Thursday, March 31, 2005

1 NEW YORK STATE SENATE 2 3 4 THE STENOGRAPHIC RECORD 5 6 7 8 9 ALBANY, NEW YORK 10 March 31, 2005 11 11:16 a.m. 12 13 14 REGULAR SESSION 15 16 17 18 LT. GOVERNOR MARY O. DONOHUE, President 19 STEVEN M. BOGGESS, Secretary 20 21 22 23 24 25

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(518) 371-8910 1 P R O C E E D I N G S 2 THE PRESIDENT: The Senate will 3 please come to order. 4 I ask everyone present to please 5 rise and repeat with me the Pledge of 6 Allegiance. 7 (Whereupon, the assemblage recited 8 the Pledge of Allegiance to the Flag.) 9 THE PRESIDENT: In the absence of 10 clergy, may we bow our heads in a moment of 11 silence, please. 12 (Whereupon, the assemblage 13 respected a moment of silence.) 14 THE PRESIDENT: Reading of the 15 Journal. 16 THE SECRETARY: In Senate, 17 Wednesday, March 30, the Senate met pursuant 18 to adjournment. The Journal of Tuesday, 19 March 29, was read and approved. On motion, 20 Senate adjourned. 21 THE PRESIDENT: Without 22 objection, the Journal stands approved as 23 read. 24 Presentation of petitions. 25 Messages from the Assembly.

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(518) 371-8910 1 Messages from the Governor. 2 Reports of standing committees. 3 Reports of select committees. 4 Communications and reports from 5 state officers. 6 Motions and resolutions. 7 Senator Fuschillo. 8 SENATOR FUSCHILLO: Thank you, 9 Madam President. 10 On behalf of Senator Libous, on 11 page number 26 I offer the following 12 amendments to Calendar Number 379, Senate 13 Print Number 1820, and ask that said bill 14 retain its place on Third Reading Calendar. 15 THE PRESIDENT: The amendments 16 are received, and the bill will retain its 17 place on the Third Reading Calendar. 18 Senator Bruno. 19 SENATOR BRUNO: Madam President, 20 can we at this time adopt the Resolution 21 Calendar. 22 THE PRESIDENT: All in favor of 23 adopting the Resolution Calendar please 24 signify by saying aye. 25 (Response of "Aye.")

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(518) 371-8910 1 THE PRESIDENT: Opposed, nay. 2 (No response.) 3 THE PRESIDENT: The Resolution 4 Calendar is adopted. 5 Senator Bruno. 6 SENATOR BRUNO: Madam President, 7 I believe that there are three resolutions at 8 the desk by Senator Morahan. I would ask that 9 the titles be read and move for their 10 immediate adoption. 11 THE PRESIDENT: The Secretary 12 will read. 13 THE SECRETARY: By Senator 14 Morahan, Legislative Resolution Number 1172, 15 honoring Natalie and Mel Harbinger upon the 16 occasion of being named "Members of the Year" 17 by the Montebello Jewish Center on April 3, 18 2005. 19 By Senator Morahan, Legislative 20 Resolution Number 1173, honoring Barbara 21 Etelson upon the occasion of being named 22 "Community Service Member of the Year" by the 23 Montebello Jewish Center on April 3, 2005. 24 And by Senator Morahan, Legislative 25 Resolution Number 1174, congratulating Sister

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(518) 371-8910 1 Fran Gorsuch upon the occasion of being named 2 "Special Honoree" by the Montebello Jewish 3 Center on April 3, 2005. 4 THE PRESIDENT: The question is 5 on the resolutions. All in favor please 6 signify by saying aye. 7 (Response of "Aye.") 8 THE PRESIDENT: Opposed, nay. 9 (No response.) 10 THE PRESIDENT: The resolutions 11 are adopted. 12 Senator Bruno. 13 SENATOR BRUNO: Madam President, 14 can we at this time have the noncontroversial 15 reading of the calendar. 16 THE PRESIDENT: The Secretary 17 will read. 18 THE SECRETARY: Calendar Number 19 270, Senate Budget Bill, Senate Print 551B, an 20 act making appropriations for the support of 21 government: Legislature and Judiciary Budget. 22 SENATOR MONTGOMERY: Lay it 23 aside. 24 THE PRESIDENT: The bill is laid 25 aside.

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(518) 371-8910 1 THE SECRETARY: Calendar Number 2 277, Senate Budget Bill, Senate Print 553E, an 3 act making appropriations for the support of 4 government: Education, Labor and Family 5 Assistance Budget. 6 SENATOR MONTGOMERY: Lay it 7 aside. 8 THE PRESIDENT: The bill is laid 9 aside. 10 THE SECRETARY: Calendar Number 11 278, Senate Budget Bill, Senate Print 554E, an 12 act making appropriations for the support of 13 government: Health and Mental Hygiene Budget. 14 SENATOR MONTGOMERY: Lay it 15 aside. 16 THE PRESIDENT: The bill is laid 17 aside. 18 THE SECRETARY: Calendar Number 19 320, by Senator DeFrancisco, Senate Print 42, 20 an act to amend the Real Property Law, in 21 relation to allowing an assignment. 22 THE PRESIDENT: Read the last 23 section. 24 THE SECRETARY: Section 2. This 25 act shall take effect on the 30th day.

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(518) 371-8910 1 THE PRESIDENT: Call the roll. 2 (The Secretary called the roll.) 3 THE SECRETARY: Ayes, 55. 4 THE PRESIDENT: The bill is 5 passed. 6 THE SECRETARY: Calendar Number 7 337, by Senator Meier, Senate Print 2323, an 8 act to amend the Penal Law, in relation to the 9 permitting. 10 THE PRESIDENT: Read the last 11 section. 12 THE SECRETARY: Section 2. This 13 act shall take effect on the first of January. 14 THE PRESIDENT: Call the roll. 15 (The Secretary called the roll.) 16 THE SECRETARY: Ayes, 55. 17 THE PRESIDENT: The bill is 18 passed. 19 THE SECRETARY: Calendar Number 20 344, by Senator Farley, Senate Print 3142, an 21 act to amend the Penal Law, in relation to 22 increasing the penalty for robbery. 23 THE PRESIDENT: Read the last 24 section. 25 THE SECRETARY: Section 2. This

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(518) 371-8910 1 act shall take effect on the first of 2 November. 3 THE PRESIDENT: Call the roll. 4 (The Secretary called the roll.) 5 THE SECRETARY: Ayes, 55. Nays, 6 1. Senator Duane recorded in the negative. 7 Excuse me. Excuse me. Ayes, 54. 8 Nays, 2. Senators Duane and Montgomery 9 recorded in the negative. 10 THE PRESIDENT: The bill is 11 passed. 12 THE SECRETARY: Calendar Number 13 395, by the Senate Committee on Rules, Senate 14 Print Number 3667, an act to amend the Labor 15 Law. 16 THE PRESIDENT: Read the last 17 section. 18 SENATOR MONTGOMERY: Lay it 19 aside. 20 THE PRESIDENT: The bill is laid 21 aside. 22 THE SECRETARY: Calendar Number 23 396, by the Senate Committee on Rules, Senate 24 Print 3668, an act to amend the Public Health 25 Law.

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(518) 371-8910 1 SENATOR MONTGOMERY: Lay it 2 aside. 3 THE PRESIDENT: The bill is laid 4 aside. 5 THE SECRETARY: Calendar Number 6 399, by the Senate Committee on Rules, Senate 7 Print 3671, an act to amend the Tax Law and 8 others. 9 SENATOR MONTGOMERY: Lay it 10 aside. 11 THE PRESIDENT: The bill is laid 12 aside. 13 Senator Bruno, that completes the 14 noncontroversial reading of the calendar. 15 SENATOR BRUNO: Madam President, 16 before we take up the controversial calendar, 17 can we ring the bell and alert the members 18 that they ought to be in the chamber to vote 19 on very important issues in their lives and 20 their constituents' lives. 21 THE PRESIDENT: The Secretary 22 will ring the bell, and the members should 23 take their seats in the chamber. 24 Senator Skelos. 25 SENATOR BRUNO: Madam President,

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(518) 371-8910 1 we're at this time going to be calling up 2 Calendar 277, which deals with the educational 3 part, the education part of our budget. 4 But I just wanted to make an 5 observation and a comment, that today is 6 March 31st. It is the end of our fiscal year. 7 And we have six bills before us, language and 8 appropriation bills, that, when enacted in 9 this house and in the other house, will 10 complete the budget process for the people of 11 New York State. And the discussions that we 12 are continuing to have with the Assembly, with 13 the Executive, with members, will continue. 14 But, Madam President and 15 colleagues, we fully intend and expect that 16 we're completing the budget process here over 17 these next several hours or whatever amount of 18 time it takes. And each of you are to be 19 commended, in this house and in the other 20 house. 21 And I don't want to be premature in 22 being congratulatory here in this chamber, but 23 I think it's appropriate because this has been 24 a team effort, it has been a partnership to 25 get us where we are. And where we are is

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(518) 371-8910 1 truly in the best interests of the people of 2 New York State. 3 So, Madam President, I would ask 4 that 277 be called. 5 THE PRESIDENT: The Secretary 6 will read. 7 THE SECRETARY: Calendar Number 8 277, Senate Budget Bill, Senate Print 553E, an 9 act making appropriations for the support of 10 government: Education, Labor and Family 11 Assistance Budget. 12 SENATOR SCHNEIDERMAN: 13 Explanation. 14 THE PRESIDENT: Senator Saland, 15 an explanation has been requested. 16 SENATOR SALAND: Thank you, Madam 17 President. 18 This bill is the bill which deals 19 with the subject of K-12 education and other 20 education-related funding. And what it does 21 is it provides some $848 million amongst its 22 other provisions -- I will deal with the 23 education portion of this bill -- some 24 $848 million over and above what school 25 districts throughout this state received by

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(518) 371-8910 1 way of funding in their last school fiscal 2 year. 3 This $848 million is an increase 4 over the $526 million that the Governor 5 proposed in his budget, an increase, 6 obviously, of more than $320 million. And 7 what we do in the course of providing this 8 funding is we restore the expense-based aids 9 that had been cut in the Governor's proposed 10 budget. 11 Those expense-driven aids dealt 12 primarily with -- the cuts dealt primarily 13 with BOCES aid and with private excess cost 14 aid or special education aid. That 15 restoration means somewhere in the area of 16 about $205 million on school year. 17 We expanded operating aid, 18 increased it to the tune of some $180 million. 19 That particular form of aid is the aid which 20 is the one which is most sought and most 21 desired by school districts because it 22 provides them the greatest flexibility. 23 We increased funding for high needs 24 and rural districts to the tune of 25 approximately $355 million. We incorporated

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(518) 371-8910 1 the Governor's SBE pot of $325 million and 2 added some additional $30 million dealing 3 both, again, with high-needs districts and 4 also attempting to address the unique needs of 5 rural districts as well. 6 We increased the building aid ratio 7 in 207 high-needs districts. Those 207 8 districts are the districts defined as such by 9 Regents. That includes the City of New York 10 and obviously a host of others. We increased 11 that formula by some 5 percent. 12 And in addition, we added 13 additional building aid enhancements to the 14 New York City building aid formula in 15 recognition of unique circumstances they have 16 with regard to issues such as demolition and 17 other, more unique types of issues that the 18 city has to deal with when it engages in 19 construction or rehabilitation. 20 For a number of school districts, 21 somewhere in excess of 200 in our state, there 22 was a problem that was created by a ruling -- 23 by the so-called GASB ruling. And don't ask 24 me what the acronym stands for, but it has to 25 do with the accounting entity that has

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(518) 371-8910 1 oversight over certified public accountants, 2 and they issued a ruling administratively 3 that, on one of those rare occasions, 4 presenting a problem for school districts that 5 at least you could safely say was not of any 6 doing by either the Legislature or the 7 Governor. 8 But that ruling basically required 9 the booking of payments of pensions in the 10 same school fiscal year. So both the 11 liability as it was incurred to pay the 12 pension and the payment of the pension was 13 required to occur in the same year. 14 Well, some 200-plus districts were 15 on a system in which the liability would 16 occur, for example, in '04-'05 and then would 17 be paid in '06. Failure to address this issue 18 would have resulted in adverse consequences to 19 those school districts in terms of things such 20 as their bond ratings, their ability to secure 21 financing at more reasonable rates. 22 What we've done is a blend of what 23 was both the Senate and the Assembly approach 24 to dealing with that issue. We have 25 effectively said that those school districts

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(518) 371-8910 1 that have this problem have the ability to, as 2 a book entry, to book the asset, the ability 3 to offset the liability, by in effect a paper 4 transfer, the ability to draw down on next 5 year's school aid. Which obviously they will 6 not receive until that following year. 7 That, we believe, resolves the 8 issue. To the extent that it does not resolve 9 the issue for a particular school district, we 10 have given those districts the ability to 11 borrow. And that would require them getting a 12 waiver from the Commissioner of Education to 13 do that. 14 Many of us heard, from our 15 libraries, concerns about restoration of 16 library funding. This bill restores library 17 funding to the tune of approximately 18 $4.5 million; I think it's something like 19 $4.475 million. 20 Also, in the Article VII language, 21 there will be provision for a uniform budget 22 revote, and that will occur on the third 23 Tuesday in June, and that will occur effective 24 2006. 25 Clearly, this house has always

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(518) 371-8910 1 concerned itself with the priority of 2 education. It's been a priority for certainly 3 this conference, this Majority conference, as 4 long as I've been a member and long before I 5 got here. 6 What this attempts to do is to 7 balance the needs of providing a quality 8 education and at the same time, as part and 9 parcel of our ability now to close this 10 process down in a timely fashion, also enables 11 school districts, independent school districts 12 that rely on property levies to know exactly 13 where they stand. And these dollars 14 certainly, additional dollars will mitigate 15 the potential tax increases that they might 16 otherwise be faced with. 17 We begin the process here of 18 enhanced funding for high-needs districts, to 19 the extent that we've incorporated the 20 Governor's SBE money and also enhanced those 21 dollars. And to the extent that there were 22 other provisions that the Governor had in his 23 budget regard with regard to accountability, 24 those issues were not addressed in the 25 agreed-upon budget that we have -- we now have

