Gotham Gazette

The Place for New York Policy and politics

The Other Power Shift

Gotham Gazette image by Ya-Hsuan Huang

Unlike Barack Obama's victory, the election of more Democrats to the New York State Senate did not produce impromptu celebrations in the streets or tears of joy. But it does represent a huge change for New York State.

Assuming the Democrats keep all their senators in the fold, the party in January will control both houses of the legislature and the governor's office. The last time a single party accomplished that was in the days of Nelson Rockefeller -- and that was the Republicans. The Democrats haven't held such clout since 1935. They haven't had a majority in the State Senate for more than 40 years.

All three men in a room -- Gov. David Paterson, Assembly Speaker Sheldon Silver and the likely Senate majority leader, Malcolm Smith -- are from New York City. Two of them are black.

This change comes at a time when New York faces a huge budget deficit along with other challenges that could prove daunting to any government, let alone one long considered to be among the most dysfunctional in the nation.

So what happens now? We asked a number of experts to weigh in on how they think Tuesday's results will affect the state government and its actions on key issues.

A Cure from Washington -- Jonathan Engel

Gaining Influence -- David Cingranelli

The Brick Wall Tumbles -- Billy Easton

Finding the Money for Schools -- Geri Palast

Changing the Way Albany Does Business -- Dick Dadey

Taxes and Spending -- Robert B. Ward

Crisis on the Tracks -- Gene Russianoff

An Opportunity to Help Low-Income New Yorkers -- David R. Jones

Room for Tenants -- Michael McKee

Regulations and Responsibility -- Jack Freund

It's Not a Revolution -- Jeff Stonecash

Thinking Small in Albany -- Gregory Julian

A Cure from Washington?

Does the party flip in the State Senate have any ramifications for healthcare in New York? Not really.

State healthcare can be roughly broken down into providing health care, paying for it and regulating it.

Health care, where available, comes through public hospitals such as the eleven hospitals of the New York City Health and Hospitals Corp. (the largest public system in the country) as well as state psychiatric facilities. Regulation comes through county and municipal public health departments: the folks responsible for inspecting restaurants, keeping tabs on births and deaths, and tracking infectious disease. And payment comes in the form of the state’s Medicaid program, which provides health insurance to the poor and permanently disabled, as well as picking up nursing home tabs for anybody falling below certain poverty thresholds. Of the three, the one most responsive to political change is Medicaid.

New York’s Medicaid program, long one of the most generously funded of all state Medicaid programs, is the largest single item in the state budget – roughly $30 billion of $80 billion. This is typical, and as a result Gov. David Paterson, along with virtually every governor in the nation, would like desperately to reduce that.

The problems he faces are twofold: First, he cannot reduce eligibility for Medicaid without violating federal guidelines, and thus the gross number of Medicaid recipients is beyond his control. Second, while he can reduce reimbursement rates to doctors and hospitals, this will encourage many physicians to no longer see Medicaid patients, thus reducing access to medical care for the state’s poor. The governor is in a bind, and the legislature can do little to help him out, short of increasing general revenue through the state income tax.

Viewed as part of the larger shift toward Democratic power holders, however, the flip is significant. President-elect Barack Obama has placed health reform high on his list of priorities, probably just behind stabilizing the credit markets and withdrawing from Iraq, and his campaign team has produced a detailed plan of his intentions. The Obama health plan is essentially a modified “pay or play” model with an expanded federal system – much like the present German system.

People with private insurance through their employers would probably see little difference, but uninsured fulltime employees would either receive a private policy through their employers or be allowed to buy into an expanded federal insurance plan, which, in theory, would mirror the plan that fulltime federal employees now have access to. Obama’s plan would guarantee more revenue coming into the federal system (through the “pay” mandate for those employers who choose not to provide insurance) meaning that less funding would have to flow through Albany. The balance of government to private money in the system will not change, but the balance of federal to state money will. Governors across the nation will breathe a sigh of relief if this comes to pass, which is looking more likely with each U.S. Senate seat that the Democrats pick up.

All by way of saying, the shift in Albany is only significant, in healthcare terms, insofar as it is emblematic of the larger national shift toward Democratic control. These will, indeed, be interesting times.

Jonathan Engel, professor and associate dean, School of Public Affairs, Baruch College,

Gaining Influence

Unified Democratic Party control at the state level, combined with unified Democratic Party control at the national level should increase the ability of the city and state of New York to influence the direction of federal government policies. At the same time, the shift in power within the state toward the Democratic Party will reduce the power of upstate New York relative to downstate over many important issues such as the proper formula for distributing state education funding among school districts.

