Transcript: Testimony and Q&A of Mayor Bill De Blasio on the 2014-15 State Executive Budget Before The State Assembly Ways & Means Committee And The Senate Finance Committee

January 27, 2014

Assemblymember Herman D. Farrell Jr: Good morning, today we being the first in the series of hearings conducted by the joint fiscal committees of the legislature regarding the Governor’s proposed budget of the fiscal year 2014-2015.  The hearing or conduct pursuant article 7 section 3 of the constitution and article 2 section 31 32a of the legislative law.  Today the Assembly Ways and Means committee and Senate Finance committee will hear testimony concerning the budget proposal for the local and general government.   I will now introduce members from the assembly and Senator DeFrancisco Chair of the Senate finance committee; will introduce members from the Senate.   Assemblyman William Magnarelli , Assemblyman Michael Cusick, Assemblyman Joe Lentol, Assemblywoman Crystal Stokes, Assemblyman Carl Heastie, Assemblyman Felix Ortiz, Assemblyman Michael Benedetto, Assemblyman James Brennan, Assemblywoman Margaret Markey, Assemblywoman Catherine Nolan, Assemblyman David Buchwald, Assemblyman Keith Wright,  Assemblyman Steve Katz, Assemblyman Francisco Moya, Assemblyman Weprin, Assemblyman Otis.  Who will introduce –

Assemblyman Steven Otis:   Yes, we have Assemblywoman Jane Corwin.

Senator John DeFrancisco:  Yes, with us the Chairman of the local government committee Jack Martins.  Senator Marciano, Senator Savino, Senator Golden.  I hope I haven’t missed anyone and from my the only thing I would like to add to what (inaudible) mentioned is that the last three years we had excellent hearings because not only would the speakers with stick to their time but the senators would stick to their 7 minutes for questions.  Sounds like a short amount but you are welcome to come back but you will be re-recognized at the end if you choose to stay as long as us else.  So we try to make it fair so everyone gets an initial opportunity and we move the hearings along.  So please try to keep the time, there is clock on the desk and the speaker desk.  Senator Kruger will introduce the remaining members of the Senate.

Senator Liz Kruger:  Thank you good morning, Mayor De Blasio.   I am joined by Senator Gibson, Senator Rivera, Senator Perkins, Senator Hoylman, Senator Sanders and Senator Smith.

Farrell Jr:  Thank you we also have been joined by Assemblywoman Earline Hoper and Assemblyman Jeff Aubry.  But before the first witness, I would like to remind all of the witnesses testifying today to keep your statements within your allotted time limit so that everyone can be afforded  the opportunity the chance to speak and not at seven o’clock at night.  I will now call the first witness, assemblyman.  Assemblyman, what did I just do there.  Mayor Bill de Blasio.

Mayor Bill de Blasio:  You gave me a promotion.  Good Morning.  I want to thank the chairmen of the committee holding this hearing, Assemblyman Denny Farrell and Senator John Defrancisco.  I want to thank the ranking minority Robert Oaks and Senator Liz Kruger.   And finally, thank all the members of both the Assembly Ways and Means committee and the Senate Finance committee for this opportunity to testify today.  

Seated with me this morning are two people many of you already know: Dean Fuleihan, New York City’s new director of Management and Budget; and Sherif Soliman, the city’s new director of state legislative affairs.

My entire administration and I look forward to a very constructive partnership with you and your colleagues during this legislative session. Over the years, we’ve seen, and appreciated, the leadership that the legislature has shown, time after time.

You have our admiration and gratitude for the work you’ve done in recent years to help right the finances of the state. The surplus now projected is a welcome far cry from the massive deficits the state faced just a few years ago – and that’s a tribute to your effective cooperation with the governor as fiscal stewards.  We also commend the legislature for its work to reform the state juvenile justice system… to provide Medicaid and other mandate relief to our city and to local governments across the state… and on other key issues.

This year, we face new challenges – and I’m confident that working together, we’ll meet them. I’ll begin that process with some preliminary thoughts today about the recently presented Executive Budget. Over the next week, we’ll flesh out our administration’s views and our agenda in greater detail.  Let me point out that in New York City, my administration is poised to begin our own budget process. On February 12, we’ll offer our preliminary budget for the city fiscal year that begins July 1. We’re approaching that task in an environment of unprecedented fiscal uncertainty for the city. In large part that’s because, for the first time in modern memory, collective bargaining agreements with more than 300,000 employees – virtually our entire municipal workforce – were allowed to expire by the previous administration.  That is over 150 individual contracts that expired.

In some cases, they’ve gone un-negotiated for as many as six years, which has produced an extraordinary and difficult city relationship with our own employees, and left unresolved issues like rising health care costs. And that makes the always-difficult task of balancing our budget far more complex. Big question marks also hang over our relationship with our federal partners. We are gratified by the efforts of the president, our Congressional delegation, FEMA, and HUD in the response to Hurricane Sandy.

But it remains unclear whether the federal funds we receive from here on out for rebuilding and for preparing our city for future extreme weather events, will be enough to address the work that still remains. And compounding those questions is the great social and economic challenge of our era – the growing crisis of affordability in our city. Because here are the stark realities.

Today close to half the residents of New York City live below, or near, the poverty line. Our city’s middle class is pummeled by rising costs and pinched by shrinking real incomes. And the social and economic gulf between those with great wealth – and the far larger number of people who lack the means to realize their dreams and make better lives for their children – continues to deepen.

We are in the midst of an inequality crisis. It is my job to rectify the shortcomings and inequalities that preclude our city from reaching its true potential. And our budget for the city will address this affordability crisis.  We are striving for “One New York,” where we all rise together, and we’re going to let hard-working New Yorkers know that City Hall “has their backs.” It’s with that same goal in mind that I begin today by outlining our plan for instituting universal full-day pre-kindergarten in our city, and for creating high-quality after-school opportunities for all middle school students across the five boroughs. It’s within our means to do both – and do them now. And by doing so, we’ll begin a major investment in our city’s future, and start to close the yawning social and economic chasms in our city.

Now, it is our obligation to enact these programs now, because in the case of both universal pre-K and after-school programs, the research evidence of their impact on greatly reducing social and economic equality is overwhelming. The verdict is in. Nobel Prize-winning economists… President Obama…the outgoing chair of the Federal Reserve system, Ben Bernanke they all agree.  And studies in dozens of states, confirm that high-quality pre-K instruction produces substantial lifetime returns in: Higher incomes, higher rates of homeownership, higher rates of savings; and fewer run-ins with the law. Yet the reality is that today, fewer than 20..excuse me fewer than 27 percent of 4-year-olds in New York City have access to full-day pre-K. We must, and can, do better than that – and do it now. The same is true of middle school after-school programs.  Programs that have been shown to reduce juvenile crime by up to half in the most high-risk communities.

There’s no question about the value of programs that keep kids on task and off the streets during the most crucial period of their days. The hours between when the last school bell rings and their parents return from work. Nor is there any doubt about the value of programs – like those I recently saw at the School of Young Leaders in the Bronx – that open young minds and enrich young lives through opportunities for cultural and artistic expression.  Yet in recent years, 30,000 seats were cut from after-school programs in the city. And today, by some estimates, nearly 1-in-4 of the schoolchildren in our city goes unsupervised after school. We can do better than that – and do it now.  And we can accomplish it by simply asking a little more of the very wealthiest people in our city. We’re seeking the right to levy a small income tax surcharge on New York City’s wealthiest residents over the next five years: an increase from the current 3.9 percent rate to a 4.4 percent rate on those with annual incomes of a half-million dollars or more. This one dedicated measure would fully fund universal pre-K in our city, and let us expand middle school extended learning programs, too. In the first year, the dedicated funds raised by the personal income tax increase on the city’s highest earners will be used to increase the number of seats available for pre-K, upgrade existing seats, and support the expansion of necessary infrastructure, including initiatives as curriculum development and improved initiatives for training and ongoing support.  In the following year, virtually all of the funding will be dedicated solely to programming.  And in subsequent years, the dedicated funds generated from this tax will be used to continue to build needed capacity, support ongoing operations, and ensure that programs offer high-quality instruction and family engagement.

Our city – in partnership with schools, community-based providers, and families – is well-positioned to take this on, and at a rapid pace. And we’re ready to begin right away. I am extremely fortunate to have a dedicated and knowledgeable group of experts – whose combined expertise in early education is nothing short of extraordinary – guiding one of the largest pre-K expansions in our nation’s history. They have volunteered many hours as part of our transition, and several of them have joined me here today: Jennifer Jones Austin, the Co-Chair of my Transition Team and Chief Executive Officer and Executive Director of the Federation of Protestant Welfare Agencies; Elba Montalvo, the Founder, President and CEO of the Committee for Hispanic Children and Families; Josh Wallack, who leads the Children’s Aid Society’s Early Childhood Programs from birth to age 5 across New York City; Sherry M. Cleary, the Executive Director of the New York City Early Childhood Professional Development Institute at the City University of New York; Gail Nayowith, the Executive Director of the SCO Family of Services, providing early childhood care and education to more than 60,000 New Yorkers; and Nancy Kolben, the Executive Director of the Center for Children’s Initiatives.

They have been joined by our Deputy Mayor for Health and Human Services Lilliam Barrios-Paoli, our Schools Chancellor Carmen Fariña and the staff at the Department of Education, our Commissioner of the Administration of Children Services, Gladys Carrion and her staff, and the staff at the Office of Management and Budget.

Their thorough analysis shows that we’re prepared to provide free, high-quality, all-day pre-K to close to 54,000 4-year-olds this September. And by January 2016, we’ll be able to increase that to the full universe of more than 73,000 children, participating in a high-quality all-day pre-K program. And we’re confident that we’ll have the space to accommodate those children across public school and community-based organization settings. The Department of Education has identified 4,000 classrooms potentially available within public school buildings, with additional space available in community-based organizations that currently serve the majority of children in pre-K.  

We’ve also begun to develop a teacher pipeline to recruit, train, and provide support for teachers and assistants to staff these classrooms. Given the diversity of our city and that 19 percent of current kindergartners are English Language Learners, the model will also put additional support in place so that teachers, administrators, and coaches are prepared to meet their needs. And for programs already offering full-day pre-K, we will bring them up to the same quality standards as the new programs established through expansion. The Working Group has agreed to continue with us to make implementation a reality this September. I am committed to this implementation, and our First Deputy Mayor Tony Shorris will supervise this effort with our Deputy Mayor for Health and Human Services, Lilliam Barrios-Paoli, Chancellor Fariña, Commissioner Carrion and dedicated management and staffs in each agency will bring these plans to fruition.

New York City Council members strongly support this proposal, and I’m confident it will send you a Home Rule message expressing that support. A broad range of the city’s business, labor, civic and educational leaders is behind it, too. It’s an idea that every public opinion poll – and also the results of last November’s elections – show has overwhelming backing from the people of New York City.

It’s one where the city’s right to self-determination – to setting and carrying out our own priorities – ought to be honored in Albany. It’s also one that’s so vital that it must be inviolable. Universal pre-K and after-school programs must have a dedicated funding stream, a locked box, shielded from what we all know is the inevitable give and take of the budgeting process. And let me remind you that the legislature has taken this kind of action before, and not so very long ago. In the early 1990s, you gave New York City authority to levy a temporary, dedicated income tax surcharge that funded the Dinkins administration’s “Safe Streets/Safe City” program. Doing that allowed us to hire thousands of new police officers. It began the historic, ongoing reduction of crime in our city.

It’s part of why today, New York is the safest big city in the nation. Now you can help us make history again: By putting New York City in the lead nationwide in making universal pre-K a reality, and in giving all our middle-school students the after-school programs they need. This year, Governor Cuomo has also proposed making universal pre-K available statewide. That’s an idea we strongly endorse and we appreciate his leadership on this issue. And we back to the hilt the $2 billion “smart schools” bond issue that he seeks to put on the ballot to improve and equalize technology in schools. We look forward to working with the governor, and all of you, to win its approval by the voters, and secure funding for necessary pre-K classroom construction and equipment purchases. But let’s be clear about two principles key to making true universal pre-K a reality. First, funding for universal, full-day pre-K must be dedicated and sufficient to meet the immediate needs of our children, and the clearly-expressed mandate given by the residents of New York City. And second, the funding must be predictable and consistent. Finally, before leaving the subject of education, let me make on last point  – One that also speaks to the goal of ending social and economic inequality in our city and state  – Since 2009, the state has not met the court-ordered obligation to our city – and to school districts elsewhere in the state – under the Campaign for Fiscal Equity lawsuit: an obligation the Court of Appeals rightly defined as providing a “sound basic education” to all children in our state. The decision in that case was a matter of simple justice. It ordered the end of an historic wrong created by the manifestly unfair distribution of state education aid to local school districts. In the next school year alone, New York City public school students will be shortchanged some $2.7 billion in state education funds. I’m confident you’ll agree that with the resources available, it is time to make a significant down-payment on this obligation this year – fulfilling a commitment and making equity in education a priority.

