Theme: When Governor Andrew first took office he aggressively outlined plans to transform New York State from the most dysfunctional state in the Nation to a new platform based on integrity, fiscal stability, social reform, while introducing improvements never achieved before. Eight columns under the cover Reform Albany Now.
Table of Contents
Part 1 – Integrity 3-4
Part 2 A – Promised Fiscal stability – Budgeting 5
Part 2 B – Promised Fiscal Stability – Affordability 6
Part 3 – Misguided Social Reform – Gambling 7
Part 4 A – Still Waiting – Transforming a State Government 8
Part 4 B – Still Waiting – Public Ethics 9
Part 4 C – Still Waiting – The Tri-borough Amendment 10
Part 5 – The Future, It All Depends 11-12
Part 1 – Integrity
When Governor Cuomo first entered office in January of 2011 he aggressively outlined plans to “transform New York State, from the most dysfunctional state in the Nation to a new platform based on integrity, fiscal stability, social reform, and efficiencies never before achieved.” Fifty-five months later these aspirations are being seriously challenged, as are his plans to stimulate the economy.
Integrity stands in the forefront of concerns when defined as a “steadfast adherence to a strict moral and ethical code.” In this regard the governor is currently reaching “last man standing status.” According to “Citizen’s United” since 2010, more than “two-dozen state legislators have been forced out of office due to a criminal conviction, or ethical issue.” Another 28, are under investigation including current Democratic Majority Leader Carl Heastie, Sheldon Silver’s replacement. Is it fair to lay the “misdeeds” of others and the problems he inherited on the back of the governor? Without a doubt, yes!
Let’s flash back to July of 2013 when in a retaliatory act he decided to pull out of the archives a 1907 law known as the Moreland Act. This allowed him to form a commission to “probe systemic corruption, and the appearance of such corruption in state government, political campaigns, and elections in New York State.” The governor made it clear “that corruption in New York’s government will not be tolerated.”
Five months later, the commission issued its first report finding the need for “campaign finance reform, election law enforcement, changes in the state’s Penal Law leading to tougher penalties, and new disclosure rules.” The commission also found a clear relationship between cash and legislative action.
In March of 2014, with little fanfare and no advance notice, Governor Cuomo dismantled the commission because the “reforms he wanted would be accomplished by new laws that he persuaded legislative leaders to support, including the need to address bribery and corruption.” He further stated, the commission had served a useful purpose. Its dismantlement “is not a legal question….the Moreland Commission was my commission….I can appoint it….I can disband it…..I appoint you, I can unappoint you tomorrow!”
Its’ closure created quite a storm. The governor was charged with politically motivated interference responding “that while the commission was staffed by some of the sharpest governmental and legal minds, many did not understand the budget or legislative process, or how state government works.”
The arrogance of his decision speaks volumes. Preet Bharara, U.S. Attorney for the Southern District of New York State intervened, and in a letter issued to the commission chair’s declaring possible obstruction of justice and/or witness tampering activities that now mandate the confiscation of all commission files.
On September 1st of 2014, the governor followed thru on his commitment to probe potential election law and campaign finance violations, granting the state’s Board of Elections investigative powers. On August 16th a number of new non-compliance issues were identified with possible serious ramifications.
Part 2 A – Promised Fiscal Stability – Budgeting
Governor Andrew Cuomo has taken tremendous pride in passing, for the 4th year in a row, an on-time, balanced, affordable budget. Apart from timing, the use of the word “balanced” is a joke, and affordability a myth.
His comptroller, Thomas DiNapoli considers the balancing process a “deficit shuffle wherein the state dips into dedicated funds here, and shifts the money there, all to cover the cash required.” He is also concerned that the enacted budget also includes more than $7.4 billion in new and increased authorizations for state approved borrowing, an increase of 6.4% from previously authorized levels. All of this debt will be issued on behalf of the state by its Public Authorities. Such backdoor borrowing “circumvents the States Constitution’s requirement that State debt be approved by voters.”
Former Lt. Governor Richard Ravitch adds another significant concern in his new book “So Much to Do” highlighting “budgeters in both the state’s Executive and Legislative Branches have perfected the art of evading balanced-budget requirements in order to fulfill what they see (or ordered to see) as their public responsibilities…..the results of which actually mask results and decisions that are skillfully engineered to keep a crisis from occurring, even as the underlying problems grow work.”
Bottom line, fiscal manipulations create an illusion that the State is fiscally well managed, and that the true size of the State’s underlying structural deficit, no less stability, remains difficult to track and hidden from the public.
