Last year, during a time of recovery from one of the most devastating events in
our nation's history, we found ourselves re-evaluating what was significant in our
lives. This year we again face a changed landscape that will cause us to identify
what is critical to our future. Giving our children a strong educational foundation
is an American ideal that is unwavering. Maybe more so than in the years prior to
September 11th, New Yorkers, like most Americans, understand that an educated
citizenry is an essential cornerstone to our democratic way of life.
The Assembly Majority is committed to preserving these values for all New Yorkers.
We are determined to ensure the provision of a sound basic education for all our
children in New York State. Parents and their children have the right to expect the
leaders of our State to provide exemplary leadership, especially during challenging
economic times. Dismantling what has been built as a foundation for educational
progress is tantamount to permitting the State to balance its fiscal needs on the
backs of our children.
Unfortunately, the Governor's proposed budget for the 2003-04 school years allows
for no educational vision. The Executive budget cuts aid to education by $1.24
billion, or 8.5 percent. It eliminates virtually all early childhood programs
including prekindergarten, K-3 class size reduction, and full day kindergarten.
The Executive budget also chooses to treat other vulnerable populations with
disregard. The budget cuts $70 million in support of schools serving only severely
disabled children and eliminates distinct financial support for all children with
disabilities. The Governor's budget also eliminates aid for after school programs,
consolidates resources for students with limited English proficiency and reduces
aid for professional development programs. Nearly every aid category specifically
targeted to high need children, or designed to help students increase their
achievement has been wiped out. That is the educational future that this budget
envisions, and that is the wrong choice that this Governor makes.
In fact, the Governor's record on investing in aid to education has been dismal.
From the first year of his administration through the current 2002-03 school year,
the aggregate amount that he has been willing to increase educational expenditures
for our kids, their teachers, and our communities has been a total of $1.7 billion.
The Assembly's intervention and insistence on education as a priority has driven the
enacted increases in education to a total of $4.6 billion, a financial commitment
that is truly meaningful for our children and their future.
For nearly a decade, the Regents have provided the leadership for implementing
standards based reform. In fact, it is only within this past year, with the passage
of the No Child Left Behind (NCLB) Act, that the nation has begun to catch up. By
raising the bar, we have changed the landscape forever. We have raised expectations
for each of New York's children, but, they cannot do it alone and they cannot do
it without resources.
The Assembly Majority has always realized that when we invest consistently,
adequately and wisely in education, we are also investing in the State's future
economic wealth and human capital. A first class, high quality education for our
children is a priority we must continue to adhere to. Our multi-year LADDER
program has provided many children with the strong, sound start for the challenges
of higher standards and improved student achievement by focusing on priorities
such as early childhood education, reduced class size, and afterschool programs.
The Universal Prekindergarten program has served more than 200,000 four year olds.
The Class Size Reduction program has supported the creation of nearly 2,500
additional classrooms, providing a more individualized classroom for nearly 50,000
children in this year alone. Full day kindergarten has gotten an estimated 27,000
five year olds off to a good start and extended day programs are currently
providing a safe environment for approximately 80,000 children after every school
day. We must not abandon our children during times of uncertainty, and must
instead provide an equitable distribution of resources necessary to support all
children reach their full potential. Unless we act to mitigate the wrong choices
reflected in the Executive budget, school districts will be forced to shoulder the
shift of the financial burden, and local taxpayers will bear the brunt of these
The Federal government's recent passage of the No Child Left Behind Act (NCLB) will
challenge us to focus our attention and resources on those students who have the
greatest needs in order to ensure that all children will succeed. In fact, Federal
money that New York State receives will be at risk if we fail to craft a sound,
forward thinking, future directed education for our children. We cannot afford to
let our education system crumble. Our children are worth it, and it is essential
to a bright and promising future.
Continuing the Assembly LADDER Program
The Assembly majority has worked diligently to develop and maintain sound policies
that promote school readiness and early intervention for all New York's preschool
age children. Based on these premises, in 1997, the Legislature enacted LADDER's
Universal Prekindergarten program, a multi-year plan to provide for universal
access and appropriate resources for the establishment of prekindergarten programs
in all school districts. This legislation provided New York's public school
districts and private early childhood providers with the ability to build a
supportive and nurturing community network, thereby providing all youngsters with
an educational head start. The prerequisite skills learned in an exemplary
prekindergarten program set the path for young children to benefit from the rigors
of higher standards for grades K-3.
Universal Prekindergarten has an undeniable educational benefit for participating
children, which must be maintained. It is clear that investing in high quality
prekindergarten experiences for children defrays costs of more expensive
interventions in the future, such as special education, and remediation.
One of the most prominent studies on the benefits of participating in a
prekindergarten program is the High/Scope Educational Research Foundation study.
This study documented the effects of preschool child development programs on
children from poor communities in the Ypsilanti Public Schools in Michigan. The
study followed these children for three decades and concluded that the investment
in high quality preschool education far outweighed any costs the community would
face had these same children not had access to pre-k. More recently, the studies
of prekindergarten programs have found shorter term effects that underscore the
High/Scope research. In the Michigan School Readiness Program, a State funded
initiative serving about 24,000 four-year-olds each year who were considered at
risk, students were found to be better prepared for school intellectually and
socially; more likely to achieve greater school success; and demonstrated higher
passage of the State's reading and mathematics tests (Highscope Educational
Research Foundation, Schweinhart, June 2002).
New York's Universal Prekindergarten program has also experienced similar success.
Children in these districts begin kindergarten with more of the basic skills
needed to succeed and a broader conceptual foundation upon which to build future
learning. When, in addition, districts offer full day kindergarten, the children
have an even greater advantage in meeting the rigorous demands of the Regents
higher learning standards. In fact, many school districts where children have
the opportunity to attend prekindergarten have shifted their level of kindergarten
instruction to accommodate the advanced level of their incoming students.
New York State school districts have overwhelmingly responded to implementing and
expanding a Universal Prekindergarten program. In 1998, the Universal
Prekindergarten program served 18,200 children at a cost of $56.3 million. In
the 2002-03 school year, nearly 60,000 children are being served at a cost of just
over $200 million. Over these past four years, more than 200,000 four year olds
have had the advantage of a prekindergarten program. As an indication of the
recognition of the value of prekindergarten to a child's ongoing educational
experience, it is important to note that participation has increased even from
the 2001-02 to this school year in spite of fiscal constraints in many school
districts. New York State is now regarded nationally as a model program
(see Figure 1). However, the Executive budget has chosen to recommend complete
elimination of Universal Prekindergarten, which is a step backwards - clearly a
Class Size Reduction
In 1997, as an integral part of the LADDER plan, the Assembly majority was
successful in ensuring the passage of a groundbreaking initiative authorizing a
class size reduction program in grades K through 3. Districts were provided with
funds for teacher salaries and startup costs for each new classroom. The Assembly
majority believed that this investment in smaller classes would provide children
with a more personal, individualized environment in which to set the foundation
of their education. Smaller class size allows teachers to provide a more effective
instructional program which results in improved learning. In fact, more than 200
districts participate in this program, serving nearly 50,000 children in smaller
classes, thereby providing a more individualized instructional approach.
According to the Quality Counts 2003 Report by Education Week, 32 states have
implemented a class size reduction program. In fact, during the 2000 school
year, states spent an additional $2.3 billion on their own class size reduction
programs, thereby supplementing Federal funds received to help school districts
hire new teachers to reduce class sizes in the elementary grades. The public as
well as experienced educators know that smaller class size is an important
support to our children's obtaining the higher standards expected of them
(see Figure 2).
The support of class size reduction programs by the states, experienced educators,
and the public continues to be bolstered by the results achieved by our children.
These programs are based on sound research and many experts point to the Tennessee
Project STAR study as evidence. This study included a four-year, large scale,
longitudinal study of reduced class sizes in 79 schools in 42 systems and included
schools in inner city, rural, urban and suburban localities. It was found that in
each K-3 grade level tested, and across all school locations, the pupils in the
smaller classes had the highest scores on both the norm referenced Standard
Achievement Test and the criterion-based Basic Skills First Test.
As one of the cornerstones of LADDER, New York's class size reduction program
provides our children with an opportunity to learn and teachers an opportunity to
teach at the higher levels of cognitive and affective learning. Unfortunately, the
Executive has once again made the wrong choice by proposing the elimination of a
program which provides an improved learning environment and benefits thousands of
children in high need schools.
Full Day Kindergarten Program
The LADDER program emphasizes the benefits of a strong early education experience.
Building upon a quality prekindergarten program, LADDER provides a financial
incentive for districts looking to expand their kindergarten program into a full
day educational program. For many children, the foundation is laid through
participation in a quality prekindergarten program and then reinforced through
the provision of a full day kindergarten program, where the positive academic and
social effects for these young children are multiplied. Providing financial
support which encourages districts to develop a full day program is consistent
with the goals of districts looking to solidify early learning patterns.
The long term educational value of full day kindergarten is well documented.
The benefits to children who have participated in full day programs have included
improved independent thinking and socialization. Several studies document the
need for full day kindergarten and the new Federal legislation addresses the
importance of early education as well. Within the NCLB legislation, Congress
emphasizes reading for primary students and requires States to provide instruction
grounded in scientifically based research during the first years of schooling,
New York State has committed more than $47 million for full day kindergarten over
the past four years serving more than 27,000 children. In fact, this program has
been one of the most well regarded provisions of the LADDER initiative
(see Figure 3). The Governor has chosen to eliminate support for full day programs
- another wrong choice.
Extended School Day and School Violence Prevention
A vital part of the LADDER program are the funds for Extended School Day and
School Violence Prevention grants. The Assembly is deeply committed to providing
not only a safe place for youth to go after the school day is over, but, even more
importantly, to providing one that yields educational and social benefits. This
time can be spent productively with additional educational support, as well as
simply providing a safe harbor for positive recreational activities.
Unfortunately, there is a growing need for after school programs which is not
being met. A poll conducted by the Afterschool Alliance (June 2000) and reported
by the National Institute on Out-of-School Time, noted the difficulty in finding
after school programs. The U.S. General Accounting Office estimates that the
current number of after school programs will meet as little as 25 percent of the
demand in some urban areas. The U.S. Bureau of Labor Statistics in 2000 reported
that in 59 percent of all married couple families with children 6-17 years of age,
both parents work outside the home; these numbers are much higher for single
parent mothers and fathers. It is extremely troubling to note that there are
approximately eight million children ages 5-14 nationwide, that have no
supervision on a regular basis at some point during the day. According to a
1999 report by James et al, children spend time alone after school for up to 25
hours per week (The Future of Children, 1999; Miller, et al, 1997).