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(518) 371-8910 1 before us. Those -- many of the provisions 2 were not concurred in. 3 We believe that this $848 million 4 is certainly one of the richest education 5 packages that the state will ever have the 6 good fortune of enacting or having seen 7 enacted. And certainly it is, I think, a 8 great improvement over what the Governor had 9 offered us. 10 With that, Madam President, I 11 certainly am prepared to yield if anybody has 12 any questions. 13 THE PRESIDENT: Senator 14 Schneiderman. 15 SENATOR SCHNEIDERMAN: Thank you, 16 Madam President. Briefly on the bill. 17 THE PRESIDENT: You may proceed 18 on the bill. 19 SENATOR SCHNEIDERMAN: There is, 20 as Senator Saland indicated, I believe, 21 some -- there are some very good things in 22 this bill. 23 Unfortunately, this is a situation, 24 and we talked about a few of them yesterday, 25 where I believe that this house is not leading

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(518) 371-8910 1 the way towards a fairer school funding 2 formula. 3 In fact, it becomes evident after 4 this year's budget process that the obstacle 5 in the state government to a fair funding 6 based on need, to a fair funding that 7 recognizes the needs of our high-needs school 8 districts, the opposition really lies here. 9 And I'm sorry to say that, because 10 of the problems of distribution of school aid, 11 I'm not going to be able to vote for this 12 bill. I'm particularly sorry because, as 13 Senator Saland mentioned very briefly, but I 14 think it deserves more emphasis, this budget 15 bill represents a breakthrough in terms of 16 capital aid, a really extraordinary 17 accomplishment. And I know this is 18 something -- I've spoken to Assemblyman 19 Sanders, the chair of the Assembly Education 20 Committee, and this has been a commitment that 21 he's made for some time. 22 It's not just that this increases 23 the building ratio for New York City. 24 New York, as many people know, gets far less 25 reimbursement from the state for building

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(518) 371-8910 1 schools than most parts of the state -- maybe 2 33, 35 percent, 36 percent. We can say now, 3 after the passing of this bill, that the state 4 will pay for at least half and probably more 5 than half of the capital costs of the city's 6 current five-year plan for schools. That's an 7 extraordinary breakthrough. 8 It's not just changing the ratio, 9 but it's eliminating these artificial caps 10 that limited the amount a district can get for 11 site acquisition, for materials. That is a 12 huge breakthrough, and I think credit goes to 13 both our education chair and certainly to 14 Assemblyman Sanders, who I know has been 15 fighting for this. 16 The difficulty I have here comes in 17 the area of operating aid. And I would urge 18 all my colleagues from the City of New York 19 and from other high-needs districts that it 20 has clearly been demonstrated in this process 21 that Governor Pataki, in his proposal for a 22 sound, basic education fund, wanted a 23 distribution formula based on need, wanted to 24 give more money to the high-needs districts as 25 required by the CFE opinion. The Assembly's

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(518) 371-8910 1 resolution was a sound, basic education 2 proposal based on need, consistent with the 3 CFE opinion. The amendments offered by our 4 conference were a sound, basic education 5 proposal to drive more funds to high-needs 6 school districts, including the City of 7 New York. 8 The only group here that is 9 insisting on maintaining the old share system, 10 which is the obstacle to decent funding for 11 our poorer school districts, is the Majority 12 in this house. That's out in the open now. 13 Even the Governor is no longer sticking with 14 the shares. And I have to credit him for his 15 $325 million sound, basic education fund. 16 In order to make things come up in 17 the old manner, consistent with the shares 18 that have discriminated against the City of 19 New York and other districts for decades, what 20 this house has insisted on, I'm sorry to say, 21 is redoing the legislative add to essentially 22 make it a low-needs district fund. So that 23 the Governor's good funding formula combines 24 with our additional bad funding formula to 25 produce essentially the same old shares that

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(518) 371-8910 1 are the obstacle to progress on this issue. 2 This is not something that 3 stonewalling is going to solve. This is not 4 something that further appeals are going to 5 solve. This is something that has to be 6 resolved by people in good faith, recognizing 7 that hundreds of thousands of children getting 8 a lousy education is bad for everyone in this 9 state, even if it's not in your district. If 10 you're just an investment banker totally 11 interested in return on your investment, you 12 should be investing in the schoolchildren of 13 the state. They are our economic future. 14 This budget takes a move backwards 15 as far as the Senate's role is concerned in 16 operating aid. I'm sorry to see that. I know 17 that the Assembly has now committed to passing 18 the CFE bill that mandates full funding for 19 all the high-needs districts. I do recognize 20 the fact that they haven't identified the 21 funding source for that, which to many is a 22 problem. But they have expressed a further 23 commitment, as they did in their resolution, 24 to changing once and for all the funding 25 formula that leaves hundreds of thousands of

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(518) 371-8910 1 children behind. 2 And the fact that the President 3 thought it was enough of a public relations 4 priority to name his education policy "No 5 Child Left Behind" -- without discussing the 6 merits of his particular program -- indicates 7 the depth of feeling on this issue. And yet 8 the Senate today is saying, We're sticking 9 with the shares even if it means leaving 10 hundreds of thousands of children behind. 11 That's wrong. 12 I wish we had done on operating aid 13 what we did on building aid. In the absence 14 of that, I have to say I'm going to stand with 15 the plans offered by the Assembly resolution, 16 the Governor, and Senator Paterson. I'm going 17 to vote against this bill. And we will 18 revisit this issue later this session, I hope, 19 of fair funding for all of the city's children 20 in New York and for Buffalo, Rochester, 21 Syracuse, Yonkers, other districts around the 22 state. I may not leave out Albany. 23 Thank you, Madam President. 24 THE PRESIDENT: Senator Serrano. 25 SENATOR SERRANO: Thank you,

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(518) 371-8910 1 Madam President. On the bill. 2 THE PRESIDENT: You may proceed 3 on the bill. 4 SENATOR SERRANO: I'm concerned 5 with the portion of the bill that deals with 6 the funding for the State Council on the Arts. 7 This house proposed an additional 8 $2 million which unfortunately is not in this 9 bill. So we see ourselves at a cut of 10 15 percent since the year 2000-2001, which is 11 really moving in the wrong direction when you 12 consider what the arts bring to the state of 13 New York and all of the localities as far as 14 economic development and education. 15 We need to be fully cognizant all 16 the time of the fact that the state of 17 New York houses the cultural center of the 18 world, and New York needs to -- our funding of 19 the arts need needs to reflect that. The 20 investment in the arts is an investment in our 21 children, it's an investment in education, and 22 it's an investment economically for the growth 23 of our state and for our localities. And I 24 hope that, going forward, the state will do 25 better in its funding of the arts.

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(518) 371-8910 1 Thank you. 2 THE PRESIDENT: Senator Krueger. 3 SENATOR LIZ KRUEGER: Thank you, 4 Madam President. On the bill. 5 THE PRESIDENT: You may proceed 6 on the bill. 7 SENATOR LIZ KRUEGER: Thank you. 8 This bill deals with a variety of 9 very distinct program areas, and so there is a 10 great deal we can agree or disagree on. 11 I share my colleague Senator 12 Schneiderman's concerns about our failure to 13 address in almost any way the obligations of 14 the Legislature on CFE and a fair funding 15 formula for the high-needs school districts. 16 And I appreciate his comments on the capital 17 money, but I would argue that I have heard 18 that it's simply $20 million more per year for 19 the high-needs school districts for capital, 20 and that is a drop in the bucket compared to 21 where we need to be in capital funds for 22 schools. 23 And so I am extraordinarily 24 disappointed that this is where the 25 Legislature ends up on March 31st regarding

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(518) 371-8910 1 education funding and the continuing pattern 2 of decades of failing to address fair funding 3 formulas for the schools in the state of 4 New York. 5 And that ties me into other mixed 6 feelings about this budget. The good news is 7 we put $4.47 million back in for libraries, 8 which we all know are so important. And the 9 irony is all we have done is brought them back 10 to the funding level they were at in the year 11 2002-2003, because we have cut them between 12 then and now. So we define it as a victory 13 when we put our libraries back to where they 14 were at a previous point in time, recognizing 15 that was inadequate, and costs continue to 16 grow. 17 And it ties directly into education 18 and schools, since in fact, at least in 19 New York City, many of our elementary and 20 junior high schools don't have libraries in 21 their schools. There's no room for them, 22 because we don't have enough room in our 23 schools to teach our children. And so the 24 importance of our public libraries being open 25 and available and having the books that they

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(518) 371-8910 1 need becomes even more critical to the 2 education of our children. And so I have to 3 say we have not gone far enough. 4 And I appreciate the comments of my 5 colleague Senator Serrano when he talked about 6 our failure to increase money for the arts. 7 Because in fact of course that also is an 8 issue of economic generation, but also for the 9 quality of the lives of our people and the 10 education of our children. 11 And again, one of the differences 12 between the school systems in underserved 13 areas and the rest of the state, my 14 understanding is that in many parts of the 15 state we still have arts education in our 16 schools, we still have certified teachers for 17 arts education in our schools. But if you 18 check with most New York City schools, you 19 will learn that we don't have those programs, 20 we don't have those teachers. 21 And therefore ensuring that there 22 is some money out there to expand arts 23 programs and to encourage arts institutions to 24 work with school facilities to provide arts 25 education in our schools becomes more and more

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(518) 371-8910 1 critical. So I would argue that we didn't do 2 justice to the arts community or to our 3 children there. 4 But I'd like to raise issues that 5 haven't been raised yet that concern me the 6 most about this bill, the fact that we still 7 have $1.1 billion in TANF funding floating 8 around out there yet to be dealt with. I 9 recognize the constitutional problems we have, 10 given the Governor's proposals to block-grant 11 this money into a flexible funding for family 12 services program. 13 But the truth is, with passage of 14 this bill today, we haven't addressed any of 15 the concerns of the endless category of 16 service programs out there for poor families 17 with children that right now are in limbo 18 about what happens with funding. We're 19 talking about daycare programs, we're talking 20 about child welfare, we're talking about 21 after-school programs, we're talking about job 22 training programs for women with children who 23 are living in poverty. 24 And we face very real concerns with 25 what happens or doesn't happen with this money

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(518) 371-8910 1 at two levels: One, the fact that we're 2 passing budget bills that don't answer those 3 questions within the context of the current 4 TANF money; and, two, the broader context that 5 as we work here in Albany to try to get a 6 budget done on time, our colleagues in 7 Washington have been moving forward with 8 legislation, through both the U.S. House and 9 the U.S. Senate, that would radically reduce 10 monies to the State of New York for these 11 programs over the next five years. 12 And in fact this week the U.S. 13 House of Representatives passed a budget bill 14 that in fact, if it was implemented, would 15 reduce in $4.5 billion less coming to New York 16 State over the next five years in programs for 17 low-income New Yorkers. The House bill cuts 18 funds to the State of New York ten times more 19 than the U.S. Senate Bill. 20 And so we have the short-term 21 complication of how are we resolving the TANF 22 block-grant question in the context of this 23 year's budget, but we have the longer-term 24 issue of the federal government continually 25 attempting and perhaps being successful in

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(518) 371-8910 1 drying up the funding that we have been 2 fighting over how we distribute here in 3 New York and yet may not have that money to 4 even deal with these programs. 5 And that is a critical concern for 6 every one of our districts, because there is 7 no district, there is no county that does not 8 find themselves in a situation where they are 9 underfunded for their social services and 10 their human services. 11 And in fact, within this bill, 12 because of confusion over the block grant and 13 TANF, we've actually cut about $26 million in 14 aid to localities out of the Office of 15 Children and Family Services, where I believe, 16 when this was agreed upon, we thought that 17 that $26 million would somehow be rolled into 18 the TANF flexible funding block grant debate. 19 But since that debate is off the 20 table for the moment, and yet we've still cut 21 $26 million out of aid to localities -- we 22 talk a lot in this house about the concerns 23 around health care and the costs at the local 24 level. But we should not be silent on the 25 fact that this Legislature continues, year in

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(518) 371-8910 1 and year out, to go along with proposals by 2 the Governor to reduce aid to localities to 3 fund the administrative costs of these 4 programs. 5 And we need the programs, and we 6 need our counties to be able to afford to run 7 them. And we keep shifting more and more of 8 the costs of those onto the backs of our 9 counties. I know the City of New York thinks 10 that under the flexible funding agreement -- 11 that may or may not ever go anywhere right 12 now -- that they would be about $150 million 13 short compared to the previous year. 14 And so because of our failure to 15 address what we need to in education funding, 16 our failure to address the questions on social 17 services and human services, our failure to go 18 far enough in protecting other key programs 19 such as libraries and the arts -- I suppose 20 the one thing in this budget no one has 21 mentioned, because people seem to be 22 relatively happy with it at the moment, is the 23 restorations we made for the CUNY and SUNY 24 system. 25 So again, I am pleased with certain

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(518) 371-8910 1 parts in this budget. I am pleased that we 2 did not do more damage to higher ed. But 3 again, we didn't move them forward, we just 4 kept -- basically, we protected the programs 5 for the most vulnerable students, particularly 6 TAP. 7 We have to do better, and so I'll 8 be voting no on this budget. 9 Thank you, Madam President. 10 THE PRESIDENT: Senator Maltese. 11 SENATOR MALTESE: Madam 12 President, if I may, I would like to direct my 13 remarks to the statement by my colleague 14 Senator Serrano. 15 I had a discussion with Senator 16 Serrano, and we in the conference committee on 17 higher ed, where the culture and arts grants 18 are discussed and handled, had an increase of 19 $2 million for the New York State Council on 20 the Arts. And despite the best efforts of our 21 chairman, the chairman of the Higher Education 22 Committee, Kenneth LaValle, and his cochairman 23 from the Assembly side, Assemblyman Ron 24 Canestrari -- and other people on the 25 committee, both Democrat and Republican,

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(518) 371-8910 1 Minority and Majority, including the ranking 2 Minority member on the Senate side, Senator 3 Stavisky -- had lobbied very extensively for 4 an increase of $2 million for the New York 5 State Council on the Arts, and that was to be 6 an amount that was matched by the Assembly. 7 And if a lesser amount was to be appropriated, 8 it was to be also matched by the Assembly. 9 Unfortunately, as I say, despite 10 the best efforts of Democrat and Republican 11 Assembly members of that particular committee, 12 and Senate members, the Assembly leadership 13 chose not to match that amount. 14 At the same time, we have not given 15 up for the future to try to increase those 16 amounts. I fully share Senator Serrano's 17 thoughts and remarks following up on his 18 efforts in the City Council as chair of 19 culture and tourism, that the New York State 20 Council on the Arts should indeed receive 21 additional funding for their very laudatory 22 efforts and projects. 23 And unfortunately, the decrease of 24 what would have been $4 million will be 25 reflected in many, many worthwhile endeavors

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(518) 371-8910 1 across the state. But hopefully -- this is, 2 after all, a compromise budget, and it is 3 something that had to be agreed by both houses 4 and the Executive. And despite the efforts of 5 all concerned in our house and on the 6 Executive side, that amount was not matched. 7 And we're hopeful in the future 8 that we can increase those amounts at least to 9 the extent of the $2 million, which would be 10 matched and come to a total of $4 million. 11 So I plan to vote aye. I think 12 it's the best that could be obtained under the 13 circumstances. But we have not -- we will 14 continue our best efforts to get increased 15 funding for the New York State Council on the 16 Arts. 17 THE PRESIDENT: Does any other 18 member wish to be heard? 19 Then the debate is closed. 20 The Secretary will ring the bell. 21 Read the last section. 22 THE SECRETARY: Section 4. This 23 act shall take effect immediately. 24 THE PRESIDENT: Call the roll. 25 (The Secretary called the roll.)