Now let me quickly review some of the other elements of the Executive Budget. We support many of its ambitious programmatic initiatives. I strongly urge you, for example, to adopt the governor’s proposal to raise the threshold age for adult criminal prosecution in our state from 16 to 18. This would right a shameful wrong, and at long last bring us in line with the sound and decent standard followed in 48 of the other 50 states. We also commend the Governor for the bold capital investments he has put forward. Many would address top priorities in our city. His call for building four new Metro-North stations in the Bronx is music to the ears of the people of that borough – and will be a welcome enhancement of our regional mass transit system. I also strongly support the investments in the Executive Budget for strengthening the state’s coastal infrastructure and revamping MTA stations and facilities. They’re smart responses to the new realities of climate change that Sandy brought home to us all. The governor rightly deserves all the national recognition he’s earned for his leadership in rebuilding after Sandy, and for preparing New York State for future emergencies. The governor has also stressed the importance of the tax cuts that he proposes. And in the coming weeks, we will be evaluating the impact on New York City.   But I recognize that the governor is putting forward a proposal that sets state priorities with this package in the same way that we in New York City are putting forward our dedicated 5-year modest tax increase on the wealthiest New Yorkers to fund our universal high-quality pre-K for 4-year-olds and our extended learning for middle school children.

Let me also turn to the governor’s response to the dire plight of health care in the state – including the current crisis in Brooklyn.  We strongly support the state’s request for a Federal Medicaid waiver, and the goal of investing those funds for the transformation of health care facilities. We also believe that has to be part of a larger effort by the state and New York City to ensure that people in Brooklyn have consistent access to quality health care.

Members of the Legislature, you all know that a budget isn’t merely a balance sheet; it’s a statement of priorities and an expression of values. So together, let’s use the budget process we’re engaged in to address the top priority we’ve outlined today:  The crisis of inequality in our city and our state. And universal pre-K and quality after-school programs do just that. We can level the field for our kids – every child in every borough of our city – by asking those who make more than half a million dollars a year to pay a little more in taxes. Now, I know that last part has been the subject of some debate in recent weeks.   And I know that people of good intention can have different plans for how to achieve better outcomes for our kids. But let’s start debunking two myths surrounding our proposal. First, there are some who say that Albany shouldn’t approve our plan because the state government simply cannot raise any taxes right now.   But that is not the debate. We’re not asking Albany to raise the state income tax by a single penny to pay for universal pre-K and after-school programs in New York City. 

We’re simply asking Albany to allow New York City to tax itself – its wealthiest residents – those making a half-million or more a year. Second, there are some who whisper that our drive to tax the rich to fund pre-K and after-school is just political posturing – an effort to heap scorn on the wealthy to win an election.   But the election in New York City is over, and we are here to work with our leaders in Albany to govern.   This is about our commitment to “One New York,” where we all rise together. We don’t want to punish the wealthy for their success – we want to create more success stories. This is about the children of New York, and just how strong of a commitment we are willing to make to their futures. We look forward to working with you to strengthen that commitment.  And now we look forward to your questions for us.

Assemblyman Sheldon Silver: Thank you very much, first a question from Assemblyman Ortiz.

Assemblyman Felix Ortiz: Thank your Mr. Chairman.  Mr. Mayor, welcome to Albany, Thank you for your testimony. And part of being my neighbor I’m going to try to be nice. I have a couple of quick questions. You mentioned about unemployment and inequality in your testimony. The first question is can you tell us the overall fiscal condition in New York City right now.

Mayor: I’ll begin and my budget director will probably chime in. The condition right now is framed by over 150 open labor contracts, and this is literally unprecedented. There has been no time in the history of New York City when our entire labor dynamic was insecure, and I have to say to you I think there’s a reason for that. I think previous Mayors have, regardless of ideology or party, believed it was their obligation to settle contracts on a timely basis. That didn’t happen in the previous administration. We’re left with a huge unknown. We’re going to address it very resolutely, but that situation plus the unclarity in the federal dynamics, not just on Sandy but on a host of other areas where we’ve seen sustained cuts in recent years, lead us to a precarious dynamic. So we look forward to working with the legislature to act on these challenges. Obviously we have very aggressive and challenging negotiations ahead with over 150 different labor unions. But, we’re going to take this challenge head on. In the meantime, we must continue to address the underlying gaps in our city, and I just would like to refer to a New York Times Editorial today that points out, just to frame why there is a strong parallel between the education crisis we face today and the public safety crisis we faced in the early 90s, when this legislature acted in such a powerful fashion to help New York City. The New York Times Editorial Page today says that data that will be released later this spring will show that only one in four New York City students who started High School in 2009 and graduated in 2013 performed well enough on the region exams to meet the state definition of college readiness. So, only a quarter of our students are coming out of our schools college ready at a time in history when education matters more than ever before in terms of economic destiny. I’d like to note that only about 11 percent of black students and 12 percent of Hispanic students will be deemed college ready in these scores. That’s the crisis we’re facing. The school system is simply not serving many of our children and that’s what we have to address right away while dealing with our other fiscal challenges.

Ortiz: You were in Washington at the Mayor’s Association Conference. I read about your visit to Washington last week. I have a quick question, how much of the Governor’s budget is contingent on Federal assistance and on the national economy?

Mayor: I’ll turn to Dean Fuleihan on that one.

Dean Fuleihan: Wow, for my first one.

Mayor: Don’t you get a welcome back question?

Fuleihan: In my former life I would have told you about how much of the Governor’s budget is dependent on Federal assistance and what’s contingent and what’s not, I’m sorry, I actually don’t have that figure:

Ortiz: Going to the Universal Pre k Kindergarten, I do believe and I agree with you, I think you probably have almost everybody convinced that this is very critical. Fundamentally, I do believe that we should start our children at the age of four. That’s my view and personal opinion. I have a very clear example about my own children starting at four years old and I think that’s been a great success. My question to you about the Governor providing 100 million for universal pre k kindergarten. Does this funding meet the city’s needs and objectives? And what kind of capacity exists in New York City for pre-K currently?

Mayor: Well, I’ll start; Dean may choose to jump in. First of all, as you know Asssemblymember I’ve had the honor of working with your son and I can say that if he had pre k it worked out because he came out real good. The bottom line here is that we need, to achieve this goal, to create truly universal full-day pre-k for every child in New York City who needs it, we need reliable funding we need consistent funding. This is a five year build out. To do that we believe that the tax that we would levy, the PIT, would be the most reliable, the most consistent and for precedent we look at the safe city safe streets tax, we look at the tax increase that Mayor Bloomberg instituted with the PIT after 9/11. We look at how other moments of crisis have been handled and handled effectively with taxes that lapsed exactly on schedule that were dedicated, that had lock box dynamic – were used explicitly for what they were delineated for and only that. And this tax would only be used for the purposes of pre k and afterschool. In terms of the current state of affairs as I said over the last year, there’s almost 50,00 kids in this city who don’t get full day pre k, who applied for it and were turned down because the program isn’t structured  that way right now in New York City. We know that with the efforts we can undertake immediately, the implementation that’s already being planned, that we could reach, by September, this September, 54,000 kids with full day pre-K and then we would build it out the following school year and reach 73,000 kids.

Ortiz: The extent of the project provides $783 million to New York City under the Smart School Bond Act, which is intended for investment technology and pre-kindergarten classroom capacity.  What impact do you think this will have on New York City classroom instruction and what will be the plan for this funding?

Mayor:  As I said in the testimony, I strongly support the governor’s bond act proposal, obviously that is not the same thing as it passing so the first thing we have to say in planning terms, is, it’s a different discussion than what we know the people in the state have voted for.  But I’m hopeful they will and I think it will be exceedingly helpful for the governor’s state objective of addressing inequalities that exist in technology, which is crucially important, we certainly have ample evidence of that in New York City and we’ll delineate that in coming weeks, for how we might be able to benefit.  Again we know that is contingent on a vote by the people and second of all takes time for the bonds to be issued, new revenue, etcetera.  So we are hopeful but what we’re talking about is revenue we can depend on right now to achieve the goals that we have to achieve. 

Ortiz: And one more thing Mr. Mayor, your testimony about unemployment, you address the issue of education, the issue of public safety, and you touch a little bit on the Sandy relief effort.  As you know, I represent the area of Red Hook, that was hit very badly by Sandy, as a result that was Coney Island as well, and all the areas of New York City, Staten Island, as a chair of the city’s committee, the opportunity to build in this area, near Albany that was hit under the prior hurricanes.  My question is regarding NYCHA, what is your vision, what do you see being done for New York City Housing Authority, where we still have in Red Hook and Coney Island, where I went yesterday, and is continuing to be difficult to get someone to come and repair their apartment, to get someone to pay attention to their repairs, and to pay attention to their basic things that we have to do in our owns households.  Here is my quick question, what is your vision, what do you foresee happening within the New York City Housing Authority, and how these folks can be helped regarding the issue of when they’re reaching out to folks at the city housing authority.

Mayor: After Sandy hit, a couple weeks after, I spent time in the Red Hook East Houses before power had been restored.  It was a very sobering experience about how much people had suffered in that development, as you know, one of the larger developments in the city.  And I’ve been to all of the neighborhoods affected by Sandy, and have talked to residents and have seen very, in a first-hand manner, what they’re still suffering.  We have an obligation to use the federal funds that are coming in to try and do better, not just to get us back to where we were, but to do better, and to reinforce our public housing developments.  That is a work in progress.  We also have an obligation to residents of public housing in general to repair more efficiently and effectively, so we’ll be laying out plans in the coming weeks on how we’ll address those issues, but my commitment to you is very focused on public housing, I believe it is a mayoral responsibility and not something that can be swept under the rug.  And I think that the federal funds at least gives us an opportunity to right some wrongs and do better. 

Ortiz: I would love to work with you, thank you for your response to my question.  Mr. Sherman?

Assemblymember Marty Golden: Thank you chairman, and my colleagues, I concur with you, mayor, when it comes to having to do something about our hospitals, I look forward to working with you and the governor’s office, the legislature, community, and the unions, coming to some solution with Long Island College in the next couple weeks, I think that it’s very important that SUNY stop bleeding its 13 million dollars a month at that location, that’s number one.  Number two, obviously, is to work with the legislature and the governor and get that Medicaid waivers so we can upright the other 237 financially distressed facilitates across the state of New York which is very important for our health care system.  I also look forward to working with you in the traffic safety, pedestrian safety zones that we have a bill here that we can work with you to correct some of the imbalances we see here across our communities, and that we can get a safer city in our school areas, playgrounds, parks, our hospitals, our senior centers, and other locations as well. 

We briefly talked about Sandy and Sandy really is still devastating in parts of my community, areas of Gerritsen Beach, Sheapshead Bay, and Manhattan Beach.  The areas over there we have threefold, we have an infrastructure issue where we’re going to be able to harden our waterfronts, I believe that we have to take a strong look at that.  Number two, is working with the building department and expediting some of these permits.  If we can get the buildings department to get an office or get on the ground in these locations, I believe that we could expedite that and get that done and give some relief to these families that need it, it’s been a long time.  They need it desperately.  And the third area, if we could, if you could somehow visit my community, I’d like to get you in the Gerritsen Beach, Sheapshead Bay, Manhattan Beach area and take a look at the financial improprieties, the areas where we’ve seen some different contractors who’ve done some bad work, areas where money has not yet been distributed, money that is desperately needed in these communities to be able to get them back on their feet.  And our commercial strips are also having a difficult time.  And lastly, on the infrastructure again, the street sin Gerritsen Beach are caving in, the water lines are snapping, the gas lines are snapping, we are actually seeing street collapses across the complete area of Gerritsen Beach.  We need to get somebody in there and we’ve made some money available at the state level and we’re working with the city on some of those blocks, but we need a complete reconstruction of a number of those streets.  I know my colleagues have a lot of other questions, but I have another committee meeting and I just want to get them out to you and hopefully we can work together for the betterment of the city of New York.  Thank you, Mr. Mayor.

