The Novermber 1, 2008 Issue of The Capitol

VOL. 1, NO. 11 NOVEMBER 2008

Gauging Obama’s significance forNew York State.

Page 2

Marisa Lago on how New York con-tinues building even in economic crisis.

Page 27

Republicans consider how Dean Skelos should prospect for a Republican revival.

Page 17

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www.nycapitolnews.com2 NOVEMBER 2008 THE CAPITOL

BY DAN RIVOLI

Days before Sen. Barack Obama’s landslide presidential victory, Gov. David Paterson (D)

was on Capitol Hill testifying before the House Ways and Means Committee on including federal aid to states in a new stimulus package. New York’s economy has been devastated by the Wall Street collapse, and the governor warned of dark times ahead

“Unless states receive fi scal relief, I believe the goal of stabilizing the economy cannot be achieved,” Paterson told the committee, chaired by fellow Harlemite Rep. Charles Rangel (D-Manhattan).

With Obama slated to take offi ce this January, Paterson is fi nally poised to get the federal aid to New York State he has been seeking and can look forward to getting a friendlier audience in Washington than he found even a few months ago.

“A second stimulus part, one that creates and preserves jobs by focusing on infrastructure and help for the states is very much needed,” said Sen. Charles Schumer (D). “The kind of help President-elect Obama asked for the states is just what’s needed: moneys to help us out of our greatly increased Medicaid costs, which will prevent state taxes from going up.”

The stimulus package with state aid will most likely be signed after inauguration, since President George W. Bush does not support a second plan.

And that difference in opinion between the outgoing president and Obama is one of many.

Barack Obama is unlike many presidents that have come before him. He is more liberal, he will be one of the youngest commanders-in-chief ever and he is, of course, an African-American.

He is also the fi rst president in modern American history—aside from Richard Nixon, who briefl y lived in New York before winning the presidency—to make his home in a major metropolis. Though

Franklin Roosevelt was born in New York, he grew up and lived in Hyde Park, miles north of the big city.

Obama’s Hyde Park, meanwhile, is smack in the middle of the South Side of

Chicago, an urban area he represented for seven years in the Illinois State Senate before winning election to the United State Senate in 2004. Even during his fi rst four years in Washington, he kept his primary residence there, refusing to move his family to the capital.

“When our governor and congressional delegation comes calling, he’ll understand what it needs and what it’s all about,” said Rep. Gregory Meeks (D-Queens).

Meeks, one of fi ve New York House members who sit on the Financial Services Committee, said Obama’s presidency bodes well for Paterson’s call to get state representation on the oversight panel formed by the fi rst federal bailout bill.

“I’m pretty confi dent you’ll see a New Yorker on there,” Meeks said. “When you get Wall Street back on track, you get New York back on track, as you do with the rest of the country.”

Obama’s infl uence on New York will likely extend way beyond Wall Street to the other cities that make up New York’s big fi ve: Syracuse, Buffalo, Rochester and Yonkers.

Incoming Rep. Dan Maffei (D-Onondaga/Wayne/Monroe) tried unseating James Walsh—whom he is now set to succeed—in 2006 by tying him to Bush’s policies that Maffei argued were harmful to the Syracuse-based district.

“Overall, on the state level is where you see the damage done by the Bush Administration to New York,” Maffei said. “We have these large, unfunded mandates, and the Medicaid formula for getting assistance from the federal government puts us on the short end of the stick.”

Maffei’s victory was one of three pick-ups for state Democrats, which chiseled the state’s Republican congressional delegation down to three seats. Maffei and his fellow Democrats will have extra clout with Obama, as the New York Democratic delegation will make up over a tenth of the House Democratic caucus.

“He’s going to need Congress to approve his programs,” Maffei said. “New York is going to be very important to President Obama and I think he knows that.”

Obama’s tax plan could hurt tax revenue on the local and state level, Manhattan Institute’s E.J. McMahon argued. People paying more under Obama’s plan, which would raise taxes on incomes higher than $250,000 a year, would change their fi scal habits by earning less or investing more income in tax-free municipal bonds.

“When the federal government does something that causes federal income tax payers to narrow their exposure, we have our taxes affected,” McMahon said.

Robert Ward, deputy director of the Rockefeller Institute of Government, said the Obama Administration could affect upstate infrastructure projects like replacing the Tappan Zee Bridge between Rockland and Westchester counties. In addition to receiving the funds, the federal government can decide how the money will be used, Ward said.

“If the White House wants to be helpful on a major project like that, it can make an honest difference,” Ward said.

Though there are local projects in dire need of federal attention, New York State relied heavily on tax revenue. Obama’s remedy for the fi scal crisis will be the fi rst indicator of how New York will fare under his administration.

“The fi rst challenge will be managing the bailout package that is already enacted,” Ward said. “I think—clearly Sen. Obama understands the importance of the fi nancial sector to the nation economy, and that’s a good thing for New York.”

[email protected]

“New York is going to be very important to President Obama,” said incoming Rep. Dan Maffei,

“and I think he knows that.”

President-elect Barack Obama’s infl uence on New York will likely extend way beyond Wall Street to the other cities that make up New York’s big fi ve: Syracuse, Buffalo, Rochester and Yonkers.

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With State in Fiscal Crisis, New Yorkers Banking on Friendly White HouseWith a robust Democratic presence in Congress, predictions of benefi ts under Obama

Look Who’s

in CUNY!

CUNY is soaring! Enrollment is at its highest level in 33 years. More high-achieving studentsare seeking admission than ever before. CUNY students and faculty are winning the mostprestigious awards and fellowships in the nation. More alumni and other donors are investingin CUNY, too. Why? Because they know that CUNY graduates are tomorrow's leaders, justas they have been for generations. I am deeply grateful for this generosity. With the supportof our city and state, CUNY will reach even greater heights. Investing in CUNY is investingin futures. See for yourself. Visit any CUNY campus in November, CUNY Month.

Matthew Goldstein, ChancellorThe City University of New York

Lehman CollegeSaxophonistBranford Marsalis,soloist withFilarmoniaBrasileriano8 PM $10-$25; childrenunder 12, $10

Queens CollegeJewish StudiesBiblical ArchaelogySeries7:30 PM $5

College ofStaten IslandClub Hour Recital:Omni Ensemble1:30 PM Free

Lehman CollegeDancehall Reggae,Sean Paul 8 PM $55-$90Queens CollegeThe Fab Faux,Famous BeatlesTribute Band8 PM $45-$55

KingsboroughCommunity College Roy Zimmerman,music for all ages3 PM Free

Graduate CenterA Conversationon Cultural Power,Tom Stoppard &Derek Walcott7-8:30 PM Free

Veterans DayNew York CityCollege of TechnologyThe World in a City:New York Times’Joseph Berger1 PM Free

Borough ofManhattanCommunity CollegeInsurance–Cover Your Assets 2 PM Free

Graduate CenterMendelssohnString Quartet1 PM Free

Graduate CenterRalph VaughanWilliamsCommemorativeconference followedby concert9:30 AM-8:45 PMFree

York College Theater:Jamaica, Farewell3 PM $20 adults; $10 students,seniors

Graduate CenterOnlineBaccalaureateOpen House6-8 PM Free

College ofStaten IslandTheater:An Evening ofStudent-Directed Work(Through 11/22)8 PM $5

KingsboroughCommunity College(11/19-11/23)The Diary ofAnne Frank2 PM $10;students,$5

Graduate CenterIs it really so strange?DocumentaryfilmmakerWilliam E. Jones7 PM Free

Hunter CollegeWelfare Rights Initiative’s Know YourRights Training1-3 PM Free

Thanksgiving

9 10 11 12 13 14 15

For details on these and hundreds of other CUNY Month events,visit www.cuny.edu/cunymonth

1

York CollegeJazz Live at York:

Vincent Herring,saxophonist

7 PM $20adults; $10students,

seniors

Lehman College Ray Castro’sConjuncto30th Anniversary

Concert 8 PM $45-$60

S U N M O N T U E S W E D T H U R F R I S A T

KingsboroughCommunity CollegeKingsboroughfor a Day11:45 AM-4 PM Free

30

November is CUNY Month

Brooklyn CollegeChava Alberstein

2 PM$2

Queens CollegeMagic In TheMezzogiorno:The Anthropology ofErnesto De Martino6 PM Free

16 17 18 19 20 21 22

Ask about

when you visit a campus

CUNY colleges schedule open houses throughoutNovember. Check web site for details.

York CollegePianist GillesVonsattel8 PM Free

Brooklyn College The Very HungryCaterpillar2 PM $6

New York CityCollege of TechnologyBlack Solidarity Day10:30 AM Free

2 3 4 5 6 7 8Election Day

Hunter CollegeCrossover Jazz:The HunterJazz Ensemble& Jazz VocalWorkshop 1 PM Free

MONTH

Graduate CenterMacaulayHonors CollegeOpen House 6:30 PM Free

23 24 25 26 27 28 29

QueensboroughCommunity CollegeAmerican Jews andPope Pius XII(Through 11/3)1 PM Free

Details of events can change without notice, so always call in advance.


Belts Tighten and Unions Gripe as Agencies Adapt to Spending CutsSizing up the actual impact of more cuts and lower revenue stream

BY DAN RIVOLI

The collapse of Wall Street not only devastated the nation’s economy, but widened the

yawning budget defi cit New York State faces. The state’s tax revenue was gutted when fi nancial institutions collapsed. Gov. David Paterson’s (D) remedy has been to slash the budgets of state agencies to help close this year’s $1.5 billion defi cit.

Since these August cuts, agencies were forced to adapt to a smaller budget and still provide essential services.

The state’s Department of Correctional Services received a cut of $168 million, the biggest whack. With one of the country’s largest prison populations, the department was forced to consolidate 17 minimum- and medium-security prison dormitories, install double bunk beds and trim 200, or 1 percent, of its full-time correction offi cers. The department defended the alterations to maintain safety.

Donn Rowe, president of the state’s Correctional Offi cers and Police Benevolent Association, said cuts in agency spending should have come from the administrative and managerial side as to keep correctional offi cers and the public safe. Rowe said double bunks and consolidation of dormitories will cause a strain on the

employees he represents.“We understand the state is in a dire need

of budgetary reductions,” Rowe said. “But to take that kind of approach, the morale of my members is hit hard.”

With a 14-percent reduction in the inmate population over the last decade, Rowe was pleased with the extra breathing room the state’s correctional offi cers enjoyed. But adjusting to the new budget eliminated that buffer.

“We’re going back to the trend of squeezing these inmates into housing units,” Rowe said.

The budget cuts have also hit private citizens and small localities in the wallet.

The State University of New York (SUNY) had to tighten its belt after the state-subsidized college system received the second highest cut—$96 million—this past August.

Whereas the correctional offi cers union was concerned with safety of inmates and the general population, the sacrifi ces SUNY must make hits upstate localities especially hard as campuses are the economic engines of many counties.

“The cuts came right when SUNY was opening its doors to students. Kind of hit them right between the eyes,” said Phillip Smith, president of the United University Professions, which represents SUNY faculty

and administration employees.SUNY has yet to take action on reducing

its budget, with the responsibility landing on the lap of campus presidents, Smith said. Some campuses have canceled classes, increased class size and instituted a hiring freeze. This has affected student enrollments, causing the “brain drain” of young talent, and the sagging upstate economy that is a drain on the city’s fi scal health as well.

“Many of our upstate communities depend on their SUNY campuses, SUNY faculty staff and students for their own survival,” Smith said. “Let’s not turn the spigot off from that end.”

State Comptroller Thomas DiNapoli (D) feels confi dent that the agencies will have suffi cient funds to operate after the cuts, provided they streamline their operations.

“It’s not easy but they’re dealing with it,” DiNapoli said. “We have a large budget in New York—over a $120 billion budget—so there is room to do effi ciencies.”

Of the cuts Paterson and legislative leaders agreed to in August, Medicaid and education—which, at $66.6 billion, are the two largest state expenditures—were spared. Cuts to these costly hot-button areas of the budget often earn the wrath of the state’s powerful unions. Paterson, however, announced that he is seeking such cuts.

In August, GOP state senators dug their heels in opposing these cuts and are likely to do so in November.

“As I have said all along, New York State must not balance its budget by offl oading its costs to schools and local governments and forcing them to raise local taxes to make up for the shortfall,” said Senate Majority Leader Dean Skelos (R-Nassau) in a statement.

State Sen. Stephen Saland (R-Columbia/Dutchess), chair of the Education Committee until Democrats are sworn in as the majority, felt that healthcare and education should be considered for cuts in 2009’s budget negotiations, but warned that Paterson should be careful about cuts that could hurt already overburdened localities.

These localities, Saland noted, can raise property taxes to make up the difference.

“It would be taking money from one pocket and putting it in the other,” Saland said. “I fi nd that prospect very troubling.”

Though optimistic that the state will survive this year, the real struggle, DiNapoli forewarned, was cutting spending to close the 2009-2010 $12.5 billion defi cit.

“The big battle is next year,” DiNapoli said. “That’s where everything is going to have to be on the table.”

[email protected]

A Dispute over Health Premiums Is, in Part, a Dispute over TermsBY SAL GENTILE

A dispute between Nassau County and a group of insurers over rising health care premiums

may drag on indefi nitely—or, it may be resolved by the end of the month.

It depends on whom you ask.The subject of the negotiations is

itself a matter of dispute. Nassau County Comptroller Howard Weitzman (D) insists that the New York State Health Insurance Program (NYSHIP), which provides health insurance through a group of private carriers to employees of the state, county and municipal governments, has levied “overcharges” on those governments that amount to a total of more than half a billion dollars.