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(518) 371-8910 1 THE PRESIDENT: Senator 2 DeFrancisco, to explain your vote. 3 SENATOR DeFRANCISCO: Yes. The 4 comments that I have on this bill really apply 5 to all of the bills that we will be voting on 6 today as far as the budget is concerned. 7 You know, there's been some 8 criticism by some of various parts of this 9 bill, and there will be criticism of other 10 bills. But as a practical matter, none of 11 these bills are totally acceptable to any of 12 us. But the important thing is that we 13 reached a reasonable compromise in order to 14 get a budget that is a good budget in a timely 15 fashion. 16 So I certainly understand some of 17 the criticism; I have my own concerns. But as 18 a practical matter, we're doing what the 19 Constitution tells us to do in a timely 20 manner, and that should apply to each one of 21 these bills that we are going to be voting on 22 today. 23 I vote aye. 24 THE PRESIDENT: Senator Skelos. 25 SENATOR SKELOS: Please recognize

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(518) 371-8910 1 Senator Sabini. 2 THE PRESIDENT: Senator Sabini. 3 SENATOR SABINI: Thank you, Madam 4 President. To explain my vote. 5 I am voting in the affirmative on 6 this. While I concur with many others who 7 have spoken earlier that the funding formulas 8 still are not right for the City of New York, 9 this is an agreed-upon bill. And I wish we 10 would have seen more harder bargaining on the 11 other side of the building on behalf of 12 New York City's schoolchildren. 13 However, on the whole, the aid to 14 the city -- which has been unfair up until 15 now -- on school construction is modified in 16 the city's favor. I think that's important. 17 As someone who chaired the committee that 18 constructed schools when I was on the City 19 Council, I know that the money is just not 20 there for the city right now. And we still 21 have needs. My district is still among the 22 most overcrowded in the state. 23 And also I want to note the fact 24 that a piece of legislation that was carried 25 by Assemblyman Klein in the Assembly for a

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(518) 371-8910 1 long time, and by myself in this body, will in 2 effect be funded to give scholarships, 3 $29 million, to a number of different 4 programs, including World Trade Center 5 victims. But the bill we carried was for sons 6 and daughters of Flight 587 victims in the 7 particularly hard-hit Dominican-American 8 community, where the need for assistance in 9 higher education is very important. And 10 that's in this bill. 11 So on the whole, while I don't 12 think that it goes far enough, I'm going to 13 support the bill and vote in the affirmative. 14 Thank you. 15 THE PRESIDENT: You will be so 16 recorded as voting in the affirmative. 17 Senator Saland, to explain your 18 vote. 19 SENATOR SALAND: Thank you, Madam 20 President. To explain my vote. 21 Certainly everybody is aware that 22 in the aftermath of the Court of Appeals 23 decision in June of '03 dealing with CFE, 24 there is an even greater concern with regard 25 to the needs of not only New York City but

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(518) 371-8910 1 other high-needs districts. Clearly, to date, 2 we've been unable to secure any type of 3 negotiated agreement. 4 However, I think it's important to 5 note that there was nothing in that court 6 decision or any other court decision that says 7 that we have to limit funding to any 8 particular school district or any other type 9 of school district. 10 And the fallacy in the eyes of many 11 is rarely will you find districts that are 12 uniformly wealthy. And in many instances, you 13 will not have districts that are necessarily 14 uniformly poor. 15 Using my district, for example, 16 perhaps one of the wealthiest communities in 17 my district is a community that has wealth 18 because it has many people who don't 19 necessarily live full-time in my area, who 20 live in these marvelous estates, who don't 21 have children in the school system. 22 The people -- the mere mortals who 23 live in the community really suffer under 24 enormous tax burdens simply because the 25 district is viewed as wealthy. And were they

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(518) 371-8910 1 to be treated consistently, as they generally 2 are, as a wealthy district, it's an enormous 3 burden for them to overcome. 4 There's nothing wrong nor has there 5 been anything said in any court decision that 6 you can't raise all of the ships. What we 7 have done in the context of this, as I 8 mentioned before on this budget bill, is to 9 say, yes, we adopt the Governor's SBE proposal 10 to deal with high-needs districts; we enhance 11 that proposal to the tune of somewhere in the 12 area of an additional nearly 10 percent; we 13 enhance the capital side by providing 14 additional building aid to high-needs school 15 districts. 16 There is no lack of recognition of 17 dealing with issues pertaining to high-needs 18 school districts. There may be issues of 19 quantum, but certainly not issues of dealing 20 with the needs of high-needs school districts. 21 I vote in the affirmative, Madam 22 President. 23 THE PRESIDENT: Senator Stavisky. 24 SENATOR STAVISKY: Thank you, 25 Madam President. To explain my vote.

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(518) 371-8910 1 I agree with what Senator Saland 2 said if you consider that in the entire state 3 every child is entitled to the same sound, 4 basic education that the children in New York 5 City are entitled to. 6 And that unfortunately is lacking, 7 I think, in this bill. We do not have a 8 statewide formula based upon the needs of each 9 individual school district and the children 10 who go to school in that school district. 11 Secondly, I too am disappointed 12 with the lack of an increase for the State 13 Council on the Arts. I think each one of us 14 has a cultural institution in our district 15 which benefits from appropriations from the 16 State Council on the Arts. I certainly have 17 them in my district, and I regret that 18 unfortunately -- and I served on that 19 conference committee -- that we did not 20 increase the appropriation by the $2 million 21 or the $4 million amount. 22 And lastly, I am delighted that 23 this bill does not include a tuition increase 24 for the students at CUNY and SUNY. We did 25 increase the base aid to cover the cost of --

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(518) 371-8910 1 to cover the increases by about -- I don't 2 mean base aid, I'm sorry -- operating aid, 3 5.9 percent for the students at CUNY and a 4 similar amount, I understand, for SUNY. 5 And because of that fact and the 6 fact that it is an improvement over previous 7 years, I vote aye. 8 THE PRESIDENT: You will be so 9 recorded as voting in the affirmative, as will 10 Senator Saland. 11 Senator Brown. 12 SENATOR BROWN: Thank you, Madam 13 President. To explain my vote. 14 I also have some concerns about 15 this bill, as other members have expressed. 16 But I too am going to be voting in the 17 affirmative. 18 One of the concerns that I have is 19 with respect to the school aid formula. And 20 this conference had advocated a school aid 21 formula that more mirrored what the CFE 22 advocates were looking for in terms of school 23 aid. And under that formula, the high-needs 24 school district that I represent in Buffalo 25 would have fared even better than it is going

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(518) 371-8910 1 to fare under what we have agreed to in the 2 budget. 3 I am pleased, though, that the 4 district in Buffalo is going to receive a 5 7.5 percent increase, or almost an additional 6 $30 million, so that is good news for our 7 school district. Buffalo is looking at a 8 funding gap this year of about $30 million. 9 So this additional aid, even though it is not 10 as much as I would have liked to have seen, 11 and even though this conference would have 12 advocated more money, it will be enough money 13 to close the gap in Buffalo. 14 I also am very pleased at the work 15 that every member of the Senate has done in 16 terms of pushing aggressively this year for an 17 on-time state budget. When I was elected and 18 came into the Senate in 2001, I was a fierce 19 advocate for on-time budgets and have 20 advocated for an on-time budget every year 21 since I've been in the Legislature, which is 22 five years now. And certainly want to 23 congratulate all of my colleagues in the 24 Senate for all of your hard work in making 25 sure that we do have an on-time budget this

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(518) 371-8910 1 year for the first time in 21 years. 2 I vote in the affirmative, Madam 3 President. Thank you. 4 THE PRESIDENT: You will be 5 recorded as voting in the affirmative, 6 Senator. 7 Senator Malcolm Smith. 8 SENATOR MALCOLM SMITH: Thank 9 you, Madam President. To explain my vote. 10 Clearly the education issue is 11 probably one of the paramount things that are 12 of interest to the people of the City of 13 New York and obviously the state. I just rise 14 very briefly to add my voice to the chorus 15 that you've heard from many colleagues on my 16 side of the aisle with regards to the CFE 17 decision and adequate funding for schools in 18 the City of New York. 19 As one who represents a district 20 where you can walk into a classroom and 21 literally see 40 or 50 students in one room, 22 you can see some desks that are basically, I 23 would just say, in conditions that one should 24 not be sitting in, where some don't have 25 adequate books, where even the physical plant

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(518) 371-8910 1 is in dire need of repair, it just makes it 2 very difficult for us to, while being 3 appreciative of this particular budget bill, 4 and it coming somewhat on time -- there is 5 still a great deal of need in the City of 6 New York. And we cannot rest and will not be 7 able to rest until adequate funding for the 8 City of New York schools are there. 9 There are a number of advocates who 10 are continually calling our office, who are 11 continually asking us to please make sure 12 adequate funding is there. And it is just 13 very difficult, while we are voting on this 14 package -- $840 million or $830 million, while 15 it sound likes a decent number, clearly is 16 woefully short of what the City of New York 17 needs. The fact that there's no money in 18 there for capital improvements is pretty 19 horrendous. 20 And while we are going to be 21 supporting this bill and while I do support 22 this bill -- there are some good things in 23 here, obviously around the tuition increase, 24 no tuition increase. Obviously from a more 25 parochial standpoint, I know Senator Padavan

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(518) 371-8910 1 is also appreciative of the fact that there is 2 the $3 million in there for the Queensborough 3 Community College for the Holocaust Center, 4 which is something that we hope the Governor 5 will not veto this year. 6 There are some things in there that 7 while we can appreciate the dedication and the 8 thoughtful process that went into putting this 9 package together, we must be on record 10 indicating that it is not adequate enough for 11 the City of New York, which also means it's 12 not adequate for the high-need districts 13 around the state as well as some of the larger 14 cities around the state. 15 I will be voting aye, but I do want 16 my colleagues to understand that we have much 17 work that still needs to be done in this 18 regard. 19 Thank you. 20 THE PRESIDENT: You will be 21 recorded as voting in the affirmative, 22 Senator. 23 Senator Parker. 24 SENATOR PARKER: Yes, Madam 25 President, to explain my vote.

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(518) 371-8910 1 THE PRESIDENT: You may proceed 2 to explain your vote. 3 SENATOR PARKER: I really 4 appreciate that we're on the verge of getting 5 a budget on time this year. I think it's a 6 great thing. I think that all of the work 7 that people around the state, the advocates 8 and the citizens did, around reform of this 9 legislative body, has really made a 10 difference, and I'm excited to see that. 11 But I am still disappointed about 12 some of the outcomes that we're still getting. 13 And I'm voting no today on this bill because 14 it does not deal with much of the issues that 15 we need in terms of education generally, but 16 particularly the CFE matter. 17 For us to pass a budget once again 18 in the face of a court ruling that has ordered 19 us to act in a certain way, and for us to 20 continue to act like that court order doesn't 21 exist, that it's not relevant, that it's not 22 germane, I think is criminal. 23 And I think that we owe the 24 1.1 million schoolchildren who are going to 25 school in New York City right now, as we

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(518) 371-8910 1 speak, we owe them an opportunity to get a 2 sound, basic education. And right now, by 3 passing this bill, we are denying them that 4 and we're telling them that they are not worth 5 every other child in this state. And that is 6 wrong. 7 I think we have an opportunity to 8 not just do something here good for New York 9 City but to deal with all of the high-needs 10 districts throughout the state. And this is 11 not the first time I've said this. I said it 12 last year when we had this debate as well. We 13 have an opportunity to help every single 14 high-needs district in the state, from Buffalo 15 to Brooklyn, but we refuse to do it. 16 And so for that reason I'm voting 17 nay. 18 ACTING PRESIDENT MEIER: Senator 19 Parker will be recorded in the negative. 20 Senator Montgomery, to explain her 21 vote. 22 SENATOR MONTGOMERY: Yes, very 23 briefly, Mr. President, I just would like to, 24 on a particular area of this budget that we're 25 passing today, say a word of gratitude,

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(518) 371-8910 1 especially to Senator Farley, and of course 2 all of the members of his committee and the 3 people on that panel who saw fit to support 4 the libraries in our state. 5 Certainly each time that I'm in one 6 of the branch libraries in my district or in 7 the central library in Brooklyn and I see 8 hundreds of young people there utilizing the 9 library and all of its offerings to them, I am 10 reminded how much it is a cultural, 11 educational institution that we should be 12 supporting. 13 I am very happy that my colleagues 14 saw the wisdom to keep the cultural, the 15 libraries and the cultural institutions as 16 part of the education system, because indeed 17 they are. And I thank my colleagues for the 18 vision to maintain a level of support that 19 will allow these institutions to continue to 20 support the main education of young people by 21 being there to give them an opportunity to 22 have a hands-on experience in every single 23 way. 24 So I'll be voting yes on this 25 budget, for that and many other reasons.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: Senator 2 Montgomery will be recorded in the 3 affirmative. 4 Senator Bonacic, to explain his 5 vote. 6 SENATOR BONACIC: Thank you, Mr. 7 President. 8 First of all, I would like to 9 congratulate Senator Bruno, Speaker Sheldon 10 Silver and our Governor, who worked very hard 11 to get us all to this point. 12 I want to thank my colleagues here, 13 because we always fight about the amount of 14 money in education, pushing that number higher 15 and higher. And then we get involved with our 16 regional politics in the distribution 17 problem -- how much should go to the city, how 18 much should go upstate. 19 I want to tell you something. I 20 represent the Catskills and the Hudson Valley, 21 and I care as much about the children in 22 New York City as I do in my district when it 23 comes to excellence in education and whether 24 they're getting the proper education, whether 25 they're being challenged so they can compete

