Politics on the Hudson

   State Comptroller Thomas DiNapoli appears to agree with Gov. David Paterson that the state will have to reduce spending next year to deal with New York’s fiscal crisis. Here’s what DiNapoli has to say about the Mid-Year Financial Plan, which the governor released today. The governor said the state has to cut 25 percent of its spending supported by taxes next year.

   DiNapoli’s statement today:

   “New York State is facing staggering budget shortfalls. State revenues are dropping off and the markets’ errtic swings continue. The economic turmoil is driving New York into a very deep budget hole. And our past use of fiscal gimmicks has made the state’s financial situation even worse.

   “The consequences of the fiscal crisis haven’t fully played out yet. We need to assess what we can afford, and make sure we don’t keep spending money we don’t have.”

Gannett News Service intern Heather Senison attended a court appearance today by a former state assemblyman from Plattsburgh charged with felonies this week. This is her report:

   A former state assemblyman and Parole Board member from Plattsburgh who was charged with attempting to solicit sex from minors over the Internet returned to jail today after his bail hearing was postponed.  

   It was the second day in a row that the hearing was postponed for Chris Ortloff, 61. He went back to jail after Judge Randolph Treece granted a request for an indefinite delay from Andrew Safranko, Ortloff’s lawyer. Ortloff’s first appearance in federal court was Tuesday, but U.S. Attorney Thomas Spina asked for a postponement because he was waiting for the results of “a series of search warrants,” he said.

   Ortloff was arrested about 5 p.m. Monday in a Colonie motel room, where he had allegedly arranged to meet who he believed to be 11- and 12-year-old sisters. Federal authorities said Ortloff intended to engage in sexual acts at the hotel, located in an Albany suburb. Ortloff had actually been communicating with undercover agents and was found with a video camera and sex-related items in the room, police said.  

   After court was adjourned in Albany Wednesday, Safranko said he withdrew the bail request because he received “new information from the government right at the 11^th hour” Tuesday. He declined to comment on the nature of the information.

   The Nelson A. Rockefeller Institute of Government’s quarterly state tax revenue report cautions that “damage is just beginning” in state budgets, with revenue declines likely leading to more widespread budget cuts in the coming months.

   Taxes that states collected during the second quarter of 2008 increased about 3.6 percent, according to the Rockefeller Institute, part of the State University of New York. Income tax collections were up by 6.6 percent over the same period in 2007, but state sales tax collections went down 1.4 percent, corporate income taxes dropped 8.3 percent and motor fuel taxes fell by 3.4 percent.

   When adjusted for inflation, overall state tax collections increased 1.5 percent over the previous year, the institute found. 

   “Superficially, tax collections appeared to be doing okay—certainly not the leading edge of a fiscal crisis. But below the surface, great trouble is brewing,” said Donald Boyd, Rockefeller Institute senior fellow. “Some states have already made mid-year budget cuts, and more widespread cuts are virtually certain as revenues deteriorate further.”

   Arizona, California, Florida, Michigan and Rhode Island have been suffering the most, according to the report, and fiscal problems are expected to spread to Connecticut, New Jersey and New York. California is also on the list. New York lawmakers have already cut the state budget a few times because of lower income-tax collections and projected budget shortfalls. Gov. David Paterson has requested that they return to Albany next month to further reduce this year’s spending.

Gov. David Paterson plans to appoint a panel to consider ways to get private investment in state infrastructure projects, potentially like the building of a new Tappan Zee Bridge, he announced today.
The panel on public-private partnerships, headed by one of his key aides, is to issue a preliminary report in 90 days and a final one in six months. “There’s a lot to do to fix New York State’s infrastructure, and there’s not a lot of money to do it with,’’ said state Comptroller Thomas DiNapoli. “New York needs to craft new strategies to address our capital needs…’’
Last week, Paterson’s administration announced a $16 billion plan to build a new Tappan Zee Bridge across the Hudson River between Rockland and Westchester counties, and to add a commuter-rail system in Rockland that the new bridge would carry over the Hudson before joining up with tracks leading to Grand Central Terminal in Manhattan. The plan also calls for an expansion of bus service in the area. A financing plan is due out in the middle of October.
Paterson aides today didn’t specifically identify that project as one the commission will look at, but other administration officials have said before that getting private money for the bridge would be considered in trying to find the money needed for it.
Last year the administration of former Gov. Eliot Spitzer looked at privatizing the state Lottery, and there has also been talk of doing the same to the state Thruway.

   Senate Minority Leader Malcolm Smith wants his colleagues to take time off campaigning for the November elections and return to Albany. He is calling for a special session of the Senate “to protect the hundreds of thousands of jobs that have been put at risk by the extraordinary challenges facing New York’s financial markets.”

   Smith is referring to the collapse of Lehman Brothers, the sale of Merrill Lynch and the financial problems AIG is having. Lehman Brothers alone has more than 8,000 employees in the state, who contribute upward of $250 million in state taxes, Smith said in a statement. New York potentially could lose 35,000 jobs in the financial sector this year. Wages and bonuses could be reduced by $18 billion, which would reduce income-tax revenues to the state by about $1 billion, he said.

   “The possible loss of jobs and revenue pose unprecedented challenges for our
state,” Smith said.

   The loss of jobs, coupled with the rapid rise in home-heating costs,  makes an emergency session “to protect working families” urgent, Smith said. Beyond that, the Legislature and Gov. David Paterson should immediately convene a meeting of the state’s leading financial experts to provide advice and counsel and help the state take steps to reduce the impact of the financial difficulties, he said.

  A few new state task forces will begin their work in the coming weeks, joining a number of ongoing ones in Albany:  

  —The Task Force on Flame Retardant Safety holds its first meeting tomorrow. Its task is to review the health risks of the chemical flame retardant decabromodiphenyl ether, which is used in electronics, furniture, textiles, and other consumer products to reduce the risk of fire, and decide whether there are safer, effective alternatives to the chemical.

