News
from STATE SENATOR
Liz Krueger
New York State Senate, 26th
District
COMMUNITY BULLETIN – June 2004
Message from Liz . . .
My recent reports have struck a slightly more
optimistic tone, due to the emergence of conference committees on at least some
of the important issues facing Albany.
Unfortunately, such glimmers of hope remain the exception, and there is
still plenty of “business as usual” – which in the Albany context means finding
ways to avoid addressing the key issues facing our state. An important example is the current
stalemate over Timothy’s Law, which would require insurers to provide
equivalent levels of coverage for mental health that they provide for physical
healthcare.
This legislation (S.5329/A.8301) has passed
the Assembly, and more than three quarters of the Senate have indicated they
support it, but majority leader Joe Bruno refuses to bring the bill to the
floor. Instead, last month Bruno held a
press conference announcing he had a new version of the bill, and tried to line
up advocates to support his version – holding over them the threat that if they
didn’t play ball they wouldn’t get anything.
Fortunately, many of the advocates insisted on seeing the details of the
bill before agreeing to support it, and when the legislation was finally
produced, what they saw was a bill with so many loopholes that it would not
expand coverage in any significant way.
While Bruno has amended the bill, he still has
failed to garner support from the mental health community, because the legislation
(S7296-A) does not create mental health parity. It limits coverage to specific biologically based disorders,
excludes substance and chemical abuse from coverage, and substantially limits
coverage to children under 18 years of age (particularly troubling, since
Timothy’s law was named for a child who committed suicide after his parents
were unable to afford mental health treatment for their son). In addition, it exempts employers with 50 or
fewer employees, as well as employers whose premiums would increase more than
two percent. These provisions, taken
together, would mean that the law would actually provide additional mental
health coverage to almost no one.
This convoluted tale is another example of how the Albany system can work to make sure than nothing gets done, even when everyone is claiming to be in agreement on the necessity of action. Republican members of the Senate can tell their constituents that they support legislation – in this case they actually have two bills that they can claim to support to different constituencies – the original Timothy’s law, of which the majority of Republicans are cosponsors, and the “pro-business” version offered by Majority Leader Bruno. Unless the press, advocates, and other legislators call them on this arrangement, we can be assured that once again, the Senate will not act on this important legislation, or will pass a one-house bill and claim to have done something about mental health parity while in reality having simply created another level of Albany gridlock.
Community Spotlight
Advocating for Bus Rapid Transit on the
M15:
I recently
introduced legislation (S.7079) to provide funding for a Bus Rapid Transit
(BRT) demonstration project in New York City.
I have been working to bring Bus Rapid Transit to the M15 bus line. In January, I organized a meeting of elected
officials, and transit advocates with the MTA and the Department of
Transportation to explore the feasibility of BRT on the East Side. Bus Rapid Transit uses a variety of
technologies and transportation management techniques to improve bus
service. New York City currently has
the slowest buses in North America, with an average speed in Manhattan of six
miles per hour. The adoption of BRT
would make bus transportation a much more desirable option for East Side
residents, and has the potential to create new populations of transit riders in
preparation for the completion of the Second Avenue Subway.
September 11th Memorial
Leadership Scholarship Available:
In memory of the family members lost by
Administration for Children’s Services (ACS) staff on September 11, 2001, ACS
and New Yorkers For Children created a memorial scholarship fund to help foster
care youth obtain post-secondary education. Awards of $500-$1000 are made
annually. Scholarships are available
for expenses related to any type of post-secondary education and recipients
will be selected on the basis of their demonstrated leadership as well as
commitment to their communities. At least one scholarship will be awarded to a
youth enrolled in a vocational program.
Applications are due by July 2nd, 2004. For more information, call ACS at (212)
341-2955.
