
SENATOR DOLLINGER: Mr.
President, this is a continuation of the
borrow-and-spend policies of the Pataki
administration. We're up 39 percent, it's
galloping out of control. I mentioned earlier
how it violated the rules that we've become
nothing but a Wimpy state. I made reference
to J. Wellington Wimpy.
I'd just like to go back to one
other cartoon character that provides us with
a little sage advice that we ought to be
listening to, Mr. President. Remember Pogo's
4208
comment "We have met the enemy and it is us"?
We are the enemy. We are spending more money,
we are putting more money into debt than we
should. We know that the rainy day will come.
And when it does, the puny $250 million that
the Governor is putting in his debt reduction
fund will be gone like that.
And lastly, Mr. President, it seems
to me that there was a Financial Control Board
that we've had to use for New York City when
its debt practices got out of control. We
used a Financial Control Board when Nassau
County's debt practices got out of control.
Who will be on the Financial Control Board for
the State of New York?
I would suggest to all of my
colleagues, we are the Financial Control Board
of the State of New York. And what we are
doing by continuing these borrow-and-spend
policies is grossly irresponsible. I will
continue to vote no for such irresponsibility.
Please count me as a negative.
ACTING PRESIDENT MEIER: Senator
Dollinger will be recorded in the negative.
Senator Schneiderman, to explain
4209
his vote.
SENATOR SCHNEIDERMAN: I think
it's unfortunate that we're here in the late
afternoon. It seems that people are not
paying as much attention as they should be
paying.
Issues have been raised here today
that go to the economic future of our state.
And I don't think that anyone present can
argue that our state is moving in the right
direction. This is not a matter of a few
fringe characters yelling out that the sky is
falling. As I mentioned before, this is one
of those areas where I and my progressive
colleagues find ourselves in agreement and
analysis with Change New York. Someone also
just handed me an article from the National
Review making the same point about what they
call Pataki's obese $70 billion budget with
spending spike -- this was a few years ago -
and saddling New Yorkers with more debt.
So when all across the spectrum
responsible fiscal analysts agree that we're
headed in the wrong direction, how do we go
back to our constituents and say, yeah, we're
4210
doing this, but so what? We are not going to
be able to sustain the services for our
constituents, in spite of the great national
economic boom of our revenues going up. It is
our fault. It is our responsibility.
We want to have an economic future
in this state -- good schools, good
transportation, affordable housing. We are
now creating a situation where we're going to
have to cut those very keys to long-term
economic growth. This is a disaster looming,
and I'm sorry that we're taking the
shortsighted view that we are.
I ask to be recorded in the
negative. And I urge that after this budget
is passed that we really try to address these
issues, because this is not a casual or a
humorous matter. Thank you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Schneiderman will be recorded in the negative.
Senator Onorato, to explain his
vote.
SENATOR ONORATO: Mr. President,
to explain my vote.
I had originally intended on voting
4211
for this, because I certainly believe in
paying off the debts that we incurred. But I
was completely unaware about the new borrowing
that we wanted to do while we have the money
available to pay for these current needs.
Senator Stachowski was questioning
Senator Stafford earlier on about some of the
reasons for the borrowing. And Senator
Stafford replied that we have to anticipate
unanticipated expenses that we're not sure
for, so we're actually even borrowing money
but we're not sure whether we need it or not,
incurring an additional interest on borrowing
money that we're not sure that we need.
And also borrowing for money that
we have in our pockets, I certainly don't
think it's prudent to be borrowing additional
funds. When the real budget presents
itself -- and I'm sure that it will be,
hopefully, sooner than not later, it will be a
responsible budget answering all of the
questions that were brought forth here today.
I vote no.
ACTING PRESIDENT MEIER: Senator
Onorato will be recorded in the negative.
4212
Senator Stavisky, to explain her
vote.
SENATOR STAVISKY: To explain my
vote, Mr. President.
I was appalled by the $102 billion
figure that was cited in terms of the debt
incurred by the state and the authorities.
Secondly, I'm troubled by the item
on page 10 of the budget bill which talks
about the issuance of certificates of
participation. I remember the New York City
fiscal crisis in the late 1970s. The City of
New York got into trouble for doing precisely
what you're asking us to do right now.
I came in today fully prepared to
vote for the budget bill, but after listening
to what everyone has said, I wish to be
recorded in the negative.
ACTING PRESIDENT MEIER: Senator
Stavisky will be recorded in the negative.
Senator Hevesi, to explain his
vote.
SENATOR HEVESI: Thank you, Mr.
President.
First, just to clarify, maybe I
4213
wasn't clear before, in reference to Senator
Oppenheimer's comments. You don't pay
capital -- pay-as-you-go capital finance for
every capital need you have. You physically
cannot do that. It's not realistic. But you
do it when you're running in a surplus
condition and your state-supported long-term
borrowing is spiralling incredibly out of
control. That's when you do it. And so we
need to be shifting our priorities.
I got cut off by the clock as I was
speaking on the bill before. But the one
point I want to make as I'm explaining my vote
here is the real problem, as I see it, is
we've got to get our public authorities under
control. That's where our real problems are.
And the public authorities largely exist so
that they circumvent the debt caps. That's
why they're there. And so it's their
borrowing that's really becoming a tremendous,
tremendous problem. The revenue bonds that
they float are just creating a situation where
there's no end in sight. And the higher our
debt level goes, the more it's going to wind
up compromising the fiscal integrity of the
4214
state. And the more we put ourselves in a
position where we're going to not only reduce
the available expenditures in our overall
budget because the portion of the debt service
in the budget keeps growing, we're preventing
ourselves from having additional money
available to pay for the needs that we have in
this state. It's a tremendous problem.
And this is, I believe, largely as
a result of the psychology of the politician.
And the psychology of the politician is the
following. And I hope I don't run out of time
here. It is that we care -- and this is not
what we should, but we care about the next
meeting, the next group of constituents that
meet, this year's annual budget, what is our
immediate priority. And it's much easier
politically to take a very short-term view and
do things that are favorable and politically
expedient in the short term and that create
tremendous problems for us in the long term.
It is that approach and that view
that we've got to get away from, because it's
blowing the state's fiscal condition apart.
The fact that we have $10 billion -
4215
ACTING PRESIDENT MEIER: Senator
Hevesi, how do you vote?
SENATOR HEVESI: -- in additional
debt since 1994 is the reason why -
ACTING PRESIDENT MEIER: Senator
Hevesi -- Senator Hevesi, how do you vote?
SENATOR HEVESI: I'm voting no on
this bill, Mr. President, because we're
heading in the wrong direction.
ACTING PRESIDENT MEIER: Senator
Hevesi will be recorded in the negative.
Senator Duane, to explain his vote.
SENATOR DUANE: Mr. President,
you're clairvoyant. I hadn't even put my hand
up.
ACTING PRESIDENT MEIER: I
thought you had, Senator. But go ahead.
SENATOR DUANE: I do want to
first set the record -- not straight, correct
the record and acknowledge that the prisons
were sold to the -- what was then called the
UDC. So I'm sorry about that. But it's the
same horrendous policy.
I don't really think that -- I
think that we need to send a strong message
4216
about this. I know that in this year's budget
the Governor has proposed getting rid of the
PACB board, which means then that he would be
in control of really what all these funding,
bonding sources are. But that doesn't negate
all of the bad policies that brought us to
this horrendous debt situation we were in
before. We'll still have to be paying the
debt by the three men in the room of the PACB.
And it's wrong for us to mortgage the future
of our -- of the people of the State of New
York.
Maybe it would be better to give
the Governor that authority so that from this
moment on, we would know who was responsible.
But we're still going to pay the price for a
long time to come for the largesse given by
three men in a room.
And I'm going to vote no on this,
Mr. President.
ACTING PRESIDENT MEIER: Senator
Duane will be recorded in the negative.
Senator Montgomery, to explain her
vote.
SENATOR MONTGOMERY: Yes, Mr.
4217
President.
About my second term in office, one
of the authorities, the Port Authority
proposed a $20 million project in my district
which was then in Red Hook, and it was to move
the Fish Market to Brooklyn, create jobs.
Everybody got very excited. We had meetings
and we had hearings and the Authority came
many times and talked about how wonderful this
would be. And the bottom line, it never
happened. And that was $20 million, poof,
gone, no jobs, no fulfillment of the promise.
And I'm sure that is just one
example of many. The Battery Park City and
its promise to be responsible for having
affordable housing built in the city, nothing
has come out of that, or very, very little.
So the question about what happens
with the authorities I think is an excellent
one and certainly we need to be looking at
that.
I want to thank the Minority
Leader, Senator Connor, for giving such an
illuminating and brilliant presentation. I
certainly had every intention of voting yes on
4218
this debt service bill, but after having
listened to him and understanding much more
fully what this means and the problems and the
pitfalls, I'm going to be voting no on this
legislation because I think the taxpayers of
the State of New York, we owe the taxpayers
much more as it relates to being responsible
and accountable for what happens to those
dollars that are raised and that debt service
that is created by those dollars and for the
project that we supposedly are raising that
money for.
So I'm voting no.
ACTING PRESIDENT MEIER: Senator
Montgomery will be recorded in the negative.
Senator Breslin, to explain his
vote.
SENATOR BRESLIN: Thank you, Mr.
President, briefly.
I join my colleagues in urging all
of us to vote no. $10 billion in increased
debt since 1994. $10 billion. And that at
the same time we have surpluses that we can
use, surpluses that we are hiding. It's time
to be accountable. It's time to look to the
4219
people of the State of New York and stop
paying this enormous debt service and begin to
pay off that debt.
I urge everyone in this room to
vote no. Thank you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Breslin will be recorded in the negative.
Senator Ada Smith.
SENATOR ADA SMITH: Thank you,
Mr. President.
I too came this morning with every
intention of voting yes on the debt service
bill. But after sitting in the lounge
listening to my leader, Senator Connor, while
having chills from the cold that I've caught
from all the air coming up under this desk, I
forced myself to come into this room to vote
no, after listening to all of the -- what I
consider to be irregularities in how our money
is inappropriately being used.
We need to go back to trying to pay
for what we purchase or the goods that we use
and stop hiding all of our assets and fooling
the people of the State of New York. It's
time we took responsibility for what we were
4220
elected for. And I vote no.
ACTING PRESIDENT MEIER: Senator
Ada Smith will be recorded in the negative.
Senator Stachowski.
SENATOR STACHOWSKI: Mr.
President, to explain my vote.
I too came here to vote yes on this
bill. I normally vote for the debt service
bill. And although I know we do have to pay
our debts, I have a problem this year.
Senator Connor has pointed out some real
problems.
I have a basic problem with the
fact that, one, in this year's -- in the bill
we'll see later, an Article 7 bill, Governor
is going to try to eliminate the PACB. And
even though as a Minority member, when I sat
on that we don't get a vote, we do, however,
get to ask questions and we get to discuss the
items that come before us and we get a good
view of a lot of the things that are bonded
and. I just think it's a terrible idea.
Especially when our debt service is as high as
it is, I think it's a good idea that we have
as much information as possible, and that is
4221
one of the venues for doing that.
And then at the same time, in last
year's proposed constitutional amendment the
Governor put a piece in that would eliminate
the use of COPs. And there in this year's
debt reform package he has again an extensive
use of certificates of participation. And I
find that very difficult.
I think that if you're going to
propose something be removed, you don't just
use it because it's still there. I mean, this
house, when they proposed legislation that
they were going to change the rules and we
weren't going to have unlimited meals with
lobbyists, we then felt that since we proposed
that, even though we didn't pass it in both
houses, we follow that rule.
And so that's the same way I look
at this. And since that's not the case, if
for no other reason as my vocal no on the fact
that that's being done, I'm going to oppose
this bill and vote in the negative.
ACTING PRESIDENT MEIER: Senator
Stachowski will be recorded in the negative.
Senator Gentile.
4222
SENATOR GENTILE: Thank you, Mr.
President, to explain my vote.
Call it my conservative viewpoint,
but it is my fiscally conservative viewpoint
that we should pay for the things that we have
money to pay for. And I think Senator
Connor's explanation of what we were asked to
vote on today was explosive, was dynamic of
what we really have been asked to vote on here
today.
And certainly, from a fiscally
conservative viewpoint, the correct vote here
is a no vote. Because if you're fiscally
conservative, to ask us to authorize this
extra borrowing when we have a huge surplus,
frankly -- frankly, the surplus is a political
instrument and that surplus is good when the
campaign season rolls around. But to endanger
the State of New York to continue to borrow
just to keep a surplus out there during a
campaign year is not right for the
Legislature, it's not right for the people who
will incur the result and consequences of this
debt, as Senator Connor has indicated.
So the fiscally conservative, the
4223
prudent vote here is a no vote. So, Mr.
President, I too vote no.
ACTING PRESIDENT MEIER: Senator
Gentile, you will be recorded in the negative.
The Secretary will announce the
results.
I'm sorry, Senator, I should stand
up. The lamp is in my way.
Senator Malcolm Smith.
SENATOR MALCOLM SMITH: Thank you
very much, Mr. President.
I am going to be voting for this
bill. And while Senator Connor has very
appropriately pointed out some of the
experiences and appropriations that are in
this bill, which is true, what is driving me
at one point to do this -- because, one, we'll
be back. We're going to be back probably in
three weeks, probably in two months, where we
are probably going to have to do this entire
debt bill all over again.
What is important to me at this
point from a financial standpoint is Senator
Hevesi asked a question of Senator Stafford,
and while he somewhat answered the question,
4224
the fact is that we are doing some refinancing
of debt in this bill. And it is actually the
right time, whether it was just pure luck or
whether it was actually somebody forecasting
the time, this is actually the right time to
refinance some of the debt that will be
refinanced in some of these debt issuance that
will occur with some of these authorities.
So for those reasons, I will be
voting for the bill. But I know we will be
back. And when we come back, at that time I
think will be a different kind of vote, given
that will be the real debt service bill. This
one here, I believe, is just sort of a shadow.
Thank you.
ACTING PRESIDENT MEIER: Senator
Malcolm Smith will be recorded in the
affirmative.
Senator Brown.
SENATOR BROWN: To explain my
vote, Mr. President.
I too, being somewhat fiscally
conservative, am a little bit concerned that
we are voting on a debt service bill that
doesn't just pay off past debt but that has
4225
new appropriations, that creates new debt.
