News from STATE SENATOR

Liz Krueger

New York State Senate, 26^th District

COMMUNITY BULLETIN – February 2004

Message from Liz . . .

This week, the State Assembly passed a budget reform package, just as the Senate did in January. In typical Albany fashion, these two packages are almost completely different. The only area of agreement is that the budget date should be changed from April 1 to May 1. But there is some good news – the Senate and Assembly have agreed to hold a conference committee on the reform packages to try to resolve their differences. I would like to be optimistic about the prospects for this conference committee. Unfortunately, Majority Leader Bruno has already indicated he thinks it will be extremely difficult for the conference committee to come to an agreement – and his opinion will no doubt make Senate Majority members of the committee less than cooperative in resolving differences with the Assembly.

The fact is that both plans have good ideas, some of which are mutually exclusive, but others of which could be complementary. For example, the Assembly proposes the creation of an Independent Budget Office to evaluate revenues, an idea that mirrors one of my budget reform bills. The Senate Majority prefers to increase the role of the Comptroller in the budget process by giving him or her the final authority over revenue projections. These proposals are in some ways contradictory, but there is no reason that both of them couldn’t be implemented in some form, or that one house could compromise in exchange for adoption of a different part of their package. The fact is, either option would represent an improvement over the way we operate now.

Another major area of disagreement is over the scope of budget reform. The Senate wants to focus more narrowly on issues related to speeding up and rationalizing the budget process. The Assembly wants to broaden the scope to include reforming the budgetary process for public authorities, and instituting new controls over lobbying state officials regarding procurement and contracts.

I do not believe you can really develop a rational budget process without addressing the issue of off-budget public authorities. These authorities account for well over ninety percent of state supported debt, and their operation off-budget shields their expenditures from even the most basic level of public scrutiny. I hope my Senate colleagues on the conference committee will recognize that we cannot get real control of the budget process without reforming public authority budgeting.

I believe that this is a critical moment in the effort to begin moving New York State toward governmental reform, and I fear that the initial reaction of Majority Leader Bruno creates a real risk that we will once again fail to bring about any meaningful reform. The fact we are holding conference committee meetings is a major step forward, but this committee must be given the opportunity to perform its assigned function – work out meaningful compromise between the Assembly and the Senate. I hope we will go beyond passing a couple of cosmetic changes and declaring victory. Both the Senate and the Assembly have presented substantial packages of reform, and the conference committee has a real opportunity to produce meaningful legislation. We must not let this opportunity pass in a typical flurry of finger pointing by the Senate and Assembly leadership.

SENIOR/HEALTH CARE COMMUNITY FORUM:

"MEDICARE CHANGES: WHAT THEY MEAN TO YOU"

Panelists

Edo Banach, Medicare Rights Center

Amy Bernstein, New York Health Care Information Program (HICAP)

Lani Sanjek, New York Statewide Senior Action Network

And others

Date: Thursday, March 18^th

Time: 2pm –4pm

Place: Temple Shaaray Tefila

250 East 79^th Street at Second Avenue

Call (212) 490-9535 for further information

Community Spotlight

Calling for the Revocation of the Liquor License for the Cheetah Club:

I recently submitted testimony to the State Liquor Authority (SLA) regarding a transfer of liquor license application that had been submitted by the Cheetah Club. Located in a densely populated residential neighborhood at 12 West 21^st Street, the Cheetah Club has been cited by the 13^th Precinct as being the major “problem liquor license establishment” in the area and has received 232 summonses since January 1, 2002. I am pleased to report that the SLA has decided to delay the transfer proceedings in order to hold a 500-foot rule hearing. The 500

foot rule subjects liquor license approvals to greater scrutiny when they are for establishments located within 500 feet of three other licensed establishments. This is a small, but significant victory, as the SLA frequently approves transfers without holding such a hearing, and I will continue to work to resolve the problems caused by the Cheetah Club and other liquor license establishments. Based on the record of problems at this establishment coupled with Community Board #5’s opposition to the transfer, I called upon the SLA to invoke the Rowdy Bar Law. Furthermore, I have commenced an exhaustive study of pending SLA reform

legislation and I hope to work with those legislators who want to change the culture of the SLA.

Opposing Service Cuts on East Side Bus Lines:

I recently submitted testimony to the Metropolitan Transportation Authority (MTA) opposing service cuts on a number of Manhattan bus lines, including the M30, M31, M42, M57 and M104. These service reductions, which follow on the heels of cuts on the M15 and other lines last year, will increase the time riders wait between buses, increase passenger boarding times, and increase ride times on the slowest bus system in the United States. I also expressed my dissatisfaction with the manner in which elected officials and community groups were notified of these changes. Community boards were not notified by the MTA at all, and my office was notified only days before the hearing, limiting the opportunity for community input on this service reduction. I will continue to pressure the MTA to develop a better system of notification for service changes, so that affected communities have ample opportunity for input regarding proposed changes.