Assemblyman William B. Magnarelli: Thank you Mr. Chairman.  Mr. Mayor, thank you for being here today, first of all I’d like to commend you on a proposal for pre-K and I agree with you one hundred percent that this is necessary for our young people.  But I do have some questions, especially with what I’ve seen over the past year or two in rolling out other proposals maybe a little too quickly.  So my questions basically revolves round, how do you see getting this started so quickly, my understanding is that classroom space, especially in New York City, is very difficult to put together, I also know that getting the teachers to be able to teach in these schools, certified teachers, getting them is also problematic.  So I guess the biggest question for me is, although you’re talking about a dedicated fund, etcetera, couldn’t this be rolled out over a period of time, rather than having this done directly this year as you’ve suggested.

Mayor: Well first of all, I would just say time waits for no man, we know there’s a crying need right now, and as I said, this is a very sobering editorial I just referenced, and if we aren’t acting immediately to undress the underlying reality, we will continue to fail.  I know Assemblymember, you feel as I do, all of us in public life take an oath to protect our people and right when it comes to education, we’re just not doing well enough in New York City. 

So the first point I would make is one of urgency.  Early child education and after school programs will be profound difference makers, the reality is they’re available to us right now, this white paper that we put out today is a detailed explanation, we will put this up online immediately, it’s got the appropriate title, Ready to Launch.  And what we did, that panel I mentioned before of folks who’ve devoted their lives to this subject, early childhood education, after school, and the development of our young people.  Very meticulously over the past few weeks we’ve reviewed all of these details, space, teachers, teacher quality, all of the things that go into to putting this up and running, and came back with a very clear plan that said we could get up to 54,000 for this September, 73,000 in the course of the following school year and get to that maximum 73,000 point. 

Dean Fuleihan was a part of those deliberations and I’ll let him add, but the bottom line is this – and here are the core logic, we can find up to 4,000 available classrooms in school buildings all over the city, we know some of those will work well for this task, some will not work as well, but we have a substantial pool to begin with.  We’ve identified hundreds of classrooms in community based organizations that are currently or have recently provided childcare, we know we are graduating and have available to use in a typical year, 2,000 early childhood teachers, we also know there’s a pent up demand of trained teachers who haven’t been able to find the appropriate assignments so there’s a lot of moving parts here, but they all point to the same outcome.  The space is there, the teachers are there, curriculums is there based on New York State Common Core standards for pre-k, we have methodology for getting people additional training in the summer for September, so we’re confident we can get this up and running on a much greater scale than it is currently. 

And I think you’ll agree from the grassroots level, talk to parents right now who get no pre-k for their kids, or talk to parents who get only half a day, which doesn’t help parents real schedules when it comes to work, and doesn’t give kids enough enrichment and development.  There’s tremendous support among parents of every background because they know what a difference this had made for their kids, they also know it would lighten one of the many burdens that working parents experience.  So this report proves…do you want to go now? 

Fuleihan: And it is in the report which delineates the space and the teachers, the two questions you’ve focused on, we have both in the city schools system and through the relationships that the community based organizations have with the Department of Education and children’s services, there are existing pre-k programs out there that can easily expand and make this accommodation and have actually shown that they’re capable of doing that in a very quick turnaround.   They just did it for significant expansion consistent with one of the state RP proposals, so the space is out there, we can take current facilities that are being used and make it full day, we have an abundance of classrooms that have been identified, over 4,000, we need now to focus on the needs with the classrooms, but we’re very confident we can do that over the two year period.

We’re also, it’s worth noting, it’s in the program the mayor outlined, it’s about new facilities, it’s about converting existing facilities into full day programs, it’s also about taking a very significant population and providing a high quality program.   So those enhancements the mayor talked about, the teacher training, making sure there’s enough resources in high need districts, English language learners given a focus to the teachers, that that’s a priority for the children of New York City.  Those are all wrapped in and we can do those in this timeframe. 

Magnarelli: I want to thank you both for your response, my concern simply revolves around biting off more than we can chew right away, it seems we have done that in parts of our education policy over the last few years, not that the ideas are wrong, they’re right, but just the implementation of those and whether this should be done via your plan or the governor’s plan.

Mayor: Just a quick comment, the concern you raise, a question well-grounded in history I might say, we have seen things implemented poorly, the difference here is that we already have such powerful existing models for pre-K and for after school.  I announced this concept almost 16 months ago, I borrowed from existing models as well, it wasn’t like we looked to create something out of the great unknown.  We know what works, we have the pieces to bring the resources sand the teachers together, so we can actually serve our kids. We also know as I mentioned in testimony undoubtedly this provides a much stronger foundation. So there are areas in government where I couldn’t agree with you more but in this one I think we have the tools and we’ve already proven what we are capable of doing and that’s why we need to act quickly.

Jack Martins: Thank you, Good Morning Mayor. Thank you for being here, I appreciate your testimony and I also appreciate the point you made about politics being over, the campaign is over, now we get to discuss Government and Governance so let’s address this issue holistically. My understanding is that there’s approximately 59,000 children currently attending Pre-K in New York City, either full day or half day. Is that right?

 

Unknown: Just one second.

Mayor: Hold on just checking numbers. It is correct. 59,000 including half days

 

Martins: So about 59,000 children, (inaudible) who are attending Pre-K classes and if I recall your testimony you said you hoped that by September of this year, by the beginning of the new school year 54,000 full day Pre-K students. Which I understand the 59,000 figure is half day or part day and full day but we’re going to expand that 59 or actually reduce that 59,000 dollar, 59,000 child figure to 54,000 full day Pre-K.

 

Mayor: The 59 just to be clear, and then Dean will jump in as his facts to fill in. The 59 is primarily half day. The current system is primarily half day and that’s the problem we seek to address that umm Pre-K in New York City, the phrase Universal Pre-K has long been used but it does not acknowledge reality there is still a substantial number of kids who get no time at all and that most kids get half day. Half day does not provide the level of educational enrichment necessary particularly ever increasing standards. By the way I am someone who believes common cores is a correct concept but we have to back it up with preparing our children properly.  Half days doesn’t do that. Half days doesn’t fit with parents’ schedule. So the fact that we’re going to a consistence full day model is crucial in terms of the outcome we are trying to achieve.

Fuleihan: Approximately 19,000, 19, 500 children who receive full day Pre-K in the public school system through CBO’s would receive a higher quality that’s getting to your questions about what’s full day but they will receive a much more enhanced environment and a much higher quality. Umm, almost 13,000, 12,600 children who receive umm full day services at the Administration for Children’s receive only a veering level and veering degrees of actual Pre-K and that surrounded then by other day care operations, they will be moving to a full high quality Pre-K Program and then the surrounding support services around that. And  then 23,640 students will have access to full day services.

Martins: So paraphrase about 40,000 children currently are in Full day Pre-K right now, about 19,000 are in part or half day Pre-K -

 

Mayor: If I may Senator, I apologize, other way around 40,000 about 40,000 in half day right now, 20,000 in full day right now.

 

Martins: I heard that it was full day but they didn’t have a full day curriculum part of that full day was also involved in other things but the kids were in a school environment all day even though part of that day was not necessarily curriculum (Inaudible, someone talking over him) .

 

Fuleihan: But the part of that day that’s (academic) Pre-K can be 2 hours, 2 ½ hours not providing a full day Pre-K environment.

Martins: Social economically the children who are in Pre-K currently across New York City do they touch on every social economic status in this city? Do they involve children from high needs areas as well as children from middle income areas and wealthy areas or are they predominately in areas that are social economically challenged?

 

Mayor: Let me start then Dean will jump in. I use to be a Community School Board member before Mayoral control we had community elected Community School Boards and I was a school board member in my local district, I am a public school parent today and I have been for the past 14 years. Umm the current system has the parents of all backgrounds have some opportunities. For example in your zone school there’s Pre-K classrooms people can apply for them regardless of background and I know people of every kind of background who are in (inaudible) the Department of Education pre-K programs in a zoned school. There are other programs that are income based/need based we want this program to be truly universal. I want to emphasize that point; we believe for the betterment of our society, for the future of our city, I would dare say for our state, that we must have a more educated work force. We must have a society in which education is more pervasive.  And so from my point of view and our Administrations point of view, we want to give full day Pre-K to every kind of child. We also know that we have a school system that is deeply trouble. Has been for a long time and if we’re going to lift all boats, if we’re going to straighten that school system  all around getting every kind of child full day Pre-K is pre-requisite to do that. So our vision is a universal one.

Fuleihan: The population we were discussing in Children’s Services is primarily a high needs population and once again they are not receiving high, they are receiving child care, Head Start programs, they are receiving a lot of assistance. But we are talking about a very different kind of program and modeled on most successful national programs to give them a complete experience with the proper training for the educator who’s going to be doing that and expanding the hours in some cases for that population from 2 ½ to 6 ½ hours.

Martins: I just want to be clear, so when we’re talking about equity and education and lifting all boats and the Tales of Two Cities, we have access or the city has access right now for those children in the most social economically challenged areas of the city where they have access to Pre-K even though it may be in a half day or in a some sort of a hybrid form?

Fuleihan: Not every child is being served, let me (inaudible) there’s some access yes, but I think again I would and I appreciate you invoking the Tales of Two Cities. I talked a lot about it in the last year and I think this is wholly consistent. The notion here is 1) This is about of course reaching those in greatest need more effectively I think as Dean has pointed out higher quality programing, consistent programing and programing that is full day for all. These are major reforms in the current approach. 2) Second, to truly bring about an effort towards equality our schools have to improve across the board. I think some have been a bit lost (?) in this larger discussion is that this is not about just creating a better foundation for those children as individuals, this is about improving our school system (?). We believe that is we set a stronger foundation a lot more kids are going to succeed and that success breed’s success. It creates a different kind of classroom environment; it creates a different possibility for all children to learn. Follows through with our commitment to after school at the middle school level which is a historically troubled time for kids, challenging time for kids, challenging time in the educational process. We want to reinforce for everyone.  Every kid that gets a better chance helps make education to work better for whole group.

 

Martin: I appreciate that Mayor. Thank you, I have a statistic here umm confirmed by the City’s own Independent Budget Office that the city projects to have a surplus of $2.5 Billion this year and a surplus of $1.9 Billion next year. Given the surpluses that are being projected, this year and next year by the Independent Budget Office, the City’s own Independent Budget Office, Why is a tax increase necessary?

Mayor: I’ll start then I will let the budget expert weigh in. Because of the profoundly great great unknown of the open Labor contracts. 300,000 employees without a contract. By definition that’s going to add additional fiscal stresses. We have to resolve this issue. We don’t know exactly which day it will be resolved because, as you know, it’s subject to negotiation, and when you’re negotiating with 150 separate units it gets a little complicated. But, at some point his will be resolved and there will be a cost to pay, a cost that should have been handled over years is now going to have to be handled in many ways in the here and now. So, that challenge makes clear to us that we’re in a troubled fiscal environment. I t may look nice, and if I may be so bold, on the way out the door my predecessor painted a very rosy picture.  But I think whether you’re a democrat or republican, a conservative or a liberal, you would agree that 300,000 employees without a contract constitutes the makings of a serious fiscal challenge:

Martins: I appreciate that and I see that –

Fuleihan: I’ll add, I’ll add, if I may, that the Mayor identified for you really three significant challenges that we’re confronting. The labor contracts, unprecedented, and really its somewhat to Assemblyman Ortiz’ answer which, not exactly what the percentage is in the state, but the federal assistance and the risk that we have in not completely mitigating for now and for the future, the results of Sandy. And then the Governor has actually articulated a major one, which is the Federal waiver and the future of Medicaid and how we take care of our entire health care system. In addition, that role and that surplus that you’re talking about was actually accumulated in prior years in the operating surplus or deficit of this year or next year. So, basically, it was a surplus of prior years’ that’s been rolled over to cover what the current expenses, without taking into account any of those risks.

Martins: I appreciate that, I see that my seven minutes are up, have been up for a while, I will though reserve my opportunity to come back and ask a few more questions later. Thank you.

Silver: Assemblyman Heastie.

Assemblyman Carl Heastie: Thank you Mr. Mayor and I’m happy to see that you brought in a good friend with you and Dean, we miss him. Just a couple of things I want to touch on. The roll out of the universal pre-k. You and I, when you were Public Advocate, had many discussions on how the previous administration had dealt with daycare centers and the removing of contracts. The roll out of the universal pre k; Is some of those concerns that we discussed in how the contracts are given out and the concerns in the roll out of that, will some of that be looked at in terms of how we look forward to maybe fix some of those things that were wrong in the previous administration.

