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8/22/08 Affairs and Appointments

8/22/08 Affairs and Appointments

New York City

New York State

Quotes of the Week

“I’ve had to establish in the past couple of months that I’m not the substitute teacher.  I’m the new teacher.”

Governor David Paterson, discussing his relationship with the State Legislature in an interview with the New York Times

“More than 100 years ago, a new statue standing tall in New York Harbor gave our nation its greatest symbol of freedom. In this century, that freedom is being undermined by dependence on foreign oil. So I think it would be a thing of beauty if, when Lady Liberty looks out on the horizon, she not only welcomes new immigrants, but lights their way with a torch powered by an ocean windfarm.”

Mayor Michael Bloomberg, from a speech at the National Clean Energy Action Summit in Las Vegas in which he proposed to increase New York City’s production of wind and solar power so that within ten years the City can get 10 percent of its electricity from renewable sources.

Policy of the Week: NYC Clean Energy

During a speech at the Clean Energy Action Summit in Las Vegas this week, Mayor Michael Bloomberg announced New York City’s first steps toward developing new sources of renewable energy, including off-shore windfarms.  Concurrent with the Mayor’s speech, the New York City Economic Development Corporation released a Request for Expressions of Interest (RFEI) seeking ideas for how New York City can harness more of its power from the sun, wind, and waves. In addition to off-shore windfarms, EDC expressed openness to placing wind turbines on top of New York City’s bridges and skyscrapers and the generation of tidal power, solar power and geothermal energy.

The Mayor’s proposal was greeted enthusiastically by many, but also skeptically by some who raised questions about much total energy the City can hope to derive from alternative sources, as well as about complicated logistics of placing wind turbines in New York City.  In response, the Mayor stressed developing more renewable power is a long-term initiative – but reiterated his goal that he believes it is realistic for New York City within ten years to get 10 percent of its electricity (between 5000 and 7000 megawatt-hours) from renewable sources.

Following the Mayor’s speech, Staten Island Borough President James P. Molinaro advocated Fresh Kills land fill as the perfect spot for a wind farm.  Mr. Molinaro argued that seven 400-foot turbines could generate 17 megawatts of energy, enough to power 5,000 homes.

Read the text of the Mayor’s speech here and watch his delivery here.

Download here a copy of EDC’s RFEI, “Identifying Opportunities for the Expansion of Renewable Energy in New York City”.

Read here for New York Times’ coverage of the Mayor’s renewable energy initiative here; for a Times’ story with skeptical comments from some architects and engineers, read here.

Read here a post from the Times’ City Room blog on Mr. Molinaro’s proposal to turn Fresh Kills landfill into a wind farm.

Interview of the Week: Governor Paterson with the New York Times

In an interview with Danny Hakim of the New York Times, Governor David Paterson discusses how the need to confront New York State’s fiscal troubles has prompted him to adopt a more commanding governing style.  The interview also discusses the Governor’s reaction to the first political ads aired against him, which criticize the Governor for allegedly proposing to reduce state aid to school programs.

Read the full interview here.

Interactive Tool of the Week: Hunger Maps for Free Summer Meals

At the Times’ City Room blog, Jennifer 8. Lee describes a new web tool from the New York City Coalition Against Hunger.  Read here.


Governor David Paterson this week nominated Marisa Lago, Global Head of Compliance at Citi Markets & Banking, as President and Chief Executive Officer of New York State’s economic development agency, the Empire State Development Corporation (ESD). He also nominated Dennis Mullen, President and CEO of the Greater Rochester Enterprise, Inc. (GRE), as Upstate President of ESD.  Read the Governor’s press release here.

This week Governor Paterson also announced the appointment of Allen P. Cappelli as a member of the Metropolitan Transportation Authority Board. Mr. Cappelli, of Staten Island, is currently working as an attorney in private practice.  Read here the Governor’s announcement of Mr. Cappelli’s nomination.

Governor Paterson this week convened a Council of Economic Advisors for New York State, modeled after the U.S. Council of Economic Advisors that provides economic advice to the President.  The council includes Robert Rubin, former United States Secretary of the Treasury and current Chairman of the Executive Committee of Citi, Roger Altman, former United States Deputy Treasury Secretary and current Chairman and CEO of Evercore Partners and Joseph Stiglitz, 2001 Nobel Prize Winner. The 18-member council met this week to review the current State budget and provide Governor Paterson with additional recommendations to address the fiscal crisis.