Free Tax Assistance Available:

Eviction Intervention Services and Community Food Resource Center are each offering Free Tax Assistance to eligible individuals. Eviction Intervention Services offers assistance to seniors every Tuesday through April 13^th from 10:00am to 1:30pm. They are located at 150 East 62^nd Street between Lexington and Third Avenue. Walk-ins are welcome, or call

212-308-2210 for more information. Community Food Resource Center offers assistance to individuals with incomes below $35,000 if they have dependent children, and below $15,000 for individuals without dependent children. Their midtown location is at the 1199SEIU office, 330 West 42^nd Street between 8^th and 9^th Avenues, on the 9^th Floor. Hours are Monday to Thursday 4pm-8pm, and Saturday 10am-6pm. No appointment is necessary. Call 1-866-924-3759 for more information.

Heat and Hot Water Complaint Information:

By law, apartment, co-op and condo building owners or managers must provide adequate heat between October 1 and May 31. During this period, between 6:00 a.m. and 10:00 p.m., if the outside temperature is below 55 degrees Fahrenheit, owners must heat apartments to at least 68 degrees Fahrenheit. Between 10:00 p.m. and 6:00 a.m., if the outside temperature is below 40 degrees Fahrenheit, owners must heat apartments to at least 55 degrees Fahrenheit. Owners must also provide hot water at a minimum constant temperature of 120 degrees Fahrenheit all year round. Tenants whose building owners fail to provide adequate heat or hot water should first try to speak with the owner or building manager about the problem. If an owner is unavailable or does not correct the problem, tenants should then call the City's Citizen Service Center at 311, open 24 hours per day, seven days per week, to lodge a complaint.

Spotlight on Policy

Development Incentives

New York City and State frequently offer a wide range of grants, loans and tax incentives in a effort to promote development, retain existing business, and encourage existing businesses to expand. As I have explored the criteria by which these incentives are offered, it has become apparent that there is little effort to ensure that the state and city are getting what they pay for.

At the state level, there is currently no comprehensive system of standards or oversight for the distribution of economic development incentives. Because these incentives are offered through off-budget public authorities, decisions about the allocation of economic incentives and evaluation of the economic benefits to residents of New York State provided by those incentives are not subject to significant public or legislative scrutiny or review.

This current situation has real economic costs to the state of New York. All to frequently, the state has provided subsidies, loans and tax breaks to companies that then failed to create jobs as promised. Companies such as Kodak, General Electric, Nine West and Rubbermaid all laid off large numbers of employees after receiving state incentives through the Empire State Development Corporation. These cases are hardly unique - a 1997 study by former State Senator Franz Leichter discovered that companies receiving state economic incentives at that time actually had a net loss of 1,765 jobs during the previous year. New York State simply cannot afford to be giving money to companies that are not providing real economic benefits to the state.

In addition to real job creation, companies should be expected to have a record of good corporate citizenship if they are going to receive public support. Currently there are no such standards. If subsidies are really going to benefit the people of New York, the businesses that receive them should be required to pay living wages, avoid criminal activity, and work with the communities in which they are located.

In an effort to address these concerns at the state level, I am introducing corporate accountability legislation this session that will require businesses seeking incentives to meet stringent criteria in order to be eligible for incentive packages, and to strengthen penalties in cases where job creation or capital investment commitments are not kept by incentive recipients.

I recently submitted testimony to the Industrial Development Agency (IDA) regarding the One Bryant Park Land Use Improvement Project and Bank of America’s (BoA) proposed $42 million benefits package. The package is comprised of $6 million in sales tax exemptions for job retention; $32.5 million in sales tax exemptions that can be earned by adding jobs; and $3.5 million in energy discount savings. New York’s overall strategy for economic development has been a defensive policy that reacts to individual companies’ threats to leave, and has resulted in an overemphasis on the finance and real estate industries. These policies have destabilized the city’s economy, ignored the employment needs of most residents, and failed to develop a comprehensive workforce development strategy. As such, New York City should reassess the commonplace usage of discretionary funding and subsidies for corporate retention deals.

Over the past six years, more than $2 billion of New York City and New York State funds have gone to some of the world’s most profitable companies in the name of job retention. In fact, this is not the first time that BoA has received tax subsidies for a corporate retention deal. In 1993, BoA asked for $12 million in sales-tax abatements in exchange for a promise to retain 1,700 employees at the World Trade Center. A few years later, the sales-tax deal was terminated when BoA merged with Security Pacific National Bank and laid off 800 employees. With these significant reservations in mind, I also believe the use of Liberty Bonds to broker this type of deal is a misallocation of this funding. This bond issue would be the biggest yet under the Liberty Bond program. Durst and BoA have obtained preliminary approval for $650 million in Liberty Bonds, which will cover 65% of the project costs. Considering that the purpose of Liberty Bonds is to stimulate business throughout New York City, I believe that it is inappropriate for such a large sum of money to go towards one project.

New York State should not be functioning like a real estate speculator on behalf of large corporations and developing a midtown office building in spite of the current glut of office space in New York City.

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District Office: 211 East 43^rd Street, Suite 1300, New York NY 10017 (212) 490-9535 Fax: (212) 490-2151

Albany Office: Room 302, Legislative Office Bldg., Albany NY 12247 (518) 455-2297 Fax: (518) 426-6874

On the Web at http://www.lizkrueger.com