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(518) 371-8910 1 when they get out of school. 2 So I support the money allocation 3 because we pushed it up. But I will ask you 4 this question. Will we monitor, every one of 5 us, the excellence in education for our 6 children as we keep pumping money into these 7 school districts? Keep in mind, now, we give 8 more per pupil than any state in the country. 9 And when we make that kind of money 10 commitment, we should ask and demand 11 accountability that our students are at the 12 top in excellence in education, from Buffalo 13 to Syracuse, to my district, to every district 14 in New York City. 15 And I would ask each of us to 16 monitor the excellence in education after 17 you've won the battle, collectively, on 18 raising the money commitment. 19 So I support this budget. I 20 support the education amount for our children. 21 But I still think we all have a lot of work to 22 do to improve the efficiency, the 23 accountability in raising the excellence of 24 education for all of the children of the State 25 of New York, and I ask that we monitor that

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(518) 371-8910 1 always. 2 Thank you, Mr. President. 3 ACTING PRESIDENT MEIER: Senator 4 Bonacic will be recorded in the affirmative. 5 Senator Little, to explain her 6 vote. 7 SENATOR LITTLE: Thank you, Mr. 8 President. To explain my vote. 9 Today, as we are concluding our 10 budget votes, we tend to look at the words 11 "allocation" and "appropriation" for the money 12 that we are designating for certain 13 departments in our state budget. 14 I tend to look at our money for 15 education not as an appropriation or an 16 allocation, but as an investment, because I 17 think it's the most important investment that 18 we can make in New York State with the money 19 that we are dealing with. 20 Helping our schools address the 21 needs that they have throughout New York 22 State, in all the varying sizes and varying 23 problems, is truly important. Today our 24 schools have health insurance increases, they 25 have pension cost increases, as well as the

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(518) 371-8910 1 many demands put upon them by the State 2 Education Department. 3 I represent 53 school districts in 4 the State of New York. Considering there are 5 only 750 school districts, that's quite a 6 share. Some, a couple, are dealing with 7 expanded growth, but most of my school 8 districts are dealing with a reduction and 9 declining enrollment. And yet the expenses 10 for class of 12 are pretty much the same as 11 for a class of 22 or 25 or 30. 12 Therefore, additional investment 13 and funds for these schools is truly 14 important. And I thank everyone for their 15 contributions, for their working together to 16 come up with a budget that is fair and 17 equitable in New York State, and I thank you. 18 I vote in the affirmative. Thank 19 you. 20 ACTING PRESIDENT MEIER: Senator 21 Little will be recorded in the affirmative. 22 The Secretary will announce the 23 results. 24 THE SECRETARY: Those recorded in 25 the negative on Calendar Number 277 are

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(518) 371-8910 1 Senators Duane, L. Krueger, Parker and 2 Schneiderman. 3 Ayes, 57. Nays, 4. 4 ACTING PRESIDENT MEIER: The bill 5 is passed. 6 Senator Skelos. 7 SENATOR SKELOS: Mr. President, 8 would you please call up Calendar Number 278. 9 ACTING PRESIDENT MEIER: The 10 Secretary will read Calendar 278. 11 THE SECRETARY: In relation to 12 Calendar Number 278, Senator Johnson moves to 13 discharge, from the Committee on Finance, 14 Assembly Bill Number 554C and substitute it 15 for the identical Senate Bill Number 554E, 16 Third Reading Calendar 278. 17 ACTING PRESIDENT MEIER: 18 Substitution ordered. 19 The Secretary will read. 20 THE SECRETARY: Calendar Number 21 278, Assembly Budget Bill, Assembly Print 22 Number 554C, an act making appropriations for 23 the support of government: Transportation, 24 Economic Development and Environmental 25 Conservation Budget.

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(518) 371-8910 1 SENATOR SCHNEIDERMAN: 2 Explanation. 3 ACTING PRESIDENT MEIER: Senator 4 Hannon, an explanation has been requested of 5 Calendar 278. 6 SENATOR HANNON: Thank you, Mr. 7 President. 8 What we have before us is, in major 9 part, the health appropriation bill. Later on 10 today we will be dealing with the Article VII 11 language bill. 12 This is the measure which 13 incorporates the collective actions in regard 14 to the Executive proposal concerning 15 hospitals, nursing homes, home health care, 16 managed care, Family Health Plus, HCRA, public 17 health, aging, substance abuse, alcoholism, 18 and the related appropriate actions concerning 19 the funds and the subfunds and the revenue 20 funds therein. 21 ACTING PRESIDENT MEIER: The 22 Secretary will sound the bells. 23 Senator Montgomery, I'm sorry. 24 Senator Montgomery, you're recognized. 25 SENATOR MONTGOMERY: Yes, Mr.

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(518) 371-8910 1 President, just very briefly. 2 I would be remiss if I did not 3 express my frustration that we do not have 4 enough funding in this budget for school-based 5 health clinics. 6 We should be absolutely ashamed as 7 a state that we have abandoned our young 8 people in terms of their health care needs, 9 health and mental health, in their schools 10 where they are, mostly. And it could be done 11 so efficiently and so effectively and serve 12 the needs of our young people. We have high 13 rates of suicide among our young people, 14 especially upstate. We have high rates of HIV 15 infection occurring in young people in this 16 state. We have no access to mental health 17 crisis intervention services for them in their 18 schools or, in most instances, nor in their 19 communities. 20 So it really is -- we have left out 21 our young people, especially early teens, high 22 school and middle school young people. 23 So while I know that there is 24 funding, and certainly appreciate that Senator 25 Hannon has been supportive of this -- but we

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(518) 371-8910 1 just have not seen fit to invest in the health 2 care needs and mental health needs of our 3 young people through those centers, 4 school-based health clinics that could serve 5 them where they are, both in the rural areas 6 of this state as well as in the urban areas, 7 all of our children. It doesn't have any 8 income test required or associated with it. 9 It is all children, all young people in this 10 state need access to school-based health 11 clinics. 12 And I certainly hope that some time 13 in the very near future we're going to see fit 14 to add this kind of funding so that we create, 15 as part of our health delivery system, a means 16 of providing health and mental health services 17 to our young people. 18 Thank you, Mr. President. 19 ACTING PRESIDENT MEIER: Senator 20 Hannon. 21 SENATOR HANNON: I would just say 22 that, with the other house, we have tried to 23 have an appropriate level of funding for this. 24 We have moved monies into the school-based 25 health centers to replace monies otherwise not

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(518) 371-8910 1 available through the TANF funds. And we 2 believe there has been an appropriate level to 3 maintain where we've been in previous years. 4 ACTING PRESIDENT MEIER: Any 5 other Senator wish to be heard on the bill? 6 Debate is closed, then. 7 The Secretary will sound the bells. 8 Members are asked to return to the 9 chamber for a vote. 10 Read the last section. 11 THE SECRETARY: Section 2. This 12 act shall take effect immediately. 13 ACTING PRESIDENT MEIER: Call the 14 roll. 15 (The Secretary called the roll.) 16 THE SECRETARY: Ayes, 61. 17 ACTING PRESIDENT MEIER: The bill 18 is passed. 19 Senator Skelos. 20 SENATOR SKELOS: Mr. President, 21 will you please call up Calendar Number 270. 22 ACTING PRESIDENT MEIER: The 23 Secretary will read Calendar 270. 24 THE SECRETARY: Calendar Number 25 270, Senate Budget Bill, Senate Print 551B, an

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(518) 371-8910 1 act making appropriations for the support of 2 government: Legislature and Judiciary Budget. 3 SENATOR SCHNEIDERMAN: 4 Explanation. 5 SENATOR JOHNSON: This bill is 6 the legislative budget, and judiciary, for the 7 year, total of $208 million. 8 We concur with the Judiciary 9 Committee's request, with the following 10 modifications: Reduced without prejudice, 11 nonpersonal service and maintenance 12 undistributed by $10 million, and general 13 state charges by $17.3 million, to cover the 14 Executive's request to allow quarterly 15 reimbursement to the Office of Court 16 Administration from the Indigent Legal 17 Services Fund up to $6.25 million per quarter. 18 ACTING PRESIDENT MEIER: Senator 19 Schneiderman. 20 SENATOR SCHNEIDERMAN: Thank you, 21 Mr. President. On the bill very briefly. 22 This is the legislature and 23 judiciary appropriation language bill. It is 24 improved from the Senate one-house bill that 25 came before us a few weeks ago, because that

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(518) 371-8910 1 bill contained a $30 million cut to the 2 judiciary. This bill only contains a 3 $10 million cut to the judiciary. 4 I think that that is unfortunate. 5 Those of us who actually practice in the 6 courts and are familiar with the extraordinary 7 overburdening in many jurisdictions, 8 particularly in poorer communities, have to 9 look with great sadness on a bill that for 10 such -- deals really so disrespectfully with 11 another branch of government. 12 I think that we should be expanding 13 the funding of the judiciary. I think that 14 having equal access to justice requires them 15 to have adequate funding. And I think it is 16 extraordinarily irresponsible of us to be 17 cutting their budget at all, although it is 18 certainly a tribute to the conference process 19 and our colleagues in the Assembly, I guess, 20 that it's gone from a $30 million cut in the 21 first draft of the Senate bill to a 22 $10 million cut here. 23 But I do think it's unfortunate as 24 a matter of public policy and is something I 25 hope we will reverse in the days and weeks to

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(518) 371-8910 1 come. 2 Thank you, Mr. President. 3 ACTING PRESIDENT MEIER: Senator 4 DeFrancisco. 5 SENATOR DeFRANCISCO: Yes. The 6 $10 million deduction or reduction in the 7 judiciary budget has been fully explained to 8 the Chief Administrative Judge and the Chief 9 Judge of the Court of Appeals. They have 10 indicated they can easily absorb that budget. 11 They have indicated that it is not going to 12 cause a problem with them with respect to the 13 performance of the duties of the judiciary. 14 There are some who believe that the 15 judiciary could use some streamlining in view 16 of the fact that there is a huge bureaucracy 17 that has developed, I know at least in my 18 lifetime, called the Office of Court 19 Administration, that doesn't deal with justice 20 at the grassroots effort but that needs some 21 type of streamlining. 22 So that, I believe, explains why 23 there was a compromise of $10 million. It was 24 something the judiciary could deal with and 25 deal with effectively without hurting the

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(518) 371-8910 1 local administration of justice or any of the 2 administration of justice. And also it took 3 into account some of the concerns of some 4 members of both houses, I believe, as well as 5 the Governor. 6 ACTING PRESIDENT MEIER: Senator 7 Malcolm Smith. 8 SENATOR MALCOLM SMITH: Thank 9 you, Mr. President. 10 It is true that the -- I guess what 11 Senator DeFrancisco has indicated in terms of 12 being able to absorb the $10 million. 13 Obviously Judge Lippman and Judge Kaye have 14 indicated they have that ability to do so 15 without basically hurting services. 16 However, what I would hope is that 17 it's not the beginning of a practice, that as 18 we see fit to give them a $10 million decrease 19 in their support services dollars that they 20 need, that we don't look to the year 2007-2008 21 and begin to say: Well, we can continue to do 22 this. 23 While we did change it from 24 $30 million to $10 million, I hope we don't go 25 forward talking about we still owe another

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(518) 371-8910 1 $10 million for the next two years. 2 More importantly, it does have an 3 impact indirectly on some of the poorer 4 neighborhoods, as you will find Family Courts 5 in many of our neighborhoods are bursting at 6 the seams. And it would be hopeful that we'll 7 make sure that the judiciary budget stays in 8 place, if not increased. I truly believe the 9 judges need an increase in salary, but I guess 10 we'll save that for another time. 11 But I do want to rise just to 12 indicate that I hope this is not the beginning 13 of a practice to have some onslaught on the 14 judicial budget in the State of New York. 15 Thank you. 16 ACTING PRESIDENT MEIER: Does any 17 other Senator wish to be heard on the bill? 18 Debate is closed, then. 19 The Secretary will sound the bells. 20 Members are asked to return to the 21 chamber for a vote. 22 Read the last section. 23 THE SECRETARY: Section 2. This 24 act shall take effect immediately. 25 ACTING PRESIDENT MEIER: Call the

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(518) 371-8910 1 roll. 2 (The Secretary called the roll.) 3 THE SECRETARY: Ayes, 60. Nays, 4 1. Senator Schneiderman recorded in the 5 negative. 6 ACTING PRESIDENT MEIER: The bill 7 is passed. 8 THE SECRETARY: Calendar Number 9 395, by the Senate Committee on Rules, Senate 10 Print Number 3667, an act to amend the Labor 11 Law and others. 12 SENATOR SCHNEIDERMAN: 13 Explanation. 14 ACTING PRESIDENT MEIER: Can we 15 have some order in the chamber. 16 Senator Johnson. 17 SENATOR JOHNSON: Mr. President, 18 this is the language bill which goes along 19 with the bill that's been explained previously 20 by Senator Saland, the Education, Labor and 21 Family Assistance Budget for the 2005-2006 22 state fiscal year. 23 ACTING PRESIDENT MEIER: Any 24 other Senator wish to be heard on the bill? 25 Debate is closed, then.

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(518) 371-8910 1 The Secretary will sound the bells. 2 Members should return to the 3 chamber for a vote. 4 Read the last section. 5 THE SECRETARY: Section 9. This 6 act shall take effect immediately. 7 ACTING PRESIDENT MEIER: Call the 8 roll. 9 (The Secretary called the roll.) 10 THE SECRETARY: Ayes, 59. Nays, 11 2. Those recorded in the negative are 12 Senators L. Krueger and Schneiderman. 13 ACTING PRESIDENT MEIER: The bill 14 is passed. 15 The Secretary will continue to 16 read. 17 THE SECRETARY: Calendar Number 18 396, by the Senate Committee on Rules, Senate 19 Print Number 3668, an act to amend the Public 20 Health Law and others. 21 SENATOR SCHNEIDERMAN: 22 Explanation. 23 ACTING PRESIDENT MEIER: Senator 24 Johnson. 25 SENATOR JOHNSON: Mr. President,

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(518) 371-8910 1 this is the provisions of the law for changes 2 necessary to be implemented in order to put in 3 place the 2005-2006 health and mental health 4 budget. 5 ACTING PRESIDENT MEIER: Senator 6 Montgomery. 7 SENATOR MONTGOMERY: Mr. 8 President, I want to thank Senator Johnson for 9 that explanation. It's satisfactory to us. 10 (Laughter.) 11 ACTING PRESIDENT MEIER: Well, 12 thank you for being satisfied, Senator 13 Montgomery. 14 Senator Winner. 15 SENATOR WINNER: Thank you, Mr. 16 President. 17 I want to rise in support of this 18 measure, particularly as it relates to some of 19 the provisions that are designed to help our 20 local governments in dealing with the Medicaid 21 crisis. 22 I want to commend Senator Hannon 23 and Senator Bruno for recognizing the 24 difficulty that our counties are in with 25 respect to meeting these Medicaid obligations.