Part 2 B – Promised Fiscal Stability – Affordability
My last two columns dealt with integrity, and self-serving fiscal manipulations used to mask budget deficits, both up-front issues that are difficult to refute. Affordability, brings into play another dimension i.e. how billions are spent, affordable or not.
In January of 2014 Mayor Bill De Blasio went to the State Capital asking approval of a plan to raise taxes on New York City’s highest earners to pay for prekindergarten classes, and after school programs for 4 year old’s. The governor had a better idea, and in a budget statement mentioned a new $1.5 billion commitment for statewide pre-kindergarten education, without identifying where the money came from. Fifty-Three thousand were enrolled last year in the full-day program. Another 4,500 in half-day slots, all at our expense.
Add affordable housing to the mix, and things get even more unaffordable. $407 million is included in this years’ state budget for an array of affordable housing programs. Of this amount $100 million is for the New York City Housing Authority, $124 million to provide support for “vulnerable” New Yorkers, $40 million to provide rental assistance for families in NYC homeless shelters, $27 million to cap the rent of people on public assistance living with HIV/AID @ 30%, $50 million for revitalization and preservation programs.
Obviously our Governor has little understanding of his fiduciary responsibility in managing other people’s money.
Part 3 – Misguided Social Reform – Gambling
It is my belief that the expansion of casino gambling, approved last November via a ballot proposal is one of the worst examples of socially engineered reform we have witnessed in many years. Why?
Let’s start with a 1934 picture (available on the web) showing the late Mayor Fiorello LaGuardia using a sledgehammer to destroy a pile of slot machines loaded onto a city street. He believed their availability was “wrong, and he hated to see ordinary New Yorkers getting cheated, particularly lower income people, while politicians who cheat, get rich.”
His forewarnings are alive and well today. In addition to improved slot machines, we now have Video Lottery Terminals (VRT’s) in some fifty-five casinos’ located in the Northeast, twelve (or less) of which are in Atlantic City, and six in Pennsylvania.
Sounds scrumptious! Its’ not. Gambling should never be considered a major economic engine for New York State. It’s a business model fraught with uncertainties as evident in Atlantic City beset with social problems beyond correction, and even Foxwoods Resort in Connecticut which just reengineered its business plan to satisfy $2.3 billion in debt. Gambling is not a “painless” source of revenue.
The New York Times disagrees, and in an editorial described the opposition as a “ragtag array of religious conservatives who associate gambling with social ills, liberal intellectuals who see gambling as a form of regressive taxation, and skeptics who believe that Mr. Cuomo has overstated economic promises. There is no middle ground. Gambling is now the rage and personal saving are at an all-time low. Misguided, indeed. .
Part 4A – Still Waiting! Transforming a State Government Cluttered with Waste.
When Governor Cuomo took office in 2011, he pledged to approach his job with “constructive impatience, shrink the size of the sprawling state government, and represent the interests of those who have lost faith in Albany.” How, by cutting 15,000 state jobs, and closing 20 percent of thousands of state agencies and departments.
I have to admit that when I hear a politician, no less the governor, promise to shrink anything, I’m impressed. Restoring “faith” in government is another matter, reminding me of listening to Richard Kiley, the Tony Award winning actor, who in 1965 sang “The Impossible Dream” in the Broadway musical, Man from La Mancha.
In May of 2013 the Spending and Government Efficiency (SAGE) Commission he established, provided specific recommendations that when fully implemented will “transform a state government synonymous with clutter, waste and out-of-control spending to one that is modern, efficient and works for taxpayers saving (when fully implemented) $421 million thru modernizing the workforce, $200 million in process improvements, $639 million by rightsizing and consolidating facilities, $75 million anticipated through the merger of agencies or authorities, and $290 million using information technology.” That’s, $1,625 billion my friends.
One year later, the head of the Authorities Budget Office, David Kidera, issued a plea to the governor and the legislature that a need exists “to truly understand and debate whether New York State, its local governments, and its taxpayers can continue to support the growing size of the system as structured, administrated and currently enforced.” His plea gained no traction from the governor and/or key legislative members. I formally requested quarterly progress reports be issued to no avail. We are back to square one. As far as restoring ‘faith’ in government, credibility remains at all-time lows.
Part 4 B – Still Waiting! Public Ethics
In June of 2011, the New York State Legislature passed, and Governor Cuomo signed into law, the Public Integrity Reform Act to restore trust in government by ensuring compliance with the state’s ethics and lobbying laws, regulations, and guidance. A key component of this law was the establishment of yet another agency referred to as JCOPE, a Joint Commission on Public Ethics with oversight over both the Executive and Legislative branches of government.