Children who do not have adult supervision are at a greater risk for truancy,
stress, poor grades, risky behavior and substance abuse. The younger a child is
when he or she begins to be left alone, the greater the risk (Dwyer, et al, 1990;
Pettit, et al, 1997). Additionally, between 3 and 6 p.m. the occurrence of
violent crimes - murders, sexual assaults, robberies and assaults - on juveniles
triples (Sickmund, et al., 1997). The safety issue is a growing concern for a
variety of reasons. According to researchers at the University of Wisconsin
(1999), children who attended more supervised after school programs were rated by
their teachers as having better work habits and interpersonal skills, as well as
improved school attendance and better response to conflict.
Currently, students who are in Extended School Day and School Violence programs
in New York State benefit from activities such as academic tutoring and
remediation. Bringing students up to speed academically is especially crucial at
this point when graduation requirements for all students are now at their most
rigorous level statewide. In addition, activities such as conflict
resolution/violence prevention, and other recreational and alternative education
programs are undertaken throughout the State.
To date, New York has spent $125 million for these after school and school
safety programs and is currently serving approximately 80,000 youngsters with
an appropriation of $30.2 million. Again, the Governor has made the wrong
choice by eliminating this important program. The Assembly remains committed
to providing optimal after school programs, activities and settings for our
youth in safe, supportive and educationally stimulating environments.
Since 1997, a crucial part of the Assembly LADDER program has been funding
for improving school facilities. LADDER provided both an enhancement to the
building aid reimbursement formula for the construction and renovation of
facilities, as well as a distinct grant program for the upgrade and repair
of existing facilities, the Minor Maintenance and Repair Program. To date,
the Minor Maintenance program has provided $250 million to upgrade the
quality of the school environment statewide. Unfortunately, the Executive has
made the wrong choice by proposing to discontinue $50 million in funding for
this important initiative. Furthermore, the Executive budget provides for
additional changes to building aid calculations, which will serve to act as
a disincentive to construction, reconstruction and renovation projects.
A report from the State Comptroller noted unacceptable levels of overcrowding
throughout the State. The report points out that changes in educational programs
over the past few decades such as growth in special education, remediation, and
the need for computer and science labs, have placed a significant demand on the
need to upgrade and expand facilities. Compounding the problem of overcrowding,
a report issued by the U.S. General Accounting Office found that 90 percent of
New York's schools needed to upgrade or repair buildings to achieve good,
Few would argue that most, if not all low performing schools could benefit from
facility upgrades. The correlation between schools in various stages of disrepair
or schools that do not have the appropriate wiring for computers, or space for
science labs, and low performance has been well established. The improvement
of school buildings in disrepair must remain a priority.
Educational Technology and Instructional Materials
The Assembly LADDER program was unique in its recognition of the full spectrum of
student needs. Over and above the aforementioned programs, LADDER also provided
additional resources for instructional materials for all students statewide, as
well as support for educational technology.
Given the high cost of textbooks, districts are often unable to purchase up-to-date
textbooks for all students. Software that changes from year to year cannot be
replaced, and hardware is out-of-date almost from the time of purchase.
Maintaining relevant and sufficient instructional materials has become a challenge
for many districts.
The importance of access to educational technology has also been emphasized with
the passage of the No Child Left Behind Act of 2001. The Act clearly states as
one of its goals "... to improve student academic achievement through the use of
technology in elementary and secondary schools." The Act goes on to say that
"every student - regardless of race, ethnicity, income, geographical location,
or disability - ... should become technologically literate by the end of eighth
However, the digital divide persists. Internet access, for example, is far from
uniform. Having a piece of possibly out-of-date hardware in the classroom does
not mean that students are becoming computer literate or learning to use technology
for a variety of educational purposes. Another disparity noted in the Education
Week report is that not all schools have the technical support to keep the
computers running and the resources necessary to train teachers.
In light of the new Federal legislation, as well as the State's uniform graduation
requirements, it is imperative that none of New York State's youth are left on
the wrong side of the digital divide. Students must be provided with equal
access to educational technology and the opportunities it provides. Every school
in the State must be able to give students access and experience with educational
Education Week, in their "Quality Counts 2003", rates New York
State an "A" in their category of Standards and Accountability. Their
survey examines testing, tracking and results, along with intervention policies
instituted in each of the states. Under the leadership of the Regents, New York
State has already made significant efforts to reach higher standards, promote
more efficient policies, and provide followup and accountability.
Successfully implementing the new Federal legislation cannot be realized without
funding. Simply stating that low performing schools have to improve is not
enough. Schools are being pressured to increase performance, but we must provide
resources to improve access to successful practices and funding that will enable
teachers and administrators to respond to the challenges they face.
The Federal No Child Left Behind Act reinforced the Regents approach for
attainment of higher standards. The intent of this law is to hold schools
accountable for the achievement of all students, and to close the achievement
gap between students from different backgrounds. The NCLB legislation mandates
preparing, training, and recruiting high quality teachers and principals;
improving the academic achievement of the disadvantaged; providing language
instruction for limited English proficient and immigrant students; requiring
annual improvement of students and schools on standardized tests; and an
increased emphasis on reading, especially for young children. NCLB will require
annual assessments to measure our students in reading and math in grades three
through eight. These tests will track the performance of every school. The
data must be disaggregated for students by poverty levels, race, ethnicity,
disability, and limited English proficiency to ensure that no child, regardless
of his or her background, is left behind. States must also report on school
safety on a school by school basis. All of these requirements are costly.
Unfortunately, the Governor has made the wrong choice by not making educational
attainment and meeting the Regents standards and NCLB requirements his priorities.
This Executive budget reduces overall aid by $1.24 billion, including $407
million in unrestricted aid, an estimated $400 million in early education
initiatives, and approximately $75 million in professional development
While statewide results on 4th and 8th grade math and English Language Art
exams indicate improvement, and some individual schools and districts posted
large gains, other schools improved only slightly or even declined. It is
clear that there still remain significant numbers of individual children,
primarily in high need districts, needing additional help in order to meet
both the Regents and NCLB standards. Though the State faces unprecedented
fiscal constraints, we must make the right choice by directing our energies
and resources toward education as the demands grow ever more stringent.
All efforts must be made to provide the needed resources (see Figure 4 and
Teacher Quality and Professional Development
In addition to the requirements mentioned previously, the NCLB Act also mandates
that all new teachers hired with Title I funds be "highly qualified" by
the current school year and, that all teachers in core academic subjects be
"highly qualified" by 2005-2006.
New York State's high need districts have long experienced the challenge of
providing certified teachers who are able to teach courses in the disciplines for
which they were trained. Data indicates that in New York's high need districts,
17 percent of the teachers are teaching without being properly certified and are
in the classroom with waivers from certification requirements. In contrast, the
low need districts have four percent of their teachers with waivers. These
districts now have two years to solve a persistently difficult and decades old
New York State cannot afford to abandon its current teaching workforce. We must
support ongoing, high quality professional development that is achievement focused.
Resources are necessary to help teachers enhance their support of student achievement
of the Regents higher standards. We must work toward directing and amplifying our
resources to programs and initiatives that we know enhance effective, high quality
Research has clearly shown that teacher quality and student achievement are
positively related. In fact, studies using value added student achievement data
have found that student achievement gains are influenced by a student's assigned
teacher more so than by various other factors. Teacher attributes and experience
contribute to student learning, including their general academic and verbal ability,
subject matter knowledge, knowledge about teaching and learning, and the combined
set of qualifications as measured by teacher certification (Darling-Hammond, 2000).
Goldhaber and Brewer (2000) found strong influences of teacher certification on
student achievement in high school math and science. School level analysis
provides further support that teacher certification status is strongly related to
student achievement. Recent studies in California also found a positive
relationship between a teacher's experience level and student achievement (Betts,
Rueben, & Dannenberg, 2000; Fetler, 1999; Goe, 2002). Finally, the most
significant and strong predictor of student achievement was the proportion of well
qualified teachers, defined as holding both full certification and a major in the
field being taught (see Figure 6).
Unfortunately, the Executive budget has made the wrong choice by reducing funding
for professional development programs by over $70 million. Teacher Support Aid,
which acts as a retention tool in the five large city school districts has been
cut by $44.9 million. Funding for Teacher Resource Centers and the Mentor-Intern
program have been cut by $20 million and $3.33 million respectively. Teachers of
Tomorrow, a comprehensive set of programs providing recruitment and professional
development opportunities has also been reduced by $5 million. Funding is
eliminated for the National Board for Professional Teaching Standards, a reduction
of $500,000. The Governor once again provides no funding for Professional
Development Grants. This budget would stall, and in many schools, reverse, the
remarkable progress that we have made toward attracting and retaining high quality
Executive Proposal for Aid to Schools
The Executive proposes to decrease General Support for Public Schools by $1.243
billion, or 8.5 percent below School Year (SY) 2002-03 levels. This decrease surpasses
the cuts made during the recession of the early 1990s. The wrong choices in his
proposed budget will surely hurt the quality of educational programs available in
New York State's public schools, further denying many children their constitutional
right to a sound basic education.
It is also apparent that the Executive Budget recommendations represent a massive
shift in the burden for funding public education from the State to local communities.
These cuts would simply transfer the financial burden from the State to individual
taxpayers, a shift that would very likely hurt poor areas the most. This will force
school districts to choose among raising taxes, staff layoffs, and program elimination.
The Executive proposes the consolidation of nine existing formula-based aids into
one aid category entitled Comprehensive Operating Aid. The Governor proposes a
$407 million cut in this aid category. Reductions range from 2.00 percent to 8.75
percent for individual districts.
This consolidation includes aid categories specifically targeted toward students
with disabilities. By eliminating targeted aid for students with disabilities under
Public Excess Cost Aid, as well as aid which prevents the referral of students to
special education provided through ERSSA, the Executive provides no additional funds
to districts which may experience additional placements of children into special
education programs and services. The Governor also proposes funding changes in
private special education. The State share of the cost for placements in private
special education settings will be reduced from 85 percent to 49 percent. This
reduces funding for Private Excess Cost Aid by $70.68 million. Placements in
these private settings are for the most severely disabled children and are largely
driven by Federal requirements.