Each year, the insurers estimate how much it will take to cover the claims of government employees. When the premiums charged by NYSHIP end up higher than the total costs, the insurers roll that money over into future years, using it to stabilize future premiums.

But county and local governments—led by Nassau—want that money back.

“These overcharges were never justifi ed,” he said. “NYSHIP’s practice of retaining $540 million in overcharges from prior years is not affordable for governments and school districts, and is especially onerous in today’s economic climate.”

The Department of Civil Service, which

oversees the program, might agree—if they were indeed “overcharges.” NYSHIP prefers to call them “dividends”—additional revenue rolled over from one year to the next—and says they serve an important purpose in guaranteeing that insurers can cover all of their claims from year to year.

“It’s a misnomer to call them ‘overcharges,’” said Department spokesperson David Ernst.

The different ways of conceptualizing the problem—excess payments that are rolled over from one year to the next to stabilize premiums—cut to the heart of the dispute.

“There are plentiful reasons to err on the side of caution on this,” Ernst said. “The point of what we call the ‘dividend,’ to spend it all in one year and leave nothing for future years, is not, probably, the wisest way to go.”

Weitzman counters that lean economic times for governments and their employees—as well as skyrocketing health care costs—require that Nassau and other counties, as well as the state, recoup all the savings they can.

He added that NYSHIP’s concern over the stability of the rate structure—that refunding the pool of excess cash would cause premiums to fl uctuate—was unfounded.

“They don’t want to see large refunds

in premium reduction, and then in six years have premiums go up dramatically,” Weitzman said of NYSHIP’s concerns. “We don’t believe they would.”

Weitzman, the Department of Budget and NYSHIP’s insurers have been in talks regarding the excess payments—which fl uctuate from year to year because of changes in the number of claims employees make—but have apparently

come away with vastly different conclusions.

An aide with knowledge of the negotiations said it seemed as though both sides were making progress, and that a resolution could entail a mixture of cash refunds and future rate reductions.

One thing that Nassau and its fellow county governments would not abide, the aide said, was a proposal made by Civil Service Commissioner Nancy Groenwegen that county and local governments opt out of the state plan if

they fi nd it too expensive.“While we welcome the participation

of Nassau County and 800 other localities in the Empire Plan, they owe it to their taxpayers to be aware of alternative plans that may provide comparable benefi ts to public employees at lower cost,” she said in a statement. “They of course have other options to control costs based on the benefi ts they choose to provide.”

An aide to Weitzman said in response that it would be unreasonable to expect Nassau County offi cials to withdraw from the state plan without fi rst recouping the several hundred million dollars it has paid in excess premiums.

The New York State Association of Counties agrees with Weitzman. Executive director, Stephen Acquario said that “reforming NYSHIP payments, and returning

overpayments to participating agents” would help stave off sweeping budget cuts and burdensome tax hikes at a time when local and county governments are reeling from the fi nancial crisis.

But, to insurers who want to keep the money, the answer is not as simple as refunding excess payments.

“It’s impossible to calculate how much there is going to be in the way of claims during the course of the year,” Ernst said. “This is not a precise science.”

[email protected]

“This is not a precise science,” said David

Ernst, a spokesperson for the Department of

Civil Service. Neither is it a precise vocabulary.

Making New York Prisons More Dangerous!New York State is currently facing a severe budget crisis. The New

York State Department of Correctional Services has implementeda plan that jeopardizes the security of our prisons and the safety

of both Correction Officers and inmates. This plan calls for dormitory consolidations, which really means stuffing inmates in already overcrowded dorms. (See photo’s attached) This will only increase tension between inmates and create the potential for conflict and violence.

Our 25,000 statewide members recognize that Governor Paterson andthe State Legislature are facing some difficult choices when they meeton November 18.

We are asking that all New Yorker’s better educate themselves as to howNYS prisons are currently operating. Our prisons are already understaffed, already overcrowded, and already dangerous. Ratherthan reducing the number of medium and minimum inmates in doublebunk beds from 8,000 to 7,000, the Department has chosen to squeeze1,000 inmates in already overcrowded dormitories and cut over 300vital Correction Officer positions.

Our brave members enter the most dangerous working conditions imaginable each and every day. Now the administrator’s want to solvebudgetary matters by crowding more inmates into overcrowded dorms,while at the same time cutting staff. Does this make sense?

The Secret About N.Y.S. Prisons• NYS Prisons are currently at 107% of capacity.“The technical capacity is how many single beds the facility will accom-modate, so yes we are over capacity,” (DOCS Spokesman Eric Kriss,Legislative Gazette October 6, 2008)

• Over 8,000 inmates are housed in bunk-bed conditions.

• There are over 24,000 inmates housed in maximumsecurity cells, currently at 124% capacity.

• There are over 30,000 inmates housed in mediumsecurity dormitories, currently at 102% capacity. Whenthe lights go out in these dormitories one (1) CorrectionOfficer is assigned to watch sixty (60) inmates.

Would you feel safe workingbehind the walls of a NYS Prison?

Donn RowePresidentNew York State Correctional Officers & PoliceBenevolent Association102 Hackett Boulevard - Albany NY 12209 (518)427-1551www.nyscopba.org


BY ANDREW J. HAWKINS

On the Sunday two weeksbefore the election, Sen. Charles Schumer (D) was endorsing

Council Member Joseph Addabbo (D-Queens) for State Senate at a senior center in Howard Beach, when he was interrupted by his vibrating cell phone.

Without pausing, he underhand-tossed it to an aide.

“It’s Reid,” he said, referring to Senate Majority Leader Harry Reid (D-Nev.) and offering a brief glimpse into Schumer’s other job as head of the Democratic Senatorial Campaign Committee. Under his leadership, Democrats increased their ranks by six seats this year—and counting.

Seizing the moment, Schumer connected the desire for change in Queens with the desire for change in communities around the country.

“Just like here in Howard Beach,” Schumer said, “people in Mississippi and Alaska want change, too.”

Addabbo grinned. This was the kind of stuff he was hoping would send him to Albany and put the State Senate in the hands of the Democrats for the fi rst time in 40 years.

Schumer regaled the crowd with tales of Addabbo in Albany, leading the charge to reform Medicare and provide aid to families who want to send their children to college.

“I go way back with the Addabbo family,” said Schumer, who talked about being mentored by Addabbo’s father, Joe, Sr., in Congress.

After riffi ng through a few more variations on the need for change, Schumer quickly signed an autograph for a fan and leapt back into his awaiting car. He had one more endorsement stop in Long Island before he could enjoy the rest of his Sunday.

“I have to be home by 4:15 for the Giants/Steelers game,” Schumer said before driving off.

* * *Several days later, Addabbo and

Maltese met for their fi nal debate. While not as dramatic as a previous debate, which included a “double dare ya” moment between the two candidates to drive to a nearby subway station and investigate the smell of urine, the Oct. 30 debate was replete with tense moments.

On that night, local businesses along Eliot Avenue

in Middle Village were covered in signs declaring

support for both candidates, as well

as City Council Member Anthony

Como (R-Queens), a former Maltese aid who

would be defeated a week later by Democrat

Elizabeth Crowley.Inside the auditorium of the Our

Lady of Hope school, local residents and political operatives milled about, trading campaign literature, and shared relief for an election that was winding down. In the corner, two elderly ladies served cookies and Sanka.

“Enjoy the show,” Addabbo said to Maltese’s wife, Constance, who sat in the front row.

But if anything, the hour-and-fi fteen-minute debate lacked fi reworks. Addabbo and Maltese traded verbal barbs over local issues, such as the deal to build a casino at the Aqueduct racetrack, and over

policy-heavy snoozers, like the intricacies of budget negotiations in Albany. Several members of the audience appeared to doze off during the debate.

Addabbo characterized himself as a fi ghter, and over the course of the debate repeated variations of the word ad naseum. He spoke very fast, sometimes running his sentences together.

“You know this is the last one of these debates and I’ve had a good time doing these debates to talk to the residents about my platform and hear from you about your concerns and I would work on those concerns as your state senator,” he said.

Maltese, on the other hand, sounded a little worse for the wear, explaining that he was coming down with a cold. Experience is what counts in Albany, he stressed, sucking on a lozenge.

“Ladies and gentleman, they do everything on seniority in Albany,” Maltese said. “They even assign license plates based on seniority. I have license plate No. 21.”

Asked to justify the size of his staff during such tough economic times, Maltese launched into a defense of his aides and their diverse experience.

“Senator, there you go again,” Addabbo retorted, channeling Ronald Reagan. Previously, though, Addabbo had promised to have his staff man a 24-hour hotline for emergencies if elected.

After the debate, Albert Baldeo and David Quintana, a local blogger, stood out

in the parking lot, trading opinions.Baldeo, an attorney who came within

800 votes of defeating Maltese without party support in 2006 (thus putting the senator on the endangered list), expressed no regrets about pulling out of this year’s race and endorsing Addabbo.

“Did you notice how Senator Maltese evaded those questions?” Baldeo asked, already in post-debate spin mode. But he quickly fell silent as Maltese and his wife strode past on the way to their car.

“Have a good night,” said Maltese, smiling.

* * *The next day found Maltese pulling

out the big guns. Here was Mayor Michael Bloomberg (Ind.), who two years previous was so at odds with Maltese that he tried to recruit Addabbo to run against him then.

But that day, Bloomberg, desperate to keep the Senate in Republican hands, stood shoulder-to-shoulder with Maltese at the entrance of the Christ Tabernacle Church in Glendale, greeting a stream of costumed children and their families.

Hundreds had shown up for the church’s extravagant Halloween celebration, complete with special effects, a booming techno soundtrack and synchronized dancing.

Maltese and Bloomberg shook hands and posed for pictures with a parade of Supermen, Iron Men, Batmen, princesses and even one giant banana.

“Are you going to be okay?” Bloomberg muttered under his breath to Maltese amidst the hand shaking.

“I think so,” Maltese whispered. He suddenly fl inched as the Grim Reaper approached. “I don’t want this guy near me,” the 76-year-old said, laughing.

One young girl dressed as Catwoman approached the two men warily. Turning to her friends, she said, “Which one is the mayor?”

Inside, Bloomberg took the microphone for the formal endorse. But fi rst, the mayor dared the kids to guess his age, then his mother’s age and then Maltese’s age.

“Nobody remembers how old he is,” Bloomberg said. “But he’s been a state senator for 20 years! Is that right? I can’t even count that high!”

[email protected]

On a Losing Night in Queens, an Aging Community Grapples with a Cultural ShiftBY SAL GENTILE

State Sen. Serphin Maltese was exchanging tearful hugs with supporters when an aide handed

him the phone. It was fellow Sen. Kemp Hannon, of Nassau. He was calling to commiserate.

The two men, who came into the Senate together two decades ago, have been fi xtures of Albany politics and lions of the Republican Senate. But on Nov. 4, they were powerless to resist

the moment, to gird against the tectonic shifts that toppled one of their careers and endangered the other.

Phrases like “insurmountable” and “tidal wave” sounded throughout the clustered Republican headquarters in Queens, commingling with the historic proclamations echoing from television sets at each end.

Hannon survived. Maltese did not. Raw emotions fl ashed as supporters—

Italian immigrants and baby boomers—grappled with the cultural signifi cance

of the moment: Barack Obama and Malcolm Smith, two African-American men in their 40s had swept away, in just one night, an era of power and infl uence for a community that has come to defi ne Queens for generations.

Even an election-day appearance by former Mayor Rudy Giuliani, celebrated in the once-dominant Italian-American enclaves of the outer boroughs, was not enough to turn back the tide. The sheer volume of fi rst-time voters—African-Americans, Hispanics and young people—

propelled to the polls by the candidacy of Barack Obama, overwhelmed the district’s traditional ticket-splitters.

* * *There were fl ashes of anger and

outpourings of despair as Maltese’s supporters mourned the erosion of their political identity. An aide tried to calm a distraught supporter, standing behind the senator before a live interview, as she exclaimed that she would not accept Obama’s victory. Another shot back at

Continued on page 8

“I go way back with the Addabbo family,” said Sen. Charles Schumer, who talked about being mentored by Joseph Addabbo’s father in Congress.

In Final Days of Tipping Point Race, Addabbo and Maltese Pulled Out All Stops

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Maltese when he said he looked forward to working with his opponent, Joseph Addabbo, saying, “You look forward to working with them—I don’t!”

As the curtain fell on an historic campaign, they were being shuffl ed off the stage—and it was unclear how they would ever make their way back.

Beyond the cultural moment, there was a broader political narrative snaking its way through the grim faces and tangled limbs of despondent supporters: The Republican Party’s traditional power base was withering away, a gradual decline hastened by the unlikely circumstances of the presidential election. The outcome was, by all accounts, unsurprising.

Aides to the Senate Republican Campaign Committee, for example, said party leaders had been predicting for nearly a year and a half that the fl uctuating demographics of Hannon’s district, anchored by Garden City and Farmingdale, suggested it was only a matter of time before Hannon loses his seat, too. But nobody has been eyeing a replacement.

The same goes for Sen. Caesar Trunzo, the 82-year-old Republican who lost his Suffolk seat to Brookhaven Town

Supervisor Brian Foley. Trunzo barely assembled a campaign, and managed only a limited schedule of public appearances in the run-up to the election.

Even Maltese, historically a popular fi gure in his district, had been mulling retirement, he told Hannon during their conversation. After discussions with former Majority Leader Joe Bruno, he decided to stay on to help the Republicans retain control of the Senate.

