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THE

MAKE NEW YORK WORK


PLAN
Restructuring State Government

KAPLOWITZ 2010 | RESTRUCTURING STATE GOVERNMENT

A Comprehensive Plan to Reduce Government Spending and Maximize Efficiency

I. REDUCE STATE SPENDING

New Yorkers can no longer afford to foot the bill for Albany’s extravagant spending. For too

long, New York’s budgets have put forth spending commitments that dramatically outpace

realistic revenue growth. Irresponsible debt practices and profligate spending, coupled with

significant job losses, have severely weakened our financial condition. Since the year 2000, state

spending has increased by over 80 percent, from $73.6 billion in SFY 2000-01 to $133.8 billion

in SFY 2010-11.1 Over the same period, state debt has risen to over $52 billion. The State faces

budget gaps of $30 billion over the next three years, even after closing a budget gap of

approximately $9 billion for the fiscal year beginning April 1, 2010. At the same time, many

localities face severe financial difficulties that will significantly impede their ability to provide

quality public services to our citizens.

These considerable fiscal challenges will require the state’s leaders to find creative and effective

solutions to reestablish a stable financial footing. A comprehensive and disciplined fiscal policy

will help the state reverse patterns of unsustainable spending, rising debt levels and structural

budgetary imbalances. Drawing on his experience as a financial planner, Mike Kaplowitz will

work hard to implement a series of effective budgetary controls that will finally impose a heavy

dose of financial discipline.

1
Office of the State Comptroller: Comprehensive Annual Financial Report 2010, available at
http://www.osc.state.ny.us/finance/index.htm

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Impose a State Spending Cap

A statutory and constitutional spending cap is absolutely necessary to limit the excessive growth

in state spending that has gone unchecked for decades. Limiting spending growth in the State

Operating Fund to the rate of inflation will impose budgetary discipline both in times of

economic prosperity and decline, and force state lawmakers to confine budget priorities within

reasonable expense limits. This is a simple, non-partisan and consistent way to contain reckless

spending.

Freeze Public Sector Hiring and Salary Increases

New York State has one of the largest and fastest growing public sector workforces in the

country, yet the manner in which public services are delivered is sorely lacking in efficiency and

cost-effectiveness. With over 164,000 full-time employees across over 50 state agencies, the

state now spends more than $15 billion on salaries and non-personal services costs. This

represents a significant expense for the state and must be controlled. Contracts for 96 percent of

the State workforce must be renegotiated beginning April 1, 2011. As gubernatorial candidate

Andrew Cuomo has suggested, we must freeze salary increases for state workers for one year as

part of a short-term financial austerity plan.

Cut Down of the Use of Outside Consultants

In SFY 2008-09, at a time when the state was facing severe fiscal constraints, spending on

outside consultants, including support staff, rose to $2.9 billion; a $100 million increase from the

prior fiscal year. That is the equivalent of 23,329 full time consultants working for the state.

Based on reports filed with the New York State Comptroller, the state pays outside consultants

performing professional services an average of $160,719 each annually; 62 percent more than

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public employees doing similar work, including the cost of their benefits. By some estimates,

the state could save between $280 and $480 million annually by replacing about half of the

state’s expensive private consultants with employees already on the state payroll.2

As State Senator, Mike Kaplowitz would sponsor legislation directing the Division of Budget to

set consultant spending savings targets for each state agency. He would also work to institute a

freeze on new and renewed state agency consultant contracts over $100,000 until a cost-benefit

analysis is completed by the agency and a waiver is approved by the DOB.

Reduce Pension Costs

According to estimates by the Office of the State Comptroller, the cost of public pensions and

health benefits for active and retired public employees will grow from $1.3 billion in 1998-99 to

$6.2 billion in 2013-14 – almost a 500 percent increase. Next to public health and education

spending, pension benefits are one of the most significant cost-drivers in the state budget. The

recent pension reforms creating a Tier V for new employees was a step in the right direction, but

did not go nearly far enough. We must re-evaluate what benefits the State provides and to

whom, including increasing employee contributions. We must also concentrate our efforts on

fighting the abuses of the pension system that have been uncovered, especially among employees

near retirement who manipulate overtime schedules to increase retirement benefits. A new Tier

VI would crack down on “pension padding” and overtime issues that drive up pension costs.

Fix Medicaid

The State of New York faces growing budget gaps in the next several years, and a chief source

of pressure on the State budget is the growth of Medicaid costs. In SFY 2009-10, Medicaid

2
http://www.nyspef.org/fact_sheets/2010/reducestatespendingonconsultants.pdf

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spending – State, federal, and local – totaled over $50 billion, the equivalent of more than one-

third of the State’s All Funds budget. Between 2009-10 and 2013-14, this total is expected to

grow by 27 percent to $63.5 billion, an average annual increase of nearly seven percent. Over

the same period, the State’s share of Medicaid costs will increase much faster – by 71 percent, an

average annual increase of nearly 18 percent – because of the expiry of federal stimulus aid. 3 In

2014, because of the recently enacted federal health care reform law, increased numbers of New

Yorkers are projected to enroll in Medicaid, further increasing State costs. Worse, New York

State spends 69 percent more per beneficiary than the national average.4

The State cannot do an adequate job of managing the increasing number of enrollees and their

associated costs, let alone adjust to the changes contemplated by federal health care reform,

unless it changes the way in which Medicaid manages, delivers and pays for health care. A

fundamental restructuring would be driven by the following imperatives:

A) The State must do a much better job of controlling over-utilization of Medicaid services.

An important element of this is having the State take over responsibility for

administration of Medicaid from the counties. Once the State capped the counties’

Medicaid costs, counties lost all incentive to control costs in the program.

B) The State must change the process by which Medicaid sets rates of reimbursement to

health care providers in order to increase the program’s capacity to control costs and

improve outcomes.

3
These figures do not reflect the recent extension of the temporary FMAP increase through June, 2011.
4
See Carol Kellerman, “Citizens Budget Commission recommendations for the fiscal year 2009-10 budget to State
Legislators”, (February 02, 2009).

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C) The State must also address cost pressures arising outside Medicaid through reform of its

medical malpractice system and a more aggressive push for preventative care in

underlying treatment areas such as substance abuse, cardiovascular disease and childhood

obesity.

D) Adequate funding for the Office of the Medicaid Inspector General (OMIG) is critical for

the State to effectively cut down on fraud, waste and abuse.

Improve the Efficiency of Education Spending

In addition to Medicaid, education spending is one of the fastest growing state expenses. Since

2003-04, school aid has increased at more than twice the rate of inflation. 5 To mitigate the

unsustainable growth in education spending, the state must ensure that school aid is targeted and

fair, providing support to those school districts most in need. Also, other subsidies (e.g. building

aid, reimbursable aid) must be scrutinized so that these policies do not create a perverse incentive

for school districts to ignore efforts to control costs. Coordination between school districts can

boost efficiency and save money overall; a recent study from the State Comptroller’s Office

estimated that $145 to $365 million could be saved from the consolidation of school “back

office” services.6

State policymakers must also focus on eliminating mandates on school districts that dramatically

increase the cost of providing a quality education. Mandate reform will better position local

districts to reduce costs, including personnel costs which account for over 70 percent of school
5
See NYS Division of Budget, “2010-11 Executive Budget press release” available at
http://www.budget.state.ny.us/pubs/press/2010/pressrelease10eBudget01.html.
6
NYS Comptroller’s Office, 2010 Annual Report on Local Governments, available at
http://www.osc.state.ny.us/localgov/datanstat/annreport/10annreport.pdf.

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district expenses.7 School district personnel costs have been growing at a rate of close to six

percent annually. Reducing that growth by half would enable school districts to save

approximately $1 billion annually, while freezing personnel costs would generate approximately

$2 billion in savings from projected growth rates.8

Establish a Statewide Care Coordination Plan for New York’s Mentally Ill

Care Coordination is a method of strengthening the support networks for New York’s mentally

ill population. While various baseline support programs are available to adults suffering from

mental illnesses, support networks that focus on long term care and patient stability are

inadequate, which can often result in repeated hospitalizations, incarcerations, homelessness and

potential injury to oneself or others. These negative consequences are not only detrimental to a

patient’s overall health, but are a serious drain on the state’s limited resources.

