Regular Session - July 22, 2004
5496
NEW YORK STATE SENATE
THE STENOGRAPHIC RECORD
ALBANY, NEW YORK
July 22, 2004
1:20 p.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 please come to order.
Senator Bruno.
SENATOR BRUNO: Can we do the
Pledge of Allegiance, say a prayer, bless
everyone in the chamber, Mr. President.
ACTING PRESIDENT MEIER:
Certainly.
Please join me in 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, July 21, the Senate met pursuant to
adjournment. The Journal of Tuesday, July 20,
was read and approved. On motion, Senate
adjourned.
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ACTING PRESIDENT MEIER: Without
objection, the Journal stands approved as
read.
Presentation of petitions.
Messages from the Assembly.
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, I
ask for an immediate meeting of the Rules
Committee in the Majority Conference Room.
ACTING PRESIDENT MEIER:
Immediate meeting of the Rules Committee in
the Majority Conference Room.
Senator Bonacic.
SENATOR BONACIC: Thank you, Mr.
President.
On behalf of Senator Nozzolio, I
wish to call up Bill Print Number 7417,
recalled from the Assembly, which is now at
the desk.
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ACTING PRESIDENT MEIER: The
Secretary will read.
THE SECRETARY: Calendar Number
1558, by Senator Nozzolio, Senate Print 7417,
an act to amend the Criminal Procedure Law.
ACTING PRESIDENT MEIER: Senator
Bonacic.
SENATOR BONACIC: Mr. President,
I now move to reconsider the vote by which the
bill was passed.
ACTING PRESIDENT MEIER: Call the
roll on reconsideration.
(The Secretary called the roll.)
THE SECRETARY: Ayes, 55.
ACTING PRESIDENT MEIER: Senator
Bonacic.
SENATOR BONACIC: Mr. President,
we recommit the bill.
ACTING PRESIDENT MEIER: So
ordered.
Senator Bruno.
SENATOR BRUNO: Mr. President,
can we return to reports of standing
committees.
I believe there's a report from the
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Rules Committee. I ask that it be read at
this time.
ACTING PRESIDENT MEIER: Reports
of standing committees.
The Secretary will read.
THE SECRETARY: Senator Bruno,
from the Committee on Rules, reports the
following bills:
Senate Print 7683, by the Senate
Committee on Rules, an act to amend the Real
Property Tax Law and the Tax Law;
And Senate Print 7687, by the
Senate Committee on Rules, an act to amend
Chapter 405 of the Laws of 1999.
Both bills ordered direct to third
reading.
ACTING PRESIDENT MEIER: Senator
Bruno.
SENATOR BRUNO: I would move to
accept the report of the Rules Committee.
ACTING PRESIDENT MEIER: All
those in favor of accepting the report of the
Rules Committee signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Those
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opposed, nay.
(No response.)
ACTING PRESIDENT MEIER: The
report of the Rules Committee is accepted.
All bills directly to third
reading.
Senator Bruno.
SENATOR BRUNO: Can we at this
time take up Calendar Number 1887.
ACTING PRESIDENT MEIER: The
Secretary will read Calendar 1887.
THE SECRETARY: Calendar Number
1887, by the Senate Committee on Rules, Senate
Print Number 7683, an act to amend the Real
Property Tax Law and the Tax Law.
SENATOR HASSELL-THOMPSON:
Explanation.
SENATOR BRUNO: Is there a
message of necessity from the Governor?
ACTING PRESIDENT MEIER: There is
a message at the desk, yes.
SENATOR BRUNO: I would move that
we accept that message.
ACTING PRESIDENT MEIER: All
those in favor of accepting the message of
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necessity signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Those
opposed, nay.
(Response of "Nay.")
ACTING PRESIDENT MEIER: The
message is accepted.
The bill is before the house.
SENATOR LIZ KRUEGER:
Explanation.
ACTING PRESIDENT MEIER: Senator
Bruno, an explanation has been requested of
the bill.
SENATOR BRUNO: Thank you, Mr.
President.
I'm going to be very short, very
direct. This is a tax refund piece of
legislation. It refunds $990 million to the
taxpayers of this state, ultimately, over the
next several years. And there's a description
of the schedule in the bill.
Part of what we are doing here with
this rebate, the Council and the Mayor have
proposed a $400, approximately, rebate to the
people of New York City. That is part of the
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legislation that's before us on the floor.
Now, I listened with great interest
either here or on the monitor as some people
commented on when you cut taxes, the loss of
revenue, and why don't we not cut taxes and
get the revenue and support education and
other things that way.
Well, that's an opinion. And it's
a lot of people's opinion. But I would humbly
submit it's the wrong opinion. Because I
mentioned earlier that New York State
residents are still the highest taxed per
capita, because of local taxes and school
taxes, now -- not state taxes -- in the whole
country.