“We’ll have to reorient ourselves, take a look at the entire

Senate,” he said of the party’s outlook, in an interview.

* * *He made the rounds of

the cramped headquarters, trying to ease the heartbreak

and lift the pall that had settled over the room.

He opened a victory cake, urging people to eat it. He leaned

in and whispered words of assurance, telling people, “we’ll recover.”

But he and his fellow Republicans continued to grapple with the inevitable consequences of a surreal and historic collapse, as results from the rest of the state streamed in.

As he stepped away from a live television interview, during which he told a reporter he was “hopeful” the Republicans would retain the Senate, he was confronted by yet another anxious supporter.

“Is the majority gone?” she asked.He laughed and, in a hushed tone,

gasped, “Yeah.” [email protected]

MalteseContinued from page 6

Mayor Michael Bloomberg joined State. Sen. Serphin Maltese for some Halloween campaign.

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$1.6 Billion Dollar SolutionHow to keep valued services without raising new taxes

STATE'S FISCAL BIND:In a televised address to New Yorkers, Governor Paterson recently reported that the state's fiscal condition is far worse than anyone had previously acknowl-edged, and called for drastic cuts in spending including reducing the state workforce. He has described our current condition in terms of a Depression.

BLOOMBERG URGES ACTION:New York City Mayor has urged Governor Paterson to start collecting taxes on Indian sales of cigarettes to non-Indians in order to generate the additional rev-enue needed to avoid another increase in Big Apple bus and subway fares.

In a New York Post 08/04 article, TAXING INDIAN BUTTS, written by Mayor Bloomberg and Long Island Congressman, Peter King of the Home LandSecurity Committee states, “For years, the state has refused to collect taxes on cigarettes sold to non-residents of Indian reservations - despite a 1994 USSupreme Court ruling that states have the right to collect these taxes. Failure to collect the tax not only hurts public health, it hurts the rest of the state's small businesses, who must sell cigarettes at far higher prices. Worse, there'sreason to believe that tobacco smugglers are funneling profits from Indian reservation sales to terrorist organizations overseas…As the city and state both strug-gle to balance budgets in the midst of the national economic downturn, it has become all the more urgent to collect these revenues and put them to good use.

Governor Paterson’s Response:He would like to collect the lawfully due excise and sales taxes from the suppliers of cigarettes to Indian stores for resale to non-Native Americans,but rather than ruffle feathers plans to engage New York’s tribes in new rounds of negotiations. None are under way! For 17 years there have been protracted, fruitless and disingenuous negotiations on this subject. The state’s losses have mounted predictably witheach incremental raise in taxation, further enriching a few Indian cigarette sellers and their lobbyists. We have repeatedly witnessed fabrications ofnon-existent treaties, false claims of sovereignty and in general, stonewalling. Each week that Paterson delays is costing New Yorkers $30 million,(See below). Why??

The Math:The Office of the Budget and Department of Tax estimate that the State excise tax from the taxed sales of cigarettes will be $1.320 Billion.

State Excise Tax: (48 million cartons x $27.50) = $1,320,000,000City Excise Tax: (14 million cartons x $15.00) = $210,000,000Average Sales Tax: (48 million cartons x $5.00) = $240,000,000

-------------------------$1,770,000,000

Using National demographics of cigarette consumption and New York tax rates, New York consumers are estimated to smoke 100 million car-tons. By Government ‘biting the bullet’ and collecting the taxes on Native American sales to non tribal members as prescribed by law andincreasing our enforcement of tax collection, we will tax 90 million of the 100 million cartons this year.

The New MathState Excise Tax: (90 million cartons x $27.50) = $2,475,000,000City Excise Tax: (30 million cartons x $15.00) = $450,000,000Average Sales Tax: (90 million cartons x $5.00) = $450,000,000

---------------------------$3,375,000,000

Arthur H. KatzExecutive Director

NYSAWMD[NYS Tax Agents]

Alexandra PopePresident

Local Union No.805International Brotherhood

of Teamsters

Ralph BombardlereExecutive Director

NYS Association of ServiceStations & Repair Shops

[Convenience Stores]

Kevin BeyerPresident/CEO

Long Island Gasoline Retailers Association, Inc.

• $1,605,000,000 will be added to our tax rolls.• Criminal and Terrorist cigarette funding will

be decimated.• Our State Laws will be enforced as intended.• New York Business and our economy will be uplifted.

• Fairness and a level playing field will be restored.• Valued State and City Services will continue to be

funded.• Loss of union and non-union jobs will be contained.

This Solution is a ‘no-brainer’! COLLECT THE TAX AS PRESCRIBED BY LAW!!!


Foley’s Two-Pronged Formula for Success: Big Box Stores, and Barack ObamaBY SAL GENTILE

Brookhaven, Long Island, andthe 50 or so working-class hamlets

that comprise it—places with names like Shirley and Yaphank—are mostly grids of intersecting highways dotted with shop-ping centers and big box stores. Great stretches of nothing space them out, with quiet neighborhoods tucked into pockets along the Long Island Expressway.

Brian Foley, the Brookhaven Town Supervisor, is doing some “visibility” fi ve days before the election. Not many people here know they have a town supervisor, or who he is. Not many people know he’s running for State Senate, or that there is even a race.

* * *Foley has a rotating network of staff-

ers and volunteers pegged to highly traf-fi cked locales—like the King Cullen, a lo-

cal grocery chain. They rotate every so often, carrying fresh bundles of literature to their next assignments.

Most of the people who pass in and out as Foley and his staff hand them glossy placards touting Foley’s pledge to reign in “Big Oil,” among oth-er promises, remain silent. They

know about Barack Obama—but who is Brian Foley?

But they know even less, Foley’s

aides insist, about the incumbent, long-

time Republican Sen. Caesar Trunzo. The area

has seen many changes over the years—the de-

mographics have shifted as more ethnic minorities

move out of the city to its suburbs— but its politics have remained static.

* * *Trunzo enjoyed union support—bring-

ing pork back to his district as a member of the majority—but he has mostly kept his head down. Going into the election, he had not spoken on the fl oor of the Sen-ate in two years.

He did not put much of a campaign to-gether, either. Asked if the senator would be holding any public events the week-end before the election, an aide would not say no, but made clear that this was the answer. Instead, the aide said, Repub-lican-friendly union workers would act as stand-ins, courting voters, knocking on doors.

Foley, meanwhile, held consecutive weekend rallies with Attorney General Andrew Cuomo (D) and Gov. David Pat-erson (D).

Told by a reporter of a rare Trunzo sighting—a ribbon-cutting, not a cam-paign event—an aide to Foley looked in-credulous.

“What Trunzo event are you going to?” he asked.

Trunzo’s absence on the campaign trail provided all the more opportunity for the Foley campaign to drive up their candidate’s name recognition and asso-ciate him, as much as possible, with the Democratic brand that has seen a resur-gence in Brookhaven as Ronkonkoma and surrounding hamlets became more working-class.

So Foley and his volunteers pile into a four-door sedan and rumble down William Floyd Parkway, hitting a series of high-traffi c sites dotted along the highway: a Pathmark in the morning, William Floyd Elementary school at about 2:00 p.m., and King Cullen an hour later.

* * *As they navigate the patchwork

of highways, they pass by a series of “Obama-Foley” signs tacked to telephone polls and fl ickering in the crisp October wind.

At each location, Foley meets up with a stationed volunteer—most are on loan from other county legislators in the area—and leaves at least one behind.

At the King Cullen, Josh Slaughter, an aide to Kate Browning, a Democratic member of the County Legislature, mans the post.

(The legislature is controlled by Dem-

These Are Challenging Times For New York And Our Nation.CSEA is part of the solution,not the problem.On the job, CSEA members across the state work hard in good times and bad, to deliver essential services thatNew Yorkers depend on. Off the job, CSEA members help improve our communities, supporting numerous organizations and causes with time, talent and money.

And CSEA members pay our fair share of taxes too!

Fiscal responsibility has always been a CSEA priority. In fact, in every contract CSEA negotiates across the state we find better ways to get the job done, avoid costly injuries, save taxpayers money and add value to the workplace.

In recent weeks we’ve also offered elected officials a number of additional money saving ideas for the immediate budget crisis..

The nearly 300,000 members of CSEA will continue to do our fair share.

CSEA is urging Gov. David Paterson,state legislators, and all local officials across New York to find a fair balance that protects services and keeps people working.

A Positive Force Throughout New York State For Nearly A Century.

THE CAPITOL NOVEMBER 2008 11www.nycapitolnews.com

ocrats, a tectonic shift in Suffolk, where Republicans ruled until 2005. There is even one member of the Working Fami-lies Party, which is making inroads here and came out in force for Foley.)

Slaughter wears large, dark sunglasses and a fi ve o’clock shadow. Campaigning in these last frenzied days, with everyone aware that this district would determine control of the State Senate—a fact that

fi red up Foley’s volunteers even more—has taken its toll.

Slaughter says he rarely encounters anyone who says they plan to vote for Trunzo. Occasionally someone will de-

clare him or herself a Republican, or ex-press disdain for Barack Obama.

But nobody at these big box stores, shrines of the working class, seems to be for Trunzo.

Slaughter hands some literature to one man pushing a cart full of groceries who gives him the kind of response he lives for.

“Brian is a friend of mine,” the man says, “I’m voting for him!”

When Foley and his aides return to headquarters, Slaughter stays behind and digs in. He knows the last fi ve days will be a long, hard slog.

“He’s been representing the area for 36 years,” he says of Trunzo. “I think he just doesn’t have the energy it takes to do the job anymore.”

[email protected]

State Senator-elect Brian Foley (above) campaigned relentlessly in the 50 working class hamlets that com-prise Brookhaven, riding Barack Obama’s coattails in a traditionally Republican district.


Stumping in Familiar Territory, Padavan Promotes Squirrel Removal and Personalized Pillboxes

BY CLARK MERREFIELD

Despite a recent wave ofstatewide support for Democratic candidates, Sen. Frank Padavan

(R-Queens) campaigned the last week of October in comfortable territory. Perhaps that is what may have almost cost him the seat he has held since 1972.

Padavan appears to have narrowly edged out Council Member James Gennaro in one of the closest contests of the 74-year-old senator’s political career, but talking before the election, he radiated confi dence. Between campaign stops two days before Halloween, Padavan said his internal poll numbers suggested he was “doing rather well.”

“My district is very sophisticated,” Padavan said. “They vote for the person, not the party.”

* * *Padavan’s fi rst stop on Oct. 29 was

with a panel of 16 single seniors at the Samuel Field YM & YWHA in Little Neck, in a spartan, beige-colored multi-purpose room.

“Senator Padavan has helped a lot of people in this neighborhood,” one woman said during the meeting.

Padavan sat legs crossed knee-over-knee in the center of a long table in the middle of the room. The toughest question came early, when Padavan was asked about what the seniors should expect from the current fi nancial downturn.

“We’ll get through this,” he said, avoiding specifi cs.

Other questions meandered from an alleged wave of Halloween lawn decoration thefts to the senator’s successful campaign to bring Access-a-Ride, a free transportation service for disabled people, to Little Neck.

“Now, they’re not going to pick you up to meet your boyfriend for a date,” Padavan said. “Or your girlfriend.”

The seniors chuckled. Padavan, who several times during the hour-long meeting referred to his local accomplishments, later reminded the group of the time he got a call from a vexed constituent with a dead squirrel on her property. Padavan, donning the role of charismatic pseudo-hero, got in his car, black garbage bag in hand, and removed the squirrel himself.

Soon, though, Padavan and the seniors were out of talking points, and the senator was off to speak as the featured guest at the St. Mary’s Church Golden Age Club Halloween party.

* * *Padavan pulled into the parking lot of

St. Mary’s Elementary School in Flushing in his dark green Ford Explorer SUV at about 2 p.m., parking in a somewhat illegal spot and nearly knocking over an orange traffi c cone. He got out and opened the backseat door, and grabbed a box full of Padavan-endorsed shopping lists and medication cases bearing his

campaign slogan: “Nobody Cares Like Frank.”

After a few minutes of searching

for the Halloween party—it was across

the street, in the actual St. Mary’s Church—

Padavan opened a pair of glass doors and walked

down a long wheelchair ramp into a vast basement

gymnasium. Hundreds of seniors sat at tables with

bright orange plastic tablecloths, each with a center array of roast beef and turkey sandwiches, potato salad, cole slaw and Cokes. Padavan sat at a table with Bill Balla, the club’s president, and six others.

The conversation at Padavan’s table turned to the weather, Padavan’s birthday, which was on Halloween, and the origins of his last name—but rarely did it turn political. The purpose of Padavan’s appearance, it seemed, was to put in face time with supporters and remind them to vote, but not necessarily to discuss the issues.

“He looks younger than his pictures,” one woman whispered.

* * *A few seniors in the room at St. Mary’s

wore costumes. One wore operating room scrubs and another wore a sombrero and poncho. Most, though, were dressed in sweaters and slacks.

After a short while, Balla asked Padavan to say a few words. Padavan wiped his mouth and walked behind a lectern set up in the front of the room, near the wheelchair ramp. He said it was

good to be there and thanked the Golden Age Club for having him.

“You’ve got a surgeon over here in case anyone falls down,” Padavan joked, “and a Mexican bandit to steal your money.”

The speech was brief, and when he fi nished Padavan worked the crowd. He posed for pictures and placed a comforting hand on a few shoulders.

“We love you,” one senior told him, again summing up the general mood of the room.

cmerrefi [email protected]

State Sen. Frank Padavan shmoozing with the St. Mary’s Church Golden Age Club two days before Halloween.