And like others who have spoken
before me, I'm very thankful to Senator Connor
also for pointing out the certificates of
participation in this bill. To me,
$24 million for passenger vehicles paid over
seven years, $3,908,000 in interest is
excessive.
But as we have gone through this
debate yesterday and today and talked about
the need to continue programs and the need to
pay our debts, I too believe that while I
don't like the process, while I'm concerned
about how this has been going and I'm going to
speak out about that, I'm going to be forced
to vote in the affirmative on this bill.
ACTING PRESIDENT MEIER: Senator
Brown will be recorded in the affirmative.
Senator Lachman.
SENATOR LACHMAN: First, I want
to say that I'm in great debt, tremendous debt
of gratitude to my leader, Senator Connor, for
bringing things to my attention that I was
unaware of. And in doing that, he's just torn
me apart for the last two or three hours. But
4226
I've heard what he had to say, and I believe a
great deal of what he has to say is correct.
But at the same time, in looking at
this legislation, there are so many important
things that we need in the State of New York,
with all the problems that have been brought
to our attention -- and I also don't want
New York State to rank 51st in the states of
the Union.
But the final decision, I have to
admit, was based on a political policy issue.
I said to myself a few minutes ago, when I
hadn't decided yet how to vote, what the heck,
even if I vote no, it will pass because the
other side has the majority. And then I said
to myself, how would I vote in a few years
when we might have a majority? And I said the
responsible thing to do today is to vote as if
the Democratic Minority was in the majority.
I vote aye.
ACTING PRESIDENT MEIER: Senator
Lachman will be recorded in the affirmative.
Announce the results.
THE SECRETARY: Those recorded in
the negative on Calendar Number 328 are
4227
Senators Breslin, Connor, Dollinger, Duane,
Gentile, Hassell-Thompson, Hevesi, Montgomery,
Onorato, Paterson, Schneiderman, A. Smith,
Stachowski, and Senator Stavisky. Ayes, 43.
Nays, 14.
ACTING PRESIDENT MEIER: The bill
is passed.
Senator Kuhl.
SENATOR KUHL: Yes. Would you
recognize Senator Morahan, please.
ACTING PRESIDENT MEIER:
Certainly.
Senator Morahan.
SENATOR MORAHAN: Yes, Mr.
President. I'd ask for unanimous consent to
be recorded in the affirmative on Calendar
331, Senate Bill 3995.
ACTING PRESIDENT MEIER: Without
objection, Senator Morahan will be recorded in
affirmative on Calendar 331.
Senator Kuhl.
SENATOR KUHL: Is there any
housekeeping at the desk?
ACTING PRESIDENT MEIER: Yes, I
believe we have some motions.
4228
Senator Fuschillo.
SENATOR FUSCHILLO: Thank you,
Mr. President. On behalf of Senator Maltese,
I move to recommit Senate Print Number 1855,
Calendar Number 206 on the order of third
reading, to the Committee of Veterans and
Military Affairs, with instructions to said
committee to strike out the enacting clause.
ACTING PRESIDENT MEIER: So
ordered.
Senator Fuschillo.
SENATOR FUSCHILLO: Mr.
President, on behalf of Senator Libous, on
page 27 I offer the following amendment to
Calendar Number 181, Senate Print Number 2819,
and ask that said bill retain its place on
Third Reading Calendar.
ACTING PRESIDENT MEIER: The
amendment is received, and the bill will
retain its place on the Third Reading
Calendar.
Senator Kuhl.
SENATOR KUHL: Could we go to the
regular calendar now and call up Calendar
Number 314, by Senator Seward, please.
4229
ACTING PRESIDENT MEIER: The
Secretary will read Calendar 314.
THE SECRETARY: Calendar Number
314, by Senator Seward, Senate Print 3653, an
act to amend the Insurance Law, in relation to
homeowners' insurance.
SENATOR CONNOR: Explanation.
ACTING PRESIDENT MEIER: Senator
Seward, Senator Connor has requested an
explanation of Calendar 314.
SENATOR SEWARD: Certainly, Mr.
President.
This bill would extend the New York
Property Insurance Underwriting Association,
the so-called NYPIUA, for two years.
Currently NYPIUA will expire on April 30th of
this year. This bill would extend it for a
two-year period, to April 30, 2003.
It would also extend for the same
two-year period provisions allowing for
multitier programs for homeowners' insurance
to encourage the availability of insurance in
so-called high-risk areas.
ACTING PRESIDENT MEIER: Senator
Dollinger.
4230
SENATOR DOLLINGER: Mr.
President, will the sponsor yield to a
question?
ACTING PRESIDENT MEIER: Senator,
do you yield?
SENATOR SEWARD: Yes, I do.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR DOLLINGER: Through you,
Mr. President, to Senator Seward, is there any
evaluation of the NYPIUA program that has been
undertaken to determine its effectiveness and
the impact on the marketplace that it was
designed to achieve?
SENATOR SEWARD: Well, I would
say, Mr. President, there are really two ways
that I could answer the question. Number one
is if you take a look at the market in both
some of these high-risk areas, particularly on
the coastal regions of our state, which are
susceptible to hurricanes and those types of
more dramatic storms, the market for this type
of insurance is quite vibrant. There have
been a number of companies in competing for
business to the benefit of the insureds. So
4231
that's one part of the answer.
The second part of the answer would
be that there is in place, and this bill would
continue it, the Temporary Panel on
Homeowners' Insurance Coverage, which is made
up of producers, and the Superintendent of
Insurance chairs this body. And it is their
responsibility to evaluate the market and to,
you know, make recommendations should there be
the need to change. But so far, it has not
been necessary because the market is doing
pretty well. And that's why I'd like to see
this extended.
SENATOR DOLLINGER: Well, through
you, Mr. President, that's my question to
Senator Seward. I mean, this was a program
undertaken by the State of New York to have an
impact on the marketplace because either there
was insurance coverage that wasn't available
for the kind of catastrophic problems of
windstorms, hailstorms, hurricanes, high water
levels even in some places. And so we entered
the marketplace to create this association.
And my question now is, given the
seeming -
4232
ACTING PRESIDENT MEIER: Senator
Dollinger, are you asking Senator Seward to
yield?
SENATOR DOLLINGER: Yes, I am,
Mr. President, thank you.
ACTING PRESIDENT MEIER: Senator
Seward, would you yield to a question from
Senator Dollinger?
SENATOR SEWARD: Yes, I will.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR DOLLINGER: I think
that's, Mr. President, because I didn't
articulate that, that's correct.
But my question is, we entered into
the marketplace in 1984 to provide benefits
that were either too expensive or nonexistent.
My question is, is there any study of the
marketplace to show that those benefits are
now existent in the marketplace or that the
price has come down to such a point that we
need to continue to be in the marketplace?
Which I think most of us would agree the State
of New York is best kept out of the vibrant
marketplace.
4233
SENATOR SEWARD: Well, Mr.
President, if the Senator is suggesting that
because of this improved market in these areas
that we should allow NYPIUA to expire, I would
only point out that around 2 percent of the
state's residential properties are insured
through NYPIUA. And if you were among
those -- within that 2 percent, I don't think
you would want to see NYPIUA expire.
SENATOR DOLLINGER: Through you,
Mr. President, if Senator Seward will continue
to yield.
ACTING PRESIDENT MEIER: Senator
Seward, do you yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR DOLLINGER: Senator, I
would agree with you that if I were one of
those 2 percent that were covered, I might be
concerned. But shouldn't I know what else is
out there in the marketplace and what it costs
before I draw that conclusion?
If we allowed it to expire, how
could we tell whether it was working unless we
4234
could show there was either a lack of
insurance available or that it was too
expensive and that this organization had
somehow either made something available that
was never there or to reduce the cost?
Where's the evidence that it's worked and that
it needs to continue?
SENATOR SEWARD: Well, Mr.
President, I would respond in this way.
NYPIUA, which by the way is not a New York
State-run operation, it's made up of -- all
the insurers who write fire and property
coverage in New York State are members of
NYPIUA and make up NYPIUA. We obviously
through statute authorize this association,
but it's not a New York State-run operation.
It's run by these companies that make up
NYPIUA. They participate in all of the
expenses and profits and losses and all of
that.
So NYPIUA exists as what I would
describe as the insurer of last resort. If
you are a homeowner or a small businessman in
a high-risk area and did not have the
availability of insurance in the voluntary
4235
market, then you have this option of going to
NYPIUA. And as I said earlier, about
2 percent of the state's residential
properties depend on this insurer of last
resort. And so that's the reason for the
extension.
I point out the vibrancy of the
market, particularly in the coastal areas, we
went through a time back prior to -- let's
see. I forget the exact year. In the
mid-'90s, obviously, because in 1996 this
Legislature had adopted provisions in the law
which came in with the multitiered program to
entice insurers into the coastal areas.
So this Legislature has responded
over the years to market conditions. Right
now, things seem to be fairly stable. And I
recommend that we keep it that way through the
extension of NYPIUA.
SENATOR DOLLINGER: Through you,
Mr. President, if the sponsor will continue to
yield.
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Sure.
4236
ACTING PRESIDENT MEIER: The
Senator yields.
SENATOR DOLLINGER: Is there a
recommendation from the Superintendent of
Insurance to keep this program going?
SENATOR SEWARD: Well, Mr.
President, I can't point to a formal memo or
letter. But certainly in conversations with
the Superintendent, they would like to see
NYPIUA continue, yes.
SENATOR DOLLINGER: Through you,
Mr. President, if Senator Seward will continue
to yield.
ACTING PRESIDENT MEIER: Senator,
do you yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR DOLLINGER: Do you know
what the factual basis was for the
Superintendent's comment that it should
continue in existence?
SENATOR SEWARD: The facts speak
for themselves, Senator, and Mr. President,
that the -- we still continue to have
4237
2 percent receiving their coverage through
this vehicle. And therefore, it should be
continued. I mean, the facts speak for
themselves.
SENATOR DOLLINGER: Through you,
Mr. President, if Senator Seward would
continue to yield.
ACTING PRESIDENT MEIER: Senator,
do you yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR DOLLINGER: Senator, I'm
just trying to figure out what's in the mind
of those people who get the 2 percent of the
coverage. Are they selecting this option
because it's the least expensive? Is there
any market survey as to the rate that's paid
by this organization versus other commercial
insurers? That's number one.
And, number two, do you have any
price advantage in this as distinguished from
other insurers?
I agree with you, Senator Seward, I
think that this state has had the benefit of a
4238
vibrant market. I think that's a good thing
for consumers to have lots of choices. And my
question was, in 1984 we said there wasn't
enough competition in the marketplace. That
was in part, Senator Seward -- and I think you
may acknowledge this, as the chair of the
Insurance Committee -- that was in part
because there weren't large, massive insurance
companies.
Back in those days, in the
preconsolidation days, the companies generally
tended to be smaller. So underwriting the
catastrophic risks that this program does -
windstorm, hail, explosion, hurricanes -- was
very difficult to do for smaller insurers.
We now live in a world where,
because of consolidation, we have much bigger
insurers, there's a much more competitive
marketplace. You haven't yet -- and with all
due respect, I just don't see the basis for
suggesting that there's a reason to continue
this just because 2 percent of the people have
it. Why shouldn't we send them to the private
marketplace and get the state out of the
business of selling this kind of insurance?
4239
SENATOR SEWARD: Well, Mr.
President, the reason that people find
themselves doing business through NYPIUA is
the fact that they do not have access in the
voluntary market. It's a question of access
to basic insurance coverage.
And so there's certainly no price
advantage, because -- it's in fact more
expensive, because the cost is higher to be
insured through NYPIUA. And that's just part
of the pricing mechanism. So there's no
advantage from a price point of view.
The advantage is that they do in
fact have access to insurance coverage. And
in sort of these so-called high-risk
neighborhoods, the fact that because of NYPIUA
they're able to receive coverage, this basic
coverage, that, I think, is very beneficial to
those communities. It helps them to secure a
mortgage on properties, it helps to attract
private investment. I think these are all
very positive things, and I think they should
be continued.
SENATOR DOLLINGER: Okay. A
final question, through you, Mr. President.
4240
ACTING PRESIDENT MEIER: Senator
Seward, do you yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR DOLLINGER: Has the
Insurance Committee of either this house or
the other house studied the impact of this
device on the marketplace and drawn the kinds
of conclusions that you just drew with respect
to availability and price? Has there been any
study of this by any of the bodies in this
Legislature to confirm your observations?
SENATOR SEWARD: Well, Mr.
President, I would direct the Senator to the
various reports that are -- that have come to
us over the years from this Temporary Panel on
Homeowners' Insurance Coverage which delve
into these issues and have recommended the
continuation of NYPIUA. Even though they do
acknowledge that overall the market is much
more vibrant, but the recommendation is there
that it continue.
So the Senator is free to read
those reports, and I'd happy to provide them
4241
to him.
SENATOR DOLLINGER: Through you,
Mr. President, just one final question for
Senator Seward.
ACTING PRESIDENT MEIER: Senator
Seward, do you yield for a question?
SENATOR SEWARD: Yes.
SENATOR DOLLINGER: Just one
final question. When is the most recent of
those reports?
SENATOR SEWARD: The most recent
was on May 1, 2000.
SENATOR DOLLINGER: Okay.
Through you, Mr. President, just on the bill.
ACTING PRESIDENT MEIER: Senator
Dollinger, on the bill.
SENATOR DOLLINGER: Mr.
President, I'm not quite sure I understand the
theory of an extender for a two-year period of
time in this bill. And it really comes down
to -- and, Senator Seward, I appreciate the
colloquy about this.
I once again am struck, however,
somewhat by how we put extenders into effect.
And the whole purpose of sunset legislation is
4242
that we will force each other -- we'll force
the Legislature to examine a piece of
legislation before we make it permanent. The
whole point of it is that we're going to force
ourselves to go through a self-examination, to
come up with a conclusion as to why a proposed
piece of legislation should be renewed.
And with all due respect to Senator
Seward, I hear a concept that should be
continued, but I don't hear the facts to
support it. This was obviously put in place
at a different time. This was obviously put
in place because the current marketplace did
not provide access to insurance, it was too
expensive. So what, at least as I understand
this, it was designed to do, is this said,
well, we're going to sell you this insurance
at a particular rate and if you have losses
above those, we will charge the entire pool of
available insurers an additional cash sum to
fund those losses to put the money in. That's
the way I understand it works. And I don't
deny that there was an appropriate time to do
this.