A list of the Council’s members, from the Governor’s announcement, is reproduced below:

Roger Altman, Chairman and CEO, Evercore Partners; Former U.S. Deputy Treasury Secretary

Bernard Anderson, Economist, Senior Fellow, Wharton School of Business, University of Pennsylvania

Richard Deitz, Regional Economist, Federal Reserve Bank of NY (Buffalo)

Blair Effron, Partner, Centerview Partners; former Vice-Chairman, UBS

Isaac Ehrlich, Chairman and Professor, Department of Economics, SUNY Buffalo

Kent Gardner, Ph.D., President and Chief Economist, Center for Governmental Research

Dan O’Flaherty, Associate Professor of Economics, Columbia University

James Orr, Assistant Vice President, Federal Reserve Bank of NY

James Parrott, Deputy Director and Chief Economist, Fiscal Policy Institute

Steve Rattner, Managing Principal, Quadrangle Group

Richard Ravitch, Principal, Ravitch, Rice and Company

Rae Rosen, Assistant Vice President and Senior Economist, Federal Reserve Bank of NY (NYC)

Robert Rubin, Director and Chairman of the Executive Committee, Citi; Former United States Secretary of the Treasury

Jerry Speyer, Chairman and CEO, Tishman Speyer

William Spriggs, Chairman and Professor, Department of Economics, Howard University

Joseph Stiglitz, Professor of Economics, Columbia University (Winner of the 2001 Nobel Prize in Economics)

Chris Varvares, President, Macroeconomic Advisors, LLC

Robert Ward, Deputy Director, Rockefeller Institute of Government

Governor David Paterson this week announced the resignation of Deputy Secretary of Education Dr. Manuel J. Rivera.  Duffy Palmer, previously the Assistant Deputy Secretary of Education, will serve as the Interim Deputy Secretary of Education.  Read the Governor’s announcement here.

E-Commerce Shrinking City’s Sales Tax Revenue

For Fiscal Year 2007, IBO Estimates that City Lost Out on $29 Million in Revenue Due to Uncollected Taxes on Internet Sales

This week New York City’s Independent Budget Office released a fiscal brief examining how the growth of Internet commerce has affected the City’s ability to collect sales taxes.  IBO found that the City’s tax base is likely shrinking as a result of many Internet merchants not collecting and remitting adequate sales tax. 

Key findings of the report:

IBO noted that in recent years the sales tax has comprised a declining share of total city tax revenues, as the chart below illustrates.  IBO emphasized that rising levels of untaxed Internet commerce was likely one reason for this decline (other reasons being the long-term shift toward purchase of services – which are generally exempt from City sales taxes – rather than goods, growth in personal income leading to greater revenues from income taxes, and the recent boom in business income taxes).

Read the full IBO Fiscal Brief here; read Crain’s New York Business coverage of the IBO analysis of E-Commerce here.

Mayor Bloomberg Announces Tentative Agreement with the Patrolmen’s Benevolent Association

Contract Will Give 23,000 Police Officers a 20% Raise Over Four Years; Will Raise Salaries for Rookie Officers to Almost $42,000 a Year, from $36,000

Read the Mayor’s press release on the City-PBA agreement here; read New York Times coverage of the agreement here, and a description of the negotiations from the Times’ City Room blog here.

Mayor Bloomberg Announces Opening of 18 New Charter Schools, While Also Announcing a One-Third Reduction in the Number of Schools Ranked as “Persistently Dangerous”

Read here the Mayor’s announcement on charter schools, and here the Mayor’s comment on decreasing school violence.

Mayor Bloomberg And Nation’s Mayors Hold Second Action Forum: Call For Renewed Investment In The Nation’s Infrastructure

Read the Mayor’s press release here; key excerpts are presented below.

Mayor Michael R. Bloomberg, U.S. Conference of Mayors President Miami Mayor Manny Diaz, Conference Vice President Seattle Mayor Greg Nickels and other mayors from around the country today held their second Mayors ’08 Action Forum.