CLA

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It is Election Night, and hundreds of Addabbo’s supporters are gathered at Russo’s on the Bay, a banquet hall in southern Queens. The party is several hours in, the pasta buffet is starting to get cold and all eyes are on Buddy for the news.

“He just got a call from ex-Senator Serf—”

Buddy never gets to fi nish his sentence. What Democrats have consistently referred to as the tipping point—the race that would decide which party controlled the State Senate—offi cially tipped at 10:33 p.m. when Sen. Serphin Maltese (R-Queens) called Addabbo to concede.

The crowd at Russo’s screams in joy. The race is over. It was not even close.

In Midtown Manhattan, Democrats celebrating at the Sheraton Hotel already know that Brian Foley has defeated Sen. Caesar Trunzo (R) in Suffolk County. When word reaches them of Addabbo’s victory, the implication is clear.

“The New York State Senate is now under Democratic control!” Gov. David Paterson (D) declares to a deafening swell of cheers and applause.

Forty years of a divided State Legislature, undone in just one day.

The following day, in a hot, crowded corner of the capitol, Malcolm Smith (D-Queens), the Senate majority leader-

in-waiting, emerges from a one-hour meeting with his members to face a changed world.

Senate Democrats will bring the state into the 21st century, Smith boasts. They will work with Paterson to trim the budget during the upcoming special session, work with Republicans to repair the economy and work to reform the rules of government to distribute power more evenly between both parties.

“This is day one of a new Albany,” says Sen. Jeff Klein (D-Bronx).

After answering a few questions, the Democrats scurry back to their meeting, while their aides linger in the hallway, reveling in the moment.

“We’re in the majority now!” one staffer brags to a friend. “Gonna buy new clothes, new haircut, new everything!”

Welcome to blue New York.

A new Albany indeed.The New York Legislature has

been divided longer than any other state government. But as it stands now, New York rivals Massachusetts as one of the bluest states in the union. Democrats control both houses of the Legislature and all statewide offi ces for the fi rst time—minus a few months—in 70 years. Enrolled Democrats outnumber Republicans by 2 million voters. Only three Republicans

remain in the 29-member New York congressional delegation.

As Senate Democrats begin moving their furniture into larger offi ces and start looking to hire more staff, the economy threatens to spoil the victorious mood. The budget defi cit is projected to grow to a staggering $47 billion over the next four years. Paterson is asking for $2 billion in cuts to education and Medicaid, setting the stage for some vicious fi ghts between the old guard and the new one.

Senate Democrats are using the spotlight to stress their commitment to fi xing the economy. Socially progressive issues—gay marriage, rent control, Rockefeller drug law reform—will have to wait until it becomes less politically dangerous to take them up, they say.

“Clearly there are other issues we’d like to work on,” said Sen. Tom Duane (D-Manhattan), who sponsored a bill that would legalize same-sex marriage.

Assembly Democrats, meanwhile, are eager to get the ball rolling on those exact issues, considering that they have been

languishing under a divided legislature for so long.

“It’s kind of daunting to think about it,” said Assembly Member Joseph Lentol (D-Brooklyn), who said he is eager to get cracking on universal healthcare, transit upgrades and a bill that would address wrongful convictions. “Now maybe we can put the cart before the horse and talk about real improvements.”

All told, the budget defi cit provides Democrats with a good cover for what is actually a very tenuous hold on state government. Gov. David Paterson (D) is still trying to recover after being dealt a blow by the resignation of his most trusted aide, Charles O’Byrne, over unpaid income taxes. And looming in the background is his own re-election in 2010.

Smith also is trying to get his bearings. With just a two-seat, razor-thin majority, most of his attention recently has focused on wooing wavering members of his conference in the hopes of staving off any defections to the Republicans.


toWelcome

New YorkBLUE

Democrats control Albany

for the fi rst time in 70 years, but

can they fi x everything fast enough to stay

in power?

he fi rst to know is Buddy Addabbo, grinning in a shark gray suit.“Joe’s on the phone,” Buddy says into a microphone, referring to his

brother, Joseph Addabbo, a Council member running for State Senate.T

If Silver and Smith decide to strike out on their own, Democrats may end up proving

that a unified government can be just as dysfunctional as a divided one.


This leaves Assembly Speaker Sheldon Silver (D-Manhattan) holding most of the cards. All “three men in the room” may now be Democrats, but Silver is the one that has been there the longest.

But Silver, whose majority in the Assembly grew to an unprecedented 109 seats after Election Day, rejected the notion that he is now primed to dictate the legislative agenda.

Silver was clear that socially progressive policies would move more quickly through the Legislature than Senate Democrats may feel comfortable to admit.

“I’m looking forward to a very socially progressive agenda,” Silver said. “I think it will come on a faster timetable.”

Silver added: “A lot of it will have nothing to do with the economy.”

The speaker said he is aware that pressure will increase on his members in terms of policymaking. In a divided legislature, the Assembly often passed one-house bills, such as the bill legalizing gay marriage, which had no hope of clearing the Republican Senate. But now there is likely to be less, Silver said, calling it a fair price to pay for unifi ed control.

But Silver could be wrong. If baby-stepping Senate Democrats are reluctant to vote on liberal Assembly bills, the Legislature may continue to churn out

one-house bills, further deepening the perception that Albany is dysfunctional.

Ken Gordon, a state senator from Colorado, knows something about balancing the power within the party. As the majority leader in the Colorado State Senate, Gordon oversaw the transfer of power in both houses from Democrat to Republican in 2005, the fi rst time in decades.

“When you’re in the minority, you have this common goal to get into the majority,” Gordon said. “And when you’re in the majority it does tend to become factionalized between moderates and liberals.”

In New York, Republicans are well aware of the shaky unity in the new Democratic-controlled Legislature. Seeking to capitalize on that, the GOP is arguing that a government run by big-city Democrats will pour cash into downstate at the expense of upstate and the suburbs.

Sen. Charles Schumer (D), a key ally to Democrats in Albany, does not bifurcate New York into upstate and downstate, preferring to divide the state into nine regions: the North Country, Central New York, Finger Lakes, Western New York, the Southern Tier, Capital Region, Hudson Valley, New York City and Long Island.

During the campaign, Senate

Democrats condensed Schumer’s nuanced vision into the theme of “One New York,” with the promise to treat all regions of the state equally.

But while Democrats won in Long Island and New York City, they fell short in practically all of the key upstate races, denying Smith the super-powered majority he wanted so badly.

Democrats all over the state were sure that former boxer Joe Mesi’s bid for the Senate seat in Erie County was in the bag. But County Legislator Michael Ranzenhofer, buoyed by a Republican edge in enrollment, beat him by almost 10 points.

Before the election, upstate Democrats were hopeful that the message of one New York would resonate with voters living in communities that were suffering from massive job losses and a stagnant economy. They pushed hard for candidates like Mesi, Kathy Konst and Richard Dollinger, fully aware that a one-party state could mean more money for upstate economic development.

But the money will be diffi cult to come by in the near term. Senate Democrats are tossing around ideas like $1,000 tax credits to businesses for each job they create. But to close a billion-dollar budget gap, Democrats may fi nd themselves in the unenviable position of having to remove jobs from upstate, through prison closings and other controversial actions.

Several special sessions were scheduled before January, when Paterson will preside over the new power dynamic for the fi rst time. How successful he is depends on the

willingness of Silver and Smith to follow his lead. If they decide to strike out on their own, Democrats may end up proving that a unifi ed government can be just as dysfunctional as a divided one.

There are other lessons for New York Democrats out west in Colorado. After Democrats took control of

both houses of the General Assembly in 2005, Bill Ritter (D) was elected governor, giving the party complete control of the whole state for the fi rst time in 40 years.

Gordon, the Senate majority leader, said that an effective government under one-party rule depends almost entirely on the party leaders—the majority leader, the speaker and the governor. If the majority party marginalizes the minority party—as Democrats wanted to do to Republicans in Colorado after languishing in the minority for years—than they would also be marginalizing the voters, Gordon advised.

After inheriting control of the government in Colorado, Gordon said that Democrats set out to try and fi nd money for those programs that suffered under Republican rule.

But budget realities and a vocal Republican minority conspired to prevent Democrats from pushing through many meaningful changes.

“In terms of labor and environmental matters, the Democrats have moved in a direction that the Republicans didn’t before, and would not have had they been in power,” said John Straayer, a political science professor at Colorado State University. “They’re doing as well as they can given the budgetary circumstances.”

There is no need to travel so far west, though. Albany has been here before.

In 1971, New York had a billion-dollar budget defi cit, an economy in crisis and a state government under control of one party. Gov. Nelson Rockefeller (R) called both houses back to Albany for a special session to discuss budget cuts and new sources of revenue. Back then, Republicans controlled all the levers of government.

Even with a $1.5 billion budget defi cit, Rockefeller’s urgent plan for $427 million in new and increased taxes was met with indifferent shrugs from his fellow Republicans in the Legislature.

The lack of urgency felt by Republican leaders in the Assembly and Senate forced Rockefeller to cross party lines and reach out to minority members for assistance. He met Assembly Minority Leader Stanley Steingut (D-Brooklyn) in the hallways of the capitol to discuss how

many Democrat votes he would need to pass his fi scal package.

Assembly Member Richard Gotfried (D-Manhattan), who was in Albany for four years while Republicans controlled all three chambers, said that there are key differences between one-party control then and now.

“Regardless of which party is in control, the New York State Legislature is a much more assertive body, independent of the governor regardless of party, than it was back then,” he said.

In 1973, Rockefeller presented the Legislature with a package of restrictive drug laws, but Republicans demanded he loosen some of the harsher provisions. After agreeing to some compromises, Rockefeller was able to overcome the objections of both the powerful Conservative Party and Mayor John Lindsay to pass the toughest drug laws in the country.

(Ironically, the drug laws, the last major policy initiative of an all-Republican government, may be the fi rst thing to go under an all-Democratic one.)

Rockefeller was often successful in bending GOP lawmakers to his will. But the notion that Democrats today will be marching in lockstep with Paterson is laughable, Gotfried said.

“A Republican governor could go to

“I’m looking forward to a very socially

progressive agenda,” Shelly Silver said. “I think it will come on

a faster timetable.”

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a Republican legislature and say, ‘We’re all supposed to work together,’” Gotfried said. “But if a Democratic governor were to say that, we’d all kind of roll our eyes and say, ‘Yeah right.’”

At the Sheraton on Election Night, Smith singled out a select few for special acclaim.

“We’re going to make people like NARAL proud,” he said, referring to the national pro-choice organization. “We’re going to make the Working Families proud, Tenants PAC, we’re going to make sure the friends who have been with us for years—32BJ, who was there when nobody was with us!”

The subtext of Smith’s shout-outs was that in a new Albany, there would be new infl uential voices. For years, powerful groups like 1199/SEIU, the New York State United Teachers, Civil Service Employees Association and the United Federation of Teachers devoted a bulk of their cash and membership to keeping Republicans in control of the Senate. Now they are likely to fade into the background, while others emerge to take their place.

Mike Fishman, president of 32BJ, which represents over 50,000 building service workers in New York, said he is confi dent that the union’s choice to back Smith’s efforts to fl ip the Senate will pay off before long.

“We made a conscious choice that

we would play big in this election and make big things happen,” Fishman said. “And I think the success has borne out our choices. That means we can do some bigger things.”

Top of the list for 32BJ is reforming Industrial Development Agencies (IDA) to ensure health and wage benefi ts for workers, Fishman said. And even though the economy is tanking, Fishman said

his union is counting on Democrats overhauling the health care system in New York.

Developers and business partnerships—allies of the Senate Republicans—have long opposed IDA reform, arguing that it would saddle businesses with expensive regulations and higher labor costs.

No group was counting on Democrats coming out on top more than the Working Families Party (WFP). The pro-labor organization lent candidates like Foley and Addabbo its powerful ground operation, leaving Democrats deeply indebted to the

party for its electoral victories.For Dan Cantor, the party’s executive

director, that leverage is a good start towards re-altering the political landscape in New York.

“Long-term, it’s about creating a new social contract,” Cantor said. “We are now going to use the brains God gave us a little more intelligently.”

Cantor said he understood that

Democrats would have a tough time pushing through any tax increases in the next session to address the budget gap. But down the line the party is expecting Democrats to take up many of the WFP’s hallmark causes—paid family leave, a tax on millionaires and campaign fi nance reform.

But Cantor is tempering his optimism. After all, this is Albany he is talking about.

“It means that things that shouldn’t be that hard, won’t be that hard,” like raising the minimum wage, he said. “But that the things that are hard”—the

millionaire’s tax, paid family leave, etc.—“will still be hard.”

Democrats say they are mindful of the lessons of 1965, when the party had control of the Senate for less than a year. The Party barely had

enough time to elect its leaders before the GOP regained the majority and then redrew the legislative districts, ensuring their long-term control.

Democrats will have the opportunity to redraw the district lines themselves if they manage to stay in power beyond 2010. Even though Democrats are hammering the need for reform in government, they make no mention of an independent redistricting panel, leaving open the possibility for future gerrymandering.

There are also discomforting national trends to consider, said Tim Storey, an election analyst at the National Conference of State Legislatures. Dating back to the 1930s, every midterm election sees the party in the White House lose seats in state legislatures.

If New Yorkers do not see noticeable improvements in terms of the economy and job creation, the party in charge may see some pushback in 2010, Storey said.