But it seems to me, given what
4243
Senator Seward acknowledges is a vibrant
marketplace, why not put this back on the
marketplace? Why not just turn over to big
commercial insurers the availability of
insuring the full extent of the risk? I'm not
so sure there's any evidence that the private
sector couldn't do that.
And under those circumstances, I
think the private sector should be given a
chance to do it, I don't see a justification
for continuing this. If there were one -- and
I'd be glad to look at the May 1, 2000,
report -- I haven't seen it to this point, Mr.
President. I'm not satisfied that at least
what I've heard to date suggests that there's
a basis for the continuing presence of
government in the marketplace. And in the
absence of that kind of evidence, I think the
government ought to get out of the
marketplace, turn this over to private
insurers, let them figure it out. And if they
need to come back to us, we'll make that
judgment then.
But I'm going to vote no on this,
Mr. President, because I don't think there's
4244
the evidence to support it.
ACTING PRESIDENT MEIER: Senator
Onorato.
SENATOR ONORATO: Mr. President,
will the sponsor yield to a question.
ACTING PRESIDENT MEIER: Senator
Seward, do you yield for a question from
Senator Onorato?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR ONORATO: Senator Seward,
I think I'm going to be in favor of this bill,
and I just want a little clarification.
Actually, isn't this almost the equivalent of
a assigned risk pool for homeowners? Because
I've had some experience where I had people
from my own district living with waterfront
property and they couldn't get any of this
insurance to insure their homes.
Now, this association was basically
formed to provide insurance for this
particular category of homeowners and property
owners, was it not?
SENATOR SEWARD: Mr. President,
4245
Senator Onorato is basically correct. I think
it is a -- if you want to talk concept, to
think in terms of this as an assigned risk
for -- in terms of the auto insurance area.
This would be for the fire, basic home
residential insurance.
Now, unlike what has been described
by Senator Dollinger, this is not an extra
layer of insurance. We're talking about
making available very basic coverage. These
policyholders that secure their insurance
through NYPIUA currently, as you correctly
point out, have no other options.
SENATOR ONORATO: One further
thing. I believe the association -
ACTING PRESIDENT MEIER: Senator
Onorato, do you want Senator Seward to
continue to yield?
SENATOR ONORATO: Would you
continue to yield, Senator?
ACTING PRESIDENT MEIER: Senator
Seward, do you yield -
SENATOR ONORATO: I have a couple
of questions, Senator.
ACTING PRESIDENT MEIER: Wait,
4246
wait, wait.
Senator Seward, do you yield for a
question?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR ONORATO: I understand,
Senator, is it correct or not that the
association will guarantee that if there are
any losses to any of the private insurers that
do the insuring, they'll be reimbursed or made
up for the differences? Or do they simply
raise the rates the following year when it
expires?
SENATOR SEWARD: Mr. President,
the rates that are charged are set by statute.
And in terms of the members of the
association, they share in whatever profit or
loss develops depending on, you know, the
claims that are filed.
SENATOR ONORATO: Again through
you, Mr. President, I was under the -
ACTING PRESIDENT MEIER: Senator
Seward, do you yield for another question?
SENATOR SEWARD: Yes.
4247
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR ONORATO: I was under the
assumption that the association reimbursed
anybody for a deficit if it should occur,
through the provision of the insurance.
SENATOR SEWARD: Just a point of
clarification, Mr. President. You're
referring to any loss that may be incurred by
a member of the association, a company that is
a member?
SENATOR ONORATO: Right. Yes.
SENATOR SEWARD: Well, the
association does, through its flow of
finances, in effect do that, because there is
a sharing of the profits and the losses. So
that if one company -- it's a sharing of the
risk, as you point out. So there is a form of
what you suggest in terms of the making up the
difference for a particular company. Because
they're not out there on their own, it's a
member of this association which is made up of
all the insurers. And so the risk is shared
and the losses of a particular company are
made up by the other members of the
4248
association.
SENATOR ONORATO: And one final
question, through you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Seward, do you yield for another question?
SENATOR SEWARD: Yes, Mr.
President.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR ONORATO: Are these
insurers capable or are they allowed to
provide any other types of insurance besides
this specific catastrophe for the homeowners
with the waterfront property?
SENATOR SEWARD: Well, Mr.
President, the -- there's very basic coverage,
in terms of what they offer through the NYPIUA
program is very specific and very basic
coverage.
There are additional coverages that
are on what I call a standby basis. The
Superintendent, under existing law, which
would be extended, has the authority to, after
having public hearings and so on, if the
market in some other lines necessitates their
4249
offering other lines of insurance through the
NYPIUA vehicle, that is possible.
Although it's interesting to note
that these additional types of insurance have
never been invoked. I mean, the
superintendent has never determined, to date,
anyway, that that has been necessary. But it
is possible.
SENATOR ONORATO: Thank you,
Senator. As I stated earlier, I think it's a
good bill and I certainly do intend voting for
it.
ACTING PRESIDENT MEIER: Senator
Schneiderman.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, if the sponsor
would yield for a few questions.
ACTING PRESIDENT MEIER: Senator
Seward, do you yield to a question?
SENATOR SEWARD: Yes, Mr.
President.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: I'm trying
to understand the relationship between the
4250
members of NYPIUA and the temporary panel that
was discussed earlier. Which is, I guess,
defined in Section 12 of Chapter 42. Are the
same companies represented -- that are in
NYPIUA also on the temporary panel?
SENATOR SEWARD: Mr. President,
they could be. The association members have a
board of 13. There are 10 that come from the
companies that are participating, or at least
they vote 10 members in. And then the
Superintendent is able to appoint three.
And in terms of -- the Temporary
Panel on Homeowners' Insurance Coverage is
also made up of producers, so it's more than
likely that many of them are the same
companies involved, the same entities.
There's nothing that would prevent that.
I would point out that as this
temporary panel reviews the market, I think
who better to make judgments than the people
who are out there, you know, on the street, so
to speak, knowing exactly what the conditions
are because they're doing business there.
SENATOR SCHNEIDERMAN: Well,
through you, Mr. President, then -
4251
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: Thank you.
I think that the concern that I'm raising
is -- and it was hinted at by Senator
Dollinger's question -- is that it does not
appear, and I may be mistaken, it does not
appear there's been any objective appraisal -
and by that I mean someone who is not a part
of the industry, not those entities that are
writing coverage for a profit -- that has
produced any sort of assessment of this.
I appreciate that there are reports
by the temporary panel, but I gather that the
temporary panel is evaluating the program that
is participated in by the same people who are
on the temporary panel.
Has anyone else looked at this, or
any other representatives of consumer
interests, public interests, or the insured,
as opposed to the insurer?
SENATOR SEWARD: Well, Mr.
4252
President, in terms of this temporary panel,
it consists of 14 members. They are appointed
by -- some by the Governor, three members by
the Governor and the Temporary President of
the Senate, the Speaker of the Assembly. The
Minority Leader of the Senate get two
appointments, and the Minority Leader of the
Assembly gets two appointments as well.
So it is -- if you're suggesting
it's some sort of an inside group, I would
speak to your leader and other leaders who are
appointing members if you feel that they're
appointing inappropriate individuals to that
body.
I've never heard a complaint at all
about it.
SENATOR SCHNEIDERMAN: Well,
through you, Mr. President, if the sponsor
will continue to yield.
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to continue to yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: I'm not
4253
suggesting that anyone is doing anything
improper. It's just that if I am regulating
myself, if I am doing a report on whether my
office is doing a good job, it will be a
different report than if somebody else is
doing such a report. And I'm sure that
everyone is endeavoring to appoint the most
qualified people to this panel.
My concern is that the great
majority of people on the temporary panel are,
and I'm reading from the statute,
representatives of producers actively placing
homeowners' insurance policies in this state
and representatives of insurance companies
actively writing homeowners' insurance
policies in this state. Which, as I gather,
are the same entities that are in NYPIUA.
So I'm not suggesting anything
improper, it's just that we get different
perspectives from different sources. And my
question, once again, is has there been any
other outside entity that has ever evaluated
this program?
SENATOR SEWARD: Mr. President,
I'm not aware that there has been. And I'm
4254
also not aware that there really is a need to
have an outside group or another entity
created to do that.
You know, it's interesting to note,
when you take at a look at the NYPIUA
association, that is in fact made up of -- the
members of the association elect that
governing board, more than likely company
representatives. The panel members that are
advising the Superintendent of Insurance and
us, because we receive those reports as well,
there is a far-reaching group that's there
involving agents -- I mean, any number of
people. There are so many players in the
insurance field that it's more than just
company representatives. So you have agents
and the like. And it's a situation where -
plus the market is very visible.
I think the best way to gauge how
well NYPIUA and some of the other changes in
the law that were made to address some of the
issues along the coast, the best way to assess
it is to talk to individual homeowners. And
in fact, if there was not an availability of
insurance -- which was the case a few years
4255
ago in this state in select areas -- believe
me, we would not need a temporary panel to
tell us that. It would be pretty well known.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, if the
sponsor will continue to yield.
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: I'm
curious as to how the categories of insurance
that are covered by NYPIUA were developed. It
seems to apply to a fairly broad range but
actually a fairly random sprinkling of types
of insurance -- vandalism, extended coverage.
How were the different categories that are
under NYPIUA identified?
SENATOR SEWARD: Mr. President,
NYPIUA was created originally back in 1968 to
provide this basic property insurance
coverage, particularly in urban areas that -
if you recall, in the late '60s, in some of
the urban areas of our state, there was some
4256
civil unrest and some communities had serious
problems. And it was difficult and in fact
impossible for certain properties in certain
areas to obtain insurance coverage. And so
NYPIUA was created. That's the origination of
it.
And what we have done since that
time is to basically carry forth those
coverages in the statute. Personally, I have
had no involvement in establishing the list of
coverages. And I don't -- I can't answer your
question directly other than the fact that we
are carrying forward what is in place now, and
it seems to be working very well.
SENATOR SCHNEIDERMAN: Through
you, Mr. President, if the sponsor will
continue to yield.
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: I note
that one of the areas that appears to be
covered is professional liability insurance.
4257
I'm not sure I understand -- I understand the
notion of homes in dangerous areas or in
environmentally hazardous areas. How does
professional liability insurance get into
this?
SENATOR SEWARD: Well, Mr.
President, the commercial risk insurance,
public entity insurance, and the professional
liability insurance, those three categories
are in that so-called standby powers, which
have never been invoked. But because back in
1986, when there was a general liability
insurance crisis in this state in terms of
access and availability, those -- that's when
those particular coverages were added to the
statute on a standby basis. And that was in
response to conditions that existed at that
time.
SENATOR SCHNEIDERMAN: Through
you, Mr. President, so those -
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
4258
SENATOR SCHNEIDERMAN: So in
fact, NYPIUA has never done that, it's been
authorized but not undertaken as far as those
additional categories of insurance are
concerned?
SENATOR SEWARD: That is correct.
It would require a process that is headed up
by the Superintendent of Insurance, has to
have public hearings and go through a process
outlined in the statute before that type of
insurance could be available through NYPIUA.
SENATOR SCHNEIDERMAN: Thank you.
And through you, Mr. President, just one or
two more brief questions.
ACTING PRESIDENT MEIER: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Yes.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR SCHNEIDERMAN: What
happens if the association runs a deficit?
What's the mechanism for dealing with that?
SENATOR SEWARD: Well, Mr.
President, the members of the association
would have to assume any losses.
4259
SENATOR SCHNEIDERMAN: So there
would be no drain on the public funds?
There's no public funding for that?
SENATOR SEWARD: Mr. President,
the Senator is correct. There's no exposure
here on the part of the State of New York.
SENATOR SCHNEIDERMAN: Sounds
pretty good to me. Thank you.
SENATOR SEWARD: You're welcome.
ACTING PRESIDENT MEIER: Senator
Oppenheimer, why do you rise?
SENATOR OPPENHEIMER: I would
like to ask a question, if the Senator would
yield.
ACTING PRESIDENT MEIER: Senator
Seward, do you yield a question from Senator
Oppenheimer?
SENATOR SEWARD: Certainly.
ACTING PRESIDENT MEIER: The
sponsor yields.
SENATOR OPPENHEIMER: This is a
simple question for you. I know many people
who are near the waterfront having trouble
getting -- you know, in the voluntary market
getting insurance. But every time there's a
4260
northeaster there, part of their houses go
underwater. And I wonder how they would
specifically go about availing themselves of
this insurance.
SENATOR SEWARD: Well, Mr.
President, if a homeowner found themselves in
that situation when -- if their regular
insurance carrier refused to renew them and
they had no availability of insurance coverage
through the normal marketplace, then they
could approach NYPIUA to obtain coverage.
Only then. Only if their regular -- in the
regular market they could find no coverage
there.
But I must say, the -- that has
improved along coastal areas, because of some
additional changes we made in 1996 in this
Legislature. So that the availability has
improved greatly. However, if someone does
find themselves in the position of not having
availability of coverage, then they could
receive that coverage through NYPIUA.
SENATOR OPPENHEIMER: Would you
continue to yield, Senator?
ACTING PRESIDENT KUHL: Senator
4261
Seward, do you continue to yield?
SENATOR SEWARD: Certainly.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR OPPENHEIMER: How would
we go about that? Is there a central office
you could provide us with?
SENATOR SEWARD: Well, Mr.
President, I was turning to counsel here to
say do we have an address or a phone number.
I do not have that available at this time.
But generally, if an individual is
working with an insurance agent and together
they have reached the conclusion that there's
no coverage available, obviously the insurance
agent could direct them to NYPIUA.
But, I mean, it does exist. I
mean, it has a physical location and a phone
number. I'm sure they're in the book.
SENATOR OPPENHEIMER: Okay.
Thank you.
On the bill, please.
ACTING PRESIDENT KUHL: Senator
Oppenheimer, on the bill.
SENATOR OPPENHEIMER: This is a
4262
good bill. It will definitely be of some
service to many of my communities which are
surrounded by water. And very often the FEMA
insurance is not available, which is the
Federal Emergency Management office, which has
insurance.
But I think this can only benefit
us, and so I'll be happy to support it.
ACTING PRESIDENT KUHL: Senator
Brown, why do you rise?
SENATOR BROWN: Through you, Mr.
President, if the sponsor would yield for a
few questions.
ACTING PRESIDENT KUHL: Senator
Seward, do you yield to a question from
Senator Bruno?