By assigning “care coordinators” to enrolled members, New York’s mentally ill will have the

support and assistance of trained professionals who will, among other things:

A) Develop Individualized Service Plans (ISPs) to identify existing state services,

support programs and providers that will help patients in recovery, enhancing

wellness and satisfaction (the ISP is web-based and shared across state-supported

service programs to boost efficiency);

B) Use best efforts to provide or arrange for desired services and support programs;
7
New York State Commission on Property Tax Relief, Final Report, (December 1, 2008) pg. 34, available at
http://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdf.
8
This is based on the following calculation: Estimates of growth rates from 06-07 and 07-08 from the NYS
Commission on Property Tax Relief’s Final Report (pg. 35); Total school spending is assumed to be about $50
billion. Three percent multiplied by 0.7 (for the percent of spending accounted for by personnel costs) produces
savings of $1.05 billion on a $50 billion base spending level.

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C) Ensure that services are being provided as identified by the ISP; and

D) Support the ISP as the single plan for service delivery.

As a Westchester County Legislator, Mike Kaplowitz spearheaded the effort to establish

Westchester’s first Care Coordination program under the county’s Department of Community

Mental Health.9 Within its first year, the program significantly reduced patient stays in State

hospitals, days incarcerated, emergency room visits and rates of homelessness. The reduced

strain on secondary government services resulted in a fiscal savings of over $1 million in

Westchester County, from only 48 enrollees in the first year of the program.

As State Senator, Mike Kaplowitz would work collaboratively with officials from the New York

State Department of Mental Health to implement a statewide Care Coordination plan for the

more than 500,000 New Yorkers who are served by New York’s mental healthcare system each

year. By expanding Westchester’s successful model statewide, projected savings could exceed

$20,000,00010, and the long term health and wellness of our mentally ill population would be

dramatically improved.

9
http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450 .
10
This rough calculation aggregates Westchester County’s savings figures as a result of the Care Coordination
program ($1.1 million) as a function of the county’s share of New York State’s overall population (4.86%). $1.1
million/0.0486 = $22,633,745.

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II. RESTRUCTURING STATE GOVERNMENT TO MAXIMIZE EFFICIENCY

New York’s State and local governments have become too big, too expensive, and too

ineffective. There are countless State agencies, boards, commissions, departments, councils,

divisions, offices, task forces and public authorities that collectively make up a slow, antiquated,

bureaucratic state government apparatus that continuously struggles to meet the needs of our

citizens with efficiency. New York’s overlapping system of local government today consists of

more than 10,500 governmental entities, while the proliferation of special taxing jurisdictions

and other specialized administrative entities has needlessly disjointed service delivery at the local

level. This oversized and inefficient bureaucracy is not only duplicative and inefficient, but also

extraordinarily expensive.

Mike Kaplowitz will make it a priority to restructure and rightsize the existing bureaucratic mess

by:

A) Targeting structural waste and inefficiency in state government;

B) Reducing and consolidating the number of local governments and special taxing

jurisdictions throughout the state;

C) Consolidating New York’s various economic development agencies;

D) Holding Industrial Development Agencies accountable; and

E) Continuing the effort to rein in New York’s public authorities.

Reducing Structural Waste and Inefficiency

With the proliferation of state agencies, government is no longer operating as a single, integrated

unit working collaboratively and efficiently to accomplish the various public policy goals of the

State. Agencies have their own modes of organization and procedures, their own bureaucracy

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and their own constituencies who are extremely reluctant to change. Consider, for example, the

Department of Health. In just this one single agency, the Legislature has inserted at least 87

statutorily created administrative units, including 46 councils, 17 boards, 6 institutes, 6

committees, 5 facilities, 2 task forces, 2 advisory panels and a working group. In total, the

Executive Department now consists of at least 75 administrative units, almost all frozen in

statute.11

As State Senator, Mike Kaplowitz will carefully assess the performance and effectiveness of

every state entity and work to streamline their functions through the consolidation and leveraging

of shared resources. Eliminating this inefficiency and waste will save taxpayers hundreds of

millions of dollars.

Local Government Consolidation

Government at the local level in New York is rife with excessive redundancies, duplicative

service delivery and overlapping responsibilities. Currently, there are more than 10,500 local

governmental entities – including 62 counties, 932 towns, 555 villages and more than 7,000

special districts – all of which are imposing taxes and fees on struggling New York individuals

and families.12 Despite the important public services provided by many of these local

government entities, as a recent report from the Comptroller’s Office explained, “[o]ur municipal

structure is not only highly complex, [but] it no longer provides a rational differentiation based

on population densities and settlement patterns, as it did when the classifications were originally

11
Cuomo 2010, The New NY Agenda: A Plan for Action; pg. 66.
12
There is no definitive study on how many local governments New York actually has. The Department of State, the
Office of the State Comptroller and most recently, the New York State Commission on Local Government
Efficiency and Competitiveness (known as the “Lundine Commission”) have arrived at different numbers. A survey
by the New York State Attorney General’s Office found 10,521 total local governments. A breakdown of that
number can be found at http://www.ag.ny.gov/bureaus/legislative/governmentconsolidation/govs.html.

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made.”13 Moreover, New York’s ballooning local government structure is responsible for much

of the high local tax burden that New Yorkers have been shouldering for too long.

The Government Reorganization and Citizen Empowerment Act, authored by Attorney General

Andrew Cuomo, was a critical first step in the state’s effort to eliminate legal barriers to

government mergers and empower citizens to reorganize their local governments by dissolving

or merging the many taxing layers that have contributed to New York’s high local tax burden

(the highest in the country). To ensure that local governments and citizens maximize the

potential for efficiency and consolidation offered by this act, Mike Kaplowitz will work to

provide adequate financial incentives and reorganizational expertise to all local governments.

Additionally, he will continue efforts to eliminate remaining legal barriers to the integration and

merger of municipal services.

Consolidation of Economic Development Agencies

Currently, economic development efforts are balkanized across as many as 28 separate agencies 14

and hundreds of public entities with economic development missions, including over 600 local

development corporations, 115 local industrial development agencies, 72 local Empire Zone

boards, 50 business improvement districts, 49 urban renewal agencies and community

development agencies and 10 regional planning councils.15

13
Office of the New York State Comptroller, Outdated Municipal Structures, available at
http://www.osc.state.ny.us/localgov/pubs/research/munistructures.pdf.
14
See A.T. Kearney, Delivering on the Promise of New York State: A Strategy for Growth & Revitalization 12
(2007) – report prepared for Empire State Development, available at http://www.nycp.org/publications/2007 0717
ATKearney report.pdf.
15
Cuomo 2010, The New NY Agenda: A Plan for Action; pg. 97.

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This bloated economic development apparatus results in overlap, duplication and waste, and acts

as an entrenched impediment to giving the public the best service at the lowest cost. Mike

Kaplowitz, in working to better position New York State to lead our economic recovery, will

support legislation that consolidates the efforts and responsibilities of these disparate economic

development entities under the auspices of a single State Office of Economic Development.

Restore Accountability of Industrial Development Agencies (IDAs)

A pattern of poor performance and unfulfilled job creation promises by Industrial Development

Agencies (IDAs) and qualifying IDA-partner developers has become clear, suggesting that

broad-based reforms are urgently necessary to ensure that IDA subsidies fulfill their mission of

creating jobs and stimulating economic growth. Between the 116 IDAs currently operating in

New York State, nearly $400 million in annual tax exemptions are offered in support of local

economic development initiatives. But an analysis of the most recent data reported by IDAs to

the NYS Comptroller’s Office indicates that New Yorkers are not getting their money’s worth.

IDAs provided $385 million in tax exemptions in 2005 which resulted in a net loss of $266

million in property taxes to local governments, including $136 million in lost revenue to school

boards.16 Subsidized projects only managed to deliver 36% of the total number of jobs promised,

and almost 70% of IDAs statewide subsidized companies that actually cut jobs.17

Because these benefits implicate the power of the State and come at the expense of the State and

local coffers, it is important to carefully monitor and control IDA operations to ensure that IDA-

supported projects deliver the benefits that their proponents promise. At a time when local

16
New York Office of the State Comptroller. “IDAs Project Approval, Evaluation, and Monitoring Efforts.” (2006)
17
Ibid, pg. 5.