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(518) 371-8910 1 And this provision contains a 2 long-sought-after cap on local government 3 expenditures for Medicaid as well as other 4 measures that will reduce some of the local 5 governments' concerns that have caused 6 double-digit property tax increases, not only 7 in my district but throughout most of upstate 8 New York and Long Island. 9 These tax increases are related 10 directly to the ever-burgeoning costs of 11 Medicaid. And this provision speaks out very 12 directly and forcefully to curtailing those 13 levels of expenditures. And I'm very pleased 14 to support it, because now trying to get the 15 Medicaid burden under control will be 16 something that is within sight and will 17 provide for some more confidence in the 18 Medicaid system throughout New York. 19 Certainly the provisions of this 20 bill involving the cap, the preferred drug 21 list, the efforts at more disease management 22 control and other measures of cost containment 23 will provide the relief to the counties and 24 relief to the State of New York as we try to 25 go forward to tame the Medicaid burden that

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(518) 371-8910 1 we're all facing. 2 This burden, at $44 billion or 3 $45 billion and growing, is consuming an ever, 4 ever increasing percentage of all of our 5 resources that are then crowding out the 6 provision of support for many other programs 7 that we all hold near and dear. 8 So therefore, Mr. President, I 9 thank you for the opportunity to speak on this 10 pleasure and look forward to working in the 11 future with a lot more efforts to bring 12 Medicaid under control and provide for relief 13 for our local counties. 14 Thank you. I vote aye. 15 ACTING PRESIDENT MEIER: Senator 16 Rath. 17 SENATOR RATH: Thank you, 18 Mr. Chairman. 19 The efforts of the health budget 20 conference committee were wonderful, a true 21 bipartisan effort to sort out what has become 22 a chief cost center in the State of New York, 23 not only for us but for the counties. And not 24 only the State of New York; the discussion is 25 not only in our chamber here but, I'm sure, in

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(518) 371-8910 1 senate and assembly chambers all across the 2 country as to how do we move forward in 3 consideration of the spiraling costs of health 4 care. 5 We have made a very good start here 6 today. There's a lot more work to be done. 7 The phrase "cost containment," the phrase 8 "reform, restructure," will be on this floor 9 for the next ten years, I would bet, before we 10 get to a point where we're all comfortable 11 with what costs are in relation to what the 12 traffic will bear in terms of our taxpayers in 13 New York State. 14 Whether they're business taxes or 15 whether they're the property taxes, Senator 16 Winner has pointed out they're going to be 17 relieved with this cap. Or whether it's sales 18 tax -- which my home county, Erie County, 19 absolutely refused to move on sales tax to 20 support the cost of Medicaid. So I think if 21 you have been reading the press, you know what 22 the circumstances are there. 23 So, thankfully, we have begun a 24 very long road. And I'm hopeful that as this 25 legislative session proceeds, there will be

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(518) 371-8910 1 full debate in both houses of the Legislature 2 on what we need to do by way of restructure so 3 that we can get on with providing services for 4 people who need the services but not spending 5 more money than we can afford to spend. 6 Thank you, and I will be voting 7 aye. 8 ACTING PRESIDENT MEIER: Any 9 other Senator wish to be heard on the bill? 10 Debate is closed, then. 11 The Secretary will sound the bells. 12 Members should return to their 13 seats for a vote. 14 Read the last section. 15 THE SECRETARY: Section 2. This 16 act shall take effect immediately. 17 ACTING PRESIDENT MEIER: Call the 18 roll. 19 (The Secretary called the roll.) 20 ACTING PRESIDENT MEIER: Senator 21 Bonacic, to explain his vote. 22 SENATOR BONACIC: Yes. First of 23 all, I'd like to thank Senator Hannon and 24 Senator Meier for their work on Medicaid 25 reform and cost containment.

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(518) 371-8910 1 And many of the speakers standing 2 up talked about how it was going to help 3 property tax owners where the savings with the 4 cap would be passed on to the counties. I 5 would suggest to you that if we're concerned 6 with the taxpayers, and I know we all are, now 7 that the budget is behind us we have a bigger 8 problem with the rising school taxes, 9 especially on Long Island, all of the Hudson 10 Valley, coming up. 11 And I think if we are serious of 12 alleviating the burden, we should be 13 concentrating on school taxes in two areas. 14 One, we should be thinking of reforming tax 15 exempts. There's billions of dollars being 16 lost by abusers that are abusing the tax 17 system and avoiding property tax, passing it 18 on to families that are struggling to keep up 19 the payment of the taxes and their mortgage to 20 save their house. 21 The other thing that we should be 22 thinking about -- and I don't have the answer 23 yet -- and that is we should find an alternate 24 way of financing public education other than 25 the demand on property taxes.

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(518) 371-8910 1 We will be having legislative 2 hearings throughout the state of New York. I 3 welcome your input, your wisdom in shaping 4 that. And we can now have three months to 5 four months that we're here, we're not 6 distracted by the budget, and we can now work 7 on policy, legislation. And alleviating 8 school taxes should be one of our top 9 priorities. 10 Thank you, Mr. President. 11 ACTING PRESIDENT MEIER: Senator 12 Bonacic will be recorded in the affirmative. 13 Senator Skelos, to explain his 14 vote. 15 SENATOR SKELOS: To explain my 16 vote. 17 I'm going to support this 18 legislation. And I want to congratulate you 19 and Senator Hannon for the fine work that you 20 have done on this whole issue of Medicaid. 21 There's more to be done at this 22 point, though. The cap is very positive for 23 our counties, but the counties now do have a 24 responsibility -- two responsibilities, in my 25 opinion.

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(518) 371-8910 1 Number one, to watch utilization. 2 So that if they turn their back on their 3 responsibilities as gatekeepers, the cost of 4 their program, our program, is going to be 5 shifted to the state, and we'll see a burden 6 put on the taxpayers of the state that we will 7 not be able to fund other programs. 8 The second challenge to the 9 counties, now, with this burden being 10 alleviated, there is absolutely no reason for 11 them to raise property taxes. I can speak for 12 my county, and I think we can speak for most 13 counties: with this accomplishment of the 14 cap, there will be no reason for them to raise 15 county real property taxes. 16 One other open problem is fraud. 17 And I believe the Senate, we will be 18 addressing the issue of fraud, which, as many 19 of us know, can reach 10, 15, 20 percent of 20 the Medicaid program. And if we put that in 21 perspective, a $50 billion program, if just 22 10 percent is fraud, we're talking about 23 $5 billion, which is a lot of money. 24 So I congratulate both Senator 25 Hannon, you, Senator Meier, for the great work

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(518) 371-8910 1 that you've done. But again, there is a lot 2 more to do in terms of cost containment and 3 the elimination of fraud within the Medicaid 4 program. 5 ACTING PRESIDENT MEIER: Senator 6 Skelos will be recorded in the affirmative. 7 Senator Oppenheimer, to explain her 8 vote. 9 SENATOR OPPENHEIMER: I would 10 like to just respond to a couple of things 11 that have just been said. 12 While I certainly am very 13 appreciative that the county share, the county 14 property tax will not really be escalating 15 that much, hopefully, in the future, because 16 the main driving force was the Medicaid -- but 17 I would like to pick up on what my colleagues 18 said about the property tax, which is the 19 largest -- the largest piece of our property 20 tax, which is the funding of our schools. 21 And I think we will have to be 22 looking at some point in the future, and I 23 would like it to be sooner rather than later, 24 to alternative mechanisms for funding schools. 25 We know that the county property tax is maybe

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(518) 371-8910 1 20 percent of all the taxes we pay on 2 property. We know that schools are somewhere 3 between 55 and 65 percent of what we pay in 4 our property tax. 5 I think we have seen or heard 6 anecdotally so many people that have moved 7 away from our areas because they can no longer 8 afford the property tax and then they feel, 9 you know, very negatively about our schools 10 and about passing budgets. And it becomes 11 more and more difficult each year. 12 I think that a more progressive 13 tax, such as the personal income tax, should 14 be looked at closely and perhaps in some way 15 phased in over the next decade so that it 16 shares part of this burden of paying for our 17 school systems. 18 The property tax in many of our 19 counties is simply overburdened, and you 20 really can't do very much more with that. Yet 21 we don't want to deprive our schools. And 22 therefore I think the more progressive tax, 23 which is, of course, the personal income tax, 24 is the one that we should be looking at. And 25 perhaps just starting with 5 percent of the

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(518) 371-8910 1 cost being personal income tax and just moving 2 it higher as we go along. 3 It's something that I think we 4 should be talking about. I think for the 5 future of our state and of our children we 6 really have to discuss this. 7 I'll be voting yes on this bill. 8 ACTING PRESIDENT MEIER: Senator 9 Oppenheimer will be recorded in the 10 affirmative. 11 Senator Fuschillo, to explain his 12 vote. 13 SENATOR FUSCHILLO: Thank you, 14 Mr. President. 15 I will vote in the affirmative. 16 But, just briefly, I want to just congratulate 17 you and Senator Hannon on the fine work that 18 you have done on the task force and the 19 recommendations that have finally been 20 implemented. 21 But there's an opportunity here, 22 and it's been stated on this floor, that for 23 the county executives that have been crying 24 for this, to give it back now. 25 Now, my colleague Senator Winner

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(518) 371-8910 1 got up and explained how the property taxes 2 have increased. I think some county 3 executives have used that as an excuse. In 4 one of my counties, the Medicaid expenditure 5 is less than 10 percent of the budget, and he 6 cries that the sales tax is eating it all up. 7 It's not. The sales tax in Nassau County 8 raises nearly a billion dollars. Medicaid 9 expenditures are about $250 million. 10 When you equate that to the real 11 property taxes -- and Senator Balboni has 12 demonstrated this day after day back home -- 13 it's less than 1 percent of the real property 14 taxes. 15 So where's the relief? I wish we 16 had a measure tied into this that we should 17 call publicly on our county executives to 18 provide a CPR program, County Property/Tax 19 Relief program. Give it back to the 20 taxpayers. Provide them with real meaningful 21 relief. 22 We're spending millions and tens of 23 millions of dollars on this Medicaid relief 24 program. We should now be calling on them to 25 give it directly back to the taxpayers.

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(518) 371-8910 1 I vote aye. 2 ACTING PRESIDENT MEIER: Senator 3 Fuschillo will be recorded in the affirmative. 4 Senator Marcellino, to explain his 5 vote. 6 SENATOR MARCELLINO: I would like 7 to add my voice to my colleagues'. Senator 8 Skelos and Senator Fuschillo have said it very 9 eloquently. I do believe it's time for the 10 counties to take a look at cost containment, 11 make sure that they maintain the fact that, 12 when we take over the cap, that the benefits 13 of taking over the cap on the state are not 14 lost to the taxpayers. 15 The taxpayers of the counties must 16 get some relief at this point in time, and 17 it's up to the county executives to hold the 18 line and to make sure that these taxes are not 19 raised. In fact, if they are cut, it would be 20 all to the good. 21 With respect to the property tax 22 shift maybe to an income tax, Senator 23 Oppenheimer, I would suggest be careful what 24 you ask for. The income tax is not the 25 fairest tax. It may be progressive, but it's

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(518) 371-8910 1 also a tax that lands very heavily on the 2 middle class. The rich, the very wealthy can 3 hide money. Foundations, other tax-exempt tax 4 shelters and a whole bunch of mechanisms can 5 be used by these people, whereas the middle 6 class does not have these capabilities. If we 7 don't watch it, they will pay an inordinate 8 percentage of that tax. 9 So while it's something we could 10 look at, we should study it very carefully. 11 Because otherwise we could be buying into an 12 even more unfair system. So I suggest we take 13 care. 14 In fact, the STAR program is the 15 beginnings of a shift from the property tax to 16 the income tax. We're doing that now. Let's 17 not go jumping willy-nilly into something that 18 would be even worse without very good study 19 and extensive study on this particular issue. 20 It's not as good as it sounds. 21 I vote aye, sir. 22 ACTING PRESIDENT MEIER: Senator 23 Marcellino will be recorded in the 24 affirmative. 25 Announce the results.

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(518) 371-8910 1 THE SECRETARY: Ayes, 60. Nays, 2 1. Senator Parker recorded in the negative. 3 ACTING PRESIDENT MEIER: The bill 4 is passed. 5 The Secretary will continue to 6 read. 7 THE SECRETARY: Calendar Number 8 399, by the Senate Committee on Rules, Senate 9 Print Number 3671, an act to amend the Tax 10 Law. 11 SENATOR SCHNEIDERMAN: 12 Explanation. 13 SENATOR JOHNSON: Mr. President, 14 this bill enacts into law major components of 15 the legislation relating to taxes and revenues 16 which are necessary to implement the state's 17 fiscal plan for the 2005-2006 fiscal year. 18 ACTING PRESIDENT MEIER: Senator 19 Balboni. 20 SENATOR BALBONI: Mr. President, 21 on the bill and on the budget. 22 Back on February 20th of 1990, John 23 Bonacic and I were elected to the New York 24 State Assembly. Back then, this is the way we 25 did the budgets: Three men in a room would

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(518) 371-8910 1 work, white smoke would appear, mammoth 2 documents would appear on the desks as 3 unintelligible as Egyptian hieroglyphics, we'd 4 get a couple of hours at best to review them, 5 we'd vote in the dead of the night. And it 6 was always late. 7 This year we have a budget 8 negotiated in public by the members of the 9 Legislature, then led by five men in a very 10 public room. It's been on our desks for three 11 days. We have debated it in the light of day, 12 and it is before the end of the fiscal year. 13 What a difference. 14 But this year's budget that was 15 decided by the conference committees leads us 16 to a discussion as to how could this situation 17 have persisted for so long. We always look 18 back on that. How could it be 20 years 19 without a budget on time? I found an answer 20 which I would like to proffer to you in a book 21 that I just completed by Paul Grondahl. It's 22 called I Rose Like a Rocket, and it's about 23 the time that Theodore Roosevelt spent in 24 Albany. 25 And in 1887, they had so much

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(518) 371-8910 1 confusion and chaos they couldn't even decide 2 on who the Speaker should be. For several 3 months, they did nothing in Albany. And you 4 know why? Because of the diversity, the 5 geopolitical challenges of the state, and the 6 economic differences. Sound familiar? That's 7 where we are today. The same exact issues, 8 but exacerbated. 9 So we have reached a consensus 10 today because of who we are. And let me be 11 clear on this. We're here today now, at this 12 time, not because of certain self-serving, 13 disingenuous local politicians or editorial 14 boards or so-called reform groups. We are 15 here today because of people: people in this 16 institution, the staffs who have worked so 17 incredibly hard, both in this chamber and the 18 other chamber and on the second floor, and the 19 advocates who have been roaming the halls for 20 months. 21 And we are here today because of 22 the people in this body, who for the last ten 23 years at least have said that an on-time 24 budget is the priority for the state. This 25 year we got partners.

