“Thank you both our Chairmen, Denny and John DeFrancisco, and ranking members of the committees, Assemblyman Oaks and Senator Krueger; and all of the members of both the Assembly Ways and Means Committee and the Senate Finance Committee for this opportunity to testify today.
“Seated with me today are Mark Page, the City’s Director of Management and Budget, and Micah Lasher, our Director of State Legislative Affairs.
“I’ve come to Albany this morning to express my strong support for many elements of Governor Cuomo’s executive budget and reform plan for 2012 and 2013, to indicate where and how the Legislature can improve this budget and plan, and to present elements of the City’s own legislative agenda for this session.
“In his budget, the Governor has set an agenda that is both far-ranging and ambitious. Its energy and vision, I think, are just what this State needs, and at the outset let me quickly try to summarize our many points of agreement with the Governor’s priorities and strategies.
“And they include: Creating a new pension tier for future State and City employees – an urgent reform, critical to curbing the current, unsustainable growth of public pension costs that threaten to overwhelm our capacity to fund essential government services.
“Ensuring compliance with a truly effective teacher evaluation process – a measure that New York City Schools Chancellor Dennis Walcott also endorsed in his testimony yesterday, and one that will help give our children across the state the education they need and that they deserve.
“Empowering New York City to assume greater juvenile justice responsibilities and end reliance on State facilities that, despite their astronomical expense, have utterly failed either to keep kids out of going back to jail, helping them get their lives on track, or improving public safety.
“And providing some very welcome Medicaid and other mandate relief to our city and to local governments in every part of the state.
“We also applaud the fact that the Executive Budget would impose no new broad-based taxes or fees on New Yorkers – many of whom are still struggling to get their family finances back on a firm footing.
“The two top items on the Governor’s agenda – pension reform and teacher evaluations – both pose the same central question: Are we going to do what’s right for New York’s future?
“Let me turn first to pension reform. When I came to Albany the first time back in 2002 as New York City’s mayor, the City’s pension costs came to about $1.5 billion annually. Here we are, 10 years later, and they are more than $8 billion annually. That is, if you do the math, nearly a 500 percent increase.
“Pension costs now account for more than 12 percent of New York City’s budget. That’s more than the combined operations of our police, fire, sanitation departments combined. And unless we enact sensible reforms now, our pension costs will only keep growing – and keep diminishing our ability to pay for schools, libraries, parks, other essential services, or to limit the increase in taxes which seems to come again and again and again.
“We will, in short, be mortgaging our future to pay for our past. And we must stop this. We all know it. Just look around.
“In recent months, we’ve already seen pension costs push some American cities to, and even over, the brink of bankruptcy. Last fall, only an infusion of State money kept Pittsburgh’s pension system solvent. In November, voters in San Francisco approved a rollback of future, and also some current, pension benefits for City workers. Similar measures could soon well go on the ballots in San Diego and San Jose.
“Now thankfully, New York City is not in this boat. We are capable of meeting our pension obligations. But we are also at the point where pension costs are putting an ever-tightening squeeze on our ability to cover the costs of essential services or to make living in New York City affordable.
“That’s why this session needs to create the new pension tier for future State and City workers that we’ve long argued for, for so long, and that the Governor has proposed. It would not diminish pension benefits for a single current employee. What it would do is what’s necessary to keep pension systems solvent for future workers.
“It would raise the retirement age for newly hired employees, exclude employee overtime from pension calculations for newly hired employees, bring progressivity into employee pension contributions into line and institute shared risks and rewards that would reflect the fluctuations of the markets.
“It would also offer new employees the choice of a defined contribution option with a flexibility and portability that many may find a better, fairer choice for them, but it wouldn’t force it on them, it would just give them the option. Why are we so afraid of giving people an option?
“This new pension tier would also do something else very important. It would save New York City approximately $30 billion over the next 30 years. And that’s something that City taxpayers, and City workers, should all want to see happen.