Mayor: Yes, I think the efforts were going to make on behalf of our four-year olds will substantially alter the previous administrations approach. As Dean laid out, we’re going to raise the standard for all four year olds and that cuts across the different types of programs they’ve been in now, which, I think addresses the contradiction of some of the previous policies that were holding back the level of service for four year olds and creating some, as we talked about with the childcare centers, some unmanageable dynamics. This, I think, will start to unravel that at the four year old level. Getting to the three year old level and below is a separate challenge that we have to address but this I think does substantially address the four year old level.

Heastie: And also the impact of the previous administration moving Kindergarten students into the schools I think also leaves some capacity to look at these daycare centers that could help out.

Mayor: Exactly right, there is substantial capacity, remembering that on the afterschool side we lost 30,000 seats, on the child care side we lost 10,000 seats. Obviously a lot of the approaches were restructured, that changed the physical dynamics. That’s why we’re very confident about space. When we started out this process, we knew, without even having to do the research, that after school space was existent in schools and in community based organizations and in Libraries. The question we had to objectively address was the space dynamics for Pre k. We looked at the current capacity for DOE and we looked on top of that the capacity in the community based organizations, what became clear was a lot of space had freed up in the different actions of the previous administration. Some arguably good, some arguably bad, but a lot of space freed up in facilities that were actually already set up for this age group. So, that’s why we’re confident that we’ll have the space to get up to that 54,000 level by September.

Heastie: And just the last thing I want to discuss. On the bond act, and it’s probably a question maybe I can give you next year when you come up and give testimony, because it has to pass this year. But, in the discussions with the Governor some of this came out of the fact that, you know, when you talk about inequity in the schools, I have taken tours of all of the schools in my Assembly district, some had more technology than others. I guess this is something I can ask your new schools chancellor tomorrow, but can we get an assessment of the disparity of technology among all the schools in the city. I mean, I know that may be a difficult thing, because I think once that money comes and you give a plan to how to spend that money on technology, some of that inequity I hope could be addressed when that comes through.

 

Mayor:  Yeah, we will absolutely, whatever’s been already prepared we’ll get to you. We would like to do more obviously in anticipation of what we hope will happen is the passage of the Bond Act. I think we can safely say that with the advances in technology a lot of our schools are well behind. I’d like to quote a young man who is one of my top advisors, Dante de Blasio, who talked about the fact that when he was in middle school, one of his social studies classes had a textbook called “The Soviet Union Today.” Dante was in middle school just a few years ago I’d like to note. So that’s a little bit of an indication on the textbook side of where we are. Clearly on the technology side we’re way behind in many schools and there is a gap, in terms of the quality, depending on the school. So we’ll get you some delineation of that, but I think the Governor’s initiative is right on target. We need to – one of the best ways to address inequality is to provide equal technology, and that’s what we would like to see pass and we look forward to implementing it.

Heastie:  Just, can it be done by, I know it’s difficult, not just by school district but by school because I noticed a big difference from one school to the next in the districts.

Mayor: As do I.

Heastie: Thank you again Mr. Mayor. It’s good to see you.

Silver: Thank you. Senator Diaz.

Senator Ruben Diaz: Thank you. Good morning Mr. Mayor.

Mayor: Good morning.

Diaz: First, I would like to congratulate Senator Martin. I think that we have to look more into the fifty nine thousand versus the fifty four thousand students and to be aware of that. Mr. Mayor, your idea of, your version of Pre-k, is a great one, however, the governor has a plan also for you for pre-k and the governor is including charter schools. There are some legislators, including myself, who are very strong pro charter school. And that would be one of the things that would make me make up my mind how to vote and how – which plan would support. Charter school to me is a Godsend for black and Hispanic children in our communities. And it’s competition. So charter schools, the Governor is including charter schools, I mean that can mean thinking, because your plan doesn’t include charter schools. So I want to make that clear. The other thing I would like to make clear that I will finish is that when you were campaigning, you had a great theme. You had a great theme: doing away with the tale of the two cities. And you were promoting one city. Even though I did not support you, I would say, “man, this guy has something that maybe there will be room for me somewhere. Maybe there would be a place, in New York. Finally, this guy is going to bring everyone together.” And the governor of the state of New York, Andrew Cuomo, just said that people that support the second amendment of the constitution of the nation, and are pro-gun, people upstate, hunting and all of that, that those that oppose gay marriage and those that oppose abortion are extreme conservatives. They have no place in the state of New York. So, going on, that would take Cardinal Timothy Dolan, involve the Jewish rabbis, Muslim imams, and evangelical ministers. So all of those, I would say millions of the residents of the New York state that have been labeled extreme conservatives. Now you are agreeing with the Governor and you are also labeling things as conservative. So now, I’m confused because even though I didn’t support you, I was hoping, hoping that you would take care of every single resident of the state of New York, of the city of New York, and every citizen in the city of New York, black, Hispanic, white, gay, lesbian, whatever, straight, conservative, moderate, left, we will be – we finally have someone that would bring all of us together. But you are agreeing with the governor:  we are all extreme conservatives, we have no place in the state. So all of us would have to go, move or, what would you do? What happened with your theme of bringing together the city and doing away with the tale of two cities? What happened?

Mayor:  Senator, let me address the first question then speak to the second. On the first question, right now in New York City, there are charter organizations that are using affiliated entities to participate in our pre-k efforts. We welcome that. For example the Harlem Children’s Zone: It’s not through the charter school itself, it’s through a separate entity. And that’s fine. And we want to reach the children that we’ve talked about effectively and quickly and we can work with them in that kind of model. On the second question that you raised, I want to emphasize – I don’t think there should be a misunderstanding of anyone’s comments here, certainly not mine. I believe all of us in government have to work with people across the philosophical spectrum as we talked about earlier. We’re now in the governance phase. Campaigns are over, we’re here to work together. And I think as per usual, people find there is substantial common ground, democrats, republicans, liberals, conservatives, there is always some common ground. I think on the pre-k issue for example, it’s been very encouraging to me how people across the spectrum have united to say we have to do something about our schools to help a lot of the kids who aren’t getting the education they need. And that’s been truly across the spectrum. A lot of the business leaders have stood up. A lot of labor leaders have stood up. A lot of people who don’t agree on some other things do agree on this. By definition, it’s my job to work with everyone. Every kind of constituent, the people who voted for me, or…

Diaz: I was hoping for that.

Mayor:  And the ones who didn’t vote for me—it’s my job to serve them, too. But, on the question of the values of the state and of our city, I said this in Washington, I interpret the Governor’s comments, and I associate with my Governor or with the Governor’s comments to mean that some of those more extreme views do not represent the majority of our state. We respect first amendment rights, we’re going to work with everyone, but that doesn’t represent the majority of our state and we want to be honest about that fact. So you and I will work together and every member here I look forward to working with, but I think it’s fair to say we do understand what the vast majority of people in our state believes and we have an obligation to heed that, respect that, while at the same time working together issue by issue. On many issues, we are going to find a lot of common ground.

Diaz: Thank you, I just feel that millions of people like me, Timothy Dolan, rabbis, Orthodox Jews, people that, you know, that we have, we should have a place in the city of New York. We should have a place in the state, and by making those extreme comments made me question who is the extremist now and, thank you. Maybe, I hope and I pray that you know, you just started your administration and maybe in the future we could work together and my ministers, my evangelical ministers, people like, that believe like me, that we could sit down at the table, that we could talk and stop calling us extremists.

Mayor:  All I can say Senator, as my wife likes to say, “Show me, don’t tell me.” And so by our actions, and by the willingness of this administration to work with everyone (we will work with everyone), I think you’ll see the kind of unity that you seek.

Diaz: And I hope that, I hope that by the way me saying that I am strong charter supporter doesn’t also qualify me as an extremist conservative: Being a strong supporter of charter schools. Thank you, Mr. Mayor.

Silver: Thank you. Assemblywoman Corwin.

 

Assemblywoman Jane Corwin: Thank you Mr. Chairman. Thank you Mr. Mayor. I’ll let those extremist comments go. Quite frankly, I could spend an hour on that, and I won’t because my comments really have to do with Pre-K and I want to thank you for your efforts in terms of trying to implement Universal Pre-K. I am concerned, however, about this dedicated funding stream that you’re searching for, particularly the part involving a personal income tax increase on high-income earners. I understand that you’ve made comments publicly that you believe that state funding is not reliable enough in order to implement this program. However, I am concerned because currently in New York City you have 35,000 tax payers paying forty percent of the taxes. So if you increase the amount of tax receipts on high-income earners, we’re actually depending more on fewer people in order to get our tax receipts. And that increase is coming in larger and larger percentage in terms of investment income which is much more volatile than regular ordinary income. So my concern is that if you have 35,000 tax payers paying the bulk of the taxes, what happens if some of them leave the state? I mean right now a study just came out that showed that New York State has the highest out-migration of any state in the nation. We’ve got people leaving in droves for various reasons. I’m not going to say it’s because of the tax raises. I’m not going to say it’s because of the taxes. It’s also because of weather and other issues. But as that number of people leaving is more impactful on our tax receipts, isn’t that going to be a negative for the future of the Universal Pre-K program?

Mayor:  No, I would respectfully say no. First of all, I think fixing our schools is the greatest positive in terms of the decisions people will make about future investment in the city, about whether to have a business here, build a business, grow a business, relocate here. I’ve talked to so many people in the business community who acknowledge that, in terms of both business planning and in the decisions by employees of where to locate, of which jobs to take, which companies to join, nothing is more important than the quality of the school system. And by the way, New York City businesses are looking ahead to the kind of workforce they are going to need down the line, and it’s hard for anyone to believe that our schools are producing the kind of workforce necessary for the 21^st century economy. The New York Times editorial I mentioned earlier is very sobering on that fact. If only one in four of our graduating seniors meets state standards for college readiness, you can imagine what that says about our future. So, I think I would argue to you that this is an investment that actually will improve our business climate, that will improve our real estate values, that will make our city more livable, and that even many wealthy people and folks who are leaders in the business community who have come out and said in support of this plan and that it is a worthy investment in our future. Second, I would argue that there is not empirical evidence that this kind of small taxation change effects location decisions of people who live in the city, or in any other location. When it’s a small, marginal tax increase in a locality and a temporary one, we don’t have evidence. That is something I’ve asked a lot of business leaders and a lot of economists and about. The vast majority of the people I’ve talked to and the vast majority of the research I’ve seen does not confirm. I agree with you entirely that New York State has a different issue, which is the out migration, but as you said that’s for many, many reasons. But this, you know we used the analogy in my inauguration speech that for someone making up to about a million dollars (the first part of that tier), it is the equivalent of about three dollars a day. And I used the famous quote, “It is the equivalent of a small soy latte.” That’s not to be flippant, that is to say it really is a very marginal change. But the impact, the cumulative impact, is huge.  And it aligns with a lot of goals that civic-minded people have that happen to be wealthy and that business leaders have. So I think that I would also make one other note that, when you look at the environment we’re in now—of course you’re right that none of us can predict the economy—the recent trends in terms of the stock market, the recent trends in terms of real estate values in our city have been very positive. Certainly those who are doing well have continued to expand their wealth. So to ask a little more in this moment, we think is fair. But we are very clear—and this is important to a lot of wealthy people—only for Pre-K and afterschool. And many who are doing well have said to me, if they were to agree to greater taxation, education would be the thing they care about the most. And there is broad agreement that early childhood education is crucial, afterschool is a proven approach. We borrow from the Afterschool Corporation model which has been so effective. And many have said that the fact that it’s a temporary tax, and again, we have precedent. I know some will argue this, but it’s up to all of us to look at the facts from previous mayoral requests of this legislature in the last twenty years that were honored to the tee: Safe Streets, Safe City, and the post nine-eleven increase that Mayor Bloomberg sought. Both of those lapsed exactly on schedule. This will lapse on schedule after five years but will make a foundational impact on education in the meantime.