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(518) 371-8910 1 But let's also be clear about 2 something else. This cannot be the end. This 3 must be the beginning. The people we 4 represent, who have really been the people who 5 have moved this process, desire a good budget 6 and an on-time budget, and they deserve no 7 less. And we can do it. With all the 8 diversity and all the challenges, we can get 9 together. 10 And, you know, it's been a tough 11 couple of years for this Legislature as a 12 whole. We've been denigrated in the press. 13 I'm here to say you know what, this isn't our 14 crowning achievement. This is our job. But 15 I'm proud to be a member of this Legislature, 16 working together, moving forward. That's what 17 it's about. 18 I'm going to vote aye on this one. 19 Thank you. 20 ACTING PRESIDENT MEIER: Senator 21 Diaz. 22 SENATOR DIAZ: Thank you, Mr. 23 President. On the bill. 24 This is my third year in this 25 chamber. I'm here in part thanks to my

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(518) 371-8910 1 colleague Senator Connor. And I will always 2 be grateful to Senator Connor for helping me 3 become an elected official in this body as a 4 state senator. 5 But when I came here three years 6 ago, I came on under new leadership, a 7 minority leader named David Paterson. And I 8 have been here for three years. And since I 9 got here, I've overheard people saying, The 10 budget is never on time. They're always 11 criticizing us. 12 And yesterday, yesterday I read in 13 the Daily News a quote made by a state 14 senator, my colleague Eric Senator 15 Schneiderman. In that quote he said that 16 everybody -- more or less, he said that we're 17 all trying to get the glory for passing a 18 budget on time. And if I recall right, in 19 that quote he also said: My colleagues, don't 20 think, my colleagues, that this will make them 21 golden boys. 22 Well, when I came here three years 23 ago, as I said before, I came under the 24 leadership of Senator Paterson. In that first 25 year, in that first year, Senator Paterson was

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(518) 371-8910 1 able to join together with Senator Bruno and 2 for the first time in many, many years, we got 3 together and we had a unanimous Senate voting 4 to override the Governor's veto. That first 5 year of Senator Paterson's leadership. 6 In the second year of Senator 7 Paterson's leadership, my second year of me 8 being here, there was another override. Last 9 year, Senator Paterson obtained three more 10 members to our conference. 11 And this year, under Senator 12 Paterson's leadership, and Senator Bruno, we 13 are passing a budget on time for the first 14 time in 20 years. And Senator Balboni just 15 said that this time we did it not three men 16 locked in a room, but publicly, that everybody 17 could see. 18 So, my colleagues, referring to the 19 quote of Senator Schneiderman in the Daily 20 News, if all those achievements under Senator 21 Paterson and Senator Bruno in the last three 22 years doesn't make Senator Paterson a golden 23 boy -- well, let me tell you, to me, Senator 24 Paterson is a golden boy in the last three 25 years I have been here.

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(518) 371-8910 1 So you need a golden boy to take 2 credit for what we have done? There's a 3 golden boy. 4 And I'm voting yes. Thank you. 5 ACTING PRESIDENT MEIER: Senator 6 Farley. 7 SENATOR FARLEY: Thank you, Mr. 8 President. 9 I rise on this very happy occasion 10 to say that we will be having an on-time 11 budget. I was here for a number of years, as 12 a few of my colleagues, where we passed 13 on-time budgets. We used to stop the clock 14 occasionally because we were running a little 15 bit over. 16 But, you know, I was pleased to see 17 a brand-new process where the Minority in both 18 houses also participated in open forums. 19 And let me just pay tribute to our 20 Majority Leader on this side of the aisle, who 21 kept us informed the entire way and in my 22 judgment was the moving force to get an 23 on-time budget. He was relentless in that 24 pursuit, as was our conference almost 25 unanimously.

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(518) 371-8910 1 As somebody that chaired a 2 conference committee, I found in the other 3 house every single member of our conference 4 committee, on both sides of the political 5 spectrum, were committed to an on-time budget. 6 And it can happen. And of course 7 the big thing that we have to do is make sure 8 it happens next year when all of you good 9 people are running for reelection. Because 10 we've started an on-time situation, and I 11 think we've got the things in place. We have 12 to do more. 13 But my congratulations to my 14 colleagues, but a particular congratulations 15 should go to the Majority Leader of this house 16 because he was really the major force in 17 pushing this, in pushing everybody towards 18 getting a budget, possibly because those of us 19 in the Capital District feel the heat of a 20 late budget as badly as anybody in the state. 21 Thank you, Mr. President, and 22 congratulations to all my colleagues. 23 ACTING PRESIDENT MEIER: Senator 24 DeFrancisco. 25 SENATOR DeFRANCISCO: Yes. On

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(518) 371-8910 1 this side of the aisle we may not have a 2 golden boy, but we certainly have a very 3 distinguished silver-haired man -- who anyone 4 who knows the process fully has understood for 5 the last several years that the mediator 6 between the respective parties in the budget 7 process has always been Joe Bruno. 8 And I think what Senator Farley 9 said is right on the money. In order to make 10 this happen, there has to be somebody that's a 11 mediator. Not just someone who's willing to 12 stick on a specific philosophical point, but 13 an individual who's able to get people 14 together. 15 And he was good enough to have the 16 minority leaders of each house participate 17 this year. And that made things happen, I 18 think, as well, the fact that everyone 19 participated. 20 So we don't have our golden boy, 21 but we have the silver-haired distinguished 22 gentleman that has moved this body and this 23 process more than anyone else has, at least in 24 my time in the New York State. 25 Thank you.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: Senator 2 Liz Krueger. 3 SENATOR LIZ KRUEGER: Thank you, 4 Mr. President. On the bill. 5 Before we complete our assignment, 6 as it's been described, to finish our work on 7 the budget, this revenue bill is the bill we 8 should be spending an enormous amount of time 9 talking about. And that we did not in the 10 conference process. 11 But I was delighted to hear so many 12 of my colleagues today already talk about 13 their interest in dealing with tax policy. 14 Senator Bonacic, who raised his concerns about 15 property taxes and paying for schools. The 16 issues raised about the relationship between 17 what we did in Medicaid and what the tax rate 18 at the county level might be. The point of 19 Senator Marcellino that be careful when you 20 assume a progressive tax is in fact that, when 21 you look at the loopholes that certain 22 individuals can take. 23 And that starts me off again with 24 delight that having a budget done on time, 25 maybe we will actually this year attempt to

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(518) 371-8910 1 bite into the extraordinarily complex set of 2 issues that is New York State tax policy and 3 our failure to address so many of these 4 issues. 5 Our fight, as always, in the budget 6 is where do we get the money and how do we 7 prioritize spending it. But to be honest, we 8 don't look at where we get the money very 9 often. And in fact, in this house for many 10 years we have not done the job we ought to to 11 evaluate New York State tax policy, what its 12 equity is, what its progressive versus 13 regressive outcomes are, what the relationship 14 is between what we decide to do at the state 15 level and what our localities can and cannot 16 do. 17 What was not said here today, but 18 we all know is true, one of the reasons that 19 our counties are so aggravated and the people 20 in our counties are so aggravated about their 21 property tax rates is because it's one of the 22 only taxes they control at home. We control 23 tax policy here in Albany. And frankly, we 24 don't do our homework on it. 25 So when I evaluate this budget, and

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(518) 371-8910 1 I've spoken several times in this week about 2 it, I evaluate both what we don't have money 3 for and then how we're spending that money. 4 But this is the only opportunity, I think, in 5 the context of the tax and revenue bill to 6 raise, again, some very serious questions 7 about the money we don't collect in taxes and 8 what that outcome is for individuals in our 9 districts and also for businesses. 10 Because in fact what we 11 consistently do in New York State tax policy 12 is to favor large corporations, large 13 multinational and multistate corporations over 14 small businesses, despite the fact that small 15 businesses are in fact the creators of the 16 greatest number of jobs in New York State. 17 And so when you look at our tax 18 expenditure reports, you can add up that we 19 give in this year's budget $465 million in 20 special depreciation, exemptions and credits, 21 primarily to large corporations. And we 22 should ask the question, what if that money 23 was available for education instead? What if 24 that money was available for transportation 25 without having to do as much borrowing as we

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(518) 371-8910 1 have approved earlier this week for 2 transportation? 3 And that budget includes 4 $2.15 billion for corporate franchise 5 exclusions of interest, dividends, capital 6 gains from subsidiary capital. Again, 7 primarily large corporations. Small 8 businesses can't take advantage of those 9 expenditures and loopholes. 10 Or the fact that while we have 11 changed Empire Zones -- and I will get to that 12 in a little bit -- we project in the 13 expenditure budget $437 million in exemptions 14 and tax credits for businesses in Empire 15 Zones. 16 So it's both the questions of 17 Empire Zones and how we oversee them and how 18 we're going to decide what happens in the 19 future through this bill, but also the lost 20 revenue to the State of New York, money that 21 is not available for education, is not 22 available for transportation, is not available 23 for health care or social services because we 24 have made -- I question whether a conscious 25 decision, but we have made the decision to

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(518) 371-8910 1 exempt certain subsidiary types of businesses 2 from paying taxes. 3 And again, and I've used these 4 examples, but I want to highlight them, if I 5 buy a gold ring or a gold necklace or silver 6 earrings in the state of New York, I pay sales 7 tax. If I buy the raw bullion of gold or 8 silver or coins, I don't pay sales tax. And 9 that means the State of New York loses, 10 according to this budget, $108 million a year 11 in tax revenue. 12 What would you do with $108 million 13 more? We might disagree about it, but what's 14 the justification? 15 And we exempt the cable television 16 industry from $140 million in sales tax and 17 $80 million in corporate tax reductions for 18 cable TV. There's always the question in 19 business about what kind of taxes drive a 20 company away from a state or locality. But 21 cable TV? Can you ignore the New York market, 22 simply say: We don't like the taxes, we won't 23 do cable television in the state of New York? 24 I think not. 25 And I personally like having cable

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(518) 371-8910 1 television. It lets me watch Bravo and watch 2 the reruns of "West Wing." And yet I wonder 3 why that's a tax-free option. 4 And we're continuing to underwrite 5 historic barns. And maybe that's a terrific 6 use of taxpayer dollars, but again I will ask, 7 $75 million in tax exemptions for historic 8 barns, is that a priority in the tax policy of 9 your communities and your counties? 10 And we don't decouple from federal 11 tax policy on a variety of issues that we 12 should be asking hard questions about. And so 13 I'm very glad that Senator Marcellino raised 14 that question about personal income tax versus 15 other types of taxation, because he's right. 16 Wealthier New Yorkers figure out how to avoid 17 taxation because they've got more money to 18 protect and they've got accountants. 19 So this year in our tax budget we 20 will lose, because we haven't decoupled from 21 federal policy, we'll lose $749 million 22 because of our rules around capital gains at 23 death. And that's for wealthy New Yorkers. 24 And we will lose $483 million in 25 revenue from the exclusion of interest on life

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(518) 371-8910 1 insurance and annuities. And it's only 2 high-income New Yorkers who are in fact 3 choosing to make investment decisions to 4 reduce their taxes through annuities. And in 5 fact, that number has grown, has over doubled 6 between 1998 and 2005 as loss of revenue to 7 the State of New York because people do make 8 financial decisions as individuals based on 9 where they can avoid taxes. 10 But again, who's able to do that? 11 And does it skew the tax base for the State of 12 New York? 13 And we're making more mistakes this 14 year in this budget, rather than sitting down 15 and answering some of the questions I've 16 raised that were decisions made in previous 17 years' budgets. Why are we passing a single 18 sales factor tax credit this year? It is 19 estimated that this will be a tax cut of 20 $130 million when fully implemented. But if 21 you do the research from other states that 22 have passed this type of law, the assumption 23 actually is it will cost us far more. 24 And there's reports, huge numbers 25 of reports coming out for states that have

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(518) 371-8910 1 implemented single sales tax factors. And 2 some of the points that they make, very 3 powerfully, is that while it decreases the 4 taxes for large multistate and multinational 5 corporations, it actually increases taxes on 6 small business in relationship and in 7 competition. 8 And the states that have passed 9 these taxes are wondering about why they've 10 done this and whether they should continue 11 them. A report that just came out this month 12 talks about the issue of the single sales tax 13 factor in the Intel Corporation in several 14 southwestern and western states. And their 15 conclusion is that in fact the single sales 16 factor changes did not increase, for 17 corporations -- even though they're the ones 18 who lobbied to have it in all these states, it 19 did not increase the amount they invested in 20 single sales factor states versus states 21 without this tax exemption. And in fact, they 22 disproportionately continued to invest in 23 non-SSF states. 24 And that it did not increase jobs 25 and in fact appears to have reduced jobs,

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(518) 371-8910 1 because there's no direct association with 2 this tax and an obligation of the company to 3 increase jobs, a test we should always use in 4 tax policy. 5 And so, again, why would we pass a 6 new tax exemption for large corporations worth 7 $130 million when there's not one person in 8 this chamber who would say that everything 9 they thought was a priority for the State of 10 New York or their constituents got into this 11 budget? 12 And why are we passing an expansion 13 of the CAPCO program, another questionable, at 14 best, model for tax exemptions, a model that 15 allows insurance companies to invest in 16 venture capital and reduce their taxes? 17 Private companies should choose to 18 invest in venture capital. That's the market. 19 Why should the State of New York choose to 20 subsidize, through tax policy, certain types 21 of businesses' ability to have surplus cash 22 and invest it in venture capital? We don't 23 get a win out of this; we lose tax dollars. 24 And there have been studies done 25 around the country about the fact that CAPCOs

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(518) 371-8910 1 usually go unnoticed but rarely have proved to 2 be effective in any way. 3 And on the Empire Zones, it's a 4 dilemma, because I think we all recognize that 5 the way we've been running Empire Zones has 6 not worked. And there are some improvements 7 in the agreement that has been made to 8 increase oversight on Empire Zones and to 9 require reporting and to, in theory, have the 10 authority to throw companies out of their 11 Empire Zone agreements if they fail to meet 12 new tests we will place on them. 13 Except it doesn't change the fact 14 that the research does not prove that the 15 enormous amount of money we're losing through 16 Empire Zones is not in fact increasing the 17 number of jobs being created. 18 And ironically, if you look at the 19 details Empire Zone to Empire Zone, what we 20 have done in the state of New York is make our 21 towns and our villages and our counties and 22 our cities all compete with each other to see 23 who can have a race to the bottom of claims 24 they've got the lower tax package than the 25 town next to them or figure out a way to get

