With its new plan to rein in the state's ballooning Medicaid budget, the Pataki administration has dealt a severe blow to Mayor Michael R. Bloomberg, who is seeking relief from the city's growing health care costs.
Rather than absorb $200 million of the city's $4 billion annual Medicaid budget, as the city requested, Gov. George E. Pataki, in his new budget proposal released Wednesday, is asking each county to increase the portion they pay to hospitals and clinics under the Medicaid program. In exchange, the state would pick up their drug costs.
While this swap may benefit many counties in upstate New York, it is of no benefit to New York City, health care experts said, because New York City's hospital costs take up a larger percentage of the city's total Medicaid bill than of the bills of cities elsewhere in the state.
Further, the Pataki administration wants to decrease the amount it pays to hospitals under Medicaid, which would reduce a major source of revenue for the city's public hospital system and could cost it millions of dollars annually.
"This appears to be a fairly significant shift of costs to the city," said James R. Tallon Jr., president of the United Hospital Fund. "The plan does not respond to what the city and counties are asking for, which is picking up more share."
The Medicaid rebuff ? the first salvo in the months-long budget battle in the state capital ? is just the latest in a string of icy responses Mr. Bloomberg has received from Albany to his myriad budget requests...-----
Those of you who follow such things may remember how Mr. Pataki made education and health care for the poor focii of his campaign...
Throughout his career, one constant thread in Gov. George E. Pataki's politics has been his belief in lowering taxes to prompt economic growth.
Indeed, cutting taxes has been the core of his governing philosophy and one of the few policies that distinguishes the Republican governor from the Democrats in the state. He often touts his record of cutting 19 different taxes 63 times, and said in January that he wanted New York to be the "tax-cutting capital of America."
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As he has wrestled with how to close an $11.5 billion budget shortfall this year and next, the governor has clung fiercely to that philosophy. Rather than raise state levies, he has proposed cutting aid to schools by $1.2 billion and curbing spending on health care for the poor by an additional $1 billion.
The governor went on a speaking tour to rail against those who would raise taxes, arguing that in the long run only cutting taxes will revive the economy and provide revenue that can save education and health care programs.
"Raising taxes this year or any year is the wrong choice," he said as he presented his budget Wednesday. "Let's take the option of raising job-killing taxes off the table on Day 1."
Yet Mr. Pataki's commitment to tax cuts faces its most serious test this year, and it remains to be seen whether he is stubborn enough or popular enough to weather the firestorm his proposed cuts to education will ignite.
During his first two terms, Mr. Pataki was able to dramatically cut personal income tax rates, the biggest source of state revenue, and still greatly increase spending, because the boom on Wall Street flooded state coffers with revenue. He even had the resources to start a program that helps pay the property tax bills that school districts charge local homeowners. But times have changed. The Wall Street bubble burst in 2000. Income from capital gains, for instance, fell to $17 million last year from $62 million in 2000. Income tax revenue shrank over the same period by $3.3 billion.
Now, Mr. Pataki's proposal to reduce state education grants by $1.2 billion will force most school districts to make a choice between laying off teachers or raising local taxes. Already Democrats are arguing that he has simply pushed the tax burden down to local property owners, who are already reeling from double-digit county tax increases.
That argument could be a problem for Mr. Pataki, whose Republican constituents are largely homeowners and suburbanites who already pay some of the highest property taxes in the country. It could also put some pressure on Republicans in the Senate majority, who will feel the wrath of homeowners in their districts if school taxes rise.
"Now the argument is that the refusal to raise taxes has a direct consequence," said Gerald Benjamin, a Republican and a political scientist at the State University of New York at New Paltz. "You are not talking about whether or not to have a tax increase. You are talking about which tax increase is more desirable."...
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Nearly a year and a half after the Sept. 11 attacks, the Pataki administration has finally told the federal government how it plans to spend hundreds of millions of available dollars to make New York State better prepared to deal with future terrorist attacks.
The submission of the wish list comes after months of unexplained delays and considerable secrecy. The delays had left New York lawmakers, Democrats and Republicans alike, concerned that the indecision had not only left the state vulnerable, but had also compromised the state's ability to petition for more money from Washington.
The state announced yesterday that it had submitted the plan to the Federal Emergency Management Agency on Wednesday, but refused to release specific details, citing concerns about security. But officials with knowledge of the plan said that it sets aside $90 million for fortifying transit hubs, including Grand Central Terminal, Penn Station and the Port Authority Bus Terminal, against future terrorist attacks.
The plan, totaling $418 million, also envisions spending $175 million to improve the security of major river crossings in New York City, including the George Washington Bridge and the Triborough Bridge.
In addition, the state proposed spending at least $100 million to rebuild the city's emergency operation center, which was located inside 7 World Trade Center and was lost when that building collapsed on Sept. 11. And the state has proposed $20 million in unspecified projects to improve its own emergency response efforts.
The list of projects is subject to the approval of FEMA officials, who have so far allocated a total of $8.8 billion to assist New York in its recovery effort.
"This agreement means we are nearing the end of the recovery and response phase, and are closer than ever to beginning the next phase: rebuilding and renewal," Gov. George E. Pataki said in a statement.
In announcing its much-anticipated antiterror plan, the state also said it had reached agreement with the city on how to spend more than $360 million in additional FEMA aid that had not yet been earmarked.
The city and state plan to use that money ? along with $700 million that state officials managed to squeeze out of existing disaster recovery projects ? for one of their biggest concerns: recouping the costs of paying police officers, firefighters and other emergency personnel who were deployed in the aftermath of the terror attacks.
