Wednesday, January 19, 2011

1 NEW YORK STATE SENATE 2 3 4 THE STENOGRAPHIC RECORD 5 6 7 8 9 ALBANY, NEW YORK 10 January 19, 2011 11 11:17 a.m. 12 13 14 REGULAR SESSION 15 16 17 18 LIEUTENANT GOVERNOR ROBERT J. DUFFY, President 19 FRANCIS W. PATIENCE, Secretary 20 21 22 23 24 25

Candyco Transcription Service, Inc. 1 P R O C E E D I N G S 2 THE PRESIDENT: The Senate will 3 now come to order. 4 Please stand for the Pledge of 5 Allegiance. 6 (Whereupon, the assemblage recited 7 the Pledge of Allegiance to the Flag.) 8 THE PRESIDENT: We're proud to be 9 joined again by the Reverend Peter G. Young, 10 from the Mother Teresa Community of Albany. 11 Father Young. 12 FATHER YOUNG: Thank you, 13 Governor. Let us pray. 14 Having survived the sleet, the 15 snow, and the inclement weather, let us 16 remember that all of our Senators are here 17 today and they will guide our government for 18 just and caring societies. 19 May God strengthen them, lead them, 20 and give them wisdom and understanding as they 21 work for our good and for the good of all of 22 our New York State citizens. 23 Amen. 24 THE PRESIDENT: Thank you, 25 Father.

Candyco Transcription Service, Inc. 1 Next, the reading of the Journal. 2 The Secretary will read. 3 THE SECRETARY: In Senate, 4 Tuesday, January 18, the Senate met pursuant 5 to adjournment. The Journal of Monday, 6 January 17, was read and approved. On motion, 7 Senate adjourned. 8 THE PRESIDENT: Without 9 objection, the Journal stands approved as 10 read. 11 Presentation of petitions. 12 Any messages from the Assembly? 13 The Secretary will read. 14 THE SECRETARY: On page 1, 15 Senator Golden moves to discharge, from the 16 Committee on Finance, Assembly Bill Number 851 17 and substitute it for the identical Senate 18 Bill Number 1198, Third Reading Calendar 1. 19 THE PRESIDENT: Substitution 20 ordered. 21 Messages from the Governor. 22 Reports of standing committees. 23 Reports of select committees. 24 Communications and reports from 25 state officers.

Candyco Transcription Service, Inc. 1 Motions and resolutions. 2 Senator Libous. 3 SENATOR LIBOUS: Thank you, 4 Mr. President. 5 Mr. President, may we please adopt 6 the Resolution Calendar, with the exception of 7 the following resolutions: Number 98, 240, 8 and 241. 9 THE PRESIDENT: All in favor of 10 adopting the Resolution Calendar with the 11 exceptions of Resolutions Number 98, 240, and 12 241, signify by saying aye. 13 (Response of "Aye.") 14 THE PRESIDENT: Opposed, nay. 15 (No response.) 16 THE PRESIDENT: The Resolution 17 Calendar is adopted. 18 Senator Libous. 19 SENATOR LIBOUS: Thank you, 20 Mr. President. 21 Mr. President, I believe there's a 22 privileged resolution at the desk by Senator 23 Larkin. May we please have the title read and 24 move for its immediate adoption. 25 THE PRESIDENT: The Secretary

Candyco Transcription Service, Inc. 1 will read. 2 THE SECRETARY: By Senator 3 Larkin, Legislative Resolution Number 261, 4 commemorating the 30th anniversary of the 5 ending of the Iranian hostage crisis on 6 January 20, 2011. 7 THE PRESIDENT: Senator Larkin. 8 SENATOR LARKIN: Thank you, 9 Mr. President. 10 It's hard to believe that Tom 11 Libous was a young man with lots of hair on 12 his head 30 years ago when this country 13 suffered one of the most damaging blows to our 14 history and our honor. 15 On that day, the 20th of January, 16 1981, we saw a complete turnaround of that 17 incident. But we have to take a look at what 18 happened. On November the 4th of 1979, 19 thousands of Iranians took to the streets, not 20 only with words but with weapons. They took 21 into custody 90 members of the embassies and 22 of the military assigned to the embassy and 23 put them in captivity. 24 There was efforts to try to help 25 them. Back in 1980, we lost 8 U.S. Army

Candyco Transcription Service, Inc. 1 personnel that were killed when helicopters 2 crashed in the desert. 3 The period between '79 and when 4 they were released was a hardship on many of 5 them. Some family members had died. Some 6 people just gave up hope. But if you recall, 7 there was a drive in our country of yellow 8 ribbons. The song is out there someplace, 9 John; I know Skelos wrote it. But what we had 10 here was a statement from the American people 11 that this is our country, and we're not going 12 to be thrown around. 13 Fifty-two hostages, 444 days. One 14 person whose name is not mentioned anymore, 15 and I apologize, a charge d'affaires of the 16 Canadian Embassy, took Americans and hid them. 17 These were Americans that the Iranians wanted 18 because they were the shakers and movers of 19 policy of the United States government in Iran 20 at the time. 21 On January 20, 1981, a new 22 president was sworn in and the hostages were 23 released. You can't forget President Carter; 24 he did everything he could. But the Iranian 25 government were waiting for somebody to really

Candyco Transcription Service, Inc. 1 pitch in. The Iranian government said, We 2 will return your Americans if you give us 3 $34 million. President Reagan says, 4 8 million, take it or leave it, and our 5 aircraft are ready. 6 Right after being sworn in, the 7 Swiss Embassy informed the Secretary of State 8 designee, 1981, that the hostages were 9 released. 10 Now, you know, the biggest thing 11 was first debriefing, healthcare. They were 12 flown from Iran to Wiesbaden, Germany, to the 13 U.S. Air Force Hospital. Two days later they 14 were flown to Stewart Airport in Orange 15 County. There's a spot on the ground that 16 marks where the aircraft landed. One of the 17 hostages, from Texas, got off the aircraft and 18 kissed the ground. And then he looked up, and 19 I was wondering what was going on when he was 20 looking up. And he said, "Lord, you did not 21 desert us." A very powerful statement and 22 something that we ought to be sure that we do 23 not forget. 24 On this Saturday there will be a 25 reunion of these individuals in Highland

Candyco Transcription Service, Inc. 1 Falls, New York, and at West Point itself 2 honoring those individuals. You start to 3 think about it, for 444 days they didn't 4 break, turn against their country, or those 5 Canadians or others from Australia didn't turn 6 against their countries and say "whatever you 7 want, we'll do." The message from President 8 Reagan was you're not going to get no 9 34 million, here's $8 million in frozen 10 assets, no cost to the U.S. government. 11 But we need to take and think about 12 it. Thirty years ago, just think about where 13 you were when they were released. And also 14 take a moment and think about the 444 days 15 that these men and women were in captivity and 16 were subject to restraints that we don't 17 always know what happened. 18 So when we meet on Saturday, I'm 19 very happy. I understand my good friend 20 Senator Ball will join us there. Anybody in 21 the area, come join us. We have one from 22 Brooklyn, John, Mr. Rosen. He was a high 23 school classmate of Stanley Fink's. And 24 Stanley's got the whole book of pictures, by 25 the way.

Candyco Transcription Service, Inc. 1 Mr. President, I thank you. I 2 think it's a day that we should not forget. 3 We should always remember, this is the 4 greatest country, America is the greatest 5 country in the world. And when we live up to 6 the honors and respect that we should have, we 7 will be a greater country. 8 Thank you very much. 9 THE PRESIDENT: Thank you, 10 Senator Larkin. 11 The question is on the resolution. 12 All in favor signify by saying aye. 13 (Response of "Aye.") 14 THE PRESIDENT: Opposed, nay. 15 (No response.) 16 THE PRESIDENT: Senator. 17 SENATOR LARKIN: I would like to 18 ask that it be open for all members who would 19 like to be on the resolution. 20 THE PRESIDENT: So ordered. 21 The resolution is adopted. 22 Senator Libous. 23 SENATOR LIBOUS: Thank you, 24 Mr. President. 25 I also believe that Senator Huntley

Candyco Transcription Service, Inc. 1 has a resolution at the desk. I would ask 2 that you read the resolution in its entirety 3 and then call on Senator Huntley, please. 4 THE PRESIDENT: The Secretary 5 will read the resolution in its entirety. 6 THE SECRETARY: By Senator 7 Huntley, Legislative Resolution Number 98, 8 mourning the death of Chief Arthur B. Hill, 9 distinguished citizen and devoted member of 10 his community. 11 "WHEREAS, It is the custom of this 12 Legislative Body to pay tribute to citizens of 13 the State of New York whose lifework and civic 14 endeavor serve to enhance the quality of life 15 in their communities and the great State of 16 New York; and 17 "WHEREAS, Chief of the New York 18 Police Department Arthur (Artie) B. Hill, of 19 St. Albans, New York, died on Thursday, 20 July 22, 2010, at the age of 88; and 21 "WHEREAS, Arthur B. Hill was born 22 in New York in 1922 and grew up in Harlem. He 23 graduated from DeWitt Clinton High School, the 24 Bronx, in 1940, and proudly served in the 25 United States Army during World War II from

Candyco Transcription Service, Inc. 1 1942 to 1946; and 2 "WHEREAS, Upon an honorary 3 discharge from military service, Arthur B. 4 Hill took civil service exams and was called 5 to join the New York City Police Department in 6 1946. He was assigned to the 28th Precinct 7 and rose through the ranks; and 8 "WHEREAS, An exemplary leader, 9 Arthur B. Hill was promoted to the rank of 10 sergeant in 1959 while serving in the 42nd and 11 49th Precincts. He was then advanced to the 12 esteemed position of lieutenant in 1961 and 13 received a variety of assignments to work in 14 the 20th Precinct, as well as the 5th 15 Division, the 40th Precinct and in the 16 Planning Bureau, where he worked as a system 17 analyst. He had the honor of serving as 18 commanding officer of the Malcolm X funeral 19 detail in February, 1965; and 20 "WHEREAS, Arthur B. Hill was 21 promoted to the rank of captain in 1965 and 22 worked in the 5th and 6th Divisions of the 23 NYPD before he was appointed the second 24 African-American commanding officer of the 25 28th Precinct; and

Candyco Transcription Service, Inc. 1 "WHEREAS, While studying for 2 promotions, Arthur B. Hill attended John Jay 3 College of Criminal Justice/CUNY where he 4 earned a bachelor's degree in political 5 science and a master's degree in police 6 administration; and 7 "WHEREAS, His extraordinary 8 trailblazing career continued when Arthur B. 9 Hill was appointed to the rank of deputy 10 inspector in 1967 and was assigned to the 6th 11 Division in Harlem. On September 16, 1969, 12 Arthur B. Hill was promoted to the rank of 13 deputy chief inspector and transferred to the 14 13th Division, Brooklyn; and 15 "WHEREAS, Chief Hill became the 16 first African-American commander of the 17 Support Service Unit, which was formerly known 18 as the Special Operations Division. He 19 oversaw NYPD Tactical Patrol Force, Aviation, 20 Emergency Service and Harbor Patrol Units; and 21 "WHEREAS, Respected by his fellow 22 officers, Arthur B. Hill was promoted to the 23 rank of assistant chief in September 1971 and 24 retired in January 1973. During his 25 illustrious career, Chief Hill received two

Candyco Transcription Service, Inc. 1 Commendations, three Meritorious and three 2 Excellent Police Duty Awards, along with 3 numerous citations for outstanding community 4 service; and 5 "WHEREAS, Arthur B. Hill 6 distinguished himself in his profession and by 7 his sincere dedication and substantial 8 contribution to the welfare of his community; 9 and 10 "WHEREAS, Arthur B. Hill's 11 commitment to excellence, and his spirit of 12 humanity, carried over into all fields of 13 enterprise, including charitable and civic 14 endeavors; and 15 "WHEREAS, In retirement, Chief Hill 16 joined several civic organizations. He served 17 on several boards of directors for charitable 18 organizations, including the Apollo Theater. 19 He was the long-time executive secretary of 20 the Guy R. Brewer Club. Chief Hill also 21 enjoyed a second career as an executive for 22 the United Parcel Service; and 23 "WHEREAS, Arthur B. Hill is 24 survived by his beloved wife, Patricia, and 25 his children, Arthur, Jr., Ernest, Victoria

Candyco Transcription Service, Inc. 1 and Joanne; and 2 "WHEREAS, Armed with a humanistic 3 spirit, imbued with a sense of compassion, and 4 comforted by a loving family, Arthur B. Hill 5 leaves behind a legacy which will long endure 6 the passage of time and will remain as a 7 comforting memory to all he served and 8 befriended; now, therefore, be it 9 "RESOLVED, That this Legislative 10 Body pause in its deliberations to mourn the 11 death of Chief Arthur B. Hill, distinguished 12 citizen and devoted member of his community; 13 and be it further 14 "RESOLVED, That a copy of this 15 resolution, suitably engrossed, be transmitted 16 to the family of Arthur B. Hill." 17 THE PRESIDENT: Senator Huntley. 18 SENATOR HUNTLEY: Yes, 19 Mr. President. 20 Arthur B. Hill, who we 21 affectionately called "Artie," was a member of 22 the St. Albans community. He was a member of 23 one of the greatest political clubs in 24 Southeast Queens, Guy R. Brewer. He was a man 25 of many, many talents.

Candyco Transcription Service, Inc. 1 And I asked for the resolution to 2 be read in its entirety because I really 3 wanted people to listen, to hear about Artie 4 and to hear how he worked very hard to achieve 5 his goals. And I wanted you to hear what a 6 great family he had. 7 And he was a person who cared about 8 his community. He cared about his career, but 9 his community was also very important to him. 10 And at 88, he was still active before he 11 passed away. He was still active the year 12 before. I used to meet him in places, meet 13 him at the club, meet him at the dances, and 14 him and his wife were always there. 15 And when we lost Artie Hill in that 16 community, it was a great loss. And I just 17 want his family to know that I deeply 18 appreciated Artie for all the things that he 19 had done for people -- for young people, for 20 old people, for everyone. Because that's the 21 kind of person Artie was. 22 Thank you. 23 THE PRESIDENT: Thank you, 24 Senator. 25 The question is on the resolution.

Candyco Transcription Service, Inc. 1 All in favor signify by saying aye. 2 (Response of "Aye.") 3 THE PRESIDENT: Opposed, nay. 4 (No response.) 5 THE PRESIDENT: The resolution is 6 adopted. 7 Senator Libous. 8 SENATOR LIBOUS: Thank you, 9 Mr. President. 10 I believe there's a resolution, 11 Number 240, at the desk by Senator Peralta. 12 May we have the resolution's title read and 13 move for its immediate adoption, please. 14 THE PRESIDENT: The Secretary 15 will read. 16 THE SECRETARY: By Senator 17 Peralta, Legislative Resolution Number 240, 18 mourning the death of legendary New York 19 Yankees owner George Steinbrenner. 20 THE PRESIDENT: The question is 21 on the resolution. All in favor signify by 22 saying aye. 23 (Response of "Aye.") 24 THE PRESIDENT: Opposed, nay. 25 (No response.)

