Politics on the Hudson

Gov. David Paterson said Monday night his office will delay payments to local governments and schools—and ultimately seek to cut the money entirely—because legislative leaders refuse to make enough spending reductions to state programs.

The move came after a day of negotiations with legislative leaders, who met Paterson at the governor’s mansion and sought to reach a deal that eliminated school cuts.

Paterson said he’s done negotiating and said legislators have been unable to recognize the need to cut spending. But his comments left unclear whether he will accept about $2.8 billion in budget reductions that legislators appear near to agreeing on.

The Legislature expect to convene Tuesday in hopes of reaching a budget deal.

The state faces a $3.2 billion mid-year budget deficit, and Paterson has sought to cut about $1.3 billion in aid to schools, health care and local governments.

Paterson did not indicate how much in aid will be delayed, but he said he would ask the Legislature in January to simply forgo the payment altogether as part of the 2010-11 budget, which starts April 1.

“Negotiations with legislative leaders on a deficit-reduction plan concluded this afternoon,” Paterson said in a statement.

“Unfortunately, the Legislature’s last best offer does not take sufficient action to restore New York state’s long-term fiscal stability and does nowhere near enough to address next year’s budget deficit.”

The jury in the trial of former Senate Majority Leader Joseph Bruno failed to reach a verdict during the second day of deliberations Monday, the first since taking a five-day break for the Thanksgiving holiday.

Jurors will return to the James T. Foley U.S. Courthouse at 8:30 a.m. Tuesday to resume deliberations, reports Gannett’s Jon Campbell.

Bruno is charged with eight counts of federal mail and wire fraud. The prosecution alleges Bruno used his consulting business as a way to use his political power for personal gain, robbing his constituents of “honest services.”

Monday opened with a reading of testimony by former Senate lawyer Francis Gluchowski, who recalled a telephone conversation he had with then Chief Senate Counsel Kenneth Riddett about whether or not Bruno’s dealings with Connecticut-based company Wright Investors’ Services had to be reviewed by the Legislature Ethics Committee. Bruno allegedly used his political connections to convince labor unions to invest in Wright with their pensions.

In his testimony, Gluchowski said he and Riddett agreed that Bruno ‘s work with Wright did not have to be reviewed.

Shortly after 2 p.m., the jury returned to the courtroom to hear the complete testimony of Mary-Louise Mallick, the former secretary of the Senate Finance Committee.

During her time on the witness stand, Mallick discussed a review she conducted of Evident Technologies, a start-up nanoscience company partially funded by Albany-area businessman Jared Abbruzzese that had applied for state grants.

Mallick, who has a master’s degree in bio-ethics and economics, testified that Bruno had sent her out to the company’s property to see if Evident was worthy of the grant because of her knowledge in the field. She gave a positive recommendation, and the company was eventually awarded two $250,000 grants through Bruno.

“I think it’s apparent by that read-back that there was a process, a business-like, professional process in the Senate that I established,”Bruno said outside of the courthouse. “I followed it in every way and everything that I did, without exception.”

In a bid to get an agreement to close the remainder of the $3.2 billion mid-year budget deficit, legislative leaders this afternoon presented Gov. David Paterson a plan that would not include cuts to schools during the current fiscal year.

Assembly Speaker Sheldon Silver, D-Manhattan, said this afternoon that the leaders gave Paterson “a presentation of the realities of what’s happening.”

He added that, “Clearly the Senate will not entertain any education cuts, minority or majority, and therefore there aren’t 32 votes in the Senate to do a broader deficit-reduction plan. So having said that (the governor was) presented something within the political realities that exist. And it’s up to the governor to accept or reject or modify.”

The proposal, however, did include using $391 million in federal-stimulus funds for education that was going to be reserved for 2010-11 fiscal year, which starts April 1. In total, the package would cut about $2.8 billion of the $3.2 billion budget gap.

There was no immediate comment from the governor’s office on whether he would accept the deal.

Last week, Paterson began to back away from his initial proposal to cut about $686 million in education aid. Instead, he modified the plan to reduce school aid by $295 million through the end of the school year ($206 million through the end of the fiscal year March 31).