“Because the fact is that City employees need City services, as well. And these savings of $30 billion will help pay the salaries of the teachers of their children, of the police who patrol our streets and of the firefighters who might be called on to save lives. This is the right thing to do; and this may be our last, best chance to do it. If we don’t face this issue this year we are going to wind up in a situation that is just intolerable and nobody is willing to look to be responsible.
“Last summer, we lost a great New Yorker: Former Governor Hugh Carey. History will remember a time of intense crisis, and he did what was right for New York’s future. So in that spirit, I ask you to do what’s right for New York’s future now. The Governor is right on this and he needs help.
“Let’s also do what’s right for the students who truly are our state’s future. Certainly, the Governor’s schools agenda takes some very welcome steps in that direction, and we strongly support his emphasis on teacher evaluation.
“And that’s not simply, or even primarily, because it’s a precondition to retaining hundreds of millions of dollars in Federal ‘Race to the Top’ funds for schools across our state. It is because, as Chancellor Dennis Walcott stressed yesterday, the education of every student in our city and state is on the line.
“It’s becoming clearer every day that the key to success in education is great teachers. And professional evaluations that go beyond what we have now – ‘pass/fail’ grades that are not very informative about teacher quality – are an essential tool for assessing and improving that teacher quality. It is really that simple. And that’s why we fully support the Governor’s efforts to put an effective, statewide teacher evaluation process in this year.
“Let me remind you that every one of your constituents outside of government lives in a world where they are evaluated constantly, and they’ve managed to survive doing it. Constant evaluation is good for everyone. It tells you what you are doing wrong so you can fix it, so you can make yourself more effective, so that you can make yourself move valuable. And trying to hide behind, ‘It’s not fair to evaluate people,’ is just ridiculous. We do evaluate people all the time, and we have to do it in the most important function the government has – providing an education – so that our kids get the education they need to compete in a world of the future.
“I would urge all of you to go and to take a look at an article that was in the New York Times this past weekend on Apple and how they have moved an enormous amount of their business overseas. The way to stop that is improving education. We are not going to stand there and say we’re not going to let the tides come in. That just does not work. We are leaving our kids susceptible to a life of not sharing in the Great American Dream.
“The Governor’s budget also proposes to increase education foundation aid to New York City by $136 million. And I will say that’s certainly welcome, however I must say that the budget mistakenly lumps that amount, and $45 million in expense-based aid to New York City schools that cover items like schools transportation together with $45 million in building aid.
“But we just have to keep building aid separate – and not just for accounting purposes. Because common sense always tells us that when you mix operating and capital funds together, investment in capital improvements almost inevitably suffers as a result. Immediate operational needs invariably trump long-term capital needs. But we are a growing city, this is a growing state, and we can’t afford to let that happen. We have to make the investments now that are going to be needed tomorrow.
“Our Administration – with matching funds from the State – has in recent years dramatically improved the long-neglected physical condition of New York City’s public schools. It’s an achievement that we can all be proud of and we should take the necessary steps now to protect it in the future.
“Before leaving the subject of education, just let me add what happens after the final school bell of the day rings is as important to students as what goes on in the classrooms. That’s why this year we also urge increased State funding for New York City’s nationally recognized ‘Out of School Time’ program. That additional support would be in keeping with the Governor’s new ‘New York Youth Works’ initiative.
“And like that initiative, the Governor’s proposed juvenile justice reforms is another thing that will make an enormous difference in creating better outcomes for our communities and our kids.
“Here are the facts – some kids just seem to fall off the right path. It’s always happened, and it probably always will happen. We have to find a way to get those kids back on the right path and back as productive members of society or they are going to continue to go through this revolving door of into jail and out of jail, into the prison system and out of the prison system. And nobody wins with that. They don’t win, and we the general public do not win.
“Let me give you some of the facts: Since the year 2000, the number of kids in State institutions has decreased by more than two-thirds. And since 2007, the State has begun closing these very expensive, under-used juvenile facilities – a process that accelerated last year.