Corwin: Well, thank you. I do put to you though, that in the past 20 years there have been different circumstances, for example, we have an out-migration now that we haven’t experienced, or we didn’t experience, back after 9/11, so I do think that it will have more of an impact here. But let me just move on, because my concern is again that a lot of it comes down to volatility of the investment income, of which more and more of our tax receipts would be based on. If we don’t have a strong stock market, if investors aren’t making a lot of money, and that negatively impacts taxes, would the City Council have the ability to alter the funding stream? I mean, the legislation that City Council will approve to put forth in the Home Rule message, is that going to dedicate the funding stream so that the City Council can’t direct it to any other program? Because what’s going to happen is if the tax receipts go down the City Council, as far as I can see, I know this works in other governments, is going to have the ability those tax receipts and put them into other program.

Fuleihan: It will be modeled exactly the way as Safe Streets, Safe Cities was. It was dedicated and basically a lock-box, which all of you are familiar with in State Law, and it is mirrored in City Law, but it cannot be changed by the City. These are dedicated, locked revenues, for one, for two specific purposes. The pre-K program that the mayor has outlined and the after school programs, and there’s nothing else for that five year period.

And just to your other point, quickly, the citation about the distribution of who’s is paying the tax, this will actually not change it. It’s that small a marginal change that it will not affect that table that you’re talking about.

Corwin: Okay, thank you very much, thank you Mr. Mayor.

Silver: Thank you. We’ve been joined by Assemblywoman Schimel. Senator.

Assemblyman Francisco Moya: Senator Malcolm Smith.

Senator Malcolm Smith: Thank you very much Mr. Chairman, thank you ranking member Senator Liz Kruger. Mr. Mayor, good morning.

Mayor: Good morning.

Smith: It’s good to see you. Let me first congratulate you on the paid sick family leave initiative. Obviously, the Pre-K initiative is right on target, and most importantly, because a lot of people in my district work there, I want to thank you for your the support of the workers at the airports. That’s a huge issue for us in the district that I represent.

Just two quick questions: Your predecessor, normally he would fight and push for AIM. We did not provide AIM, the Governor did not provide AIM, for quite some time. Dean knows this very well. Is that something you will pursue? I’d love to push for that. I don’t know if it’s in the Governor’s budget at this point. But clearly it was other resources that we were short-changed on as a city for quite some time.

And the second question: You rightfully discussed infrastructure when you went down to Washington and spoke to most of the mayors. And just curious, is the city going to be looking into establishing an infrastructure bank? If so, how can we be helpful? We don’t have one in the state. Senator [inaudible]  before he departed, had a focus on that, and I’m not sure what the status of that is at this point.

Fuleihan: So Senator, I know the mayor would not turn down any additional assistance, AIM, formerly revenue sharing. But, what the mayor has done for you is articulated what are the city’s priorities, and the priorities in the state budget.  And, that’s pre-K, with the pre-K initiative, quality of pre-K, universal pre-K for all children in New York City over a two-year period to give us the ability also with funds to start that up, a dedicated revenue stream for the five year period. CFE - making good on the commitment, or at least beginning the down-payment process on CFE. So those are the priorities the mayor’s articulated and those are the priorities we’re asking you for.

Mayor: On the second point: The broad notion infrastructure bank and similar notions of how to focus our resources on addressing crying infrastructure needs, I believe in all of those approaches, or of many allied approaches, I think they’re all in the right direction. We’ve already said, as part of our vision, that in terms of, for example, affordable housing, we will take a billion dollars of our pension fund money, with obviously the assent of our union partners, and apply it to affordable housing creation that’s on a scale that has been unprecedented in New York City. I think there’s a lot of interesting potential from city, state and authority pension funds and other entities to focus together on infrastructure needs, whether through an infrastructure bank model or some other common model. But, I appreciate you raising it, because I think what I tried to say in Washington is the sad reality is this should be high on the federal agenda, high on the Congressional agenda. I think, in all fairness, objectively, it is high on the President’s agenda. He said it in the last few State of the Union Addresses, I believe he’ll say it again tomorrow night that the future of our cities, the future of our economy rests on infrastructure investments that we are not making, that by the way our foreign competitors are making.

But what I tried to say in Washington is while we should join together, cities and states around the country to try and change the paradigm in Washington and get the federal government back in the infrastructure business. In the meantime, we have to be as creative as we can with our own resources. That’s why I’ve proposed, for example, using some of our pension fund dollars to maximize our affordable housing development.

Smith: Thank you very much. Congratulations on your selection as a Budget Director, of Dean Fuleihan, you got the right guy.

Mayor: We’ve got the right guy. Thank you.

Smith: Thank you. Mr. Chairman.

Moya: Assemblyman Lentol.

Assemblymember Joseph Lentol: Thank you very much Mayor de Blasio. First of all, thank you on your excellent choices for staff. Dean Fuleihan and Mr. Soliman, Sherif. Excellent choices. So, I’m just a little bit confused and maybe you can help me. We’re talking about from the way you’ve explained it, 54,000 kids that can enter pre-K in year one, and then about 19,000 in year two. Now, have you been able to analyze the Governor’s proposal, to make a determination about how many kids would enter New York City pre-K programs in year one and year two?

Mayor: I think the governor has offered a concept, a broad principle of being supportive of pre-K programs in the city and the state, which we appreciate deeply. What we’ve said is, because every one of us in this room has seen the ups and downs that go with the annual budget process and a program of this magnitude cannot be subjected to those variations and those vagaries that we need to lock in five year’s worth of funding and we think this is the most effective way to do it. I would also say and I know every single person on this panel has a local perspective, too. I was a legislator for eight years of my life and I know that with that comes an understanding of the place you come from. Every town, every city in this state understands it has the right to make some of the decisions for itself. I would say in this case it’s of paramount importance that the needs of New York City be respected, that we have to build out something extraordinarily important for our future. We have to have reliable funding to do it. We know we have the capacity to raise our own money to do it and we’re simply asking for the right to do that. That takes us immediately away from the everyday ebb and flow of the annual budget process.  So, the answer is we appreciate the broad proposal the Governor has put forward. We haven’t seen a very specific delineation because I think it’s been a broader statement of where he wants to go. But, that doesn’t account for the fact that we have to have a five-year plan that we can rely on.

Lentol: I should have more artfully asked my question, but let me just make a comment on what you said, because I completely agree with you and I’m glad the New York Times in its wisdom saw the need for an editorial today, and I think it was only about the after school program, I didn’t get to read it. I heard what you said. But I think that it also applies to pre-K, as well, because I believe, as I think you do, the quicker that we’re able to get kids into the educational system, and pay a few dollars on the front end, it’s less dollars we pay on the back end through criminal justice.

Mayor: Exactly right.

Lentol: That’s where I’m coming from, that’s what I wanted to determine, how much, how many kids could be entertained in pre-K by the Governor’s budget.

Mayor: One quick note. There have been studies done, including some very recent studies, that point out that early childhood and after school save the taxpayers a huge amount of money in the long run, because of all of the negative outcomes that are avoided    all of the positive outcomes that are created. You’re going to see graduation rates go up. You’re going to see kids who are safer, families who are safer, less crime. There’s a huge positive multiplier effects here.

Lentol: And finally, my last question. I, like you and my colleagues from the Brooklyn delegation are concerned about   distressed hospitals and I understand that there has been a meeting called at noon by the Governor to meet with you as well as other Brooklyn legislators to discuss that issue today. But my concern really is about, you spoke about the Medicaid waiver and I’m just fearful that if that doesn’t happen, what do we do next? Is there a collaborative plan between you and the Governor in development in order to rescue the distressed hospitals of Brooklyn, wherever they be?

Mayor: There’s a lot of work going on right now, in terms of Interfaith Hospital and Long Island College Hospital, to secure their futures. As you know, over the last year there were many times where both hospitals were declared dead. We believe that we can preserve local health care capacity in both those communities. We know it will take a lot of work. We’ll have to work with a variety of partners. We’ll have to come up with a realistic plan, and we’re committed to doing that, and we’re committed to work with the State to do that and I think very productive conversations are going on right now on those fronts. The Medicaid waiver has a huge positive impact on this equation. It is built explicitly for these kinds of transformations. So we’re going to fight very hard alongside the Governor to get it done. I spoke to Secretary Sebelius of HHS last week and pressed very clearly the point that there’s a sense of urgency here in this state and in this city to get this done and I’m hopeful from the response that she put out publicly, that this is something we’ll see progress on soon. But I think the Governor is absolutely right, that this would enhance our ability to get this done well.

Senator John DeFrancisco: Senator Savino.

Senator Diane Savino: Thank you Senator DeFrancisco.  Welcome Mayor de Blasio.

Mayor: Thank you.

Savino: And I think that this is the first time I get to officially address you in that way in a hearing and it indeed is a pleasure. And of course your able staff and everyone you brought with you. So, I will be brief. I want to talk a bit about the UPK program, as I’m sure you’re aware. We were all very happy to see that the Governor has made a commitment to statewide UPK, acknowledging that what has been one of the problems in UPK over the years since we established it is inconsistency in funding, inconsistency in program.  So he’s committed to that, but by our analysis in the IDC and I think in your analysis is what the Governor has proposed won’t begin to cover what New York City needs right now. So what we’re trying to figure out is what exactly do we think we need to get you to where you want to be in September.

Mayor: The program that I originally proposed in October 2012 - $340 million per year for pre-K, $190 million for after school, that is consistent with our current numbers. And as you heard from Dean about the build out process, those resources allow us to build out on our two year timeline that we think is crucial.

Because right now, and again, it is so clear, you know from your constituents in Staten Island and Brooklyn too many kids are not being served right now and I’m not just talking about the absence of full day pre-K or in many cases any pre-K, I’m talking about the school system writ large as failing too many kids, as not providing what kids need to learn and to succeed.

So we are adamant that we need to make this change now. Every year we delay is a year that we basically set further back the prospects of our city for the future, again in an ever more competitive environment.

So that combined total of $530 million per year is necessary. Our plan extrapolated over five years - about 2.6 billion. That would be, again, acquired through taxation of our own taxpayers and that’s the level of commitment and solidity and consistency we need to make this work.

Savino: I think it bears repeating, though, that what the Governor’s proposed for after school alone, the $144 million, doesn’t begin to cover what the city of New York needs. So, I think that it’s critically important that we get across to the other members of the legislature that this is not just trying to provide UPK and after school programs statewide, or providing the UPK and after school programs that the city needs, it’s about making sure you have the steady funding stream, that you don’t have to come back, hat in hand every year, to Albany. It’s – What I find interesting is that we seem to be forgetting that New York State is a home rule State, and in fact it is not uncommon for local elected bodies to come to the legislature, with a home rule request, to establish a funding stream just for their locality. That has been the history of the legislature- since it began and certainly in my nine years in the Senate;  many times I have voted on legislation that effected a particularly locality that had nothing to do with the localities that I come from.  In fact on last Tuesday we passed a long awaited bill for the county of Ulster to raise their sales tax – so they can maintain their county. 

On today’s Senate active list – we have 5 Local bills that allow localities or counties to either raise a tax, extend a tax, or create a new tax credit for a particular purpose just for their county.  Because we in the legislature are not supposed to substitute our judgment for the judgment of local governments. So I wholly support your proposal  because I believe like you do- that if it is going to be successful-and we want it to be successful, we need a steady funding stream independent of the winds of Albany.  So I just want to make that point clearly.

And in my final couple minutes here, Mayor de Blasio, as you know I represent one of the most hard hit areas by Superstorm Sandy- both Coney Island and Staten Island and Brighten Beach.  One of the stumbling blocks over the past year in the recovery efforts- has been this…  push me\pull me between the city and the state.

So what we’re hoping for in your administration, that there will be a more coordinated effort with the state with respect to the: build it back program,  the buy outs – so that we can  get some of these communities, either people back in their homes or homes purchased and new development for the future, as soon as we possibly can. 

Mayor:   I understand the urgency of that issue for sure. And I’ve talked to so many folks who are still suffering and need help and I think your absolutely right the coordination between city and state has to improve and I’m committed to it improving- and I think we’ll be able to do that.

The previous issue, I appreciate and agree with what you’re saying. I think localities understand their own needs, and this legislature has respected the needs of every type-consistently. My three predecessors as Mayor of New York City have come to this legislature requesting actions on revenue; each and everytime those actions were agreed to.

So I think the pattern is clear, it is an honorable pattern, of this legislature respecting the needs and rights of localities and I look forward to us continuing that this year.

Senator Diane J. Savino: One final point, because you have raised this more than once, the existence of 150 outstanding contracts. It's my understanding that the previous administration didn't just settle those contracts, but unlike other administrations, did they in fact zero out the labor reserves? Normally you would set aside a certain amount of money in anticipation of labor settlements. And so it's been suggested that there's no money in those labor reserves. Is that true or not?

