Regular Session - May 2, 2003
2302
NEW YORK STATE SENATE
THE STENOGRAPHIC RECORD
ALBANY, NEW YORK
May 2, 2003
12:43 p.m.
REGULAR SESSION
SENATOR THOMAS P. MORAHAN, Acting President
STEVEN M. BOGGESS, Secretary
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P R O C E E D I N G S
ACTING PRESIDENT MORAHAN: The
Senate will come to order.
And I ask everyone present to
please join with me and repeat the Pledge of
Allegiance.
(Whereupon, the assemblage recited
the Pledge of Allegiance to the Flag.)
ACTING PRESIDENT MORAHAN: In the
absence of clergy, I would ask that we all bow
our heads in a moment of silence.
(Whereupon, the assemblage
respected a moment of silence.)
ACTING PRESIDENT MORAHAN:
Reading of the Journal.
THE SECRETARY: In Senate,
Thursday, May 1, the Senate met pursuant to
adjournment. The Journal of Wednesday,
April 30, was read and approved. On motion,
Senate adjourned.
ACTING PRESIDENT MORAHAN:
Without objection, the Journal stands approved
as read.
Presentation of petitions.
Messages from the Assembly.
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Messages from the Governor.
Reports of standing committees.
Reports of select committees.
Communications and reports from
state officers.
Motions and resolutions.
Senator Farley.
SENATOR FARLEY: Thank you, Mr.
President.
On behalf of Senator Maltese,
Mr. President, I move that the following bill
be discharged from its respective committee
and be recommitted with instructions to strike
the enacting clause: That's Senate 156.
ACTING PRESIDENT MORAHAN: So
ordered.
SENATOR FARLEY: On behalf of
Senator Nozzolio, Mr. President, on page 35 I
offer the following amendments to Calendar
Number 575, Senate Print 1930, and I ask that
that bill retain its place on the Third
Reading Calendar.
ACTING PRESIDENT MORAHAN: The
amendments are received and adopted, and the
bill will maintain its position on the Third
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Reading Calendar.
Senator Skelos.
SENATOR SKELOS: Mr. President, I
move we adopt the Resolution Calendar in its
entirety.
ACTING PRESIDENT MORAHAN: All in
favor of adopting the Resolution Calendar
signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MORAHAN:
Opposed, nay.
(No response.)
ACTING PRESIDENT MORAHAN: The
Resolution Calendar is adopted, Senator
Skelos.
SENATOR SKELOS: Mr. President,
there will be an immediate meeting of the
Finance Committee in the Majority Conference
Room.
ACTING PRESIDENT MORAHAN: There
will be an immediate meeting of the Finance
Committee in the Majority Conference Room.
SENATOR SKELOS: Mr. President,
if we could go to the noncontroversial reading
of the calendar.
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ACTING PRESIDENT MORAHAN: The
Secretary will read.
THE SECRETARY: Calendar Number
526, by --
ACTING PRESIDENT MORAHAN: Quiet
in the chamber, please. Take your
conversations outside.
The Secretary will read.
THE SECRETARY: Calendar Number
526, by Senator Wright, Senate Print 2171, an
act to amend the General City Law, in relation
to the membership of the examining board.
ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 2. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
THE SECRETARY: Calendar Number
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531, by Senator Balboni, Senate Print 4744, an
act to amend the Executive Law, in relation to
requiring the Disaster Preparedness
Commission.
ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 2. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
THE SECRETARY: Calendar Number
564, by Senator Golden, Senate Print 3121A, an
act to amend the Executive Law, in relation to
increasing income eligibility levels.
ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 2. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
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the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
THE SECRETARY: Calendar Number
568, by Senator Wright, Senate Print 700, an
act authorizing the City of Fulton, County of
Oswego.
ACTING PRESIDENT MORAHAN: There
is a home-rule message at the desk.
Please read the last section.
THE SECRETARY: Section 4. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
THE SECRETARY: Calendar Number
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578, by Senator LaValle, Senate Print 2742, an
act to amend the Town Law, in relation to
exemptions.
ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 2. This
act shall take effect on the first of January.
ACTING PRESIDENT MORAHAN: Call
the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
THE SECRETARY: Calendar Number
579, by Senator Libous, Senate Print 3022, an
act to amend the Town Law and the Public
Officers Law, in relation to providing.
ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 3. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
the roll.
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(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
THE SECRETARY: Calendar Number
582, by Senator Little, Senate Print 3817, an
act to amend the Local Finance Law and
Chapter 413 of the Laws of 1991.
ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 6. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MORAHAN: The
bill is passed.
Senator Skelos, that completes the
reading of the calendar.
SENATOR SKELOS: Thank you, Mr.
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President.
We will await the return of the
Finance Committee. And following the meeting
of the Finance Committee, there will be a
meeting of the Civil Service and Pensions
Committee.
So the Senate will stand at ease
pending the return of the report of the
Finance Committee.
ACTING PRESIDENT MORAHAN: The
Senate will stand at ease.
SENATOR SKELOS: Mr. President.
ACTING PRESIDENT MORAHAN:
Senator Skelos.
SENATOR SKELOS: There will be an
immediate meeting of the Civil Service and
Pensions Committee in the Majority Conference
Room.
ACTING PRESIDENT MORAHAN: There
will be an immediate meeting of the Civil
Service and Pensions Committee in the Majority
Conference Room.
The Senate will stand at ease.
(Whereupon, the Senate stood at
ease at 12:49 p.m.)
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(Whereupon, the Senate reconvened
at 12:59 p.m.)
ACTING PRESIDENT MORAHAN: The
Senate will come to order.
Senator Skelos.
SENATOR SKELOS: Mr. President,
if we could return to reports of standing
committees, I believe there's a report of the
Finance Committee and of the Civil Service and
Pensions Committee. I ask that they be read
at this time.
ACTING PRESIDENT MORAHAN: The
Secretary will read.
THE SECRETARY: Senator Johnson,
from the Committee on Finance, reports the
following bill:
Senate Print 1406B, Senate Budget
Bill, an act to amend the General Business Law
and others.
And Senator Robach, from the
Committee on Civil Service, reports the
following bill:
Senate Print 4902, by Senator
Robach, an act to amend the Retirement and
Social Security Law.
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Both bills ordered direct to third
reading.
ACTING PRESIDENT MORAHAN:
Without objection, both bills are reported
direct to third reading.
SENATOR SKELOS: Mr. President.
ACTING PRESIDENT MORAHAN:
Senator Skelos.
SENATOR SKELOS: Would you please
call up Calendar Number 601.
ACTING PRESIDENT MORAHAN: The
Secretary will read.
THE SECRETARY: In relation to
Calendar Number 601, Senator Robach moves to
discharge, from the Committee on Civil Service
and Pensions, Assembly Bill Number 8352 and
substitute it for the identical Senate Bill
Number 4902, Third Reading Calendar 601.
ACTING PRESIDENT MORAHAN: The
substitution is ordered.
The Secretary will read.
THE SECRETARY: Calendar Number
601, by the Assembly Committee on Rules,
Assembly Print Number 8352, an act to amend
the Retirement and Social Security Law.
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ACTING PRESIDENT MORAHAN: Read
the last section.
THE SECRETARY: Section 7. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN: Call
the roll.
(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Ayes, 58.
ACTING PRESIDENT MORAHAN: The
bill is passed.
Senator Bruno.
SENATOR BRUNO: Mr. President,
can we at this time call up Calendar Number
600.
ACTING PRESIDENT MORAHAN: The
Secretary will read.
THE SECRETARY: In relation to
Calendar Number 600, Senator Johnson moves to
discharge, from the Committee on Finance,
Assembly Bill Number 2106B and substitute it
for the identical Senate Bill Number 1406B,
Third Reading Calendar 600.
ACTING PRESIDENT MORAHAN:
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Substitution ordered.
The Secretary will read.
THE SECRETARY: Calendar Number
600, Assembly Budget Bill, Assembly Print
Number 2106B, an act to amend the General
Business Law and others.
SENATOR SCHNEIDERMAN:
Explanation.
ACTING PRESIDENT MORAHAN:
Senator Johnson, an explanation has been
requested.
SENATOR JOHNSON: Mr. President,
this bill provides for restoration of many
items in the budget which were negatively
affected by the Governor's budget.
For example, increase in school
aid, aid to our hospitals and nursing homes,
aid to local governments. We've made
restorations of almost $2 billion in things
that we had to put back for the benefit of our
constituents.