SENATOR SEWARD: Yes, I do, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR BROWN: Senator -- Mr.
President, through you, is NYPIUA a statewide
organization that has listings across the
entire state of New York?
SENATOR SEWARD: Mr. President,
4263
yes, NYPIUA is empowered to write coverage or
obtain access to coverage throughout the state
for individuals. It's not in a select area.
SENATOR BROWN: Through you, Mr.
President, would the sponsor continue to
yield?
SENATOR SEWARD: Yes, I will, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR BROWN: So in my district
there are certain areas where homeowners have
been told that their insurance is being
canceled. In cases like that, Senator, would
they then be able to go to NYPIUA for
insurance?
SENATOR SEWARD: Yes, Mr.
President. An individual who has been
canceled, if they work with an agent or on
their own if they make some calls and attempt
to secure coverage from another carrier, if
that's not possible, then NYPIUA is there as,
shall we say, a safety net, the insurer of
last resort.
SENATOR BROWN: Through you, Mr.
4264
President, would the sponsor continue to
yield?
ACTING PRESIDENT KUHL: Senator
Seward, do you continue to yield?
SENATOR SEWARD: Yes, I will.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR BROWN: And I apologize
if you answered this question already, Senator
Seward. Do the rates that NYPIUA charges, are
they comparable with the voluntary market?
SENATOR SEWARD: Mr. President,
the insurance premiums and costs through the
NYPIUA program are higher than the voluntary
market, in recognition that there must be a
higher risk involved. Otherwise, the
voluntary market would have assumed that risk
voluntarily.
SENATOR BROWN: Through you, Mr.
President, would the sponsor continue to
yield?
ACTING PRESIDENT KUHL: Senator
Seward, do you yield?
SENATOR SEWARD: Certainly.
ACTING PRESIDENT KUHL: The
4265
Senator yields.
SENATOR BROWN: Senator Seward,
how does NYPIUA market itself? I have never
heard of it. And even previously, as a city
council member representing a district where
homeowners and business owners sometimes found
it difficult to get the insurance they needed,
I never heard of it offered as an option in
those communities.
SENATOR SEWARD: Well, Mr.
President, I think it was Senator Onorato who
had made the comparison to the so-called
assigned risk pool with auto insurance. One
doesn't see the high-risk pool, you know, out
there marketing themselves either. It's the
case when -- generally when an individual in
working with an agent finds that there's no
insurance coverage available to them, then
that agent will direct them to NYPIUA, much as
they do with the assigned risk pool when it
comes to auto.
SENATOR BROWN: Thank you,
Senator.
SENATOR SEWARD: Thank you.
ACTING PRESIDENT KUHL: Senator
4266
Dollinger, why do you rise?
SENATOR DOLLINGER: Just one
other question, if Senator Seward will
continue to yield.
ACTING PRESIDENT KUHL: Senator
Seward, do you yield to a question from
Senator Dollinger?
SENATOR SEWARD: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DOLLINGER: There's no
joint sponsorship of this bill. Has the
Assembly taken up the extender, and what if
anything have they done, if you know?
SENATOR SEWARD: Mr. President,
the Assembly has passed a permanent extension
of NYPIUA. And I would anticipate, if history
is any indication, that they will pass this
two-year extender once we do.
In the past, we have been, in this
house, passing one-year extensions of NYPIUA.
There are those that would argue for a
permanent extension. And it's my view, and
the majority of the Insurance Committee's view
as we reported out this bill, that we should
4267
extend it for a two-year period because I
think it is, as we've had this discussion
today, as we allow the Temporary Panel on
Homeowners' Insurance Coverage to do their
work in terms of evaluating the marketplace, I
think there is some value to bring these
issues to the forefront on a periodic basis in
order to assess the marketplace and see if
there are any changes needed.
If you take a look at the statute,
there were changes made in the mid-'80s to
NYPIUA, and again in the mid-'90s, in reaction
to market conditions at those times. So I
think there's some value to bring this matter
before the Legislature on a periodic basis.
And that's the logic behind the two-year
extension.
SENATOR DOLLINGER: Okay. Mr.
President, just briefly on the bill again.
ACTING PRESIDENT KUHL: Senator
Dollinger, on the bill.
SENATOR DOLLINGER: I've listened
to the colloquy between my other colleagues
who have questioned Senator Seward. I
continue to be skeptical about the continual
4268
renewals. I think if this program has value
in the marketplace, we ought to do what the
Assembly did, make it permanent. Or we should
commission the kind of study to figure out
whether the marketplace is vibrant enough to
provide this insurance without state
assistance.
I'm reluctant to have the state get
involved in the marketplace and remain there,
become a fixture there. I think we could look
at the State Insurance Fund and think about
selling that off, because I'm not sure that we
need that either. I think there are a number
of times when we have entered into the
marketplace for a beneficial purpose and
stayed way, way, way too long.
I just think that this is something
that there isn't enough evidence for me,
sitting here in this chamber today, to
conclude that the vibrant marketplace that's
now available cannot provide this function,
cannot serve this function.
Under those circumstances, Mr.
President, as I articulated earlier, I'll be
voting in the negative.
4269
ACTING PRESIDENT KUHL: Does any
other member wish to speak on the bill?
Senator Breslin.
SENATOR BRESLIN: On the bill,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Breslin, on the bill.
SENATOR BRESLIN: I think Senator
Seward has done an exemplary job in explaining
NYPIUA. And I think NYPIUA, on an ongoing
basis, has performed an admirable service,
particularly for Nassau and Suffolk County,
but also for inner city areas. And it
provides a coverage when no coverage exists.
And as was pointed out, it still carries
2 percent of the insurance business in the
State of New York, albeit at a premium, at a
premium often in the neighborhood of
30 percent. But that's as opposed to not
being able to find insurance.
However, NYPIUA has been with us
for a generation, and it's proved to be
viable, it's proved to be necessary, it's
proved to fulfill a mission. And the
Legislature ought to say, fine, leave it
4270
alone, leave to the Insurance Department to
assist in regulating, and make this permanent.
And the Assembly felt that way on the 19th of
March of this year and passed a permanent
extender.
And I would urge this body, at a
later point in time, because I intend to vote
on this legislation, to consider that, to get
on to more important business and let NYPIUA
operate as it has for, as I said, the past
generation in a very positive and successful
way.
And because of that, Mr. President,
I intend to vote in the affirmative.
ACTING PRESIDENT KUHL: Senator
Brown, why do you rise?
SENATOR BROWN: Mr. President, if
I may, through you, ask the sponsor just one
additional question.
ACTING PRESIDENT KUHL: Senator
Seward, do you yield to one additional
question?
SENATOR SEWARD: Certainly.
ACTING PRESIDENT KUHL: The
Senator yields.
4271
SENATOR BROWN: Senator, do you
know how much of this insurance or what
percentage of NYPIUA's coverage is sold in
inner cities across the state?
SENATOR SEWARD: I must say I'd
have to do a little research. I don't have
that information off the top of my head.
But it's primarily in the urban
areas, and occasionally along the coastal
areas which are vulnerable to storms.
SENATOR BROWN: On the bill, Mr.
President, if I may.
ACTING PRESIDENT KUHL: Senator
Brown, on the bill a second time.
SENATOR BROWN: I too want to
thank Senator Seward for his explanation of
NYPIUA. Prior to reading the bill and hearing
Senator Seward's explanation, I was not
acquainted with NYPIUA at all or its function.
I understand how it works in
coastal areas. I haven't seen evidence of it
in urban areas at this point, but I certainly
intend to do more research on NYPIUA and
certainly want to provide it as an alternative
to my constituents, some of which I know have
4272
not been able to get homeowners' insurance and
in some cases commercial insurance, business
insurance in some areas of my district. And
it certainly sounds like an intelligent
option, because some insurance to safeguard
one's possessions is certainly better than no
insurance.
And so I'm thankful to Senator
Seward for his kindness in responding to our
questions. And I certainly today have been
better educated on this matter, and hopefully
that will inure to the benefit of my
constituents.
Thank you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Stachowski, why do you rise?
SENATOR STACHOWSKI: Mr.
President, briefly on the bill.
ACTING PRESIDENT KUHL: Senator
Stachowski, briefly on the bill.
SENATOR STACHOWSKI: I'd just
like to thank Senator Seward for his patience
and his thoughtful answers and the information
he shared with everybody here.
This particular debate is another
4273
example how a new member that wasn't aware of
what was available through NYPIUA now knows
about it and will avail it to people in his
district that might not have been aware of it.
And another member that was here for a while
for whatever reason maybe didn't know that
this particular insurance was available to
people that are right on the water and now as
a result of this debate and all the
information that Senator Seward provided will
also make sure that people in their district
find out about this insurance availability
where maybe they couldn't get any insurance
coverage before.
So the fact is that this particular
debate has proved to be not only informative
for all of us, but it's going to come in handy
for a couple of members in providing more
information and an additional service to
people in our districts. So I just wanted to
commend him on that fact.
And I don't understand, as Senator
Breslin said, why we wouldn't do the permanent
extender. I will vote for this bill because
it does extend it, but it would seem to me
4274
that even if we did have changes to make to
whatever operates, governs NYPIUA, we could do
that through a chapter if we permanentized it.
So it could still be discussed and changed if
necessary.
And usually these kind of
associations would bring forward any changes
they needed, or people that worked with them
would bring forward any changes they needed
for debate. And I'm sure the Insurance
Department, in oversight, if it noticed that
it needed changes, if this was permanentized,
would bring them forward.
But since that's not available, I
will take the next best thing and vote for the
two-year extender. It's better than the
one-year extenders we used to do.
So with that I'll be supporting the
issue. Thank you.
ACTING PRESIDENT KUHL: The
Secretary will read last section.
THE SECRETARY: Section 4. This
act shall take effect immediately.
ACTING PRESIDENT KUHL: Call the
roll.
4275
(The Secretary called the roll.)
ACTING PRESIDENT KUHL: Record
the negatives and announce the results.
THE SECRETARY: Ayes, 56. Nays,
1. Senator Dollinger recorded in the
negative.
ACTING PRESIDENT KUHL: The bill
is passed.
Senator Skelos.
SENATOR SKELOS: Mr. President,
would you please call up Calendar Number 258,
by Senator Farley.
ACTING PRESIDENT KUHL: Calendar
Number 258, by Senator Farley, Senate Print
2838, an act to amend the Banking Law, in
relation to the appointment.
SENATOR OPPENHEIMER:
Explanation, please.
ACTING PRESIDENT KUHL: Senator
Farley, an explanation has been requested by
Senator Oppenheimer.
SENATOR FARLEY: Thank you.
This bill was originally was
proposed in 1999 as part of a Banking
Department bill. It was introduced as a
4276
separate bill in 2000, and it was passed
unanimously by the Senate in 2000.
The bill would clarify that the
boards of banking institutions may establish
policies for the appointment of appraisers -
these are real estate appraisers -- rather
than having to individually appoint each
appraiser used by each institution.
Currently, some bank boards review
and approve each appraiser individually, while
other bank boards establish general policies
governing the appointment of appraisers.
However, the Banking Department has noted that
the current law is ambiguous in regard to the
appointment of appraisers. They point out
that some could interpret the existing
language to mean that bank boards must
individually appoint each appraiser used by
their institution.
In order to clarify this is not the
case, the Banking Department developed these
direct appointments of each appraiser and said
it may be cumbersome, inefficient, and
especially for the larger institutions.
Furthermore, there's no need or benefit in
4277
requiring that this level of detail be
addressed by the -- at the board level.
This is a matter that should be
left to the discretion of each individual
institution. And while some may wish to
retain this authority to individually appoint
appraisers, others may wish to establish
policies to be followed.
It is important that it be noted
that in response to the savings and loan
crisis, New York State now has a state law
which provides for the licensing and
certification of real estate appraisers. This
has helped to strength and improve the
professionalism of the industry.
Also attached to this bill are
technical changes. This bill includes a few
technical corrections. It eliminates the
designation of paragraph B within Section
103.4 of the Banking Law. The designation of
paragraph A had been eliminated back in 1984.
However, the statute still contains the
designation of paragraph B. This designation
is meaningless and confusing. The bill would
eliminate this outdated and unnecessary
4278
designation.
It enacts conforming changes to
Section 5 in the Banking Law in regard to the
use of one appraiser rather than two. Laws
enacted in 1984 and '86 had eliminated the
requirement that state-chartered banks and
thrifts use two appraisers on every property.
The use of two appraisers was unnecessary and
simply resulted in higher costs of mortgage
loans.
However, Section 5 of the Banking
Law, which relates specifically to VA loans,
was inadvertently overlooked when these laws
were enacted in 1984 and 1986. This bill
makes the conforming amendments to that
section.
SENATOR OPPENHEIMER: That was
very thorough.
ACTING PRESIDENT KUHL: Senator
Oppenheimer.
SENATOR OPPENHEIMER: If the
Senator would yield for a couple of questions.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to a couple of questions
from Senator Oppenheimer?
4279
SENATOR FARLEY: Senator, before
I yield, do you understand all of these
technical amendments?
SENATOR OPPENHEIMER: Oh,
perfectly, thank you. I have some other
questions, though.
SENATOR FARLEY: I may ask you a
few questions on them.
(Laughter.)
SENATOR OPPENHEIMER: Not a word.
SENATOR FARLEY: Go ahead.
ACTING PRESIDENT KUHL: Ladies
and gentlemen, I realize it's 4:00 in the
afternoon -
SENATOR OPPENHEIMER: I'm sorry.
I'm sorry.
ACTING PRESIDENT KUHL: -- and
I'm being very gracious in allowing you to
deviate from the rules, but the rules don't
allow for a dialogue back and forth in the
chamber, neither from you, Senator Farley, nor
from you, Senator Oppenheimer.
So I appreciate all your
conversations going through the chair.
And no, I'm not distracted by the
4280
phone. I've been known to throw these, as a
matter of fact. So please listen to and obey
to the rules of the house.
SENATOR FARLEY: There will be no
more dialogue from this part of the chamber.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to a question?
SENATOR FARLEY: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
Thank you, Senator Oppenheimer.
SENATOR OPPENHEIMER: Thank you
very much. Mr. President, is there someone on
that phone or is this like Ernie and the
banana?
SENATOR FARLEY: I think it's the
Banking Board.
(Laughter.)