The Executive appropriates $1.11 billion for Building Aid, a decrease of $144
million below 2002-03 levels. The Governor also proposes that prospective Building
Aid be paid out of a $130 million priority pool where local districts would be
forced to compete for severely limited construction funding. Additional limitations
include restrictions on the use of existing incentives, choice of building aid
ratio and a simplification in the way the building cost allowance is calculated,
all designed to reduce the State level of reimbursement.
BOCES funding is cut by $129 million or 25 percent below present law levels.
Beginning in the 2004-05 school year, the Executive proposes to prospectively
consolidate BOCES Aid into Operating Aid. BOCES is a proven vehicle for providing
cost effective quality services to component school districts.
School Aid Litigation
Litigation was commenced in May of 1993 in State Supreme Court challenging
New York State's funding structure for New York City public schools. The
lawsuit was filed on the grounds that the current system violated the
Education Clause of the New York State Constitution, the Equal Protection
Clause of the State and Federal Constitutions, and Title VI of the Civil
Rights Act of 1964 and its implementing regulations.
On January 10, 2001, the Court ruled in favor of the plaintiff on both the
State Constitutional claim and the claim involving the implementing
regulations of Title VI of the Civil Rights Act. The Court held that New
York State has consistently violated the Education Article of the State
Constitution by failing to provide the opportunity for a sound basic education
to New York City's public school students. In addition, the Court found that
the school financing system has an adverse unjustified disparate impact on
minority public school students in violation of Federal Civil Rights regulations.
The Appellate Division, First Department issued a split decision on June
25, 2002 reversing the State Supreme Court's findings on both the inadequacy
of the school financing system and the disparate impact on minority public
school students. The Appellate Division majority opinion held that a minimal
opportunity for a sound basic education (not "more than a ninth-grade
education") had been provided to public school students in New York City
because there were minimally adequate educational facilities, minimally adequate
instrumentalities of learning and minimally adequate teaching so as to enable
students to have an opportunity to be prepared for some potential employment
and to meet certain basic civic obligations (serving on a jury and voting in
elections). In essence, the Appellate Division disagreed with both the trial
Court's assessment of the evidence submitted and the criteria employed by the
trial Court in assessing "adequacy".
The plaintiffs have appealed this decision to the Court of Appeals and oral
arguments are scheduled for May, 2003. Both the Mayor of New York City and
the City itself are filing briefs in support of the plaintiff's appeal.
In light of the current budget crisis confronting New York it remains imperative
to recognize that a strong higher education system provides a crucial foundation
for economic growth and the development of a highly trained workforce. In
addition, the public universities of New York have historically assumed increased
importance during times of economic uncertainty. As the number of students
seeking a higher education at public universities increases, the need to maintain
the quality and value of the public university system of New York has never been
more critical (see Figure 7).
Unfortunately, the 2003-04 Executive Budget Proposal makes the wrong choice by
ignoring the needed investment by the State of New York in higher education. In
fact, the Governor's proposed cuts to higher education programs exceed $660
million in SFY 2003-04. Including this massive cut, higher education has been
the target of a cumulative total proposed reductions totaling approximately $2.4
billion since the beginning of the "Pataki-Era". The Assembly has stood
firm in its commitment to working families from across the State and has fought
to restore these proposed reductions. While the Governor continues to promote
the research and discoveries of New York's colleges and universities, he
regrettably has yet to embrace the concept that their greatest contribution as
"engines of economic growth" are the skills provided to students pursuing
a college degree in New York State.
The Executive Proposal would increase tuition supported appropriations by $318.3
million at SUNY and CUNY. Unstated in their appropriations is a tuition increase
of up to $1,200. This would increase tuition at SUNY by 35% from $3,400 per year
to $4,600 per year; and would increase tuition at CUNY by 38 percent from $3,200
per year to $4,400 per year. Unfortunately, in the same instant that the Governor
proposes raising tuition, he uses this measure to lower state support for SUNY
and CUNY by roughly $279.2 million from 2002-03 levels (see Figure 8).
Cost of Pursuing a College Degree Increases in New York State
In 2000-01, tuition and fee costs for attending a community college in New York
State was the 5th highest in the nation, roughly 88 percent higher than the
national average (2002-03 Almanac of Higher Education). At a time when a
significant investment is being directed toward large research institutions,
the needs of the State's community colleges should not be ignored. Community
colleges serve as a gateway to the pursuit of a higher education and train a
significant portion of the workers needed in the new economy.
Throughout much of the "Pataki Era" New York State has trailed the
rest of the nation in support for higher education. According to a recent survey
issued by the Center for Higher Education & Educational Finance, New York
currently ranks 47th in state support for higher education per $1,000 of personal
income. In fact, New York ranks 44th in the nation, or roughly 55 percent below
the national average in the percent change in State support for higher education
over the ten-year period from 1992-2002.
Due to the lack of adequate State support for New York's public universities, the
costs incurred by college students has increased in recent years. In 1995, the
average cost of tuition and fees for students attending public four-year
institutions in New York State was approximately $2,921. Since 1995 this figure
has increased by approximately $1,141 or 39 percent to $4,062 (1995-96 and 2002-03
Almanac of Higher Education). As a result, even without the Governor's proposed
$1,200 tuition increase, the average cost of tuition and fees for a student
attending a public four-year institution in New York State today is roughly 16
percent greater than the national average (2002-03 Almanac of Higher Education).
The Governor's proposal also provides $317.4 million for SUNY-operated community
colleges and $108 million for CUNY community colleges. This reflects an overall
reduction in State support of $49.4 million for community colleges. This consists
of a net reduction of $41.4 million resulting from the lowering of State Base Aid
support for community colleges by $345 per full time equivalent (fte) student,
lowering State support by 15 percent from $2,300 per fte to $1,955 per fte. In
addition the Governor would eliminate $7.9 million in support for contract
courses, rental aid, and the College Discovery Program at the State's community
colleges. Unfortunately, the Governor has made the wrong choice by proposing to
reduce State support for these campuses in a moment when increased demands are
being placed on the educational services that they provide.
Access to Student Aid and Student Support Programs
The 2003-04 Executive budget proposal would also reduce the Tuition Assistance
Program (TAP) awards for all eligible students by one-third. The proposed 2003-04
Executive budget includes $567.5 million for the Tuition Assistance Program (TAP).
This represents a $161.1 million reduction from the 2002-03 Academic Year which
would translate into an overall reduction of $279 million in estimated TAP
expenditures in the 2003-04 Academic Year. Unfortunately, the Governor fails to
provide the necessary resources to support TAP even at such lower funding level.
Instead, the Governor proposes to fund $225 million, or 40 percent of the costs of
TAP in 2003-04, through a transfer of funds from the Federal Temporary Assistance
for Needy Families (TANF) Program. TAP has all too often been the target of
proposed reductions. In fact, since 1995-96, the Governor has proposed cutting
the TAP Program on six different occasions.
This across-the-board, regressive measure would directly add to the financial
burden that college students across the State would bear in pursuit of a higher
education. In fact, a second component of the Governor's TAP proposal is the
provision of incentives that directly encourage students to fall further into
debt in order to fund their educational costs. Governor Pataki proposes the
creation of a new TAP Performance Award that would require students to
self-finance their college education via additional student loans. Upon the
completion of a degree, students would be eligible to receive a TAP Performance
Award equal to the amount that their TAP award has been reduced, plus accrued
interest. Finally, the Governor also proposes the creation of a new $11.6 million
TAP Loan Program to support the additional student loan borrowing for students
who have exhausted their Federal student loan eligibility. In 2002-03, the
Executive proposed an overall reduction of $212 million in estimated TAP
expenditures and advanced similar dramatic modifications that would have
threatened the long-term viability of the Program. However, the Assembly
fought to restore the proposed cuts to the Tuition Assistance Program.
In addition to recommending the one-third reduction of TAP, the Executive
Proposal targets programs focused on improving the access and affordability
of a college education in New York State. This includes a proposal to reduce
funding for college opportunity programs by $26.9 million, or 50 percent.
This reduction reflects an Executive Proposal to eliminate supplemental student
assistance to economically disadvantaged students that participate in college
opportunity programs. In addition, the Executive recommends reducing support
for Aid to Independent Colleges and Universities (Bundy Aid) by $18.7 million
or 42.3 percent. This reflects an Executive Proposal to eliminate funding for
graduate degrees conferred at New York's independent colleges and universities.
Finally, the Executive Proposal recommends the complete elimination of $10
million in funding for the Science and Technology Entry Program (STEP) and its
collegiate counterpart (CSTEP). These programs have proven to be extremely
successful at increasing the participation rate of underrepresented and
disadvantaged students in mathematics, science, technology, health-related
SUNY and CUNY Capital Plans
The Executive proposal includes a request to provide authorization for $3.7 billion
to support a multi-year plan for SUNY and CUNY capital projects. This includes
$2.5 billion in bonding authorization to support a second multi-year plan for SUNY
capital projects. Within this figure $1.64 billion would be directed toward
academic facilities, $350 million for the SUNY Health Science Centers, $210 million
for community colleges and $335 million for residence halls.
In addition, the Executive includes $1.2 billion in authorization to support a
second multi-year plan for CUNY capital projects. Within this figure $1.1 billion
would be directed toward CUNY senior colleges and $130 million would be directed
toward CUNY community colleges. Funded projects encompass critical health and
safety, preservation and handicapped access projects as well as the completion of
on-going projects at John Jay College and the construction of a new academic building
at Medgar Evers College. Finally, the Executive proposal would provide CUNY with
authorization necessary to begin planning efforts for the development of Governor's
Again this year, as he has done nearly every year of his past two terms of office,
the Governor is making the wrong choice by proposing massive cuts to the State's
Medicaid Program in his Executive budget. These cuts and new taxes will impose a
severe financial hardship on the State's ailing health care industry -- an industry
that is already reeling from previous cuts, new Medicare cuts, workforce shortages,
new technology costs, disaster preparedness activities, and meeting the needs of the
thousands of New Yorkers who still remain uninsured.
