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Herman D. Farrell, Jr.
Assembly District 71
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Chair, Ways and Means Committee
WAM Hearing Story
At the Assembly Ways and Means Economic Crisis Hearings Nov. 13-14
November 13, 2008

Albany – During two days of hearings Nov. 13 and 14 before members of the New York State Assembly’s Ways and Means Committee, speakers representing a number of interest groups responded to Gov. Paterson’s slate of proposed mid-year budget cuts.

Opening the Nov. 13 hearing, Ways and Means Committee Chairman Assemblyman Herman D. Farrell, Jr. called the Governor’s recommended cuts "sobering." The hearings were called to establish priorities before the Legislature enters a special session Nov. 18 and ensure that the sacrifices that will be called for are shared equally.

"Yesterday the Governor released his sobering recommendations for budget modifications to deal with the projected current year deficit. The Speaker said the Governor’s plan ‘recognizes the painful reality that this crisis is unlike any we have faced in our adult lives and will require deep cuts.’ I recognize that reality as well," Assemblyman Farrell said.

Farrell said Ways and Means staff has predicted even larger budget deficits than did the Governor, and called the financial outlook "bleak." Overall, mid-year deficits of up to $1.5 billion have been identified. Gov. Paterson has targeted cuts of about $2 billion. These cuts may be among the possible remedies discussed during the Legislature’s special session.

Rather than see their funding cut, speakers representing the Public Employees Federation, Alliance for a Quality Education and other groups offered alternate suggestions.

Several suggested the state change or eliminate the STAR and Empire Zone tax programs or tap its "rainy day fund" during the crisis while others said the state should raise taxes on its top earners. Business representatives urged lawmakers to fund economic development programs.

"We’re very upset about many of the cuts the Governor is recommending," said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness and Thursday’s first speaker. "We don’t think this is the right approach at this time."

Deutsch, who is part of a larger campaign of faith-based and community service groups called the Better Choice Budget Campaign, said 39 other states in similar straits have opted for more balanced approaches that raised taxes and cut spending.

He brushed off claims out-of-control spending is driving the budget deficit, identifying new, large-scale projects such as the takeover of Family Health Plus, the Campaign for Fiscal Equity school funding settlement and an economic development package designed to attract Advanced Micro Devices to build a manufacturing facility in the Luther Forest area as the driving factors.

Excluding these new commitments, state spending has increased less than 3 percent this year, Deutsch testified. The state is also foregoing billions in revenue through a series of tax cuts, he said, urging lawmakers to ignore critics and put into place a special tax on the highest earners.

"We did not have an exodus of millionaires from New York State" during earlier years when a ‘millionaires tax’ was on the books, Deutsch said.

Brian McMahon, executive director of the New York State Economic Council, got into a spirited exchange with Assemblyman Farrell about education spending after McMahon said 110,000 persons educated by state colleges between 1995 and 2000 later left the state.

"The one hope we have is our workforce, and the educational system that creates that workforce," Farrell said. "To keep that quality workforce, we have to educate them. It’s not something we’re doing because we want to buy the Cadillac of education. Education seems to be the base of everything we do."

Following several less contentious speakers was Public Employees Federation President Ken Brynien, who represents almost 60,000 state employees in the scientific and technological fields.

Much of his testimony laid blame for higher state spending at the feet of private-sector consultants that do the same jobs as state workers at greater expense, he said. Even including health insurance and other benefits received by state workers, having public employees do equivalent jobs is cheaper, Brynien said.