SENATOR OPPENHEIMER: Okay,
Senator, I actually have a pretty simple
question. These appraisers, were they -- was
the law originally written that each single
bank would have to have their own appraisers?
Or was this a board of appraisers that could
be used by all of the -- each of the banks in
4281
that area?
SENATOR FARLEY: The law was
originally each bank had to have its own
appraisers. Each bank branch, if you will, or
whatever you wish. Yup.
SENATOR OPPENHEIMER: Okay.
Well, if you would yield again.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to a another question?
SENATOR FARLEY: I will yield.
ACTING PRESIDENT KUHL: The
Senator yields. Thank you.
SENATOR OPPENHEIMER: It would
seem, if they're small banks, for each of them
to have to acquire one or two appraisers -
since you said some of the instances of real
estate appraising required two appraisers
instead of one. Certainly if it's a branch
where there is not that much activity, one can
see why a board that could handle several
banks, a board of appraisers would be logical.
Am I correct in -
SENATOR FARLEY: Yes, I think
you're getting to the problem. The bank can
set a policy, let's say, that this board could
4282
have several appraisers which could handle the
appraising for several branches.
SENATOR OPPENHEIMER: I see.
Through you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley, do you continue to yield to a question
from Senator Oppenheimer?
SENATOR FARLEY: I certainly
will, Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR OPPENHEIMER: Then the -
how shall we phrase this -- the mother bank
would have a board of appraisers that would be
able to service the various branches?
SENATOR FARLEY: The mother bank
would have a policy as to how the
appraisers -- it leaves it open that each
individual bank could -- they could have a
policy which each individual branch could
appoint its own appraiser or they could have
appraisers that would service all the
branches. Or -- in other words, it clarifies
the law, which was kind of ambiguous, and the
board didn't have do micromanage, if they
4283
didn't want to, all the appraisers of -- real
estate appraisers for the branches.
SENATOR OPPENHEIMER: I think I'm
understanding. Now, this bill isn't at the
request of the Banking Department -
ACTING PRESIDENT KUHL: Senator
Oppenheimer.
SENATOR OPPENHEIMER: Through
you, Mr. President, is there a reason that the
Banking Department hasn't said they're in
favor of this legislation?
SENATOR FARLEY: Yes, it was
originally a department bill. They are in
favor of it. And the law needs to changed or
clarified, is a better way to put it.
SENATOR OPPENHEIMER: Through
you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to another question?
SENATOR FARLEY: I certainly do,
Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR OPPENHEIMER: Would this
law and the change, the clarification that
4284
we're making to the law, would this apply to
all banks that are doing business in our
state? You know, the federal and the state
and the foreign banks?
SENATOR FARLEY: Just
state-chartered banks.
SENATOR OPPENHEIMER: Just
state-chartered banks.
Now, are the federal -
ACTING PRESIDENT KUHL: Senator
Oppenheimer, are you asking Senator Farley to
yield to another question?
SENATOR OPPENHEIMER: Yes,
please.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to another question?
SENATOR FARLEY: Yes.
ACTING PRESIDENT KUHL: The
Senator yields to a question.
SENATOR OPPENHEIMER: In the
cases where a federal or foreign bank was
making a realty loan -
SENATOR FARLEY: We are
conforming to the feds.
SENATOR OPPENHEIMER: They are
4285
conforming -
SENATOR FARLEY: No, we are
conforming to them. We're leveling the
playing field and having our state-chartereds
have the same law apply to them that the
federal chartered banks have.
SENATOR OPPENHEIMER: Oh, I see.
Okay, well, thank you very much.
SENATOR FARLEY: My pleasure.
SENATOR OPPENHEIMER: And I do
understand it now, and I certainly will be
supporting it.
SENATOR FARLEY: Thank you.
ACTING PRESIDENT KUHL: Senator
Duane, why do you rise?
SENATOR DUANE: If the sponsor
would yield, Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield a question from Senator
Duane?
SENATOR FARLEY: Yes, I will, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: As I recall,
4286
there was a time when the Banking Department
not only supported this bill, but it was one
of their program bills. I'm wondering if they
now have a position on it or if they came to
the -
SENATOR FARLEY: Yeah, I believe
I said that, that this -- I think it was last
year, was a -- this last year was a Banking
Department bill. It is a bill that they
support. They knew I was going to put it in
as Banking chairman. It's been supported by
the Banking Committee, and it's on the floor
for your discussion.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to another question from
Senator Duane?
SENATOR FARLEY: Mr. President, I
will yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Is there anything
different about this bill than the bill that
4287
was the program bill of the Banking
Department?
SENATOR FARLEY: Just those
technical amendments which I -- it's a cleanup
bill, that I cleaned up some of the
inaccuracies, if you will, in the current law.
I read them all to you.
ACTING PRESIDENT KUHL: Senator
Duane.
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to another question?
SENATOR FARLEY: Yes. I
certainly will, Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Are there really
any bank boards now individually appointing
appraisers?
SENATOR FARLEY: Yes, there are.
SENATOR DUANE: And through you,
Mr. President, has the Banking Department -
ACTING PRESIDENT KUHL: Excuse
4288
me.
Senator Farley, do you yield to
another question?
SENATOR FARLEY: I will yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Has the Banking
Department or anyone else taken any action
against any bank that didn't use their board
to make the appointment?
SENATOR FARLEY: No.
SENATOR DUANE: And through you,
Mr. President, if the sponsor would continue
to yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to another question?
SENATOR FARLEY: I will yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Do we have any
sense of how many have been using their boards
to make the appointments and how many have
been doing it through another process, an
internal process?
SENATOR FARLEY: I have no sense.
4289
SENATOR DUANE: Through you, Mr.
President, if the sponsor would continue to
yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to a question?
SENATOR FARLEY: I will yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DUANE: Did the Assembly
take any action on the former bill, or do you
know what they're doing this year on it?
SENATOR FARLEY: The Assembly has
not taken action on this. I don't think they
have any objection to it. We were in such a
rush to get out of here last year, because we
were a little late with things, and things
came together in a hurry. And this is one
that fell between the cracks.
SENATOR DUANE: And through you,
Mr. President, if the sponsor would continue
to yield.
SENATOR FARLEY: Yes.
ACTING PRESIDENT KUHL: Senator
Farley yields.
SENATOR DUANE: Do I take that to
4290
mean, then, that there is an Assembly sponsor
this year?
SENATOR FARLEY: Not yet. But I
think there will be.
SENATOR DUANE: That's it. Thank
you, Mr. President.
Thank you.
ACTING PRESIDENT KUHL: Senator
Stavisky, why do you rise?
SENATOR STAVISKY: I have one
question for the sponsor, if he would yield.
SENATOR FARLEY: I will yield,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley yields.
SENATOR STAVISKY: I think I
heard Senator Farley say that the federal
government has this benefit now.
SENATOR FARLEY: That's correct.
SENATOR STAVISKY: And did I hear
you say that -
ACTING PRESIDENT KUHL: Senator
Stavisky, are you asking Senator Farley to
yield to another question?
SENATOR STAVISKY: I'm sorry.
4291
Well, it's the same question. Well, I haven't
had a -- all right, yes.
SENATOR FARLEY: I will yield,
Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields to another question.
SENATOR STAVISKY: How is this
going to affect foreign banks? And I ask that
question because I have a great many foreign
banks in my area in Queens.
SENATOR FARLEY: They can do it
by policy. They're not affected by this.
This bill is specifically for our
state-chartered banks.
SENATOR STAVISKY: Thank you.
That's what I thought. Thank you.
ACTING PRESIDENT KUHL: Senator
Onorato, why do you rise?
SENATOR ONORATO: Senator Farley,
would yield to two questions, please?
SENATOR FARLEY: I will yield,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley yields.
SENATOR ONORATO: Senator Farley,
4292
are there any statutes or regulations that
currently could be used to help shape this new
clarification that you're trying to clean up
regarding the assessors? Is there anything
that they can use, any other statutes?
SENATOR FARLEY: No.
SENATOR ONORATO: And through
you, Mr. President, one last question.
SENATOR FARLEY: I will yield,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley yields.
SENATOR ONORATO: Will the
Superintendent continue to review this aspect
if it becomes law? Will the Superintendent
have the supervision over this aspect?
SENATOR FARLEY: Yes, the
Superintendent in the Banking Department
examines all the banks. You know, we'll go to
the bit if they're not appraising and they're
supposed to be appraising, they will be
penalized and so forth.
What this basically does, Senator
Onorato, is to kind of makes it uniform within
the banking industry as to how appraisers,
4293
real estate appraisers are appointed and kind
of lowers the cost, if you will, for a
consumer's loan on a mortgage. And it's
certainly not high on anybody's agenda, but
anyway it's one that I think that we need to
do and correct the law. There's some mistakes
written in the law which we're correcting.
ACTING PRESIDENT KUHL: Senator
Onorato.
SENATOR ONORATO: Through you,
Mr. President, will he continue to yield?
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to another question?
SENATOR FARLEY: I certainly
will, Mr. President.
SENATOR ONORATO: Thank you.
Senator, through our deregulation
bill that we passed, now we're removing a
portion of the Banking Law that the current
Superintendent had jurisdiction over. This is
what the gist of my question was. In view of
the fact we are now removing this now from
part of the regulations that were already in
existence, will the Superintendent continue to
have supervision over the policy?
4294
SENATOR FARLEY: The Banking
Board -- incidentally, which is one of the
finest in the nation. Our Banking Department
really does a great job -- will continue to
have supervision. All this does is clarify
the law. That's all this is doing, is
clarifying the current law because it's going
kind of ambiguous and confusing.
SENATOR ONORATO: Thank you,
Senator.
ACTING PRESIDENT KUHL: Senator
Dollinger, why do you rise?
SENATOR DOLLINGER: Will Senator
Farley yield to a question, please?
SENATOR FARLEY: I certainly
will.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DOLLINGER: Senator, as I
understand this bill, this bill will
substitute a single appraiser's judgment for
now what is required that two or more people
participate in the valuation of a piece of
property. I assume that the two or more
person language was placed in the statute to
4295
create two different opinions as to value
rather than the opinion of a single person.
Why is this a step forward in bank regulation
if we're substituting the single judgment for
what has previously been a two-person
judgment?
SENATOR FARLEY: Not exactly,
Senator Dollinger. Seldom have I ever heard
you say something that was inaccurate. But
that's not quite accurate.
We repealed that two or more in the
'80s, that they had to have two or more.
Currently under this law and the law that's -
that we will be passing, they may have two or
more if they wish.
SENATOR DOLLINGER: Through you,
Mr. President, if Senator Farley will continue
to yield to a question, I'm willing to allow
the term "shall" to be interpreted any way it
wants to. We've been -- in the course of the
last two days, we've been through "shall" so
many times, and we've learned that it really
means "may," it really means "might," it
really means that the Governor can do it
whenever he wants to.
4296
But I would call Senator Farley's
attention to line 20 on page 3, which says:
"Current language now says such appraised
value shall be determined by two or more
persons." That bracketed section is now what
we're repealing.
SENATOR FARLEY: That -- I know,
that is the law that relates to only to VA
loans, Veterans Administration loans.
SENATOR DOLLINGER: Again through
you, Mr. President, I must be confused.
ACTING PRESIDENT KUHL: Senator
Dollinger, you're asking Senator Farley to
continue to yield?
SENATOR DOLLINGER: Yes, please,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield?
SENATOR FARLEY: Yes, I'd be
pleased to yield.
ACTING PRESIDENT KUHL: Senator
Farley yields.
SENATOR DOLLINGER: This says
that no such loan upon the security of real
estate -- I'm referring to line 15 on page 3.
4297
It makes reference to a paragraph of
subdivision 1 of Section 5 of the Banking Law.
Now, I'm going to assume that Section 5 of the
Banking Law is right up front in the Banking
Law and constitutes the general provisions of
banking -- circumstances under which banks can
operate.
SENATOR FARLEY: Only VA loans.
SENATOR DOLLINGER: Section 5 -
SENATOR FARLEY: It's only VA
loans, Veterans Administration loans. Trust
me.
SENATOR DOLLINGER: I do.
Through you, Mr. President, under
this -
SENATOR FARLEY: I will yield,
Mr. President.
SENATOR DOLLINGER: Thank you,
Senator Farley.
ACTING PRESIDENT KUHL: Senator
Farley yields.
SENATOR DOLLINGER: Under this
section of the bill we have previously
required that we have two appraisers, two
people make a determination of value about VA
4298
loans. Senator Farley, those loans are the
best loans we can make, that any bank can
make, because they're backed by the full faith
and credit of the United States. Those are
the VA loans.
My question is, why, if we've had
the protection of two people determining value
for federally backed loans -
SENATOR FARLEY: We only require
one.
SENATOR DOLLINGER: Well, again
Mr. President, if Senator Farley will continue
to yield, I'll just read the current law as it
appears in -
ACTING PRESIDENT KUHL: Senator
Farley -- excuse me, Senator Dollinger.
Senator Farley, do you continue to
yield?
SENATOR FARLEY: Federal law
requires one.
SENATOR DOLLINGER: Through you,
Mr. President, if Senator Farley will continue
to yield, since I didn't even get the question
out of my mouth.
ACTING PRESIDENT KUHL: Senator
4299
Dollinger, I -
SENATOR FARLEY: We were
inconsistent.
ACTING PRESIDENT KUHL: Senator
Dollinger, I'm enjoying this conversation, but
I'm standing here and every time I look at
that seat, I see Senator Paterson. And I
don't know whether you have decided to vacate
the Minority Leader's seat or whether it's
something that Senator Onorato said earlier
today that causes you to be not in your seat.
SENATOR DOLLINGER: Yes, I
understand, Mr. President. I'll be glad to go
to the one that has my name on it.
ACTING PRESIDENT KUHL: That
would make me much happier.
SENATOR DOLLINGER: Thank you,
Mr. President. I could go either way, you're
saying, but not stay in -
ACTING PRESIDENT KUHL: Well, I
won't go into a dialogue with you about that
last statement of yours. But are you asking
Senator Farley to yield to a question?
SENATOR DOLLINGER: Yes, Mr.
President.
4300
SENATOR FARLEY: I will yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DOLLINGER: What I'm
trying to understand is under current law, as
I understand you've explained it to me, if
it's a VA loan, in New York we require that
the appraised value of the property for the
purpose of advancing the loan, that it be done
with the -- with two people being involved in
the appraisal. And it's my understanding that
you've responded to me by saying federal law
says you only have to have one.