As anticipated, the State Fiscal Year (SFY) 2003-04 Executive budget proposes
reinstating nearly $1 billion (all funds) in old cost containment actions that
were slated to expire in March 2003. The Executive proposes new actions that
would save the State over $640 million through the implementation of new cuts and
the re-imposition of provider assessments (taxes) which had been eliminated in
2000. However, such action would precipitate the loss of nearly $1.6 billion in
combined Federal, State, and local reimbursement to health care providers. Revenue
loss of this magnitude would not only severely impact the health care industry,
but ultimately would be detrimental to the "health" of New York's already
The health care industry has a major presence in New York State, being either the
first or second largest employer in nearly all of the counties in this State.
Committee staff estimates that these proposed Medicaid cuts could result in a total
loss of up to 38,000 jobs in New York State at a time when unemployment is already
on the rise. Moreover, this job loss would result in a serious reduction in
services in an industry already plagued by workforce shortages and other revenue
shortfalls that have impacted the service delivery system, as demonstrated by
emergency room closedowns or inordinately long waits for emergency care, as well
as by the denial of home care services to many elderly Upstate New Yorkers. New
cuts will only exacerbate this situation, having the potential to impact not only
access to care but also the quality of such care as providers are forced to cut
staff or rely on less trained staff to deliver services. Consequently, the
deleterious effects of the Governor's proposals reach beyond New York's poor,
elderly, and disabled citizens who rely on Medicaid for their health care benefits,
having the potential to affect adversely the quality and availability of health
care for all New Yorkers.
Health Care Reform Act
The Health Care Reform Act of 2000 (HCRA 2000) is scheduled to expire on June 30,
2003. As part of his Executive budget submission, the Governor proposes a two
year extender of HCRA through June 30, 2005. The proposed legislation makes some
notable but wrong changes that not only would deny or limit access to needed
health insurance coverage to thousands of low income working families and their
children, but also would impose a greater financial burden on health care
providers and insurers, which could jeopardize their economic viability. In order
to replace revenues lost through a proposed plan to securitize tobacco settlement
payments, the Governor proposes the dedication of several new revenue sources to
HCRA. These would include additional proceeds from the Empire Blue Cross/Blue
Shield conversion to a for-profit corporation, as well as proceeds from any future
conversions; anticipated federal relief funds related to the World Trade Center
disaster; new Community Health Care Conversion Demonstration Project revenues; and
revenues from a proposed amnesty program. More importantly, however, the Governor
proposes increased surcharges on hospital and clinic patient bills and an increased
assessment on health insurance companies. In many instances, these increases will
be passed on to consumers in the form of higher out-of-pocket expenses or premiums.
To further close the gap between lost revenues and to meet the cost of previous
HCRA commitments and new General Fund shifts, the Governor recommends cuts in
funding for valuable public health programs related to rural health care, poison
control, emergency medical services, cancer initiatives, worker retraining, and
anti-tobacco efforts. Of even greater significance, however, is the Governor's
effort to achieve Medicaid savings by eliminating Medicaid coverage for an
estimated 234,000 low-income children, shifting their coverage to the Child Health
Plus program. Child Health Plus provides no long-term care benefits, so this
action could seriously disadvantage disabled children in need of such services.
Moreover, the Governor's purported commitment to lowering the numbers of New York's
uninsured is defied by his proposal to eliminate health care coverage for
approximately 22,000 low-income adults under the Family Health Plus program by
rolling back eligibility standards. Here again, the Governor has made the wrong
choice by opting to resolve the State's fiscal crisis on the backs of vulnerable
populations -- the State's poor children and the uninsured. These are the wrong
The Executive Budget for State Fiscal Year (SFY) 2003-04 demonstrates little
compassion for the plight of New York's senior citizens who struggle daily to make
ends meet on fixed incomes. In fact, the Governor's budget makes the wrong choices
by finding fiscal solutions on the backs of the elderly.
Although many seniors rely totally on Supplemental Security Income (SSI) to meet
their living expenses, the Governor denies passing through to them a federal
cost-of-living adjustment, amounting to $14 per month for individuals and $21
per month for couples. Rather than allowing the elderly and the disabled to
receive this money, the Governor proposes to divert it to defray a portion of
the State's cost associated with the SSI State supplement payments.
In addition, access to quality health care is critically important for the 2.45
million New Yorkers who are 65 years of age or older. While poor children and
families constitute the largest number of Medicaid recipients, this group accounts
for only 21 percent of Medicaid spending. Across all service categories, the aged,
blind and disabled account for approximately 73 percent of Medicaid expenditures,
even though this group represents only 31 percent of recipients. Consequently,
cuts to Medicaid adversely affect the poor elderly and disabled population that
have no other recourse and must rely on Medicaid for needed medical care. As the
elderly use a disproportionate share of hospital, home health care, and nursing
home services, proposed new cuts are certain to have a severe impact on the health
care services needed by the elderly.
Home care costs less than one-third the cost of nursing home care and is one of
the most cost-effective alternatives to nursing homes. From a human perspective,
it allows elderly individuals in need of care to remain in their homes or with
their families in the community, instead of being institutionalized. Among the
proposals that will have the most harmful effect on the elderly are new cuts of
$71.8 million (All Funds) on the home care industry. Proposed reductions in home
care rates will limit the elderly's access to home care services. Severe
workforce shortages have already caused some upstate providers to curtail services,
thereby denying access to many families desperately in need of this care.
The Governor also proposes new Medicaid reductions to nursing homes of $388.2
million (All Funds). Such cuts could severely impact the quality of care at these
facilities as homes are forced to lay off workers in an industry already plagued
by workforce shortages. In addition, over one-third of New York's voluntary
nursing homes are already at risk of bankruptcy or insolvency ("Sounding the
Alarm: New York's Nursing Homes in Financial Crisis", December 2002, New York
Association of Homes and Services for the Aging). Nursing homes receive about 70
percent of their net patient revenues from Medicaid. The imposition of new cuts
could spell disaster to those homes already in jeopardy, ultimately forcing them
to close their doors, thereby denying access to needed care for many of the State's
elderly population. Moreover, such closings could place severe hardships and
mental anguish on families responsible for elderly relatives who have become
too incapacitated to be cared for adequately at home.
Another area of grave concern to the elderly is the rising cost of prescription
drugs. Most elderly individuals take multiple drugs on a daily basis to maintain
good health. The escalating costs of these drugs have become a serious cause of
concern for those living on a fixed income, forcing many elderly to choose
between essential medications and the necessities of life like food or rent.
Even though out-of-pocket costs for prescription drugs continue to rise for
the elderly population, the Governor does nothing to address this dilemma. In
fact, the Governor recommends various reductions to the Elderly Pharmaceutical
Insurance Coverage (EPIC) program that effectively would dig deeper into their
already empty pockets by increasing fees and deductibles paid by program
participants by 10 percent. His proposal to reduce reimbursement to pharmacies
for filling prescriptions for EPIC participants would result in reduced access
to greatly needed medications for the elderly. Given the Governor's rhetoric
that recognizes the hardship ever-increasing drug costs have placed on seniors,
this is the wrong solution to a pressing problem.
When elderly individuals are unable to access needed community-based services, they
are often forced to utilize more costly services in institutional settings, such as
nursing homes. Despite this fact, the Governor's proposed budget would eliminate
various community-based programs in the State Office for the Aging (SOFA) that
assist low-income elderly to remain as independent as possible for as long as
possible, thereby avoiding costly institutional care.
The Executive's proposed budget for SFY 2003-04 eliminates funding for several
programs that foster wellness, independence, and community involvement. One such
program is the Congregate Services Initiative (CSI) which provides the elderly
with services that promote their physical and mental well being in congregate
settings, such as senior centers. The Executive also recommends the elimination
of funding for Naturally Occurring Retirement Communities (NORC), a program that
encourages elderly citizens to remain in their homes and in the community. Other
worthy senior programs defunded in the Governor's proposed budget include: the
Retired and Senior Volunteer Program (RSVP), a program that achieves the dual goal
of providing services to needy citizens while providing encouragement for older
volunteers to remain active in the community, and the Foster Grandparent Program,
which allows the elderly to become "foster grandparents" to children with special
or exceptional needs.
The Governor's budget also provides significantly decreased funding for respite
programs. These programs offer services that provide caregivers relief from the
stresses or responsibilities of providing care to frail or disabled relatives or
friends, thereby enabling the caregivers to maintain the person at home for as
long as possible. Again, the Governor's decision to cut these programs is yet
another wrong choice in a series of bad choices that will negatively impact New
York's vulnerable elderly citizens.
The Assembly has been a leader advocating for comprehensive, progressive
economic development policies and has been first in line to recommend new programs
to achieve economic growth and create jobs. Many of the significant economic
development accomplishments over the last several years-Empire Zones, the Excelsior
Linked Deposit Program, CAPCO, and Downtown Development Initiative Grants, and
workforce training funds-- were Assembly initiatives. However, in spite of
legislative efforts to provide innovative tools to stimulate growth, the lack
of a strategic framework by the Executive has continued to contribute to the
During most of the past decade, although the national economy was expanding and
targeted investments were made in the area of economic development, the Executive
failed to provide a comprehensive economic development strategy that would have
allowed New York State to capitalize on its regional strengths and the booming
national economy, despite the Assembly having advanced a comprehensive,
statewide economic development strategy. Evidence of these failed policies can
be seen in the State's slow employment growth. During the period between 1995
and 2001, the nation's employment grew by 12.6 percent, while New York State
employment grew by only 8.8 percent. If New York State employment grew at the
same rate as the nation over this period, 289,900 additional jobs would have
New York State's job growth continues to lag behind most other states. New York
State is ranked 40th in employment growth when compared to other states. Now,
as New York faces what is likely to be one of its biggest budget crises in recent
history, it is imperative that the foundation for economic growth not be further
undermined. However, the Executive's proposed budget only continues his failed
policies of the present, and also devastates the most significant job creation
and retention program in New York State, the Empire Zones Program.
