As you may have heard, last Thursday, March 28, the Assembly completed its' work on the State budget for Fiscal Year 2013-2014, which began April 1. This marks the third year in a row that the Legislature has passed an on-time budget, a feat not accomplished in nearly 30 years. Aside from $6.2 billion in Federal funds for "Superstorm Sandy" recovery, the budget totals $135.1 billion, an increase of less than 1 percent over spending during State Fiscal Year 2012-2013, for a total budget of $141.3 billion that closes a budget gap of $1.4 billion.

Assemblyman Farrell debates budget bills on the Assembly floor, March 28, 2013.

I am happy to announce that our budget increases school aid by $436 million over the amount proposed in January by Governor Cuomo, more than $300 million of which is for City schools. Total Formula Base Aid for schools statewide is $936.6 million more than was allocated during Fiscal Year 2012-2013, for a total of $20.8 billion. We also succeeded in raising community college base aid by $150 per full-time student for the second year in a row, to $2,422 per student, and allocated $25 million for full-day Kindergarten and half-day pre-Kindergarten programs. New York City schools are funded at a level of $8.28 billion, an increase of $363.9 million over last year and $184.3 million more than was initially proposed by the Governor.

College opportunity programs were increased by 3 percent across the board. The Higher Education Opportunity Program was increased $728,040 (to $25 million); the Educational Opportunity Program was increased by $632,430 (to $21.7 million); the Liberty Partnerships Program was increased by $376,250 (to $12.9 million); the Science and Technology Entrance Program was increased by $324,030 (to $11.1 million); and the Collegiate Science and Technology Entry Program was increased by $245,520 (to $8.4 million).

Raising the Minimum Wage and Helping the Unemployed

Our budget also contains language that will increase the minimum wage to $9 per hour by 2016. This increase will directly benefit almost 1 million New Yorkers who currently earn less than $9 per hour, and my Assembly colleagues and I believe this change may benefit the economy as these workers tend to spend their earnings as they receive them. The budget also extends the "millionaires' tax" while locking in lower tax rates for middle-class families and lowering the cost of doing business in New York State for many small employers.

The budget also contains provisions to increase the weekly unemployment benefit, which is now capped at $405 per week. Over the coming years, in a series of incremental steps, unemployment benefits will rise to half the State average weekly wage, providing much-needed help to families in need. The budget also helps employers by making reforms to cut unemployment insurance costs by nearly $500 million while assuring the unemployment system is solvent in the future.

We were also able to keep our promise to inner-city youth seeking jobs and opportunity by providing a tax credit to employers who hire unemployed youth aged 16 to 24 to work in the fields of clean energy, health care, manufacturing and environmental conservation. Employers will receive a tax credit of up to $4,000 per employee if these young people remain on their payroll for at least one year. This program also gives young people who wish to improve their lives the opportunity to gain valuable work experience that will serve them well later in life.

Partial Restoration of Developmental Disability Programs Achieved

Unfortunately, we were not as successful in restoring budget cuts to the Office for People with Developmental Disabilities (OPWDD). Responding to actions by the Federal government, the Governor proposed a 6 percent cut to this important program, totaling $120 million. Negotiating with the Governor and Senate, we were able to restore $30 million to OPWDD and protect OPWDD providers from suffering the effects of the Federal government's plans to recover $1.1 billion that had already been paid to these providers.

As you may know, weeks after the Governor released his Executive Budget in January, the Federal government determined it had overpaid New York State's Medicaid-reimbursement program for many years and announced immediate and deep cuts to these reimbursements. This forced Governor Cuomo to fill a surprise $500 million hole in the budget at a delicate time.

Though I was happy to vote in favor of new money for education after years of cuts, it was very difficult for me to support this budget because of the harm these OPWDD cuts will do to vulnerable members of our community. My colleague, Assembly Member Harvey Weisenberg of Long Island, stood on the Assembly floor during our debate to make an impassioned speech against these damaging cuts.

Assembly Member Weisenberg, who has an adult son living with developmental disabilities, spoke of his family's experiences with the system and recalled the nightmares that have taken place. He argued passionately that protecting the disabled is one of the most fundamental responsibilities of State government, and that as elected officials we hold the fate of this nearly defenseless and voiceless community in our hands as we make decisions on the budget.