But in this bluer-than-most state, the most shocking result of the election may be how little things will change. Paterson is asking legislators to make more budget cuts, setting up the possibility for a protracted battle between the Legislature and the interest groups that support them. Smith continues to struggle to bring new members and more conservative Democrats into his fold. Silver, the consummate backroom power broker, remains as inscrutable as ever.

Meanwhile, after suffering a humiliating election, Sen. Dean Skelos (R-Nassau) has said that while his conference may have gotten smaller, his members will only grow louder as they fi ght to maintain balance in Albany.

A governor struggling. Democrats infi ghting. Republicans promising obstruction. If anything, voters can be forgiven for seeing a new, bluer New York that looks remarkably similar to the old New York.

But for Hank Sheinkopf, the strategist who ran the Senate Democrats’ messaging during the campaign, change will come, but it will come incrementally.

“Democrats have to make the credible argument that they are sharing the pain with everyone else and they are leading the state out of the wilderness,” Sheinkopf said. “Can they do it? Can Barack Obama do it? Can anybody do it?”

Until those questions can be answered, Sheinkopf said, Democrats can only do what they have been in the days since the election: talk big and act in charge.

“Be truthful with the voters,” he advised, “help them understand that expectations may be high but problems are huge, and get them to enlist in what almost is going to be portrayed as a crusade to save the state.”

[email protected]

Things did not run completely smoothly, but the last time the state was controlled by one party—the Repub-licans—they did manage to put up the LOB.

“Can they do it?”asked Hank Sheinkopf.

“Can Barack Obama do it?Can anybody do it?”


BY SAL GENTILE

New York Republicans are deep in the wilderness.

Starting now, they have two years to fi nd their way back.

Republicans roundly agree that it will be a diffi cult undertaking, and they face an array of challenges: weak leadership, a nonexistent ground game, a toxic political climate and shifting demographics.

Not to mention the lack of candidates. As one senior Republican who has run for statewide offi ce put it, there is considerable “dry rot” in the party’s ranks, which leaders will have to fl ush out if they hope to mount a comeback.

All of those factors have helped Democrats build inroads into traditionally Republican enclaves, like Long Island and Queens. And the Democrats have their eyes on two more prized Republican strongholds: the seats of State Sens. Frank Padavan, of Queens, and Kemp Hannon, of Nassau, where largely unknown, under-funded candidates mounted surprisingly strong challenges this year. As of press time, Hannon and Padavan led their Democratic opponents by narrow margins.

In the case of Hannon, Republicans have been fretting over demographic trends—the predominantly African-American Hempstead portion of his district has grown—for close to two years. Some Republican senators have even said privately that it was only a matter of time before he lost his seat.

So Republicans, now, have to regroup. And at breakneck pace, if they expect to rebuild for 2010.

“We have to actively, actively recruit, and

not just rely on the same ‘old boy network,’” said Rep. Pete King, a Nassau Republican who has been mentioned as a possible gubernatorial candidate. “And if there’s some places where it looks like an incumbent can lose, for whatever reason, then ease him out and bring in somebody else.”

King recalled the tack congressional Democrats, led by Rep. Rahm Emanuel

(Ill.), took after Republicans gained seats in both the House and Senate in 2004.

“The day after the election in 2004, [Emanuel] went out into every congressional district around the country where the Democrats had a chance, and he actively, actively recruited. And he got candidates who worked in that district, so he was running pro-life, pro-gun Democrat candidates, he was running radical left wing Democrats, whatever it took to get elected,” King said.

Republicans say the groundwork for such an effort is already underway. They plan on targeting Democrats in at least three linchpin Senate districts across the state: Andrea Stewart-Cousins, of Westchester; Suzi Oppenheimer, also of Westchester; and Toby Ann Stavisky, of Queens.

Stewart-Cousins and Oppenheimer were key targets for the Republicans this time around, but in both cases, their candidates—Yonkers City Council Member John Murtagh and Larchmont Mayor Liz Feld—fared poorly. Nonetheless, Republicans see them as their best hopes in 2010.

A third, less obvious choice is Stavisky, a longtime Democrat from Flushing. She was challenged this year by Peter Koo, a Chinese immigrant who owns a string of pharmacies in Flushing. His ties to the Asian-American business community

allowed him to raise a sizeable war chest, and he managed to win more than 30 percent of the vote with almost no help from the state party. Republicans see the burgeoning infl uence of the Asian-American community there as an opportunity to build inroads into an untapped ethnic community.

But retaking the Senate will be, by all

accounts, a Herculean task. For one, the Republicans have no reservoir of power from which to raise money. Building a war chest to rival the Democrats’ without control of a single branch of government—or even one statewide offi ce—will prove diffi cult.

Second, the axis of the state’s political world has shifted considerably over the past few years. Republicans, eager to maintain ties with interest groups that have fi lled their coffers, have often found themselves defending infl ated spending measures, while Democrats have seized the mantle of sound fi scal management.

That reversal, Republicans say, spells trouble for their party’s brand, which has come to resemble in many ways the caricature they use to paint of the Democrats.

“The Republican Party has not distinguished itself from the Democrats,” King said. “The lines are getting blurred. And in an election like this, when the tide is going one way, why not go with the real Democrats rather than the pretenders?”

For years, Democrats have carefully and methodically plotted a takeover, chipping away at the Republicans’ majority in vulnerable pockets of the state, where they have nurtured fl edgling candidates and built extensive ground operations.

The Republicans, on the other hand, have forged unnatural and politically awkward alliances that yielded short-term gains but crippled the party in the

long run.In 2002, for example,

Gov. George Pataki won the backing of infl uential unions, such as 1199/S.E.I.U., the health care workers union, by pledging to support pro-union policies and protect spending measures that benefi ted labor, such as billions of dollars in pay increases for hospital employees and teachers.

That marriage of political convenience may have temporarily helped the party retain control of the Senate and governor’s mansion—the unions

have donated hundreds of thousands of dollars to

Republicans since 2002—but in the long run, Republicans say, it put them on shifting and unfamiliar terrain, making it diffi cult to stake

out positions that were distinguishable from those of the Democrats.

“The beginning of the end was really in 2002,” said one Republican operative who has worked for the state party.

Since then, Republican leaders have been so reluctant to risk their fragile Senate majority that former Senate Majority Leader Joe Bruno once urged party donors to contribute to candidates for Senate rather than Assembly.

That failure to build from the bottom up, Republicans now say, was dangerously short-sighted and set in motion the gradual atrophy of the party’s so-called back bench: there are now only 41 Republican members of the Assembly scattered throughout the state, and whole swaths of downstate regions with endangered Republican Senators—such as Hannon in Nassau and Padavan in Queens—without Republican Assembly members to replace them.

Reversing the long-term effects of those decisions in the span of just two years will be a grueling task, Republicans say. Others write it off altogether, urging party leaders to recalibrate for the long-term: shed the party’s muddled ties to special interest groups, restock the ground operation with fresh reserves of volunteers and cultivate talent at the local level.

“We’ll have to reorient ourselves, take a look at the entire Senate,” said Sen. Serf Maltese, of Queens, as he exchanged tearful hugs with supporters in his cramped headquarters on election night.

He spoke to Hannon on the phone about the loss of the Senate and offered a last gasp of optimism.

“Hopefully,” he said, “two years from now, we’ll take another shot at it.”

[email protected]

For Republicans, a History of Missteps, and an Uncertain FutureParty looks back at union ties, infi ghting—and toward rebuilding

Republican leaders were so reluctant to build from the bottom up—and so concerned

about the fragile majority in the Senate—that they urged major donors to give to can-didates for Senate rather than the Assembly.

That approach dangerously crippled the party’s so-called back bench.


Breaking Bread With the New LeaderThree days after Democrats took the majority

in the State Senate, apparent incoming Majority Leader Malcolm Smith joined City

Hall and The Capitol for an On/Off the Record breakfast sponsored by Finklestein, Newman Ferrara LLP and held at the TD Bank on 42nd and Madison in New York City.

In his fi rst at-length interview since the election, Smith discussed many topics, including his views on the leadership struggle within his conference, some specifi c items on the agenda aside from budget cuts, and why he believes having a wife named Michelle is the secret to success for political advancement.

Q: It’s been quite a week. Can you sum up what this week meant to you as an American, as a New Yorker, as a Democrat, as a New York state senator, as an African-American? A: This was a memorable week. It actually brought back to mind some things that my father used to say to me when we were growing up, and he used to always say to me, you know, “No matter what happens in life, just know: if you keep your faith, if you maintain your integrity and your honesty with people, they will trust you and believe in you,” and I say that because I believe what happened with Barack was just that. Against all odds, a senator, then a U.S. Senator, and now President of the United States of America, the greatest country in the world—I believe a lot of that had to do with how he got there, and I believe the same is true of myself in terms of my colleagues, in terms of what I represent to them and, hopefully, what I will represent to each and every one of you in this audience, that I pledge to you as I pledge to my colleagues and my friends that I will always be honest with you, I will always tell you what we can and cannot do—but most importantly, we’re going to need all of your help, because it’s a very challenging time for this state, but it’s always a time laced with a lot of opportunities. So, this was a great week for me, one that I’ll remember. I must tell you, it probably won’t be the fi rst chapter in the book but it will be the largest chapter in the book.

Q: There has been a lot of speculation out there about the leadership situation. Why is it that it is still fl oating? Is it that this is just part of being a Democrat, that you can’t get everything together?A: I don’t look at it as fl oating out there. Listen, notwithstanding present company and some of my other friends, you know, you’re reporters. You have to sell newspapers, you have to sell, so you write stories that are exciting and titillating and causing people to pick up the paper.

Q: It looks like a 32-30 margin, at least for the moment. Do you think the close divide will be a problem for governing? Dean Skelos has pledged that the now-Republican minority will be a very vocal minority. Do you think that’s going to be a problem at all, and what will you do as leader to get around that?A: Well, vocal is good. And I will tell you, I don’t know if they can be any more vocal than we were in the minority. We were very vocal. But there will be bipartisan activity in this Senate. Whether you’re a Democrat, Republican, conservative, independent, rank-and-fi le members will have input in committees, they will have the ability to move bills throughout the fl oor, and we have no problem,

and I will have no problem, working with them. I think that is part of why the state has its challenges today. We allowed ourselves to be so divided as opposed to recognizing that, you know, we have a lot of intellectual resources around the state, from Watertown to Suffolk County, and when we don’t use them we have what we have now: an upstate economy that over the last eight years has lost over 195,000 manufacturing jobs, 47,000 people have left the upstate region. And I think what we will learn from this chapter in New York State is that we have to diversify our portfolio as it relates to how we use your tax dollars. We put a lot of our eggs in one basket down at Wall Street, and that’s a good thing. I had a nice ride in Wall Street, for a while. But what we learned is that now that Wall Street, which will never be the same again, has faltered, the rest of the state, the upstate cities, have no ability to assist us in making up for that loss of revenue. So we are going to change that. We will never, and I stress, we will never be in this situation again.

Q: Budget is priority number one, but can you tell us where your feelings are about passing gay marriage and legalizing gay marriage in the state?A: Well, I support gay marriage, and everybody knows that. But we have a job in front of us that, it won’t matter if we don’t rebuild the economy of this state. If we don’t bring jobs back here, if we don’t get businesses to understand that we can offer some incentives to them, whether by virtue of tax credits for job creation, I think we won’t manage to keep the people in this state. So, our priority right now is rebuilding the New York state economy. We have to deal with a budget defi cit that you all know has grown, we have a projection of about $1.66 billion, the department of budget has it slightly less than that, and the state, the Assembly has one a little bit less than that. So we have to deal with that fi rst, and once we build this economy, we build your faith that we can right-size the State of New York’s government and get us moving again—nothing else matters.

Q: But why are decisions on that and other issues mutually exclusive to doing things on the budget? Is it possible to function on doing the budget things and then doing the other issues at the same time?A: There are a number of other issues. There’s paid family leave, there’s campaign fi nance, there are a number of other issues that we’re going to address. What I am simply saying is that the budget is critical to us,

and that’s our number-one issue. We will have committees, maybe have members, they will be reviewing a number of pieces of legislation. Business will go on. But I’m just telling you right now, as a body, our focus will be on this economy, and what the committee chairs will do, they will do within their committee. Any bill, as you know—legislation has to go through a process. The budget is going to go through a legislative process, but it’s one that’s done by the whole body.

Q: For years, the excuse for why things did not move quickly in Albany was that there was a divide in the government. Either the Assembly or the Senate wasn’t in the same hands as the governor. Will the budget

situation be the excuse now for why other things do not get done and why there is not faster movement on other issues in Albany?A: No, I wouldn’t say that the budget would be the only reason why. I mean, let’s put it in perspective. For 40 years, barring nine months, which is 70 years, we were in the minority. We now have 45 to 50 days to get ourselves ready for that. We have been getting ourselves ready. Last year, as you reported, we began to train ourselves to be chairpersons, we started training ourselves to deal with the media, fi nancial issues, so I believe we are ready to move forward. However, we now have to deal with a transition. And I’m not sure if the transition will be a friendly transition. I don’t know if the Republicans are going to give all the information at the right time that we need. They may have landmines out there so that they make the Democrats look strange. So, you have to also be aware of that as well. We know that our interest

is the people of the state, and restoring your faith that government is working for you. What we don’t know is where everything is, so you’re defi nitely going to have to give us some time.

Q: Back in July in The Capitol, we did a cover feature we called the Obameter, and asked a number of consultants to say what they thought of some of the members of the New York State Senate compared with the president-elect who, all of four years ago, was a state senator himself. We have one state senator who’s our president-elect, we have another state senator who’s the governor of New York. What do you see in your own political future?