“And that’s great, but kids coming from our city still continue to be sent to the remaining facilities, some of which are hundreds of miles from the city. So now it’s time to take the next logical step: Transfer to New York City government the authority, and the funds, to operate limited secure and non-secure facilities in our city.
“We have worked with the Governor for months on this transfer plan. Because the fact is that we can do every aspect of this job more effectively, saving taxpayer dollars at the same time. We have a very good track record in operating secure and non-secure juvenile detention facilities for kids awaiting hearings, which are similar to the ones operated by the State.
“But keeping a youngster at a ‘limited secure’ State facility, the most common type, costs – listen to this – $270,000 per year, per kid. That’s enough to send five kids to Harvard every single year. Just think about that, how can you look your constituents in the eye and say, ‘We’re charging the City $270,000 per child.’
“We can do far better at a fraction of the cost. And also, by keeping the kids more closely connected to their families, their schools, their churches and communities, we’re confident that we can improve public safety, save money and help more kids stay out of trouble and help them make new starts in their still-young lives. Being close to your families is one of the keys to correction and one of the ways to right recidivism. And this Legislature has an historic opportunity to join us in making that happen this year.
“Before leaving the subject of juvenile justice, just let me add this: Last year, the State created a new ‘alternatives to detention’ grant for localities. This year, we are asking you to convert that to a block grant because we believe it would further incentivize creating these alternatives to detention.
“Let me now turn to another great cost, and that is Medicaid. We very strongly support the Governor’s plan first to limit, and then eliminate, the rate of growth in the Medicaid costs borne by our City, and by the counties in the state for years to come.
“This is another step along the long road that the Legislature started us on in 2005 by capping the growth in the local share of Medicaid at 3 percent a year.
“Nevertheless, it is still true that no other state in the union comes close to requiring localities to assume the kind of Medicaid costs that New York State does. And our ultimate goal ought to be getting our local governments out of the business of funding Medicaid, period.
“I also want to commend the Governor for including in the budget a proposal for our Administration advocates. It provides that when the State closes nursing homes or reduces hospital beds used by Medicaid patients, a portion of the savings realized will fund housing for people with major medical needs. There are just too many people in hospitals who don’t need to be in hospitals, costing everybody a lot more than they need to cost because we can’t find a place for them to go outside of the hospitals where they can have decent housing.
“The Governor has also proposed reforms concerning childhood early intervention services that would save the City an estimated $30.5 million over the next four years. State law mandates evaluations and therapy for children under the age of three who have certain developmental delays. The City and State share these expenses, but currently the City is required to pay its portion upfront and then bill Medicaid or private insurers for reimbursement. The Governor’s plan would rationalize and streamline this process, making it far less time-consuming and costly – something we strongly endorse.
“The Legislature should also provide further mandate relief to the City in the area of Civil Service rules. The Governor’s budget proposes Civil Service changes permitting State agencies’ greater flexibility in hiring for certain specialized skills; and the City should certainly have that flexibility as well. Today there are just too many things where you have to have special training in order to provide the functions that the public needs.
“The Legislature also needs to correct these four deficiencies in the Governor’s budget concerning human services.
“First, the budget eliminates the State’s share of funding for local administrative costs for child support enforcement and collection. This is walking away from a partnership that involves local administration of State- and Federally-mandated programs, and it should not be permitted.
“Second, to expedite State support for sheltering homeless adults, we urge that the current reimbursement system be converted into a local block grant.
“Third, we also urge the State to provide 100 percent reimbursement of child care costs of families receiving public assistance, instead of the current 75 percent. This will not, I might point out, involve any new State funds; it will give families on public assistance the same reimbursement all other families qualifying for State-subsidized child care already receive.
“And fourth, we ask you to fill a $5 million shortfall in funding for the Nurse-Family Partnership program, which is a demonstrated success in helping low-income new mothers, or those who are about to give birth, in New York City and also, I might point out, in Monroe and Onondaga counties.