Candyco Transcription Service, Inc. 1 THE PRESIDENT: The resolution is 2 adopted. 3 Senator Libous. 4 SENATOR LIBOUS: Thank you, 5 Mr. President. 6 I believe Senator Peralta would 7 like the resolution open for all member. And 8 in custom, if you don't want your name on the 9 resolution, please let the desk know. 10 Otherwise, it will go on. 11 THE PRESIDENT: The resolution is 12 open for cosponsorship. If you don't wish to 13 cosponsor, please notify the desk. 14 Senator Libous. 15 SENATOR LIBOUS: Thank you, 16 Mr. President. 17 There's another resolution at the 18 desk, by Senator Perkins. May we please have 19 the title read and move for its immediate 20 adoption. 21 THE PRESIDENT: The Secretary 22 will read the title of the resolution. 23 THE SECRETARY: By Senator 24 Perkins, Legislative Resolution Number 241, 25 mourning the death of legendary jazz pianist

Candyco Transcription Service, Inc. 1 Dr. William Taylor. 2 THE PRESIDENT: Senator Perkins. 3 SENATOR PERKINS: Thank you very 4 much. I wanted to take an opportunity to read 5 into the record a letter to the family. 6 "Dear Mrs. Taylor and 7 Ms. Thompson-Taylor: 8 "On behalf of a broad and diverse 9 constituency of music lovers, extending 10 profound, heartfelt condolences for the loss 11 of your husband and father, the great 12 musician, composer and jazz ambassador 13 Dr. Billy Taylor, I write to you as the 14 Senator representing the 30th District of the 15 New York State Senate. Widely associated with 16 historic Harlem, my district also comprises 17 significant portions of East Harlem's 18 El Barrio, Washington Heights, Morningside 19 Heights, and the Upper West Side. 20 "It's serving Harlem, with our 21 incomparable connection to jazz history, that 22 makes it particularly important to praise 23 Dr. Billy Taylor, who through a career 24 spanning decades liltingly played piano with 25 other legends such as Charlie Parker, Ella

Candyco Transcription Service, Inc. 1 Fitzgerald, Dizzy Gillespie and Miles Davis. 2 Whatever he undertook, he was an innovator, 3 whether hosting jazz shows on WLIB and 4 National Public Radio, doing spots on CBS's 5 Sunday Morning, or playing his hit "C A G" and 6 "Capricious" on Marian McPartland's first 7 segment of Piano Jazz. Foremost, helping to 8 found Jazzmobile, which gives mobile 9 neighborhood concerts on a parade float, 10 Dr. Taylor was the ultimate explainer of 11 America's unique art form, jazz! 12 "All of this is exceptional, but 13 more importantly and personally, I write to 14 you as a friend of your talented son and 15 brother Duane. Reflecting on the life and 16 significance of Duane's father reminds me of 17 what a deep impact Dr. Taylor had on my 18 development and life and those of our 19 classmates. Writing 'I wish I knew how it 20 would feel to be free,' Dr. Taylor composed an 21 anthem that expressed the anger, anxiety and 22 aspirations of my community and generation. 23 "In an era when black excellence 24 was excluded from most history books, 25 Dr. Taylor came to Collegiate School each year

Candyco Transcription Service, Inc. 1 to teach about the artistic achievement of 2 African-Americans in music. Positive black 3 role models were not as visible then as today, 4 so Dr. Taylor had as valuable an influence on 5 the 50 white students he would address as he 6 did on the five black students in attendance. 7 "Defying stereotypes, his gentility 8 was disarming. Mild-mannered, he was always 9 quietly but distinctively dressed, wearing 10 definitive enormous dark-rimmed eyeglasses. 11 Impeccably reasoned, Dr. Taylor's scholarship 12 was an articulate activism, as affecting and 13 radical as any expressed by Stokely Carmichael 14 or Malcolm X. 15 "So if the riches of possibility, 16 the potential to transform a formerly 17 apathetic and passive pupil like me was the 18 one great gift of a first-rate education, 19 exposure to a brilliant and committed man like 20 Dr. Taylor was equally imperative. 21 Invaluably, his example of success underscored 22 my potential to be productive as well. 23 Hearing him speak and play, one 24 easily appreciated an art not merely for art's 25 sake. Nor were the intellectual pursuits he

Candyco Transcription Service, Inc. 1 espoused only about academic concerns. 2 Instead, Dr. Taylor employed our music as a 3 synthesis of eclectic sounds and traditions to 4 articulate and focus the meaning of a movement 5 fighting for freedom and inclusion. 6 "I epitomize the effectiveness of 7 Dr. Taylor's pioneering efforts to enlighten 8 our youth. Appreciative of his influence, 9 working to perpetuate his example, one hopes 10 to similarly teach young people today about 11 our extraordinary heritage and to suggest to 12 them the limitless possibility of all they 13 have to offer. 14 "Inevitably, whenever someone takes 15 on a selfless mission, their family has to 16 sacrifice for that cause too. The world, 17 especially our world, is greatly indebted to 18 the work and wisdom of Dr. Billy Taylor. 19 Because you, his loved ones, drove, sustained, 20 inspired and fulfilled him, we are indebted to 21 you as well. For myself, my family and all 22 New Yorkers, I say thank you. Dr. Taylor was 23 an heroic figure. He and you are in our 24 prayers. 25 "Sincerely, Senator Bill Perkins,

Candyco Transcription Service, Inc. 1 30th District." 2 THE PRESIDENT: Thank you, 3 Senator. 4 SENATOR PERKINS: And I ask my 5 colleagues to join me in signing onto the 6 resolution. Thank you. 7 THE PRESIDENT: Senator Libous, 8 Senator Perkins asked that the resolution be 9 reopened for cosponsorship. 10 SENATOR LIBOUS: Again, if 11 someone doesn't want to be on the resolution, 12 they should let the desk know. 13 Senator Perkins, otherwise, that 14 you have opened up the sponsorship to all 15 members? 16 SENATOR PERKINS: Yes. Thank 17 you. 18 SENATOR LIBOUS: Can we move the 19 resolution, please. 20 THE PRESIDENT: The question is 21 on the resolution. All in favor signify by 22 saying aye. 23 (Response of "Aye.") 24 THE PRESIDENT: Opposed, nay. 25 (No response.)

Candyco Transcription Service, Inc. 1 THE PRESIDENT: The resolution is 2 adopted. 3 Senator Libous. 4 SENATOR LIBOUS: Mr. President, 5 before we go to the noncontroversial calendar, 6 there was a resolution that was adopted 7 already on the calendar today by Senator 8 Larkin. It's Number 231. Senator Larkin 9 would like to open that up to all members of 10 the Senate. 11 And again, as our policy, if you 12 wish not to be on Resolution 231, please let 13 the desk know. But it had already passed. 14 Mr. President, may we please have 15 the reading of the noncontroversial calendar. 16 THE PRESIDENT: The Secretary 17 will read. 18 THE SECRETARY: Calendar Number 19 1, substituted earlier today by Member of the 20 Assembly Weinstein, Assembly Print Number 851, 21 an act to amend the Civil Practice Law and 22 Rules. 23 THE PRESIDENT: Read the last 24 section. 25 THE SECRETARY: Section 2. This

Candyco Transcription Service, Inc. 1 act shall take effect on the same date and in 2 the same manner as Chapter 568 of the Laws of 3 2010. 4 THE PRESIDENT: Call the roll. 5 (The Secretary called the roll.) 6 THE SECRETARY: Ayes, 60. 7 THE PRESIDENT: The bill is 8 passed. 9 THE SECRETARY: Calendar Number 10 2, by Senator Alesi, Senate Print 1891, an act 11 to amend the Tax Law. 12 SENATOR BRESLIN: Lay it aside. 13 THE PRESIDENT: The bill is laid 14 aside. 15 THE SECRETARY: Calendar Number 16 3, by Senator Ranzenhofer, Senate Print -- 17 SENATOR BRESLIN: Lay it aside. 18 THE PRESIDENT: The resolution is 19 laid aside. 20 THE SECRETARY: Calendar Number 21 4, by Senator Zeldin -- 22 SENATOR BRESLIN: Lay it aside. 23 THE PRESIDENT: The resolution is 24 laid aside. 25 That completes the reading of the

Candyco Transcription Service, Inc. 1 noncontroversial aspects of the calendar. 2 Senator Libous. 3 SENATOR LIBOUS: May we go to the 4 controversial calendar, Mr. President. 5 THE PRESIDENT: The Secretary 6 will ring the bell. 7 The Secretary will read Calendar 8 Number 2. 9 THE SECRETARY: Calendar Number 10 2, by Senator Alesi, Senate Print 1891, an act 11 to amend the Tax Law. 12 SENATOR LIZ KRUEGER: 13 Explanation. 14 THE PRESIDENT: Senator Alesi, an 15 explanation has been asked for by Senator 16 Krueger. 17 SENATOR ALESI: Thank you, 18 Mr. President and my colleagues. I'm very 19 proud, for the second time in a year or so, to 20 introduce this bill; happier still that the 21 bill has made it to the floor. It is called 22 the 2011 Job Creation and Retention Package. 23 The underpinnings of this bill have 24 three major components: First of all, a job 25 tax credit for new jobs that are created in

Candyco Transcription Service, Inc. 1 this state; secondly, what is called the Small 2 Business Tax Freedom Plan; and finally, the 3 Red Tape Moratorium Plan. 4 This is a comprehensive approach 5 toward creating new jobs in New York State. 6 And there isn't anybody in this chamber, I 7 believe, that would argue that we don't need 8 new jobs to improve our economy. 9 The first component, job creation 10 tax credit, provides a payroll tax credit to 11 any small business that creates a new job. So 12 for example, if there is no employee working, 13 there is no withholding tax against a 14 nonexistent employee. If the new small 15 business hires a new employee, they are given 16 a tax credit against the withholding tax. 17 There's no cost to the state because there was 18 no employee paying that withholding tax in the 19 first place. It's totally neutral. 20 But more significantly, it's a very 21 large incentive for small businesses who many 22 of them right now, in this economy, are on the 23 threshold of emerging into a hiring mode but 24 are holding back just because they need that 25 little extra.

Candyco Transcription Service, Inc. 1 This is that little extra that will 2 help those companies survive, that will help 3 them move into the future. And equally 4 important, it is that little extra at no cost 5 to the state that will get people back to 6 work. 7 The second component of this is the 8 Small Business Tax Freedom Plan that 9 eliminates the corporate franchise tax for 10 small businesses, cutting it in half this year 11 and reducing it entirely into the future. 12 And then finally, we all know and 13 we've heard many times that red tape is one of 14 the biggest killers of small businesses. It 15 keeps them from thriving, it keeps them from 16 growing, it keeps them from succeeding, it 17 keeps them from staying in New York or even 18 wanting to locate in New York. 19 Those are the three components of 20 the 2011 Job Creation and Retention Plan, 21 similar to a plan that was, I believe, 22 fashioned after this plan that Senator Schumer 23 introduced and had implemented in the United 24 States Congress about three months after we 25 proposed it.

Candyco Transcription Service, Inc. 1 Thank you, Mr. President. 2 THE PRESIDENT: Thank you, 3 Senator. 4 Senator Krueger, why do you rise? 5 SENATOR LIZ KRUEGER: I rise to 6 request that the sponsor yield to some 7 questions, Mr. President. 8 THE PRESIDENT: Senator Alesi, do 9 you yield to questions? 10 SENATOR ALESI: Mr. President, it 11 would be my pleasure. 12 THE PRESIDENT: The Senator 13 yields. 14 SENATOR LIZ KRUEGER: Thank you, 15 Mr. President. Through you, if the sponsor 16 could explain to me how this is a cost-neutral 17 proposal to the state as opposed to a loss of 18 tax revenue to the State of New York of 19 hundreds of millions of dollars. 20 SENATOR ALESI: Mr. President and 21 my colleagues, there's a simple answer to 22 that, as I stated in my opening remarks. If 23 there is a withholding tax against an existing 24 employee and you take that withholding tax 25 away, that would be a cost to the state

Candyco Transcription Service, Inc. 1 because that withholding tax is being taken in 2 as revenue. 3 If an employee does not exist today 4 but is hired this afternoon, a new employee 5 against which -- whose payroll against which 6 there was never any withholding, is hired and 7 the employer has a tax credit -- in other 8 words, doesn't have to pay that withholding 9 tax up to the limit -- there's no lot of 10 revenue because there was never any revenue in 11 the first place. 12 The benefit to that is you have 13 someone working and you have a business 14 growing and starting to thrive because they 15 have additional help and talent. 16 SENATOR LIZ KRUEGER: Mr. 17 President, if through you the sponsor would 18 continue to yield. 19 THE PRESIDENT: Senator, will you 20 continue to yield? 21 SENATOR ALESI: Thank you for the 22 opportunity, Mr. President. 23 THE PRESIDENT: The Senator 24 yields. 25 SENATOR LIZ KRUEGER: Thank you.

