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Senator Bruno unveiled the Senate's mandate relief plan at a New York State Association of Counties (NYSAC) meeting. |
Tuesday, February 3, 2004
In a speech before the New York State Association of Counties (NYSAC) today, Senate Majority Leader Joseph L. Bruno unveiled a comprehensive mandate relief plan that would save local property taxpayers billions of dollars. The plan includes Medicaid and pension reform, as well as reforms related to education, municipal liability, local government services and hundreds of other measures that together could save municipalities $4 billion annually.
"From massive mandates like Medicaid to annoying paperwork and reporting requirements, they add up to billions of dollars and property taxpayers have to pay the bill," said Senator Bruno. "The Senate plan would relieve localities and school districts from hundreds of burdensome, expensive mandates and, as a result, reduce the property tax burden on New Yorkers by billions of dollars.
"The Senate has been fighting for mandate relief for more than a decade. It has always been a priority issue because unfunded mandates are a major reason why New Yorkers pay some of the highest property taxes in the nation," Senator Bruno said. "This year, local officials have brought this issue to the forefront and the Governor and Assembly have joined the Senate in advocating for mandate relief. With this cooperation and momentum, real mandate relief can happen this year and real property tax relief must follow."
Highlights of the Senate Mandate Relief Plan include:
Medicaid Reform -- The recommendations of the Senate Medicaid Reform Task Force, which worked closely with NYSAC and other local officials, would save state and local taxpayers $2.5 billion over five years. The recommendations include a takeover of local Family Health Plus costs and reforms related to long term care and pharmaceuticals. Many of the task force proposals were mirrored in recommendations made by the Governor�s Medicaid Reform Commission.
Pension Reform -- The Senate�s pension restructuring plan, similar to recent plans advanced by the Governor and Comptroller, would provide $1.8 billion in fiscal relief to local governments and school districts over the next three years and ensure a sound pension fund.
Municipal Liability Reform -- The Senate�s plan has been applauded by local officials, businesses, and organizations statewide as a way to save billions of dollars by, among other things, restricting baseless lawsuits, limiting jury awards and extending Court of Claims jurisdiction to localities.
Local Government Cooperation and Shared Services -- The Senate plan would provide additional resources to encourage localities to share services and cooperate to reduce duplicative layers of government and save taxpayers money.
Wick�s Law Reform -- The Senate is proposing a phased-in increase of the $50,000 Wick�s competitive bidding threshold for plumbing, electrical and HVAC components of public construction projects that could save localities hundreds of millions of dollars.
Education Mandates -- While the Senate has pushed for increased school aid and the STAR property tax relief program, onerous mandates drive up the costs for local school districts and taxpayers. The Senate is proposing to eliminate hundreds of mandates placed on schools to cut red tape and save school districts and taxpayers tens of millions of dollars.
Omnibus Mandate Relief Act -- For over a decade, the Senate has advanced legislation to provide comprehensive relief for local governments and taxpayers from a wide array of expensive, unfunded state mandates. The package aims to reduce local burdens, provide increased flexibility, eliminate unnecessary reporting and approval requirements and encourage local cooperation.
Constitutional Ban on Unfunded Mandates -- The Senate plan includes a proposed Constitutional Amendment that would prohibit the State from imposing unfunded mandates on local governments and school districts. Also, compliance with new State mandates, once determined to be unfunded, would be voluntary for localities.
SENATE MANDATE RELIEF PLAN
MEDICAID REFORM
After six months of statewide public round table meetings, open discussions and information gathering, the Senate Medicaid Reform Task Force issued a set of more than 40 recommendations in December 2003. The recommendations, comprising the first comprehensive overhaul of the State�s Medicaid program since it was enacted, would save state and local taxpayers $2.5 billion over five years.
"The need to deliver better quality care to Medicaid beneficiaries while ensuring the New York State Taxpayer's hard earned dollar was wisely being spent guided the recommendations found in this report," said Senator Kemp Hannon (R-C, Garden City), Co-Chairman of the Senate Medicaid Reform Task Force.
"The Medicaid program constitutes the single largest mandated burden on local governments," said Senator Raymond Meier (R, Western), Co-Chairman of the Senate Medicaid Reform Task Force. "The Senate Task Force proposal gives counties immediate fiscal relief by picking up the local share of Family Health Plus and makes solid proposals to give counties greater flexibility for innovative programs."
The main components of the plan include a state takeover of the local share of the Family Health Plus program, implementation of reforms and cost containment aimed at making Medicaid more efficient, improved quality of care and fiscal relief to state and local taxpayers.