That is being met primarily by
increases in the income tax, a small increase
surcharge on people over $150,000 per family
income, and also a small bump up in the sales
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tax of one-quarter of 1 percent. And of
course closing some other tax loopholes which
have existed for some period of time which we
are now closing, being altogether about
$3 billion.
This budget is balanced for the
next year and will also provide some
additional revenues to start off the following
fiscal year.
So I think it's a very good bill.
It's got a lot of things which your
constituents asked you for, we put them in
there, and we are voting for a small tax
increase which will not hurt any low-income
people to provide the revenue which will
enable us to fund all these programs.
Thank you.
ACTING PRESIDENT MORAHAN:
Senator Schneiderman.
SENATOR SCHNEIDERMAN: Thank you,
Mr. President. Briefly on the bill.
I recognize the creativity and I
recognize the courage that went into this
piece of legislation. I do have some concerns
about some of the bill's provisions.
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We are now in a multiyear fiscal
crisis that did not appear overnight in this
year's budget. And everyone who participated
in the budgets over the last eight years has
had a part in creating the situation we are in
today. You can't raise spending and cut taxes
forever without hitting the wall.
My concern is that the benefits of
the $13.5 billion in tax cuts that we've
enacted over the last eight years
predominantly went to the wealthy. Almost
half of the benefits of the tax cuts went to
the top 5 percent of earners in New York
State.
This bill is not nearly as
progressive. This bill does not follow the
same pattern and seek to impose taxes on those
who benefited from the earlier tax cuts.
We have determined that because of
the federal tax cuts, wealthy New Yorkers
actually will still have a net tax cut, even
with the increases in this bill on the income
tax, but poor New Yorkers will be
substantially hurt by increases in sales tax.
Particularly the exemption for clothing, we
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think, is a -- I think is a grave error.
We have a multiyear problem here.
This is something that requires the kind of
planning that unfortunately is not easy to do
in the state government. I think we are very,
very pleased that this is going to become the
budget, and it will become the budget, instead
of what the Governor has proposed.
However, I feel that the regressive
nature of some of the taxes and the failure to
add additional resources to the state's budget
by rolling back the tax cuts enacted over the
last eight years and rolling them back
equitably by taking back from those who
benefited make this bill really less than what
we should be doing right now.
We're going to be faced with this
situation again next year. We're going to
have a budget gap next year. And I think it's
important for us to engage in the honest
argument about taxes and spending that this
state deserves and not to degenerate into the
kind of rhetoric that we've been seeing in
recent days, much directed against members of
this house.
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The fact of the matter is
New Yorkers are willing to pay slightly higher
taxes for good public services. We all know
that. Our constituents tell us that all the
time. People move into districts where they
will pay higher taxes because they know there
are good public schools.
Let's have an honest debate. Taxes
aren't always bad; tax cuts aren't always
good. Let's get the conservative hardcore who
are prepared to take a fundamentalist position
on this issue to debate it honestly.
But we're going to be back here
next year, and I urge that we try to look for
more progressive ways to generate revenue and
that we look again to the income tax and look
at the beneficiaries of the last eight years
of tax cuts.
I'm going to vote no on this bill
because, in my view, the sales tax increase is
a mistake. I think we have to do better. I
do think we need to generate more revenues.
And I hope these factors will be taken into
consideration as we move forward this year and
next year.
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Thank you, Mr. President.
ACTING PRESIDENT MORAHAN: Any
other Senator wish to be heard?
Senator Krueger.
SENATOR LIZ KRUEGER: Thank you.
On the bill, Mr. President.
I too know that we are in a very
difficult situation. We need to raise our
revenues. We need to ensure that we have the
money to continue to operate fundamental
public services. But I also know we could
have done better on this revenue package. And
I want to highlight a few of the things that I
think we should have in this package and
things that we should not.
I'll start out with the sales tax
increase. We all know that sales taxes are
the most regressive approach to taxing our
community and our constituents. I just want
to highlight that New York State already has
the highest tax burden on poor people in our
state, the lowest 20 percent percentile of any
state in the country. And sales taxes,
because of their regressivity, will hit our
lowest-income New Yorkers the most.