SENATOR FARLEY: That's right.
SENATOR DOLLINGER: My question,
through you, Mr. President, is -
ACTING PRESIDENT KUHL: Senator
Farley, do you continue to yield?
SENATOR FARLEY: I do.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DOLLINGER: If New York
State believed that two appraisers was the
right number in the first instance at some
prior point, what has happened to convince us
4301
that we should back off from that combined
value to the judgment of a single person? Why
not continue to use two, regardless of what
the federal government does?
SENATOR FARLEY: It should be
noted that during the savings and loan crisis,
New York now has a state law which provides
for the licensing and certification of real
estate appraisers. This has helped to
strengthen and improve the professionalism of
the industry. I said that.
Also, it's more expensive because
the homeowner or the person getting the
mortgage has to pay for that, and there's no
need for it. Federal law, the VA law says you
only need one appraiser, and we're conforming
to that.
SENATOR DOLLINGER: Through you,
Mr. President, if Senator Farley will continue
to yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield?
SENATOR FARLEY: Yes.
ACTING PRESIDENT KUHL: The
Senator yields.
4302
SENATOR DOLLINGER: Under current
law, Senator Farley, the bank could use two
appraisers; correct?
SENATOR FARLEY: That's correct.
SENATOR DOLLINGER: So -- through
you, Mr. President, if Senator Farley will
continue to yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you continue to yield?
SENATOR FARLEY: I continue.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR DOLLINGER: So under
current law, we have an extra layer of
protection for the bank making the loan,
because we require that two appraisers
determine the value for the VA loan; is that
correct?
SENATOR FARLEY: No, I don't
think that's correct. You're calling it an
extra layer of protection. I call it an extra
expense that, generally speaking, the entire
industry, including the Banking Board and
this -- unanimously in the Senate last year,
felt that that was unnecessary.
4303
Now, if that particular bank feels
it is terribly important for them to have two
appraisers, I guess they still can have that.
But there's no need of it, in my judgment,
particularly if you have a licensed
professional appraiser. And it's one that
allowed them to set a policy to have one
appraiser.
SENATOR DOLLINGER: Okay.
Through you, Mr. President, first of all, I
appreciate Senator Farley's education of this
member.
I'm going to vote in favor of this.
I guess what Senator Farley has convinced me
is that if the federal law only requires one,
and if by -- we have an assurance that we have
a higher quality brand of professional
providing these services, I guess under those
circumstances I'm willing to take a small step
back from what was, at least in my judgment, a
stronger form of protection for the banking
system. And that is that before loans,
whether they're government-insured VA loans or
not, that banks were required to have two
opinions as to value before they made a
4304
judgment about the amount that they would loan
on a particular piece of property.
I would suggest, Senator Farley,
and at least in my practice as a lawyer,
despite the greater professionalism -- and I
believe that our appraisers are pretty good in
this state, at least the ones that I've dealt
with. But nonetheless, Senator Farley, as I'm
sure you realize, I have been faced, as have
others, with two certified appraisers giving
very significant differences in the property
value.
And my concern is that by going to
a single appraisal, the banks may be exposing
themselves to greater risk. If they want to
do that, from my point of view that's really
their choice, and I will abide by their
policy-setting. I would just suggest that
there clearly will be instances where two
appraisers should look at a piece of property.
And I would hope that the Banking Department
would encourage state banks to consider two
appraisers in certain required circumstances.
I'll leave that to the discretion
of individual banks. But I wouldn't like to
4305
think that we're telling banks that in every
single instance, only one appraiser is
necessary.
Thank you, Mr. President.
SENATOR FARLEY: Thank you, Mr.
President. On the bill.
ACTING PRESIDENT KUHL: Senator
Farley, on the bill.
SENATOR FARLEY: This law does
exactly what you say it should be doing. It
gives that bank the option to have two
appraisers if they feel it's necessary. They
still can do that. And there's times when you
may want two appraisers, and this law allows
them to have that if they wish it.
But truly, it's in the benefit of
the consumer, because it raises costs to have
a couple of appraisers, and sometimes it's not
necessary.
ACTING PRESIDENT KUHL: Senator
Stachowski.
SENATOR STACHOWSKI: Mr.
President, if Senator Farley would yield.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to a question?
4306
SENATOR FARLEY: Certainly.
SENATOR STACHOWSKI: I heard a
lot of your explanation on the appraisers.
However, when you were explaining to Senator
Oppenheimer the technical pieces, I couldn't
hear it. And it wasn't your fault. There was
a lot of conversation in this general area,
and I just couldn't hear it.
So if you wouldn't mind going over
that for me quickly, and then I might have a
couple of other questions. But I'm really
serious about that. Thanks.
SENATOR FARLEY: Okay. This bill
contains a few technical corrections. It
eliminates the designation of paragraph B
within Section 103.4 of the Banking Law. The
designation of paragraph A had been eliminated
in 1984. However, the statute still contains
the designation of paragraph B. This
designation is meaningless and confusing. The
bill would eliminate this outdated and
unnecessary designation.
It also enacts conforming changes
to Section 5 of the Banking Law in regard to
the use of one appraiser rather than two.
4307
Laws in 1984 and 1986 had eliminated the
requirement that state-chartered banks and
thrifts use two appraisers on every property.
The use of two appraisers was unnecessary and
simply resulted in higher costs for mortgage
loans. However, Section 5 of the Banking Law,
which relates specifically to VA loans, was
inadvertently overlooked when these laws were
enacted in 1984 and 1986. This bill makes
conforming amendments to that section.
SENATOR STACHOWSKI: Mr.
President, through you.
ACTING PRESIDENT KUHL: Senator
Farley, do you yield to a question?
SENATOR FARLEY: I'll yield.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR STACHOWSKI: The
technical changes had to do with that VA part,
or it was just taking other parts out,
unnecessary parts of the bill?
SENATOR FARLEY: It took out
unnecessary parts and also specifically spoke
to the VA part.
SENATOR STACHOWSKI: Thank you,
4308
Senator.
On the bill.
ACTING PRESIDENT KUHL: Senator
Stachowski, on the bill.
SENATOR STACHOWSKI: I had asked
some of the questions on the appraisers when
we were in committee, and Senator Farley gave
me answers that were satisfactory to me. At
first I was concerned that maybe we were doing
this change because the bank boards didn't
want to have extra meetings or we didn't want
to burden those very busy people that are on
bank boards getting that particularly
attractive stipend that they get for serving
on them, and we wouldn't want to overburden
them with a lot of extra work because they
might have to increase that attractive stipend
that they currently get. Sometimes in
multiple cases.
I think it was Senator Volker that
once told me he used it find it particularly
embarrassing that no matter what kind of bank
you named in the early '80s, Senator Barclay
would get up and recuse himself because he was
on the board. So, I mean, that was -- and
4309
Dale always said that he would love one time
to be able to do that.
But anyway, I found his answers
satisfactory. I believe that the Banking
Department wouldn't be behind this if they
thought there was an extended risk to the
people that deal with the banks or to the
banks themselves by changing this to set up
all appraisers available at once and that the
use of one appraiser should be sufficient.
Not being a lawyer, I don't find
all the difficulties that lawyers seem to find
in a lot of these kinds of changes. But then
again, I don't find a lot of the difficulties
in everyday live that a lot of the lawyers
seem to find. So anyway, with that being
said, I'm going to support this bill and thank
Senator Farley for his time and gracious
explanation.
ACTING PRESIDENT KUHL: Is there
any other Senator wishing to speak on the
bill?
Senator Brown.
SENATOR BROWN: Through you, Mr.
President, would Senator Farley yield for a
4310
few questions?
SENATOR FARLEY: I would yield,
Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR BROWN: Senator Farley,
I've read the legislation, and I think I
understand it. But can you tell me, do you
think that bank appraisers can contribute to
redlining?
SENATOR FARLEY: I can't see
where they would be involved in that, Senator.
A bank appraiser basically goes out and
establishes the value of a piece of property
to protect the bank's investment in that
property. If they've got a personal agenda, I
don't think they're going to be working for
the bank for very long.
SENATOR BROWN: Thank you.
Through you, Mr. President, would
Senator Farley yield for another -
SENATOR FARLEY: I would yield,
Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields to another question.
4311
SENATOR BROWN: Thank you,
Senator.
In this are there any provisions
for the banking boards to look at diversity in
terms of the hiring of appraisers?
SENATOR FARLEY: No, not that I
know of.
SENATOR BROWN: Thank you,
Senator.
ACTING PRESIDENT KUHL: The
Secretary will read the last section.
THE SECRETARY: Section 6. This
act shall take effect immediately.
ACTING PRESIDENT KUHL: Call the
roll.
(The Secretary called the roll.)
THE SECRETARY: Ayes, 57.
ACTING PRESIDENT KUHL: The bill
is passed.
Senator Bonacic.
SENATOR BONACIC: Mr. President,
can we call up Calendar Number 274, by Senator
Libous, please.
ACTING PRESIDENT KUHL: The
Secretary will read.
4312
THE SECRETARY: Calendar Number
274, by Senator Libous, Senate Print 2900, an
act to amend the Tax Law, in relation to
extending the authorization.
SENATOR DOLLINGER: Explanation,
Mr. President.
ACTING PRESIDENT KUHL: Senator
Libous, an explanation of Calendar Number 274
has been requested by Senator Dollinger.
SENATOR LIBOUS: Thank you, Mr.
President. This piece of legislation has come
to us through the Tioga County Legislature,
who voted to ask us to extend the sales tax
extender so that they could raise an
additional half a percent in sales tax for the
County of Tioga.
ACTING PRESIDENT KUHL: Senator
Gentile, why do you rise?
SENATOR GENTILE: Yes, if Senator
Libous would yield to questions.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to a question?
SENATOR LIBOUS: Mr. President, I
would be pleased to yield to Senator Gentile.
ACTING PRESIDENT KUHL: The
4313
Senator yields.
SENATOR GENTILE: Thank you, Mr.
President. And thank you, Senator Libous.
Through you, Mr. President, I'll
just ask the sponsor, do you agree that at
this point in time our state is actually
moving in the direction of repealing the tax
sales tax on items, particularly clothing and
footwear?
SENATOR LIBOUS: Mr. President, I
was very proud to be a cosponsor of that
legislation. As a matter of fact, when I
first ran for the Senate in 1988, because I
live in the Southern Tier and, Senator
Gentile, south of us is the Pennsylvania
border. And at that time, and as it is today,
people could go to Pennsylvania and purchase
clothing with no sales tax. As a matter of
fact, many people would go in busloads, and
leave the State of New York.
And I was a proponent back then of
trying to remove sales tax on clothing. Back
then my proposal was $500 or less. I was very
pleased when this house, in conjunction with
Governor Pataki, took a very big move several
4314
years ago and eliminated the sales tax on
clothing on items of $110 or less.
So, you know, I'm a bill proponent
of that. I would like to see us go further as
a body to $500, and that's very important.
However, Mr. President, this
particular piece of legislation is designed a
little bit different, where this is something
that the local entity, Tioga County, chose -
and by the way, that county has chose not to
reduce their sales tax on clothing, like other
individual counties have.
Now, in Broome County, where I
live, Mr. President, they chose to also
eliminate their share of the sales tax on
clothing. But Tioga County did not, because
they had some debts that had to pay off and
they felt that that was a better way of taking
care of those debts rather than passing them
on to the property taxpayer.
One of the reasons for that, Mr.
President, is because Tioga County is a rural
county in which we have a lot of farms. And
to pass that on to the farmer would not be a
good thing.
4315
ACTING PRESIDENT KUHL: Senator
Gentile.
SENATOR GENTILE: If the sponsor
would continue yield.
SENATOR LIBOUS: I would be
honored to.
ACTING PRESIDENT KUHL: Senator
Libous yields.
SENATOR GENTILE: Thank you, Mr.
President.
First of all, I'm shocked to hear
that Tioga County has not taken the lead of
the Governor and the Legislature in this state
and followed the path to reduction of the
sales tax. Certainly that is shocking to
hear.
My question to you, Senator, is
that in practical terms, how much has this
increase percentage in the sales tax brought
to Tioga County?
SENATOR LIBOUS: About
$1.6 million annually.
SENATOR GENTILE: Did you say
million?
SENATOR LIBOUS: $1.6 million.
4316
SENATOR GENTILE: $1.6 million
annually.
Well, Senator, I'm not sure, not
having known any of the -- and I'd ask the
Senator to continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous, do you continue to yield?
SENATOR LIBOUS: Yes, Mr.
President, I will.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR GENTILE: Not knowing any
of the officials in Tioga County, I'm
wondering if you or someone on your staff has
shared with them the wonderful economic
stimulus that a repeal of the sales tax on
clothing and shoes, particularly that we have
led, has made around the state of New York,
particularly in the City of New York, and
maybe even in Broome County also. Have you
been able to share that good news with Tioga
County?
SENATOR LIBOUS: Mr. President,
would Senator Gentile yield to a question?
SENATOR GENTILE: Sure.
4317
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR LIBOUS: Mr. President,
has Senator Gentile ever been to Tioga County?
SENATOR GENTILE: I have never
been to -- actually, drove through Tioga
County. Never stopped in Tioga.
SENATOR LIBOUS: That's
unfortunate, Mr. President, because I would
hope the next time Senator Gentile drives
through Tioga County that he would have an
opportunity to stop there and visit some of
the people.
Let me, Mr. President, answer the
Senator's question. Tioga County is a
wonderful place in which the local officials,
who I have tremendous respect for, like I do
in all three of the counties that I represent,
have made a decision. They were elected by
the people of that county, and they meet on a
regular basis and they made a decision. I
respect the decision that they made, sent us a
home rule message.
And because of that, I think it is
proper for this body to carry out their
4318
wishes, because I believe that government
closest to the people is the best. And that
in this case we have government very close to
the people. And their decision is to take
this half a percent and put it toward bond
indebtedness.
Mr. President, earlier today a
number of people on the other side of the
aisle voted against debt. And I certainly
respect that. And certainly the legislators
in Tioga County want to continue paying down
their debt. So they take the money from this,
and they put it toward their bond
indebtedness, whether it be on the county jail
that they were mandated to build by the state,
or other items that have been mandated by the
State of New York.
So, Mr. President, yes, I think
they're very much aware of the importance -
that the sales tax reduction on clothing, as
Senator Gentile mentions, is important. But
at the same time, I do believe that government
closest to the people is the most responsible
and responsive government.
