Assemblymember Cahill Reacts to 2006-2007 Executive Budget Proposal

February 12, 2006

Governor Pataki released his 2006-2007 Executive Budget proposal today. The Governor’s spending plan, the final one of his tenure, would raise spending to an estimated $110 billion next year. The budget fails to offer any solutions for the immediate challenges New York is facing, namely in the areas of education funding, health care and real economic opportunity.

Governor Pataki has once again ignored the Court of Appeals mandate to reform the state’s school funding formula by offering up what amounts to only a modest increase in education spending. In the area of health care, the Governor has proposed cutting hundreds of millions of dollars in appropriations to hospitals and nursing homes. Many hospitals are already facing severe financial difficulties and the proposed cuts could lead to closures in some parts of the state. Economic development proposals consisted of meager expansions of limping programs and more unproven tax breaks for business without addressing the real property tax crisis.

“The Governor’s Executive Budget is focused on the future, but it is clear that the future he is concerned with is not that of New York State, but the future of his national political career,” said Assemblymember Kevin Cahill (D – Ulster and Dutchess Counties). “We have an ailing health care system in this state and many of our hospitals are on the verge of bankruptcy and we have an outdated education funding model that is over-reliant on property taxes – yet the Governor’s budget only seeks to bandage and cover up these critical issues, while at the same time he proposes billions of dollars in tax giveaways, the bulk of which would not have to be paid for until years after he has left office. This proposal is heavy on politics and severely lacking in fiscal discipline.”

Under the Governor’s health care proposals, hospitals and nursing homes would be forced to cover the burdens of inflation, a plan that would cost institutions hundreds of millions of dollars in funding. The Family Health Plus Program, which currently provides health insurance to over 340,000 people, would be altered to require mandatory co-payments for all services, increase co-payments for emergency room visits in certain instances and would prohibit coverage for working people employed by large businesses regardless of their income. The budget would finally establish a Medicaid Fraud Inspector General’s office within the Department of Health. The office, to be staffed by over 600 employees, would be charged with rooting out corruption in the Medicaid system which, as exposed by the New York Times this past summer, has potentially cost the state billions of dollars since Governor Pataki has taken office.

The Governor has also proposed further conversion of nonprofit health insurers into profit-making companies, while the failures of the first plan so converted include the squeezing down on health care providers, diminishing benefits for consumers and increasing compensation for highly paid corporate executives.

“We all want to find cost containment solutions for health care,” said Mr. Cahill. “It is important to go about it the right way, by providing the support necessary to modernize care and easing the burden on our strained hospital system. Unfortunately, the Governor has once again made the wrong choices by increasing the financial burden on health facilities, approaches that strike right at the heart of the livelihood of countless families residing in the Hudson Valley.”

Assemblymember Cahill went on to express concern over the Governor’s proposal to allow for additional conversions of health insurance companies from not-for-profit into for-profit entities, saying, “Under the law, not-for-profit health care companies are obligated to take care of the health of their members – the health of the people who subscribe to their plans. In contrast, a publicly-traded health care company is legally obligated to meet the needs of the shareholders of that company. It would be an abdication of our responsibility as lawmakers to pit the health care interests of our citizens against the profits of shareholders. It is inevitable that the citizens will lose out.”

College students were once again victims of attacks on aid programs and a woefully inadequate higher education spending plan. The Governor’s budget address focused on initiatives to encourage students to enter into the fields of science, math and engineering, proposing free SUNY or CUNY tuition for students agreeing to teach those subjects in New York’s middle and high schools. He neglected to include any funding for new faculty positions in these areas.

The Governor’s remarks failed to mention that he was once again proposing a $500 tuition increase at SUNY, followed by annual increases thereafter. A $500 increase would run SUNY tuition dangerously close to the $5,000 maximum grant available under the state Tuition Assistance Program (TAP). Just as he has the previous five years, the Governor is attempting to raid TAP by raising the levels necessary to receive full financial aid awards. The proposal would redefine full-time study as 15 credits per semester, up from the current 12 credits. Students enrolled with less than 15 credit hours would be hit with a 20% reduction in their TAP awards.

In addition, the Governor’s plan fails to sufficiently boost State aid for public four-year universities. This year’s Executive Proposal is consistent with those of previous years. In his tenure, the Governor has increased tuition by 65 percent while watching mandatory fees skyrocket, allowed state support for community colleges to drop to its lowest level in 30 years and attempted to cut TAP at least eight times.

“Instead of raising tuition and cutting back on financial aid, the Governor should join us in seeking to expand state support to our colleges and universities,” said Mr. Cahill. “The Governor never ceases to astound me with his college funding proposals. The Legislature has repeatedly rejected his plan to restructure TAP awards, yet year after year he continues to propose them. Instead of cutting financial aid, we need to think about improving the program to deal with the costs college students are facing today, namely mandatory fees.”

“The Governor spoke about fiscal integrity and a forward-looking budget in his address,” Mr. Cahill pointed out. “Proposing to annually raise tuition while cutting back on financial aid is one of the most fiscally irresponsible moves one could make with regards to the vibrancy of New York’s economy. Our college graduates are already among the most indebted in the nation. If we continue to force them to take on more and more debt, our economy is going to suffer. Our young people will be unable contribute to the tax base after making their monthly loan payments, if they can afford to continue to reside in New York at all.”

In the area of primary and secondary education the Executive Budget allows for what amounts to a five percent increase in state aid over the previous year’s level. That is an increase that barely matches the rate of inflation and fails to meet the needs of our school districts as they struggle to meet the demands of increased health care costs and rising energy bills. The budget directs a $375 million to the state’s neediest schools but it falls well short of the Court of Appeals ruling requiring the state to meet its constitutional and moral obligation to provide a sound, basic education to all students. The Governor fails to address the ever expanding burden of school property taxes but instead proposes minor changes to the STAR program for seniors and tax rebates tied to undefined local cost containment.

“The Governor has been ducking his responsibility to reform the way our schools are funded for the past eleven years, I am not surprised that he is trying to do so again this year,” exclaimed Mr. Cahill. “I support proposals that to ease the burden of school real estate taxes, but the Governor’s plan only amounts to a band-aid. The state needs to begin a real discussion about education reform, one that includes the abolishment of the use of local property taxes to fund education.” Assemblymember Cahill has introduced legislation (A.8069) that would implement a state takeover of education funding while eliminating local school property taxes and require that every student receive a sound basic education. That proposal is currently gaining support in both the Assembly and Senate (see S.1265 – LaValle).

Today’s Executive Budget also included a series of proposals designed to encourage the production and use of alternative fuels. “I agree with the Governor that the state needs to dedicate more funding towards alternative energy, we also need to do more to stress conservation,” said Mr. Cahill. “A more pressing issue is the crushing burden of this winter’s record high home heating costs. The Assembly has already passed legislation to provide more funding to the Low Income Home Energy Assistance Program (LIHEAP) to help seniors, people with disabilities and working families cope with their higher bills. The Governor need to get behind this proposal immediately, we cannot wait for the budget process to play out.”

“I plan on working closely with my colleagues in the Senate to pass a budget that brings quality education, affordable health care, real economic opportunity and living wage jobs back to the Hudson Valley,” said Mr. Cahill. “I was hoping to see the Governor embellish the proposals he laid out two weeks ago to prepare for a significant positive legacy for his tenure. Instead the budget Governor Pataki presented today is the biggest disappointment of them all,” concluded Assemblymember Cahill.