Candyco Transcription Service, Inc. 1 Well, I suppose first a statement. 2 On that logic, then, assuming that jobs 3 continue to be created -- which we hope in the 4 state -- and then people also move from job to 5 job, and we were continuing to withhold the 6 money from the employee, which is what this 7 does, the employee has the tax taken out of 8 their paycheck but never moved over to the 9 state, you would actually have a transfer from 10 employees to businesses without ever seeing 11 new tax revenue for the state forever. But 12 that's not actually my question. 13 The bill also allows the 14 bifurcation for small business income between 15 the taxpayer's personal income tax bill to the 16 state and the business tax bill to the state, 17 which as we know some small businesses 18 currently choose to pay their taxes through 19 their PIT. 20 Can you just explain a little more 21 how this bifurcation would work? Let's say I 22 was a fairly successful business owner but I 23 had 10 small businesses. So now there's a 24 bifurcation where I can have a different tax 25 rate, I, the wealthy business owner, under

Candyco Transcription Service, Inc. 1 your model. 2 SENATOR ALESI: Mr. President, I 3 think I heard two questions there. If not, 4 the first part was at least a comment which 5 deserves a comment in response. 6 I can't imagine in today's 7 environment, when people are struggling to 8 find jobs and businesses are struggling to 9 find a way to employ people, that people would 10 take a job, move on to another just to take 11 advantage of what we're trying to do here. 12 That's like finding a Coca-Cola machine that 13 is working for free. There's only so much 14 Coca-Cola you can drink. 15 And I don't think anybody would do 16 that. There may be some, but I don't think 17 enough to make any impact on this bill or the 18 benefits this bill can provide to businesses, 19 working people in this state. 20 Secondly, I'm not entirely sure 21 that you can look at businesses that have 22 subsidiaries -- wholly owned subsidiaries, 23 LLCs, other corporations -- that are part of 24 an overall enterprise and say that the single 25 or collective owners of those businesses would

Candyco Transcription Service, Inc. 1 benefit unfairly because of this program. 2 Because the simple answer is this program is 3 designed to put people to work. 4 And if the program puts people to 5 work because it incentivizes employers to 6 offer jobs that they can't offer now because 7 they can't afford it, then that's the end 8 goal. 9 And if in fact a company owns or a 10 business owner owns more than one company, 11 it's the company that benefits and it's the 12 people that are employed by that company or 13 companies that benefit. 14 The net result of that is that 15 New York State benefits, because we have 16 people out of work and when people go to work, 17 there isn't anybody in this room that would 18 argue the fact that the more people that are 19 working, the more robust our economy is; the 20 more robust our economy is, the better off we 21 are with tax revenues, et cetera. 22 Mr. President and my colleagues, 23 this is a good bill. It was, I believe, if 24 not copied, at least it was imitated on the 25 federal level with the federal HIRES Act,

Candyco Transcription Service, Inc. 1 which expired at the end of this year but is 2 scheduled to be reinstated because it has 3 proven to be so effective as a tool to hire 4 new people, put people to work, not only in 5 America but now here in New York State. 6 In fact, coupled with that, my 7 colleagues, this bill leverages the federal 8 bill because it provides even more tax 9 incentives for those businesses that want to 10 put people to work. 11 THE PRESIDENT: Senator Krueger. 12 SENATOR LIZ KRUEGER: Thank you, 13 Mr. President. On the bill. 14 THE PRESIDENT: Senator Krueger, 15 on the bill. 16 SENATOR LIZ KRUEGER: Thank you. 17 Thank you, Senator Alesi, for your 18 explanation of the bill. 19 I think I will get to my points 20 better if I just articulate some of my 21 concerns. 22 I am certainly not opposed to a tax 23 credit model that puts more New Yorkers to 24 work. Senator Alesi is right, there's no one 25 in this chamber who doesn't want to see more

Candyco Transcription Service, Inc. 1 New Yorkers working. But as is often said, 2 God is in the details, especially on tax 3 expenditure and tax credit bills. 4 So the reason I raise the concern 5 about it being a withholding bill from 6 employees' paychecks is you have to ask the 7 question what actions are you incentivizing. 8 Are you incentivizing the creation of new 9 jobs, or are you actually incentivizing the 10 creation of rapid turnover in jobs? 11 Because we know, in a bad economy, 12 there are endless numbers of people all 13 competing for the same jobs. But if you set 14 up a tax credit for business where they get 15 additional money off of their taxes for every 16 new person who comes in without any obligation 17 to keep that person, they have a reason to 18 keep moving people in and out, in and out, in 19 and out, because you get more money the more 20 people you put on payroll, not necessarily 21 keep on payroll. 22 So you have to be very careful in 23 business tax incentives not to be encouraging 24 simply the rotation of people rapidly off of 25 jobs that have been incentivized. And that

Candyco Transcription Service, Inc. 1 actually is the history of any number of 2 programs, state and federal, that went wrong. 3 And I don't want the state to go wrong again. 4 And that is one of the big ways that this bill 5 is very different than the bills being 6 proposed by the Obama administration. 7 Second, the issue of bifurcating 8 the business tax from the personal tax when a 9 person is trying to pay both as a small 10 business owner through their personal income 11 tax, rather than filing as a corporate tax, is 12 we can in fact, at no benefit to the State of 13 New York, dramatically lower the tax rate of 14 wealthier successful business owners. 15 I want business owners to be 16 successful. I want them to hire more people 17 into their companies. I want them to increase 18 economic activity. But I don't want us to, 19 under the rubric of saying we have a job 20 creation program, actually shift to a more 21 regressive personal income tax for 22 higher-income New Yorkers. And I'm very 23 concerned that that is a big piece of this 24 bill and perhaps the most costly piece of the 25 bill to the State of New York.

Candyco Transcription Service, Inc. 1 So that section of the bill 2 wouldn't create jobs but would reduce tax 3 revenue at a time where we have a $10 billion 4 deficit and none of us know how the heck we're 5 going to meet that responsibility in the next 6 few months. 7 Third, this bill also provides for 8 a reduction by 50 percent of the corporate 9 franchise tax for small businesses in the 10 first year and then a zeroing out of the 11 corporate franchise tax afterwards. It's not 12 clear from the language of the bill whether, 13 if you got to be -- let's all hope that every 14 small business becomes the next IBM, the next 15 Google, the next fill-in-the-blank. It's not 16 clear here where they would ever be obligated 17 to pay business taxes again, even though they 18 had been successful, incentivized and went on 19 to become large corporations in New York. 20 So the concept that within a bill 21 we might actually be zeroing out corporate 22 franchise taxes for everybody over time, when 23 you think about the cost impact for the State 24 of New York and the tax policy ramifications, 25 I have to urge people to think carefully.

Candyco Transcription Service, Inc. 1 In addition, particularly because 2 there's another section of the bill that set a 3 moratorium on any tax or fee increase on 4 businesses until June 2015, meaning you might 5 have your taxes zeroed out, being a small 6 business, using the incentives to do the right 7 things and hire people, and then shift your 8 entire business model, but there would be no 9 way for New York State to get taxes out of you 10 at least till June 30, 2015. And if some of 11 the other bills we're going to discuss soon -- 12 about supermajority rules for taxes -- became 13 law, we probably would never increase or 14 revisit a zeroed-out tax again for anyone. 15 So I have to say, watch the details 16 carefully. There have been successful tax 17 credits to create and incentivize small 18 businesses hiring people, and there have been 19 some real doozies of failures right here in 20 our state. And we don't want to replicate the 21 mistakes of the past as we move forward. 22 Finally, it's an expense bill two 23 weeks before the new Governor Cuomo is giving 24 us his budget. I don't understand why we are 25 making a one-house decision at this moment in

Candyco Transcription Service, Inc. 1 history to cost the State of New York a 2 minimum of $500 million when we are awaiting 3 the Governor's budget with a $10 billion 4 deficit to fill. 5 I think there are any number of 6 reasons today for members on both sides of the 7 aisle to vote no on this bill. I'll be voting 8 no. 9 Thank you, Mr. President. 10 THE PRESIDENT: Thank you, 11 Senator Krueger. 12 Senator Alesi. 13 SENATOR ALESI: On the bill, 14 Mr. President. 15 Thank you, my colleagues. Thank 16 you, Senator Krueger. 17 I'll be brief. I think that it's 18 easy to see that we disagree. So I'm urging 19 my colleagues to supporter this bill because 20 this bill is an intelligent way to give 21 businesses who desperately need to grow and 22 thrive in New York State the incentives to 23 hire new employees. 24 And with regard to Senator 25 Krueger's concerns about an employer hiring

Candyco Transcription Service, Inc. 1 someone and then firing them and then hiring 2 them again and firing them to take advantage 3 of multiple credits, I can't imagine that that 4 would occur in any business atmosphere, 5 because the credit is against the paycheck. 6 So if you hire and fire somebody, you're not 7 gaining anything. The tax credit goes against 8 the paycheck, not multiple persons. 9 But we could get into the smaller 10 details of someone's objections to this and do 11 this all day long. The fact of the matter is 12 this is an intelligent approach. The federal 13 government has adopted it and shown that it 14 has worked. It is successful enough that 15 Senator Schumer himself is going to renew this 16 bill, effective January 1 retroactively. 17 So I encourage my colleagues to 18 understand that we need to help businesses 19 grow and thrive. And equally important, we 20 need to give them the opportunity to put 21 people to work. Because at the end of the 22 day, if we're not putting people to work in 23 New York State, we've failed in our 24 responsibility. 25 I urge a yes vote. Thank you,

Candyco Transcription Service, Inc. 1 Mr. President. 2 THE PRESIDENT: Thank you, 3 Senator Alesi. 4 Is there any other Senator wishing 5 to be heard on this bill? 6 (No response.) 7 THE PRESIDENT: The debate is 8 closed. The Secretary will ring the bell. 9 (Pause.) 10 THE PRESIDENT: The Secretary 11 will read the last section. 12 THE SECRETARY: Section 3. This 13 act shall take effect immediately. 14 THE PRESIDENT: Call the roll. 15 (The Secretary called the roll.) 16 THE PRESIDENT: Senator Klein, to 17 explain his vote. 18 SENATOR KLEIN: Mr. President, to 19 explain my vote. 20 I want to praise the sponsor of 21 this legislation. I think it's a commonsense 22 approach to protecting and enhancing small 23 businesses and creating jobs. 24 One of the things that we see as 25 far as our national recovery is not enough

Candyco Transcription Service, Inc. 1 being done for small businesses. We bailed 2 out the banks, we bailed out the automobile 3 industry, but we still haven't done anything 4 for small businesses who generate jobs. 5 If we're really serious about 6 reducing unemployment, we're going to do tax 7 credits, as is contained in this bill, we'll 8 put a moratorium on red tape and other 9 regulations. 10 So I think this is really a smart, 11 commonsense approach to get our economy moving 12 again and once again getting back to basics 13 and helping small businesses. 14 I vote yes, Mr. President. 15 THE PRESIDENT: Senator Klein in 16 the affirmative. 17 Announce the results. 18 THE SECRETARY: Those recorded in 19 the negative on Calendar Number 2 are Senators 20 Adams, Hassell-Thompson, Huntley, L. Krueger, 21 Montgomery, Parker, Peralta, Perkins and 22 Rivera. 23 Ayes, 51. Nays, 9. 24 THE PRESIDENT: The bill is 25 passed.

Candyco Transcription Service, Inc. 1 Senator Libous. 2 SENATOR LIBOUS: Mr. President, 3 before we go on to the next bill I'd like to 4 suggest to all of my colleagues, in the 5 cooperation and spirit of the new year, when 6 we are on the noncontroversial calendar if 7 members would please, on both sides of the 8 aisle, stay close to the chamber. We have a 9 responsibility to be in here and vote. It is 10 not fair to the members who are in here if 11 other members are out milling around. We have 12 a lot of work to do. 13 And I know that, with the inclement 14 weather. That people want to speak, they want 15 to be on the road and get home at a reasonable 16 hour. 17 So let's be fair to ourselves this 18 year so that when we're on the 19 noncontroversial calendar that we will stay 20 close by so that we can get through business 21 rapidly. 22 Thank you, Mr. President. 23 THE PRESIDENT: Thank you, 24 Senator Libous. 25 The Secretary will read now read

Candyco Transcription Service, Inc. 1 Calendar Number 3. 2 THE SECRETARY: Calendar Number 3 3, by Senator Ranzenhofer, Senate Print 1892, 4 concurrent resolution of the Senate and 5 Assembly proposing an amendment to Article 7 6 of the Constitution. 7 SENATOR BRESLIN: Explanation. 8 THE PRESIDENT: Senator 9 Ranzenhofer, an explanation has been 10 requested. 11 SENATOR RANZENHOFER: Mr. 12 President, who asked for the explanation? 13 THE PRESIDENT: Who asked for the 14 clarification? 15 SENATOR BRESLIN: I did. 16 THE PRESIDENT: Senator Breslin 17 asked for the explanation, Senator 18 Ranzenhofer. 19 SENATOR RANZENHOFER: Mr. 20 President, this is a constitutional state 21 spending cap which will be put in place -- 22 MULTIPLE MEMBERS: We can't hear 23 you. We can't hear. 24 SENATOR RANZENHOFER: The 25 microphone is not working. If you can't hear

Candyco Transcription Service, Inc. 1 me, I'll speak a little louder. 2 This is a constitutional state 3 spending cap -- is this better? I won't break 4 into song, I can tell you that. 5 This would have a 2 percent cap or 6 120 percent of the CPI, whichever is less. 7 Right now that would be a little less than 8 2 percent. There's also a provision in the 9 bill where, if there are excess revenues, 10 50 percent of those would go into a tax 11 stabilization fund, the other 50 percent would 12 be returned to the taxpayers. 13 There's also a provision that if 14 there is an emergency declared by the Governor 15 and certified by the Comptroller, that the tax 16 cap could be exceeded. There's also no 17 requirement that you have to go to a tax cap; 18 you could also have less spending than the 19 2 percent that's provided in the bill. 20 As a constitutional amendment, it 21 would require passage by this legislature, it 22 would require passage by the next legislature, 23 in 2013, and then the voters of the State of 24 New York would have a right to decide on the 25 constitutional amendment.

Candyco Transcription Service, Inc. 1 THE PRESIDENT: Thank you, 2 Senator. 3 Senator Krueger, why do you rise? 4 SENATOR LIZ KRUEGER: We're 5 seeing whether the microphones work. Can you 6 hear me, Mr. President? 7 THE PRESIDENT: We can hear you, 8 Senator. And we're getting you a microphone. 9 SENATOR LIZ KRUEGER: All right. 10 I'll speak loudly. 11 Mr. President, through you, if the 12 sponsor would yield to some questions. 13 THE PRESIDENT: Senator 14 Ranzenhofer, would you yield? 15 SENATOR RANZENHOFER: Yes, 16 Mr. President, I yield. 17 THE PRESIDENT: The Senator 18 yields. 19 SENATOR LIZ KRUEGER: Thank you. 20 If you can't hear me, I'll try to speak even 21 louder. 22 SENATOR LIBOUS: No, no, Senator, 23 we want to hear you. 24 SENATOR LIZ KRUEGER: Oh, we each 25 have one. Thank you so much.

Candyco Transcription Service, Inc. 1 SENATOR LIBOUS: We want to hear 2 you. 3 SENATOR LIZ KRUEGER: Thank you. 4 UNIDENTIFIED SENATOR: Just like 5 Oprah. 6 SENATOR LIZ KRUEGER: Not exactly 7 like Oprah. 8 Thank you very much for your 9 explanation, Senator Ranzenhofer. 10 Senator Ranzenhofer, do you know 11 how many times a bill like this or identical 12 to this has passed here on the floor of the 13 Senate? 14 SENATOR RANZENHOFER: I've been 15 here a few years. It didn't pass during my 16 tenure. But I believe on two other occasions 17 prior to me coming to the Senate. 18 SENATOR LIZ KRUEGER: Thank you. 19 Through you, Mr. President, if the 20 sponsor would continue to yield. 21 SENATOR RANZENHOFER: Yes, of 22 course. Yes. 23 THE PRESIDENT: The Senator 24 yields. 25 SENATOR LIZ KRUEGER: Thank you.