In addition to the takeover of the local share of Family Health Plus, the Task Force recommendations include substantial reforms that will save state government $600 million on top of the nearly $2 billion in local savings over five years. The panel�s recommendations include reforms to the Long Term Care program, including stronger estate planning provisions; reforms to control skyrocketing pharmaceutical costs including the establishment of a preferred drug list; establishment of disease management programs to better coordinate care and improve the efficiency of the Medicaid program; and establish comprehensive utilization review to closely monitor patient use of the system and provider billing of the Medicaid system.
PENSION RESTRUCTURING
The Senate�s sweeping pension reform plan would strengthen the Retirement System and provide localities with $1.8 billion dollars in fiscal relief for their pension costs in the coming year. Along with providing additional relief to taxpayers and localities, the plan would also ensure that the pension fund is sound and that benefits are protected for New York�s current and retired workers.
"The uncertainty of funding for our pension system has provided serious budget problems for state and local government," said Senator Joseph Robach (R, Rochester), Chair of the Senate�s Civil Service and Pension Committee. "Through continued dialogue with the Comptroller and Governor, I hope to go further to minimize the negative impact and diminish the spikes and wide fluctuations which have adversely effected our municipalities."
The plan, which includes elements mirrored in Governor George Pataki�s and Comptroller Alan Hevesi�s plans, would address rising pension costs, implement reforms to control future increases, finance the costs of recent pension enhancements over a 30-year period, and strengthen the Retirement System. Additionally, the plan would permit expanded use of existing reserves to include payment of pension contributions and allow local governments to make their annual pension payments in the next fiscal year, among other options.
MUNICIPAL LIABILITY REFORM
The Senate's Municipal Liability reform package (S. 2944, S.5395) would save local governments across New York State $1 billion dollars by enacting common sense reforms to limit judicial awards which have spiraled out of control in recent years. From 1988 to 1996, annual tort case filings in New York State grew by almost 60 percent, from 53,104 to 84,089. Last year, the City of New York paid out more than $550 million in settlements and judgments in lawsuits claiming the city negligently caused injuries. According to the Public Policy Institute, in 1996, the �tort tax� cost every taxpayer in New York $800.
"Every sector of New York's economy is affected by the threat of virtually open-ended liability created by the state's current tort laws and unfortunately municipalities throughout our state face the brunt on this out of control system," said Senator Dale M. Volker, sponsor of the legislation. "The costs are huge because, all too often, our civil justice system assigns blame and assesses damages on an irrational and unpredictable basis. Most of our residents continue to be negatively impacted by the ongoing game of lawsuit lottery. Liability costs drive up prices while reducing the availability of goods and services; workers lose when jobs are lost to foreign competitors with less product liability exposure; the poor lose when the threat of lawsuits makes it difficult for nonprofit groups to deliver services; and taxpayers lose when local governments are seen as the deepest "deep pocket" of all. New York State must reform our Tort system. It will be an essential component for our state to remain economically competitive and ensure that those who are truly injured have the ability to have their day in court and receive fair and just rewards."
The Senate's municipal liability reform package includes provisions that would have direct savings for localities including repealing joint and several liability, placing a $250,000 cap on non-economic damages and extending Court of Claims jurisdiction to localities. Additional portions of the package would help localities save money by reducing the overall cost of New York's tort system. These proposals have generated a groundswell of support in New York and across the nation.
SHARED SERVICES AND COOPERATIVE INCENTIVE AID
Modeled after a long-standing school district program, Reorganization Incentive Aid, the Senate Majority is proposing a new program that would reward shared service and cooperative agreements between local governments with additional incentive aid for those efforts that save taxpayer dollars while providing the same or improved level of service. By streamlining government, the plan will provide significant savings on local taxes.
"When faced with tough budget decisions, local governments need to know they have options other than cutting services or raising taxes," said Senator Betty Little (R,C,I-Queensbury), Chair of Local Governments. "We need to encourage and provide opportunities for them to be creative, and one way to do that is through sharing services. It's a viable option I've seen work well in my Senate District. The quality and delivery of services isn't affected just done more efficiently for the taxpayers."
Under current law, localities have the authority to provide services jointly. The Senate plan would encourage this cooperation by using $1 million, through Quality Communities in the Department of State, to help cover startup and reorganization costs. It also recommends municipalities that share services receive priority consideration for any competitive grants provided by the State.