The state Legislature was waiting this afternoon for the conclusion of a meeting at the governor’s mansion between legislative leaders and Gov. David Paterson to determine whether there will be a budget deal to close the state’s $3.2 billion budget gap.

Lawmakers, Democrats and Republicans, said they were frustrated with the process—the fourth consecutive week they are returning to Albany without a budget bill before them to vote on.

“We have an entire Legislature brought into the Capitol and no leadership, no action, no outcome,” said Sen. James Alesi, R-Perinton, Monroe County, adding it’s a “bunch of people in suits and ties doing nothing.”

Lawmakers said the sides are only about $250 million apart on a deal, which has been the case for several weeks. Basically, it comes down to Paterson’s continued insistence on cuts in school spending, which the Senate has rejected, senators said.

Apparently, legislative leaders went to Paterson this afternoon with a deal that would close $2.8 billion of the gap, but left out school cuts.

“I’m unhappy with the lack of progress,” said Senate Education Committee Chairwoman Suzi Oppenheimer, D-Mamaroneck, Westchester County. “We are so close, within $250 million out of $3 billion. At this point, the sides are digging their heels in, and that’s not the way I operate. I say sit down and stay in a locked room until you come to a decision.”

Oppenheimer said she’s pushing for an agreement that spares schools mid-year education cuts, but schools would have to brace for major cuts in the 2010-11 fiscal year, which starts April 1.

Sen. Ruth Hassell-Thompson, D-Mount Vernon, said that negotiations are better when lawmakers are in town, but she also ruled out education cuts.

“These are negotiations that can’t happen if we’re not here,” she said.

Senate Finance Committee Chairman Carl Kruger, D-Brooklyn, said he recognizes that the Legislature should be in Albany addressing the state’s fiscal problems, but he said every day of session costs taxpayers about $100,000.

“To me that’s a teacher and a half, to me that’s a cop, that’s a fireman,” he said.

Assemblyman George Latimer, D-Rye, said he would rather see lawmakers pass the pieces of the deficit-reduction plan that they agree on, then negotiate on where there is disagreement.

“Why aren’t we just focusing completely on those negotiations, and then bring us back in when we have a deal, because absent that, you’re spending a lot of money for us to be here,” Latimer said.

Others tried to remain optimistic.

“I’m hopeful that I came here for a reason,” said Sen. Thomas Libous, R-Binghamton. “It is a waste of time, unfortunately, if nothing happens over the course of the next several days. I believe something can happen, I don’t believe it’s that far apart.”

Added Assemblywoman Ellen Jaffee, D-Suffern, Rockland County: “It’s a difficult time and obviously a very challenging budget that we have to face. We’re making every effort to work with the governor and the Senate and hopefully we’re on the right track.”

Westchester County Legislator Pete Harckham, a Democrat who represents the Bedford area, plans to announce tomorrow that he’s running for the state Assembly seat being vacated by Adam Bradley. The announcement regarding the 89th Assembly District is set for 1:30 p.m. at the county Democratic Committee headquarters in White Plains.

Former Republican gubernatorial candidate John Faso is calling on Gov. David Paterson to seek legislative approval to freeze all raises scheduled for state employees as a way to lower the state’s deficit.

Faso argued in an op-ed piece Sunday and this morning on Fred Dicker’s radio show that Paterson should get the Legislature to declare a fiscal emergency to freeze raises and state spending on education, as well as enact pension reforms and other measures.

“There is legal precedent to do this but you’d have to do it with the proper legislative authorization and you’d have to do it upon a finding of a fiscal emergency that the Legislature would make,” Faso said today.

The Legislature hasn’t gone along with any budget cuts proposed by Paterson, who has also sought to have them approve a new pension tier to lower pension benefits for new public employees.

Faso, of Kinderhook, Columbia County, said he’s made no decision on another possible statewide run or whether he will run for Congress in the 20th District next year. Faso ran unsuccessfully for state comptroller in 2002 against Democrat Alan Hevesi and governor in 2006 against Eliot Spitzer.

He sought the GOP nomination earlier this year for the U.S. House seat vacated by Kirsten Gillibrand when she was appointed to the U.S. Senate. But the nomination went to Assemblyman James Tedisco, R-Schenectady, who lost to Democrat Scott Murphy.