But because of the sensitivity of the Governor's negotiations with Washington, if we had voted to reject the 25 percent restoration to OPWDD, we risked a much larger cut of $1.1 billion in Federal funding for the OPWDD program. Our choice was painful, but clear. Both Assembly Member Weisenberg and I voted yes, despite our reservations.

It is our intention to make these cuts to OPWDD a one-time event, and we will be fighting to restore these cuts through the end of our Legislative Session in June, and in the future.

Farrell Welcomes Friends of Riverbank to Albany

On Tuesday, March 19, while work on the budget was still ongoing, along with my colleague Assembly Member Keith Wright I had the pleasure of welcoming L. Ann Rocker and members of Friends of Riverbank to the State Capitol. During their visit, which was several of the members' first trip to Albany, the travelers got to see the legislative process up close.

Assembly Member Wright and I introduced members of Friends of Riverbank to Assembly Member Joseph D. Morelle of Rochester, who became Majority Leader earlier this year, and officially welcomed the group to Albany and to the Assembly floor.

In case you do not know, the Friends of Riverbank meet on the second Saturday each month at the park. Their next meeting is April 13. I make it a point to attend, and hope to see you there.

Yours truly,
Herman D. Farrell, Jr.

Last night, March 20, the Assembly and Senate reached agreement with Governor Cuomo on a budget for State Fiscal Year 2013-2014, which begins April 1. Because of the upcoming religious holidays our deadline is earlier than the usual March 31 deadline. Excluding Federal aid for "Superstorm Sandy" recovery, the budget is $135.1 billion, a slight increase over 2012-2013.

Several budget bills went to print last night, and other budget legislation was printed today. Because these bills must “age” for three days without a Message of Necessity from the Governor which would allow us to pass them immediately (and which he has said he will not grant us) we expect to start passing the budget on Saturday and complete the process early Sunday morning.

I am happy to report that the Assembly met all of our top priorities including a higher minimum wage, funding for education, ensuring the care and well-being of our vulnerable populations, job creation and extending the "millionaires’ tax." Since my February report to you we finished our Joint Legislative Budget hearings on the Executive Budget, finished our revenue projections and agreed with the Governor and Senate on $200 million in new revenue that will be available.

Farrell Leads Debate on Assembly Budget Resolution

Unfortunately, we could not convince the Governor to agree to restore $240 million in cuts to City schools, which arose from a dispute between the mayor and the teachers' union on teacher evaluations. However, we succeeded in restoring another $300 million to City schools. Work continues to decriminalize possession of small amounts of marijuana and close a loophole that has caused problems for young men and women of color under the stop-and-frisk program.

Funding for these crucial programs had been cut because of a dispute between Albany and Washington about Medicaid payments to New York that had been made in previous years. Washington cut $500 million in Medicaid funding after the Executive Budget had already been released, forcing a sudden funding cut for non-profits who serve the developmentally disabled.

Seeing the catastrophic effect these cuts would have on communities statewide, the Assembly restored funding for programs that positively affect the quality of life for thousands of New Yorkers while providing badly needed jobs. Many of our restorations will be in the final budget.

The Assembly's resolution also increases the amount of financial aid that is available to students attending SUNY-affiliated community colleges and increases funding for SUNY and CUNY child care centers which provide vital assistance and support to parents who attend college..

After the Mothership Committee met, Joint Budget Conference Committees met and broke the budget down into Environment/Agriculture/Housing; Higher Education; Mental Hygiene; Transportation; Human Services/Labor; Public Protection/Criminal Justice/Judiciary; General Government/Local Assistance; Economic Development; Health; and Education components. Members of these subcommittees, in their discussions, were not allowed to discuss any item that was not included in either the Assembly or Senate resolution as they worked to reconcile these resolutions. Parallel the subcommittees' work, legislative leaders began meeting directly with the Governor to negotiate a final budget deal, which was reached at around 8 p.m. last night.

Under the terms of the bill, debt service will remain under the legal maximum amount, and new protocols will be introduced to make the State's money-handling procedures more efficient and to lower borrowing costs. Please look forward to further budget details in future reports.

Yours truly,
Herman D. Farrell, Jr.

On Wednesday, March 20, following a floor debate led by Assemblyman Farrell, the first bill related to the State budget for Fiscal Year 2013-2014 passed by a measure of 104 to 41.