Rebuilding Lower Manhattan
In the fourth quarter of 2000, two million people were employed in Manhattan
private establishments and 407,700 or 20.6 percent were employed in the area
below 14th Street. A year later, in the fourth quarter of 2001, immediately after
the attacks of September 11th, the level of private employment fell to 1.8 million;
129,000 jobs were lost over the previous year. Below 14th Street, private
employment fell to 363,300; a loss of 44,400 over the previous year. The share of
private employment in Manhattan below 14th Street fell from 20.6 percent to 19.7
percent between the fourth quarters of 2000 and 2001. While there are federally
funded programs intended to assist the affected businesses in Lower Manhattan,
many businesses have complained about arbitrary decision-making, unnecessary
paperwork, and undue delays on the part of the state agency administering the
It has been nearly a year and a half since the tragic events of September 11th
and the clean up of the site is now complete. However, very little progress has
been made either in redeveloping the site of the former World Trade Center and
the surrounding area or in creating a memorial to those who lost their lives as a
result of the terrorist attack.
Beginning in December of 2001 and continuing to the present, the Assembly has
conducted a series of hearings on the future of Lower Manhattan. These hearings
have focused on the governance, transportation, economic development, small
business, tourism, and insurance issues that remain unresolved. One of the more
significant findings of these hearings is a strong indication of an overall lack
of coordination on the part of the city, state, and federal agencies involved in
the rebuilding and revitalization efforts. This has resulted in confusion and
uncertainty over which agencies are responsible and accountable for the various
phases of this massive undertaking. As further indication of the administrative
and managerial confusion, the Federal Emergency Management Agency (FEMA) recently
noted that the State has missed two deadlines for submitting proposals to fund
security projects in and around Lower Manhattan for which a minimum of $418
million has been set aside. However, on January 30, 2002, the State finally
submitted their $418 million security plan to FEMA. The details of this plan have
yet to be released adding further speculation regarding the ability of those
agencies involved in the rebuilding and revitalization efforts.
The Assembly has been committed to providing direct assistance to the rebuilding
and revitalization of Lower Manhattan. Through its Rebuilding the Empire State
Through Opportunities in Regional Economies (RESTORE) New York Program, enacted
as part of last year's State budget, the Assembly committed to provide capital
support for two major initiatives that will contribute to Lower Manhattan's
economic rejuvenation-the Lower Manhattan Bioscience Project and the Institute
for Advanced Studies in Software and Information Technology. These projects will
generate over 1,300 new jobs and add significant new incubator space in Lower
Small businesses are the economic backbone of many diverse neighborhoods that
comprise Lower Manhattan. The unprecedented loss of jobs since September 11th
has been exacerbated by a drop-off in tourist traffic to Chinatown, South
Street Seaport, and other communities, resulting in a precipitous drop in
revenue for the many restaurants, tourist oriented businesses and retailers.
Unfortunately, New York City's application to establish an Empire Zone in
Lower Manhattan was rejected by the Governor's designation board. The Empire
Zone concept, created by the Assembly in 2000, seeks to bolster struggling
communities around the State by using a range of tax-based incentives to
attract new businesses and support existing ones.
Improving the Upstate Economy
While the Downstate economy struggles to rebound in the aftermath of the World
Trade Center attacks and the earlier downturn of the economy, the Upstate
economy has also lagged under the Governor's failed economic policies. With
its historic dependence on manufacturing, it suffered greatly from the recession
of the early 1990's and benefited the least from the prolonged economic boom that
began in the mid-1990's. Since the Upstate economy never benefited from the
economic expansion, it never really entered a recession in 2001. Rather, it
simply experienced acceleration in its ongoing economic decline (see Figure 9).
In fact, Upstate's job growth rate has been virtually stagnant, falling from one
half of one percent in 2001 to zero growth in 2002. Furthermore, since the
mid-1990's, most of the regions in Upstate New York lagged the State in annual
employment growth, with four of the regions growing at less than one-half the rate
of the State as a whole. Upstate also lagged the State as a whole for wage growth
since the mid-1990's. New York City fueled by Manhattan, was the only region in
the State to outpace the State as a whole. (see Figure 10)
A Clear Open Path for Economic Development
The Assembly has long recognized that New York's economy is a collection of diverse
regional economies and industry clusters. The Executive's cumbersome, top-down,
project-by-project approach to economic development is the wrong choice. It has
been slow to respond to differing needs across the State or provide coordinated
guidance to help sectors benefit from synergistic growth, thus preventing the
State's economy from reaching its full potential. New York has added new programs
and organizations for economic development, but without an apparent overall economic
development strategy. The development of a rapidly changing, technology-based
"new economy" only further highlights the need for flexibility, creativity
and responsiveness to increase the State's competitiveness in national and global
Although providing a more strategic focus to State economic development programs
is not enough by itself to boost the State's economy, it can contribute to this
effort by optimizing the State's valuable, but limited resources and by marketing
the State more aggressively as an attractive business location.
New York State should adopt a more comprehensive strategic policy for economic
growth beyond the requirements of individual projects and companies. The Assembly
has put forward this strategy to capitalize on industries in which the State has
a competitive advantage and recognize the economic diversity of the State's
regions. This strategic approach should emphasize programs that link research and
development funding to jobs for New Yorkers in new industries as well as modernize
traditional industries to increase their competitiveness. It should identify the
needs of regional economies and make available assistance to revitalize urban
centers and main streets, assist small business, promote tourism and maintain a
state of the art workforce.
Revitalizing New York's Manufacturing Sector
New York's manufacturing industry has been steadily losing jobs. From 1995
through 2001, the manufacturing industry lost over 106,100 jobs statewide. Furthermore,
during this same period, Upstate manufacturing employment declined at more than twice
the rate of the nation (New York State Department of Labor). In order for
manufacturers to remain competitive in a global economy and provide stable employment
opportunities to their employees, they must be able to quickly adapt to rapid
technological changes. New York State's diverse manufacturing base, which includes
traditional manufacturers and the newer high tech industries, must be an integral
component of a comprehensive economic development strategy to reinvigorate the State's
During the 2000 Session, the Assembly Majority transformed the old Economic
Development Zones Program into the Empire Zones Program. As part of the
transformation, the Assembly Majority fought for and secured changes to the Program
that resulted in the creation of many of the new jobs in the State. This Program is
now the most successful economic development program for attracting and retaining
business in New York State.
The Program provides vital tax-based incentives to businesses that locate and grow
in a Zone and allows them, under certain circumstances, to operate tax-free. The
State reimburses the localities for local taxes the expanding employer would
otherwise have to pay. However, in his SFY 2003-04 State Budget proposal, the
Executive threatens the viability of the Program by requiring localities to pick up
50 percent of the cost of the real property tax benefit offered to new Zone
businesses certified as of January 1, 2004. This proposal will have a chilling
effect on future job creation efforts as localities would have to weigh the cost
of attracting a new business to its Zone.
In addition, the SFY 2002-03 enacted State budget provided for the creation of
six new zones. However, many areas of the State, both Upstate and Downstate,
were overlooked by a flawed designation process controlled by the Governor.
For example, the City of New York's application for an Empire Zone in Lower
Manhattan, still reeling economically from the events of September 11th, as
well as applications from many Upstate areas that continue to face hard
economic times, were rejected in the designation process.
Providing Capital Access to Small Business
Small businesses are one of the major forces driving New York State's economy.
Based on data for the second quarter of 2002, small businesses accounted for
over 97.9 percent of businesses in New York State and employed 53.9 percent
of the State's workforce (New York State Department of Labor).
While small businesses are the backbone of the State's economy, many small
business start-ups continue to find it difficult to access much needed
financing, especially venture capital. Minority and women-owned businesses
are even more susceptible to failure due to their inability to obtain
financing through traditional lending institutions.
Originally an Assembly initiative, the Linked Deposit Program provides small
businesses with access to capital through "linked loans." These funds
allow companies to improve their competitiveness through an increase of sales,
enhancement of product development, market expansion, and realization of
operational cost savings. In the 2002-2003 State budget, funding authorization
for this Program was increased from $200 million to $350 million.
There is also a need for equity investment in small, start-up companies. As the
"technology revolution" has changed the nature of the economy, new
"knowledge-based" companies, who typically do not possess traditional
forms of collateral, require equity, rather than debt financing. Yet, the business
assistance offered by the State economic development agencies has tended to be of
the more traditional "bricks and mortar" financing.
During the technology boom in the last decade, private venture capital markets
grew tremendously, taking equity stakes in new high-tech ventures allowing these
firms to take their products and services to market. Although large concentrations
of private venture funds were located in New York City, often the actual businesses
invested in were located in other states or even internationally.
Recognizing the need to keep a greater amount of venture investments within the
State, the Assembly championed enactment of the CAPCO Program, that provides tax
incentives for insurance companies to invest in certified venture capital funds
which, in turn, make available funds to help small businesses start-up and grow
in New York. Since 1998, over $280 million has been raised, with over 74 firms
receiving capital critical to their growth. In addition, the Assembly supported
authorization for the New York State Comptroller to allocate up to $250 million
in state pension funds to qualified investment firms, which provide equity funds
to technology businesses.
In the SFY 2003-04 State Budget proposal, the Executive recommends the creation
of a new CAPCO Program to provide additional venture capital investment in
discoveries that emerge from the State's capital investment in academic research.
While the Assembly welcomes the concept of new funds for CAPCO, the Governor's
proposal differs significantly from prior CAPCO Programs and must be evaluated
in such context.
Today, the economic downturn of the past few years has the private venture
capital market "entrenched in the worst slump in its history" according to the
National Venture Capital Association. It is critical to New York's economic
recovery that the State continues to support private sector investment in
technology companies and seek creative ways to fill the gaps in various stages
of venture capital investment.
1 A small business is an establishment that
employs not more than 100 workers.
Providing a Skilled Workforce
Improving the skills of the workforce has always been one way to encourage job
creation and stimulate wage gains. However, there is uncertainty in funding
levels and potential changes in training programs for New York workers. At the
federal level, the Workforce Investment Act of 1998 (WIA) is subject to
reauthorization in 2003. The program, which provides funding for job training
for adults, dislocated worker services, and youth employment, would see declines
in federal funding under current proposals. Even with increasing worker
retraining needs following the events of September 11, 2001, WIA funds allocated
to New York State have remained unspent and may be subject to the recapture
provisions under federal law. Because of implementation delays by the Executive,
only $43 million of $116 million in 2001 program year funding allocated to New
York City was disbursed through November 2002, and none of the City's 2002 program
year funding ($96.7 million) had been spent. Even though the program is over four
years old, New York City still has only three operational one-stop employment and
training centers. Without one-stop centers and a fully implemented system for
retraining and reemployment, many workers in New York City unemployed as a result
of the September 11th World Trade Center attacks and the economic downturn are
As technology continues to drive changes in almost every industry sector and as
new, emerging industries gain significance in the State's overall economy, the
demand for a workforce that is technically skilled continues to grow. Without a
highly trained workforce, we put New York's present and future prosperity at risk.