Faso knocked Attorney General Andrew Cuomo for continuing to hide “behind the veil of his office” and not discuss his likely run for governor next year. Republican gubernatorial candidate Rick Lazio—and even Paterson’s campaign —have begun to criticize Cuomo for not speaking about his intentions.

“So far, I think, the attorney general has gotten a pretty free ride on this fiscal crisis,” Faso said. “And if he really does intend to run for governor, I think it’s incumbent upon him to state forthrightly what he would do about the fiscal dilemmas that are facing the state and their local governments.”

   Here’s a letter that came from the Governor Paterson 2010 campaign today. He’s asking supporters to call their lawmakers and urge them to close the state’s $3.2 billion budget deficit.

   “Please call your legislator and say the time for action is now—and click here to let me know you stand with end the delays, cut our spending and close the deficit. I need your support to help send a powerful message to Albany—the time for playing politics is over and the time for recovery must begin now,” he writes.

   The Senate and Assembly are back in Albany today for their first special session on the budget since last Tuesday. Paterson said yesterday that negotiations had not progressed much or yielded new proposals over the holiday.

Dear XXX, The stakes could not be higher for the future of our state. During the state’s budget battles of the last year, I have fought to do what’s right for the people of New York despite intense opposition from special interests and state legislators who refuse to confront fiscal reality. Over the past several weeks, I’ve been fighting for a deficit reduction program that would close our current $3.2 billion gap in our current fiscal year and reduce the nearly $7 billion next year. We have to make immediate, substantial cuts reducing our spending. We cannot raise taxes—New Yorkers’ tax burden is already high enough. We should not borrow any more money—it will cost us more in the long run. And we simply cannot spend money that we don’t have. We need responsible solutions to cut the deficit and we need them now. This is why on Tuesday, I delivered a clear message to the legislature: cut this deficit with me or give me the power to do it myself. Governor Paterson’s message to the legislature: “Cut this deficit with me or give me the power to do it myself. Watch here. I have submitted two bills to the legislature. The first is my Deficit Reduction Program. It is a plan of shared sacrifice with responsible, recurring spending cuts across every area of the budget. It is a road map to putting New York on the road to fiscal recovery. The second is my Executive Option Proposal. This would grant me, as Governor, a one-time authority to cut our spending, preserve the integrity of our credit rating, and keep New York safely afloat. The legislature has been choosing to sit on the sidelines while our state risks running out of cash. Running out of cash has severe consequences for the state, just like it would for any family. A cash-strapped New York means delayed payments to schools and critical services hindered. I will not let that happen. This is why I have taken these steps. In short: if the legislature is unwilling to make the necessary cuts, I will. If the legislature is unwilling to do what needs to be done, I will. If the legislature is unwilling to endure the criticism and the consequences, I will. It is only because the legislature has been plagued by inaction and unwillingness that I have sought these measures. So far, New York has been able to avoid the devastation suffered by other states. In fact, we’re ahead of nearly every other state. It’s so important that we keep our foundation strong so that we can be ready for the next wave of innovation and new economy jobs. Please call your legislator and say the time for action is now—and click here to let me know you stand with end the delays, cut our spending and close the deficit. I need your support to help send a powerful message to Albany—the time for playing politics is over and the time for recovery must begin now. This is a crisis. This is a time for leadership. I’m willing to make the tough choices. Thank you for standing with me. I’ll always stand with you. Sincerely, David A. Paterson Governor of New York PS New Yorkers often ask me how we got into this deficit in the first place. The very short answer is two-fold: we have declining tax revenues and we’ve suffered from decades of excessive spending. The legislature has found it easy to increase spending over the years, but now refuses to make the difficult decisions to reduce spending. I believe that if New Yorkers can make those decisions in their own lives and households during these tough economic times, so should our legislature. If you do not want to get e-mails from me in the future, click here.

Governor Paterson 2010 · 461 Park Avenue South, 9th Floor · New York, NY 10016

   Good-government and labor advocates are asking lawmakers to pass legislation to reform the Industrial Development Agency system along with a budget to close the state’s $3.2 billion mid-year deficit. The groups want to increase accountability, introduce business standards and guarantee higher wages.