What does that mean? That means
when other states have lower rates and
businesspeople make business decisions, they
take a look at their bottom line. And I
talked this week with companies making
decisions, and they look at the bottom line.
And if their employees and their
profits are greater in Texas, in Carolina, in
Virginia, in any other state other than
New York, many of them -- in Connecticut --
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make decisions to go there, costing people
jobs, costing potential jobs. That's why our
children and grandchildren are working in
California and Texas, because companies see
fit to grow there, locate there -- Atlanta,
Georgia -- and expand there.
So when we talk about tax cuts, the
proper way to expand the revenue base -- and
unlike the federal government, we don't print
money. We do not manufacture or print money.
We have to get our revenue from companies that
are prosperous and making profits, people that
are employed, and they pay taxes. Sales
taxes, when people go out and earn money.
They're not buying things unless they're
earning. Fees. That's where our revenue
comes from.
So if we are more competitive with
other countries -- we're in a global
economy -- other states, we expand our revenue
base. Because companies locate here, they
grow here, they expand here, they make more
money here, they pay more taxes, they hire
more employees who pay taxes, they go out and
stimulate the economy. Now, I didn't invent
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this. That's a fact.
So this tax rebate package is part
of helping New York State stay competitive,
grow our economy. Nothing sadder than someone
who can't get a job here. Either when they're
out of college, out of school, just looking
for a job. Nothing sadder than that.
So we're trying to do what we can
to make New York State competitive, help
people stay in their homes, be comfortable,
have more spendable income. And people know
how to spend their money in most cases better
than the state knows how to spend it, or a
municipality knows how to spend it, because
they earn it.
Thank you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Krueger.
SENATOR LIZ KRUEGER: Thank you,
Mr. President.
If the sponsor would please yield
for a question.
SENATOR BRUNO: I think Senator
Balboni is fairly well versed in the subject,
and I would like to defer to Senator Balboni.
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SENATOR LIZ KRUEGER: Certainly.
SENATOR BRUNO: Thank you,
Senator.
ACTING PRESIDENT MEIER: Senator
Balboni, do you yield for a question from
Senator Krueger?
SENATOR BALBONI: Yes, I do, Mr.
President.
ACTING PRESIDENT MEIER: Senator
Balboni, nice to see you here today.
SENATOR BALBONI: Nice to be
here.
ACTING PRESIDENT MEIER: Senator
Krueger.
SENATOR LIZ KRUEGER: Thank you.
Thank you, Mr. President. Through you.
The memo attached to the bill
describes that this program, the STAR section
specifically, is designed to offset the
effects of inflation on the original STAR
program and replace regressive school property
taxes with state broad-based tax revenue.
What broad-based tax revenue are we
going to be increasing to replace that lost
$990 million of what I would agree, property
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taxes tend to be regressive taxes?
SENATOR BALBONI: Mr. President,
as a part of the CFE discussion, there was a
great deal of fiscal forecasting as to the
growth of the economy of the State of New York
within the next five years.
This particular proposal will
result in a savings of almost a billion
dollars when fully funded over five years.
Within that time, it is estimated that the
economic growth of the state will provide more
than enough revenue when combined with, of
course, responsible, perhaps not as favored
tax revenue streams, such as VLTs, for other
proposals like CFE.
So what we're really looking for is
the growth numbers to provide for additional
revenues that will offset any costs that might
have to be used for this type of tax cut.
SENATOR LIZ KRUEGER: Thank you.
Mr. President, if the sponsor's
representative would continue to yield.
ACTING PRESIDENT MEIER: Senator
Balboni, do you continue to yield?
SENATOR BALBONI: Yes.
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ACTING PRESIDENT MEIER: Senator
Balboni yields.
SENATOR LIZ KRUEGER: Thank you.
The STAR section of the bill is in
fact a state tax bill, and is the state making
this decision for the state.
The New York City primary
residents' property tax rebate section, and
the New York City earned income tax credit
section, are actually not state budget bills
or state tax bills but, rather, the City of
New York asking, as a local initiative,
through a home-rule model, for the right to do
this themselves.
And in fact, Senator Golden carries
those two sections of this bill in another
bill, 7606.
Why did we merge a state tax issue
with two issues that were local issues and
would, I would argue, more appropriately be
treated separately in a separate bill which we
have already?
SENATOR BALBONI: Mr. President,
through you, as my colleague will notice, the
sections of the bill that are amended are in
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fact different and retain their original
placement in the law.
Therefore, the fact that these
amendments are considered within this
particular package has no consequence as to
their viability within the existing legal
framework.
SENATOR LIZ KRUEGER: Thank you.
Mr. President, on the bill.
ACTING PRESIDENT MEIER: Senator
Krueger, on the bill.