Fuleihan: There's very small amounts of money called for in the financial plan. 1.25– nothing on the prior, the first, the '08, '09, 010 [sic]– those are zeros, they're small amounts of money, very small.

Savino: And while there are people, I'm sure, that would suggest that you give nothing, in retroactivity, and I'll leave that to you to negotiate– that's where that belongs, it shouldn't be done in public. It would fly in the face of history that there be nothing, for some sort of settlement. So, again, it puts a continuous strain on the city budget, and I think it just bolsters your argument– if you're going to invest in pre-K, as we know we want to, and in fact the New York Times– I think you people cited the New York Times today– they did a feature piece on UPK in New Jersey. And New Jersey is even more expansive than New York. They start at three instead of four year-olds. And we've seen the benefits that they're reaping in New Jersey. So you need– again, to make that argument– you need a steady funding stream because you have other obligations that aren't going to be able to come out of the city budget.

Mayor: Thank you, Senator. One quick response that our initiative on pre-K and after school, again, it's only for those two endeavors. It's for new capacity. Some have tried to– some observers have tried to somehow combine this initiative with the challenges we face on the ongoing labor dynamics. These are two ships passing in the night. And people who want to have an honest discourse have to acknowledge that. The challenge we have around the labor contracts is vast. And it is– as you just rightly asked– it is not accounted for in anything that was left for us in the budgeting process. It's vast and incredibly problematic. No administration in the history of the city has ever dealt with this much of a question mark in terms of labor contracts. That has to be handled. And we're resolute about handling it.  What we need to do to invest in education, to build new capacity, to bring us into the 21st century–is entirely separate, in a lockbox, just for new pre-K and after school capacity. It has no connection, by structural architecture– has no connection whatsoever to the huge challenge of dealing with the open labor contracts.

Savino: Thank You.

Silver: Thank you. We’ve been joined by Assemblywoman Rosa and Assemblyman Levin. Next is Mr. Cusick, Assemblyman Cusick.

Assemblyman Michael Cusick: Thank you Mr. Chairman, Welcome Mr. Mayor  also want to welcome Dean and Sherif back to Albany- must be a little different sitting on that side instead of up here with us.

Mayor: I just want to point out that Sherif learned all his valuable life lessons living on Staten Island.

Cusick: Yes, and we’re going to hold him to that too, Mr. Mayor want to thank you again for coming and moving  forward on the Pre-K issue it’s very important to all us sitting up here, as some of my colleagues have mentioned we’re a little gun shy when it comes to roll out of educational things in the last couple of months and years, so I think a lot the questions are based on the implementation of these plans you put forward. Let me just clarify- there is a five year sunset on this proposal, correct?

Mayor: Absolutely.

Cusick: And- how did we come up with the five years?

Mayor:  Let me first make very clear, that we are deadly serious about the sunset.  I announced it originally when I first proposed idea in October 2012, reiterated in October 2013, reiterated in every occasion since, including today.  We believe  in this model, and again- this legislature has supported this kind of model to great effect. Safe Street-Safe cities, being a particularly prominent example of a taxation model and sunset on schedule. The notion of five years was the time we believe was necessary because of the time it would talk to the build the program to full capacity, and run it at such a level that we know it would be stable for the long term and qualitatively. That we would’ve made everything work, work consistently, and reach every child, with full day. Thereafter as I said in October 2012- we have to find the resources to continue it within our own budget. We would have asked those who are doing well to get us to the first stage and get us through the first stage and then we would find the resources through other means.  I proposed at the time,  one the most promising examples is the savings that we would hope to achieve in employee healthcare costs. In the platform  I laid out last year, we believe that there are billions of dollars in savings potential from better ways in achieving employee healthcare for the workers in New York City, that are also cheaper. One of the examples being Hotel Trades Council Clinic model.  The will take years to put in place, that is why we gave ourselves a five year model, both to build out but also to create cost savings on a sustain basis to then sustain the effort thereafter.

Cusick:  Part of the plan, I don’t know if this is in place yet, if it’s too early in the process or not, is there a break-down of where these Pre-K’s will be located? Throughout the city- five boroughs, is it going to be an even distribution of where these centers or these preschools will be?   And how, if not, if it’s not already in place – how would you go about doing that?

Mayor: We’re basing the model, and I’ll start, Dean may want to add, his work with the working group. We’re basing the model on need, across every borough, every neighborhood, simply the desire of parents, to get their kids this kind of education. And that number when we look at the models over resent years it’s what gets us to that 73,000 model. The number of kids that with every piece of research we have will take advantage of full day pre-k in our city.  That is literally every neighborhood, every school zone, every borough, this is not and I want to emphasize the is not, based on any kinds of means test, this is a truly universal program. As I’ve talked about over the past year enthusiasm levels are equal throughout every kind of neighborhood, for reasons that I think are increasingly clear. Every parent wants the best start for their child and every parent understands that educational standards are rising all the time. And the only way to meet them is at a stronger grounding at the early childhood level. Second parental lives and schedules are getting harder and busier all the time- this is something that is happening in our society we need to start changing our policies to recognize it.  We’re in a city with a huge percentage of single parent households with strains on those wage earners are huge. In two person households the hours these people are working the strains on their lives are increasingly challenging. Having some responsibility on parents and families- Knowing, and you can know about your constituents, that everyone who had a child approaching 4 years old, knew – they were guaranteed a seat and it was full day- that’s a game changer. The same with the after school component.  If you know that you’re still at work, your child is someplace safe, they’re getting tutoring, homework help, enrichment- that’s a game changer. So we found support in every part of the city because it’s a universal program.

I’m going to switch gears a little bit, I see my times running… I also want to thank you for your work on Sandy – before you were mayor. You were one of the first city-wide electeds to come out to Staten Island, the most affected areas in Cedar Grove and South Beach and Midland Beach. The question I have- you mentioned some funding with FEMA and my collogue Diane had mentioned there’s a push and pull with the state with our funding for our folks on Staten Island. Is there an added amount  money needed that the city sees on top of the money for the rebuilding process, not only for homes but for parks, some of the city projects that existed before the storm and may exist after the storm?    

 

Mayor: I’ll start, and know Dean wants to jump in on this. First of all I remember walking with you in Staten Island the Friday after the storm, and it was one of the more sobering experiences I’ve had in a long time. And people lost literally everything. And that leads into the answer: yes, there are still unmet needs and we know we’re going to have a challenge, and we’ve already started to address this challenge with the federal government, in terms of making sure that the aid actually reaches the levels necessary, but Dean can pick it up from there.

Fuleihan: So there are two phases to this: the FEMA money, the additional HUD money that comes,  the Mayor has directed all of us to take a complete review and a very quick review of the priorities of the next request to HUD to make sure those priorities reflect the needs of the City. Even with that, there will be significant unmet needs and we’re going to have to face that challenge with the State and with the federal government. And the Mayor has also directed us to be meeting with HUD officials, we’ll be doing that actually this week. Just trying to see if we can address some of those issues.

Cusick: And I look forward to working with you on that. One last thing, a side question, an ask – a parochial ask – on Staten Island, as you know Mr. Mayor, we’re the only borough that doesn’t have a City hospital that’s a full-service hospital. And in past years, we’ve had legislation to provide funding for the existing hospitals out on Staten Island, to help our constituents. I’d like to work with the City to find out what the answer is on Staten Island. Without – we’re not asking the ultimate of building a new hospital, we just need to serve the people out in Staten Island.

Mayor: I just want to note to all of the members that I anticipate – Assemblymember Cusick’s question and named as the head of the Health and Hospitals Corporation a Staten Island resident to ensure that there will be – Ron Raju is a fantastic leader and is also very sensitive to the fact that we have to address the inequalities in the funding in some creative and appropriate manner. So we’ll work with you on that, for sure.

Cusick: Thank you.

Senator Brad Hoylman: Thank you Mr. Chair. Welcome, Mr. Mayor, and your colleagues here from City Hall. I wanted to congratulate you on your bold vision for universal pre-K. It’s had strong and broad support from my colleagues in the Democratic conference. And I wanted to point out, Mr. Mayor, to my colleagues, your strong support from the citizens of New York City too, to remind my colleagues: you had the most decisive victory, 73.2 percent of the vote of any newly elected Mayor since the consolidation of New York City. And that was way back in 1898. And exit polls from the 2013 election reveal your message about fighting income inequality with a small tax on the wealthiest New Yorkers wins across all genders, ages, race, ethnicity, educational, religious, and income demographics. That includes those making over $100,000 a year, it includes moderates, and even 41 percent of self-described conservatives. Now I think, Mr. Mayor, the Albany elected officials of New York City shouldn’t be telling the good people of say – Lockport or Appleton – how to raise taxes and spend City revenue on their initiatives. As much as the elected official s of Lockport or Appleton should be telling the good people of New York City to do that same. So particularly though, I’d like to ask you about a proposal that has passed this body on more than one occasion, which has a similar upfront investment scheme and multiplier effect as universal pre-K. and that’s the proposal to institute a 30 percent income –rent contribution cap for low-income New Yorkers in the State’s HIV/AID rental assistance program. Every other State and Federal program, low-income housing program – including NYCHA, Section 8, NYNY3 – limits participants rent income contribution to 30 percent. Now because of this loophole Mr. Mayor, in State law – and I think you know this – low-income New Yorkers with HIV/AIDS have to spend down their disability income, leaving about $12 a day for them to live off of and pay for every other expense. And that would include food, clothing, travel, utilities, medications. This predicament places many of these New Yorkers having to decide between paying their rent or homelessness, which creates a vicious cycle of eviction, and more costly emergency shelter. Now the cost of the rent cap is about $20 million dollars annually, which would be divided between the City and State. About 70 percent for the City, 30 percent for the State. But studies have shown that a rent cap would actually be cost-neutral, and in the medium and long term, save money because it’s cheaper, as you know well, to keep folks in their homes than in emergency shelters. Plus it saves lives, clearly, because people are more adherent to their HIV and other medications in a stable housing environment. Now there’s an opportunity to include the rent cap proposal in the budget, in the 21day amendments, perhaps utilizing some of the proceeds from the J.P. Morgan Chase settlement for this purpose. Your predecessor, I know you know, opposed the 30 percent rent cap and urged Governor Patterson to veto it, which he did, sadly. I wanted to ask you if you have a different position.

Mayor: I do. Let me preface by saying I appreciate your impressive research skills and I liked your opening statement very much. And I agree that people in localities all over the State, regardless of their party affiliation or what part of the State they’re in, share that desire for local self-determination and look to the legislature to respect local needs. I do support the 30 percent cap aggressively, unequivocally -

Fuleihan: Equivocally.

Mayor: The fact is that folks with HIV and AIDS are struggling in many ways and for those who live in New York City, they’re struggling in one of the highest cost jurisdictions in the country. And we have an opportunity to lighten their burden in a meaningful way. Their struggles are too many as it is, we should do all we can to lighten their burden. So I support the rent cap strongly, as you just indicated, the City has to do a lot. I am sitting here with my Budget Director, who shares my deep feeling that this is something we must do. And we look forward to the State joining with us and doing its share as well so that we can help people in need.

Silver: Thank you. Assemblywoman Nolan?

Assemblywoman Catherine Nolan: Thank you, Mr. Chairman and thank you, Mr. Mayor, you’ve been very generous with your time and we’re thrilled you’re here. Love the team, very happy to see Dean and all the people here and I got the chance to read the report coming up the Throughway this morning – not driving, someone else – and like it. Like it a lot. And certainly it has my support, your pre-K proposal, and I’m sure the support of many members of the Assembly, especially those of us who serve on education. But I do have a question about – the Mayor has a lot of responsibilities in education, not just the pre-K. And so, especially I see my City Councilmember Jimmy van Bramer, it’s a big issue for us at home in our district: trailers. And Dean knows that question well. The Assembly has pushed very hard over the years, there were about 400 trailers ten years ago. With a lot of pressure on the Administration, we’re down to about – I understand – 310, 320. But that still only eliminated 80 of them, even with all the money that has gone to education and we still have about 8,000 elementary students – elementary and middle school students – having their classes, their school experiences in a trailer. And when we add in the high school students, the number probably kicks up to about ten. So especially as you’re going to be looking for space, I think I’d like to see some comments today about what you are going to do. And I know that as a public school parent, as am I, you care. But what are you going to do about eliminating this really disgraceful – it’s gone on for way too long. So, trailers. Look at Dean’s face. Dean’s heard me ask this question every year for many, many years. But it has to be asked of you as well.