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The households in the state that
have incomes below $15,000 a year, sales tax
before we pass this budget results in a
9.5 percent tax on these households. For
households between $15,000 and $27,000 in
income per year, the sales tax is equivalent
to 7.5 percent before this budget is
implemented. But, for the top 20 percent
earners in this state, sales tax is equivalent
to only a 3 percent rate.
It's a bad model for taxation, and
we shouldn't be expanding our sales tax.
At the same time, the personal
income tax increases and surcharges that we
propose I think are a better model for taxes,
and I think we could have done better and gone
farther. No one wants to tax anyone. No one
likes taxes. But in fact in this state we've
seen dramatic decreases in the tax rates on
our highest-income New Yorkers, both through
tax cuts in 1995 at the state level and
federal tax cuts of the early Bush
administration, even before we talk about the
tax cuts being proposed right now in Congress.
So in fact the tax proposals that
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we've put into this budget will have a
significant impact on our ability as a state
to deliver services. But when you factor in
previous tax cuts on upper-income New Yorkers
and the fact that our new income tax
surcharges will be deductible from federal
taxes at a certain level for many, in fact,
the personal income tax increases we're
proposing are relatively minor, and I do
believe are the right approach for us to be
going forward with.
But perhaps the thing that I'm most
disturbed about in our budget bill today is
the fact that we're going to borrow over
$4.2 billion that we will have to pay back at
an extraordinarily high interest rate.
Borrowing money to pay for
operating expenses is the worst way for us to
budget in this state. It is that exact
situation that got my home city, New York
City, into so much trouble during the 1970s.
And I would argue that we had preferable
alternatives before us.
We should have been looking at a
restructuring of our entire tax code,
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particularly our tax expenditure budget.
There are $29 billion in tax expenditures in
the state tax code that we didn't even look at
or discuss this year. And we should have
focused on that tax budget, the expenditure
budget, to evaluate where else New York State
could go to get the money we need to continue
the operation of our state at the levels that
I think we need to.
Just a few examples. While we're
increasing our sales tax and we're expanding
sales tax again for low-cost clothing, we did
nothing to explore a sales tax on the buying
and selling of bullion in this state. If you
are in the business of buying or selling gold
or silver bullion, we exempt you from taxes,
for sales tax.
So while poor people and
middle-income people in this state in this
budget are going to be asked to pay higher
sales taxes, we consciously each year don't
tax the buying and selling of gold and silver
bricks. And that's $101 million we don't
collect from that one industry.
We should be reevaluating corporate
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tax loopholes, particularly reforming the
current alternative minimum tax, where we have
reduced the rate by almost 50 percent since
1994. We should be looking at the model that
other states have already implemented to fill
or close the, quote, unquote, Toys "R" Us tax
loophole that costs us an estimated
400 million in annual revenue.
There is no excuse for some people
to pay little to no taxes while other people
are asked to pay even higher tax rates each
year. There is no excuse for us going down
the road of a more regressive pattern of tax
policy rather than a more progressive model
for tax policy.
We should have, as well, looked at
additional decoupling from the federal tax
policies when their decisions are unfair to us
and our state and our taxpayers. We do have
to raise our revenues in order to assure that
we can meet our obligations, but I think -- I
know we could have done a better job and that
we should have focused more of our time and
energy on a true evaluation of New York
State's tax code and the relationship between
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personal income tax levels, corporate tax
levels, and again the entire budget of tax
expenditure items that we give exemptions year
after year and we never go back and look again
at what that means for our economy.
And it's unfair. And this budget
is unfair. So I will also be voting no on
this bill today.
Thank you, Mr. President.
ACTING PRESIDENT MORAHAN: Thank
you, Senator.
Any other Senator wish to be heard?
Senator Lachman.
SENATOR LACHMAN: Yes. I agree
with much of what my colleagues have just
said. There are many problems with this bill.
I am opposed to the sales tax as much as my
colleagues are opposed to the sales tax,
especially the elimination of the exemption on
the sale on clothing, which will hurt many
people and has been a successful revenue
generator in the past.
But we're faced -- we're facing a
real world, not a world that we can create
ourselves, alone, individually, without
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cooperating with others of both parties in
achieving a viable budget.