The new commission consists of fourteen individuals appointed by the governor and lawmakers charged with the responsibility to randomly auditing thousands of documents filed by policy-makers and state employees who earn more than $88,000.
Last February, JCOPE issued supplemental guidelines calling for the expanded “disclosure of public officials’ private clients, and all political consulting and fundraising activities by lobbyists……..including the naming of clients that receive grants or contracts from the state, or which are parties in proceedings before state agencies.” Information gathered must be cleared with the Legislative Ethics Commission, an agency never known to censure errant lawmakers and/or decide on penalties.
Last but not least, in an article recently published by the Wall Street Journal titled “Ethics Panel Discord Flares” suggests the governor is exercising too much control and hindering (through the use of a Review Panel) efforts to evaluate performance. Still waiting! No wonder why.
Part 4 C – Still Waiting! The Tri-Borough Amendment
In the private sector, if a company faces a difficult business climate, management can use that as leverage to get unions to agree to concessions. Both sides make sacrifices for the good of the company. But that’s nearly impossible in New York State because, state law (the Tri-borough Amendment) allows for terms and conditions of a contract with public employee unions, including pay raises, to continue even when a contract has expired. This means there’s little incentive for unions to settle contract disputes. The amendment came about in 1972 as a modification of the Taylor law, which restricted unions from striking because a contract hasn’t been agreed to.
A recent column published in the WSJ, mentioned the following consequences: “Year after year, elected officials behind closed doors negotiate labor contracts for 19 million state and local government workers resulting in skyrocketing salaries, health-care costs and pension benefits that are making services like public schools and policing unaffordable for taxpayers.”
County executives, mayors, school administrators, and school board members throughout New York State have cited the Tri-borough Amendment as a major obstacle in providing more efficient, less costly public services. The toll is significant. For state government alone, pay hikes guaranteed under the amendment for teachers have added an additional burden of no less than $383 million.
Common sense might rule, if Assembly member Michael Fitzpatrick (R-St. James) has his way. On May 20th he introduced a bill to amend the retirement and social security laws that would exclude “any form of overtime compensation, unused vacation, sick leave and personal time” from pension calculations. He realizes, he is in uncharted waters, public unions yield great power with the State Legislature whose members also receive substantial contributions from the unions. Fitzpatrick is part of the Republican minority conference in the Assembly, with little power to push the bill to the floor for debate. Still waiting.
Part 5 – The Future – It all depends
As highlighted in the first column in this series, the need for total integrity has to be the primary concern upon which everything else rests. U.S. Attorney, Preet Bharara, from the Southern District of New York, has already denounced Albany as a “cauldron of corruption.” To change this toxic mix will be extremely difficult and a challenge, if history be any guide.
New York Magazine published earlier this year a featured column titled “What Happened to Joe Bruno, the New York Senate Majority Leader Charged with Corruption” A great question when linked to what might happen to former Majority Leaders State Senators Sheldon Silver and Dean Skelos, both charged with monetizing their respective government offices.
On June 23, 2009 Joe Bruno announced he would not seek reelection anticipating his indictment on eight counts of corruption, including “honest services” fraud, and mail and wire fraud.
If memory serves us well, he was convicted of two felony counts of mail and wire fraud, and sentenced to just two years in prison. He was allowed to remain free while the U.S. Supreme Court scaled back the definition of “honest services” fraud, explicitly limiting the statue to bribes and kickbacks. This left out of reach undisclosed self-dealing by a public official. In May of 2012 he was retried and found not guilty. One argument Bruno’s attorney’s made “no crimes were actually committed i.e. how things are done in Albany.” He never served a day in jail, and as a state employee he was reimbursed $2,419,200.25 to cover his legal defense costs. I love the .25 cents in billing. Now we know what happened.
In a me-too moment, lawyer’s for Sheldon Silver latched on to the Bruno defense requesting charges be dropped because the alleged misconduct were “not actual federal crimes but rather long standing features of New York state government that the prosecuting attorney now finds distasteful.” So much for a matter of law. Attorneys for Senator Skelos did not comment at that time. I assume they will jump on board this evasive band wagon shortly.
Fordham University Professor Zephyr Teachout, who ran against the governor in the last Democratic primary, and author of “Corruption in America” defines “corruption is an abuse of public power for private benefit or acts whereby private gain is made at public expense, or when private interest excessively overrides public or group interest in a significant or meaningful exercise of political power.” A got-cha.
No system can survive for long periods by arguing the definition of any one word. If it walks like a duck, and quacks like a duck it must be a duck. It’s that simple.
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