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municipalities and school districts are shouldering the burden of increasing costs associated with

Medicaid, pension obligations, schooling and an eroding tax base, it is crucial that taxpayers hold

IDAs and the projects they support accountable. Specific reforms that Mike Kaplowitz will

work to implement include:

A) Improved Standards for determining who receives IDA assistance. Current law does

not require IDAs to set basic standards for the projects that are subsidized and the

jobs that are created. Mike Kaplowitz will ensure that IDAs limit their subsidies to

projects that provide quality jobs and fair wages that will sustain New York families,

build our local economies, and make a positive impact on our communities and our

environment.

B) Greater Transparency in the decision-making and reporting processes of IDAs to

provide the communities that are affected with the necessary information to advocate

for their needs, or raise concerns about negative impacts. Stronger reporting

requirements for subsidy recipients will also make it easier for communities to keep

track of a developer’s activities and evaluate their performance.

C) Stronger Accountability measures that will hold businesses accountable for their poor

performance in meeting job creation and economic development goals. By working to

institute “clawback” procedures, localities will be authorized to cancel, reduce or

recover a subsidy when the recipient fails to deliver the promised benefits or violates

its contractual obligations.

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Public Authorities Reform

New York’s public authorities were originally created in 1921 to circumvent the Constitutional

requirement of voter approval of State debt.18 After decades of exponential growth, the State

now has several hundred public authorities created either by statute or as subsidiaries of other

authorities.19 Public authorities perform a multitude of services previously provided through

State agencies or local governments, including economic development, transportation

infrastructure development and housing.

Sadly, like the increasingly complex web of state agencies, public authorities have proliferated to

an extent that has compromised their effectiveness. Moreover, authorities are responsible for

approximately 93 percent of the State’s indebtedness (over $48 billion as of 2009). 20 The bloated

size and inefficiency of public authorities, as well as their steep price tag, demand reform.

As State Senator, Mike Kaplowitz will work to enhance existing reform efforts to increase

transparency, strengthen accountability measures, and improve debt management. Created

pursuant to the Public Authorities Reform Act of 2009, the independent Authorities Budget

Office (ABO) has collected, analyzed and disseminated to the public a plethora of information

on the finances and operations of state and local public authorities. With this influx of new

information, the Legislature is better positioned to exercise its oversight and enforcement powers

under state law to institute best management practices, streamline operations, boost efficiency,

and ensure that New Yorkers are getting their money’s worth.

18
See N.Y. Const. Art. 7, Sec. 11 (prohibiting the State from contracting a debt unless the debt shall be authorized
for some single work or purpose by the people at a general election).
19
Lynn Wilson and Clayton Eichelberger, New York State Public Authority Reform: Where We Have Come From
and Where We Need to Go, 11 N.Y.S.B.A. Gov’t, Law and Policy Journal. 15-16 (2009).
20
See Scott Fein, Introduction: Public Authority Reform, 11 N.Y.S.B.A. Gov’t, Law and Policy Journal; pg. 5
(2009).

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Specific reforms include:

A) Statutory limit on the creation of subsidiaries within existing state or local public

authorities. Certain provisions of the 2009 Public Authorities Reform Act addressed the

excessive creation of subsidiaries, but stronger provisions are necessary to ensure that

any newly-created subsidiaries are absolutely necessary, and that their anticipated

purpose does not fall under the scope of the operational responsibilities of another

authority or existing state agency.

B) Lower the monetary threshold of authority contracts that must be approved by the State

Comptroller from $1 million to $500,000.

C) Institute an annual debt ceiling for public authorities. New state authority debt issued in

2009 alone amounted to over $17.7 billion. The state can no longer be expected to meet

the unsustainably high service payments on this debt.

III. BUDGET REFORMS

New York State is in dire need of a comprehensive reform plan to fix the State’s broken budget

process and give New Yorkers a fiscally responsible state spending plan. For decades, Albany

has ignored the need for wholesale changes to the budget process, instead opting for quick fix

gimmicks on the back of misguided assumptions. As State Senator, Mike Kaplowitz will work

to implement wholesale changes to the budget process, helping to establish a long-term,

sustainable financial planning model, stricter accounting principles, and stringent standards of

accountability for State-financed programs and services through the use of performance-based

budgeting (a budgeting concept that links funding decisions to program results).

GAAP Budgeting

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It is time for New York to shed its reliance on fiscal gimmickry and manipulation by requiring

both the Executive Budget and the Enacted Budget to be balanced according to Generally

Accepted Accounting Principles (instead of the current cash-basis accounting method), which

will fundamentally realign recurring spending with recurring revenue to restore fiscal stability.

Mike Kaplowitz will also insist on reforms that will mandate that all state operating funds be

balanced each fiscal year, not merely the General fund.

Mandate an Annual Tax Expenditure Report

This would require the Executive to submit to the Legislature an “Annual Tax Expenditure

Report” that would list a cost-benefit analysis of all of New York’s 380-plus tax break programs,

so that we may focus our efforts on strengthening the programs that work, and ending the

programs which waste hundreds of millions of dollars in revenue.

Performance-Based Budgeting

In February 2009, the Pew Center on the States issued a report on effective performance-driven

and data-based budgeting methods. According to the Pew Center, states that are successful in

such endeavors are “those that combine short-term strategies to balance their budgets with long-

term fiscal and management investments to serve vital public needs and position themselves for

the future.”21 In the same report, the Pew Center singled out New York as a state whose inability

to budget for performance is a weakness.

While some New York State agencies report program performance information in their strategic

plans, “performance information does not appear to be well integrated in the decision-making

process [of the budget].”22 For example, New York currently does not:

21
The Pew Center on the States, Trade-Off Time: How Four States Continue to Deliver, Feb. 2009.
22
The Pew Center on the States, Government Performance Project: New York, 2008.

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 Define clear, statewide outcome goals as part of a long-term strategic framework;

 Have a uniform system of soliciting performance information from agencies or programs;

 Give instructions on how to assemble such information; or

 Include performance information or connect funding determinations to performance

measures or targets in either the Governor’s proposed budget or the legislature’s

appropriations bills.

New York’s budget process is best described as “incremental budgeting.” In other words, an

agency’s budget is primarily based on the amount it was allocated the previous year, although

broad economic or political changes (such as recessions or changes in administration) can result

in an agency requesting and/or receiving more or less than they did the year before. Incremental

budgeting has its advantages; it is a very stable process with few, if any, great changes in funding

from year to year. However, it often encourages wasteful or unnecessary spending to maintain

or increase allocations in future budgets, and creates no incentives to reduce costs. Over time,

budget allocations can disconnect from statewide priorities, leading to ineffective or relatively

low priority “legacy” programs getting more money than newer, more effective programs.

New York can meet the standard of smart, effective, and transparent budgeting that has been set

by the best practices of other states by re-evaluating the way it budgets. New York should

consider adopting budgeting methods that:

A) Build a long-term strategic framework for the state, with clearly defined outcome goals;

B) Refocus agency missions and performance measures to chart progress toward those goals;

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C) Use the information gathered to better inform the budget process, improve state program

performance, and engage the public.

In short, New York should consider adopting a system of performance-based budgeting.

Who Uses Performance-Based Budgeting?

The federal government adopted the Government Performance and Results Act (GPRA) in 1993,

a form of performance-budgeting which required all federal agencies to develop five-year

strategic plans setting out long-term goals and objectives and to submit annual performance

reports with their budget requests. A review of the GPRA by the General Accounting Office

(GAO) found that the act “established a solid foundation of results-oriented performance

planning, measurement, and reporting in the federal government.” 23 A 2010 report by the Center

for American Progress notes, however, that in practice “[the GPRA] has led more to the

preparation of reams of paper than clarity on the outcomes agencies are trying to achieve.” 24

President Obama has recognized these deficiencies and is addressing them by asking his

agencies to work towards and report on a targeted set of high-priority objectives, rather than just

producing a litany of agency activities.

Virtually every state has adopted a requirement for some form of measuring agency or program

results, a crucial first step in implementing a system of performance-budgeting. New York is not

one of them. Most states have requirements for measuring performance that do not tie the

measurements to statewide goals or use the information for smarter budgeting. However, there

23
U.S. GAO, GPRA Has Established a Solid Foundation for Achieving Greater Results, Mar. 2004.
24
Center for American Progress, Golden Goals for Government Performance, Feb. 2010.