SENATOR GENTILE: If the Senator
4319
would continue to yield.
SENATOR LIBOUS: Yes, Mr.
President, I will.
ACTING PRESIDENT KUHL: Senator
Libous yields.
SENATOR GENTILE: Thank you,
Senator. I agree with you that government
closest to the people can be the most
responsible at times.
But when that government closest to
the people is also a tax-and-spend government,
then wouldn't you agree with me, Senator, that
the best fiscally conservative approach to
proceed with in this state is to put money
back in the pockets of the residents of Tioga
County, and wouldn't that be the most fiscally
conservative and prudent and best way rather
than a tax-and-spend approach of Tioga County?
SENATOR LIBOUS: Well, Mr.
President, one might think that. But in this
case I believe what they're doing is they're
saving the taxpayers money. Because by taking
a broad approach and taking this half a
percent and paying off the bond indebtedness
on the jail and other items, they -- by doing
4320
that, they don't have to raise property taxes.
And property taxes, especially in a rural
county, when you have large farms, is
devastating.
And then at the same time, the
State of New York of which we are responsible
in passing legislation for, has passed a
number of important tax measures that have
helped businesses and have helped property
owners. Obviously the STAR program comes to
mind.
So I think what the county
legislature is doing here is a prudent
approach. And actually, by collecting an
extra half a percent, over the long run what
they're doing is they're reducing the burden
to the property taxpayer. So I think this is
a very prudent approach, and therefore I
support it.
SENATOR GENTILE: Senator, thank
you. If I can continue and -- if the Senator
would continue to yield for a question or two
more.
ACTING PRESIDENT KUHL: Senator
Libous, do you continue to yield?
4321
SENATOR LIBOUS: Be happy to, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator continues to yield.
SENATOR GENTILE: Senator, then
the question -- I think you mentioned it, with
the addition of the STAR property tax cut and
all the other benefits that all New Yorkers
now receive through the STAR program. I'm
curious as to when was the last time Tioga
County was forced to raise their property
taxes.
SENATOR LIBOUS: You know, Mr.
President, again, I would revert back to my
philosophy. And my philosophy is that the
government closest to the people governs best.
And I try not to get involved in the
day-to-day operation of Tioga County or the
decisions that the county legislators make.
Because again, they too were representatives
of the people.
So I don't know the last time that
Tioga County raised its property taxes. But
I'm sure that if we were able to contact the
county legislature, they might be able to
4322
provide us with that information.
SENATOR GENTILE: If the Senator
will continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield?
SENATOR LIBOUS: Be happy to, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR GENTILE: Senator, the
only reason I asked that question is because
you have used that as a condition for having
this tax raised, so that property taxes would
not have to go up. If we found out that
property taxes have not gone up in Tioga
County in quite some time, then wouldn't you
agree that this reason for having an increase
in the sales tax is really nonexistent?
SENATOR LIBOUS: You know, Mr.
President, we pass a number of major pieces of
legislation here on an annual basis, and some
years quicker than others. But we do pass
very important legislation that impacts the
people of New York State.
And I know that it's always
4323
well-intended that when I vote for a tax cut,
that it is my hope that the local government
doesn't pile on later on. Because I know that
this house, under Senator Bruno's leadership,
has been very concerned over the years about
additional mandates to local governments and
adding an additional tax burden to those
particular areas of the state that feel that
state government piles onto.
And because of that, Mr. President,
it is always with good intention that we pass
tax cuts that we would hope get passed on at
the local level. However, as a state
official, I have no control over what my
county legislature does or my city council
does. And if they wish to pile on, which
would be unfortunate, that again is certainly
their decision.
SENATOR GENTILE: If the Senator
would continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous?
SENATOR LIBOUS: I would
certainly do so.
ACTING PRESIDENT KUHL: The
4324
Senator yields.
SENATOR GENTILE: Well, Senator,
I guess what I'm asking you is that -- and I
understand your philosophy on tax cuts and
applaud you and stand shoulder to shoulder
with you, although you're somewhat taller than
I am.
But I ask you that with that
philosophy and what you have espoused in terms
of tax cuts, why not join me and the others
who believe that cutting the sales tax across
this state in every county is the right thing
to do and therefore lead a campaign to
convince the local officials in Tioga County
that they're doing the wrong thing?
SENATOR LIBOUS: Well, Mr.
President, I see it in a different view. I
see Senator Gentile and his colleagues
following Senator Bruno and us as far as
leading the fight to cut taxes and sales tax
on clothing in this state.
And certainly, Senator Gentile, I
will continue to try to convince those local
officials that what the Senate Majority here
is doing in Albany, in conjunction with the
4325
Governor, is the right thing to do.
However, again, they are elected by
the people, they have a right to pass
resolutions and laws. And we have a right to
honor those resolutions and laws. And in this
case, I feel that when the majority of the
county legislature, both the Democrat and
Republican, say to me as their elected
representative that we need assistance in this
particular legislation, I'm here to give it to
them.
SENATOR GENTILE: If the Senator
would continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous?
SENATOR LIBOUS: I'd be happy to,
Mr. President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR GENTILE: So, Senator,
are you saying in essence that although you
don't agree with the officials in Tioga County
you nevertheless will sponsor this legislation
because that's their will?
SENATOR LIBOUS: I believe in the
4326
will of the people, Mr. President. I believe
the will of the people is being carried out
through the elected representatives at the
local level. Therefore, it is upon us to do
what they feel is best. And that's what we
are doing here today, Mr. President.
SENATOR GENTILE: If the Senator
would continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to another question?
SENATOR LIBOUS: I will do so.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR GENTILE: Well, Senator,
then I'm forced to ask you this question,
then. Do you believe it's the will of the
people to go ahead and have a sales tax
increase imposed upon them?
SENATOR LIBOUS: Again, Mr.
President, I think if Senator Gentile had an
opportunity to stop in Tioga County at some
point -- and I'm going to invite him today to
do that, because I think that's important.
And if he had an opportunity just to walk down
the streets of the village of Owego and talk
4327
to some of the people there, he would find -
I really believe this in my heart -- that
overwhelmingly they would prefer a half a
percent increase in sales tax over increased
property taxes.
And again, they have elected these
individuals. These individuals meet on
regular basis. They make decisions.
Sometimes the decisions are good decisions.
And I'm sure maybe in the past, from time to
time, they might have made one or two bad
decisions.
But again, they feel that this is
what is in the best interests of their county.
As their state elected representative, I'm
going to carry out their best wishes and try
to do it here today before the end of the
afternoon.
SENATOR GENTILE: If the Senator
would yield to one more question.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to one more question?
SENATOR LIBOUS: I certainly
will, Mr. President.
ACTING PRESIDENT KUHL: The
4328
Senator yields.
SENATOR GENTILE: Senator, what I
hear you saying, what I hear you saying is
that you wish you really didn't have to bring
this bill to the floor, that frankly, frankly,
you would join the rest of us on this campaign
to cut sales taxes across the board in every
county of this entire state, and yet your hand
is forced, you're saying, because the County
of Tioga -- and I've been through Owego, the
County of Tioga -- never stopped there, but
been through it -- the County of Tioga, for
whatever reason -- maybe they can't see that
border in Pennsylvania. Maybe it's the reason
that I said, it's a tax-and-spend local
government. They're going to push this bill.
Should we be party to that, Senator?
SENATOR LIBOUS: Mr. President,
having won 86 percent of the vote in Tioga
County, I feel confident that this is the
right thing to do for the people.
SENATOR GENTILE: Thank you,
Senator.
On the bill, Mr. President.
ACTING PRESIDENT KUHL: Senator
4329
Gentile, on the bill.
SENATOR GENTILE: Mr. President,
I appreciate Senator Libous's answers to my
questions. And certainly it's a pleasure
having that conversation with him.
But it still comes down to the
bottom line. The bottom line is that the
sales tax that is being proposed here is the
exact type of sales tax that this state, over
the last several years, has sought to
eliminate. The fact that Tioga County has not
jumped on that bandwagon is at the detriment,
is at the detriment of the people in Tioga
County.
And certainly I'm willing to come
and visit the people in Tioga -- as I said on
my way to Cornell University, always drove
through Owego -- but certainly willing to meet
with them. Because I think if they saw what
the benefits were in New York City and
elsewhere in this state as to what an economic
engine it is to cut the sales tax and put that
money back into the pockets of the people of
the State of New York, that would convince
them that any half-percent increase in sales
4330
tax is by far the less preferable than the
economic engine of putting the money back in
the pocket of the people in this state.
And that's why I think we've moved
forward in repealing the sales tax at $110.
My next step, and I hear it's your next step,
is to make it a $500 limit on the repeal of
the sales tax on clothing and shoes. I'm glad
to hear that, Senator Libous. I will join you
in that effort.
However, I cannot join you in this
effort, on principle, and I will be voting no.
ACTING PRESIDENT KUHL: Senator
Stachowski, why do you rise?
SENATOR STACHOWSKI: Would
Senator Libous yield to a couple of questions,
please.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield?
SENATOR LIBOUS: Be happy to, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR STACHOWSKI: Right off
the bat, prefacing my first question, I'm not
4331
sure if I've ever been in Tioga County or not.
But I have been in Binghamton.
SENATOR LIBOUS: Mr. President, I
would extend the same invitation to Senator
Stachowski.
SENATOR STACHOWSKI: And I've
been in Binghamton more than once, for -- way
back, for a bunch of coaching clinics when I
was coaching in high school. Most of those
stories I will share with you sometime, but
not on this floor.
Anyway, I'm curious about why it
was a half a percent in the first place and
not a whole percent. Because it would seem to
me it would be a little difficult for all the
merchants, et cetera, that do sales tax. So
why did they do a half a percent?
SENATOR LIBOUS: I believe, Mr.
President, because Tioga County is a very
conservative county.
(Laughter.)
SENATOR STACHOWSKI: Thank you,
Senator.
If the Senator would continue to
yield.
4332
ACTING PRESIDENT KUHL: Senator
Libous?
SENATOR LIBOUS: Yes, I will.
ACTING PRESIDENT KUHL: He yields
to another question.
SENATOR STACHOWSKI: If this is
retiring some of their debt services, that's
what this sales tax is used for? And you said
it's about -- did you say 1.6?
SENATOR LIBOUS: It's
approximately 1.6, Mr. President.
SENATOR STACHOWSKI: The question
is, what was it when it started and how much
has it grown? If you know. You may not know
that. But I don't know.
SENATOR LIBOUS: Mr. President, I
think I can best answer Senator Stachowski's
question by saying that the half a percent
goes toward the debt on the jail. It is my
best understanding, Mr. President, that that
debt was about $10 million. And there are
about 10 to 15 years remaining, somewhere in
that time period, on the bond indebtedness,
with both the amount of principal and
interest. And what they try to do is pay
4333
toward this each year with that percentage.
SENATOR STACHOWSKI: If the
Senator would continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to another question?
SENATOR LIBOUS: Yes, I will.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR STACHOWSKI: So this
particular sales tax piece, as opposed to most
of the other ones that we see, is just
dedicated strictly for the jail? Or is there
any other debt service that it's dedicated
for?
SENATOR LIBOUS: Mr. President,
the ranking member of the Finance Committee is
quite astute in that this particular half a
percent is unique from other sales tax
extenders. In that this half a percent, as
the Senator indicates, does go toward the bond
indebtedness, which is the indebtedness on the
jail and I believe on a couple of other
capital projects that were thrown into that
bond.
So, Mr. President, Senator
4334
Stachowski is correct, and this is different
from other extenders that we have done.
SENATOR STACHOWSKI: On the bill.
Thank you, Senator.
ACTING PRESIDENT KUHL: Senator
Stachowski, on the bill.
SENATOR STACHOWSKI: Because this
is so much different than most sales taxes,
and I'm sure that with it being a rural county
and a conservative kind of people that
wouldn't want an extra tax on themselves
unless it benefited them in the long run -
and obviously if this is dedicated only to
their debt service reduction -- I'm going to
probably support this. It seems to me like
it's probably not a bad idea.
I know in Erie County one of the
problems that we constantly get faced with is
they have a 1 percent that the county gets and
it's grown immensely. It's over a hundred
million dollars, I think. And the problem is
that all the localities and school districts
that signed off on the county getting that,
way back when we first started it -- and they
originally put it in for the reduction of the
4335
Dome Stadium payments. And once that was
done, they kept it. And it continues to grow.
And the city, which is financially
probably the worst off, is hurt because they
can't get a share of that extra 1 percent.
And the school districts, which are always
looking for a little extra money rather than
raise taxes, are up against it because they
can't get their normal percentage of that
extra 1 percent.
And the county does some kind of
interesting things how -- talking about how
fiscally responsible they are and how they
have money always and everybody else is
looking to raise taxes. And oftentimes when
people make the request, they'll say, well, if
you were as fiscally responsible as we were,
and as finding good ways of spending your
money and not taxing, you would have money,
you wouldn't have to come to us for it.
And yet most of us that observe
this from afar notice that that 1 percent
keeps growing. And that extra hundred million
dollars -- probably it's close to between 110
and 120 now -- is a pretty nice fallback
4336
package that nobody else had available to
them. And yet they continue to keep it to
themselves.
And I'm not saying that that's
entirely wrong, but to take the attitude that
we don't have to share it, you guys don't do
as good a job as we do, because we are
financially sounder, when everybody pretty
much knows they're financially sounder because
of this wonderful hundred plus million dollars
that comes every year because of that
1 percent, it's rather interesting.
And the most interesting part, from
my perspective, is that one of my
predecessors -- not the immediate predecessor,
but the one before him, who Senator Marchi
would know and a few of other members that are
here, probably Senator Johnson. Because if
Jimmy Griffin was here, he'd be as popular as
Senator Johnson is. And I had just been to a
conference, and everybody that found out I was
from New York said, "How is Owen?" I said,
"As conservative as always." And they all
smiled and said, "That's great, we'll see him
in New York," and I said, "I'm sure you will,"
4337
and da-da-da-da-da.
But anyway, back to this sales tax
that I was talking about. Jimmy Griffin was
the one that made sure the county could get
that in the first place. He signed off from
the city. And then shortly thereafter, he was
the one beating our doors down saying, you
know, You got to get us a share of that sales
tax money, because it's not going.