SENATOR LIZ KRUEGER: Well, it's
true legally you can do it all as one omnibus
bill, or you could keep it separate. Which
would be, in fact, my preference.
Because as I stated in a debate
with Senator Flanagan yesterday, I believe and
respect the concept of home-rule requests when
the decision is made by the locality and the
impact would in fact be upon the locality
rather than the rest of the State of New York.
And while I had problems with his
bill yesterday, I ultimately voted for it
because of my respect for the home-rule
process.
5510
This bill, because it merges two
New York City home-rule issues with a larger
state tax-cut decision, leaves me in the
predicament of it's not a clear-cut case here.
You could support your locality's
desires for home rule on two of the three
sections of this bill that would only impact
New York City and in fact be paid for by
New York City, and then choose to have to vote
for a section of the bill you're not
comfortable with, or vote against the entire
bill, even though it's three different issues.
And so I find myself in the
predicament where I cannot vote for this bill
because I cannot support a STAR rebate program
at this point in time.
I appreciate Senator Balboni's
statement that perhaps through natural growth
we will make up for the lost revenue through
this program. But our projections for the
outyears on not only our budget deficit
situation and the new increased costs for
education -- because, while we spent much of
the day on a CFE bill, it's not what will be
the end of the story involving education
5511
funds, and we will have greater costs for the
State of New York to meet the obligations of
that court decision than what we dealt with
today. So even if he was correct on natural
growth would absorb $200 million a year,
that's not what we're going to be facing.
So I cannot support this bill,
because I cannot support a STAR rebate program
expansion at this time. I don't think we've
done nearly enough analysis of our tax revenue
picture and expenditures over the next five
years. And I think it would be, frankly,
irresponsible for us to be voting tax cuts at
this point in time without explaining how
we're going to pay for the things we need to
pay for.
I wish that I could, in fact,
support my city's desire through home rule to
have the primary residents' property tax
rebate passed, and the earned income tax
credit -- although, for the record, I don't
support the property tax rebate.
I also think the City of New York
is facing serious deficits in the outyears.
There were newspaper stories throughout
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New York today on just that issue, that
New York City is still facing serious fiscal
problems in its outyears. And I don't think
that they should be rebating their property
taxes either, although they've requested to do
so. And again, on the theory of home rule
generally, I would like to agree with them om
that.
So I have to say that I will vote
no. I hope my colleagues will consider that
issue as well.
And finally, just in response to
the opening explanation of the bill, while I
do understand the issues of sometimes you make
decisions to do tax credits and tax reductions
to help expand your economy, and certainly we
are all concerned about making sure that our
businesses stay here in New York and stay
healthy, and that our young people can return
to the state that they grew up in and raise
families here, just for the record, the STAR
program is specifically a program of tax
rebates for senior citizens. So I'm not sure
that argument applied in the case of this
piece of legislation.
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So I'll be voting no and ask my
colleagues to consider doing the same.
Thank you, Mr. President.
ACTING PRESIDENT MEIER: Senator
Padavan.
SENATOR PADAVAN: Will Senator
Krueger yield to a question.
ACTING PRESIDENT MEIER: Senator
Krueger, do you yield for a question?
SENATOR LIZ KRUEGER: Yes, I
will.
ACTING PRESIDENT MEIER: The
Senator yields.
SENATOR PADAVAN: Senator, as you
probably are aware -- but many of the other
members here are not, because they're outside
the City of New York -- as a result of a
maximum allowed assessment increase of
6 percent and two rate increases within a
matter of months apart, the total property tax
increase to the average homeowner in the City
of New York in my district and elsewhere was
over 26 percent.
Now, the Mayor, calculating what
these revenues would produce, wanted to
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balance a budget. He determined that a
portion of it could be returned, because it
was not a sum of money they needed. The City
Council agreed.
Now, can you explain to me, in view
of that, why you feel that you do not want to
return the small part of that overall tax
increase to those property taxpayers in the
City of New York?
SENATOR LIZ KRUEGER: Certainly.
As I mentioned, if that section was
a freestanding bill or attached to the earned
income tax credit request of the city, as it
is in Senator Golden's S7606, I would vote for
the bill out of respect for the home-rule
decision of my city. Although, as I said and
will say again, I still don't think that that
is the wisest fiscal policy for the City of
New York to take.
I am very familiar with the issue.
I am, in fact, a co-op owner myself. So I
suppose I am voting against my own tax cut
when I say that I don't support this, because
it's one-, two- and three-family-home owners
who will receive the rebate, and condo and
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cooperative owners who would receive the
rebate.
Several problems with the rebate
proposal, in my opinion. One, those taxes
were increased for both renters and for
owners, but this rebate proposal would only
address returning the money to owners, not
renters. So I think there's an inequity in
the structure of the rebate.