This shortfall will jeopardize New York State's leadership role in the nation's
economy and undermine the growth of the high-tech industry in New York.
According to a recent survey by the U.S. Chamber of Commerce, members of employer
organizations have made it clear that a quality workforce is one of their most
pressing challenges. Workforce development was a priority of 99 percent of the
members of the largest chambers of commerce responding, with 91 percent reporting
workforce development as their top priority. The Chamber also reported this month
that by 2010 the national labor force would fall 4.8 million workers short of
meeting the demands of an estimated 58 million job openings.
The State's Strategic Training Alliance Program, which provides for the development
of a technically skilled workforce, was enacted in 1998 and funded at $34 million.
The Executive agencies have only disbursed approximately $9 million. Furthermore,
only a small percentage of awards and funding has been approved for training
projects undertaken by industry alliances or consortia. Providing training
assistance to businesses through consortia is an innovative and cost-effective way
to ensure that employees are highly trained. The Executive's inability to
effectively implement this Program is detrimental to the State's economic recovery.
With the current unemployment rate increasing to 6.3 percent in December 2002, the
effective implementation of a program that could provide necessary job training
that would help retain jobs and avert layoffs should be a priority of the
Providing Technology Innovation through Increased
Collaboration between Industry and Universities
It is imperative that the unsurpassed research and development efforts of the many
universities of the Empire State are supported and allowed to prosper. New York
maintains a tremendous system of public and private institutions of higher education
that provide a unique and comprehensive knowledge base that will continue to serve
as an engine of future economic growth.
In order to reap the benefits of the significant investments the State has recently
made in research and development, we must formulate a strategic commercialization
policy to translate the innovations created at our universities into jobs for New
Yorkers. This policy should ensure that academic entrepreneurs have access to
appropriate technology transfer services - financing, management, business plan
and marketing assistance, and help in navigating the patent process. Additionally,
the State should continue its capital support of incubators and accelerators that
provide low-cost, flexible, state-of-the-art space where young and expanding
technology firms can thrive.
The Assembly has historically supported increased collaboration between industry
and universities. The Assembly successfully fought for the creation of the
RESTORE New York Program as part of the 2002-03 enacted State budget, which, in
part, focuses on the development and improvement of facilities promoting the
growth and advancement of high technology research and commercialization efforts
in New York State.
In SFY 1999-00, the budget provided roughly $117 million in State support for
research and development and capital improvements at research universities,
incentive grants for Centers for Advanced Technology and incentives to attract
quality research and development faculty. In 2001-02, the Assembly proposed a
five-year program providing an additional $525 million in State support for high
technology, biotechnology and biomedical research being performed across the
Increased cooperation between university centers and high technology sectors has
been a key link in the development and commercialization of technological
innovation. Whether it is California's Silicon Valley or the Research Triangle of
North Carolina, a preponderance of leading research universities has been a key
factor in the development of regional high technology clusters. Within New York
State there already exists such an accumulation of "intellectual
capital". This includes over 360,000 scientists and engineers, roughly
10-percent of the nation's Ph.D's, and more than 185 members of the Academy of
Sciences. This existing capacity for new discovery must be nurtured so that
technologies of the future will continue to be developed in New York. As new
technologies make their way from the laboratory to the marketplace, new business
opportunities will be created, spurring on the creation of high-skilled, high
quality jobs across New York State.
The tourism industry remains an essential component of New York State's economy.
In 2001, tourism was directly responsible for over 319,250 jobs and accounted for
$11.1 billion in wages (New York State Department of Labor). However, the Executive
continually fails to provide a coordinated strategy to facilitate growth of the
The State must focus its efforts on attracting more visitors, thereby bringing
new money into New York's economy. Finding ways to stimulate international travel
as well as developing a tourism strategy that allows localities to share in the
State's successes remain important. The Assembly has long supported partnerships
between local governments and tourism promotion agencies to market their tourist
destinations throughout the State. Further, local investment in tourism catalyzes
regional job growth sustained by traveler demand.
New York has great economic strengths and great potential. The Assembly Majority
has fought in the past to establish economic development strategies that promote
real job growth in every region and every industry in New York State. In order
for New York to reach its full economic potential, the State must focus its
limited resources by eliminating bureaucracy, ensuring and promoting the
availability of a skilled workforce for the new economy, investing in partnerships
between university and industry, investing in programs that revitalize communities,
reviving the manufacturing sector, revitalizing tourism and encouraging
entrepreneurs and small business growth.
The Governor's failed electric deregulation strategy has hurt residential and
business consumers. Utility rates in New York are consistently among the highest
in the nation and electricity prices in New York State have increased faster than
prices in the rest of the country. Further, due to suspect accounting practices
and a weak economy, the credit ratings of power generators in New York have been
significantly downgraded, discouraging new construction and threatening the
operation of existing plants. Given concerns about job creation and retention
throughout New York, the need for a comprehensive energy policy that encourages
economic growth and provides rate relief for business and residents throughout
the State should be addressed immediately.
For the past several years, the Assembly has continued to demonstrate leadership
in the energy policy arena. To assist families and businesses struggling with
high energy prices, the Assembly approved the New York State Transitional Energy
Plan (NYSTEP) - a comprehensive energy plan to provide for immediate action to
relieve burdens on consumers and protect them from extreme price fluctuations
and unfair selling practices. NYSTEP also promoted conservation, energy
efficiency and alternative energy resources to lower energy costs and spur job
creation. One of the components of this package, the Consumer Protection Act
of 2002, was signed into law on December 20, 2002 (Chapter 686, Laws of 2002).
This legislation extends provisions of the Home Energy Fair Practices Act to
cover all energy service companies, to ensure that consumers continue to be
protected in a changing energy market.
The Assembly will continue to advocate for actions that will provide immediate
rate relief, balanced economic and environmental energy policy, and provide
mechanisms to guarantee market development that offers true customer choice for
all New York State energy consumers. Over the past seven years, the Assembly
has introduced comprehensive legislation that provided a cautious, instrumental
approach toward restructuring the energy industry. Unless the Governor makes
the right choices and advocates for similarly sound energy policies this year,
New York State will not be able to reach its full economic potential.
State Highways and Bridges
The Capital Program of the State Department of Transportation (DOT) is a five-year
plan to improve and rehabilitate critical components of the State's transportation
infrastructure by providing funds for State and local roads and bridges, transit
systems, the State's freight and passenger rail network, airports, ports and
canals. The Program also provides funds for economic investments through the
Industrial Access Program.
The DOT Capital Program and a number of local road and bridge programs, including
the Consolidated Highway Improvement Program (CHIPs) and the Municipal Streets
and Highways Program ("Marchiselli"), are supported by New York's Dedicated
Highway and Bridge Trust Fund. This fund is comprised of revenues from motor
fuel taxes, motor vehicle registration fees, and highway user fees.
The Capital Program is vital to improving the transportation infrastructure,
increasing the flow of goods and services, and stimulating economic development
and job creation. The Executive has proposed to decrease the highway and bridge
construction letting level from $1.75 billion to $1.65 billion.
A sufficient letting level for highway and bridge construction and repair is
important to maintaining good transportation infrastructure. The Governor's
proposal to decrease the letting level to $1.65 billion for the 2003-04 fiscal
year will likely mean the condition of New York State roads will decline.
Approximately 30 percent of the roads in New York have pavement conditions that
were rated poor or fair in 2002. Nearly 30 percent of state highway bridges
were also rated deficient. An alarming 43 percent of local bridges were rated
deficient. Poor pavement conditions and deficient bridges are a threat to the
safety of motorists and a tax on the State's economy. Improving the
transportation infrastructure in the State is critical to ensuring the safety
of motorists as well as keeping New York competitive in attracting businesses
and jobs, and promoting tourism in the State.
Federal Transportation Act of the 21st Century
The Transportation Act of the 21st Century (TEA-21) is Federal legislation
(Public Law 105-178) that was enacted in 1998 and expires September 30, 2003.
The current program allocates $8.1 billion in highway funding and $6.7 billion
in transit funding to New York during the 1998-2003 period. TEA-21 requires the
Federal government to prioritize highway funding for the States and to provide
guaranteed minimum funding levels to the States based on formulas and State
contribution levels. States contribute to the funding in the form of highway
user fees, fuel taxes and similar revenue. Reauthorization is critical. If
the reauthorization fails or if the current level of funding decreases it will
greatly impact highway and transit funding in the State. New York must send a
clear message to the Administration and Congress about the importance of TEA-21
and be active in securing its fair share of Federal transportation funding.
New York State transit systems transport approximately 2.37 billion riders over
678 million miles every year. State investments in mass transit benefit all New
Yorkers. It has been estimated that for every $1 spent on mass transit, at least
$6 in economic benefits is realized. Mass transit is essential to cutting
pollution, increasing energy conservation, relieving road congestion as well as
bolstering the economic well being of the State. The Executive proposes $1.73
billion in transit aid for transit systems statewide. Upstate transit systems
would receive $111 million. Downstate transit systems, excluding the Metropolitan
Transportation Authority (MTA), would receive $163 million. The MTA, which serves
the New York City metropolitan area, would receive $1.46 billion. New York
transit riders account for one third of all transit riders in the entire United
States. State mass transit funding supports suburban, urban and rural mobility;
accessibility and opportunity for welfare to work program participants;
transportation for school children; and accessibility for the elderly and people
with disabilities. Additionally, economical and efficient transit systems
support businesses by providing transportation for workers and consumers.
Metropolitan Transportation Authority
In November 2002, the Metropolitan Transportation Authority announced it would
face budget gaps totaling $2.8 billion in 2003 and 2004. In an effort to close
the gaps, the MTA has proposed to increase fares and tolls by as much as 33
percent. The alternative would be funding from State or regional sources. The
SFY 2003-04 Executive Budget proposes no increase in State funding for the MTA.