Assemblyman Farrell debates in favor of 2013-2014's first budget bill

On Tuesday, March 19, Assembly Members Farrell and Keith Wright welcomed L. Ann Rocker and members of Friends of Riverbank to the State Capitol. During their visit, which was several of the members' first trip to Albany, the travelers got to see the legislative process up close.

Farrell and Wright welcome the Friends of Riverbank to Albany. Between them stands Dr. Vicki Gholson (in sunglasses). Chairwoman L. Ann Rocker stands in front of Farrell.

Farrell and Wright introduced members of Friends of Riverbank to Assembly Member Joseph D. Morelle of Rochester, who became Majority Leader earlier this year, and officially welcomed the group to Albany and to the Assembly floor.

Farrell and Wright with L. Ann Rocker, who is also chair of North River Community Environmental Review Board, Inc., an organization dedicated to protecting Riverbank State Park.

The Friends of Riverbank meet on the second Saturday each month at the park. Their next meeting is April 13.

The Assembly on Monday, March 11 passed its' "one-house" budget resolution, followed by a meeting of legislative leaders in the General Budget ("Mothership") Conference Committee and Joint Budget Conference Committees. Monday's floor debate was led by Assemblyman Farrell, who as chair of the Ways and Means Committee is responsible for helping pass the budget.

Assemblyman Farrell debates the Assembly's budget resolution Monday, March 11.

The Assembly's budget resolution and the Senate's corresponding budget resolution are being discussed during Joint Budget Conference Committees. These committees divide the budget into components: Public Protection/Criminal Justice/Judiciary; Environment/Agriculture/Housing; Higher Education; Mental Hygiene; Transportation; Human Services/Labor; General Government/Local Assistance; Economic Development; Health; and Education.

Speaker Silver, Assemblyman Farrell and members of the Mothership Committee meet.

Members of these subcommittees, in their discussions, are not allowed to discuss any item that is not included in either the Assembly or Senate resolution. Once the differences in the resolutions are ironed out, a unified budget bill will be passed and sent to Governor Cuomo.

The Assembly's budget bill makes several significant restorations to the $141.6 billion Executive Budget released by Governor Cuomo in January. While the Executive Budget included higher school aid compared to State Fiscal Year 2012-2013, the Assembly's restorations increase school aid by more than $800 million, including restoration of $240 million for New York City Schools.

These funds had been cut because of a disagreement on teacher evaluations between the mayor and the teachers' union, causing a missed deadline which in turned forced City schools to forfeit increased State aid. This cut was blocked by a judge. The Assembly, anticipating an agreement would be reached, included this $240 million in State aid in its' budget resolution.

The following are highlights of the Assembly budget resolution: the Aid and Incentives for Municipalities (AIM) program would allocate an additional $140 million for New York City during each of the next three years, and $120 million would be allocated for the State Office for People with Developmental Disabilities, reversing significant proposed cuts.

Funding for these crucial programs had been cut because of a dispute between Albany and Washington about Medicaid payments to New York that had been made in previous years. Washington cut $500 million in Medicaid funding after the Executive Budget had already been released, forcing a sudden funding cut for non-profits who serve the developmentally disabled.

Seeing the catastrophic effect these cuts would have on communities statewide, the Assembly restored funding for programs that positively affect the quality of life for thousands of New Yorkers while providing badly needed jobs.

The Assembly's budget also increases the amount of financial aid that is available to students attending SUNY-affiliated community colleges, increases SUNY and CUNY child care centers which provide vital assistance and support to parents who attend college, and makes $25 million in financial aid available to undocumented youth who wish to pursue a higher education.

Speaking in Albany before a conference room full of student participants in the Assembly's intern program this morning, Assemblyman Farrell on Tuesday, March 5 explained the policies that drive legislation in Albany and explained the inner workings of the State's budget process.

The intern program is open to up to 150 full-time undergraduate and 10 graduate students of any major who meet academic qualifications. These students work from Jan. 7 to May 15 in exchange for a small stipend and a full semester's academic credit, and have the opportunity to become involved in State government and see the legislative process firsthand.

Reflecting back upon his earlier work in the Assembly's banking and housing committees and the law he passed creating the Neighborhood Preservation Companies Program, Farrell told the students that his earlier work prepared him to lead the Ways and Means Committee and work each year on the process of crafting the third-largest state budget in the United States.