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are a handful of states that lead the way in performance-budgeting best practices. Virginia has

an acclaimed system of legislating for results that includes a bipartisan and multi-branch

approach to setting statewide goals and publicizing progress towards those goals.  

As State Senator, Mike Kaplowitz will make the design and implementation of a comprehensive

performance-based budgeting process a top priority. With a state budget exceeding $133 billion,

it is imperative that each budget allocation is thoroughly evaluated and measured against the

outcomes of that spending.

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Tax Relief & Economic Development

KAPLOWITZ 2010 | TAX RELIEF & ECONOMIC DEVELOPMENT

Delivering Meaningful Tax Relief to New York’s Individuals and Businesses

I. PROPERTY TAX RELIEF

Property taxes across New York State have reached unsustainably high levels, cutting deeply

into the bottom lines of individuals, families and businesses, and stunting our economic growth.

From 1998 to 2008, local property taxes in New York grew by 73 percent, more than twice the

rate of inflation in that period. 25 Excluding New York City, property taxes per capita are $1,634

– 73 percent above the national average. 26 Closer to home, in absolute dollars, the level of

property taxes for an average household in Westchester County is ranked highest in the nation. 27

Westchester and Putnam Counties are also both listed in the top ten highest taxed counties in the

nation as a percentage of household income. 28 Whether it is property tax amounts, property tax

rates or property tax as a percentage of household income, residents in the 40th State Senate

district pay some of the highest property taxes in the country. What is worse, not only is this

property tax burden exceedingly high and rising quickly, but it is also increasingly unaffordable.

The growth rate in property tax levels far exceeds the growth rate of wages in New York. While

property taxes have increased by a total of approximately 54 percent since the year 2000, wages

have only risen by about 26 percent. 29 This clearly underscores how unaffordable property tax

bills have become for the average New York family. Rising property taxes also create a
25
NYS Office of the State Comptroller, Financial Condition Report 2009, available at
http://www.osc.state.ny.us/finance/finreports/fcr09.pdf.
26
NYS Commission on Property Tax Relief, Final Report 2008, available at
http://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdf
27
See Francesca Levy, “Where Americans Pay Most in Property Taxes” Forbes (January 15, 2010), available at
http://www.forbes.com/2010/01/15/propertytaxes-high-lifestyle-real-estate-counties-assessmenttaxes.
html.
28
NYS Commission on Property Tax Relief, Final Report 2008, pg. 22.
29
Ibid, pg. 24.

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competitive disadvantage for New York’s businesses, encouraging them to flee the state and

discouraging out-of-state businesses and new industries from locating here. Unsurprisingly, no

issue is more important to the residents of the Hudson Valley than reining in this unaffordable

tax burden.30

Victims of Unsustainable Property Tax Levels

 Low-Income Households – the regressive nature of our property tax system unfairly

shackles low-income homeowners and renters; those among us with the lowest incomes

are most likely to pay the highest percentage of their income in property taxes.

 Seniors on Fixed Incomes – Many seniors, who made the decision to buy their house

perhaps decades ago, are now victimized by property tax bills that have practically

doubled every ten years. Those who are “house rich, income limited” face a

disproportionately high property tax burden.

 Small Businesses – small businesses are extremely sensitive to overhead costs, and

property taxes represent a huge slice of these costs (whether directly, or indirectly

through rent). For many businesses, large and small, the property tax represents the

largest business tax (and, in contrast to the corporate franchise tax, property taxes must be

paid even when the business is losing money). Excessively high property taxes and sharp

increases from year to year greatly hamper the competitiveness of New York’s business

community.
30
Important Note: New York is an average tax state when looking only at state taxes (i.e. it is only once we include
local taxes that our overall tax rate becomes disproportionately high compared to other states). In fact, New York
taxes per $100 of personal income actually declined from $7.39 in 1977 to $7.01 in 2007. New York’s state tax
rank declined from 10th highest in 1977, to 21st highest in 2007. And finally, New York’s tax burden as measured by
the ratio of state taxes to income was only one cent above the national average in 2007. See, 2010-11 Executive
Budget, Economic and Revenue Outlook, available at
http://publications.budget.state.ny.us/eBudget1011/ExecutiveBudget.html.

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Tax Relief & Economic Development

 Middle-Class Wage-Earners – Individuals and families trying to get by on an average

wage, including our nurses, service workers, construction workers and first responders,

rarely see their incomes double in a decade. They are fortunate if their incomes rise 3 to

4 percent per year, while tax growth can equal over 7 percent per year.

 Young Families – Young families and first-time home buyers are forced away from too

many homes in too many good school districts because they are unaffordable.

 New York State as a Whole – Due in great part to New York’s crushing tax burden, many

people are leaving the state to find better jobs or a lower cost of living elsewhere. This

further depletes New York’s tax base a drives tax rates even higher for those residents

that remain, resulting in a negative feedback loop of economic stagnation and decline.

Reasons for New York’s High Property Tax Burden

When evaluating New York’s colossal property tax burden, it is important to note that school

property taxes represent the greatest share of the property tax levy. In fact, outside of New York

City, school property taxes amount to 62 percent of total property taxes. 31 School district tax

levies are also increasing at a much swifter pace than the other categories of local taxation,

though it is unclear whether this growth is warranted. It is telling that property tax collection by

school districts rose 31.8 percent from 1993-2006, while student enrollment grew by only 4.8

percent over the same period.32 What is clear is that any comprehensive effort to provide New

York homeowners with meaningful property tax relief will require a close examination of the

factors driving our education spending to new heights each year.

31
Total property taxes have four components; school taxes (62 percent), county taxes (17 percent), municipal taxes
(14 percent) and special district taxes (7 percent).
32
Nelson A. Rockefeller Institute of Government, The Property Tax in New York State – Condition Report prepared
for the Education Finance Research Consortium, December 2008.

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Tax Relief & Economic Development

New York spends more per student on primary and secondary education than any other state - an

estimated $18,768 per pupil in the 2008-09 school year.33 The growth in New York’s education

spending is also comparatively high; New York’s per pupil spending from 1999 to 2006

increased at a compound annual growth rate of 6.6 percent, substantially higher than the national

average of 4.8 percent.

Providing a world-class education to every student will continually be a top priority for state

lawmakers. But as Alan Lubin, former Executive Vice President of New York State United

Teachers, stated aptly, “it’s not whether we pay for education; it’s whether we pay wisely for

education.”

Local governments face cost pressures as well that drive up their portion of the property tax bill,

and this can be attributed to the complex web of 10,000-plus local government entities

throughout the state, all with separate and distinct taxing authority. It is no wonder property

taxes have increased unabated with such a superfluous arrangement. Unfunded mandates

imposed by the State have profound fiscal implications for local governments, and certain

contracting and procurement regulations unnecessarily impede local governments’ ability to

capture potential cost savings.

Reining in Education Spending

Controlling our education spending must be a central component of any long-term property tax

relief strategy. While New Yorkers remain committed to generously funding our children’s

33
This figure excludes school districts in New York City and the four other cities with dependent school districts.

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Tax Relief & Economic Development

education, we are also frustrated with government mandates that drive up costs. Some solutions

to mitigate unnecessary school costs include34:

 Permit schools to engage in shared transportation services and “piggyback” contracts -

this would allow school districts to share certain service contracts, such as private

transportation contracts for pupils outside of the district.

 Mandate Review Process – increasing transparency and feedback in the Education

Department’s proposed regulations so that local concerns are heard and fiscal impacts

more carefully considered.

 Pre-Kindergarten Flexibility – provides flexibility in the use of pre-kindergarten funds

so that programs can use otherwise unspent money on needed expenses like pupil

transportation.

 Paperwork Reduction – working with, and if needed, requiring the Education

Department to create an electronic filing system to eliminate duplicative requirements

that waste time, money and natural resources.

 Wicks Reform for School Districts – Outdated contract requirements for public works

projects drive up costs and unnecessarily delay project completion. By repealing the

Wicks Law and relieving these administrative hurdles for school district construction

projects, $200 million in capital costs could be saved.

Reducing Local Government Costs

Governor Paterson proposed a four-year moratorium on unfunded legislative mandates as part of

his 2010-11 budget to help keep property taxes down and ease the burden on local governments
34
A more detailed discussion of potential cost savings to be realized in education can be found in the following
chapter entitled “Restructuring State Government.”