More than 2.3 billion New Yorkers rely on the MTA every year for travel in the
metropolitan New York area. Yet, the MTA's budget process is essentially closed
to the public. The MTA should be required to improve its budget adoption process
to better incorporate valuable public input as well as provide more transparency
in its financial accounting practices. Better financial oversight is prerequisite
to ensuring that the MTA handles its financial affairs in an accurate, efficient
and responsible manner.
The MTA is in the third year of its $18.3 billion 2000-04 Capital Plan. The MTA
Capital Plan includes essential network expansion projects like the 2nd Avenue
Subway project and access to Grand Central Station for Long Island Railroad
(LIRR) commuters. The full-length 2nd Avenue Subway line will extend from 125th
Street in East Harlem to Lower Manhattan. The 2nd Avenue Subway project is
important because it will relieve over-crowding on the Lexington Avenue line;
serve as a new transit line for residents on Manhattan's East Side, who currently
are under-served; and provide better access to Lower Manhattan. Access to Grand
Central Station from the LIRR will more thoroughly integrate the region's mass
transit operation. Moreover, network expansion projects help reduce pollution
and traffic congestion by providing additional mass transit options.
The MTA Capital Plan was amended subsequent to the terrorist attack on September
11th to allow for the reconstruction of facilities destroyed with the collapse
of the World Trade Center. The MTA has received federal funding and expects to
receive insurance reimbursement to assist in covering the costs of already
completed repairs and additional 9/11 related reconstruction in the future.
Since September 11th, ferry ridership has doubled in the metropolitan New York
City area. The United States Department of Transportation recently announced
$11.4 million in funding for a new West Midtown Intermodal Ferry Terminal in
New York City. The money is part of a $55 million allocation for New York and
New Jersey to expand ferry service, a measure necessary due to the loss of the
PATH train service as a result of 9/11.
State support of continued improvements in transportation infrastructure and
efforts to maximize mass transportation options is vital to health and well
being of New Yorkers and to the State economy.
Without question, the September 11th 2001 attacks on New York City, Pennsylvania
and Washington, DC have had a profound impact on public protection policy and
procedure. In response to these acts of terrorism, the Assembly has introduced
legislation that is designed to prevent and combat terrorism in its many forms,
from the rigorous screening of airport personnel to the criminalization of
possession of chemical and biological agents. New York State has seen military,
police and other public safety personnel redouble their efforts to enhance the
State's security through an increased presence at reservoirs, airports, boarders
and bridges. These efforts require interagency cooperation at the local, State,
federal, and international levels.
The Executive has proposed the establishment of an Office of Public Security,
which would be responsible for the development and implementation of a statewide
counter-terrorism strategy. Originally established by Executive Order following
the September 11, 2001 attacks on the World Trade Center, OPS is charged with
creating coordinated strategies to prevent and counter future incidents of
domestic terrorism. The proposed Office would operate a Cyber Security and
Critical Infrastructure Coordination program to continually assess the
vulnerability of the State's data, communications and geographic information
systems. The Office of Public Security will be funded on an All Funds basis at
$11.9 million, which includes support for 95 positions.
Statewide Wireless Network
Interagency cooperation within the law enforcement community is fundamental to
effective policing. When confronting the possibility of future terrorist attacks
on our State this cooperation is paramount. The Assembly will remain committed to
the creation and full implementation of a Statewide Wireless Network, allowing for
seamless communication between State and local police agencies. At full
performance, this network will be available to all agencies performing public
safety and emergency response functions.
Enhanced Wireless 911 Funding
A 70-cent surcharge on monthly cellular phone use was implemented during 1991,
for the payment of State Police costs related to the operation of a cellular 911
(C-911) emergency telecommunications system. In 1996, implementation of a C-911
program became necessary to come into compliance with Federal Communications
Commission (FCC) regulations related to locating and identifying a person in
need of assistance when the caller is using wireless or cellular technology.
After 10 years and at least $160 million in surcharge deposits to a seized
assets account, no real progress has been made in implementing enhanced wireless
emergency service. Imprudent allocation of the surcharge revenue, lack of
significant cooperation by providers with government, and the lack of Executive
leadership have all contributed to the failure to achieve the system that all
citizens deserve and that lawmakers envisioned when passing the enabling
legislation. Over this same ten-year period, in an effort to comply with the
federal requirements, many localities have begun to allocate their own resources
to provide this crucial technology.
During SFY 2002-03, the cellular surcharge was raised to $1.20 per month, and
a Local Enhanced Wireless 911 program was created. An allocation of $20 million
from the State surcharge is provided in the SFY 2002-03 Budget for local
reimbursement of eligible costs associated with implementation of wireless 911
service. A framework was established to create a board to disperse these funds
on a per capita basis. Despite repeated requests, funding for these purposes
has yet to flow to municipalities, thus stalling efforts to spread an emergency
wireless safety network. With cellular phone use on the rise and for many New
Yorkers replacing land lines altogether, it is time to implement emergency
wireless caller locator systems for the safety of all New Yorkers.
Thousands of working families in New York State have been able to seek and
to retain employment due to the commitment of the Assembly to provide subsidized
child care. The Executive proposes a $17 million increase to the Child Care
Block Grant contained in the Executive Budget proposal for State Fiscal Year
(SFY) 2003-04, bringing the total to $929 million. This level will sustain
183,400 subsidized child care placements, which is the current number of
available subsidies, while allowing for a market rate increase for child care
The Executive Budget proposal does not include new funding to continue the
SUNY and CUNY child care programs, satellite child care, nor the facilitated
enrollment demonstration projects enacted in the current year's budget. The
total funding provided in the current year to support these programs is $20.4
million. Moreover, the Governor, again, fails to take advantage of the maximum
allowable transfer of TANF funds to the Child Care Block Grant. Maximizing the
transfer of TANF funds would have raised the TANF transfer to $488 million, $80
million above the Governor's proposed transfer of $408 million. Such additional
funding would support approximately 19,000 additional subsidies. Some 940,000
children under age 13 years in New York State are eligible for child care, and
at least 29,158 families are on waiting lists; nevertheless, the State is
providing child care for only 183,400 children2.
Even in times of fiscal crisis,
quality, affordable child care is a necessary expenditure. It is an important and
integral part of the equation that keeps families moving from welfare to work and
helps low-income parents stay employed.
Affordable, accessible, quality child care is of great concern to working families.
Moreover, the availability of subsidized care can often mean the difference between
employment and public assistance. In addition, quality child care can be
instrumental in fostering a child's intellectual and personal development and in
teaching appropriate social and behavioral skills. Various studies have shown
that a child's earliest learning experiences shape them for life and, that child
care, particularly school-age child care, is an effective deterrent to antisocial
behavior. As reductions in child care funding are likely to have far-reaching
repercussions, a sustained commitment to providing subsidies to working families
should be viewed as a government obligation.
With over 29,000 families on waiting lists, the State faces the need to expand
both the number of child care subsidies and child care capacity. In SFY 1999-2000
and 2000 01, the Assembly secured appropriations that together totaled $30 million
to establish the Child Care Facilities Development Program to create, to renovate
and to rehabilitate child care facilities. No such commitment to child care
capacity is expressed in the Executive Budget for SFY 2003-04.
Moreover, the Governor's proposal to eliminate universal pre-K in this State has
ramifications beyond the positive learning experience that will be denied to our
children. Not-for-profit child care providers are an integral part of the system
for providing universal pre-K programs through the State. The elimination of
pre-K funding could jeopardize present child care capacity if child care providers,
operating at the margin, are forced to close as a result of this loss of revenue.
2 "Child Care in New York State: A Patchwork
of Policies," Greater Upstate Law Project, Inc., November 2002.
A growing body of research brings to light that after-school supervision that
engages children in constructive activity and connects them with caring adults
can help develop attitudes and skills that dramatically reduce the instance of risky
or delinquent behavior that would otherwise result in their entry into the juvenile
In SFY 2003, the Executive makes youth proposals that appear to be inconsistent
with "prevention" as a goal. The Executive proposes to reduce the Youth
Development and Delinquency Program (YDDP) by $4.3 million, the Special Delinquency
Prevention Program by $1.042 million, Advantage schools by $4.8 million, and
extended day care programs that were partially funded from TANF funds will be
operating with $11.3 million fewer dollars. At a time when we can see the benefit
of the State's investment in prevention, the Executive is proposing to reduce that
investment by $21 million. At the same time, the Executive proposes to reform the
juvenile justice system through the implementation of an initiative which includes
a community-based intensive supervision program, a reduction in the number of beds
in the OCFS residential system, and the transfer of certain juvenile offenders to
the Department of Corrections.
While the decline in juvenile crime suggests reform of the system is appropriate,
such reform must stay focused on the provision of preventive and rehabilitative
services to the children and their families that reduce the risk of their entry
or re-entry into the legal system. Moreover, at the centerpiece of such reform
should be programs that provide high-risk children with a place in which to be
constructively engaged in developmental, educational and recreational activity.
In addition, for that small minority for which placement in the OCFS-operated
residential system is unavoidable, rehabilitative services and effective community
reintegration activity must be a priority.
Welfare Reform Reauthorization
Federal authorization of the Temporary Assistance for Needy Families (TANF)
Block Grant originally expired on September 30, 2002 but was extended through
January 11,2003, spending authorization provided until the end of the State Fiscal
Year (SFY) 2002-03. Welfare Reauthorization is expected this congressional session.
Many anticipate another extension of the TANF Block Grant at the current funding
levels. This is not the appropriate time for the Federal Government nor the
Executive to implement new requirements that could make a significant impact on
the way New York State utilizes TANF funding by decreasing support for programs
that assist individuals most vulnerable during economic instability.
New York's $2.44 billion TANF allocation is based on the State's caseload and
expenditures from 1995. New York's caseload and expenditures were significantly
higher in 1995 than in the subsequent years. As a result of the change in the
number of New Yorkers in the TANF program, the State has annually experienced
federal TANF funding above the amount needed to support the Federal share of the
Family Assistance Program. This funding overage is referred to as the
"TANF Surplus". Since 2000, the annual surplus has been approximately
$1.5 billion. The Legislature has allocated the TANF Surplus to provide
additional funding for children and family services; various employment and
training initiatives, including health care, worker training and child care
worker recruitment and retention; child care subsidies; and transitional/local
Many worthwhile programs funded in the enacted SFY 2002-03 Budget which provide
much needed services are eliminated or drastically reduced in the Executive's
recommended SFY 2003-04 Budget. Programs serving individuals with disabilities,
households with small children, persons with basic educational needs, and
families seeking preventive or emergency services have been all but abolished
in the Executive's budget. This approach simply seeks to leave the most
vulnerable individuals behind during these difficult economic times.