Farrell speaks to student participants in the Assembly's intern program.

By law, Farrell explained, the State must pass a balanced budget every year by April 1, the first day of each State fiscal year. This year, the budget will be $141.6 billion because of over $5 billion in Federal aid to recover from "Superstorm Sandy." The long, complex preparations for the next budget begin on the first day of the fiscal year, Farrell said.

In his Executive Budget, a spending plan that is later modified by the Legislature, the Governor makes certain decisions, Farrell said. These are based in part by the budget requests of the Governor's agency commissioners, who in the fall submit their "wish lists" of funding for projects they intend to take on in the next fiscal year.

These requests are reviewed by the Governor's Division of Budget, Farrell explained, and after requests are vetted they are passed along to the Governor, who publishes their Executive Budget in December. While this is ongoing, the Division of Budget and Ways and Means Committee staff separately track spending and revenue each quarter to ensure the budget remains in balance.

Once the budget is passed, the Governor has the power to control the amount and timing of spending and respond to changing flows of revenue, slowing down or speeding up expenditures the way you do at home, Farrell explained. This power is very important in times of economic change, such as the crash that occurred in 2008.

The economy unexpectedly crashed in mid-2008. During June and July of 2008, the first quarter of the State fiscal year, revenues were doing well, but in October Wall Street crashed and revenue crashed with it, Farrell said, adding that the loss of revenue continued for years through the present day. Under the circumstances, the Governor had to control spending, which the present Governor has done very well, Farrell said.

On the other hand, the Governor has one problem in the budget process, Farrell said - the revenue forecasts in the Governor's Executive Budget are projected in December and printed for a January 20 presentation, meaning that it is unclear how Wall Street bonuses and other revenues will shape up by April 1, the first day of the new fiscal year. The Assembly and Senate usually forecast these revenues more accurately, as the Legislative forecasts are not due until late February, Farrell said. From December to April, Ways and Means staff analyze Executive Branch forecasts and incoming data to determine if Ways and Means staff agrees with the Division of Budget's forecasts, Farrell explained.

Once the Executive Budget has been released January 20, Legislative budget committees meet to hold public hearings and hear from the public and other interested parties how spending plans in the Executive Budget will affect them, Farrell said. Later, in this case February 28, 2013, the Governor's Division of Budget and Legislative finance staff meet to reach a consensus on how much revenue may be counted upon while working on the budget.

This year, Farrell said, it was agreed that revenues would be about $200 million higher than the Division of Budget anticipated in December in the current fiscal year (2012-2013) and next year (2013-2014). These additional revenues may mean that cuts the Governor initially called for can be restored in the final version of the budget, Farrell said. Funding restorations, particularly for education, were the reason for the many late budgets in the past, as lawmakers fought for more school funding.

Legislators also "sweep" unused but available funds when possible, Farrell said - for instance, insurance programs may have reserves, but the Legislature may find that these reserves are beyond the programs' need and appropriate these funds for another use.

This year, the Legislature will try to find money to restore cuts to education and health care programs, Farrell said. Health programs were cut because Washington found it had been overpaying New York State for Medicaid and other programs. Many of these cuts will be harmful and it will be necessary to fix them in the final budget. State aid to New York City was cut and will cause problems because of a disagreement between the Mayor of New York and the teacher's union, which cost the City $240 million. We have to solve this problem, Farrell said.

As the budget takes shape, legislative leaders will present components of the budget to the members, who will discuss the budget plans and offer their feedback. By Friday, March 8, the Ways and Means Committee staff will print a budget resolution that includes these suggestions and modifies the Executive Budget, Farrell said. The following week, the Assembly will pass this budget resolution as its' own "one-house" budget bill, and the Senate will go through a similar process and produce its' own "one-house" budget bill.

To reconcile their "one-house" budget bills, representatives of the Assembly and Senate will meet during the following weeks in conference committees. Once the conference committees come to agreement and produce a budget the Governor also supports, the budget bill comes to the floor of the Assembly and Senate for a vote, and then to the Governor's desk to become law.

This year, to comply with the law, the budget bill will have to be passed by March 22 in order to allow the elected officials to observe the upcoming religious holidays, Farrell said.