The forum, held in New York City, focused on infrastructure, and the mayors called for a new local/federal partnership to bring critical investment to our nation’s cities in transportation, water and other critical public infrastructure.  Further, the mayors want to ensure that infrastructure investments are climate and energy centered and that existing resources are used more efficiently….

Other key findings of the report reveal:

  • Recent estimates are that one dollar of water and sewer infrastructure investment increases private long-term output (Gross Domestic Product, GDP) by $6.35.

  • The U.S. Department of Commerce (DOC) estimates that for annual general revenue and spending on operating and maintaining water and sewer systems, each additional dollar of public revenue from providing water and sewer services increases revenue in all industries by $2.62.

  • DOC estimates that adding one new job in local water and sewer creates 3.68 jobs in the national economy to support it

  • An indirect benefit of local government investment in “green water and sewer infrastructure” such as protecting one hectare (2.5 acres) of wetlands for source water protection yields $4,177 annually in avoided water treatment costs, and another $10,000 in other ecoservices categories (e.g., water supply, climate regulation, recreation, etc.)

The Mayors Action Forum on Infrastructure is the second in a series of mayoral forums in key cities around the country intended to challenge the next Presidential Administration to invest in America’s cities and metropolitan areas – the economic engines of the nation. These areas account for 86 percent of the Gross Domestic Product and house over 85% of Americans.  Recommendations from this forum and four others will be presented to the next President of the United States during the first 100 days of the new administration.

At Special Economic Session, Governor Paterson Announces Compact with Legislature to Enact a $1 Billion, Two-Year Savings Plan

Read New York Times’ coverage of the Special Economic Session agreement here.

According to the Governor’s announcement, major highlights of the savings plan include the following:

Reducing Local Assistance Spending (Savings: $97 million in 2008-09, $160 million in 2009-10):

A six percent reduction will be taken against all unspent local assistance funding except for school aid, welfare, Medicaid, child welfare, youth detention, the Aid and Incentives to Municipalities (AIM) program, aid to community colleges, aid to local governments for mandated programs, appropriations of under $500,000, and special education.

Reducing New and Enhanced 2008-09 Executive Programs by 50 Percent, and New and Enhanced Legislative Programs by Six Percent (Savings: $34 million in 2008-09, $21 million in 2009-10):

This reduction will apply to new and enhanced programs or initiatives in the 2008-09 Enacted Budget proposed by either the Executive Branch (50 percent) or the Legislature (six percent). The six percent reduction in legislative initiatives is equal to those included as a part of the local assistance savings actions. Executive programs exempted from the 50 percent reduction include Medicaid coverage for foster children, housing and family support services, AIM, veterans tuition assistance, and 21st Century Community Learning Centers (CLCs).

General Fund Transfers (Savings: $50 million in 2008-09, $20 million in 2009-10):

The agreement contains additional General Fund transfers of over $50 million, including $40 million from the Statewide Wireless Network project related to slower than anticipated spending on that initiative. This action does not reflect any decision regarding the future of the Statewide Wireless Network project, which will be made at a later date.

Reducing Executive and Legislative Member Item Funding by $50 million (Savings: $50 million in 2008-09):

Today’s agreement reduces member item funding by $50 million.

Reducing Support to the City University of New York (CUNY) to Achieve Parity with SUNY Reduction (Savings: $51 million in 2008-09, $51 million in 2009-10):

Under Governor Paterson’s July 30 administrative savings proposal, the State University of New York (SUNY) must implement a seven percent General Fund spending reduction. Because CUNY is funded through local assistance rather than state operations, it was not impacted by the Governor’s proposal. Today’s agreement will reduce state support to CUNY by $26 million. Additionally, CUNY will transfer $25 million in reserves to the state. Together, the impact of these actions totals $51 million, which is equal to seven percent of state support for CUNY, therefore achieving parity with SUNY. Neither institution will face a reduction from its tuition or other non-General Fund revenues.