Food Stamp Assistance
Many families that continue to be eligible for Food Stamps are not receiving
them after securing employment and leaving public assistance. Food Stamps
should be a means of supporting families that are making the shift into the
workforce. The State must try to improve outreach programs to identify and
better serve eligible families. The Food Stamp Program could be made more
effective if statewide measures were taken to simplify eligibility rules and
adjust the quality control system. If the Executive utilizes the federally
funded Food Stamp Program more effectively, additional State resources could
be employed to promote more programs for low-income families working towards
self-sufficiency. Again, the Executive has failed to implement State social
services policies in a way that is both successful at assisting families
towards self-sufficiency and cost effective.
Safety Net Assistance
In October of 2001, 111,103 recipients were receiving public assistance through
the State's Safety Net Assistance Program. In October 2002, that number
increased by 248 percent to 275,736 recipients. Much of this increase is due
to the large number of Family Assistance recipients who exhausted their 60
month time limit on Federal TANF and transitioned to the State Safety Net
The Executive's failure to fully utilize the federally allowed exemption status
for many of these new Safety Net recipients has cost the state significant
dollars. Those individuals exempted from the federal 60-month time limit are
still eligible to have their living expenses funded by the Federal Government.
Failing to fully utilize the 20 percent exemption provided for by the federal
law is the wrong choice because it forces the State and local governments to
assume costs that would otherwise be borne by the Federal Government. A more
effective use of the exemption would be prudent in these difficult fiscal
Events of the past year have shown that the Executive has fallen short in its
responsibility to build a coherent, integrated statewide system of mental
health services that helps persons who struggle daily with serious and
persistent mental illness to lead fulfilling lives. This inattention has
resulted in a serious shortage in residential placements, with mentally
disabled individuals being placed inappropriately in adult homes and nursing
homes where inadequate follow-up by the Office of Mental Health (OMH) allowed
them to be neglected and abused. The expiration of the Community Mental
Health Reinvestment Act serves to magnify these problems.
The State must take bold steps: to expand the number of supportive, residential
opportunities; to move mentally ill persons out of adult homes and nursing homes;
to protect the service expansion made through the Enhanced Community Services
Program; to continue building up base funding for mental health services; and
to re-establish the Community Mental Health Reinvestment Act in order to meet
the needs of this vulnerable population.
The Shift to Community Based Services
Tremendous change has occurred over the last 50 years as approximately 85,000
beds were eliminated from the State psychiatric hospital system. The people
who would have occupied those beds are now residing in our communities. These
individuals require a constellation of services to assist them in meeting life's
day-to-day challenges, such as housing with a mental health component;
free-standing mental health services; supported employment; case management;
social activities; and, in some cases, medication supervision. In its rush
to downsize and to achieve General Fund savings, the Office of Mental Health
has not planned adequately for the development of sufficient community based
mental health services or for placement and follow-up care of patients being
discharged from its institutions as witnessed by recent news reports.
Mental health services are provided most effectively when they are organized
around a stable, supportive living situation. Unfortunately, while 85,000 beds
have disappeared from the State operated mental health system, only 24,982
residential placements have been developed in local communities and there are
few vacancies. OMH has relied on other, less satisfactory, places for persons
with chronic mental illness to live.
Between 12,000 and 15,000 vulnerable, mentally ill persons have been placed in
adult homes across the State in conditions that range from satisfactory to
appalling. Generally, adult homes provide little or no mental health services.
Another untold number live in nursing homes. Again, little or no mental health
services are provided in this setting.
In response to articles in the New York Times which ran in the spring of 2002,
exposing the deplorable conditions in certain adult homes and nursing homes, the
Department of Health (which has oversight responsibility for these facilities)
formed an Adult Homes Workgroup to develop solutions. A recent report of the
Work Group documented the appalling conditions existing in certain Adult Homes
that house persons who are mentally disabled and recommended certain remedies.
The Executive has proposed that the Commission on Quality of Care for the
Mentally Disabled (CQC), the Office of Mental Health (OMH), the Department
of Health (DOH) and the State Office for the Aging (SOFA) work together to
implement the Work Group's recommendations. Eight million dollars would be
appropriated to initiate the following steps: conducting client assessments,
improving medication management, enhancing service coordination, providing
advocacy services, and expanding social and recreational activities. Providing
sufficient residential opportunities with strong mental health supports is
essential to addressing the problem.
The shortage of mental health housing impacts other programs. The Mental
Health Court, administered by the Office of Court Innovation, seeks to provide
alternatives to incarceration for non-violent, mentally ill felons. While the
program is proving very successful, the need for housing with mental health
supports on premises, as well as wrap around services, is key. Persons who
are otherwise eligible for the diversion program will not be accepted until
stable housing is found for them. Many more mentally ill persons could be
kept out of our jails and prisons if more housing and services were available.
The Office of Mental Health reports that there are 3,013 beds "in the
pipeline," i.e., under various stages of development. Moreover, the
Executive's SFY 2003-04 budget request includes a new two-phase community bed
development proposal that provides $65 million in capital bonding authority to
support construction of 1,000 beds (Phase I). The goal of this project is to
construct a total of 2,000 new beds to house a mix of persons released from
State psychiatric centers, persons with mental illness who had been
inappropriately placed in Adult Homes, and persons who are mentally ill and
homeless. While this is a laudable goal, and these new beds, together with
those beds that are continuing to move forward "in the pipeline",
will ease the housing shortage, it must be recognized that capital
construction projects to create more bed capacity take a significant amount
of time to reach completion. Consequently, the Governor's budget does
little to address the pressing, immediate need for more housing with
The Executive continues its efforts to downsize the State-operated psychiatric
center (PC) system in the SFY 2003-04 Budget with proposals to eliminate 90 beds
from the system by March 31, 2004 and to close four adult psychiatric centers
and one children's psychiatric center over the next three years. In addition,
the Nathan Kline Institute for Psychiatric Research would be merged into the New
York Psychiatric Institute. The Office of Mental Health workforce is slated to
be reduced by 950 people.
Under the Governor's plan, Elmira PC, Hutchings PC, and Middletown PC would be
closed by July 1, 2003, while the Bronx PC and Bronx Children's PC would be
closed by October 1, 2005. The Executive proposes using savings from the SFY
2003-04 bed and facility closures to support the cost of living adjustment and
Medicaid fee increase provided in SFY 2002-03 which total $30 million on a full
annual basis. The Governor's plan, however, does not address the impact these
closures will have on the affected communities, nor the personal hardship that
may be placed on the families of patients who will be moved.
Community Mental Health
The groundbreaking Community Mental Health Reinvestment Act (Chapter 723, Laws
of 1993) required that savings from the elimination of adult, non-geriatric beds
in State psychiatric centers, as well as savings from facility closures, be
"reinvested" in the expansion of community-based mental health programs.
Such program growth was needed to serve the tens of thousands of persons no longer
being served by the State-operated system. The Act also included provisions to
protect various stakeholders -- patients and their families, State employees, and
the local communities -- that would be impacted by psychiatric center closures.
During its existence, the Reinvestment Act directed funds to community providers
through the Reinvestment Program, which grew to provide more than $180 million
The Reinvestment Act expired on September 30, 2001. The Legislature of 2002 passed
a new Community Mental Health Support and Workforce Reinvestment Program Bill
(A. 11604) that would have placed particular emphasis on increasing and
strengthening base level funding for existing programs so as to support workforce
retention and recruitment initiatives. Governor Pataki vetoed the bill on December
20, 2002, and in his veto message he indicated that he would submit a new
reinvestment proposal in its stead. The Governor's budget proposes Article VII
legislation that would create a new Reinvestment Program to channel savings from
future bed closures and facility closures to community programs. The new
legislation, however, would not take effect until SFY 2004 05.
The State must find ways to confront continuing serious problems: staff recruitment
and retention; the severe shortage in housing alternatives that provide mental health
care and supervision; and the need for effective oversight of services provided to
persons with mental illness in adult homes and nursing homes.
Mental Retardation and Developmental Disabilities
The NYS-CARES program was inaugurated in State Fiscal Year (SFY) 1999-2000 with the
goal of eliminating waiting lists of persons living at home that were in need of a
permanent out of home residential placement. Many of these individuals are adult
children of elderly parents who are no longer capable of caring for them at home.
SFY 2003-04 was expected to be the fifth and final year of the initiative with
4,900 beds having been added to the community-based residential system, in addition
to expansion of day services and family supports. The SFY 2003-04 Executive budget,
however, proposes a new program, NYS-CARES II, that would provide yet another 1,900
new residential beds, 370 new day service opportunities, and increased support for
in-home services over the next five years.
Capping Overburden Aid
The success of the proposed NYS-CARES II program may be compromised, however, by
another action in the Executive's budget, the proposal to cap "over burden
aid." As a result of the de-institutionalization movement, persons with
mental illness or mental retardation, who had previously resided in State-operated,
State-funded facilities for years, were released to local communities. Virtually
all persons being released from these State-run psychiatric centers and
developmental centers were eligible for Medical Assistance (Medicaid) coverage for
their care upon discharge.
Medicaid is funded jointly by the Federal Government, the State, and localities.
As Medicaid recipients, a portion of the cost of their care would have been shifted
from the State to counties. In recognition of the many support services this
population would need, and the burden the cost shift would place on local taxpayers,
the State agreed to absorb the counties' share of the costs of providing services
to this group. The fiscal relief provided to local governments is referred to as
"overburden aid." Today's policies direct that more and more of those
individuals who would once have been institutionalized be retained in the community
whenever possible; State aid for the care of these individuals has continued to
accrue to the counties.
The Governor's SFY 2003-04 budget, however, includes a proposal to cap overburden
payments at calendar year 2002 levels, so that any service expansion would require
counties to contribute a local share. The proposed expansion through the NYS CARES
II program could impose a fiscal impact on counties that had previously been
protected by "overburden aid." If counties take steps to lessen the fiscal impact
of new services by discouraging not-for-profit providers from participating in the
NYS-CARES II program, developmentally disabled persons needing out-of-home
placements and day services would suffer.