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(518) 371-8910 1 the zone lines moved. 2 And that in fact at the end of the 3 day there's not evidence that we're really 4 increasing jobs, we're just moving the people 5 around the map of the state of New York, so 6 that a job that might have been in Senator 7 Meier's district last week would move into 8 Senator Libous's district this week. But that 9 doesn't increase the number of jobs. 10 We are losing huge amounts of tax 11 revenue. And I don't believe it is smart for 12 regional planning or for local planning that 13 we have trapped our localities in this 14 scenario. 15 So while I will say that the Empire 16 Zone proposals this year are significantly 17 better than what we have had up until today, I 18 am not convinced that this will lead us down 19 the road of a more successful model. I am 20 convinced this will extend these programs 21 until the year 2015. And again, who's doing 22 the homework? Who's asking the questions? 23 Who's even evaluating the reports that are 24 coming in? 25 Again, my theme is an attempt to

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(518) 371-8910 1 argue that we have to do a serious job of 2 evaluating tax policy in the state of 3 New York. We have to remember that our budget 4 is not just the budget we talk about as 5 revenue and expenses, but also the tax 6 expenditure budget that comes out each year, 7 that every year grows and grows and grows by 8 the billions. And I don't believe either 9 house of this Legislature is doing our 10 homework or asking the right questions. 11 And when we go home and we say to 12 our constituents we got a budget done on time, 13 it was full of compromises, we're happy about 14 some things, we're not happy about others, the 15 fundamental question is was it the best budget 16 we could do. 17 And unless we're prepared to really 18 evaluate and analyze how we're spending our 19 money and how we're raising and who we're 20 exempting from having to pay their fair share 21 of taxes in the state of New York, we can't 22 sincerely say that we passed the best budget 23 we could. 24 So I will vote against this bill, 25 because I think it goes down the wrong road on

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(518) 371-8910 1 single sales factor, on CAPCO. And while I 2 give 50 percent points for the Empire Zone 3 efforts, I don't believe at the end of the day 4 it will meet the needs of the state. 5 And again, I hope that now that our 6 budget, in theory, will be done today, 7 tomorrow, soon, that the members who got up 8 today to speak about their own recognition of 9 tax policy problems in their own communities 10 and their own counties, or on fundamental 11 issues such as education and health care, will 12 be willing to take a serious look and spend a 13 healthy amount of time evaluating the New York 14 State tax code and where we ought to be going 15 in the 21st century. 16 Because maybe this tax code worked 17 in the 20th century, but it will not solve our 18 problems for the 21st century. And today 19 we've increased some of them with this bill. 20 Thank you, Mr. President. I'll 21 vote no. 22 ACTING PRESIDENT MEIER: Senator 23 Johnson. 24 SENATOR JOHNSON: Mr. President 25 and my colleagues, I'd like to of course

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(518) 371-8910 1 extend my congratulations to Senator Joseph 2 Bruno -- and of course David Paterson, who 3 worked with him in this house -- for his 4 initiative in getting a resolution of the late 5 budget problem by helping initiate public TV 6 sessions with the Governor and the other 7 house, sitting together; for putting together 8 the conference committee process, which we 9 used last year to try to get a budget reform 10 bill which this house passed, that one house 11 passed. 12 I want to thank Senator Neil 13 Breslin, my ranking Minority member on the 14 Senate Finance Committee, for his help in 15 helping to expedite this process. 16 And of course I can't say enough 17 about the Senate staff. Mary Louise Mallick 18 and her staff, day and night working. We have 19 all sorts of trying to work this out, trying 20 to that out, give us another draft. This has 21 been going on for quite a period of time, as 22 you know, and they eventually put it all 23 together. 24 We've even had the cooperation of 25 the other house this year, which of course

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(518) 371-8910 1 helped to make this all possible. 2 So we have a -- some people say, I 3 always wanted an on-time budget. Well, I 4 think everyone in here can say the same thing, 5 because we've all wanted an on-time budget. 6 We never could get around to the formula that 7 would magically put it all together. 8 But I think this year we've 9 accomplished it, collectively. So we can 10 thank ourselves, thank the leadership, thank 11 the Governor that he played a role in this as 12 well. 13 And if this budget is the final 14 budget, it's done as much as we can do for the 15 people that we represent, economically but 16 also timely, which we never could get the 17 formula together to have it timely and the 18 right budget. We always had to delay until we 19 got what we needed to take home. I think 20 everybody's got what they need to represent 21 their people adequately. 22 So let's all congratulate each 23 other, and thank you all for your support. 24 ACTING PRESIDENT MEIER: Senator 25 Robach.

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(518) 371-8910 1 SENATOR ROBACH: Yes, Mr. 2 President. On the bill. 3 I rise to support this and the 4 entire budget package. First and foremost, 5 it's been said before, but I think it's 6 critically important, for the first time in 7 20 years we are getting this budget done. And 8 to many people, not only in this room but in 9 our districts, that is an important thing. It 10 has come to symbolize the gridlock and the 11 lack of compromise that's gone on for far too 12 long for a myriad of reasons. 13 And I want to say that oftentimes 14 we don't need political rhetoric to get a 15 budget done, we really need more compromise 16 and statesmanlike men and women striking 17 compromise to get it done. And I think this 18 has happened this year, and I applaud 19 everyone. 20 Interestingly enough, I found 21 something that I was reading that my father 22 had said to a reporter some twenty years ago 23 when his frustration started with the late 24 budget, who I followed into the Assembly. And 25 he said to the reporter, he said: "You know,

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(518) 371-8910 1 without compromise, the only way I know how to 2 do a budget is if I could provide more and 3 better services for less money." 4 Well, we know that's not going to 5 occur. So this year what allowed us, without 6 the ability to do that, the impossible, what 7 allowed this to happen was compromise. 8 And I would say that this budget, 9 while not perfect, really meets the needs of 10 New Yorkers in education, higher education, 11 health care, roads, bridges, public safety and 12 other things. And that is good. It is good 13 for a number of ways. And what allowed us to 14 get to those good compromises was utilization 15 of the conference committees. 16 So while I want to applaud everyone 17 in every house, both leaders here and even in 18 the other house, I want to say it is a great 19 day that this year's process resulted in a 20 reasonable budget that meets the needs of 21 New Yorkers. But I would concur with my 22 colleague Senator Balboni, while our work is 23 done on the budget, on the process it is not 24 done yet. 25 The measures that were passed in

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(518) 371-8910 1 this house, in a bipartisan measure, to 2 utilize conference committees as though normal 3 operating procedure for doing a budget, 4 accepting the Comptroller's revenue 5 estimate -- and I would even go one step 6 further. I think the bill on a contingency 7 budget, very, very important. 8 If we can now take this timely 9 budget process and get the other house to act 10 on those measures that we have already passed 11 in this house, this will not become the 12 exception for the rule getting the budget done 13 on time, striking reasonable compromise -- it 14 will become the rule. And we should make it 15 the rule. That's what our constituents want. 16 I know that's what I want. And I believe that 17 that's what most of the people in this chamber 18 want. And hopefully we will continue down 19 this road. 20 But let me say not only will I vote 21 for this portion of the budget, the whole 22 thing. And in all sincerity, I say thank you 23 to the people who were smart enough, in 24 response to their constituents, to publicly be 25 engaged, the everyday members of these

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(518) 371-8910 1 conference committees, and strike compromises 2 to merge timeliness and content to get this 3 budget done. 4 I thank all my colleagues and vote 5 in the affirmative. 6 ACTING PRESIDENT MEIER: Senator 7 Sabini. 8 SENATOR SABINI: Thank you, Mr. 9 President. On the bill. 10 I think there is some merit and 11 congratulations to be given that we have 12 achieved a work product at this point in time. 13 It's been referred to in past years that a 14 long time ago they used to stop the clock. I 15 wasn't eager to see whether or not the 16 Majority Leader had the power, as he had said 17 he would get us out in daylight, to stop the 18 sun. That would really be impressive if he 19 could do that. 20 But I do want to say one thing and 21 take exception to an earlier speaker. Before 22 we spread all the praise that we should on 23 staff and the leadership of the two houses -- 24 and to some extent to the Governor, for 25 becoming engaged toward the end -- but before

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(518) 371-8910 1 we hurt ourselves from patting ourselves on 2 the back, I want to take exception to 3 something that was said earlier. 4 I don't believe that this process 5 happened because we were all imbued with this 6 new sense of responsibility. So I do want to 7 thank the editorial boards and the civic 8 groups, who don't have a vested financial 9 interest in us getting our job done, for 10 forcing us to do our job on time. 11 I'll take you back to last year 12 when, after April 1st, we were here two days 13 out of the next 17. We're going to be here 14 after April 1st whether or not we pass this 15 budget, and that's a good thing, because 16 that's what we're supposed to do. 17 But if anyone thinks that all this 18 happened without public pressure, without a 19 targeted Assembly race in Nassau County, 20 without people losing their seats here, think 21 about this. Twenty-one years went by, people 22 were born and have now graduated college in 23 that period of time, during the time we didn't 24 have on-time budgets. There were members of 25 this body and of the Assembly that came into

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(518) 371-8910 1 the body, became committee chairs, and have 2 left since then. 3 The last time we had an on-time 4 budget, the Islanders were a decent hockey 5 team and won Stanley Cups. Now the NHL 6 doesn't even play. 7 So things have changed a lot in 8 21 years. And if you believe that this just 9 happened because we're all imbued with this 10 sense of honor all of a sudden, we're not only 11 kidding ourselves, you know, I guess there's a 12 bridge in Senator Connor's district we could 13 sell you if you believe that. 14 I don't believe that. I believe 15 that the attention that was given to the 16 process up here was long overdue. We all felt 17 it. Many of us knew it all along. And the 18 fact that we're actually doing what we're 19 supposed to be doing is a good thing, but 20 let's not kid ourselves. We're doing it 21 because people have held our feet to the fire 22 collectively. And I congratulate those people 23 for doing that. And if they were not part of 24 the process, I don't believe this would be 25 happening today.

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(518) 371-8910 1 I'm going to be voting in the 2 affirmative. 3 ACTING PRESIDENT MEIER: Senator 4 Nozzolio. 5 SENATOR NOZZOLIO: Thank you, Mr. 6 President. On the bill. 7 Mr. President and my colleagues, 8 what we are doing today is not simply enacting 9 a budget on time, but we are restoring 10 integrity in the budget process and, in so 11 doing, restoring accountability in 12 budget-making for our taxpayers. 13 Our taxpayers deserve this type of 14 government, a government that runs its budget 15 process in an efficient manner, in an on-time 16 manner, in an open manner, in a bipartisan 17 manner. 18 Each and every one of those who 19 participated in making this budget can be 20 proud of their efforts. But we have more to 21 do. We need to ensure that, in law, these 22 steps are taken and taken each and every year. 23 What we are doing here is not an 24 end, it's a beginning, a beginning to launch a 25 reform of the budget process, a beginning to

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(518) 371-8910 1 continue to fight for not simply an on-time 2 budget but a budget that achieves reform of 3 the welfare system and attacks welfare fraud, 4 a welfare fraud across this state that costs 5 the taxpayers billions of dollars. 6 Make government more effective and 7 efficient, but, most importantly, make 8 government more accountable to the people it 9 is designed to serve. 10 Mr. President, I'm supporting this 11 measure and, in doing so, I think taking a 12 giant step towards achieving the 13 accountability that our taxpayers deserve. 14 ACTING PRESIDENT MEIER: Senator 15 Oppenheimer. 16 SENATOR OPPENHEIMER: I just 17 wanted to second -- thank you, Mr. President. 18 I just wanted to second what Senator Johnson 19 said, that there are so much people, 20 particularly staff, that have really put 21 themselves out in this process. And half of 22 them are sleepwalking still because they 23 haven't had sleep in many weeks. 24 But particularly to the leader of 25 this house, and to my leaders, I want to thank

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(518) 371-8910 1 them. 2 And I want to say that I think I 3 can speak for Senator Montgomery and myself 4 that there is probably nobody that is happier 5 than she and me, and pleased with this 6 process. And I will tell you why. 7 We both got elected in 1984. That 8 was the last year there was an on-time budget. 9 Many people have been telling us that it is 10 because of she and me that we have not had an 11 on-time budget in the last 20 years. So as we 12 are now in our 21st year, we are very proud to 13 say we have at last accomplished the right 14 thing, done the right thing by our citizens. 15 And fortunately, the leadership of this house 16 and the other house have helped us a great 17 deal. 18 So thank you very much. I'm voting 19 yes on this bill. 20 ACTING PRESIDENT MEIER: Senator 21 Klein. 22 SENATOR KLEIN: Mr. President, I 23 believe there's an amendment at the desk. I 24 ask that the reading of the amendment be 25 waived and ask to be heard on the amendment.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: The 2 amendment is at the desk, the reading is 3 waived, and you're recognized for the purpose 4 of explaining the amendment. 5 SENATOR KLEIN: Thank you, Mr. 6 President. 7 This amendment provides for the 8 distribution of 11 percent from the video 9 lottery terminals, otherwise known as VLTs, at 10 racetracks to support education in the 11 municipalities which host these racetracks. 12 Several weeks ago I rose and spoke 13 in favor of the VLT proposal we had. While at 14 the same time I don't think the only source of 15 revenue to fund our schoolkids should be 16 gambling, it clearly is a very quick and 17 needed infusion of cash. 18 I also believe, and I said at that 19 time, I have Yonkers Raceway within my Senate 20 district, which also is in need of cash and 21 presently in tremendous disrepair. 22 There doesn't often come a time 23 where we can help several different groups by 24 advocating one specific proposal. But this is 25 certainly the case, because the money that we

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(518) 371-8910 1 would gain from VLTs would not only help the 2 tracks that are hosting these racinos around 3 the state but will also help education 4 throughout the state and would also help the 5 racing industry. So we're actually able to 6 use these monies, I think, for very, very 7 important purposes. 8 I'd like to take it one step 9 further. I think that the racetracks which 10 actually host the VLTs should also get a 11 larger share. You know, when we think about 12 it for a moment -- and I can certainly speak 13 for an example of Yonkers Raceway. Hopefully 14 this is going to take off and it's going to 15 generate a lot of money for the state. I'm 16 hopeful it's going to bring 40,000 to 42,000 17 people to Yonkers Raceway, like there used to 18 be years and years ago. 19 That requires more police service, 20 that requires more sanitation, that requires 21 better roads and access to and from the track. 22 So clearly the City of Yonkers in this case is 23 going to have to shoulder some of the burden. 24 And I think in turn not only 25 Yonkers Raceway but the seven tracks around