Two, the City of New York, as you
correctly explained, increased their property
tax because they needed the money. And as I
just said stated earlier, property taxes are
regressive taxes. They are the taxes I like
least.
But because property taxes, you
know, are the only tax the City of New York
can basically authorize for itself without
state approval, and the state consistently,
and this house, as well, consistently rejects
the City of New York's request to change other
taxes that are less regressive, they find
themselves stuck with having to increase the
property tax.
Not the right model to a fair
5516
distribution of taxation, but unfortunately
for the City of New York, our city, often the
only model we, the state, allow them.
Again, they made that decision
because of the need for money and the
limitations from the state of other
alternative tax options that they proposed but
were rejected from pursuing.
But we know today, as we knew a
year or so ago when this was first approved,
that the City of New York's finances for the
outyears are still seriously in deficit. In
fact, the Financial Control Board has sent out
warnings they might need to step in if the
city doesn't address its outyear budget
deficits.
So I suppose my response to your
question is also a question: Is it really
wise fiscal policy for the City of New York to
put itself in a position where perhaps a year
from now, again, they have to turn to the same
population and say, Now we're going to raise
you back again or even raise you more -- when
they knew today, as of this day in July, that
they are in a fiscal crisis for the outyears
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from a budget perspective and don't have the
answers for how they will balance the budget
in future years?
But again, if they were separate,
freestanding bills, I would, in respect to
home rule, vote for them. But in tandem with
the STAR expansion, which I don't believe we
can justify at the state level, I will be
voting against the bill.
Thank you. Thank you, Mr.
President.
ACTING PRESIDENT MEIER: Read the
last section.
THE SECRETARY: Section 7. This
act shall take effect immediately.
ACTING PRESIDENT MEIER: Call the
roll.
(The Secretary called the roll.)
THE SECRETARY: Ayes, 52. Nays,
3. Those recorded in the negative are
Senators Duane, L. Krueger, and Montgomery.
ACTING PRESIDENT MEIER: The bill
is passed.
Senator Bruno.
SENATOR BRUNO: Mr. President,
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can we take up Calendar Number 1888.
ACTING PRESIDENT MEIER: The
Secretary will read.
THE SECRETARY: In relation to
Calendar Number 1888, Senator Bruno moves to
discharge, from the Committee on Rules,
Assembly Bill Number 11761 and substitute it
for the identical Senate Bill Number 7687,
Third Reading Calendar 1888.
ACTING PRESIDENT MEIER:
Substitution ordered.
The Secretary will read.
THE SECRETARY: Calendar Number
1888, by the Assembly Committee on Rules,
Assembly Print Number 11761, an act to amend
Chapter 405 of the Laws of 1999.
ACTING PRESIDENT MEIER: Senator
Bruno.
SENATOR BRUNO: Is there a
message of necessity at the desk?
ACTING PRESIDENT MEIER: There is
a message at the desk.
SENATOR BRUNO: I would move that
we accept the message.
ACTING PRESIDENT MEIER: All
5519
those in favor of accepting the message of
necessity signify by saying aye.
(Response of "Aye.")
ACTING PRESIDENT MEIER: Those
opposed, nay.
(Response of "Nay.")
ACTING PRESIDENT MEIER: The
message is accepted.
Read the last section.
THE SECRETARY: Section 3. This
act shall take effect immediately.
ACTING PRESIDENT MEIER: Call the
roll.
(The Secretary called the roll.)
ACTING PRESIDENT MEIER: Senator
Bruno.
SENATOR BRUNO: Is there any
housekeeping at the desk? Oh, you haven't --
I'm sorry.
ACTING PRESIDENT MEIER: Just a
second, Senator. Sorry.
SENATOR BRUNO: I'm just looking
for housekeeping.
ACTING PRESIDENT MEIER: The
Secretary will conclude the roll.
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THE SECRETARY: Ayes, 53. Nays,
2. Senators Duane and Padavan recorded in the
negative.
ACTING PRESIDENT MEIER: The bill
is passed.
Senator Bruno.
SENATOR BRUNO: Mr. President, is
there anything else that we have to do that's
at the front desk while we're here in session?
ACTING PRESIDENT MEIER: That's
it, Senator.
SENATOR BRUNO: There being no
further business to come before the Senate, I
would move that we stand adjourned, subject to
the call of the Majority Leader, with the
expectation, if we're not called back before,
that we would expect to be here on August 2nd,
in session -- that's a Monday -- at 3:00 p.m.,
intervening days to be legislative days.
Thank you all. And thank you, Mr.
President.
ACTING PRESIDENT MEIER: On
motion, the Senate stands adjourned, subject
to the call of the Majority Leader.
Intervening days will be legislative days.
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(Whereupon, at 1:45 p.m., the
Senate adjourned.)