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Tax Relief & Economic Development

during an unprecedented fiscal crisis. The Governor also proposed long overdue reforms to the

Wicks Law to lift contracting restrictions that increase costs for school districts and property

taxpayers. In total, the Governor's mandate reform agenda included more than 100 mandate

reform initiatives that are expected to provide savings to local governments of nearly $1 billion

over the next three years, with the potential for billions of dollars in savings in future years.

Along with a series of statutory initiatives, many of the Governor's reforms are the result of the

Executive Order No.17 mandate review process led by his Office of Taxpayer Accountability.

As State Senator, Mike Kaplowitz would strongly consider these and other major reforms,

including:

 Pension Reform for Public Employees – Pension systems are crippling states’ budgets

across the county, and New York is no exception. We need to reevaluate our benefits

system, and should seriously consider converting to a defined-contribution system and

modifying post-employment health benefits.

 Moratorium on Unfunded Mandates - Legislative proposals and proposed regulations

must undergo thorough fiscal impact analyses to ensure that they do not have a hidden

fiscal impact that will force local governments to bear a greater burden, and there must be

a transparent process that involves local governments in assessing legislative and

regulatory impacts. Right now the Governor has imposed an executive order that requires

executive agencies to undergo an evaluation process in considering the fiscal impact of

proposed regulations; this does not affect the Legislature or Education Department or

Judiciary, and is only valid if the Executive Order is retained by the next governor.

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Tax Relief & Economic Development

 Increase Procurement Thresholds for Local Governments - Chap. 494 of 2009 permitted

the increasing of the public works contract competitive bidding threshold from $20,000

to $35,000. This threshold was not previously changed since the early 1990s, and

increasing the threshold for service and purchase contracts would provide localities with

more flexibility to use competitive bidding and save costs – Mike Kaplowitz will build on

proposals to increase the public services threshold to $50,000 and doubling the purchase

contracts threshold to $20,000.

 Shared Services & Local Government Piggybacking - Chap. 494 of 2009 also permitted

localities to share some transportation maintenance costs with the State Department of

Transportation, and allowed the shared use of many public health officials. This concept

should be expanded to other fields where officials have overlapping roles in the same

regions, pooling resources and mitigating risk. Proposals include: shared, secure medical

facilities in men’s and women’s correctional facilities, allowing shared justice court

facilities, consolidation of local districts and justice courts, and consideration of whether

school administrators from smaller districts can assist other smaller schools or districts in

the same area.

 Permitting Electronic Court Appearances – By expanding the electronic filing of legal

documents (such as pre-sentence investigations forms) and using teleconferences to make

court appearances electronically, we can substantially reduce transportation and overtime

costs for corrections officers.

Alleviating County Government Tax Burden

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Tax Relief & Economic Development

County taxes represent approximately 17 percent of the overall property tax burden for

households, and finding cost efficiencies at the county level is also of vital importance in order to

successfully reduce the overall cost of government and deliver meaningful property tax relief.

One area of spending where considerable savings could be realized is in the Medicaid program.

Across the State, growing Medicaid costs continue to place significant pressure on local fiscal

conditions. In Westchester County alone, Medicaid costs are expected to rise from $204 million

to $222 million by 2013.35

Based on his experience in the Westchester County Legislature, Mike Kaplowitz understands the

challenges that counties face in administering the state’s bloated Medicaid system, and will be an

effective advocate for reform. The end-goal will be a full state takeover of the Medicaid

program to provide immediate cost relief to county governments, while at the same time allow

the state to streamline oversight and service delivery to better control costs. Alleviating this

significant cost driver will provide county governments with the fiscal relief needed to sustain

property tax reductions.

Property Tax Cap & Circuit Breaker

While cost containment strategies at every level of local government (county, municipal and

school district) will allow for a more manageable property tax burden in the long term, relief is

needed immediately. In order to achieve short term relief, the State must simultaneously institute

a property tax cap to limit the growth in tax levies year over year and a circuit breaker model to

tie a household’s property tax burden to annual income.

35
http://www.westchestergov.com/pdfs/SOC2010_CEremarks.pdf

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Tax Relief & Economic Development

In contrast to the types of relief already discussed, property tax caps seek to limit the aggregate

amount of property tax collected. A tax levy cap is the first of several steps in reining in

property tax increases. This would limit the amount by which the total property tax can increase

from year to year. According to the National Tax Journal, which surveyed the continental 48

states in 2006, 43 states have some form of limitation on real property taxes. Twenty-nine states

have a tax levy cap, and at least 15 allow voters to lift, at least temporarily, or override, this

cap.36

As State Senator, Mike Kaplowitz would advocate for the implementation of a property tax levy

cap. The levy cap would be set at 120 percent of the consumer price index or 4 percent increase,

whichever is lower. This is the same formula that is applied to the current school district

contingency budget that goes into effect when school budgets fail to pass. This formula would

limit property tax increases to manageable levels and allow flexibility for inflation.

Despite the many virtues of a property tax levy cap, it only limits future growth and does nothing

to actually reduce tax rates down to manageable levels. This is why any tax cap must be

accompanied by a circuit breaker formula to directly tie property taxes to the adjusted annual

income of homeowners, not merely the value of their property. The fundamental premise of a

circuit breaker is to effectively target property tax relief to those homeowners who need it most.

Such a design can be accomplished by restoring and enhancing the STAR program and

incorporate a circuit breaker element. circuit breaker concept is not new - current Tax Law has a

low-income Real Property Tax Circuit Breaker for New Yorkers earning under $18,000.37
36
Final Report, Commission on Property Tax Relief (2008); pg. 66.
37
Bills have been introduced that would raise the income levels the Real Property Tax Circuit Breaker, including
S.4154 (Montgomery) and S.3728 (LaValle).

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Tax Relief & Economic Development

Nevertheless, this basic level of relief is not nearly substantial enough to provide the relief that is

needed, especially in the lower Hudson Valley.

Legislation is needed that will establish a circuit breaker in the form of a state personal income

tax credit.38 Specifically, Mike Kaplowitz's proposal would call for a tax credit against your state

personal income tax equivalent to 70 percent of the amount of your property tax bill that exceeds

a certain percentage of your annual income.  This "certain percentage" varies depending on your

annual income.  For example, If your annual gross income is $120k or less, once you property

tax bill exceeds 7 percent of your income, the circuit breaker activates and you would receive a

tax credit equivalent to 70% of the amount by which your tax bill exceeds that 7 percent value.

For example, let's assume your annual income is $67,000.  Once your property tax bill exceeds

$4,690 (7% of your income), the circuit breaker activates. Now, for every dollar in property tax

you pay above $4,690, you will receive 70% back in the form of a state income tax credit.  So, if

we assume your property tax bill is $11,500, you would get 70% of $6,810 ($11,500 - $4,690)

back.  That's a tax credit of $4,767, and a savings of over 41 percent.

These principle recommendations will be very effective in controlling property tax levies and

delivering much needed relief to those families most in need. To summarize, these

recommendations include:

A) A property tax levy cap;

38
Designing a circuit breaker as a tax credit on one’s state personal income tax liability has the ancillary benefit of
still exposing property taxpayers to the increases in their local tax levy each year, thereby leading them to consider
more carefully their position on school budget increases and other local budget matters. If the credit was merely
applied to their property tax bill, it would disguise the true tax increases from the homeowner, and would fail to give
that taxpayer and accurate picture of local spending growth.

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Tax Relief & Economic Development

B) A restored and enhanced STAR program incorporating targeted tax relief via a circuit

breaker model; and

C) An aggressive cost containment strategy to reduce the cost-drivers that have steadily

increased expenses and the municipal, county and school district level.

II. ECONOMIC DEVELOPMENT

Tax relief will undoubtedly establish a more affordable living and working environment in New

York State over the medium and long term. But to create jobs and get people back to work in the

short term, a vigorous infrastructure development policy must be adopted. And here in the

Hudson Valley, the reconstruction of the Tappan Zee Bridge is a unique and promising

opportunity to refuel this region’s economy.

As we await completion of the Draft Environmental Impact Statement for the Tappan Zee Bridge

reconstruction and expansion, Mike Kaplowitz intends to work with agency leaders to prepare

our institutional infrastructure so we can hit the ground running. We should be focusing on a

few major elements:

1) Diligently monitoring our use of resources and implementation of the study;

2) Exploring legislative changes that could assist in financing a potentially $16 billion mega

project; and

3) Maximizing use of this mega-investment as an economic development tool.