So my only fear, even with this 1
percent, and as dedicated as it is, is that
someday they're going to retire all their
debts, hopefully, and they won't be building
anything else major, or they won't have to,
and so that then they'll have -- the county
will have that extra one-half a percent. And
I don't know what they'd use it for,
because -- I mean, I don't know what's there,
because I haven't been there. But I will make
a point of going there just so I can find out,
besides farms, what's there. Because it
sounds like a very nice place and wonderful
people.
And because of all those reasons,
and my little story, even though I have some
4338
concern because of what's happened in Erie
County, I'm going to support this. Because I
also believe that in most cases, when the home
rule message comes, unless there's some
strange circumstance that brought it here -
and I may know other reasons, and in that case
I might vote against it. I have no reason to
vote against somebody's home rule message in
this case, and so I'll probably support this
bill.
And thank you very much, Mr.
President.
ACTING PRESIDENT KUHL: Senator
Dollinger, why do you rise?
SENATOR DOLLINGER: I'll yield to
Senator Schneiderman, Mr. President.
ACTING PRESIDENT KUHL: Senator
Schneiderman.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, if the sponsor
would yield for a few questions.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield?
SENATOR LIBOUS: Sure. Yes, I
will.
4339
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR SCHNEIDERMAN: Listening
to this debate, I think it raises some
interesting issues about the purposes and
effects of sales taxes. I'm concerned about
communities like the community of Owego. Are
you familiar with Owego?
SENATOR LIBOUS: Mr. President,
is he asking you that question or is he
asking -
SENATOR SCHNEIDERMAN: Through
you, Mr. President, is the sponsor familiar
with the community of Owego?
ACTING PRESIDENT KUHL: I think
he's asking you, Senator. I'm familiar with
Owego, so he wouldn't want to ask me.
SENATOR LIBOUS: Mr. President,
would you please tell Senator Schneiderman I'm
not even going to respond to that.
ACTING PRESIDENT KUHL: The
Senator refuses to answer.
SENATOR SCHNEIDERMAN: Well, the
reason I'm asking about Owego is that it's an
area that has been undergoing some
4340
redevelopment, starting up antique businesses,
other things that may be affected by the sales
tax. So that is the reason for that, and I
would hope that the Senator would respond,
because I am concerned about its impact on
redevelopment of small businesses.
Has there been any effort to
examine whether or not the cottage industries
growing up in places like Owego would be
affected? Through you, Mr. President.
ACTING PRESIDENT KUHL: Are you
asking the Senator to yield?
SENATOR SCHNEIDERMAN: I am
asking if the Senator will yield for that
question. And if he would like, I will be
happy to repeat it.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to a question from
Senator Schneiderman?
SENATOR LIBOUS: I'd yield to a
question from the Senator.
ACTING PRESIDENT KUHL: The
Senator yields to a question.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President. Has anyone
4341
looked, to your knowledge, in Tioga County or
anywhere else, at the issue of these cottage
industries, antique stores that are developing
there, and I gather somewhat successfully, and
whether or not the sales tax would have an
adverse impact on their business?
SENATOR LIBOUS: Mr. President, I
take it Senator Schneiderman has been to
Owego, or at least has received information
about Owego, because Owego has a magnificent
antique row. And I do know that the county
legislator that the represents the heart of
the city was supportive of this legislation,
actually was the sponsor of this legislation.
So the best information that I
could provide the Senator, that if the local
legislator who represents Antique Row supports
this legislation, I would have to assume that
it would be in the best interests of the
community.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, if the sponsor
would continue to yield.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to another question?
4342
SENATOR LIBOUS: Sure.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR SCHNEIDERMAN: Thank you.
Do you know if any consideration
was given to any other type of tax to cover
the financial needs of Tioga County in income
tax or other additional property tax?
SENATOR LIBOUS: Mr. President, I
do know that when this tax was first imposed
and came to us and voted by the legislature
with a home rule, they looked at a number of
ways to pay off what they considered a state
mandate. And that was the jail that I've
talked about.
At that time and again at this
time, they feel that the half a percent is the
best way to go. It is going to be one of the
taxes that is going to be less abusive to the
people who own property and do business in
Tioga County.
And again, Mr. President, through
you, I defer -- and I've said this a number of
times, I will continue to say that I really do
defer to the legislators in knowing what is
4343
best at the local level when it comes to local
taxation on their constituents.
ACTING PRESIDENT KUHL: Senator
Schneiderman.
SENATOR SCHNEIDERMAN: Thank you.
Through you, Mr. President, if the sponsor
would yield for another question.
ACTING PRESIDENT KUHL: Senator
Libous, do you yield to another question?
SENATOR LIBOUS: Yes, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR SCHNEIDERMAN: I've heard
your repeated references to the government
closest to the people governing best. Would I
then -- what would your position be then
regarding the fact that the local government I
deal with mostly, the government of the City
of New York, frequently requests this body for
additional authority to impose rent
regulations and is routinely turned down on
the basis that the big government in Albany
knows better?
ACTING PRESIDENT KUHL: Senator
4344
Schneiderman, let me just interject here. I
assume that Senator Libous is having some
concern about answering that question because
it has nothing to do with his bill. And I
would just simply say to you that if some
member were to object to the germaneness of
your question, I would be inclined to rule
that question nongermane. I just reflect
that.
And I would remind you, so that we
don't have to go through that kind of a battle
on the floor, that to try to keep your
questions germane to the bill before us.
Senator Libous, for an answer to
the question.
SENATOR LIBOUS: Mr. President,
in the 13 years I've served here, I have
handled each piece of legislation separately
as it comes here and make decisions based on
that particular piece of legislation that is
before me.
SENATOR SCHNEIDERMAN: Thank you.
Thank the sponsor for his answers.
On the bill.
ACTING PRESIDENT KUHL: Senator
4345
Schneiderman, on the bill.
SENATOR SCHNEIDERMAN: And I have
benefited for many years as an attorney from
judges whose suggestions were made as artfully
as the presiding officer today.
I think that the only concern that
people have expressed here -- Senator Gentile
and others -- is over the overall direction of
tax policy in New York State. I think it
sounds as though Senator Libous is doing a
fine job representing his constituents here,
based upon my limited knowledge of events in
Tioga County, limited, I'm afraid, to people
from New York City who have purchased antiques
there. It does sound as though things are
moving in the right direction.
I do share the concern expressed by
several of my colleagues, though, that we -
in addition to piling up debt, we continue to
shift taxes in New York State. Many of the
tax cuts that we've locked in that have yet to
achieve their full impact cut taxes like the
income tax for top income brackets. And what
we end up with is an increase in things like
sales taxes and user fees that actually have a
4346
tremendously regressive effect.
The New York State economy is now
the most regressive of all the fifty states.
The gap between rich and poor is greater than
in any other state. And that is really a
tragedy of the last decade. And I'm afraid
that the direction we're headed in is probably
not the best one for the long-term economic
health of the state.
And I would respectfully submit
that we would be better off maintaining a
responsible level of state income tax, given
the expenditures we're going to make. If
we're going to cut the size of government,
that's different. But we don't seem to be
interested in doing that. Rather than
creating a situation where communities such as
Tioga have to increase sales taxes, which do
disproportionately affect low-income and
working residents.
I do intend to vote for this bill
based on the commentary of the sponsor and the
colloquy we've had here today, but I do think
there are larger issues raised by this
question.
4347
Thank you, Mr. President.
ACTING PRESIDENT KUHL: Senator
Dollinger, why do you rise?
SENATOR DOLLINGER: Mr.
President, will the sponsor yield to one
question?
SENATOR LIBOUS: Yes, Mr.
President.
ACTING PRESIDENT KUHL: The
Senator yields.
SENATOR DOLLINGER: Senator
Libous, the sales tax that we're about to
impose goes also on the price of gasoline.
And my question is in a place like Tioga
County, where the cost of fuel -- both in
terms of farming and because of the somewhat
rural nature of Tioga County, I would assume
that the cost of gasoline, consumption of
gasoline is a significant expense.
And my question is that the -- by
reimposing this sales tax, I mean, out of a
$1.50 price of a gallon of gas, we're imposing
12 cents worth of sales tax. And my question
is considering the continuing imposition of
the tax, do you know whether the county
4348
legislature considered the rising price of
gasoline as a factor in the collection of
sales tax and in the impact on the farming and
other industries there?
SENATOR LIBOUS: Mr. President, I
do not know the answer do that question.
SENATOR DOLLINGER: Okay. Thank
you, Mr. President. On the bill, briefly.
ACTING PRESIDENT KUHL: Senator
Dollinger, on the bill.
SENATOR DOLLINGER: I'm actually
going to change a long-standing practice in
this house -- I have voted against all the
sales tax increases that we've seen -- largely
because the colloquy that we have had today
we're finally having.
I think Senator Libous has
presented a reasonable explanation for the
continued imposition of this tax. I've
generally been against continued imposition of
sales taxes because, from my point of view,
one, I think they have a regressive nature to
them and, two, by imposing sales taxes rather
than property taxes, you lose the tax
deductibility of property taxes. They are
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deductible on federal income tax returns. We
allow it to be deducted on your state tax
return. So generally, if you're paying
property taxes, you're actually having the
federal and state government finance as much
as 40 percent of the total cost is actually
financed through the form of a tax deduction.
That is not true with sales taxes.
But I know why sales taxes have
been very popular among local governments.
They are collected by an entity that is not
government. Nobody ever has to send a check
to government. They're collected right at the
point of purchase. Makes it enormously
convenient. They're the hidden tax that
everybody pays.
And in addition, the rising cost of
some items -- for example, items like
gasoline -- means that the revenue goes up
even though they don't have to increase the
percentage rate. It just keeps going up. The
price goes up from a dollar to dollar and a
half, the revenue from a sales tax on gasoline
goes up 50 percent. It's as though it was a
tax increase. Nobody sees it. It's all
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collected at the wellhead, all collected at
the point of purchase. It's an invisible yet
increasing tax.
Through you, Mr. President, I've
voted against this Tioga tax before. I'm not
going to vote against it. Senator Libous,
you've convinced me, and I'm going to withdraw
that position. A good justification for a
sales tax, it looks like conscientiously
arrived at by the County of Tioga, explained
by their Senator in the State Senate. I'm
going to back away from that position.
I'll retain one position. Sales
taxes that have no explanation, that nobody
offers an explanation for, that go through as
a matter of routine I will not vote for.
This one, I'm going to change my
mind. You've convinced me.
ACTING PRESIDENT KUHL: Senator
Oppenheimer, why do you rise?
SENATOR OPPENHEIMER: I'd like to
explain my vote.
ACTING PRESIDENT KUHL: We're not
on a roll call yet, but we will be shortly.
SENATOR OPPENHEIMER: Oh, I
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thought that's what he was doing.
ACTING PRESIDENT KUHL: Is there
any other member wishing to speak on the bill?
Hearing none, the Secretary will
read the last section.
THE SECRETARY: Section 2. This
act shall take effect immediately.
ACTING PRESIDENT KUHL: Call the
roll.
(The Secretary called the roll.)
ACTING PRESIDENT KUHL: Senator
Oppenheimer, to explain her vote.
SENATOR OPPENHEIMER: Under most
every circumstance, I don't favor the sales
tax, because I do believe it is the most
regressive of all taxes. And therefore, I
normally don't like sales tax.
But I feel, as the sponsor feels,
that the entity that's responsible for giving
the local services is the entity that has to
decide how those services are to be paid for.
One of the things we have often felt at the
local level of government is that we don't
have enough choices, we don't have enough mix
in our total tax package. And sales tax is
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one avenue we do have. We cannot put
everything on the property tax.
And for that reason, because the
local government wants it, because I feel we
should unless there is some really strong
reason why we would not support our local
governments, we have to go along with their
decisions, because they are the ones that are
most directly responsible for the provision of
services at that level.
I'll be voting yes.
ACTING PRESIDENT KUHL: Senator
Oppenheimer will be recorded in the
affirmative.
Senator Stavisky, to explain her
vote.
SENATOR STAVISKY: To explain my
vote.
I compliment Senator Libous on his
discussion of Owego and Tioga County. I've
learned more today about it. And I'm
delighted with his explanation.
While I too believe that the sales
tax is a regressive tax, you have convinced me
that -- Senator Libous has convinced me that
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we should all be voting yes.
ACTING PRESIDENT KUHL: Senator
Stavisky will be recorded in the affirmative.
Senator Gentile.
SENATOR GENTILE: Yes, to explain
my vote, Mr. President.
Although Senator Libous tried hard
to convince me, and did a very good job of it,
I'm not totally convinced. I'm still on my
campaign to repeal the sales tax on clothing
and shoes across the state, in every county,
up to $500 at least and, better yet,
completely. Completely.
So given that, and on principle, I
am voting no.
ACTING PRESIDENT KUHL: Senator
Gentile in the negative.
Announce the results.
THE SECRETARY: Ayes, 56. Nays,
1. Senator Gentile recorded in the negative.
ACTING PRESIDENT KUHL: The bill
is passed.
Senator Bonacic.
SENATOR BONACIC: Mr. President,
is there any housekeeping at the desk?
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ACTING PRESIDENT KUHL: There is.
Senator Morahan.
SENATOR MORAHAN: Mr. President,
on page 17 I offer the following amendments to
Calendar Number 213, Senate Print 2355, and
ask that said bill retain its place on the
Third Reading Calendar.
ACTING PRESIDENT KUHL: The
amendments to Calendar Number 213 are received
and adopted, and the bill will retain its
place on the Third Reading Calendar.
That completes the housekeeping,
Senator Bonacic.
SENATOR BONACIC: Would you
return, please, to motions and resolutions.
And recognize Senator Dollinger, please.
SENATOR DOLLINGER: Thank you,
Mr. President. I just give written notice,
pursuant to Rule XI, that I will move to amend
the Rules of the Senate to add a new rule, XV,
with respect to ethical standards for
officers, members, and employees of the State
Senate.
ACTING PRESIDENT KUHL: The
notice is received and filed.
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Senator Bonacic.
SENATOR BONACIC: Mr. President,
there being no further business, I move we
adjourn until Monday, April 2nd, at 3:00 p.m.,
intervening days being legislative days.
ACTING PRESIDENT KUHL: Without
objection, Senate is adjourned until Monday,
April 2nd, at 3:00 p.m., intervening days to
be legislative days.
(Whereupon, at 5:12 p.m., the
Senate adjourned.)