Candyco Transcription Service, Inc. 1 And it's true you haven't been here that long, 2 but do you know how many times this chamber, 3 say over the last 25 years, has called for a 4 spending cap? 5 SENATOR RANZENHOFER: Same answer 6 as I just gave you. 7 SENATOR LIZ KRUEGER: I think 8 it's about 24 times that there have been 9 bills -- excuse me. Mr. President, if through 10 you the sponsor would continue to yield. 11 SENATOR RANZENHOFER: Yes. 12 THE PRESIDENT: The Senator will 13 yield. 14 SENATOR LIZ KRUEGER: Thank you. 15 I was advised actually it was many, many times 16 where we then violated the intention or the 17 outline of the bill and actually increased the 18 budget by hundreds of millions, if not 19 billions of dollars, in years where we all 20 said no, we're not going to increase the level 21 of spending. That's not my question, though. 22 It's my editorial comment. 23 In your bill it's my understanding 24 that it would be a constitutional amendment 25 that there could be no increase above the

Candyco Transcription Service, Inc. 1 2 percent, or 120 percent or more of the 2 Consumer Price Index per year, and it would 3 cover general funds, special revenue funds, 4 capital project funds, and debt relief. Is 5 there any portion of the budget that would not 6 be included in this cap? 7 SENATOR RANZENHOFER: You 8 correctly identified the four funds that are 9 outlined in the bill. 10 SENATOR LIZ KRUEGER: Mr. 11 President, if through you the sponsor would 12 continue to yield. 13 THE PRESIDENT: Senator 14 Ranzenhofer, will you yield? 15 SENATOR RANZENHOFER: Of course. 16 THE PRESIDENT: The Senator 17 yields. 18 SENATOR LIZ KRUEGER: How would 19 this constitutional amendment apply to 20 authorities spending or raising fees and the 21 equivalent of taxes, quote, unquote, off 22 budget? 23 SENATOR RANZENHOFER: This 24 applies to the four funds that are outlined in 25 the bill.

Candyco Transcription Service, Inc. 1 SENATOR LIZ KRUEGER: Mr. 2 President, through you, may I ask another 3 question, please, of the sponsor. 4 THE PRESIDENT: Senator 5 Ranzenhofer, do you yield? 6 SENATOR RANZENHOFER: Yes. 7 THE PRESIDENT: The Senator 8 yields. 9 SENATOR LIZ KRUEGER: So I want 10 to make sure I understand your bill correctly. 11 You could continue to raise funds through 12 outside authorities even if this bill became 13 the law? 14 SENATOR RANZENHOFER: Same answer 15 as I just gave you, yes. 16 SENATOR LIZ KRUEGER: I'm not 17 sure -- thank you, Senator Ranzenhofer. 18 If, through you, Mr. President, the 19 Senator would continue to yield. 20 THE PRESIDENT: Senator 21 Ranzenhofer, do you continue to yield? 22 SENATOR RANZENHOFER: Yes, 23 Mr. President. 24 THE PRESIDENT: The Senator 25 yields.

Candyco Transcription Service, Inc. 1 SENATOR LIZ KRUEGER: Senator, 2 how did you determine what the growth 3 benchmark should be for determining the cap? 4 There is no other state in the nation that 5 uses an inflation-only rate to calculate the 6 cap. So I'm curious why you went down that 7 road with your proposal. 8 SENATOR RANZENHOFER: The reason 9 I went down that road is because over the last 10 10 years spending has increased 5.54 percent; 11 over the last 20 years, 4.54 percent; over the 12 last 27 years, 5.75 percent. 13 I thought it was important to have 14 a number which was less than that. I thought 15 2 percent was the appropriate number. I know 16 the Governor has talked very specifically that 17 we must immediately impose a state spending 18 cap. So I thought 2 percent was the proper 19 number and was also -- right now it just so 20 happens to be that that number is very closely 21 tied to what the 120 percent of the CPI would 22 be right now. Right now the 120 percent of 23 the CPI would be just under 2 percent. So the 24 2 percent right now matches very closely what 25 the CPI is.

Candyco Transcription Service, Inc. 1 SENATOR LIZ KRUEGER: Mr. 2 President, if through you the sponsor would 3 continue to yield. 4 THE PRESIDENT: Senator, do you 5 continue to yield? 6 SENATOR RANZENHOFER: Yes. 7 THE PRESIDENT: The Senator 8 continues to yield. 9 SENATOR LIZ KRUEGER: Thank you. 10 We are going through a period of 11 relatively low inflation, although we 12 historically have had periods of high 13 inflation. But there are also facts that we 14 know from the history of our budget and other 15 states' budgets that costs of some services, 16 like education and healthcare, historically 17 growth at rates that exceed inflation. 18 And then you have a complicating 19 factor -- let's say you had a population 20 burst. Now, we know that in the new Census 21 data we're going to lose Congressional seats 22 because we haven't been growing as fast as 23 other states. I believe we all agree New York 24 State wants to grow our population and not be 25 continually losing a national range war to

Candyco Transcription Service, Inc. 1 other states. 2 In your bill, where it's a 3 constitutional amendment -- and again, that 4 means there's almost no way to undo it once 5 we've done it. If we have your model of an 6 inflation-only rate cap but we had a huge 7 population burst or we had a major capital 8 expenditure requirement suddenly one year, a 9 major bridge and highway collapse, we might 10 find ourselves not able at all to just keep up 11 with a minimal continuing level of other 12 services because of the cap. 13 So did you think about what happens 14 if the inflation rate changes, what happens if 15 the population changes, or what happens if 16 something else happens such as a major capital 17 cost that might drain any other part of the 18 budget, actually forcing a major reduction 19 rather than any increase at all? 20 SENATOR RANZENHOFER: Yes, I 21 have. I'm sure there's a question, many 22 questions in there, so let me try to address 23 that as best as I can remember your questions. 24 First of all, one of the things 25 that you point out, very correctly, is that

Candyco Transcription Service, Inc. 1 New York is losing or should be losing this 2 year two Congressional representatives. 3 That's a trend that has continued over the 4 last 50 years. In my judgment, and I think 5 it's pretty well documented, that one of the 6 problems that this state is having is that we 7 are continuing to lose population to other 8 states that have better controls over their 9 taxes and spending. 10 So as a result, what's happened in 11 this state is that the spending has gone up, 12 the number of people that are left behind to 13 pay for that spending decreases -- to, as I 14 said, other states which have lower taxes 15 because their spending levels are not quite as 16 high. 17 One of the things -- you had 18 mentioned two examples. One is a population 19 burst. And again, based on the last 50 or 20 even 100 years, I don't anticipate a 21 population burst at this point in time. As a 22 matter of fact, exactly the exact opposite is 23 happening. 24 With respect to your example of a 25 bridge collapse, that's covered in the bill.

Candyco Transcription Service, Inc. 1 It does talk about an emergency. And I had 2 mentioned earlier if there is an emergency 3 such as the one that you've just described, 4 the Governor can declare an emergency, that 5 can be certified by the Comptroller, and that 6 can certainly be considered. 7 So the bill provides for that 8 particular hypothetical example which you just 9 gave. It does not address, for good reason, 10 the possible population burst that this state 11 might at some point have, in light of the last 12 100-year history, certainly 50-year history, 13 where this state continually, based upon 14 comparison with other states, continues to 15 lose population year after year, decade after 16 decade. 17 So in order to address -- that was 18 one of the primary motivating factors behind 19 this bill, is to get spending under control so 20 we can therefore control taxes so we still 21 have people here before everybody that is able 22 to decides to leave for states that are less 23 expensive than New York State. 24 SENATOR LIZ KRUEGER: Mr. 25 President, if through you the sponsor would

Candyco Transcription Service, Inc. 1 continue to yield. 2 THE PRESIDENT: Senator? 3 SENATOR RANZENHOFER: Yes, I 4 will. 5 THE PRESIDENT: The Senator 6 yields. 7 SENATOR LIZ KRUEGER: Thank you. 8 And there is a question, but I want 9 to provide some data before getting to the 10 question. 11 I've looked at what happened in 12 some other states that have passed this kind 13 of spending cap or variations on spending cap. 14 Although really no one goes as far as your 15 proposal as far as covering all different 16 types of revenue sources, a 2 percent or 17 the -- or less than 120 percent of the 18 Consumer Price Index. But the state that 19 seems to have gone closest to the model you're 20 proposing is the State of Colorado. And they 21 passed their TABOR bill, Taxpayer Bill of 22 Rights, which effectively capped state 23 spending, and then had to at a later date be 24 completely overhauled in a referendum bill by 25 the people when many Republican legislators,

Candyco Transcription Service, Inc. 1 Republican governor and their business 2 leaders, highlighted all the negative impacts 3 that were found on the State of Colorado. 4 At the time they made the decision 5 to pull back on TABOR -- and again, they have 6 I&R in their state, so they had the ability 7 to. We don't have initiative and referendum, 8 so we wouldn't have the ability to go back the 9 way they did. 10 Between 1992 and 2001, Colorado 11 declined from 35th to 49th in the nation for 12 spending on education. As of 2006, the state 13 maintained its low rank among the states to 14 48th in education. Colorado's average 15 per-pupil funding fell by $600 relative to the 16 national average. Their funding for public 17 health programs plummeted from 23rd to 48th in 18 national stating rankings. 19 Their services for children 20 plummeted in the rankings. The share of 21 low-income children lacking health insurance 22 doubled in Colorado and is now ranked 47th 23 among the 50 states on child health measures. 24 It also affected low-income adults. Colorado 25 fell from 20th to 48th for the percentage of

Candyco Transcription Service, Inc. 1 low-income non-elderly adults without health 2 insurance. 3 The business community responded 4 that Colorado was no longer a place where they 5 could grow their businesses. And so in fact 6 Colorado realized that perhaps -- not perhaps, 7 that they had gone too far. They had 8 unintended consequences of the TABOR Act. And 9 no state since then has gone as far as 10 Colorado originally did and reversed itself 11 upon in 2005. 12 Why now here in 2011 should 13 New York assume there are no lessons to be 14 learned from what some of the other states did 15 and then reversed themselves on? Why should 16 we want to put ourselves in a position where 17 these things can happen here but we won't have 18 a go-backwards option or a do-over? 19 SENATOR RANZENHOFER: The simple 20 answer is that I believe that New York State's 21 fiscal condition is so bad that if we do 22 nothing, that it will continue to worsen. And 23 notwithstanding the speech or, you know, 24 information that you just provided, people are 25 leaving the state in droves. And something

Candyco Transcription Service, Inc. 1 has to be done in order to keep them here. 2 And I think limiting spending and limiting 3 taxes and trying to create private-sector jobs 4 is the correct method to go. And that's why I 5 introduced the bill. 6 SENATOR KRUEGER: Mr. President, 7 on the bill. 8 THE PRESIDENT: Senator. 9 SENATOR LIZ KRUEGER: Thank you. 10 Thank you very much, Senator Ranzenhofer, for 11 giving me the time and explanation for your 12 legislation. 13 Again, I stand here saying no 14 disagreement, New York State has a spending in 15 relationship to revenue issue. No 16 disagreement we're facing a $10 billion 17 deficit and we must do the right things for 18 the people of the State of New York. And 19 there are right ways to handle this and I 20 believe wrong ways to handle this. 21 I think a constitutional amendment 22 mandating a specific unchangeable formula for 23 revenue and spending -- this bill is 24 specifically spending -- for spending in the 25 State of New York is a terrible, terrible road

Candyco Transcription Service, Inc. 1 to go down. We have seen, from other states 2 who tried it, it wasn't the right answer. 3 And specifically the way this 4 amendment is targeted I believe is not the 5 right answer. It doesn't address the concerns 6 about a population spurt. It doesn't address 7 the possibilities of the need to ratchet down 8 the effect when you're moving out of bad 9 economies into better economies. It doesn't 10 let you smooth over economic changes when 11 looking at a year-by-year basis. 12 There are huge unintended 13 consequences for local government. When you 14 look at the findings specifically from 15 Colorado and other states, what they found 16 when they stopped themselves from being able 17 to increase their spending at the state level 18 was that they created endless numbers of new 19 government, new governments at the local 20 level. Counties, towns, cities were creating 21 new districts, new categories that could in 22 fact increase their revenue because they knew 23 they weren't going to get any more from the 24 state as population grew, as the economy 25 changed, as there was standard inflation. So

Candyco Transcription Service, Inc. 1 that what Colorado found was that they created 2 a monster of endless small local government 3 units. 4 Well, the irony is that we know in 5 New York State, we're already the poster child 6 of states who are having that problem. We 7 have too many IDAs, we have too many public 8 authorities, we have too many subdistricts and 9 subsubdistricts within counties and townships. 10 Colorado found that it walked into this 11 problem after they passed their spending cap; 12 we already have to solve that problem without 13 dealing with the spending cap. 14 So I could go on. There's an 15 enormous body of research. This is a 16 fundamental, tough, complicated issue of 17 government. We got this bill yesterday in the 18 Finance Committee. Many of us said no notice, 19 need more time. Even if some of my colleagues 20 might end up saying, after they did the 21 homework, maybe there's a right way to do 22 this, maybe they can completely agree with 23 Senator Ranzenhofer, you should not be rushing 24 this kind of bill to the floor for a vote 25 without a very broad public discussion, I

Candyco Transcription Service, Inc. 1 would argue public hearings, I would argue 2 bringing in the experts from throughout the 3 nation. A lot has been written, a lot has 4 been tried, and much has failed. 5 So for so many reasons -- not one 6 of which is I don't believe we need to get 7 spending under control. I do. But for many, 8 many reasons, I have to urge my colleagues to 9 vote no on this bill. We should not take an 10 amendment to the Constitution of the State of 11 New York so lightly. 12 Thank you very much, Mr. President. 13 THE PRESIDENT: Thank you, 14 Senator. 15 Senator Robach, on the resolution. 16 SENATOR ROBACH: Yes, 17 Mr. President. Through you, on the bill. 18 I rise to support this measure. 19 And, you know, we're leaving some things out 20 of this dialogue. This is really in direct 21 response to what people want. They're asking 22 for it all across this state. And if 23 anything, we're going to have to actually do 24 this without this legislation in this upcoming 25 budget year.