“The Governor’s budget also includes several criminal justice measures that I wanted to say we fully endorse.
“Our Administration was an early and enthusiastic proponent of the State criminal DNA database that was established back in 2006. We now strongly support the Governor’s proposal to expand this database, and require DNA sampling of anyone convicted of a crime anywhere in the state.
“In this day and age, it is fundamentally no different than taking fingerprints, and that is why it is backed by police and prosecutors throughout the state. It is cheaper to do, it is more accurate, and it protects more people than it helps us find guilty. This is something that if we had done this, there are some people around this country that never would have been executed for crimes they didn’t commit if we had had a DNA database, and I can’t urge you more strongly to do it. And while giving law enforcement an important new tool in solving crimes, it’s this wrongful convictions effect that is really so important.
“We also support another reform proposed by the Governor that will increase public safety and improve the administration of justice, and that is legislation giving judges greater flexibility in setting the appropriate length of probationary sentences based on such factors as the prior criminal histories of the offenders before them. That would, in turn, allow probation departments to concentrate intensive supervision when and where it is the most effective.
“The Governor has, as I’ve said, set out an ambitious agenda. Let me point out that in New York City, we’ve already taken on challenges similar to those on that agenda. Our Administration’s redesign of job training and placement in New York City, for example, is a nationally recognized model, and one that in the past year alone placed over 35,000 people in jobs. And we hope that the Governor’s plans to streamline and consolidate job training at the State level meet with similar success.
“We’ve also made solar power a key element of our energy strategy for the city, so we support the Governor’s proposed expansion of the sales tax exemption for solar equipment to commercial purchasers, and to expand the residential solar equipment credit to lessees of residential solar equipment.
“The Legislature, working with the Governor, last year compiled an enviable record of achievement – one that has done a lot to restore public confidence in our State government. So now I urge you to build on that record by enacting a set of programmatic measures – some longstanding, some new – that include more than, something that is really important to us, more three and a half years ago, New York City and State leaders agreed to reactivate a marine transfer station on the Gansevoort Peninsula on Lower Manhattan’s Hudson River shore. It was a key element of implementing our City’s new and environmentally sound solid waste management plan.
“Because the transfer station is inside Hudson River Park, part of our agreement was that we would also sign a memorandum of understanding concerning improvements to the park that would be funded jointly by the City and State. However, I might point out, that MOU still hasn’t been finalized and the State funding still has not been set aside. We made an agreement, we should both stick to the agreement. It will make a big difference to the people that live on the West Side of Manhattan and to tourists that come to our city and create the economy that fuels our state’s growth. So let’s make those things happen this year.
“We also urge you to act this year on an item that we’ve advocated in the past, and that is setting the interest rate on civil judgments against the City to the rate paid on U.S. Treasury bills, instead of the currently absurd 9 percent rate. This one measure would save City taxpayers at least $1 million a year. It’s also something that would get people to stop looking at government and saying, ‘What on earth are they thinking about?’
“Because we want to give more New Yorkers an incentive to get in, and stay in, the job market, we also strongly support Speaker Shelly Silver’s proposal for a responsible increase in the State’s minimum wage this year.
“We also support the passage of a New York State Dream Act that will enable students whose parents brought them here illegally from other lands to receive State college loans, grants, and scholarships. Let’s get serious, it simply isn’t fair to blame them for what their parents did when they were only infants or small children. And certainly not wise to restrict their educational opportunities. Instead, let us help them succeed, and contribute to our economy.
“Members of the Legislature: I’m very confident that working together we can enact those items; passing the urgent pension and educational measures our state needs; instituting historic reforms in juvenile justice; providing New York City, and localities across the state, with Medicaid and mandate relief. And I look forward to working with you to make that happen. And now will secede my last eight minutes back to all of you. You can use it as you wish, but we’d be happy to take questions.”