Preparation

A few things are fairly certain at this point. The Alternatives Analysis determined that it is most

cost-effective to replace the entire bridge, and the bridge is going to be expanded. Aside from the

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Tax Relief & Economic Development

“No Build” alternative, all of the other potential alternatives being evaluated include bus rapid

transit (“BRT”) proposals. So, in considering financing and economic development initiatives,

we should be preparing for BRT and an expanded bridge in the area.39

Monitoring

Mike Kaplowitz will use the same approach in scrutinizing the public uses of funding that he has

employed throughout his legislative career. He will work with agency officials, comb through

budget documents, and highlight waste wherever it may be.

Financing

While proper design is paramount, the major issue confronting this project is how to complete

what is projected to be a potentially $16 billion venture. Legal consultants will be fully

exploring the potential options for financing a project of this size and releasing a report in the

upcoming months, but some options will clearly have to be considered:

 Alternative Delivery Systems – Streamlining the current Design-Bid-Build system in

New York State, by sharing risk and using a private sector model - while securing the

public sector with sufficient performance specifications. This would include Design-

Build, Design-Build-Operate-Maintain, Design-Build-Lease models. Some public

authorities use some of these models right now.

 Public-Private Partnerships – P3s are available on a case-by-case basis right now,

needing specific legislative grants of authority. We should be preparing legislation to

either expand this power for a particular agency/authority (like DOT or NYSTA), or

39
As you will see in the appended Alternatives list, all of the alternatives (excluding the required “No Build”
alternative) contain some form of Bus Rapid Transit (“BRT”).

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Tax Relief & Economic Development

preparing a specific grant for prospective work on the Tappan Zee and other mega

projects.

 Expansion of Thruway Authority – The Thruway Authority has the flexibility right

now to issue debt, has used a State Infrastructure Bank model in the past, has a

transportation infrastructure background, and operates the tolling on the bridge right now.

However, the Thruway Authority is too revenue-strapped and limited in its bonding

capital to support a project of this magnitude. It would need to be significantly

restructured or consolidated with other authorities to leverage existing levels of capital.

 Infrastructure Banks – The state experimented with State Infrastructure Banks in

pursuit of previous federal transportation funding. However, this was a limited entry, and

would need to be drastically expanded to take on any elements of the bridge

reconstruction/expansion.

 Development Corporations – There are a number of local economic development

entities involved already, but another consideration we could explore is a local

development corporation, similar to the way the World Trade Center area has been re-

developed by the Lower Manhattan Development Corporation.

 Federal Funding – The next 6-year transportation authorization remains uncertain. The

President has proposed a National Infrastructure Bank but has not elaborated on it, and

current financing initiatives like TIFIA are likely too limited in their present form to take

on this project.

Economic Development

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Tax Relief & Economic Development

In evaluating economic development opportunities and incentives, we should be considering the

constants in the EIS:

 Studying and Catering to the Appropriate Consumers

o Early phases of the construction will involve bridge and BRT expansion – this

early phase should be focusing on the expanded group of construction workers

who will be rebuilding the area.

o Phase II of this redevelopment should be targeted to the BRT and auto commuters

using the bridge. Preliminary studies revealed that more users are actually

commuting from Rockland to Westchester than to Manhattan – we should be

targeting our marketing at these commuters (initial development can actually be

more dispersed given the flexibility of these two transportation modes, rather than

creating an epicenter around a rail station).

o We should also be catering to the potentially 6 million residents entering in, and

should be analyzing these demographics. We also need to be exploring what

employers are looking to move to this region, given the expanded transportation

capacity and location with this mega-region.

o Finally, we should be preparing for the entry of a rail commuter system, which

will expand the community to include the New York City market and rail

commuters.

Working with Community & Business Leaders – A host of local and county leaders are

involved with this project, in addition to a number of urban planning and transit advocates. We

need to work with them to explore their ability to use their own capital financing (like the new

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Tax Relief & Economic Development

Build America Bonds through the Municipal Bond Bank Agency) on local public projects,

evaluate their economic development entities (exploring use of Empire Zones, Rockland &

Westchester IDAs, Economic Development Corporations) to maximize available capital.

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Energy & Environmental Policy

KAPLOWITZ 2010 | ENERGY & ENVIRONMENT POLICY

Establishing a Robust and Innovative Clean Energy Economy

III. PRODUCING, DELIVERING & USING ENERGY MORE EFFICIENTLY

Despite what some may think, energy efficiency and renewable energy are not merely issues of

reducing emissions and protecting our environment; it is also about strengthening our economy.

Our economic competitiveness will be greatly enhanced by investing heavily in green

technologies. New Yorkers pay nearly the highest energy costs in the nation. Residential

electricity rates were over 60 percent above the national average. Energy costs represent one of

the fastest growing overhead costs for small businesses, and compared with many industrialized

countries, the United States uses far more energy to produce the same unit of economic output.

This is an unnecessary burden on New York businesses that existing technologies could easily

help mitigate. Moreover, homeowners, who are already struggling with mounting property taxes

and mortgage payments, are facing a steep rise in utility bills this winter, sucking money out of

our economy that could otherwise boost consumer spending in the Hudson Valley’s service

industry or help individuals and families pay down debt.

As State Senator, Mike Kaplowitz will make energy efficiency and renewable energy a focal

point of his economic and environmental policy. A comprehensive energy policy focusing on

efficiency and renewable energy sources will assure that New York has a reliable energy supply

while at the same time enabling the state to significantly reduce greenhouse gas (GHG)

emissions. Moreover, such a strategy will address the affordability concerns of residents and

businesses caused by rising energy bills, greatly improving the State’s economic

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Energy & Environmental Policy

competitiveness. Finally, advances in green technologies will reduce the health and

environmental risks associated with the production of energy in all sectors and improve the

State’s energy independence and fuel diversity by developing in-state energy supply resources.

Energy Efficiency

Energy efficiency mechanisms provide extraordinary value by meeting the State’s energy needs

in a cost-effective manner and by reducing energy bills, thereby making New York businesses

more competitive and allowing families to save money. They also help the State to achieve its

environmental goals by reducing emissions of greenhouse gases and other harmful pollutants,

improving quality of life throughout the state. Finally, energy efficiency resources increase

energy security by reducing exposure to supply disruptions and price volatility associated with

reliance on imported fossil fuels, particularly petroleum.

New York’s Energy Efficiency Track Record

New York has been among the nation’s leaders in implementing market-based programs to

ensure that energy efficiency is developed, valued and recognized as a cost-effective alternative

to supply-side energy resources.

More than a decade ago, the Public Service Commission (PSC) instituted a System Benefits

Charge (SBC) to fund energy efficiency programs. The New York State Energy Research and

Development Authority (NYSERDA) has administered these funds to achieve more than 3,000

GWh in annual electricity reductions.40

40
NYSERDA. New York Energy $mart Program Evaluation and Status Report: Year Ending December 31, 2008. 2009.
http://www.nyserda.org/publications/SBC%20March%202009%20Annual%20Report.pdf

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Energy & Environmental Policy

During this same time period, the New York Power Authority (NYPA) and the Long Island

Power Authority (LIPA) contributed an additional 2,000 GWh in annual electricity reductions.

These energy reductions have saved consumers billions of dollars in electricity and fuel costs.

Other State agencies, including the Division of Housing and Community Renewal (DHCR), also

administer successful energy efficiency programs. Moreover, New York’s Energy Conservation

Construction Code (ECCC) has been in place since 1979, and both this Code and State appliance

standards have been periodically updated.

Energy Efficiency Potential

Opportunities for electricity end-use efficiency in New York are extensive and inexpensive when

compared with available supply options.41 Results of a recent study estimate the State’s

achievable potential through 2015 to be about 26,000 GWh, representing a reduction of

approximately 14 percent from the forecast of electricity demand in 2015.42 In addition,

improved building codes and appliance standards could provide a reduction of an additional

11,000 GWh (5.7 percent) from the forecasted electricity use.43

It is estimated that programs that would capture this achievable potential would cost $7.2 billion

in 2008 dollars over seven years, or an approximate average annual program portfolio budget of

$1.0 billion. However, net benefits to the New York economy would total $12.8 billion ($20.8

billion in total statewide benefits and $8.0 billion in societal costs). Therefore, the benefit-cost

ratio of various energy efficiency measures is estimated to be 2.60, which means that the New

41
Optimal Energy Inc., Energy Efficiency and Renewable Energy Resource Development Potential in New York State. It was
found that only one out of every seven kWh of cost-effective, achievable electric energy efficiency savings opportunities within
New York was being realized. The study predicted that realizing even one-third of this potential would yield over $6.2 billion in
net benefits to New Yorkers by 2022.
42
Ibid.
43
This reflects changes to residential and commercial building codes, as well as federal appliance and equipment standards that
have either already passed (but not yet taken effect), or are considered likely to take effect during the next ten years.