Mayor: As a parent, as a parent, I want us to do better - period. And one of the things I’ve said over the last year is we’re going to commit in the capital budget, to address a number of our education challenges, and all the pieces are interconnected. For example, one of the things I’ve talk about is over time creating pre-K centers where we need capacity in certain communities. That’s going to relieve some pressure on existing school buildings at the elementary school level. That might be one of the ways we get some schools to no longer need trailers. But I also think there are many areas of the City that are experiencing overcrowding in schools, that have had huge population growth, and a much higher percentage of kids – or families – who want to take advantage of public education than in the past. So we have a lot of space issues to address, and it’s something that I prioritize in our capital budget. So I’m committed to making that situation better over time.

Nolan: All the pieces in the report are good, but 24 and 30, the districts that I represent and Assemblywoman Markey and some other members – Assemblymember Aubry, who are here – we don’t have the pre-K seats that other parts of the city have because we’re so overcrowded, and Jimmy could tell you as well. So we have our own little caucus right here I think, but we need the City to focus on that. And that’s the one thing in the report, you know, I know many of the people involved in as well – that would have liked to have seen it fleshed out a little bit more. Where – when you put the seats, can you address some of the overcrowding and get rid of the trailers? It has to happen.

Mayor: Let me start, and then Dean obviously is tremendously experienced on this issue, because of your good guidance. Just a simple point: the report we put forward today is explicitly about the pre-K element. We’re going to be fleshing it out further in the coming weeks, as we will in the next couple of weeks, with the after school component. The trailer issue obviously transcends, as you said, elementary, middle school, even in some cases, high school. That to me, connects to the bigger challenge we face. One area where I agree with the Bloomberg Administration wholeheartedly is that we are on our way to nine million people, whether it’s in 2030 or whether it’s a little later than that, we’re on our way – rapidly – to nine million people. A lot more of them by percentage taking advantage of public education for their kids than was true in the past, because of economic changes in our society. We need to have a consistent commitment to capital investments in education. And so I hope that the same larger investments are going to start to get us ahead of the demand for public school space. In general, it will also help us get out of the trailers.

Nolan: I really look forward to working with you and your team on these issues, thank you very much. Thank you Mr. Chairman.

Silver: Thank you, Senator.

Senator Bill Perkins: Thank you. Good morning. And welcome to Albany. I have a few concerns I want to bring up, but first I want to express my support for your proposal for pre-K. And I hope that you move full speed ahead with it, I think there’s a lot of support for that and I have a little concern, however, about any proposal that might have a charter school pre-K component to it. And I would hope that we could avoid that with respect to yours, but in any case, I want you to know that I very much support it. I don’t think our children should have to crawl through the legislative budgetary process in order for them to get pre-K, and so I think yours avoids that and has some great value from that point of view. And I also however, want to commend you on your eloquence in representing the crisis of inequality. However, related to that, there’s another crisis of injustice. And in that regard I want to bring you greetings from the Central Park Five: Antron McCray, Kharey Rise, Raymond Santana, Kevin Richardson, and Yusef Salaam, who as you know, are waiting for some justice with respect to their case and would like to know, at this point, where is your office at in that regard?

Mayor: Well as you know, Senator, I am committed to a settlement in that case. I think a grave injustice was done. I think we have to come up with an appropriate settlement. The case, as you know, at the request – or with the agreement, I should say – of the Corporation Counsel was adjourned recently to allow for that conversation to progress. So we have already instructed the Corporation Counsel’s office and our new Corporation Counsel is vigorously taking on this responsibility to go about the process of beginning the settlement discussion. So that – as soon as we have a result – obviously we’re going to make it public. But we are clear about the fact that we will settle this case.

Perkins: Thank you, I’m glad to hear that and needless to say, there’s some urgency. This has been out there for too long and procrastination or delay aggravates the suffering that the families and the notion of justice that we want the community to have about this administration.

Mayor: Senators, just one more point. There’s been some commentary lately in one of our newspapers questioning the innocence of the Central Park Five. I find that objectionable. What happened here was a grave injustice. This city has to respond and we are resolute about that, as quickly as humanly possible.

Perkins: One other question, the Governor proposes to create a commission on youth, public safety, and justice to review how best to increase the age of juvenile jurisdiction. What would you like to see come out of this commission?

Mayor: You know, I commend the Governor and his administration, I commend this legislature for the progress we’ve made in recent years on juvenile justice. This is something the City of New York under my predecessor embraced, and I think he was right to embrace it, and I will continue that embrace. So we’re going to continue the efforts to serve our children nearer to their homes and work to give them a better outcome. But I agree with the Governor on the need to change – first study – but ultimately change the age for criminal charges from 16 to 18, which again, will put us in conformance with 48 of the other 50 states. It’s time for that change.

Perkins: Thank you.

Silver: Assemblyman Weprin.

Assemblyman David Weprin: Thank you, Mr. Chairman. Mr. Mayor, welcome, welcome back Dean and Sherif, nice to see you here. There’s been a lot of talk about taxing millionaires, or half-millionaires, but there is – what I believe – an injustice, where there’s one single indefinite property tax exemption on a multi-billion dollar corporation in the city controlled by billionaires, and that revenue today is about $17 million a year in property taxes that the City is losing. And this has gone on since 1982 when even Mayor Koch at the same said that he expected it to last only for ten years until 1992. And of course I’m referring to the Madison Square Garden tax exemption, which I have a bill in the Assembly. Senator Sanders has it in the Senate, we have 49 sponsors in the Assembly and 14 in the Senate. Could you state your position on revoking that tax exemption?

Mayor: I just want to say there was a certain wisdom in our class of the New York City Council that you and Senator Sanders and I were all a part of. And I agree with your concept 100 percent. We can’t ask the tax payers to look the other way while a very well-endowed corporation, a very profitable corporation receives a tax cut for a piece of land that’s amongst the most valuable on Earth. And so, I want to work with you to achieve – obviously it requires legislative action – but we want to support your efforts.

Weprin: Thank you, Mr. Mayor.

Silver: Thank you.

Mayor: Francisco, I’m trying to be brief.

Assemblyman Francisco Moya: No, you’re very succinct.

Mayor: I took your admonishment to heart.

Moya: You’re very succinct. Save some energy for when I ask you some questions.

LAUGHTER

Moya: Senator Sanders.

Senator James Sanders: Good to see you again, Mr. Mayor. Let me start with the smaller things, and speak of the – I, too, have a hospital in my district which is suffering and has [inaudible] from Sandy. And we need to make it whole. My hospital, the Saint John’s Hospital, took in people from the different shelters, from the nursing homes, and just took them in because it was high ground, yet we were not able to recoup the money for that. That put that hospital at a $5 million dollar hole. Help on that would be useful. Let me bring you to two other things and then I will stop. I want to remind everyone that my area according to the American Red Cross– the Rockaways– was the hardest hit area in New York City, and I would suggest that it would be useful to have a czar appointed just for that area to deal with Sandy relief.

Two more points, and then I'm going to stop, sir. We keep hearing about a home rule, but we have not of course received one from New York City. Is there– do you believe that you're going to be able to get a home rule passed in New York City, at the City Council, and if so, how large will that be? And does it strike you– well, let me do it different. It strikes me strange that we're having such a pushback on a locality speaking about getting the ability to raise its taxes, yet you've heard that last Tuesday we gave certain localities the ability, the city, to raise their taxes– to meet appropriate needs, of course, and today we're going to vote on five of these. Is there a problem with New York City, sir?

Mayor: Look, again, I respect the rights of all localities, I think the people of Ulster county needed revenue, requested of Albany, appropriately, the right simply to tax their own people. Other localities have done that for decades. New York City has done that successfully, working with this legislature, through the administrations of my three predecessors. We simply want consistency. We want localities' rights to be respected, we want the precedent set previously in terms of New York City to be respected. In terms of home rule message, Speaker Mark-Viverito has spoken out very clearly about her desire to support this plan and move a home rule message quickly. I've spoken to a number of members of the City Council; there is very very strong support in the City Council. I think you'll be seeing that in the next few weeks. In terms of the Rockaways– I'm tremendously committed to the Rockaways. I have to take the first responsibility, as leader of this city, to focus on the Rockaways because it's an area of particular need, and I have to make sure every one of my deputy mayors and commissioners understands my level of commitment. You and I, in the aftermath of Sandy, were there together on multiple occasions, and you know of my personal connection to what happened there, and my desire to follow through on that commitment.

In terms of St. Johns, although the hospital crisis, the threats to our hospitals and our local health care are most profound in Brooklyn, I've said repeatedly they exist in every part of our city. In fact, the most dramatic of all the hospital closures was St. Vincent's in Manhattan, which I think was thoroughly avoidable, and I've said it many times publicly. So we're not going to let St. John's survival be at stake. I was out there with you, in fact, it was I think the second time that Dante de Blasio spoke publicly at an event, at that rally, and I'm very committed to making sure that St. John's –the only hospital remaining in the Rockaways– is protected.

Sanders: Well, I must admit, sir, that when I was voting I thought that I was voting for Dante de Blasio, but–

Mayor: I hope I'll be sufficient.

Sanders: I'm sure you will be more than sufficient. Let me praise you again for coming out to the Rockaways in our time of need, and certainly did not do any PR on it, you really bypassed the media and we managed to put up lights out there. And to most people in here, they don't understand that we had neither lights,heat, or any of those things, and how desperate we were in the days, and you somehow even before you became Mayor, managed to liberate– as we would call it in the marine corps– liberate lights we were very grateful for. My friend here was very grateful for it. Thank you very much, sir.

Mayor: Thank you.

Silver: Senator Montgomery.

Moya:  Assemblyman Wright– and we're now reaching a point where we're overrunning our time– he came a long way, the Mayor has other places to be. If we could keep this tight I would appreciate it, we've got about three more people to go.

Assemblyman Keith Wright: Just when I get to the microphone, now they have the admonishment. Mr. Mayor, thank you so much. I want to thank you for testifying here today, and thank you for your commitment to the children of prekindergarten age, and our children, our after-school programs. With all of the push and pull of how are we going to pay for it– I think clearly, clearly, the winners are the children because we're having exactly this conversation, whereas maybe a year ago, two years ago, we would not have had been having this conversation. So thank you so much. And I wasn't going to bring this up, and I wasn't going to bring this up. But with all of the– in your testimony today, you're talking about taxing the half-millionaires, you did bring up affordable housing. As chair of the housing committee here in Albany– and I realize that you have a long and illustrious past in the housing field– and I know that the both of us have a rather ambitious agenda in terms of providing housing for all of our citizens and constituents, but I think that there's a real dearth of low-income housing in our cities. And what I'm trying to do is to maybe change the definition of what "affordable" truly is. I realize that you want to– I think the figure is around 200,000 new– to save or create about 200,000 apartments–

Mayor: Correct.

Wright: – and I realize that the definition of Area Median Income is a federal definition. I realize that. But what I'm trying to do, and hopefully, I would like to work with you and your office, is to change the definition of what "affordable" truly means, because certainly there are a lot of citizens in our city that really don't fit the definition of what affordable means.

Mayor: Well, first of all, Assemblymember, you and I have teamed up before on housing issues very productively and I very much look forward to working with you. And we need your help and partnership. 200,000 units over 10 years, by any definition, is ambitious. I've talked to a lot of experts, of all different world views and different elements– different roles, I should say–  in the housing field. They all agree it's ambitious but doable with the right mayoral leadership, and with partnership with Albany and others. We are devoted to ensuring that that housing reaches a range of income levels. One thing I've talked about is trying to adopt the tiered structure that some recent developments have utilized– Seward Park, Atlantic Yards, and some others, that have focused on devoting a substantial percentage of the housing to those at the very lowest income levels, then proportionate shares for each next income level thereafter. That's the model we need. We understand in this city, where 46% of our people are at or near the poverty level, that we have to reach lower income folks if we're going to be viable with our affordable housing plan. So that's the direction we're going to go in. It is a different direction from what my predecessor did, and we intend to turn the program towards a broader income range.

Wright: How do we plan to pay for it?