“Youth Serving Youth” Scholarships
Available to High School Senior Women:
The National
Foundation for Women Legislators (NFWL) and the Christian Science Monitor are
offering a $2500 scholarship for a college bound young woman who is graduating
from high school and has made a significant contribution to the well-being of
young people in her community. The
criteria for the award include outstanding volunteer or paid service work that
promotes the welfare of young people or demonstrates leadership in creating a
new approach, program, strategy or initiative that benefits them. The application deadline for consideration
is June 30, 2004. To obtain an
application or for more information, visit the NFWL on the web at http://www.womenlegislators.org/scholarships,
or call them at (202) 293-3040 ext. 1006.
Summer
Volunteer Opportunities:
New York Cares offers volunteer opportunities in a wide variety of interest areas, including homelessness, hunger, kids, education, seniors and the elderly, HIV/AIDS, the environment, urban renewal, and more. For more information, visit http://www.nycares.org/ or call (212) 228-5000.
The Central Park Conservancy seeks volunteers to help with maintaining the park and greeting park visitors. For more information, visit them on the web at http://www.centralparknyc.org/volunteerjobs/volunteerinfo or call 212-360-2741
Lenox Hill Neighborhood House has a number of volunteer opportunities in its youth and senior programs. For more information, call (212) 744-5022.
In an effort to protect consumers, I have joined Assemblymember Catherine Nolan in introducing the Refund Anticipation Loan Act (S7167/A.10918), which establishes regulations for loans offered by tax preparers. Refund Anticipation Loans (RALs) are short-term, high cost loans secured by and repaid from the proceeds of a consumer’s tax refund from the Internal Revenue Service (IRS). Consumers are being misled into thinking that refund anticipation loans are merely quick refunds. These loans drain billions of dollars from the pockets of ordinary people and the United States Treasury.
Instead of waiting to receive tax refunds, RAL
customers borrow against part or all of their expected tax refund. Consumers
pay several fees to get a RAL, including a loan fee for the RAL, a fee to set up a "dummy" bank account into which
the IRS will wire the tax refund, an “administrative” or “electronic
filing” fee, and a fee to a commercial tax preparer for filling out the federal
and state tax forms. In 2004, typical
loan fees ranged from $35 to $105. Administrative fees can range from $30 to
$55, and tax preparation fees average around $120. What the consumer receives
in hand is the refund minus the loan fee, the administrative fee, and the tax
preparation fee. For the average refund of about $2,100, the total amount of
the three fees would be around $250.
Because RALs only last about 10 days, fees for these loans translate
into triple digit annualized interest rates of about 70% to over 700%.
Cash-strapped consumers will pay close to a billion dollars in RAL-related
charges in the next year.
Refund anticipation loans are targeted at the
working poor who receive the Earned Income Tax Credit. The Earned Income
Tax Credit (EITC) is a refundable credit provided through the tax system and
intended to boost low-wage workers out of poverty. The EITC is the largest federal anti-poverty program, with over
$36 billion provided to over 20 million families last year. This money is necessary for the survival of
low income consumers and is needed to lift them out of poverty. Instead the tax preparers and the banks
involved in these schemes are taking advantage of those who rely on their
services, claiming their money through fees and exorbitant interest rates.
Tax prep companies have blanketed New York
neighborhoods with ads for fast cash and instant money. What they're not
telling people is that the instant refund is actually a high cost loan packed
with predatory fees. Low income taxpayers also can go to one of thousands
of free tax preparation sites in New York, and would receive their entire
refund from the IRS in just seven to ten days if they have a bank or credit
union account.
The Refund Anticipation Loan Act includes
provisions to limit RAL fees, prohibit debt collection abuses by facilitators,
and prevent referrals to check cashers.
It provides for mandatory disclosures accompanying the RAL
application. In addition, the bill
contains registration and bonding requirements designed to ensure oversight and
assure compliance with the act.
Importantly, the act grants consumers with a private right of action to
recover damages, costs and attorneys fees.
More and more banks and tax preparers are
trying to get in on the business of taking a cut out of consumers’ tax
refunds. The legislation Assemblymember
Nolan and I have introduced will work to stop this practice by requiring
greater disclosure and making refund anticipation loans more transparent. In the final analysis, we must work
vigilantly to protect consumers from deceptive lenders.