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Energy & Environmental Policy

York economy would capture approximately $2.60 in benefits for every dollar invested in

efficiency.44

Much remains to be done to overcome remaining impediments to achieving the State’s cost-

effective energy potential, and as State Senator, Mike Kaplowitz will work hard to capture the

economic savings presented by energy efficiency mechanisms. For instance, although many

energy efficiency measures pay for themselves in a few years or less, for some customers with

limited access to capital, the need for upfront investment remains a significant barrier to adoption

of cost-effective energy efficiency measures. Therefore, ensuring that every ratepayer has access

to the financing that is needed to make efficient upgrades is both critical and cost effective.

44
Optimal Energy, Inc. Achievable Electric Efficiency Potential in New York State. 2008.

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Energy & Environmental Policy

Smart Grid Technology

One of the most effective ways to capture efficiency gains is through the widespread deployment

of “smart grid” technology. Smart grid technologies will increase the efficiency of the state’s

electric system through expanded demand response programs and real-time pricing rate

structures. With the installment of “smart meters” in homes throughout the Hudson Valley,

people will be given real-time price signals that will help them alter their energy usage habits to

become more efficient power users. By monetizing the savings that people could realize by

making certain changes in their behavior, we can help individuals and families lower their utility

bills and indirectly protect our environment as well.

In light of the significant efficiency gains that can be realized with this technology, if elected,

Mike Kaplowitz will be sponsoring legislation that would create a smart electric meter pilot

program for the Hudson Valley with the aim of deploying smart meters in 50,000 homes,

increasing efficiency and lowering utility bills across the region. Homeowners who purchase a

smart meter will be awarded a 10 percent cash grant.

In addition to Mike’s smart meter pilot program, he will also work to provide local businesses

with a 30 percent tax credit (or 10 percent cash grant) for investments in manufacturing facilities

that focus on the development of green technologies.

These proposals will kick-start jobs creation in a 21st century industry and provide common sense

solutions that will put money back into the pockets of hardworking homeowners.

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Women For Kaplowitz

KAPLOWITZ 2010 | SUPPORTING & EMPOWERING WOMEN

Promoting Social & Economic Equality for All

IV. SUPPORTING WOMEN IN THE WORKPLACE

New York has a long history of hardworking women who, from farms to factories to corporate

offices, have helped create, drive and sustain New York’s economy. Yet women in New York

still on average make only 84 cents for every dollar earned by a man. Closing the wage gap and

ensuring women are paid fairly is of critical importance as New York continues its great effort to

ensure fairness in the workplace.

Pay Equity policies are important tools to eliminate a pervasive type of gender discrimination in

the workplace and to close the gender-based wage gap. Specifically, it remedies biased pay

scales that devalue the skills, responsibilities and other features of jobs performed primarily by

women. By revaluing traditionally undervalued features of female occupations and eliminating

bias, Pay Equity will increase the earnings of underpaid, female-dominated jobs and the workers

in those jobs, thereby narrowing the gender wage gap.

Mike Kaplowitz will advocate passionately for working women throughout the state to finally

close the wage gap and ensure all hardworking New Yorker’s a fair wage for a day’s work.

 Supporting and Strengthening the Fair Pay Act – It is time to take real steps to end the

unfair treatment of New York’s working women. By prohibiting wage discrimination

and increasing transparency, victims can determine when they are being discriminated

against, and we can prevent it from continuing. Fair Pay legislation provides the State

and its citizens with better legal tools to be paid fairly for what they do. Women also

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Women For Kaplowitz

deserve a partner who will follow up on the recommendations and conclusions of the

Department of Labor regarding wage inequities to ensure that employers understand their

obligations and abide by them.

Other priorities to ensure gender equality in the workplace include:


 Prohibiting discrimination in the workplace – We need to ensure that women are not

discriminated against at the interview table either, and need to reduce work-related

harassment and incidents that diminish productivity and self-confidence.

 Supporting our working families – It’s time to start exploring creative ways to make

paid family leave and paid sick leave available for New York’s entire workforce - men

and women.

State of the Law:


Despite federal and state civil protections in place, women still make only 84 cents to every

dollar that men make in New York. Assemblywoman John’s Fair Pay Act (A. 3911) would ban

discrimination against employees on the basis of “sex, race and/or national origin” and the

practice of compensating employees in equivalent jobs differently, or by compensating

equivalent jobs disproportionately when they are occupied by a particular gender or race.

Importantly, this legislation also stipulates that an independent arbiter would be empowered to

carefully examine wages in different positions and setting guidance (a party would not know

they were being discriminated against unless they knew about salary discrepancies and market

rates for equivalent positions).

While this bill represents an important first step, it can be strengthened in a number of ways by:

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Women For Kaplowitz

 Clarifying prohibitions on “labor organizations” to provide better guidance as to what

conduct during collective bargaining negotiations would constitute discrimination;

 Clarifying and expanding the whistleblower protections – in particular, defining “adverse

actions or [discriminatory behavior]” – so that retaliatory action by employers against

those employees who attempt to assert their rights or draw attention to incidents of wage

discrimination is prohibited.

 Instituting a separate right of action for the Attorney General’s Civil Rights Bureau to

pursue wage discrimination cases, especially those involving fields dominated by a

particular sex or race.

The Many Benefits of Fair Pay:

 Pay Equity Reduces State and Local Taxes: By ensuring that both men and women are

earning fair, livable wages in return for their hard work, financial security is provided to

more and more New Yorkers, reducing the demand for state-supported social services

and relieving strain on an already overburdened safety net.

 Pay Equity Presents Minimal Implementation Costs: Based on experiences in other

states, effective pay equity programs can be implemented with minimal costs. In

Minnesota, the state spent only 3.7 percent of its payroll budget over a four-year period,

decreasing the wage gap among its 30,000 employees by six to eight percent. The state of

Washington implemented its pay equity plan over a ten-year period, resulting in

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increased pay for women in the lowest job classes by about ten percent. The total cost to

the state was only 2.6 percent of payroll.45

 Pay Equity Expands the Middle Class and Reduces Poverty: By cracking down on

occupational and wage discrimination across a broad spectrum of jobs and industries, pay

equity will support our efforts to reduce poverty levels among the working poor and offer

countless hardworking middle class families greater economic security.

 Pay Equity Boosts Business Performance and Productivity: Fair pay for employees

can lead to greater productivity by raising morale among workers who are confident that

they will receive fair pay for their work. By compensating workers for the fair value of

their work, pay equity can help businesses recruit and retain the best-qualified workers

 Pay Equity Supports Working Minorities and Increases the Diversity of New York’s

Workforce: Across jobs typically dominated by people of color, workers earn

approximately 66% of white men earn, but with pay equity, that disparity would decrease

substantially, and people of color would earn approximately 94 percent of what white

men earn.46

 Pay Equity Strengthens our Economic Recovery: A recent report by the Global

Markets Institute highlighted the fact that improved gender equality and greater buying

power among women will benefit important sectors of our economy, including food,

healthcare, education, childcare, apparel, consumer durables and financial services.47

45
http://www.pay-equity.org/info-Q&A-Act.html
46
Stone, Pamela and Arielle Kuperberg. 2005. “Anti-Discrimination vs. Anti-Poverty? A Comparison of Pay Equity
and Living Wage Reforms.” Journal of Women, Politics & Policy 27:23-29.
47
Global Markets Institute: The Power of the Purse – Gender Equality and Middle Class Spending (2009), available
at http://www2.goldmansachs.com/ideas/demographic-change/power-of-purse-doc.pdf.

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Spending driven by women is expected to support the development of human capital,

which will fuel economic growth in the years ahead. At the same time, economic growth

should continue to bolster gender equality, creating a virtuous cycle of growing equality

and wealth for our communities.