Candyco Transcription Service, Inc. 1 We've all heard the Governor loud 2 and clear. We know what the dollar amounts 3 are. We know what the challenge is of the 4 fiscal situation. And certainly we're coming 5 off an election where many people talked about 6 I'm going to do my part when I get to Albany 7 to control spending. This is clearly just a 8 measure in addition to the short-term measures 9 we're going to have to do to be responsive to 10 people and the public in a long-term way. 11 I listened very intently to Senator 12 Krueger. We tried the other way. We taxed 13 seven times the rate of inflation over the 14 last two years, and the public was outraged at 15 each and every one of us, and it didn't help 16 the economy one bit. 17 I think clearly the history and the 18 outcomes would dictate that we have to move in 19 a different direction. These series of bills 20 are exactly that, following up on promises 21 made during campaigns of knowing, even though 22 it's challenging and no one necessarily enjoys 23 it, that we're going to do the tough things to 24 get our fiscal house in order and move in a 25 different direction, keeping an eye on

Candyco Transcription Service, Inc. 1 overburdened taxpayers, working men and women 2 and people on a fixed income. 3 But the beauty about this bill is 4 there will be ample time to discuss it. And 5 at the end of the day, the most important 6 people get to make the decision, the voters of 7 New York State, through this. The frustrating 8 part is it does take a couple of years. But 9 the wonderful part is everybody in your 10 district and my district will get to vote on 11 this bill if this is the direction we want to 12 go to and think that this is the vehicle to 13 get our fiscal house in order. 14 We are at a time when people are 15 challenging decisions everywhere. Amplifying 16 the voice of the people and letting them in 17 can only be good. And I strongly encourage a 18 yes vote on this important bill, 19 Mr. President. 20 THE PRESIDENT: Thank you, 21 Senator. 22 Are any other Senators wishing to 23 be heard on this resolution? 24 Senator Kruger. 25 SENATOR CARL KRUGER: Thank you,

Candyco Transcription Service, Inc. 1 Mr. President. Would Senator Ranzenhofer 2 yield for a few questions? 3 THE PRESIDENT: Senator 4 Ranzenhofer, do you yield? 5 SENATOR RANZENHOFER: Yes. 6 SENATOR CARL KRUGER: I guess, 7 you know, confusion reigns here in the chamber 8 today. You pointed out that our population in 9 this state continues to decrease and we keep 10 on losing Congressional seats. How come we 11 increase Senate seats? That's a question. 12 SENATOR RANZENHOFER: Are you 13 talking about New York Senate? 14 SENATOR CARL KRUGER: New York 15 State Senate seats continue to increase while 16 you're saying our population decreases and 17 we're losing Congressional seats. How is the 18 Republican majority able to increase Senate 19 seats? 20 SENATOR RANZENHOFER: I'm not 21 really sure what you're talking about. When I 22 came in in 2009 -- 23 SENATOR CARL KRUGER: I'm sure 24 you don't. That's part of the confusion. 25 SENATOR RANZENHOFER: -- there

Candyco Transcription Service, Inc. 1 were 61 seats, and there are still 61 seats. 2 Sixty-two. 3 SENATOR CARL KRUGER: Well, okay. 4 That was just a rhetorical point. 5 On your bill. 6 SENATOR RANZENHOFER: Is this a 7 real question or a rhetorical question? 8 SENATOR CARL KRUGER: Yes, this 9 is an on-the-bill question. 10 THE PRESIDENT: Senator, you want 11 to ask the Senator to yield? 12 SENATOR CARL KRUGER: When we 13 want to engage some dialogue -- 14 THE PRESIDENT: Senator -- 15 Senator Kruger, you want to ask Senator 16 Ranzenhofer to yield? 17 SENATOR CARL KRUGER: Yes, I do. 18 Do you yield for a question? 19 THE PRESIDENT: Senator, do you 20 yield? 21 SENATOR RANZENHOFER: Yes. 22 THE PRESIDENT: The Senator 23 yields. 24 SENATOR CARL KRUGER: Thank you, 25 Senator. When we want to talk about dialogue

Candyco Transcription Service, Inc. 1 in terms of spending, and we were to look at, 2 you know, benchmark years -- let's start from 3 1982 to the year '09. And we could pick out 4 years: 12 percent increase in spending, 5 7 percent increase in spending, 10.9 percent 6 increase in spending, and the list goes on and 7 on. 8 How come during those years, in 9 your judgment, we increased spending? 10 SENATOR RANZENHOFER: First of 11 all, I wasn't here serving with you during 12 that time, Senator Kruger. But the point I 13 was making is, and the numbers that I gave 14 before, is that whether you look at the last 15 10-year period, whether you look at the last 16 20-year period, whether you look at the last 17 27-year period, whether there was a Republican 18 governor or a Democratic governor, whether 19 there was a Republican Senate or a Democratic 20 Senate, spending has gone up too much. 21 And as a result of that, as you 22 pointed out in your verbal comments earlier, 23 we continue to lose population. I think that 24 needs to change. I'm not looking here to 25 place blame on the majority from last year.

Candyco Transcription Service, Inc. 1 I'm not looking to place blame on anywhere 2 else. What I'm saying is that the citizens of 3 this state want something done about excessive 4 spending. This bill addresses that concern. 5 Plain and simple. 6 SENATOR CARL KRUGER: Thank you, 7 Senator. 8 Firstly, we should not be able to 9 address last year's spending, because the 10 spending cap last year we spent 0.5 percent. 11 THE PRESIDENT: Senator Kruger, 12 is this on the bill? 13 SENATOR CARL KRUGER: Does 14 Senator Ranzenhofer continue to yield? 15 THE PRESIDENT: Senator Kruger, 16 is this on the resolution? 17 SENATOR CARL KRUGER: On the 18 resolution. 19 THE PRESIDENT: You asked if the 20 Senator would yield? 21 SENATOR RANZENHOFER: I'd be 22 happy to yield. 23 SENATOR CARL KRUGER: Thank you 24 very much. 25 Senator Ranzenhofer, when you talk

Candyco Transcription Service, Inc. 1 about a 2 percent cap, are you talking about a 2 2 percent aggregate cap on all state spending? 3 SENATOR RANZENHOFER: As I 4 answered the question in response to Senator 5 Krueger, in the bill in Section 2 -- I'm 6 sorry, 3 -- total state spending, which means 7 all state funds, which will include general 8 funds, special revenue funds, capital project 9 funds, and debt service funds. 10 So all state spending is all state 11 spending. 12 SENATOR CARL KRUGER: Two percent 13 cap? 14 SENATOR RANZENHOFER: Yes. 15 SENATOR CARL KRUGER: Now, this 16 bill would not -- again, through you, 17 Mr. President. 18 THE PRESIDENT: Are you asking -- 19 SENATOR CARL KRUGER: If the 20 Senator will continue to yield. 21 THE PRESIDENT: Senator, will you 22 yield? 23 SENATOR RANZENHOFER: I'd be 24 happy to continue to yield. 25 THE PRESIDENT: The Senator

Candyco Transcription Service, Inc. 1 continues to yield to Senator Kruger. 2 SENATOR CARL KRUGER: Thank you 3 again. Thank you again, Senator Ranzenhofer. 4 So if we're to look at this 5 2 percent cap and we're to say that's the 6 aggregate spending cap on all state 7 categories, let's now try to put a face on 8 that spending cap, with your permission. 9 Two percent spending cap, Senator Ranzenhofer, 10 would that apply to the aggregate amount for 11 health? 12 THE PRESIDENT: Senator? 13 SENATOR RANZENHOFER: Yes. As I 14 said, Senator Kruger, it's all state spending. 15 SENATOR CARL KRUGER: Again, 16 through you, Mr. President, if the Senator 17 will continue to yield. 18 SENATOR RANZENHOFER: Yes. 19 THE PRESIDENT: The Senator 20 yields. 21 SENATOR CARL KRUGER: So when we 22 talk about education, you are advocating that 23 we put a cap of 2 percent based upon a budget 24 that we are already going to decimate -- let's 25 pretend it's this year of taking $10 billion

Candyco Transcription Service, Inc. 1 out of the current budget. You're suggesting 2 that in future years, as we continue this road 3 to austerity, that we continue to limit our 4 ability to cap expenditures at 2 percent. Am 5 I correct? 6 SENATOR RANZENHOFER: As I said, 7 first of all, when you're talking about what's 8 going to happen this year, I think -- and as 9 Governor Cuomo has already said -- without a 10 spending cap, there is going to be significant 11 reductions in spending this year. 12 What I'm looking to do is to make 13 those spending reductions which need to be 14 made, and the public is asking us to make, 15 permanent by way of a constitutional 16 amendment. After it passes this Legislature, 17 after it passes the Legislature in 2013, and 18 then the voters will have an opportunity. 19 If the voters agree with you, 20 Senator Kruger, that there should not be 21 reductions in spending and there should not be 22 a spending cap, then I imagine that they would 23 vote in favor of the position that you're 24 espousing. If the voters feel that there 25 should be a spending cap and that the state

Candyco Transcription Service, Inc. 1 needs to get its spending under control and 2 that 2 percent or 120 percent of the CPI is a 3 better direction, I believe that they would 4 choose that path. 5 But I think it's an important step 6 that this Legislature passes to give the 7 voters of this state the opportunity to amend 8 the Constitution so they have some control and 9 they have some say over the type of spending 10 that they want. Because they haven't had any 11 control over the last number of years. And 12 their way of expressing themselves has been to 13 leave the state to go to other states that 14 don't spend as much and don't tax as much. 15 That's the reality of the 16 situation, and that's the problem which we now 17 face and the problem that I think needs to be 18 fixed. And we'll see, if it passes the 19 legislature and it passes a successive 20 legislature and the voters have an opportunity 21 to make that decision, what they feel on the 22 subject. 23 SENATOR CARL KRUGER: Thank you. 24 Once again, through you, 25 Mr. President, would the Senator continue to

Candyco Transcription Service, Inc. 1 yield? 2 THE PRESIDENT: Senator, will you 3 yield? 4 SENATOR RANZENHOFER: I'd be 5 happy to. 6 THE PRESIDENT: The Senator 7 yields. 8 SENATOR CARL KRUGER: Thank you 9 again, Senator. 10 So for a moment, if we're to use 11 the model that Senator Krueger spoke about, 12 and that's California -- 13 SENATOR RANZENHOFER: I believe 14 she spoke about Colorado. 15 SENATOR CARL KRUGER: Colorado as 16 well as California. 17 In both cases, can you in your 18 judgment, and based upon your own personal 19 knowledge, do you feel that the economies have 20 flourished under the spending cap both in 21 Colorado and California? 22 SENATOR RANZENHOFER: Through 23 you, Mr. President, let me just read you a 24 little bit of literature about what happened 25 in Colorado after they passed their spending

Candyco Transcription Service, Inc. 1 cap. 2 It says "Colorado's early 3 experience with TABOR included very rapid 4 demographic and economic growth because of 5 substantial migration, a 30 percent population 6 growth from 1990 to 2000, and the rapid 7 expansion of the electronics and 8 telecommunications industries in the state. 9 Taxpayers saw substantial TABOR refund checks 10 as revenues above the limit were returned to 11 them. The general assembly subsequently 12 reduced personal income and sales tax rates to 13 reduce surplus returnable revenues." 14 So at least the experience in 15 Colorado when it was passed, and for the 16 decade following that, actually produced some 17 pretty significant change which I imagine the 18 legislature was trying to accomplish. They 19 were trying to revive a dormant business 20 industry, which they did. They were trying to 21 limit their spending, which they did. They 22 were trying to lessen their tax burden, which 23 they did. 24 I don't have -- I don't think that 25 Senator Krueger talked about California, so

Candyco Transcription Service, Inc. 1 I'm not going to comment on that. But on the 2 specific example that you reference, and what 3 she referenced, at least for the first 4 10 years after it passed, it was a pretty 5 successful program. 6 And more importantly, Senator, I 7 believe it did what the -- you know, what the 8 residents of that state wanted, through their 9 legislature. It reduced spending and reduced 10 taxes. And at least the sense that I have, 11 and I know the Governor has spoken very 12 forcefully about that, the Governor also wants 13 to reduce spending and reduce taxes. I think 14 in his State of the State message he indicated 15 that over the last decade we've lost 2 million 16 people. 17 And that's a real problem. When 18 the spending goes up and there are fewer 19 people left behind to pay it, it just creates 20 a continuing problem which I think this 21 Legislature needs to address. It hasn't been 22 addressed properly. And this is the first 23 step to do that. 24 SENATOR CARL KRUGER: Thank you, 25 Senator.

Candyco Transcription Service, Inc. 1 Again, through you, Mr. President, 2 does the Senator continue to yield? 3 THE PRESIDENT: Senator, will you 4 continue to yield? 5 SENATOR RANZENHOFER: Yes, I'd be 6 happy to. 7 THE PRESIDENT: The Senator 8 yields. 9 SENATOR CARL KRUGER: Firstly, I 10 guess, this is a two-part question. 11 Number one, since we're awaiting 12 the Governor's budget and what his spending 13 program would lay out, is this legislation 14 ill-timed? 15 And secondly, if we want to look at 16 Colorado again, notwithstanding the fact that 17 there may have been one particular bump in 18 terms of telecommunications, can you explain 19 why Colorado, because the spending cap 20 virtually destroyed state government, that 21 they had to repeal it? 22 SENATOR RANZENHOFER: What was 23 your first question again? 24 SENATOR CARL KRUGER: My first 25 question was the Governor, how come we're not

Candyco Transcription Service, Inc. 1 waiting for him. 2 SENATOR RANZENHOFER: Well, first 3 of all, this -- as I said, we are going to, as 4 you well know, as ranker on Finance and as 5 chairman of Finance last year, that there are 6 going to be some great challenges that we're 7 facing right now. And the Governor is going 8 to propose a budget and this Legislature is 9 going to have to deal with some very, very 10 difficult choices. And that's with whether 11 you have a spending cap or not, that's just 12 the reality that we are going to have to deal 13 with over the next couple of months. 14 My feeling is that we really can't 15 afford to wait any longer. In the statistics 16 that I'd given you earlier, over the last 17 27 years -- again, regardless of who's in 18 charge -- spending has increased well above 19 the rate of inflation, with the results, as I 20 also indicated, that people are just leaving 21 the state. 22 So I think this is long overdue, 23 not too early. And I think it's important to 24 send a very important message to this state 25 that we as a body are serious about getting

Candyco Transcription Service, Inc. 1 our fiscal house in order. That's what 2 residents in your district and my district are 3 doing in their own homes. That's what 4 businesses in your district and my district 5 are doing in their businesses. They have to 6 control their spending to survive. And I 7 think the state also needs to take that 8 approach as well. 9 SENATOR CARL KRUGER: Okay. And 10 since you raise the issue of Colorado, how 11 come they rescinded their cap? 12 SENATOR RANZENHOFER: As I said, 13 you know, I'm not -- I've only been in the 14 Senate for two years. I don't know why the 15 legislators in Colorado decided to do what 16 they did. 17 We are at a point in our history in 18 the State of New York that we need a cap. We 19 can't continue to push the spending problem 20 that we have down the road and hope that 21 people will not continue to leave, hope that 22 businesses won't continue to leave. We need 23 to take some action today. And that's why the 24 bill was introduced. 25 SENATOR CARL KRUGER: Thank you,