   Studies have found that the chemical is present in food, dust and other substances in the environment, and it has been detected in samples of human serum and breast milk. It has affected neurobehavioral development in some studies in which laboratory animals are exposed to it shortly after birth.

  —Gov. David Paterson announced today that he set up a Task Force on Transforming Juvenile Justice. The panel will review ways to improve the state’s juvenile justice system, such as creating alternatives to institutional placement, assisting children’s re-entry into the community and providing better treatment in the areas of mental health and substance abuse. 

   The task force—whose first meeting is Sept. 26—will address the disproportionate number of minorities in the system. More than 75 percent of the 1,900 children served are black and Hispanic. The annual cost per child is up to $200,000. Eighty percent of the children in state custody are released and rearrested within three years, according to the governor.

   Other task forces at work in Albany include:

  —The Task Force on Retired Racehorses

  —The Senate Minority Task Force on Domestic Violence

  —The Renewable Energy Task Force

  —The Toxic Mold Task Force.

   The “Tax Cap Express,” carrying Assemblyman Greg Ball, R-Patterson, and Republican Assembly candidates from the Hudson Valley, arrived in Albany about 10:20 a.m. today. About two dozen people got off the bus and began to walk into the Capitol’s East Park. A few minutes later, many of them walked back and boarded the bus again. It turns out that News 12 staffers had been sitting in their van and hadn’t gotten the primo shot of everyone disembarking. The extra exercise delayed the news conference.

   Rob Biagi, a New Rochelle Republican who is challenging Assemblyman George Latimer, D-Rye, led the group along with Ball, a first-term assemblyman. They urged the Assembly Democratic Majority to approve a tax cap on school spending of 4 percent a year, which Democratic Gov. David Paterson proposed and the Senate recently met to approve. Assembly Speaker Sheldon Silver, D-Manhattan, has not warmed up to the concept and there are no plans for Democrats to vote on the issue in today’s special session.

   A limit on spending would stop so many people from leaving New York, Ball and others said. Most people in the state want it, they said.

   “A tax cap is the instrument that will actually get the spending in line over time to deliver serious, comprehensive relief,” Ball said.

   Ball said he would vote yes on circuit-breaker legislation, which limits property taxes based on income, that Assembly Democrats are proposing if a tax cap is not approved. The Senate has no plans to introduce a circuit-breaker bill. 

               Justin Kaufmann, 12,  of Cold Spring, rode the Tax Cap bus.

State Senate candidate and Yonkers City Council member John Murtagh is holding what he’s calling a “telephone town hall meeting” tonight as he strives to build his name recognition in his GOP challenge to Sen. Andrea Stewart-Cousins, D-Yonkers.

What does that mean? Murtagh’s campaign will be robo-calling 9,000 registered voters tonight in Mount Pleasant. The call recipients will hear a recorded invitation from Murtagh asking if they want to stay on the line to chat with the candidate and other voters about issues facing the state, including any action taken today in an Albany special legislative session.

Carl Scaringe, an aide to Murtagh, says callers will also have the option of pressing a key on their phone to opt out of the call and any future calls like it. He says the call is just one of a series the candidate expects to place to voters in Yonkers, Greenburgh and Mount Pleasant as the campaign ramps up. Mount Pleasant is first, he said, because “we haven’t really made our presence known there yet.”

While the tactic was new to me, Bill O’Reilly, who is handling press for Larchmont Mayor Liz Feld’s GOP campaign for the District 37 state Senate seat,  said she has done two such calls in White Plains and New Rochelle with “several thousand” participants.

Heather Senison in the Albany bureau reports that an anti-poverty group wants to boost income taxes for the wealthy, limit property taxes based on ability to pay:  

   On the eve of the Assembly’s special session, the Hunger Action Network today announced a campaign to get legislators to sign a petition to end poverty by 2009.
   “Poverty is seldom discussed in the state Capitol, and is generally treated as an insolvable problem. It is time for lawmakers to not only make ending poverty a state priority but to be held accountable for their success in doing so,” said Mark Dunlea of the Hunger Action Network.
   The petition aims to increase the income tax for the state’s wealthiest and to implement a property tax circuit breaker, including for renters, meaning taxes would be in line with people’s ability to pay.
   “New York has a particularly unfair system of state and local taxes, where the poor pay more as a percent of their income than the wealthy,” Dunlea said. “The state budgetary needs should be met through tax fairness that restores the principle that those who can most afford it bear a greater share of the burden.”
   The petition also asks the Legislature to raise the minimum wage to $10 by 2010, and to devote more money to affordable housing initiatives, beginning with $13 billion over the next 10 years to create about 220,000 affordable housing units.

The Westchester County Republican State Assembly candidates are headed to Albany next Tuesday on the “Tax Cap Express”, described as an “eco-friendly diesel bus” taking the pols and would-be pols to lobby during the governor’s special emergency session.

The bus plans to pull out at 7:30 a.m. from the front lawn of a citizen-to-be-named-later, described by Assemblyman Greg Ball as “a Yorktown resident concerned with the ever-increasing property tax burden.”

“Upon arrival at the State Capitol, the delegation and their supporters will be joined by members of the Assembly Republican Conference to rally along the East Steps of the capitol building and for a press availability.”

Expected to be on board are Ball; Rob Biagi, candidate for 91st Assembly District; Bill Gouldman, candidate for 90th Assembly District; Anthony Pilla, candidate for 88th Assembly District; Jim Faulkner, candidate for 93rd Assembly District; and Robin Yess, candidate for 101st Assembly District, according to Ball’s press advisory