Now, if this was not an omnibus
bill, if I could pick and choose what I
thought was good and what I thought would not
be good, I would never consider putting this
into a form where I would have to vote for
everything.
But it's not that easy. If this
bill is not passed, if this budget bill is not
passed, this revenue bill is not passed, the
property tax, which afflicts mostly
middle-class and working-class people, could
double, almost, in Staten Island and parts of
Kings County.
So what I'm saying to myself as
well as to others is that we will be not
voting on a perfect bill, but it certainly is
a much fairer version than we received from
the second floor. And it is not what I would
like to have in total, but because it is a
fairer bill and it is an omnibus bill and we
are living in a real world and we have to pay
for what we want in terms of human services --
otherwise, not only will our safety net be
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shredded totally, but the things we take for
granted in a humane, civilized society would
be lost as well -- I have to vote for it.
ACTING PRESIDENT MORAHAN: Thank
you, Senator.
Any other Senator wish to be heard?
The Secretary will read the last
section.
THE SECRETARY: Section 2. This
act shall take effect immediately.
ACTING PRESIDENT MORAHAN:
Senator Bonacic, to explain your vote.
SENATOR BONACIC: Thank you,
Mr. President.
I come from a district that in the
past couple of years has seen two of my rural
hospitals on the verge of bankruptcy. One
actually went bankrupt. I'm in an area where
I have a lot of lands that are tax-exempt, and
we have experienced double-digit property
taxes for the last four years.
We're seeing quite a bit of growth
coming into the mid-Hudson area from the
metropolitan since 9/11. In fact, one of the
counties in our Senate district is the
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fastest-growing county in the State of
New York.
If I were to embrace the Governor's
budget, I would see a decrease in education
for our children and our school districts and
our hospitals to the tune of $30 million. We
simply cannot afford that. It is for that
reason that I'm supporting this taxing bill.
I don't like taxes, but we're
dealing in fiscal reality, where it's the
toughest economic times this state has
experienced in the last fifty years. And when
you represent the majority in a house, you
have the responsibility to govern and provide
solutions. They may not always be the perfect
solutions, but you have to weigh costs versus
benefits.
And in my humble opinion, we have
to watch out for our children and we have to
watch out for the healthcare of our citizens
in our Senate district.
Thank you, Mr. President.
ACTING PRESIDENT MORAHAN: Thank
you, Senator Bonacic.
The Secretary will call the roll.
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(The Secretary called the roll.)
ACTING PRESIDENT MORAHAN:
Announce the results.
THE SECRETARY: Those recorded in
the negative on Calendar Number 600 are
Senators Golden, L. Krueger, Meier, Parker,
and Schneiderman. Ayes, 54. Nays, 5.
ACTING PRESIDENT MORAHAN: The
bill is passed.
Senator Bruno.
SENATOR BRUNO: Mr. President, is
there any housekeeping at the desk?
ACTING PRESIDENT MORAHAN: No,
Senator Bruno.
SENATOR BRUNO: There is not.
That is a remarkable thing, Mr. President.
You are keeping a very orderly house.
(Laughter.)
SENATOR BRUNO: And we have now
finished the budget process here this week.
And we are sending to the Comptroller, thank
to the efforts on both sides of the aisle
here, and the Assembly, in having partnered in
the Legislature, in sending a constitutionally
balanced budget to the Comptroller. So that
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that budget, if signed, or stands after ten
days, becomes the budget of the people of this
state.
And I believe, Mr. President and
colleagues, that we have met the needs of the
people as best we can and that we are choosing
an alternative that serves the people of this
state in the best ways possible.
And I want to thank my colleagues
here, both sides of the aisle, because we
truly are making history, I think, in the way
we are functioning, the way we are dealing
with this budget, and the way we are governing
and moving government forward on behalf of the
great majority of the people here in this
state.
So thank you, Mr. President, and
thanks to my colleague Leader Paterson, and
thanks to all of our colleagues.
And there being no further business
to come before the Senate, I would move that
we stand adjourned until Monday at 3:00 p.m.,
intervening days to be legislative days.
Have a safe weekend.
ACTING PRESIDENT MORAHAN: The
2331
Senate stands adjourned until Monday, May 5th,
at 3:00 p.m., intervening days being
legislative days.
(Whereupon, at 1:24 p.m., the
Senate adjourned.)