Candyco Transcription Service, Inc. 1 Senator. 2 SENATOR RANZENHOFER: You're 3 welcome. 4 SENATOR CARL KRUGER: Mr. 5 President, on the bill. 6 THE PRESIDENT: Senator Kruger, 7 on the resolution. 8 SENATOR CARL KRUGER: On the 9 resolution. 10 Firstly, when we want to talk about 11 a spending cap and we want to talk about 12 spending and we want to talk about cuts, it's 13 important for us as a Legislature to not look 14 at this as just amorphous numbers, but rather 15 to treat this as cuts and caps that affect 16 people's lives -- affect children and their 17 education, affect poor people and social 18 service needs, that affect senior citizens and 19 people that are sick, that are in hospitals 20 across this state. 21 And if we want to take and put 22 faces on those cuts and those caps, we have to 23 look at them both in good years and in bad 24 years as well. And if we're going to put our 25 fiscal house in order, we can never ignore the

Candyco Transcription Service, Inc. 1 human side of the equation. 2 The human side of the equation says 3 that we have a responsibility not to try to 4 hide behind constitutional amendments that in 5 this state are virtually impossible to undo. 6 If we're going to talk about a critical crisis 7 that faces us today, we can't talk about a 8 plan of action that can only be implemented 9 five years from now. 10 If we're going to talk about cuts 11 and what cuts mean, if we're going to take 12 direction from our newly elected Governor, 13 then we have to stop kicking the can down the 14 road and stop the dramatics of looking for 15 quick 30-second sound bites. What we have to 16 look for is a bill, we have to look for a 17 budget, we have to look for a plan of action, 18 and we have to look for a sense of commitment, 19 a commitment that we are here as legislators, 20 on both sides of the aisle, dedicated to speak 21 for the people that necessarily can't speak 22 for themselves: the poor, the sick, the 23 elderly, the infant child. 24 If we put that into the equation, 25 then we can't put a numerical number of

Candyco Transcription Service, Inc. 1 2 percent for virtually the rest of their life 2 on how government is going to treat them -- 2 3 percent of the aggregate number, 2 percent of 4 the number that will affect education, 5 healthcare, social services and every other 6 aspect of human life in this state. 7 So today I say that in the period 8 of 24 hours this resolution has been put 9 before our house. It's been put before our 10 house to digest, to evaluate and to vote on. 11 I think that that's a little bit putting the 12 cart in front of the horse. It's giving us 13 not enough time to have honest and clear 14 debate on the issue. But more importantly, it 15 prevents us from dealing with our immediate 16 concerns and our needs as legislators. 17 Caps and spending cuts and a budget 18 in balance is our obligation. And we meet 19 that obligation not by taking constitutional 20 amendments and hoping to hide behind them, but 21 rather taking the real facts of the day, 22 putting a face on those facts, and moving 23 forward with a budget, with the support of the 24 Assembly and the Governor, that makes sense 25 for all New Yorkers.

Candyco Transcription Service, Inc. 1 Thank you. 2 THE PRESIDENT: Thank you, 3 Senator Kruger. 4 Are there any other Senators 5 wishing to speak or be heard on this 6 resolution? 7 Senator Saland. 8 SENATOR SALAND: Thank you, 9 Mr. President. I'll be brief. I probably 10 won't need the microphone. 11 I think the reference to Colorado 12 and TABOR is totally inapt. I recall at the 13 time I was actively involved in the National 14 Conference of State Legislatures, which was 15 headquartered in Colorado. I was an officer 16 of that organization. TABOR was the product 17 of I believe a referendum adopted by the 18 people of Colorado, among other things. Not 19 only does it differ in terms of manner in 20 which it presents itself, but in the case of 21 TABOR, it made no provision for a rainy day 22 fund. 23 This particular measure does 24 require that anything that exceeds the amount 25 of the cap be divided both by way of returning

Candyco Transcription Service, Inc. 1 one-half to the taxpayers and one-half to a 2 sustained rainy day fund. 3 There was something that to 4 appearances might have appeared to be a rainy 5 day fund, but in effect it was a cash flow 6 mechanism. It was not sustainable. And it 7 did not produce the accumulation of funds to 8 be used in times of need. 9 So I would just rise clearly to 10 clear the record and to say that the use of 11 TABOR in some way, shape or form to discredit 12 Senator Ranzenhofer's resolution simply does 13 not apply. 14 Thank you, Mr. President. 15 THE PRESIDENT: Thank you, 16 Senator Saland. 17 Any other Senators wishing to be 18 heard? 19 (No response.) 20 THE PRESIDENT: Hearing none, the 21 debate is closed. 22 The Secretary will ring the bell. 23 (Pause.) 24 THE PRESIDENT: The Secretary 25 will call the roll on the resolution.

Candyco Transcription Service, Inc. 1 (The Secretary called the roll.) 2 THE PRESIDENT: The Secretary 3 will record the negatives and announce the 4 results. 5 Announce the results. 6 THE SECRETARY: Those recorded in 7 the negative on Calendar Number 3 are Senators 8 Adams, Diaz, Espaillat, Gianaris, 9 Hassell-Thompson, Huntley, L. Krueger, 10 C. Kruger, Montgomery, Oppenheimer, Parker, 11 Peralta, Perkins, Rivera, Savino, Serrano, 12 Squadron, Stavisky and Stewart-Cousins. 13 Ayes, 41. Nays, 19. 14 THE PRESIDENT: The resolution is 15 adopted. 16 The Secretary will now read 17 Calendar Number 4. 18 THE SECRETARY: Calendar Number 19 4, by Senator Zeldin, Senate Print 1919, 20 Concurrent Resolution of the Senate and 21 Assembly proposing an amendment to Section 14 22 of Article 3 of the Constitution. 23 SENATOR BRESLIN: Explanation. 24 THE PRESIDENT: Senator Zeldin, 25 an explanation has been requested.

Candyco Transcription Service, Inc. 1 SENATOR ZELDIN: Thank you, 2 Mr. President. 3 My colleagues, today we are taking 4 the first steps in a desperately needed 5 process to put the citizens back in control of 6 our state's economic future. No matter what 7 your party, no matter what part of the state 8 you come from, the message we have all heard 9 from the voters are the same: Taxes are too 10 high. Spending is too high. Not all 11 taxpayers have a voice in their government. 12 New York has lost its way. The 13 voters sent us here to represent them with the 14 hope that we will work together to create a 15 better direction for our state. It's time to 16 reestablish their confidence in us. 17 This concurrent resolution would 18 amend the Constitution to institute a 19 requirement of a two-thirds vote of the 20 members elected to each branch of the State 21 Legislature in order to pass any bill which 22 increases, extends, imposes or revives any 23 tax, fee, assessment, surcharge or any other 24 such levy or collection. Passage of this 25 resolution will constitute first passage of

Candyco Transcription Service, Inc. 1 this amendment. Whereafter, it will require 2 passage by both houses in the next legislative 3 session, and thereafter would be submitted to 4 the voters. If such amendment is approved and 5 enacted, the result will be that any attempt 6 to impose, increase, extend or revive a tax, 7 fee, assessment, surcharge, or any other such 8 tax levy or tax collection change will require 9 a two-thirds vote in each house of the 10 Legislature to pass. 11 The purpose of this amendment is 12 clear. In a state with some of the highest 13 taxes in the country and the worst business 14 climate in the country, this will reduce the 15 growth in government spending. 16 Limiting the amount of revenue that 17 government can collect will reduce the amount 18 of money that government can spend. It will 19 compel us to do the difficult but necessary 20 work of focusing on the most essential 21 programs and services our citizens need and 22 developing a tax system that generates 23 adequate revenues for these needs without 24 harming our economy. 25 I'm proud that this is a bipartisan

Candyco Transcription Service, Inc. 1 effort. The amendment is sponsored in the 2 other house by Democratic Assemblywoman RoAnn 3 Destito, and I pledge to work with her to see 4 that this two-thirds requirement is enacted. 5 Thomas Jefferson once said that a 6 government that's big enough to give you 7 everything you want is big enough to take away 8 everything you have. I believe our action in 9 this Legislature today demonstrates to the 10 public that we are serious about reducing the 11 burdens on our taxpayers and are serious about 12 both challenging and changing the way New York 13 State operates. I urge all my colleagues to 14 join me in support of this measure. 15 Thank you, Mr. President. 16 THE PRESIDENT: Senator Krueger. 17 SENATOR LIZ KRUEGER: Thank you, 18 Mr. President. If through you the sponsor 19 would yield to some questions. 20 THE PRESIDENT: Will the Senator 21 yield? 22 SENATOR ZELDIN: I'd be happy to. 23 THE PRESIDENT: The Senator 24 yields. 25 SENATOR LIZ KRUEGER: Thank you

Candyco Transcription Service, Inc. 1 so much, Mr. President. 2 Good morning, Senator Zeldin. We 3 haven't had a chance to meet yet, so welcome 4 to the New York State Senate. I suspect we're 5 going to have many fun debates on the floor in 6 the next session. 7 I'll start with a couple of 8 questions about this bill. Is it your 9 understanding that this constitutional 10 amendment would require that all budget bills, 11 which almost always have increases, 12 extensions, changes or revisions in 13 revenue-raising provisions, that this 14 constitutional amendment would apply to budget 15 bills? 16 SENATOR ZELDIN: Mr. President, 17 yes. 18 SENATOR LIZ KRUEGER: Thank you, 19 Mr. President. If through you the sponsor 20 would continue to yield. 21 THE PRESIDENT: Senator, will you 22 yield? 23 SENATOR ZELDIN: Be happy to. 24 THE PRESIDENT: The Senator 25 yields.

Candyco Transcription Service, Inc. 1 SENATOR LIZ KRUEGER: Thank you. 2 And again, it's a different 3 constitutional amendment than the last debate 4 we just had on the floor. But again, I've 5 done some checking out how it worked in other 6 states when they went down this road. Again, 7 through constitutional amendment, just to 8 emphasize, once we make this decision and we 9 put it in our Constitution, we don't really 10 get to reverse it. Or not unless through an 11 extraordinarily complex multiyear process. 12 So under this situation, if your 13 constitutional amendment became the law of the 14 land, and there would continue to be, I 15 believe, good economic times and bad economic 16 times, cycles where there were upticks and 17 downturns, how would we adjust for that in the 18 context of a supermajority, 41 out of 62 19 Senators voting for some specific tax 20 increase, potentially being mathematically 21 impossible to accomplish in this chamber? How 22 would we adjust for the bad times? 23 SENATOR ZELDIN: Mr. President, I 24 believe that if there is a tax increase or fee 25 that is that important, that we -- the

Candyco Transcription Service, Inc. 1 requirement of two-thirds of this body would 2 be obtainable. This isn't a requirement 3 imposing a four-thirds requirement, it's a 4 two-thirds requirement. That leaves the power 5 in this body to increase taxes if it wants to. 6 It just makes it more difficult to just tax 7 and spend freely, at will, in the ways that 8 hurt the state. 9 SENATOR LIZ KRUEGER: Thank you. 10 Through you, Mr. President, if the 11 Senator would continue to yield. 12 THE PRESIDENT: Senator, will you 13 continue to yield? 14 SENATOR ZELDIN: Yes, 15 Mr. President. 16 THE PRESIDENT: The Senator 17 yields. 18 SENATOR LIZ KRUEGER: Now, this 19 question is a bit of an assumption that your 20 constitutional amendment passed, as well as 21 Senator Ranzenhofer's constitutional amendment 22 on spending cap. 23 So to follow up with the question I 24 asked about good economic times, bad economic 25 times, and the need for government to be more

Candyco Transcription Service, Inc. 1 responsive in bad economic times, have greater 2 ability to raise revenue in good economic 3 times and be a smoother for the people of 4 economic cycle realities. So in the 5 Ranzenhofer constitutional amendment, there's 6 a limit of how much the state could actually 7 keep for a rainy day fund. We would have a 8 constitutional obligation to return at least 9 50 percent, in any given year, of unspent 10 monies to the taxpayer, limiting our ability 11 to save for the rainy day of bad economic 12 times. 13 Now we layer that with, you're 14 right, a supermajority, two-thirds. So that 15 would, under the current size of the Senate, 16 require 41, I believe, of 62 Senators to vote 17 for any specific bill. 18 Do you not see that there 19 potentially is a conflict in planning in 20 government of these two constitutional 21 amendments becoming law together? 22 SENATOR ZELDIN: No. 23 SENATOR LIZ KRUEGER: Thank you. 24 For the record, I disagree with you. 25 Mr. President, if through you the

Candyco Transcription Service, Inc. 1 sponsor would continue to yield. 2 THE PRESIDENT: Senator, will you 3 yield? 4 SENATOR ZELDIN: Be happy to. 5 SENATOR LIZ KRUEGER: Thank you. 6 Going back to my point about if 7 budget bills are supermajority bills -- and 8 you answered yes, they would be -- and we look 9 at some of the states that do have 10 supermajority rules on tax and revenue -- 11 although, again, your amendment would go 12 further than most other states, I believe, 13 with the exception of California, for covering 14 all possible new revenue sources. Do you see 15 us having a problem with timely budgets, 16 getting it all done by April 1st? 17 SENATOR ZELDIN: No. 18 SENATOR LIZ KRUEGER: Thank you, 19 Mr. President. If through you the sponsor 20 would continue to yield. 21 THE PRESIDENT: Senator, will you 22 continue to yield? 23 SENATOR ZELDIN: I'd be happy to. 24 SENATOR LIZ KRUEGER: I recently 25 looked very carefully at the California model,

Candyco Transcription Service, Inc. 1 where they have had a supermajority law in 2 effect. And again, they realized after an 3 extended period of time that their state had 4 enormous problems, far, far worse than 5 anything we see here in New York. Never being 6 able to get their budget done -- I wouldn't 7 even say on time, never being able to get 8 their budget done. Finding themselves in a 9 much, much more drastic deficit situation than 10 here in our state, actually having cities and 11 counties potentially on the verge of 12 bankruptcy, talking about having to pay their 13 state workers with IOUs. 14 I think most people would agree 15 California is to some degree the example 16 everyone in state government throughout the 17 country wakes up and says, Please, never let 18 me wake up and be a California elected 19 official. 20 California had this model. The 21 people actually rose up this year -- again, 22 through an initiative and referendum vote, 23 which we don't have the option of. So if we 24 became a state that had a supermajority rule 25 for revenue in our Constitution, we again,

Candyco Transcription Service, Inc. 1 like my issue with the last constitutional 2 amendment, we couldn't go back. California 3 went back. Their voters said no, we're not 4 going to continue this model, it has brought 5 California to ruin. 6 Given what just happened with 7 California, given the amount of research that 8 has been produced over literally the last 9 year, when this was such a hot debate in 10 California, why do you think it's the right 11 answer for New York given what we have learned 12 about California? 13 SENATOR ZELDIN: Mr. President, I 14 would blame, first and foremost, a 15 dysfunctional legislature in California for 16 the taxing and spending problems. As we've 17 seen here in our own state, we shouldn't be 18 following the models of what's going wrong 19 around the country but maybe what is going on 20 right. 21 I don't think that California's 22 problems is that they're not taxing their 23 residents enough. The tax-and-spend ways of 24 California in many ways are contributing to 25 the problems of that state.

