The New York Public Interest Research Group and the Schuyler Center for Analysis and Advocacy are criticizing a new program that the 2009-10 state budget— which lawmakers are in the process of voting on—would set up. The New York Higher Education Loan program (HELPs), which would cost $50 million to set up and $10 million annually after that, is a “poorly structured program with few safeguards for student borrowers,” the Schuyler Center said in a statement.

   “New York should not launch the nation’s most expensive state student loan program in the middle of the worst labor market for college graduates in a half century,” said Karen Schimke, Schuyler’s president and CEO. The group is a non-profit policy and advocacy group. “We are going to bury those students in debt that will follow them for years to come.”

   Gov. David Paterson proposed NYHELPs in his budget. In a news release this week, the governor’s administration said the initiative would provide a minimum of $350 million in loans to 45,000 resident students in degree-granting programs.

   Fran Clark, NYPIRG program coordinator, said setting up NYHELPs “without writing basic borrower protections into the law is a big mistake. With decisions about interest rates, fees, payment plans, etc. being made in regulation, it will be hard for legislators to ensure that the terms of NYHELPs loans protect students rather than banks or bond issuers.”

   There is no safeguard in NYHELPs to ensure that students don’t forego “cheaper, safer” federal Parent PLUS loans in favor of borrowing from NYHELPs, Clark said.

   According to the Schuyler Center, NYHELPs would drive New York into competition with Parent PLUS and result in the state’s taking on costs and risks that the federal government would bear under Parent PLUS. Interest rates, which are at historic rates now, are likely to rise sharply over time, the group said.

   The State University of New York Student Assembly said in a statement that is was pleased with the NYHELPs program and some other aspects of the negotiated budget, such as restoration of 10 percent in proposed cuts to community colleges and the restoration of a proposed cut in the Tuition Assistance Program for needy students. Read more of this entry »

   Some education advocacy groups have been critical of the way school-aid numbers appear in the $131.8 billion state budget lawmakers are voting on this week, saying they are misleading. The figures include economic-stimulus money to supplement the Individuals with Disabilities Education Act ($398 million for New York) and Title 1A aid for poor school districts ($454 million), federal funds that go directly to school districts. The separate pot of stabilization funds for education that the state received from the federal government do not show up in the district-by-district funding figures. The state used that money to eliminate a proposed $1.1 billion reduction in education spending.

   Most of the Title I and IDEA aid can’t be used by school districts to offset local property-tax contributions or to preserve previously funded services or positions, according to the state Council of School Superintendents. Since Title I and IDEA funds were not included in the 2008-09 aid listing, putting the additional stimulus funds for those areas in the 2009-10 budget overstates the percentage impact of that new aid, the group said in a statement.

   The Council of School Superintendents said its members appreciate efforts to eliminate some of the major education cuts from the budget proposed by the governor in December. But the budget freezes the state foundation-aid formula for two years, which means school districts have to turn to reserves, spending cuts and local taxpayers to fund their inflationary costs, the group said. Foundation aid is the largest state education grant to schools and is the major aid category that helps schools pay for basic operating costs like salaries, health insurance and utilities, the group said.

   “The freeze on foundation aid will probably hurt the state’s poorest districts most because they depend on state help the most,” said Robert Lowry, deputy director of the Council of School Superintendents. “Some of these poor districts have little they can cut that is not mandated. Also, trying to generate enough local revenue to match what they need from the state would require tax increases greater than their taxpayers can afford.”

   School district leaders are trying hard to hold down spending an tax increases in the budgets they will present this spring, the council said. Based on anecdotal reports, it expects proposed local tax increases will “average well below what we’ve seen in past years when state aid has been cut or frozen.”

   The $131.8 billion 2009-10 state budget lawmakers are voting on rejects a number of cuts that were recommended by Gov. David Paterson. They would have:

  — Delayed implementation of a law that prohibits prisoners with serious mental illness from being placed in solitary confinement in most cases. Many of the changes required by the legislation would have been delayed three years, until July 1, 2014, under the governor’s budget. The negotiated budget that lawmakers are voting on restores $8.6 million in cuts that originally were proposed.

  —Eliminated funding for Teacher Centers, which receive grants for online and classroom-based professional development. The budget provides $40 million for the centers.

  — Changed the Early Intervention Program for young children with special needs. The governor wanted to exempt children with certain speech-only delays from participation and establish parental and provider fees for participation.

    — Cut the Neighborhood Preservation and Rural Preservation programs, which provide support to citizen-led, not-for-profit housing and community-based organizations that create and preserve affordable housing.

  —Reduced funds for libraries by $10.6 million.

  —Reduced funding for the Elderly Pharmaceutical Insurance Coverage program by $49.9 million and $2.8 million for the Medicaid program to restore coverage for drugs denied by Medicare Part D. EPIC reduces the cost of prescription drugs for senior citizens living on fixed incomes.

Senate Democrats have their own 59-page report on the 2009-10 budget. You can view it here.

Update on Sen. Hassell-Thompson: She is suffering from pneumonia, is now under observation at Albany Medicaid Center and planning to return to the Capitol later today. Senate Democrats said they will start budget deliberations at 5:30 p.m.

Sen. Thompson was feeling faint earlier today and decided to go to a hospital for tests, Sen. Suzi Oppenheimer told the J-N’s Cara Matthews. The tests were normal and she’s on her way back to the Capitol, Oppenheimer said.

Sen.  Ruth Hassell-Thompson, D-Mt. Vernon, was taken out of the Capitol and taken to a hospital this morning with an undisclosed illness.

A spokeswoman in her office said this afternoon she is “fine,’’ and a spokesman for the Senate Democrats said she is expected back at the Capitol shortly.

Her presence is critical because Senate Democrats can’t pass any budget bills without her, assuming that all 30 Republicans vote against them, as they have vowed to do.

Senate Majority Leader Malcolm Smith and Gov. David Paterson got together for a second time today early this afternoon to talk about the MTA.

“I wanted to show the govenor a few things, and he wanted me to see a few things,’’ Smith said, when asked about the session right after he came out of Paterson’s office, declining to be more specific. He said he and Paterson were still working on trying to find a source of revenue to subsitute for the tolls that the governor and Assembly Speaker Sheldon Silver favor.

Republicans emerged from their closed-door conference about a half-hour ago and arenow prepared to act on the state budget.

“We just wanted to go over some of the amendments we’re going to propose and look at the school-aid runs,’’ said Sen.  George Winner, R-Elmira, when asked what the GOP members were talking about.

The session is now set to start at 3 p.m.  – five and a half hours later than originally scheduled – and will continue “until we’re finished,’’ said Senate Majority Leader Malcolm Smith, D-Queens. That makes it likely that two bills that were introduced too late to be acted on today will be approved shortly after midnight. That will make the budget late, at least by a few hours, since the new fiscal year starts just after midnigh

Local officials all across Westchester County have weighed in on their frustration with Gov. David Paterson’s proposed budget, including Larchmont’s mayor Liz Feld.

Here’s what Feld had to say about the budget, speaking on behalf of the group New Yorkers for Growth:

“Please tell us this is an April Fool’s Joke. The proposed state budget is breathtakingly irresponsible. It will cost New Yorkers thousands of jobs and guarantee tough days ahead.

Wall-Street tax revenues are shrinking precipitously—perhaps permanently—and small businesses are closing around the state. Adding more taxes to the mix could be catastrophic to long-term job development here.

This budget is beyond irresponsible. It should serve as a rallying cry to every New Yorker who has had enough. We hope this budget is a bottom for New York State, but fear it is not. The Legislature and Governor could not have done a worse job.”