EDUCATION MANDATE RELIEF
Local school property taxes across the State are the highest in the nation despite efforts to keep them under control by providing record school aid increases and advancing programs like the STAR tax relief plans. By eliminating dozens of mandates placed on school districts by the State Board of Regents and State government, local school districts and taxpayers would save $40 million and maintain a high quality of education.
"Last session the Senate Majority made a conscious effort to stem the flow of unfunded education mandates," said Senator Stephen Saland (R-C, Poughkeepsie), Chairman of the Senate Education Committee. "This session we hope to build on that success by beginning the process of rolling back and repealing unfunded mandates."
The Senate plan would raise the dollar threshold for competitive bidding for purchase and public work contracts and give school districts increased flexibility and local options in a variety of areas. Additional elements would eliminate paperwork mandates and red tape and enable schools to focus on educating our children. Another proposal, mirroring part of the proposed Executive Budget, would require the Board of Regents to obtain the review and approval of the State Office of Regulatory Reform for new regulations mandating significant costs for schools, the State and local governments.
WICKS LAW REFORM
The Senate has introduced numerous proposals to reduce the costs of local government construction projects and save localities hundreds of millions (including S.64, S. 1607, S.1226). The Senate took a leading role in establishing and extending the New York City School Construction Authority's exemption from Wicks Law, which has saved New York City taxpayers hundreds of millions of dollars.
"The State Senate has been a consistent supporter of reducing the burdens on local taxpayers, and one of the major reforms that can be done is reforming the Wick's Law on municipal construction projects," said Senator Volker. "This will be acute, when the rebuilding of the World Trade Centers commence. Without any Tort or Wick�s reform, it has been estimated that the cost to rebuild may double. This could create an enormous financial burden on state taxpayers for decades. That is just plain wrong and by reforming this law, we can allow municipalities to save millions of dollars and pass those savings onto taxpayers."
The Senate proposes a phased-in increase in the Wicks Law threshold. The current limit for the plumbing, electrical and HVAC components of public construction projects is $50,000. Some estimates project this adds 20-30% onto the final cost, which is passed on to local taxpayers.
OMNIBUS MANDATE RELIEF ACT
The Senate�s Omnibus Mandate Relief Act, (S. 4501) much of which has been endorsed by the Governor's Task Force on Local Government Reform, would save local governments and taxpayers nearly a half-billion dollars by eliminating dozens of expensive state mandates. The package aims to reduce local fiscal burdens, provide localities with greater administrative flexibility, reduce the burden of state regulation, eliminate unnecessary state reporting and approval requirements and encourage local consolidation and cooperation.
"One important, easy and quick way we can provide relief to local taxpayers is through mandate relief," said Senator Betty Little. "These are challenging times for many of our local governments. Our mandate relief package would eliminate many unnecessary and costly obstacles that make it difficult for local officials to manage their budgets. Services won't be compromised and local taxpayers will benefit."
"Unfunded mandates are a burden to local taxpayers and local governments," said Senator Saland. "Mandate relief will provide not only significant tax savings, but encourage flexibility, and in turn, greater innovation and productivity by local governments."
The plan includes elements that would require full funding of future State mandates to local governments and school districts, make Correction Commission recommendations advisory rather than binding, streamline DEC requirements and reducing regulations, require non-indigent prisoners to pay the cost of food and medical care, permit a person to serve in more than one volunteer fire department, and eliminate the requirement that municipalities obtain State Comptroller approval for investment in municipal or district debt of sales tax allocation, among others.
PROHIBITING UNFUNDED MANDATES
A Constitutional amendment proposed by the Senate plan (S.675) would prohibit the State from imposing unfunded mandates on local governments and school districts. Also, compliance with new State mandates, once determined to be unfunded, would be voluntary for localities. Under the amendment, any associated increases in cost must be offset by state funding to carry out the new mandate.
"As a county legislator, I found unfunded mandates to be very frustrating. One of the reasons I ran for statewide office was for the opportunity to work to provide necessary services to localities without jeopardizing the whole system by providing unnecessary services," said State Senator Mary Lou Rath (R-C, Williamsville). "By giving local governments flexibility in addressing their costs and helping to ensure that mandates do not unfairly tie their hands, this initiative will help localities to do that."
"Our State Constitution affords New Yorkers many protections, and it's time we amend it to include another-- protection against unfunded State mandates," said Senator Betty Little. "Unfunded mandates take local decisions out of local officials' hands, hindering their ability to govern and costing taxpayers unnecessarily. Any mandate that is good enough to pass on to local governments should be good enough to justify a State expenditure."
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