 

Mayor: We've said from the beginning that we're going to borrow the model that my predecessor utilized, that I think was productive, but retool it, again, to reach a broader range of incomes, and to be more balanced across the boroughs. The additional elements that will help us to pay for it are mandatory inclusionary zoning; the focus on our pension fund investments– we want to start with at least a billion dollars, out of our pension funds, which hasn't happened before, and again we hope for and believe that we'll get the support of the unions involved– and with your help, we would like to change the current tax laws related to vacant land that in effect reward land being left fallow, that could be used to develop both market-rate and affordable-rate housing, and we think we need that new approach so that we can liberate a lot of land and get it into play, in what is a tremendously positive housing market right now. Our real estate values are at all-time highs, and this is a perfect moment to get more land out there.

There are a number of other things we'd like to do, like legalizing some of the currently illegal basement units, and other units. There's a number of pieces to the plan. But those first three items, I think, will particularly benefit us in terms of the economics of the plan.

Wright: Would you be interested in helping me change the definition of what "affordable" truly means?

Mayor: In principle, yes. Obviously we want to work through the details, but yes–

Wright: That's all I ask.

Mayor: Absolutely.

Wright: Thank you. Thank you Mr. Mayor.

Fuleihan: Thank you Senator.

Moya: Senator Boyle.

Senator Phil Boyle: Thank you Mr. Chairman, and thank you Mr. Mayor, thank you for your testimony. Just very briefly, you have the daunting task of negotiating contracts for 300,000 plus city employees. What, realistically, do you think is the time frame for getting all or most of that done?

Mayor: Well, you've gotten to the heart of the matter. Look, our goal is to make as big an impact we can in 2014. If ever there is something that's complicated, multifaceted, with lots of moving parts, it's this issue. And obviously the contracts, you know, each contract has an impact on other contracts. So, our goal is to get it done as quickly as possible in 2014. It is based on negotiation, and there are no guarantees in the negotiation process. I think, you know, if we continue to let this situation fester, it's not in the people's interest. But you know, we're going to be having to do a major reset in the relationship between municipal labor and the city government, and work through some very complicated economics. And we've said throughout– we have to find cost-savings. My plans are progressive. But my world view is a fundamentally fiscally responsible world view. Everything we hope to do in government begins with balancing our budget. So we have to find cost-savings in the mix and that's going to take some real work.

Boyle: Thank you.

Moya: Assemblyman Benedetto to close on the assembly side.

Assemblyman Michael Benedetto: Thank you Mr. Chairman. Mr. Mayor, welcome to Albany, and thank you for your time you're giving us this morning. Pre-K– big supporter, no question–

Mayor: Former teacher.

Benedetto: Yes indeed. Couple of questions, just about my district, to be a little parochial. Number one, with the FEMA funds that's being given out, and future funds for preventative measures. I know there are parts of the city that have been devastated, and we rightly know that that's got to be addressed, and addressed as quickly as possible. However, as you well know, I represent the shore community, a shore community that did suffer– albeit a lot less damage– they did suffer. I want to basically say, please, I hope you reach out, include districts like mine, who are extremely worried about the future, and what the future is going to look like for their homes and their property, and in dealing out that money, that we be included also.

Mayor: Just like I mentioned when Assemblyman Ortiz talked about Red Hook and I talked about my experience in Red Hook Houses after the storm, or Senator Golden mentioned Gerritsen Beach, and I talked about what I experienced in Gerritsen Beach after the storm– obviously you and I participated in a community cleanup after the storm, and I saw what happened in your district. Very committed to the broad resiliency plan that was left by my predecessor. Again, there's areas where I agreed with him strongly, areas where I disagreed– on the resiliency model, I think he put forward a very sound resiliency model, and we will pursue it. I think the Governor's new proposal around resiliency are absolutely correct. Now it's about implementing, and reaching every community. So yes, we are going to reach out to all affected communities, and work with community leaders to figure out how best to implement the plans. We do need continued support from Washington. This is always a difficult reality. But as Dean said, we've made those needs clear already at the highest level of federal government, and we're going to continue to pursue that.

Benedetto: Thank you. Second thing, very quickly– we were talking about the medicaid waiver, and how that's important to the state and to the city. Let me talk about another waiver. One of the areas that I represent, Co-op City, has been under a mandate by the City Department of Health for the last 5-6 years, to test for airborne asbestos. And they've done 70,000 tests, so far without one ounce of airborne asbestos out there. It is costing them $4 and 1/2 million dollars, okay, and we're looking for a waiver too, I'll throw that out there for your consideration– and please– we would be immensely grateful.

Mayor: You've already had a big impact on my thinking, as have some of your colleagues, and as you know, I've raised concerns about the City's approach. We'll certainly direct our new Health Commissioner to review the policy and look for ways to provide some relief to the residents of Co-op City. I'm very concerned that it may be an undue mandate, and a costly one, so we're going to reevaluate that quickly.

Senator Ruth Hassell-Thompson: Thank you, Mr. Chairman.  Good morning, Mayor de Blasio.  This question is actually a question that was proposed by Senator Montgomery, but she had another meeting to attend, her question is, what do you believe the impact on daycare slots will be with your pre-k proposal, as one piece, the second part of that is, there’s great concern that we protect the wrap around services that would normally go to children who are in child care centers until 5 and 6 o’clock.  How will that impact the pre-k proposal?  And the last part, which is my addition, as somebody who has worked with models that have been very effective of crossing over day care and pre-k programs, those of us who’ve been in the business understand there’s a number of services built into pre-k that don’t exist in day care.  So we believe that the same level of care would be provided should we do those collaborations.  So your response is those three parts.

Mayor: I’ll start and I bet Dean wants to weigh in on this…the chair has reminded me he does not want to weigh in, Dean is a blank slate this point.  For eight years I was a chairman in the city council of the committee that had oversight on child care issues, so I worked very closely with child care providers, and I have a strong sense of what they do that’s so important, and also the effect of wrap around services, we are trying to make sure in this transformation that we reach more children more effectively because this to us is about raising the standards to align to the current reality of our Common Core Curriculum and the challenges of the modern educational dynamic and the modern economy, so I think the bottom line is we want to reach four year olds with that kind of support.  We also know there’s a lot of younger kids who need help as well and we continue to be committed and one of the things I’d like to do is see how we can, over time, beef up some of our childcare efforts to reach younger kids as well.  So the bottom line answer is, we’re going to work with the providers to create a lot of continuity here, we don’t want to lose important services in the transaction and we think this will be both a higher level of training in education and an opportunity to preserve a lot of those wrap around services. 

Senator John DeFrancisco: One question I had and it follows up on what Senator Diaz had asked about charter schools being inclusive, how could a program be universal without including children whether they go to public schools or charter schools? 

Mayor de Blasio: Senator, right now state law doesn’t allow the inclusion of charters at the pre-k level, but as I said there’s a way we can work with charter organizations and an example that exists is the Harlem Children’s Zone that has an affiliated entity that runs its pre-k efforts.  We’re already, as the City of New York, working with that organization and willing to work with them more.

DeFrancisco: Presumably if the governor is proposing charter schools at the pre-k level there is a good likelihood that the law could change, if it does change and authorizes it, would you expand your program to include charter schools? 

Mayor: We’re very open to finding ways to work further with charter schools at the pre-k level. 

DeFrancisco: But you wouldn’t adopt it, embrace it with all the other children? 

Mayor: Absolute and total respect, I would say until we have a law change and until we see what the law change entails, I don’t want to speculate, I’m saying I know right now with the affiliate organizations, we can, and so there’s a productive way to do it right now.  Anything else would be speculation, but we’re certainly open.

DeFrancisco: Alright, with respect to the charter schools, people are on waiting lists to go to charter schools, I mean parents are crying when they don’t get their number, they obviously have concern about their children, so much concern that they want to try a different school.  So I just urge you that if there is an opening by way of the governor’s program, that you consider those parents and those children like any other children who happen to have made a choice, that’s a legal choice in the state of New York.  Fair enough?

Mayor: Absolutely.

DeFrancisco: Ok, number two, you had mentioned that contracts and open contracts and this program for pre-school are like ships passing in the night, well, it’s one city.  You don’t have the money on one end, you’ve got to find the money for something else, and you indicated also that some of the costs of pre-k can be realized by savings in some of the health care and some of the things that the city is not doing properly with their existing employees, that you can find saves in that.  I assume that’s all interrelated, and the reason – well, go ahead –

Mayor: The reference I made to employee health care costs, and again this is a powerful area of endeavor because it could be billions in savings, that that is about solving our fundamental fiscal challenges as a city.  If there was no such thing as pre-k expansion or after school expansion, that would be equally true, the reason I say two ships passing in the night is because we are addressing our fiscal challenges based on the reality of today before we have the opportunity for the kind of pre-k and after school we need, we still have that fundamental fiscal challenge to address.  We will have it going forward, we still have to address fundamental things like employee health care costs, we have to address, by definition, the open labor contracts.  What we’re doing conversely, with pre-k and after school, is adding a strategic component to the equation that’s absolutely and fundamentally necessary.  We believe this is going to straighten our schools overall and be good for the future of the city.  But those other challenges existed before any discussion of pre-k and after school and they have to be addressed separate from whatever we do.  The revenue for pre-k and after school lock boxed and specific and limited in its time, those other problems are much more eternal and have to be addressed through our budget approach. 

Mayor: Separate from whatever we do, the revenue from Pre-K and after school lockbox is specific and limited in its time.  Those other challenges are much more internal and have to be addressed through our overall budget approach. 

DeFrancisco: Ok, the lockbox will be empty in the 6^th year.  So you don’t think there will be a problem funding it there after-

Mayor:  That is why I believe that the efforts that we need to undertake at cost-savings in area like employee healthcare cost and other areas will allow us over a 5 year frame to get on the kind of footing to be where we can sustain the pre-k going forward.  We could not sustain it today with the kind of fiscal challenges we face.  So if, I say this with absolute respect for the thread of your question and logic of your question if we were to say in order to address these other challenges we would deny our children they need.  The common core as we all know happening, the growing demand of our economy in education is happening, it’s been happening for years.   If we don’t all catch up with it unfortunately we will be damming another generation of kids to not be participants in this economy the way they should be.  So that work has to happen right now.  If we do our work properly, we link the two pieces and we believe we will do this effectively.  We link the two pieces up.  The 5 years of your own tax money, our own tax money from the city of New York, gets us up and running and fully established and a head of steam we then close off the tax, lapse the tax, and find the resources from the savings we found in the meantime.

DeFrancisco: Ok and I have to be real quick as I have to follow our own rules.  There have been editorial upstate that rather than starting a new program it pre-k, it makes heck of more sense to provide more funding to for education.  Because there are some studies, including the state of Oklahoma that was the poster child for Pre-K that shows that by the time the children in second grade or third grade you can’t see any discernible difference.  Head Start we spend a $166 billion on head start and the government, the federal government, the Obama administration just came out with a report, that said that by first grade same type of theory that by first grade the benefits really don’t show further.  So if they are going to go into, these young kids are going to go into the next part of their education and everything has been lost from their head start, isn’t the money better spent on the education system providing more money in the formula.

Mayor:  I’ll make two responses.  The first is, I think we have a very substantial body of evidence from a lot of studies and a lot different perspectives that show early childhood education is in dispensable in the process.  It is the best time for kids to learn.  Zero to five is the best developmental point at which to advance children, particularly children that have been less advantage. We also know that by third grade if a child is not on grade level, the chances of them recovering are substantially limited, so the way I look at this we have a pretty brief window in which to get kids on the right track.  Where we’ve underplayed our hand as a society is before the kindergarten level and if we get to full day pre-k, high quality, this plan when you have an opportunity review it is very much about raising quality levels and making sure that this is the kind of pre-k that fully enriches and really propels forward our young people so it has a sustainability.  Now if you say to me, do we go asleep at that point, no I couldn’t agree more – we can’t go to sleep at that point and therefore I would say, we reinforce in lots of ways, we believe the middle school level is where reinforcement is absolutely necessary, it would be enrichment tutoring, homework help etcetera, through the after school program.  But the other piece of the equation is what we talked about in terms of campaign for fiscal equity.  We believe there are a number of school districts in this state that didn’t get what was due them.  If we can right that wrong and we know it will take time, if we can right that wrong, it speaks profoundly to your point.  One of the things we would do with that money is lower class size in the earliest grades, which will allow us to link up our pre-k efforts with kindergarten, first grade, second grade, third grade, and really make that huge impact I mentioned before kids got to that crucial third grade level.  So I would say, an absolutely respectful answer to you, all of the above.  Let’s get early child hood right, let’s get after school right. But absolutely make the investments, particularly at the youngest grade level to sustain the progress.  

DeFrancisco: Thank you.

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