Candyco Transcription Service, Inc. 1 There are 16 other states that have 2 this constitutional amendment, California 3 being just one. And it's important that as we 4 look at California -- well, I would have to 5 say in my opinion it's not that California 6 needs to drastically raise their own taxes and 7 more borrowing and more spending to fix that 8 state's economy. 9 I am focused on helping fix the 10 New York State economy, and I would look at 11 the responsibility, first and foremost, 12 amongst the people that are in this 13 Legislature and giving the right to the people 14 that are in our state. If our voters in 15 New York State believe that we shouldn't have 16 this constitutional amendment, it is in their 17 power to vote no. I want to give them that 18 opportunity, and that's why I proposed this 19 bill. 20 SENATOR LIZ KRUEGER: Thank you, 21 Mr. President. If through you the Senator 22 would continue to yield. 23 THE PRESIDENT: Senator, will you 24 yield? 25 SENATOR ZELDIN: Yes.

Candyco Transcription Service, Inc. 1 THE PRESIDENT: The Senator 2 yields. 3 SENATOR LIZ KRUEGER: Senator 4 Zeldin, I think you and I share a mutual goal 5 for the State of New York, I think we're just 6 disagreeing on how we get there. 7 In your constitutional amendment -- 8 and you answered the question about having to 9 have a supermajority for budget bills because 10 a supermajority for all state revenue bills. 11 Does your constitutional amendment also apply 12 to the Legislature requiring supermajority 13 votes on any local tax proposals that come to 14 us? 15 As we know, other than the property 16 tax, counties and municipalities have to come 17 to us for a vote on every single revenue item 18 for themselves. Would the supermajority rule 19 apply to these bills as well? 20 SENATOR ZELDIN: Mr. President, 21 we're only giving the locals the option. And 22 in that case, it's up to them. 23 SENATOR LIZ KRUEGER: I'm sorry, 24 I couldn't hear, Mr. President. If the 25 sponsor could repeat himself.

Candyco Transcription Service, Inc. 1 THE PRESIDENT: Would you repeat 2 your answer, please. 3 SENATOR ZELDIN: We are giving 4 the local governments the option. So as far 5 as giving them the option, it's up to the 6 local voters to decide whether or not to 7 increase taxes. 8 SENATOR LIZ KRUEGER: Mr. 9 President, may I ask another question of the 10 sponsor, please. 11 THE PRESIDENT: Senator, will you 12 yield? 13 SENATOR ZELDIN: I'd be happy to. 14 THE PRESIDENT: The Senator 15 yields. 16 SENATOR LIZ KRUEGER: Thank you. 17 Having heard the answer, I'm afraid 18 I don't understand it. We're giving them the 19 option to say we're sending you a local tax 20 bill, and we're saying do it by supermajority 21 versus not supermajority? Was that the 22 answer? 23 SENATOR ZELDIN: It will not 24 apply to local governments. We are only 25 giving them the option, and it's the local

Candyco Transcription Service, Inc. 1 governments that are able to vote. 2 But if I understand your question 3 correctly, you're asking whether or not it's a 4 supermajority vote or a majority vote. And 5 it's a majority vote. It's up to the voters 6 of the local governments to decide whether or 7 not to impose it. 8 SENATOR LIZ KRUEGER: Mr. 9 President, if through you I could continue to 10 question the sponsor. 11 THE PRESIDENT: Senator, will you 12 yield again? 13 SENATOR ZELDIN: Be happy to. 14 THE PRESIDENT: The Senator 15 yields. 16 SENATOR LIZ KRUEGER: Thank you. 17 I'm sorry if I'm having trouble 18 understanding. Let's say a sales tax. We 19 have, almost yearly, a process where counties 20 send us requests for a sales tax increase. 21 They can't do it without coming to us. They 22 can't pass almost any kind of revenue-raiser 23 for themselves without coming to us. And I 24 don't believe there was anything in this 25 constitutional amendment that changed that.

Candyco Transcription Service, Inc. 1 So the locality can decide they 2 don't want to ask us to raise their sales tax 3 or ask us not to raise something else they 4 traditionally have come to us. I understand 5 that. But if they want to raise their 6 taxes -- let me rephrase. Nobody ever wants 7 to raise their taxes. If they need to balance 8 their budgets through a revenue increase, they 9 do have to currently come to us. I don't see 10 anything in your constitutional amendment that 11 would change that reality. 12 So where would the option come as 13 to whether we treated their tax and revenue 14 proposals as an option, a supermajority or 15 not? 16 SENATOR ZELDIN: This bill does 17 not affect your hypothetical. So I'm trying 18 to answer your hypothetical. And because it 19 does not affect your hypothetical, it's still 20 a majority vote. We're giving the option to 21 the local voters to vote on it. 22 SENATOR LIZ KRUEGER: Mr. 23 President, if through you I could continue to 24 ask a question of the Senator. 25 THE PRESIDENT: Senator, will you

Candyco Transcription Service, Inc. 1 yield? 2 SENATOR ZELDIN: Yes, I will. 3 THE PRESIDENT: The Senator 4 yields. 5 SENATOR LIZ KRUEGER: But just to 6 continue my train of thought, let me just -- 7 not a question, first -- make a statement. 8 I actually don't think that is what 9 the constitutional amendment's impact would 10 be. I believe, as I read it, it would require 11 us to do local tax bills as supermajority. 12 So in light of our disagreement on 13 that, which is okay, have you gotten an 14 opinion from the Attorney General about what 15 will this constitutional amendment would do, 16 what the impact would be, and how broad its 17 interpretation would be constitutionally? 18 Because that is a role of the Attorney General 19 on constitutional amendments. 20 SENATOR ZELDIN: Mr. President, 21 the Attorney General is aware of the bill. As 22 I'm sure you know, he has 20 days to offer an 23 opinion. He has not offered an opinion. Due 24 to the 1951 advisory opinion of the Attorney 25 General at that time, this body is authorized

Candyco Transcription Service, Inc. 1 to act. Our Attorney General has not provided 2 an opinion, but our body is going forward with 3 the proposal today. 4 SENATOR LIZ KRUEGER: Mr. 5 President, if through you the sponsor would 6 continue to yield to one more question. 7 THE PRESIDENT: Senator, would 8 you yield to one more question? 9 SENATOR ZELDIN: I'd be happy to. 10 SENATOR LIZ KRUEGER: Thank you 11 very much. See, I told you this was fun. 12 I do politely argue that we should 13 really wait for the Attorney General to give 14 us his response before this august body 15 decides to vote on something, again, so 16 dramatic in its impact on the State of 17 New York. We have no rush to have to do this. 18 Obviously, we know it requires votes in both 19 houses in two different sessions of the Senate 20 and Assembly. We are only in our first couple 21 of weeks of the beginning of this, the first 22 of two sessions. And of course starting in a 23 week and a half, we delve into budget and need 24 to deal with all these issues absent an actual 25 passage or not passage of a constitutional

Candyco Transcription Service, Inc. 1 amendment. 2 So I would urge everyone, think 3 about why we maybe want to wait to find out 4 the Attorney General's opinion. But that's 5 not my question. 6 Would your constitutional amendment 7 impact the passage of tax expenditure or 8 credit bills which reduced revenue through the 9 tax system to the State of New York, a la 10 Senator Alesi's earlier bill that we debated 11 on this floor? Or does it apply to all 12 revenue for the State of New York, including 13 tax credits and expenditures, having to be 14 passed through supermajority? 15 SENATOR ZELDIN: First, to answer 16 your question, the answer is no. 17 But to clarify one thing with 18 regard to your statement involving the 19 Attorney General, we have provided him with 20 the bill. He has declined to give us an 21 opinion. And I can only speak for myself. I 22 was elected to represent the people of the 23 Third Senate District. I work for them and 24 not the New York State Attorney General. And 25 I'm not going to wait for him to come up with

Candyco Transcription Service, Inc. 1 an opinion at some hypothetical time in the 2 future. 3 He was given the opportunity, he's 4 declined to give us an opinion and we should 5 go forward on our own independently, 6 representing the voters of your districts as I 7 want to do with mine. 8 SENATOR LIZ KRUEGER: Mr. 9 President, on the bill. 10 THE PRESIDENT: Senator Krueger, 11 on the resolution. 12 SENATOR LIZ KRUEGER: Thank you 13 very much. I appreciate the sponsor's 14 patience and back-and-forth dialogue. 15 I think he's right, none of us work 16 for the Attorney General. We are elected by 17 our constituents to represent the interests of 18 them and, I would argue, all 19 million 19 New Yorkers. We are also obligated to follow 20 the Constitution of the State of New York and 21 I hope take it very, very seriously when and 22 if we make a decision to amend the 23 Constitution of the great State of New York. 24 The Constitution actually gives the 25 Attorney General the structure by which to

Candyco Transcription Service, Inc. 1 help us evaluate the constitutionality of any 2 actions we take in the Legislature, and in 3 fact is there to help guide us to understand 4 what the intended and perhaps unintended 5 consequences are of making dramatic changes in 6 our Constitution. 7 So I'm not suggesting any of us 8 work for the Attorney General. But speaking 9 only for myself, I'd very much like to make 10 sure that if we're going to change our great 11 Constitution for the great New York State, 12 that we know we are in fact meeting 13 constitutional responsibilities and not having 14 bill language that may not in fact reflect the 15 impact that it would actually have on our 16 Constitution. 17 Because again, once you change the 18 Constitution, you don't get a fix-it 19 opportunity, as we do on the floor of the 20 Legislature when we can amend bills over and 21 over again. 22 I'm particularly concerned about 23 the last answer to my last question. This 24 would apply to raising revenue and creating 25 new streams of revenue, but this wouldn't

Candyco Transcription Service, Inc. 1 apply to tax expenditures and credits when we 2 would be reducing revenue to the State of 3 New York. It particularly concerns me that we 4 wouldn't have to meet the same obligation to 5 not look at cutting revenue to the State of 6 New York. 7 Because in light of the 8 constitutional amendment on a spending cap, 9 where the options for increasing revenue by 10 definition would be now limited by a 11 supermajority and by a maximum cap per year, 12 the concept that we could continue to reduce 13 revenue to the State of New York willy-nilly, 14 so to speak, by creating additional tax 15 expenditures and credits -- which historically 16 have been the fodder of special-interest 17 lobbyists to make sure they get their deals in 18 through the Legislature, usually without a lot 19 of attention paid, usually not within the 20 context of a broader budget discussion. 21 And now, through these two 22 constitutional amendments, if they became law, 23 we would be tying our hands for revenue and 24 spending but not for giving deals to special 25 interests. I think fundamentally, on that

Candyco Transcription Service, Inc. 1 issue alone, I would have a problem voting for 2 this constitutional amendment. 3 But I don't need to stop there. 4 Because again, it's nice to believe we're not 5 as dysfunctional as California, we're not as 6 likely to shift into gridlock, we're not as 7 likely to fall into chaos with greater and 8 greater deficits. But our history here in 9 New York isn't that good either. We just 10 haven't gone down the road that California 11 went, because we don't have a two-thirds 12 supermajority requirement on revenue. 13 And I would argue, especially given 14 our history, the current realities, our 15 bipartisan commitment to work with a new 16 Governor to fix the problems and get things 17 done the right way, this is absolutely, 18 absolutely the wrong time in history for 19 New York State to choose to voluntarily make 20 the mistakes of other states. 21 I emphatically urge my colleagues 22 for a no vote on this bill today. 23 Thank you, Mr. President. 24 THE PRESIDENT: Thank you, 25 Senator Krueger.

Candyco Transcription Service, Inc. 1 Senator Bonacic. 2 SENATOR BONACIC: Thank you, 3 Mr. President. 4 I would just like to thank Senator 5 Alesi and Senator Ranzenhofer and Senator 6 Zeldin for delivering the message of the 7 Republican Majority this year. 8 The past two years have been brutal 9 in terms of excess spending and excess taxes 10 when middle-class families were struggling 11 with high unemployment and people were losing 12 their houses. The attitude towards small 13 businesses was actually hostile, a hostile 14 environment. 15 And our message today, by three 16 Senators and my colleagues for the resolutions 17 that they're putting forward, are very simple. 18 Taxpayers need protection from what has 19 happened these past two years. 20 Now, I don't fear a constitutional 21 amendment because I respect the wisdom of the 22 people. They're going to vote. If they think 23 it's in their best interests, they'll vote for 24 it. If they made a mistake, there will be 25 another constitutional amendment and they'll

Candyco Transcription Service, Inc. 1 change it. 2 But remember, we represent the 3 people. They are our bosses. We're not 4 smarter than them. And we should always 5 respect the wisdom of the people. So all this 6 fear about constitutional amendments and we're 7 smarter than the people to do the right 8 thing -- they're paying our salary. They're 9 paying for all these programs. So believe me, 10 we should trust them. Because we're all still 11 here, they trust you to keep being their voice 12 for the next two years. 13 As to job creation, there is a 14 philosophy that is going on in this country 15 that is a clash. Where are we going with 16 America? Are we going to be an entitlement 17 culture? Are we going tax and spend more and 18 let government control our lives? Or are we 19 going empower individuals, empower people and 20 small businesses to create wealth, make them 21 our partners, be friendly with them and let 22 them lead the way? 23 And I believe that's the way to go. 24 That's the way our conference believes. So we 25 want to be more friendly to business. We want

Candyco Transcription Service, Inc. 1 more tax credits. We want to help our 2 partners, unlike the attitude and the policies 3 we've seen in the last two years. 4 Now, on Senator Alesi's resolution, 5 there were many of my colleagues on the other 6 side of the aisle that voted yes. And I thank 7 you for that, for learning from your mistakes 8 and trying a different way. 9 I saw on Senator Ranzenhofer's 10 resolution there were more nos, because of 11 fear of the Constitution. And I would hope, 12 on Senator Zeldin's resolution, we all get 13 behind him to support the taxpayers because we 14 all trust the wisdom of the people. 15 We have tough challenges ahead of 16 us, whether you're in the majority or whether 17 we're in the majority. We have challenges. 18 We have to work together and take the best 19 minds that we have here to get us out of this 20 fiscal crisis. I think our Governor is right 21 on with this drastic talk, because we are at 22 the cliff and there will be no tomorrow if we 23 don't get our house in order. 24 Thank you very much, Mr. President. 25 I support Senator Zeldin's resolution, and I

Candyco Transcription Service, Inc. 1 thank him. 2 THE PRESIDENT: Thank you, 3 Senator. 4 Any other Senators wishing to be 5 heard on this resolution? Senator Kruger. 6 SENATOR CARL KRUGER: Thank you, 7 Mr. President. 8 Through you, Mr. President, would 9 Senator Zeldin yield for a question? 10 THE PRESIDENT: Senator, would 11 you yield? 12 SENATOR ZELDIN: Yes, 13 Mr. President. 14 SENATOR CARL KRUGER: Thank you 15 so much. 16 The issue of the Attorney General 17 having this resolution for study, review and 18 comment, how long has he had it? 19 SENATOR ZELDIN: Mr. President, I 20 believe it was Friday. 21 SENATOR CARL KRUGER: Friday. 22 And today being Wednesday. So he's had two 23 working days to review it and to issue an 24 opinion. Is that -- through you, 25 Mr. President.