   “IDAs are consistently failing to deliver on the good jobs and strong economic development our communities need,” Allison Duwe, executive director of the Coalition for Economic Justice, said in a statement. “Reforming IDAs now would be fiscally sound and aid in our long-term economic recovery.”

   Legislation to do this has passed the Democrat-controlled Assembly for the past three years. It has made it through committeed in the Democrat-led Senate but not onto the floor for a vote. The business community has opposed the legislation.

   There are 115 IDAs in the state.

   “This reform is about making sure we’re investing in creating good, middle-class jobs, and in development that’s done in a way that encourages smart and sustainable growth,” said Sen. Antoine Thompson, D-Buffalo, the legislation’s Senate sponsor.

   Gov. David Paterson supports IDA reform that “will create jobs, stimulate the economy and allow long-stalled civic facility projects to move forward,” spokesman Morgan Hook said.

   Gov. David Paterson said Sunday that he would act unilaterally to close $1.6 billion of the approximately $3.1 billion budget gap, and he urged the Legislature to reach an agreement on a deficit-reduction plan for the balance as soon as possible.

   Negotiations with the Senate and Assembly over the holiday weekend had not led to any agreements or new proposals on how to remedy the problem, Paterson said during a conference call with reporters Sunday afternoon.

   The governor indicated that the administration is having more difficulty with the Senate than the Assembly in addressing the state’s “fiscal emergency.”

   “I have been trying at this point to make this a three-way agreement. I have been trying to work with them and continue to negotiate with them. The Senate in particular does not know that we’ve run out of time,” he said, adding that they seem “more concerned with short-term politics than the long-term reality.”

   Billions of dollars in payments from the state to cover school aid, tax rebates and other obligations are due next month. The state faces a downgrading of its credit rating if it does not have the cash on hand to pay those bills, the governor said.

   The governor and lawmakers have been unable to reach a deal, and this will be the fourth week he has called them into special session. The biggest stumbling block has been education cuts proposed by Paterson. Senate Democrats and Republicans do not want to make mid-year school-aid reductions. The Assembly has not ruled out cuts.

   Senate Democrats agree that there are administrative actions the governor should take while a “sensible solution to the budget gap is negotiated,” said Austin Shafran, spokesman for the Senate Democratic Majority.

   “We will continue to work with all sides on a bipartisan and fiscally prudent deficit-reduction plan that protects jobs, prevents tax hikes, and saves critical funding for our schools,” Shafran said. (more…)

   Jon Campbell of the Gannett Albany Bureau had this to report from the Bruno trial today:

   The first day of jury deliberations in the case against former Senate Republican Leader Joe Bruno wrapped up without a verdict this evening, with deliberations set to continue Monday morning despite Judge Gary Sharpe’s warning that a five-day layoff could be “dangerous.”

   Bruno, 80, is in court on charges he defrauded the state and its residents by accepting nearly $3.2 billion from companies in exchange for his political influence and assistance with referrals. The prosecution alleges Bruno, of Brunswick, Rensselaer County, used his public office for personal gain.

   “I am totally confident – as I have said for several weeks – that we have done nothing wrong and the evidence proves that we have done nothing wrong,” Bruno said outside the James T. Foley U.S. Courthouse in Albany.

   The trial began more than three weeks ago, and closing arguments concluded yesterday. The jury began deliberations at 9 a.m., and the first note to the court from the jury arrived at 2:49 p.m.

   The jury asked for a clarification regarding evidence surrounding the third count facing Bruno, a charge that alleges Bruno committed mail and wire fraud in his business dealings with VyTek, a company owned by Westchester County-based business owner Leonard Fassler.

   Sharpe allowed testimony about Fassler’s other business ventures to be
discussed, but reminded the jury they must unanimously decide whether
or not Bruno broke the law in dealing specifically with VyTek.

   At 4:23 p.m., Sharpe called the jury back into the courtroom to discuss how they wanted to continue with the Thanksgiving holiday looming. He sternly reminded members of the jury that if they decided to adjourn until
Monday they are not to discuss the case with anyone. (more…)