Medicaid/Health Savings (Savings: $127 million in 2008-09, $374 million in 2009-10):

Today’s agreement implements over $500 million in Medicaid and health care savings over a two year period. The specific actions enacted today, along with their savings value in 2008-09, are listed below. They include:

  • Revising Medicaid trend factor methodologies for calendar years 2008 and 2009 ($18.0 million);
  • Taking advantage of discounts on diabetic supplies ($1.9 million);
  • Reducing the Medicaid Managed Care and Family Health Plus state premiums paid to insurers by 1.45 percent. Additionally, managed long-term care premiums paid to insurers will be reduced by 1.0 percent ($41 million);
  • Eliminating the cost-of-living-adjustment for early intervention providers who deliver non-Medicaid services ($16.7 million);
  • Eliminating supplemental grants to public nursing homes that are no longer necessary because of increased federal and state reimbursements from alternative funding sources ($25.0 million);
  • Increasing the state’s Medicaid fraud recovery and cost-avoidance projection by three percent from $675 million to $695 million in 2008-09 ($20.0 million);
  • Achieving savings associated with a three month delay in the implementation of the Medicaid enrollment center ($4.0 million).
Governor Paterson Issues Agency Savings Targets to Achieve $630 Million in Spending Reductions and Avert Current-Year Shortfall

Below is the full list of agency savings targets; read the Governor’s announcement of these targets here.

2008-09 Financial Plan First Quarterly Update
Executive Agency Operational Spending Reduction Targets
(in thousands)

Agency Total
Department of Correctional Services (168,138)
State University of New York (96,322)
Dedicated Highway and Bridge Trust Fund Subsidy Reduction (DOT/DMV) (41,423)
Division of State Police (37,300)
Office of Mental Health (35,664)
Department of Health (27,336)
Department of Taxation and Finance (24,696)
Office of Children and Family Services (19,316)
Department of Environmental Conservation (17,374)
Office of Mental Retardation and Developmental Disabilities (16,723)
Insurance Department (13,377)
Division of Parole (12,332)
Office of Parks, Recreation and Historic Preservation (12,087)
Office of General Service (9,995)
Division of the Lottery (7,946)
Department of Education (7,877)
Workers’ Compensation Board (6,842)
Office of Homeland Security (5,333)
Division of Criminal Justice Services (5,147)
Division of the Budget (4,619)
Office of Temporary and Disability Assistance (4,443)
Higher Education Services Corporation (3,915)
Division of Housing and Community Renewal (3,858)
Department of Agriculture and Markets (3,751)
Department of Motor Vehicles (3,532)
Department of Economic Development (3,201)
Office of Alcoholism and Substance Abuse Services (2,904)
Department of State (2,903)
Banking Department (2,741)
Department of Public Service (2,623)
Division of Military and Naval Affairs (2,458)
Office of the Medicaid Inspector General (2,342)
Department of Labor (2,254)
Stem Cell and Innovation (2,248)
Office for Technology (1,744)
Department of Civil Service (1,682)
Executive Chamber (1,484)
Statewide Wireless Network (1,449)
Office of Real Property Services (1,424)
Department of Transportation (1,303)
Division of Human Rights (919)
State Board of Elections (770)
State Racing and Wagering Board (751)
Division of Alcoholic Beverage Control (608)
Olympic Regional Development Authority (600)
Office of the State Inspector General (501)
Division of Veterans’ Affairs (459)
Council on the Arts (435)
Adirondack Park Agency (398)
Commission on Quality of Care and Advocacy for Persons with Disabilities (396)
Commission on Public Integrity (375)
Environmental Facilities Corporation (373)
Judicial Commissions (355)
Crime Victims Board (345)
Office of Employee Relations (297)
Public Employment Relations Board (294)
Temporary State Commission of Investigation (286)
Foundation for Science, Technology, and Innovation (279)
Governor’s Office of Regulatory Reform (238)
Division of Tax Appeals (238)
Energy Research and Development Authority (237)
State Office for the Aging (200)
State Commission of Correction (200)
Division of Probation and Correctional Alternatives (186)
Consumer Protection Board (172)
Office for the Prevention of Domestic Violence (117)
New York State Financial Control Board (109)
Authority Budget (54)
Deferred Compensation Board (39)
Office of Welfare Inspector General (29)
Hudson River Greenway (28)
Capital Defender Office (27)
National and Community Service (23)
Automated External Defibrillators (22)
Greenway Heritage Conservancy for the Hudson River Valley (17)
Archives Partnership (14)
Northeastern Queens Nature and Historical Preserve Commission (8)