Candyco Transcription Service, Inc. 1 THE PRESIDENT: Senator, do you 2 yield for a question? 3 SENATOR ZELDIN: I would yield. 4 SENATOR CARL KRUGER: Thank you. 5 So then he's had two working days 6 to review it and issue an opinion? That's my 7 question. Is that correct? 8 SENATOR ZELDIN: He's had it 9 since Friday. However you want to break it 10 down with holidays and weekends, he's had it 11 since Friday, Mr. President. 12 SENATOR CARL KRUGER: So that's 13 two working days, not including today, in 14 order to have formed an opinion. 15 Now, through you, Mr. President, 16 one other question. 17 THE PRESIDENT: Senator, one more 18 question, do you yield? 19 SENATOR ZELDIN: I'm happy to 20 yield. 21 THE PRESIDENT: The Senator 22 yields. 23 SENATOR CARL KRUGER: Thank you 24 again, Senator. 25 The Judiciary budget, does your

Candyco Transcription Service, Inc. 1 resolution include the Judiciary budget? 2 SENATOR ZELDIN: Mr. President, 3 I'm not aware of the Judiciary budget 4 increasing taxes. If the Judiciary budget was 5 going to increase taxes, it would be my intent 6 that it would be included. But I'm not aware 7 of the Judiciary budget increasing taxes. 8 SENATOR CARL KRUGER: Thank you, 9 Senator. 10 Through you again, Mr. President, 11 Senator Zeldin, do you continue to yield? 12 THE PRESIDENT: Senator? 13 SENATOR ZELDIN: I'd be happy to. 14 THE PRESIDENT: The Senator 15 yields. 16 SENATOR CARL KRUGER: Thank you. 17 The Judiciary budget includes a 18 substantial list of fees. Are fees included 19 in your resolution? 20 SENATOR ZELDIN: Yes. 21 SENATOR CARL KRUGER: So 22 consequently we would say that we would need a 23 supermajority -- or, in the alternative, that 24 the issue of fees to the court system could be 25 virtually hijacked by twenty Senators in this

Candyco Transcription Service, Inc. 1 room. Is that correct? 2 SENATOR ZELDIN: Mr. President, 3 it would apply to new fees. 4 SENATOR CARL KRUGER: It would 5 apply to new fees. 6 Again, through you, Mr. President. 7 So what about increases in fees? 8 THE PRESIDENT: Senator, do you 9 yield? 10 SENATOR ZELDIN: I'd be happy to 11 yield. 12 SENATOR CARL KRUGER: Thank you. 13 What about increases in fees? 14 SENATOR ZELDIN: That would be 15 included. 16 SENATOR CARL KRUGER: Again, so 17 that I can understand this, we can all 18 understand it, through you, Mr. President, if 19 the Senator would continue to yield. 20 THE PRESIDENT: Senator, do you 21 yield? 22 SENATOR ZELDIN: I'm happy to 23 yield. 24 THE PRESIDENT: The Senator 25 yields.

Candyco Transcription Service, Inc. 1 SENATOR CARL KRUGER: Thank you. 2 So that I can understand this, in simple 3 terms, your resolution applies to all branches 4 of government, including the Judiciary? 5 SENATOR ZELDIN: Mr. President, 6 if -- as far as the budget goes -- and the 7 language of the bill is very simple. And 8 regardless of how that new tax or that fee is 9 packaged, where it's coming from, just to be 10 very clear, the two-thirds requirement is 11 going to apply to any tax, fee, assessment, 12 surcharge or any other such levy or collection 13 with regards to increasing, extending or 14 reviving, as I said in the language. 15 So I could be asked dozens and 16 dozens of more questions about hypothetical 17 sources of new taxes and fees, and my answer 18 to every question is going to be yes, if it 19 fits inside this language, whether it comes 20 from the Judiciary budget or some state 21 agency, to answer all the other hypotheticals 22 that may be out there, the answer very simply 23 is yes. 24 SENATOR CARL KRUGER: Thank you, 25 Senator.

Candyco Transcription Service, Inc. 1 Again, for the final question. 2 Through you, Mr. President. 3 THE PRESIDENT: Senator, do you 4 yield for one more question? 5 SENATOR ZELDIN: I'd be happy to. 6 SENATOR CARL KRUGER: A big issue 7 facing this state is the issue of 8 hydrofracking. Are you aware of that? 9 SENATOR ZELDIN: Yes. 10 SENATOR CARL KRUGER: And one of 11 the issues in terms of that is the regulation 12 and control by DEC of that process. Are you 13 aware of that? 14 SENATOR ZELDIN: Yes. 15 SENATOR CARL KRUGER: And again 16 through you, Mr. President, if the Senator 17 would continue to yield. 18 THE PRESIDENT: Senator, will you 19 yield again? 20 SENATOR ZELDIN: I'd be happy to 21 yield. 22 SENATOR CARL KRUGER: So, 23 Senator, one of the proposals -- in fact, the 24 legislation calls for that those that would be 25 doing the drilling would have to pay

Candyco Transcription Service, Inc. 1 substantial fees in order to fund a DEC 2 special fund to control and to monitor 3 hydrofracking. Would this be included in your 4 resolution? 5 SENATOR ZELDIN: If it's going to 6 be a statute that's going through this body, 7 then the answer would be yes. If it's a 8 regulatory fee, the answer would be no. 9 SENATOR CARL KRUGER: As a 10 corollary to that question, again, through 11 you, Mr. President, if the Senator would 12 continue to yield. 13 THE PRESIDENT: Senator? 14 SENATOR ZELDIN: I'd be happy to 15 yield. 16 THE PRESIDENT: Senator Libous, 17 why do you rise? 18 SENATOR LIBOUS: Since I happen 19 to know about a lot about hydrofracking 20 because it's in my district, and I would like 21 to be very fair, if Senator C. Kruger would 22 like to address any of those any of those 23 questions to me, I'd be happy to help out. 24 Because hydrofracking is a very important 25 issue that's facing the state, and I do know a

Candyco Transcription Service, Inc. 1 little bit about it. 2 SENATOR CARL KRUGER: I 3 appreciate that. And I will offer the 4 question up to you in a moment if I could just 5 ask Senator Zeldin to respond. 6 SENATOR LIBOUS: Thank you, 7 Mr. President. 8 SENATOR CARL KRUGER: The 9 legislation that would in fact empower 10 hydrofracking includes that provision. Would 11 your resolution interfere with that process? 12 SENATOR ZELDIN: Respectfully, 13 I'd like to yield to Senator Libous. Two 14 minutes. 15 SENATOR CARL KRUGER: Okay, thank 16 you. 17 THE PRESIDENT: Senator Libous. 18 SENATOR LIBOUS: Thank you, 19 Mr. President. Thank you, Senator Zeldin. 20 Senator Kruger, it wouldn't. It 21 all depends on what the Legislature decides to 22 do when it comes to that issue. The 23 department, the department could impose, 24 through regulation, fees that would address 25 the companies that are going to do the

Candyco Transcription Service, Inc. 1 drilling or the fracking. 2 None of those issues have been 3 established at this point in time because 4 obviously we do not permit for hydrofracking 5 because of a moratorium that was passed in 6 this house and in the other house. 7 This resolution, this resolution 8 would only affect those tax increases that the 9 Senator had talked about. It would not have a 10 negative effect on any departmental fees or 11 anything that the governor decides to put in 12 the budget as a fee, just like they do now. 13 No, it wouldn't have an effect. 14 SENATOR CARL KRUGER: Again, 15 Mr. President, if the Senator would yield for 16 a question. 17 THE PRESIDENT: Senator Libous, 18 would you yield. 19 SENATOR LIBOUS: Mr. President, I 20 would be honored to. 21 THE PRESIDENT: The Senator 22 yields. 23 SENATOR CARL KRUGER: Without 24 being the expert that you are on the issue, 25 I'm just trying to understand --

Candyco Transcription Service, Inc. 1 SENATOR LIBOUS: I didn't say I 2 was an expert, Senator. I said I knew a 3 little bit about it. 4 SENATOR CARL KRUGER: Well, okay. 5 That makes you an expert as far as I'm 6 concerned. 7 Firstly, that bill was vetoed, am I 8 correct? 9 SENATOR LIBOUS: Yes, it was. 10 But then there was an executive order by 11 Governor Paterson, Mr. President, that put a 12 moratorium on any fracking. And I believe -- 13 and I don't want to speak for Governor 14 Cuomo -- I believe he also carried out that 15 order until he could take a look at the issue. 16 SENATOR CARL KRUGER: Okay. 17 Thank you very much, Senator. Thank you. 18 THE PRESIDENT: Thank you, 19 Senator. 20 Any other Senators wishing to be 21 heard on this resolution? 22 (No response.) 23 THE PRESIDENT: The debate is 24 closed, and the Secretary will now ring the 25 bell that is not functioning today.

Candyco Transcription Service, Inc. 1 (Pause.) 2 THE PRESIDENT: If the Senators 3 will take their seats, we'll get ready to 4 vote. 5 The Secretary will now call the 6 roll on the resolution. 7 (The Secretary called the roll.) 8 THE PRESIDENT: Senator Young, to 9 explain her vote. 10 SENATOR YOUNG: Thank you, 11 Mr. President. 12 Historically, New York State has 13 prided itself on being a leader, a leader in 14 innovation, a leader in technology, a leader 15 in opportunity and prosperity. We were number 16 one. We were the Empire State. 17 Unfortunately, right now, we are 18 the leader for all the wrong reasons. We are 19 the leader in the country for having the 20 heaviest tax burden. We are the leader in 21 spending. We spend more on Medicaid, we spend 22 more on education, and we get poor results 23 despite all of that spending. We are number 24 one in people fleeing this state because of 25 the heavy tax burden. We are number one in

Candyco Transcription Service, Inc. 1 having the worst business climate in the 2 country. Right now we are number 50 out of 3 50 states. 4 That has to change. And now we do 5 have that opportunity to change that. So I 6 want to thank my colleagues, Senator Zeldin, 7 Senator Ranzenhofer, Senator Alesi, for having 8 the foresight and the tenacity to put in this 9 legislation, because we can lead the way as a 10 state once again. 11 These are all things that our new 12 Governor has spoken about. These are things 13 that he has prioritized. And so now is the 14 time to seize this moment. Now is the time to 15 change our business climate, to get people 16 back to work, to have career opportunities so 17 that our young people will not have to leave 18 after they graduate just to find a job. 19 And by putting in place these types 20 of measures -- a job growth program, putting 21 in place a two-thirds majority in order to 22 raise taxes, putting in place a constitutional 23 spending cap -- then we can restore hope, 24 opportunity and prosperity to the state again, 25 to the people of this state. That's our

Candyco Transcription Service, Inc. 1 responsibility. We should be accountable to 2 the people. And I will be voting yes. 3 Thank you, Mr. President. 4 THE PRESIDENT: Senator Young in 5 the affirmative. 6 The Secretary will now announce the 7 results. 8 THE SECRETARY: Those recorded in 9 the negative on Calendar Number 4 are Senators 10 Adams, Diaz, Espaillat, Gianaris, 11 Hassell-Thompson, Huntley, L. Krueger, 12 C. Kruger, Montgomery, Oppenheimer, Parker, 13 Peralta, Perkins, Rivera, Sampson, Serrano, 14 Squadron, Stavisky and Stewart-Cousins. 15 Ayes, 41. Nays, 19. 16 THE PRESIDENT: The resolution is 17 adopted. 18 (Applause.) 19 THE PRESIDENT: Senator Libous, 20 that completes the controversial reading of 21 the calendar. 22 SENATOR LIBOUS: Mr. President, 23 thank you. 24 And Senator Zeldin, 25 congratulations -- could we have some order?

Candyco Transcription Service, Inc. 1 Could we have some order in the chamber? 2 THE PRESIDENT: (Gaveling.) 3 SENATOR LIBOUS: Senator Zeldin, 4 congratulations for passing your first bill. 5 I'm sure there will be many more. 6 (Applause.) 7 SENATOR LIBOUS: Is there any 8 other business at the desk? 9 THE PRESIDENT: There is none. 10 SENATOR LIBOUS: Mr. President, I 11 now hand up the following committee 12 assignments and ask that such assignments be 13 filed in the Journal. 14 THE PRESIDENT: So ordered. 15 Senator Libous. 16 SENATOR LIBOUS: Mr. President, I 17 would also like to hand up the following 18 committee assignments. Senator Skelos, in 19 consultation with Senator Sampson, has some 20 additional assignments to hand up, and I ask 21 that they be filed. 22 THE PRESIDENT: So ordered. 23 Senator Libous. 24 SENATOR LIBOUS: Mr. President, I 25 believe Senator Hassell-Thompson would like to

Candyco Transcription Service, Inc. 1 be recognized. 2 THE PRESIDENT: Senator 3 Hassell-Thompson. 4 SENATOR HASSELL-THOMPSON: Thank 5 you, Mr. President. 6 I would just like to announce that 7 immediately following session there will be a 8 Democratic conference meeting, immediately. 9 Thank you. 10 THE PRESIDENT: Immediately after 11 session, there will be a Democratic 12 conference. 13 Senator Libous. 14 SENATOR LIBOUS: Mr. President, 15 there being no further business, I move we 16 adjourn until Monday, January 24th, at 17 3:00 p.m., intervening days being legislative 18 days. 19 THE PRESIDENT: On motion, the 20 Senate stands adjourned until Monday, 21 January 24th, at 3:00 p.m., intervening days 22 being legislative days. 23 (Whereupon, at 1:40 p.m., the 24 Senate adjourned.) 25

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