A: Well, let me, I’m going to give you, I’m going to give all of you the inside track. And this is a secret just between us: Barack Obama, state senator, now president, David Paterson, state senator, now governor, Byron Brown, state senator, now mayor of Buffalo, Malcolm Smith, state senator now soon-to-be majority leader. The one thing we all have in common? All of our wives are named Michelle. So, the idea is, fi nd a Michelle and you’re good to go. C

I’m not sure if the transition will be a friendly transition. I don’t know if the Republicans are going to give all the

information at the right time that we need. They may have landmines out there so that

they make the Democrats look strange.

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BY ASSEMBLY MEMBER JAMES BRENNAN

The most immediate majorinfrastructure issue confronting the

Legislature is funding for the Metropolitan Transportation Authority (MTA) capital plan. The mass transit system is the lifeblood of the metropolitan area and the economy of the City and State. Mass transit delivers nearly two million people a day to the Manhattan central business district. The economy could not function without the mass transit system. However, the MTA needs a new recurring source of money for its operation above and beyond the fare, and a dedicated revenue source to meet its capital needs. No system of this size can be sustained without constant need to repair, replace and extend its infrastructure.

During the congestion pricing debate, the city and the MTA estimated that the transit agency faced a shortfall of $15 billion in funding for subway, bus and commuter rail projects over the next fi ve

years. About half of its planned projects have no identifi ed sources of funding. A Commission chaired by Richard Ravitch

will report to the Legislature in early December on ways to fi nance the agency’s capital needs. The MTA also faces an operating defi cit that will exceed $2 billion a year within the next two years.

Governor David Paterson has announced that the state will confront a $12.5 billion defi cit next year, and $47 billion over the next four years, as a result of the rapid contraction of the economy, with New York City predicted to lose 165,000 jobs, many of them high-paying jobs in the fi nancial industry. New York State, New York City and the MTA face extremely severe fi nancial problems, but they can be met and addressed.

I am recommending a four-pronged plan to deal with the state’s problems, similar to the steps we took in 2003. We need to borrow $3 billion or use reserves of that amount, $3 billion in tax increases, $3 billion in spending restraints and $3 billion in additional Federal aid. The MTA’s fi nancial issues should be linked to the resolution of the

State’s problems with a similar design. The MTA should get a piece of the pie in each of these components to address its capital and operating defi cits.

Lacking in the equation above would be a recurring source of revenue for the bulk of the MTA’s capital plan. The Legislature made a mistake in not enacting the congestion pricing program and should revisit that issue. The link between public transportation and congestion pricing is incontrovertible. Congestion pricing is a rational answer, even though it is unpopular.

As we address the crisis in defi cits caused by a recession, we must make sure that solutions to the MTA’s problems are not overlooked in the hard choices we will make. In diffi cult economic times such as these, rebuilding our infrastructure is one of the best investments we can make.

James Brennan, a Democrat

representing parts of Brooklyn, is the

chair of the Cities Committee in the

Assembly.

ISSUE FORUM:TRANSPORTATION & INFRASTRUCTURE

BY COMMISSIONER ASTRID GLYNN

At a time when world fi nancial markets are in crisis, infl ation is

making commodities less affordable and New York State is facing a growing budget defi cit, our transportation infrastructure is at a crossroads. These circumstances demand a new direction.

New York State’s aging roads, bridges and public transportation systems require signifi cant work and investment to keep them in good repair. Our state has some of the oldest transportation infrastruc-ture in the nation, and some of the most heavily punished by weather and use. Yet mobility, economic development, quality of life, energy security and environmental sustainability all hinge on safe, reliable, effi cient transportation.

At this critical juncture, as state and federal offi cials struggle with their bud-gets, the decisions of governmental lead-ers in setting transportation priorities must focus on two objectives: reaffi rming the value of effi cient transportation and establishing new ways to fi nance a safe, reliable system.

Our state budget is being squeezed by declining revenue and rising expens-es. We face a growing defi cit expected to reach $12.5 billion next year and $47 billion in four years. At the same time,

both the American Association of State Highway and Transportation Offi cials and the National Surface Transportation Policy and Revenue Study Commission are recommending that transportation investments double from current levels. Against that backdrop, high fuel prices and rising demand for construction mate-rials worldwide are shrinking the value of our transportation dollars.

Compounding our state challenges are the enormous economic and fi nancial diffi culties confronting the federal gov-ernment, key partners in supporting our transportation investments. The Highway Trust Fund, which funds the nation’s high-ways and bridges, was insolvent in Sep-tember. It took an $8 billion emergency infusion to meet an anticipated shortfall. Long-term resolution of federal support for vital infrastructure projects rests with ongoing discussions about reauthorizing the nation’s fi ve-year transportation fund-ing legislation, which expires next Sep-tember.

The struggle to make these invest-ments is a symptom of a bigger problem affecting both New York State and the federal government, however. Our fund-ing strategy is at odds with contemporary energy and environmental goals.

Transportation is a major culprit in cli-mate change. The transportation sector is

responsible for 34 percent of the world’s greenhouse gases and 80 percent of its petroleum use, the largest contributor in each of those categories. Our policies and actions need to address that by reducing emissions from transportation, encourag-ing changes in vehicles, technology, land use and infrastructure while also expand-ing the use of fuel-effi cient modes, such as transit and rail.

At the national level, though, revenues that fund about 85 percent of highway and nearly 80 percent of transit invest-

ments are generated by fuel taxes. At the state level, nearly two-thirds of the high-way funding and about one-quarter of the transit funding are linked to fuel-related taxes.

Ironically, as Americans consume less fuel by driving less and shift their demands to transit, rail, carpooling and more fuel-effi cient vehicles, less gas tax revenue is generated to fund transporta-tion projects. That means when we suc-ceed in our efforts to curb global warming and move towards energy independence, we pay a fi nancial penalty in the form of less funding for highways, bridges and transit systems.

Transportation funding mechanisms need to be revised. As we work to balance economic development, environmental sustainability and energy independence, we need to look beyond the gas tax. With Governor David Paterson’s support, we are making that case. Momentous deci-sions are before us. The direction we take must meet today’s needs and provide a fi nancing structure that will reliably sus-tain our transportation system in the fu-ture. Anything less won’t get us where we need to go.

Astrid Glynn is the commissioner of

the New York State Department of Trans-

portation.

In Diffi cult Economic Times, the Best Decisions Are Infrastructure Investments

State and Federal Funding Decisions Must Support Safe, Effi cient Transportation

The Publication for and about New York State Government



BY REP. JERROLD NADLER

There has perhaps never been a more critical and oppor-tune time for major federal in-

vestment in transportation. Transporta-tion and infrastructure projects on a large scale are the most effi cient means we have for mass job creation and the most effective catalyst for an economy in crisis. With a downward fi nancial spiral whose end is still unknown, New York City and State may experience a sharper recession than other parts of the country. It’s in this context that we in government and transportation planning have begun to discuss the next major federal transportation bill, a topic that will be of paramount focus in the House Transportation and Infrastructure Committee, on which I am the senior Democrat from the Northeast.

It has been said that the fed-eral transportation bill is to New York what the farm bill is to Iowa. Crafted originally in 1991 by Sena-tor Daniel Patrick Moynihan and others, the bill’s most recent re-authorization was in 2005 under the name “Safe, Accountable, Flexible, Effi cient Transportation Equity Act: A Legacy for Users” (SAFETEA-LU). SAFETEA-LU authorized $286 billion in guar-anteed funding to the states for highways and transit and will ex-pire in October 2009.

Though I had fought for a larger fund-ing package, the program was generally quite effective for New York State. We were able to start important new initia-tives, such as Safe Routes to Schools, Se-nior Transportation Programs and funding for a new title within the bill—Projects of National and Regional Signifi cance—while at the same time maintaining our core highway and transit programs. For-mer Congressman Sherry Boehlert and I—along with Senators Chuck Schumer and Hillary Clinton—were able to ensure that New York received more than $16.5 billion for transportation and infrastruc-ture programs. We also secured more than $10 billion for highway programs, nearly $6.5 billion for mass transit and $100 million for the Cross Harbor Rail Freight Tunnel—a critical rail project on which I’ve worked for 30 years—to link Brooklyn and Long Island with the na-tional rail network.

Also, and most signifi cantly for New York, we were able to prevent major changes to the effective SAFETEA-LU funding mechanism which maintains an

equitable funding formula for more urban-ized states. For each gas-tax dollar that a state contributes, the state is guaranteed a minimum percentage back. States that receive more than they contribute in gas taxes are called “donee” states and those that receive less are called “donor” states. It is a mistake, however, to base a state’s highway funding solely on the amount of gas taxes collected in that state. New York has also invested a tremendous amount in mass transit and, therefore, buys less gasoline. We should not be punished for our energy effi ciency.

Furthermore, maintaining mass transit systems is costly and New York needs its share of federal transportation funding to improve its aging infrastructure and extensive mass transit systems. Other states ought to be encouraged to invest in mass transit and purchase less gasoline as well, and I fi rmly support a formula that distributes funding based on need and not just fuel consumption rates. We must continue to guarantee adequate funding for our energy-effi cient and mass transit-dependent states, thereby rewarding fuel effi ciency and conservation.

For next year’s authorization, it is critical that the entire New York Congres-sional delegation work as a team, along with other elected offi cials, planners and transportation advocates, to ensure that New York secures its fair share of trans-portation dollars. This bill could be one of the key elements to our state’s recovery from the mounting recession.

Jerrold Nadler, a Democrat represent-

ing parts of Manhattan and Brooklyn, is

a senior member of the House Transpor-

tation Committee.

ISSUE FORUM: TRANSPORTATION & INFRASTRUCTURE

Transportation and Infrastructure Projects Are Most Effi cient Means for Mass Job Creation



After almost 100 years in the shadows, the New York Liquidation

Bureau is looking forward to a little sunlight.

The agency, which manages impaired or insolvent insurance companies in New York, issued its fi rst audited fi nancial statement in late October. The analysis came back clean, showing the bureau, whose assets exceed $3 billion, to be operating in an open and transparent way.

For Mark Peters, the special deputy superintendent in charge of the agency, the message was clear.

“If you’re going to operate a major public safety net, which is what we do,” Peters said, “you got to let folks see it. You got to let them kick the tires.”

Peters’ desire for full transparency is understandable considering his predecessor, Johanna Hall, was indicted for steering a contract to a company that employed her husband and using agency money to pay for travel expenses and child care.

With that in mind, Peters came on board in August 2006 with the charge of cleaning up the agency, auditing its fi nancial history and rebuilding the senior management. He also set out to attract more media attention with the hope of bringing more scrutiny to

the bureau’s operation. “You can’t protect people and hide from

them at the same time,” he said. When the American International

Group (AIG) defaulted on Sept. 16, Peters’ efforts to modernize the liquidation bureau suddenly took on new signifi cance.

If AIG had gone under, the corporation’s subsidiaries—mostly smaller insurance fi rms—probably would have become insolvent. The liquidation bureau then would have been called in to manage those fi rms, Peters said. But the federal government decided to intervene and bail out AIG.

“We would have been very busy,” Peters said.

Gov. David Paterson and Insurance Superintendent Eric Dinallo made sure to stabilize the effects AIG’s collapse would have on local businesses, Peters said. But had things gotten worse, the bureau would have been ready to step in.

The economic crisis presents other challenges for the agency.

Dinallo said that during tough economic times, small and mid-sized insurance fi rms have more diffi culty staying solvent. Modernizing the liquidation bureau, which would step in to manage the assets of those struggling insurance companies, helps consumers feel confi dent that their

money is safely invested. If consumers lack confi dence, they pull their money out, causing companies to go bankrupt.

All of which serves to underscore for Dinallo what Peters has been able to accomplish.

“What they’ve done in 18 months is freakin’ unbelievable,” he said. “I talked to legislators, I talked to lawyers, I talked to private side investors, I talked to major hedge fund CEOs, all say the same thing, which is: the place is transformed.”

Peters credits his government, private sector and political experience in helping him turn the bureau around.

Peters said he fi rst learned of the importance of transparency in government while working under then-Attorney General Eliot Spitzer as the chief of the Public Integrity Unit. There, he met Dinallo, who was head of the securities bureau at the AG’s offi ce.

Peters also ran for Brooklyn district attorney in 2005, coming in a distant third place. The experience of running for offi ce, however, was instructive, he said.

“When you’re running for offi ce, you’re going out to the public and saying, ‘Please trust me to do the job for you,’” Peters said. “When you’re running this agency, what you’re doing is saying, ‘I’m managing your insurance and your money. Let me make

sure you understand how I’m doing it.’”Going forward, Peters said he intends

to continue his mission to make the liquidation bureau more open to the public. But whether Dinallo’s suggestion to change the name of the agency should be on the agenda may take some more thought.

“It should be more like the ‘Rehabilitation Bureau,’” Dinallo said. “Or does that make you think it’s a bunch of people with substance abuse problems?”

[email protected]

What Happens in Louisiana Stays in LouisianaBoudreaux v. State of LouisianaDecided by: Court of Appeals, Oct. 28

In 1981, the State of Louisiana constructed a new bridge for Inter-state 12 in Tangipahoa Parish, 30 miles north of New Orleans. Two years later, heavy rains caused the Tangipahoa River to fl ood, leaving numer-ous local homes deep under water. By building over the natural fl oodplain for the river, the I-12 bridge acted as a dam for the rainwater creating an upriver Atlantis.