Citing ongoing, unanswered questions about the possible effects of high-volume hydraulic fracturing (a controversial mining technique also known as "hydrofracking" or "fracking") the Assembly on Wednesday, March 6 passed a bill to extend an existing moratorium on the practice for two years, until April 15, 2015.

The bill, which was sponsored by Assembly Environmental Conservation Chair Robert Sweeney and supported by Speaker Silver, Assemblyman Farrell and much of the Majority Conference, would allow for a comprehensive review process to be completed before drilling permits can be issued. State experts engaged in this review recently confirmed they would miss their deadline.

Explaining the bill to the press, Speaker Silver said the Assembly has listened to arguments for and against fracking and identified two key facts - one, that New Yorkers' health and well-being must take precedence, and second, that the natural gas locked up in the Marcellus Shale formation is not going anywhere.

Before drilling permits can be issued, important questions must be answered, the Speaker said - what effects will drilling have on the quality of drinking water, will methane gas released during drilling affect climate change, could groundwater be contaminated with radioactive material, and how wastewater from the drilling process should be handled.

While the Conference is profoundly sympathetic to the economic problems of upstate residents living in potentially gas-rich areas, as well as the national energy crisis, the Speaker said members will not sign off on any process, no matter how profitable, that endangers the public's health and safety.

Farrell said it is better to begin drilling late than it would be to endanger the water supply of over eight million residents of New York City.

According to Assembly Member Sweeney, moving forward with the appropriate review left incomplete risks great harm as it is easier to handle the process correctly the first time than it is do it wrong and clean up problems later.

The Assembly will vote today on a bill sponsored by Assembly Member Keith Wright that will raise New York State's minimum wage to $9 per hour and tie the bill to the rate of inflation, so the minimum wage will rise over time without further legislative action, Speaker Silver said. The bill was debated Tuesday afternoon and evening and expected to pass.

At an early afternoon news conference, during which he was surrounded by members of the Assembly Majority Conference including Assemblyman Farrell, Speaker Silver called raising the minimum wage an issue of human dignity nearly 80 percent of New Yorkers support.

According to Speaker Silver, the Assembly bill would immediately benefit 925,000 workers who are currently paid $7.25, the lowest wage allowed by law in most jobs. Because low-wage workers live paycheck-to-paycheck they will spend the added wages immediately and stimulate their local economies, Speaker Silver said.

Saying these workers deserve better than a life of poverty, earning just over $15,000 per year for full-time year-round work, the Speaker added that no one can possibly support a family while earning those wages without government support.

Turning to criticism of the bill, the Speaker said that most minimum-wage employees work for large companies who are turning high profits, so small businesses should not be hurt by a higher minimum wage. Also, the Speaker said, 10 states currently index their minimum wage to the rate of inflation so there is no evidence that indexing artificially inflates the minimum wage.

We are now in a jobless recovery, the Speaker said, meaning that corporate profits are at or near an all-time high while joblessness remains high and consumers are strapped and cannot spend to stimulate the economy.

The minimum wage was instituted in 1938 in order to lead the nation out of the Great Depression, and by 1968 the wage had reached $1.25 per hour, Assemblyman Wright said. If the minimum wage had been indexed to inflation in 1968, it would now be $10 per hour, he said.

Farrell and Wright discuss fiscal implications of the Assembly minimum wage bill.

Studies have consistently shown that workers at the bottom of the wage scale spend their pay as they get it, Wright said, which will stimulate the economy. During five public hearings on the minimum wage held at locations around the state, support for a higher minimum wage was overwhelming, Wright said, even among farmers and other small businesspeople.

It is mathematically impossible to support a family on earnings of $15,000 per year for full-time work, said Stuart Applebaum, president of the Retail, Wholesale and Department Store Union. Worse, when wages do not keep pace with the cost of living, even survival becomes more difficult, he said. However, things do not have to be this way, and the law can be changed to make life better for these workers, Applebaum said.

Assemblyman Farrell and RWDSU President Stuart Applebaum.

Darius Ross, who was born into poverty and is now managing partner of D. Alexander Ross Real Estate Capital Partners and a member of Businesses for a Fair Minimum Wage, said better wages could lead to better morale and increased productivity. Noting that greater consumer demand drives business owners like himself to hire more workers, Ross predicted that putting more money into the hands of people who most need to spend it would help the economy prosper.