Both Mayor Michael R. Bloomberg and Mr. Pataki had been counting on that roughly $1 billion in 9/11 emergency money, at a time when both politicians must close multibillion dollar budget gaps. But New York still needs the approval of Congress and President Bush to use the money that way, and there is no guarantee they will get it.
The timing of the state's announcement was a bit surprising, since only two weeks ago the state had insisted that it did not want to be hasty as it sifted through $6 billion worth of antiterror proposals from across the state. But the state had been coming under intensifying pressure to release its list amid a chorus of complaints from jittery officials in New York City and Washington.
The state had already missed two deadlines for submitting ideas and had received two extensions totaling six months. And while it was facing a new and harder deadline of March 11 from FEMA, local and federal officials said that they had not detected much movement, or interest, from the state until recently.
"It's become a source of concern in Washington that we were coming up against some perceived deadlines and some realities," said Representative John E. Sweeney, a Republican from the Albany area.
Senator Charles E. Schumer, a Democrat, was a little more blunt, saying that he hoped that "FEMA will approve them quickly. We've waited long enough."
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It appears to be working, too, as this article in administration house organ the Washington Post takes a remarkably Pataki-friendly tone when discussing New York's budget woes:
His résumé those last few years reads like a study in liberal excess. He added thousands of employees to the biggest municipal payroll in the United States. And he burned through a $3 billion surplus as the city economy sputtered, leaving his successor with a gaping shortfall.
Who was this profligate soul?
Former mayor Rudolph W. Giuliani, the man credited with taming the great American city.
As New York Mayor Michael Bloomberg today unveiled a proposed $44 billion budget that would cut city services and lay off city employees to close a $3.2 billion dollar deficit, a cold eye has been cast on Giuliani's second term as mayor, when budget discipline weakened and spending shot upward. In 2001, his last full year in office, Giuliani increased spending by 9 percent, more than twice the rate of inflation.
School construction -- overseen by an ally of Giuliani's -- was $2.3 billion over budget. His administration built the two most expensive minor league stadiums in America. And by the end of 2001, the city had 6,000 more employees than when Giuliani took office in 1994.
"The budget exploded in the last few years under Giuliani," said Diana Fortuna of the Citizens Budget Commission, a business-funded budget watchdog in New York. "They acted like they would never have to pay the piper."
Giuliani's was a much-repeated pattern across the nation, as mayors, governors and legislatures embraced the notion that the business cycle had been tamed and tax revenue would rise indefinitely. That was an illusion bred of fat times. Now, from California with its $35 billion budget deficit to Boston with a $55 million gap, politicians are trying to realign expenses with falling tax receipts.
"Politicians across the nation spent like drunken sailors during the boom -- I don't just fault Giuliani," said E. S. Savas, a professor and director of Baruch College's Privatization Research Organization, which helped design some of Giuliani's early management innovations.
New York's rise in spending during the late 1990s was nearly on par with many other major cities. Seen in this light, Giuliani's budget management provides a useful primer on how an American city clambered out its fiscal ditch in the 1990s -- and how it fell back in again.
Ask former Giuliani officials and they say budget discipline never wavered. Their revenue estimates were conservative, they said, and the mayor continued to push business tax cuts. They blamed others for the leaks in their ship of state, not least Gov. George E. Pataki, a Republican, who joined state Democrats in tossing out the city's commuter tax a few years ago. That tax -- which Giuliani favored -- brought the city $500 million a year. The state also increased Medicaid spending, of which the city pays a fixed percentage.A brief history of the Giuliani/Pataki hostilities:
Rudy was once the Federal Prosecutor here. He was taken under the wing of Republican kingmaker Al D'Amato. The two were photographed together in a drug raid dressed as extras from a dinner theater production of Grease. Great things were in store for Rudy.
What Al didn't count on was the little-known fact that Giuliani had a little family secret. His father was, at one point, sent to prison and at one point was thought to have mob ties. This is pretty much the kiss of death for New York politicians (it was used very effectively against Cuomo, who almost certainly didn't deserve it, and Gerry Ferraro, who most certainly did). Rudy had something to prove. He became a major source of anti-mob prosecutions.
Al made a phone call. One of Rudy's prosecutions was against a good friend of Al's, who's a right guy, Al says, why don't you just let it go.
Rudy held a press conference to tell the world about it.
Now Al wants Rudy's ass. Any way Al can get in Rudy's way, Al gets in Rudy's way, including supporting a little-known state senator from Peekskill for Governor against Cuomo, getting in the way of any gubernatorial ambitions Rudy might have.
Rudy waits untl the last minute, so the papers are on tenterhooks waiting for his endorsement.
He endorsed Cuomo.
Pataki, immediately upon taking office, gutted funding for the city. It never got a whole lot friendlier than that. He also spent a buttload of state money appealing a judgment against the state for not educating the (predominantly minority) public school students of New York nearly as well as the students upstate. A hand-picked Pataki judge decided that the state is only required to educate children to an eighth grade level, and is not required to make sure even that happens.
More recently, Rudy was sighted ostentatiously dropping his handkerchief for McCain to pick up, only endorsing Bush when Pataki and D'Amato came to him hat in hand.
Some folks felt Pataki wasn't such a bad choice in the last election.
Some folks were wrong.
We have only left to hope that when convention time rolls around, Bush will knife Pataki as thoroughly as Pataki has knifed us on his behalf.
I'll bet, not that it will do him any good, that Rudy will help.
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