The fl ooded homeowners sued Loui-siana for negligent bridge construction and won, but the state has refused to pay the $92 million judgment for the past 25 years. Having failed 18 times to collect the money in Louisiana courts, the hom-eowners came to New York and tried to attach assets owned by Louisiana located in the Empire State. Manhattan Supreme Court Judge Ramos dismissed the suit and the Appellate Division affi rmed, cit-ing comity to Louisiana courts.

The Court stated there was no reason for New York courts to provide a judg-ment in this case because the problems were confi ned to Louisiana: “[t]he rights of New Yorkers are not involved in this matter at all.” Still, this statement raises an interesting question: whether the re-sult would have changed had New York-ers been involved. Would the Court treat

the Full Faith and Credit Clause with the same deference if the Louisiana legis-lature had decided only not to pay New Yorkers hurt by the damages?

Keeping a Friend and the Benefi tsGraev v. GraevDecided by: Court of Appeals, Oct. 21

From 1997 until 2004, Lawrence Graev paid his ex-wife Linda $10,000 per month as a condition of their divorce agreement. In the fall of 2004 he stopped paying, cit-ing a provision in the divorce which al-lowed him to terminate at the time Linda engages in “cohabitation ... with an unre-lated adult” for 60 consecutive days. In-deed, Lawrence had hired a surveillance team to obtain proof his ex-wife had been cohabiting with another man. When pho-tographs showed that Linda had stayed overnight with a gentleman in her Con-necticut vacation home for 60 straight days during the summer of 2004, the $10,000 payments ceased.

Linda fi led suit one month later to en-force the agreement, arguing that the rela-

tionship with the gentleman was platonic and, hence, not cohabitation. Because the divorce agreement did not defi ne the term, the New York courts were called upon to decipher the meaning of cohabitation in the New York Domestic Relations Law. The lower courts settled on a defi nitive meaning that required more than just sex-ual intimacy, but shared expenses and a shared residence as well. Linda, who was not living with the gentleman, was not co-habiting under this interpretation.

But the Court of Appeals reversed, saying cohabitation is defi nable only on a case-by-case basis. The court wanted to know how the parties interpreted the word on the day they signed the divorce. This result is perplexing, as one dissent-ing judge noted, for not only does it foster more litigation between divorcees, but it undermines the primary purpose of hav-ing a written agreement—to have a clear explanation of the rules. For anyone with a similar provision in a New York divorce, the prospect of longer and costlier court battles is becoming a reality.

Up All Night in RochesterAnonymous v. City of Rochester Decided by: Appellate Division, 4th Department, Oct. 10

After several nighttime murders of ju-veniles between 2001 and 2005, the City of Rochester implemented a curfew prohibit-ing those under the age of 17 to be in a pub-lic place from 11:00 p.m. to 5:00 a.m. Certain exceptions were created if the minor was with a parent, on a school-related duty, or in

public exercising a fundamental right (such as free speech). Thomas Anonymous (the last name of a minor is not given in court cases) fi led suit to declare the Rochester ordinance unconstitutional as a violation of the Equal Protection Clauses of the U.S. and New York Constitutions. Anonymous ar-gued that it illegally differentiated between minors and adults for no valid reason.

The Appellate Division in Rochester agreed and declared the statute unconsti-tutional as a violation of equal protection, the First Amendment and the fundamen-tal right of free movement. Controver-sially equating the discrimination against minors with the discrimination against racial or religious groups, the appellate court said that the State had no compel-ling purpose for enacting a curfew. The court found that minors had just as much interest in meeting in pubic with friends and moving about at will as adults do, and the ordinance inhibited that right.

Still, the opinion is plagued with an in-consistent application of legal standards and odd logic, such as the court’s conclu-sion that free speech is impinged because minors are denied access to public forums for approximately one-fourth of every day, despite the fact that the statute contained an exception permitting this behavior. The opinion drew a strong dissent from two judges, meaning Anonymous is headed to the Court of Appeals and Rochester’s cur-few may not be gone for long.

—James McDonald

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POLITICS • POLICY • PERSONALITIES


The Way to Reach Elected Officials

Look who’s readingThe Capitol...

Mayor Michael Bloomberg did agood job of reigniting the debateover term limits in New York City

last month before deftly disposing of theopposition in one of the fastest legislativeprocesses ever to occur in municipal gov-ernment. There were and still are manyopposed to the change, including severallocal members of the Assembly and StateSenate—most notably Hakeem Jeffries andEric Adams, though people like RubenDiaz, Jr. and Kevin Parker joined thecharge as well. Naturally, this led some inthe term limits extension camp to ask thenext reasonable question: if they are willingto fight for term limits for city officials, whynot support similarlimits for state offi-cials?

Well, some said,the opposition wasto the means, notthe ends: theyabhorred the idea ofterm limits, butabhorred the idea of legislatively tweakinga charter provision created by referendumeven more. Jeffries has since introduced ahome rule bill that would prevent thechange from taking effect without a refer-endum, and there is reason to believe thatthe legislation might have some legs if thespeaker and new majority in the Senatedecide to flex their muscle as one of thefirst acts of Democratic dominance. Thereare certainly enough personal factors inplay to imagine that they will at least betempted to get in the mix.

But the most respectable response tothose asking the questions at the New YorkCity Council’s Governmental OperationsCommittee hearing came from Adams. Yes,

the freshman senator said in his testimony,they had a good point, and he was indeedplanning to back a bill with AssemblyMember Karim Camara to institute termlimits for the Legislature.

That is exactly the right thing to do.Having term limits in place in New York

opened up the process to people who oth-erwise would have been largely shut out,many of whom arrived with importantideas. Sure, the ticking clock motivated alot of arguably premature jockeying forother positions, but this proved to be exact-ly what was necessary to motivate city gov-ernment into intense action. Sure, term lim-its kicked out a lot of good people in 2001

and was on the verge of doing so again in2009, but they also kicked out a fair amountof mediocre people, and—more important-ly—gave more good people a chance toserve, working as an effective way torecruit top leaders into civic engagement.

The argument voiced most often againstterm limits in New York City, however, isthe strongest argument for having them inAlbany: they make institutional memoryimpossible. In a state government whichhas been effectively complacent about let-ting problems ride for years and which hasbeen known to let good ideas fall by thewayside because they conflict with the sta-tus quo, institutional memory is something

we could use a lot less of in the halls of theCapitol.

With fewer and fewer competitive elec-tions for the Legislature, especially in theAssembly, the democratic check onencrusting power is all but gone, makingterm limits the only way to scrape out peo-ple who have been in their seats for far toolong. Granted, they would at the same timeremove some very good long-serving mem-bers, but that is the price we would pay fora measure that could truly do some good inchanging state government and the state asa whole.

With the two-year terms currently inplace, limits of four or five should give leg-

islators enough time tolearn the ropes but notenough time to sacrificethe energy and momen-tum which needs to bebrought into state gov-ernment. Taken togetherwith an independentredistricting commis-

sion, a real campaign finance system andrules changes which would open up com-mittees and the process of bills coming tothe floor, this is an agenda all 212 legisla-tors should support.

Responsible leadership would be actingentirely against basic self-interest to insti-tute these massive changes in the state.After a year of campaign promises andhigh-minded rhetoric, Democrats nowhave the opportunity to show that with fullcontrol of Albany, they actually can andwill be able to transform the state govern-ment from the worst-ranked in the countryto something better. Any of these would bea good way to start. All of them would bethe revolution that we need.

EDITORIALThe Changes We Need, Starting with Term Limits

BY STATE SEN. JOSEPH GRIFFO

Presidential elections should be atime when the entire nation is gal-vanized into action through a

vibrant democracy because every citizenhas a voice in setting the nation’s direc-tion for the next four years.

Sadly, that is not the reality. By lateOctober, 12 to 15 swing states are allthat matters in presidential campaigns.Much of the nation is shunted into redor blue piles. We in New York know howit feels to be treated as if we were polit-ically irrelevant: an entire state and itsvoters are ignored by one party andtaken for granted by the other. That’snot the democracy I want to leave as mylegacy to the future. I want to help cre-ate a vibrant new democracy thatsparks activism instead of abetting apa-thy.

The National Popular Vote Bill canchange that to ensure that the voice ofthe people is heard at every level of gov-

ernment. The National Popular Vote Billwould guarantee that the presidentialcandidate who receives the most votesin all 50 states will win the presidency.Isn’t that what common sense tells usshould happen in the first place?

Under the National Popular Vote Bill,instead of a winner-take-all setup thatgives all of a state’s electoral votes tothe candidate with the most votes inthat state, all of a state’s electoral voteswould be awarded to the presidentialcandidate who receives the most popu-lar votes in all 50 states and the Districtof Columbia. The legislation (in theform of an interstate compact) wouldtake effect only when enacted, in identi-cal form, by states possessing a majori-ty of the electoral votes—that is,enough electoral votes to elect aPresident (270 of 538). It’s a movementgaining ground. Bills to create theNational Popular Vote passed 11 legisla-tive chambers last year.

The current system does not serve

the people. According to research byNational Popular Vote:

Presidential candidates concentrateover two-thirds of their advertisingmoney and campaign visits in just fivevery close states, and over 99 percent oftheir advertising money in just 16 battle-ground states.

The spectator states in presidentialelections include nine of the nation’s 13most populous states (California,Texas, New York, Illinois, New Jersey,North Carolina, Georgia, Massachusettsand Virginia), 12 of the 13 least popu-lous states (all but New Hampshire) anda majority of the other states.

It’s not only big states. Idaho, Montana,Wyoming, North Dakota, South Dakotaand Alaska regularly vote Republican, andRhode Island, Delaware, Hawaii, Vermont,Maine and D.C. regularly vote Democratic.These 12 Sideline States together contain11 million people and have 40 electoralvotes. Ohio, with 11 million people and 20electoral votes, is a battleground, but the

11 million people in the 12 non-competi-tive small states are utterly irrelevant.

Elections are the cornerstone of ourdemocracy. There is nothing more impor-tant in the American system of govern-ment than elections that attract voters thatchallenge those of us who run for office todeal with all the people and all the issuesand that energize our system by attractingvoters to participate in the process. Thecurrent system of electing a presidenteffectively disenfranchises millions ofAmericans because they live in stateswhere one candidate or the other has asafe majority. At a time when Americaneeds its citizens to be involved in govern-ment and elections, we need to ensure thatevery vote counts and that the popularvote is the true measure of victory.

Joseph Griffo, a Republican repre-

senting parts of Lewis, Oneida and St.

Lawrence counties, is the outgoing

chair of the State Senate Elections

Committee.

National Popular Vote Would Give Power to the People, Rejuvenate Democracy

www.nycapitolnews.comPresident/CEO: Tom [email protected]/COO: Joanne [email protected] Publisher: Alex [email protected]

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Eric Adams is planning to back abill with Karim Camara to institute

term limits for the Legislature. Thatis exactly the right thing to do.

24 NOVEMBER 2008 THE CAPITOLwww.nycapitolnews.com

BY HON. JOSEPH BRUNO

There is no small irony that one ofthe world’s most sophisticatedcomputer chip manufacturing

facilities will be built in the State of NewYork under the umbrella of the FoundryCompany, recalling an earlier era ofmolten steel and iron men. It is an appro-priate designation since our past is stillteaching the present about how best toreinvent New York’s economic future.

The Foundry Company sits at the cen-ter of Governor David Paterson’s recentannouncement that a $4.6 billion invest-ment in high technology will be made atthe Luther Forest Technology Campus inSaratoga County. Two companies,Advanced Micro Devices (AMD) and itsinvestment partner, Advanced TechnologyInvestment Company (ATIC), combinedforces under the Foundry Company titleto create this new computer chip produc-tion facility, making it one of the largestprivate sector industrial investments inthe history of New York State.

This decision goes to the heart of how

the Empire State must continue to recastitself if it expects to remain a relevantpart of the 21st-Century economy, thistime as a leader in the digital InformationAge. The transformation is occurring at acrucial time because New York’s upstateIndustrial Age departed a long time agoand our downstate-based financial indus-try will take years to recoverfrom the current turmoil.

Yet dedicated history stu-dents will recognize that NewYork’s past is prologue.

The enormous investment inthe Foundry Company mirrors asimilar investment in our state’scommerce when New York State author-ized $7 million for the creation of the ErieCanal in 1825. That figure representsapproximately $10 billion in today’s dol-lars, a daunting cost then as now, as itrepresented three-fourths of the federalbudget of that era—and yet it would bepaid off within a decade as canal-relatedcommerce soared. One of the mostunderrated public-private efforts everundertaken in the history of New York, it

not only opened up the nation’s heartlandto trans-Atlantic trade but ensured thatNew York City would surpassPhiladelphia, Boston and every othereastern seaboard city as the most vibrantcenter of commerce in the United States.The entire state bloomed with its con-struction, and even the coming of the

railroad as a primary transportationartery couldn’t alter New York’s role as,truly, the Empire State.

Today, with its $4.6 billion dollarinvestment and 1,465 member work-force, the Foundry Company has themeans to surpass that historic chapterthrough its creation of cutting edge tech-nology-based jobs, expected revenuesand private investment. Equally impor-

tant, it will allow New York to reassert itsleadership in an area that will define ournation’s role in a digital world fordecades to come.

While the Canal was the victim of par-tisan posturing from the moment it wasproposed, the enormous potential oftoday’s state-of-the-art microchip manu-

facturing complex has quicklycrossed party lines. The cor-nerstone for this partnershipwas actually laid several yearsago when elected officials onboth sides of the political aisleagreed that New York Statewould seed this project by pro-

viding a $650 million capital grant to offsetthe construction and research and devel-opment activities for the project. Thiseffort also made eligible additional bene-fits through the Empire Zone program,which are currently estimated to totalnearly $600 million over a 14-year period.