V. ENDING VIOLENCE AGAINST WOMEN & REFORMING FAMILY LAW


Despite meaningful strides in public awareness, high rates of violence against women persist in

New York. Of highest concern is the rate of violence against our young women – one study

examining New York’s high school students found that 16 percent had already experienced

sexual violence at some point in their life, and more than half of those who had dated had

experienced some form of physical violence from their partners.48 This prevalence of violence

has a tremendously negative impact on the physical and mental health of too many New York

women, and jeopardizes our economic security and public safety.

Mike Kaplowitz is committed to ending violence against women in all its forms and carrying on

the good work that our Democratic majority began, including:

 Continuing and monitoring reforms of the order protection system until every

domestic violence or sexual violence survivor is fully protected. These efforts will

complement recent accomplishments at the state and local level.

 Continuing to update antiquated divorce and maintenance laws to ensure fairness

and prevent financially weaker spouses from being taken advantage of during prolonged

litigation or being force to settle for the wrong reasons.

48
NYC Alliance Partners and Peers: Sexual and Dating Violence Among NYC Youth (2008), available at
http://www.svfreenyc.org/research_par_3.html.

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 Prohibiting employment or housing discrimination against domestic violence

survivors.

 Combating dating violence, particularly teen dating violence, through prevention and

awareness programs, including creation of a Teen Dating Violence & Bullying Task

Force.

 Establishing mechanisms for domestic violence and stalking survivors to protect their

new locations from abusers, including an address confidentiality program.

 Reviewing policies regarding sex offender registries to ensure that they are effectively

protecting our communities.

State of the Law:

 The Order of Protection System in New York has been modified by a number common

sense proposals this year, including allowing for an extended time period to have orders

of protection issued (Chap. 325 of Laws of 2010), clarifying the law on dismissing

protection orders based on temporal considerations, recognizing the long-term pattern of

abuse and difficulty of litigating domestic violence (Chap. 341 of Laws of 2010),

permitting electronic transmittal of orders of protection statewide (Chap. 261 of Laws of

2010), and a law that clarifies that peace officers and police officers can serve orders of

protection during any legal stage (Chap. 446 of Laws of 2010). I will work with

survivors’ advocates and criminal justice officials to track the progress and

implementation of these critical reforms.

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 Chapter 371 of the laws of 2010 established responsible guidelines for the courts to

follow in distributing post-marital income during divorce proceedings. This legislation

allows low-income spouses to establish their right to maintenance during the interim

period between the initial filing and the granting of the divorce, a critical period of

transition, rather than having to undergo lengthy litigation to secure this right. However,

it does not address maintenance issues that may arise after the divorce is finalized. We

await the findings of the Law Review Commission that was directed to study and make

recommendations regarding post-divorce maintenance laws.

 The Governor vetoed the Senate’s housing discrimination legislation (S-5999A), which

would prohibit housing discrimination against domestic violence survivors. I will work

with legislative and criminal justice leaders to formulate a rationally-tailored definition of

“survivors” so that we can ensure access to safe, affordable housing.

 The Governor also vetoed an update to the previous year’s bill prohibiting employment

discrimination against domestic violence survivors (S-6000A). This expansion of the law

would require employers to make reasonable accommodations to permit survivors to use

their leave or to take unpaid leave to address the variety of medical, family and legal

matters associated with domestic violence. The veto was again based on the definition of

domestic violence survivor; I am committed to working with my colleagues to put

together a definition that is appropriate in scope and fully consistent with existing law.

 Currently, requirements that survivors use their actual addresses for many state programs

means that their abusers can find their new addresses through public records searches.

Another vetoed bill (S-7379) would direct creation of an address confidentiality program

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Women For Kaplowitz

whereby domestic violence survivors could have mail delivered to an address designated

by the secretary of state, who would then forward the mail to the survivors’ actual

addresses.  Though vetoed due to fiscal concerns, protecting domestic violence survivors

is the sort of activity that saves the State resources. Similar to our reevaluation of the

IOLA system of funding civil legal services, we should explore mechanisms to fund this

initiative as well. Perhaps the Governor’s IT in-sourcing program will generate

administrative efficiencies and provide adequate technical staff to perform this

programming.

The Staggering Scope of Violence against Women in New York

 Violence against women in NY is damaging thousands of women mentally, physically,

economically, and emotionally, costing millions in associated damages and killing New

York’s economic productivity.

o In Westchester County, there were nearly 2,500 incidents of domestic violence

involving assault, sexual assault, and violations of protection orders last year.49

o In Putnam County, there were 165 incidents of domestic violence, more than half

of which were violations of protective orders in the last year.50

o In Dutchess County, there were over 1,200 incidents of domestic violence last

year.51

49
http://criminaljustice.state.ny.us/crimnet/ojsa/domesticviolence/westchester.pdf
50
http://criminaljustice.state.ny.us/crimnet/ojsa/domesticviolence/putnam.pdf
51
http://criminaljustice.state.ny.us/crimnet/ojsa/domesticviolence/dutchess.pdf

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o In New York City, nearly half of all fatal violence against women (44%) was

confirmed to be the result of Intimate Partner Violence.52

Teen Violence

 Since 1999, physical dating violence reported by public high school females in NYC has

risen almost 50%. High school survey data indicate that reported physical dating

violence increased from 7.1% in 1999 to 10.6% in 2005.53

 About one in three high school students have been or will be involved in an abusive

relationship.54

 Forty percent of teenage girls aged 14 to 17 say they know someone their age who has

been hit or beaten by a boyfriend.55

 Over 16% of New York City high school students reported experiencing sexual violence

at some point in their lives.56

Costs

The New York State Office for the Prevention of Domestic Violence reported that nearly 30,000

individuals were denied shelter in New York facilities, 16,000 of which were children. 57

o The most common reason for denial was that the facility was “at capacity.”

52
http://www.nyc.gov/html/doh/downloads/pdf/public/ipv-08.pdf
53
http://www.nyc.gov/html/doh/downloads/pdf/public/ipv-08.pdf
54
http://www.acadv.org/dating.html#statistics
55
http://www.acadv.org/dating.html#statistics
56
NYC Alliance Partners and Peers: Sexual and Dating Violence Among NYC Youth (2008), available at
http://www.svfreenyc.org/research_par_3.html.
57
http://www.opdv.state.ny.us/statistics/nydata/2009/nys2009data.pdf

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 Over 335,000 domestic violence and sexual assault hotline calls were received by New

York State in 2009.

 25% of assaults reported by police officers outside of New York City were committed by

intimate partners.

 207,726 Orders of Protection filed in New York State courts were recorded in the

Domestic Violence Registry.

VI. BUILDING ECONOMIC SECURITY & SUPPORTING WORKING PARENTS

Mike Kaplowitz recognizes that economic security for women is crucial for both the well-being

of individuals and families and for the economic health and vitality of the state as a whole, and

he is committed to promoting policies that create greater security, including:

 Ensuring that women benefit from job creation legislation, including emerging

opportunities in the public health and green-collar jobs sector.

 Expanding workplace opportunities for women in non-traditional fields.

 Ensuring the enforcement (and monitoring the impact) of the landmark divorce reforms

implemented this year (e.g. no-fault divorce, interim counsel fees, post-marital income

guidelines). Mike Kaplowitz will work hard to ensure that these reforms are successful

in protecting the economic security of divorced women, particularly women who have

divorced after years outside the workforce.

In these challenging economic times, it is especially important to help families afford quality

child care, enabling parents to get and keep a job and ensuring safe, stable environments for

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children, promoting their overall growth and learning. Ensuring access to affordable, high-

quality early childhood education and before-and-after school programs can maximize the

possibilities of our children’s bright futures, and ease the burden for families trying to make ends

meet.

Mike Kaplowitz is committed to providing support for children, while also giving working

parents the foundation they need to raise their families. Important efforts include:

 Ensuring the availability of high-quality child care throughout the 40 th Senatorial District,

and build on the changes made last year by the “Safer, More Affordable Child Care Act.”

 Encouraging collaboration between the various state agencies that have overlapping

oversight over early childhood care and education in order to reduce waste while

improving services.

 Exploring fiscally responsible ways to expand state-funded pre-kindergarten programs.

 Enhancing the minimum health and safety standards for child care facilities.

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