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(518) 371-8910 1 the State of New York should be able to share 2 specifically in the amount of money that's 3 generated by the VLTs. And I think they 4 deserve to get a portion, and that money 5 should be specifically earmarked for 6 education. 7 You know, since I got elected three 8 months ago I heard a lot about Yonkers. And 9 Yonkers, unfortunately, is facing very, very 10 difficult fiscal times. And what's happening 11 right now is the kids are suffering. You 12 know, they're talking about laying off 13 teachers, closing schools -- nothing that 14 would certainly benefit the youngsters of 15 Yonkers. 16 I think it's incumbent upon us as 17 leaders in this legislative body to generate a 18 quick infusion of cash for that education 19 system. You know, we can talk about school 20 aid formulas, we can talk about bringing a 21 CFE-like decision on behalf of the schoolkids 22 of Yonkers. But I think the time has come to 23 figure out a way that we can get some money to 24 Yonkers now. 25 So I urge my colleagues to support

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(518) 371-8910 1 this amendment. 2 ACTING PRESIDENT MEIER: Senator 3 Spano. 4 SENATOR SPANO: On the amendment. 5 I'd like to point out that it's 6 interesting the Minority is offering an 7 amendment that would allocate 11 percent of 8 the money raised by VLTs to all of the -- to 9 the school districts that have -- or to the 10 districts that host the racetracks in the 11 state. I think that's a good idea. Seems to 12 be a bit inconsistent with some of Senator 13 Schneiderman's earlier comments, but it's a 14 good idea. 15 I'm glad to see that you are 16 willing to take money away from a lot of your 17 school districts to give to school districts 18 like the City of Yonkers. And I thank you for 19 that. 20 I would say that if you are serious 21 about this proposal and it's not just a 22 political charade that we're in, as some might 23 suggest, that you go across the hall of the 24 Capitol, talk to the Assembly, and get them on 25 board. Get them on board my bill and my

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(518) 371-8910 1 proposal that we have been pursuing very 2 actively that would bring a substantial amount 3 of money back to the host communities. 4 I agree conceptually with this 5 proposal, glad that we're moving forward on an 6 on-time budget, and would not do anything on 7 the floor of this house today that would put 8 in danger of that on-time budget, certainly 9 with a proposal that the Assembly has already 10 dismissed. 11 But glad that if you are in fact 12 serious, glad to work with you to have your 13 continued cooperation and acknowledgement of 14 the problems that the City of Yonkers has, and 15 glad to take money that might be going to 16 other school districts across the state and 17 give it to the City of Yonkers. 18 Thank you for raising that issue 19 today. 20 ACTING PRESIDENT MEIER: Senator 21 Skelos. 22 SENATOR SKELOS: Thank you very 23 much, Mr. President. 24 I just would like to point out 25 we've heard a lot of comments today about an

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(518) 371-8910 1 on-time budget. And we will have an on-time 2 budget today. 3 But I should point out to those who 4 would support this hostile amendment that, 5 under the rules of the Senate, a successful 6 nonsponsor motion to amend the bill shall 7 cause the bill to be recommitted to the 8 committee of origin for further study for a 9 minimum of ten days. 10 So my assumption is that anybody 11 that would support this amendment are saying 12 they do not want an on-time budget because we 13 could not bring this up for another 10 days. 14 So I follow up what Senator Spano 15 said, this is nothing but a political charade. 16 ACTING PRESIDENT MEIER: On the 17 amendment, those Senators in agreement please 18 signify by raising your hands. 19 THE SECRETARY: Those recorded in 20 agreement are Senators Andrews, Breslin, Diaz, 21 Dilan, Duane, Gonzalez, Hassell-Thompson, 22 Klein, L. Krueger, Montgomery, Onorato, 23 Oppenheimer, Parker, Paterson, Sabini, 24 Sampson, Schneiderman, Serrano, Stachowski and 25 Stavisky.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: The 2 amendment is not agreed to. 3 Senator Schneiderman, to close for 4 the Minority. 5 SENATOR SCHNEIDERMAN: Thank you, 6 Mr. President. I will speak very briefly. 7 This revenue bill, which 8 concludes -- I think everyone, including 9 critics, will say that this was an 10 extraordinary process this year. It led to 11 many breakthroughs, both in process and I 12 think it's fair to say in substance. 13 But I have to come back to a 14 comment that Senator Balboni made when he 15 opened the closings, as it were, that passing 16 a budget on time and debating openly and 17 trying to get the best budget we can is just 18 our job, and echo Senator Robach, who said, 19 you know, this is just the beginning, we have 20 a lot more work to do. 21 I respectfully submit that the most 22 delightful thing that has happened today is 23 that a debate broke out on the Senate floor 24 about tax policy for the first time since I've 25 been here. Senator Bonacic started it up.

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(518) 371-8910 1 I would note, my colleagues, that 2 there's a gap in our system of conference 3 committees that we should address. There is 4 no conference committee that deals with tax 5 policy. There is no public debate about 6 whether we should continue on the path the 7 state has been on for the past decade of 8 becoming more and more regressive as we seek 9 new revenues from sales taxes, from fees. 10 Passing this bill increases title 11 applications for mobile homes from $25 to 12 $125. Can't get much more regressive than 13 that. 14 Whether we should continue on that 15 path or whether we should, as Senator Bonacic 16 pointed out, look for new ways, rely more on 17 the income tax. As Senator Krueger said, plug 18 the massive loopholes that have led fiscal 19 experts to describe our state tax code as 20 Swiss cheese. 21 Senator Marcellino pointed out that 22 some rich people seek to hide their incomes. 23 It's our job to close loopholes and make it 24 harder. 25 We're never going to get

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(518) 371-8910 1 everything, but I tell you, ladies and 2 gentlemen, one of the other unfortunate things 3 that this bill does is that it allows a 4 temporary increase in the personal income tax 5 on our wealthiest taxpayers to expire, and 6 that's costing the state $3 billion. So 7 obviously some wealthy taxpayers haven't 8 succeeded in hiding all of their money. 9 I would suggest that an open debate 10 over whether or not we should have a more 11 progressive tax system, an open debate over 12 whether we should close the corporate 13 loopholes that Senator Paterson proposed last 14 year and proposed this year that would 15 generate hundreds of millions of dollars by 16 simply adopting corporate tax laws that are 17 applicable in other states. 18 That's the debate we should have. 19 And I would suggest that if we go back through 20 this process next year, a conference committee 21 to actually debate tax and revenue policy 22 would be appropriate. 23 So I don't like some of the things 24 in this particular piece of legislation, and 25 for the same reasons as Senator Krueger

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(518) 371-8910 1 articulated in detail. And I have my concerns 2 with the continued reliance on more regressive 3 forms of revenue generation from regressive 4 taxes like the property tax, to gambling. I 5 have a problem with our economic development 6 programs that don't generate jobs, don't 7 produce and give us the return on our 8 investment we should seek. 9 But I think it's time to open that 10 debate up. This year we are coming up with 11 ideas -- and they're embodied in some of these 12 budget bills -- that have just never been 13 tried before. We have to address the issue of 14 revenue. We have to address the issue of 15 taxation. 16 We are just starting here today, 17 we're just starting here today on what I hope 18 will be a new process. If we just stop after 19 this and go back to the same old gridlock, we 20 haven't done our job. 21 But I'm sure that's not going to 22 happen. I'm sure that's not going to happen. 23 Now, now, now. If I lose my way, I have to 24 start all over again. 25 (Laughter.)

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(518) 371-8910 1 SENATOR SCHNEIDERMAN: So I think 2 that the issue of taxation has been raised 3 here. I look forward to debating it. I look 4 forward to taking up Senator Bonacic's bill. 5 I look forward to dealing with issues that 6 were raised by Senator Klein's amendment. 7 Let's not stop here. Let's get the issue of 8 taxes on the table with everything else when 9 we reconvene. 10 Thank you, Mr. President. 11 ACTING PRESIDENT MEIER: Debate 12 is closed, then. 13 The Secretary will ring the bells. 14 Members are asked to come to the 15 chamber. 16 Senator Bruno. 17 SENATOR BRUNO: Are you calling 18 members back into the chamber to make sure 19 everyone's here to vote on this very important 20 bill? 21 ACTING PRESIDENT MEIER: Yes, we 22 are, Senator Bruno. 23 SENATOR BRUNO: You know, we're 24 hearing, while we're waiting to close debate 25 here, suggestions, thoughts, observations,

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(518) 371-8910 1 what can be criticisms. And anyone here can 2 do that. 3 Fact of the matter is, we're 4 completing a budget process here for the first 5 time in 21 years. And we are finishing this 6 budget process presently at about ten minutes 7 to 2:00. Would have been twenty of 2:00 if 8 people were shorter, but they weren't. 9 (Laughter.) 10 SENATOR BRUNO: But whatever. 11 Whatever works. Okay? 12 But the fact of the matter is that 13 we are still talking with the Executive, 14 talking with the Assembly, because there are 15 some issues that while we are acting on them, 16 that are still open for debate, negotiation, 17 and potential compromise. So that everyone in 18 government, with the Executive, with the 19 Assembly, with the Senate, has as much input 20 to this open, public process as is required, 21 necessary, or anyone wants. 22 So while we close this formal part 23 of what we have agreed on, we have a completed 24 budget, a balanced budget, contrary to some of 25 the observations that may be made. This

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(518) 371-8910 1 budget will total presently, as it stands, in 2 the neighborhood of $105 billion. 3 And there are some issues that have 4 been laid aside that are not critical to 5 having a complete, balanced budget. We're 6 going to be in session until the middle of 7 June, and we're going to be governing. And 8 when this process completes, we're going to be 9 doing other appropriations, we're going to be 10 doing supplementals, we're going to be 11 governing. 12 So that's the process that we're 13 all elected to, and that's what you are part 14 of. So while you can take a look and say this 15 glass is 9/10 full or it's 1/10 empty, that's, 16 you know, your selection. Fact of the matter 17 is, we are here, we got this done, we got it 18 done while the sun is shining, and that's a 19 credit to everybody in the process. 20 It's also a credit to everyone that 21 we continue the process, with the Executive, 22 to refine and improve any part of anything 23 that we have done and any part of anything 24 that we haven't done. 25 Keep talking about some of the HCRA

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(518) 371-8910 1 that was set aside. We'll get that done. We 2 can do it today, we can do it Monday, we can 3 do it attitude. We'll get it done. EPA? 4 We'll get it done. Today or next week or the 5 week after. Okay? 6 SENATOR PATERSON: Okay. 7 SENATOR BRUNO: Mr. President -- 8 okay? Did I hear okay? 9 (Laughter.) 10 SENATOR BRUNO: Okay, thank you. 11 Mr. President, do we have people 12 here prepared to vote on this last of the 13 budget bills? 14 ACTING PRESIDENT MEIER: It 15 appears the members are in their seats, 16 Senator Bruno. 17 SENATOR BRUNO: Thank you, Mr. 18 President. I would suggest we move to the 19 roll call. 20 ACTING PRESIDENT MEIER: Read the 21 last section. 22 THE SECRETARY: Section 3. This 23 act shall take effect immediately. 24 ACTING PRESIDENT MEIER: Call the 25 roll.

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(518) 371-8910 1 (The Secretary called the roll.) 2 THE SECRETARY: Those recorded in 3 the negative on Calendar Number 399 are 4 Senators Duane, L. Krueger, Parker, Savino and 5 Schneiderman. 6 Ayes, 56. Nays, 5. 7 ACTING PRESIDENT MEIER: Senator 8 Bruno, the bill and, therefore, a budget for 9 the State of New York is passed. 10 (Extended applause.) 11 ACTING PRESIDENT MEIER: Senator 12 Bruno. 13 SENATOR BRUNO: Mr. President, 14 given some of the discussions that are going 15 on, I'm going to suggest that we recess until, 16 say, 3:00 and ask for an immediate meeting of 17 the Majority conference in the conference room 18 and at that time determine where, if anywhere, 19 we are with some of the other business that we 20 might want to take up, and either take it up 21 or, sometime by 4:00 or 4:30, be adjourned. 22 That's the intent, that's the plan, 23 and hopefully that's the way it all goes. 24 ACTING PRESIDENT MEIER: Senator 25 Paterson.

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(518) 371-8910 1 SENATOR PATERSON: Mr. President, 2 I don't know what to do with myself. 3 (Laughter.) 4 SENATOR PATERSON: We will call a 5 conference of the Minority at 2:45. In the 6 interim, we'll take all the Majority's 7 suggestions that are being discussed. 8 But in all seriousness, Mr. 9 President, I'd just like to add to what 10 Senator Bruno said, that in this year I really 11 got the impression that the change in our 12 process -- the leader said the other day that 13 this was a process that was done almost 14 entirely openly. There are always 15 conversations that will be somewhat 16 confidential. 17 But in the end, I think everybody 18 leaves this room, staff and members and 19 observers, knowing that when we tried this 20 process that it went a lot smoother, that we 21 worked together a lot better and that the 22 spirit of cooperation was a lot greater than 23 any of us expected. And I was just very proud 24 to work among all of you during this period. 25 So we will, with Senator Gonzalez's

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(518) 371-8910 1 permission, have a Minority conference at 2 2:45. 3 And in the interim, Mr. President, 4 if any of the Majority members would like to 5 get up and suggest what I do with myself, I'm 6 all ears. 7 (Laughter.) 8 ACTING PRESIDENT MEIER: 9 Immediate Majority conference; Minority 10 conference at 2:45 p.m. 11 The Senate will stand in recess 12 until 3:00 p.m. 13 (Whereupon, the Senate stood at 14 ease at 1:56 p.m.) 15 (Whereupon, the Senate reconvened 16 at 3:01 p.m.) 17 ACTING PRESIDENT MEIER: Senator 18 Skelos. 19 SENATOR SKELOS: Mr. President, 20 is there any further business to come before 21 the Senate? 22 ACTING PRESIDENT MEIER: There is 23 no further business, Senator. 24 SENATOR SKELOS: There being no 25 further business, I move we adjourn until

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(518) 371-8910 1 Monday, April 4th, at 3:00 p.m., intervening 2 days being legislative days. 3 ACTING PRESIDENT MEIER: On 4 motion, the Senate stands adjourned until 5 Monday, April 4th, at 3:00 p.m., intervening 6 days being legislative days. 7 (Whereupon, at 3:02 p.m., the 8 Senate adjourned.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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(518) 371-8910