Three different governors have recog-nized the strength of this public-privatepartnership, as did State Senate andAssembly lawmakers. Personally, I wasproud to propose it in the Senate and actas its champion because I believed then,as I do now, that New York has the intel-lectual and physical resources to domi-nate this field and thereby secure itsfuture. My successor, Dean Skelos, hasbeen no less an advocate.

This historic political consensusspeaks to a number of realities.

In the wake of Wall Street’s meltdownthere is no more time left for partisanposturing when it comes to staking out astrategy for regional economic growth. Ifyou expend your political capital onblocking a good idea because it wasn’tinvented on your side of the aisle, thenyou run the serious risk of presiding overa ghost town.

Further, it is no longer sufficient tobring government resources to bear oneconomic development if it doesn’t cre-ate genuine synergies throughout oureconomy. From our educational systemproviding a new generation ofresearchers, to subcontractors feeding infabricated materials to low-cost energykeeping the research and developmentcompetitive, government’s role is that ofexpediter and facilitator, allowing privateindustry to do what it historically doesbest in reinventing the future.

Joseph Bruno, the former State

Senate majority leader, is the CEO of

CMA Consulting Services.


After a long and steady decline, theNew York Republican Party hasfinally died. For one of the only

times in history, our entire state politicalpower structure is controlled solely byDemocrats.

The tragedy is the only people whodidn’t see it coming—or if they did, wereunwilling to do anything about it—werethe Republican leaders themselves. Foryears, they’ve whinedabout changing demo-graphics, a hostile nation-al environment forRepublicans, a biasedmedia. But rather thanreinvigorating theparty by articulatingcore principles andthen sticking by them, or welcoming inwomen and young people and legal immi-grants, Albany Republicans took thecoward’s way out.

They lived hand-to-mouth from elec-tion to election, with every man for him-self, selling off their principles one afteranother in hopes of perpetuating them-selves in office, while their party wentdown in flames.

Well, they’ve finally run out of princi-ples to jettison and they’ve finally beenjettisoned themselves. Good riddance.

If Albany raises taxes, it will be theDemocrats who do it. If Albany favorsNew York City at the expense of the sub-urbs, exurbs and rural areas, it will be theDemocrats who do it. If, in spite of ourdire economic straits, Albany increases

government spending and drives oureconomy into a ditch, it will be theDemocrats who do it.

So what are Republicans to do? Startworking together. Create an organizedopposition. Articulate a few core princi-ples and stick to them. Open upRepublican organizations around thestate to women, legal immigrants andyoung people and encourage them totake leadership positions in them. Fortoo long, we’ve taken the attitude thatwomen belong in the Women’sFederation, youth in College or Young

Republicans, anddifferent minori-ties in their ownRepublican clubs.We’ve cordoned

off the New York Republican Party as theprivate preserve of old, white males.

According to Orange CountyChairman Bill DeProspo, one of the mostenergetic and successful Republicanleaders in state, “The challenge is notwhat to do, but how do we do it.” If theNew York State Republican Party is tohave any realistic chance of being takenseriously, they have to look to qualifiedRepublican women to assume leadershiproles.

DeProspo speaks from experience. InOrange County, Republicans hold 75 per-cent of all elected offices and over one-third of those offices are held by quali-fied Republican women. Assembly mem-ber Annie Rabbit. County Clerk DonnaBenson and Family Court Judges Carol

Klein and Lori Currier-Woods have wonlandslide elections to office in OrangeCounty.

Republicans must also stop living inthe past and turn to the next generation.Hofstra College Republican PresidentSean Nabi, son of Iranian immigrants, hasbuilt an organization from the grassrootsby showing up at college events, invitingspeakers, talking to the media and beingpro-active in spite of Hofstra’s campusbeing overwhelmingly Democratic. Inless than a year, Nabi has grown HofstraCollege Republicans from just a handfulto hundreds of members.

Finally, it’s time New YorkRepublicans stopped being gloomy.New Yorkers are the most entrepre-neurial, innovative, creative people inthe country. Our forbearers were immi-grants who pulled themselves up bytheir bootstraps, whether it was in theAdirondacks in the 1700s or Lake Eriein the 1800s or Lower Manhattan in the1900s. Every time an industry in NewYork faded, we created new ones totake its place, from farming to shippingto manufacturing to banking to hightech. We’re not the kind of people whowant a hand out. We may occasionallyneed a hand up, but mostly we wantgovernment to create the conditionswhere we can do it ourselves.

If New York Republicans can capturethat sentiment, we can rise again. NewYork is the land where people reinventthemselves every day. So can the NewYork Republican Party.

OP-EDLessons from the Erie Canal for New York’s Future

welcomes submissions to the op-ed page. A piece shouldbe maximum 650 words long, accompanied by the nameand address of the author, and submitted via email [email protected] to be considered.

To Help the New York GOP Stand Again, Build a New Base

Dedicated history studentswill recognize that NewYork’s past is prologue.

K.T.McFarland


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State Budget DeficitsSu

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Texas

Kansas

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North Dakota

Nebraska

Louisiana

Wyoming

VirginiaWest

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$348.3million

Indiana $592.2million

$116million

$860million

$1billion

$547million

$272.8million

$2billion

$90.5million

$100million

California

$22.2billion

New York

$6.1billion

Florida$5.1billion

Washington

$3.2billion

Massachussets

$2.6billion

New Jersey

$2.9billion

Virginia

$2.2billion

Minnesota

$935million

Maryland$1.1billion North Carolina

$1.2billion

Nevada

$1.2billion

Ohio

$1.3billion

Illinois

$1.8billion

Georgia

$1.8 billion

CarolinaSouth

$804million

Tennessee

$768million

Arizona

$2.6billion

Wisconsin

$652million

Oregon

$500million

Michigan$472million

Alabama$1.2billion

Utah$354million

Iowa$350million

New Hampsihre

$310million

Connecticut

$450million

Rhode Island

$456million

Idaho

$174million

South Dakota$4.6million

Pennsylvania

$281million

Mississippi

$114million

Maine$124million Hawaii$162

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New Mexico$253million

Oklahoma

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Kentucky

$266million

Arkansas$107million

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Gov. David Paterson (D) is criss-crossing the state, stressing the urgency of closing New York’s $1.3 billion budget gap. But that fi gure does not take into account the defi cit before this year’s budget was adopted. Once that number is added, the budget defi cit balloons to a staggering $6.1 billion, according to the Center on Budget and Policy Priorities. That puts New York pretty deep in the hole-second only to California, the most populous state, which has a $10 billion defi cit. Texas, the second-most populous, has the largest sur-plus, at $2 billion. But that probably will not last very long. With oil prices sagging, oil-producing states like Texas, Louisiana and Alaska—all with budget surpluses—will likely see some of that excess revenue dry up. Though it is unlikely their defi cits will get much higher than New York’s.


Over the summer, Gov. David Paterson (D) began to put together a team to run the Empire State Development Corporation

(ESDC), fi rst appointing M&T Bank chief executive Robert Wilmers to chair the economic development agency. Two months later, he nominated former Citi executive Marisa Lago to be president and CEO.

Since then, Lago has been traveling to communities upstate and down in an effort to better acquaint herself with the state’s dire economic conditions. She agrees that times are tough for major development projects like Moynihan Station and Atlantic Yards, but sees opportunities for job growth and retention.

Lago talks about the search for a downstate chair, the need to improve infrastructure even during tough times, and the criticisms of Wilmers as a reluctant executive.

What follows is an edited transcript.

The Capitol: Were you surprised Governor Paterson asked you to take this position?Marisa Lago: I was actually very pleased to have been selected for a couple of reasons. I’m a New Yorker, I was born in Brooklyn, this is my home state. The other reason is that it is a return almost to family. I have been involved in economic development issues, so coming back and being able to serve again, this may sound Pollyannaish, but there is something about public service that is satisfying. The ability to give back. If you look at the current economic climate, some could say, “Tough time to be in government.” It’s actually at a time when government has to be effi cient and has to be more focused. But it’s also the time when government can do an awful lot of good.

TC: Getting back to public service, what can be done to improve the state’s current economic position? ML: Well, it’s forces that are far broader than Wall Street, New York City or New York State. But having said that, if you look at the pools that we have in respect to marshalling our resources and fi guring out which of the initiatives that are under way make sense to go forward even in the economic crunch. How do we invest now so that we prepare the ground, focus on infrastructure so that when the market turns around, when the economy turns around, we set the stage for development going forward.

TC: Should there be more of a focus on infrastructure?ML: I think that’s key. That’s a question that’s broader than just our state but is felt here as well. Infrastructure is a core factor of economic development. Think about it in a more rural area. Think about roadway access, water and electricity. In a city, like New York City, people think about subways. Now that’s one facet of it. The other facet is: where can we grow business? A quick focus on job creation, but also job retention. I know the governor is working cooperatively with [New Jersey] Governor [Jon] Corzine and I think that’s a recognition that we need to focus not just on job creation for the state, but the competition for the region isn’t just Jersey City or Stamford. It’s China and Penang.

TC: Are we going to be able to fi nish big projects like Moynihan Station and construction at Ground Zero?ML: What I think is what the governor has done with respect to the budget, which is you call it as you see it. Recognition for a very clear-eyed analysis of what the fi scal reality can take. Another thing I would mention is what the governor and the Port Authority have done with respect to Ground

Zero which is to take a step back and take a clear-eyed analysis of what can be done, and recognize that projects announced in a different time need to be looked at to see what can get done, even now in this climate. But let’s be realistic about what can get done.

TC: Are there projects that might have to wait until the economy rebounds?ML: Well, it’s dependent on the project. If you look at the history of the ESDC, especially in New York City, in transformational projects, it’s hard to imagine that it was blighted land that needed to be turned around. Look at 42nd Street, I’m still smiling from it because it would have seemed inconceivable—when as a teenager I came into the city in the early ’70s—that it would be where you would go with your family to see theater. And so if you look at the projects that we’re involved with today, they have the same transformative potential, but they also require the recognition that people build projects that aren’t built in one or two years. That requires the patience and also the wise, steady investment to, let’s say, rebuild city communities at a time over multiple years.

TC: So what’s your message? Be patient?ML: The message is invest for the future, take the long-term view. Be realistic.And you should understand you’re talking with someone who worked at the New York City Department of City Planning in 1983 on the Midtown West rezoning that was trying to, in what at the time seemed like a radical concept, to try and build offi ce towers over on the west side, and that might lead to a revitalization of 42nd Street. So, it’s odd that you would use the word “patient.” I am tremendously impatient. But there is also the realization that if you are engaging in this type of transformative power, one has to take the longer-term view and not be subject to the vicissitudes of today and tomorrow.

TC: Give me a technical understanding of the balance of power between you and Robert Wilmers.ML: To talk about it in corporate terms, he is the chair of the board of directors. We have a board of directors that is a combination of private-sector citizens who are volunteering their time and some folks who serve, such as the banking commissioner. Bob Wilmers is the chair of the board and he is also in his private-sector role in his paying job, chair and CEO of M&T Bank. The board sets policy directions and there are certain fi nancial obligations that must only be entered by the Corporation

after the board’s approval. Bob is a very active and involved chair, which is a huge boon for ESDC. What do I do? I run the place during the day.

TC: Are you still engaged in trying to fi nd a downstate president to complement Dennis Mullen as the upstate president?ML: Exactly, we’re actively engaged in the search, and the way I think about it, there are two key deputies who will be working with me statewide or using the resources of the ESDC statewide, but with different foci. Dennis Mullen heads upstate. He knows what it’s like to be a business person upstate. For the last couple of years, at the Greater Rochester Enterprise, he’s been involved in the private sector in a way remarkably similar to what the ESDC does.

TC: What sort of people are you looking for?ML: It’s premature. I don’t want to talk about the hiring process in public.

TC: When do you think you’ll be close to making a decision?ML: I won’t put a timeframe on it, but I’m eager. It’s a key deputy and we all know that organizations, corporations, don’t work around one person, it’s a team that drives it.

TC: How is this going to work better than it did in the past, when the ESDC was bifurcated into upstate and downstate chairs, without one person to oversee both?ML: I think because Governor Paterson has asked to work on a one-state basis and recognizing that the businesses in different parts of the state have different needs. It’s a function of them. I think the key difference is that the resources that ESDC has will be made available statewide rather than saying there is only going to be a team that works upstate and a separate team only working on downstate. Let me use this as an example: you are the owner of a winery on Long Island. Are you going to be more aligned with Goldman Sachs or are you going to be more aligned with a winery in the Finger Lakes?

And so, what the notion is that the team of experts that we have available, be they in Albany, New York or Buffalo, those are resources that are available to serve the businesses statewide, recognizing the specialty of the regional offi ces whose expertise is knowing the businesses in the region and with respect to the resources that are available upstate and down. I think it should be more effi cient.

TC: How will the strategy to revitalize the upstate economy differ from downstate?ML: The strategy for the programs available upstate is different. It’s not a major Moynihan Station-type development. The focus there is on the businesses that are the anchor of communities, and working with businesses that either are able to bring in new jobs or create jobs.

TC: What about the criticisms of Wilmers? Some say he hasn’t done anything since becoming ESDC chair.ML: Bob Wilmers is an active, engaged chair. It’s what one would want in a chair, which is someone who has the time, makes the time. We speak on a near daily basis and his knowledge of ESDC is invaluable.

—Andrew J. Hawkins

[email protected]

: Developing Agenda

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Documents

The Novermber 1, 2008 Issue of The Capitol