-- David Cingranelli, professor of political science, Binghamton University

The 'Brick Wall' Tumbles

The State Senate Republicans have played a major defining role in all educational policy and funding debates. Instead of pushing for New York City to get its fair share, Senate Republicans have actively "dissed" New York City and pushed for money for wealthy Long Island school districts. The four Republican Senators who represent New York City have stood silently by as Dean Skelos has led them down this path.

The change in the Senate Majority is a sea change in term of education issues. Senate Democrats have consistently championed a fair funding formula that would benefit New York City and all high needs districts across the state. We have every reason to expect Senate Democrats will hold true to these principles.

A fair school aid distribution formula is what is best for New York City and other high-needs school districts across the state. The brick wall, which has stood in the way of education equity has now been taken away.

-- Billy Easton, executive director, Alliance for Quality Education.

Finding the Money for Schools

The situation is in flux. Normally one would think this would be a great sign for the Campaign for Fiscal Equity [which brought the successful law suit challenging the state's funding of New York City schools] and for education generally. Given the current economic climate, though, we don't know how these new elected officials -- like Gov. David Patterson himself, who has always been a supporter of CFE and of education -- will handle education in this time of turmoil.

We would hope that they would approach budget cutting with a scalpel, not a pickaxe. None of these cuts can be across the board. CFE has advocated meeting the needs of lower-income school districts. Those needs still are not being met.

We need to be looking at increasing revenues and not just reducing social services. The election indicated a strong willingness by New Yorkers, who voted overwhelmingly for President-elect Barack Obama, to raise revenues from high-income New Yorkers. This would be a shift from the views of the former Republican majority position in opposition to an increase in the personal income tax.

--Geri Palast, executive director, Campaign for Fiscal Equity

Changing the Way Albany Does Business

The change in party control of the State Senate provides a new level of optimism for those advocating reform of state government. The Senate Democrats have known for a long time what it is like to be in the Senate minority and live the harsh consequences of not being the party in control. Sen. Malcolm Smith, the presumed incoming majority leader, will have a lot on his plate, but he can demonstrate immediately to New Yorkers that change has indeed come to Albany by implementing some overdue reforms that the Senate Democrats have long embraced and supported.

At the Albany Reform Lobby Day last spring, Smith underscored that reform was indeed on the agenda if and when the Democrats gained control by saying “reform is on the way and “reform is the call of the day.” As Liz Benjamin of the New York Daily News reported last April, “Smith pledged to treat the Republicans better than they've treated the Democrats if he succeeds in ousting [Sen. Joe] Bruno as majority leader this fall, saying minority members should have the power to vote bills out of committee if they can muster up enough votes to do so.” So chief among the reforms that can easily be achieved at the outset in January is rules reform and opening up the legislative processes of the Senate to be more transparent and collaborative.

Most likely second on the reform list will be an effort to decrease the influence of money by implementing much needed campaign finance reform. Though public financing will ultimately be crucial to that goal, it is difficult to imagine that Gov. David Paterson will approve a campaign finance reform bill that includes public financing, although he was a strong proponent of it when he was in the Senate. Even so, much can be done to bring about campaign finance reform by increasing disclosure, lowering campaign contribution limits, restricting or outright banning some kinds of political giving, and strengthening enforcement. Bringing about campaign finance reform will be an important signal on how serious Smith and his Democratic colleagues are about reforming how state government does business.

There also will be an opportunity to enact improvements to the much maligned ethics reform measure passed two years ago when Eliot Spitzer became governor. Changing the composition of the new Commission on Public Integrity to ensure that no one elected official controls a majority of the appointments, as the governor now does, will be a good place to start. Adding legislative oversight to the commission’s realm of responsibility is another needed reform.

The recent election also gave new impetus to the need to change the way elections are run by overhauling the Board of Elections and increasing opportunities for voters to cast their ballot by implementing same day voter registration and early voting.

The most needed reform will be ending the partisan gerrymandering that now guides legislative redistricting. Taking it out of the hands of the legislature itself and giving the responsibility to an independent redistricting commission is essential to any meaningful effort to reform Albany. It would do much to restore New Yorkers confidence that they are choosing their elected officials instead of elected officials choosing their voters. Smith once strongly professed support for such an approach, but in a bow to pressure from Democratic members of Congress, he questioned the need last spring for an independent commission. He began instead arguing that the State Senate could be trusted to draw the lines if the criteria and guidelines for doing it were strengthened. Such an approach still does not get to the notion that legislators who stand to benefit from how their districts are constructed should not be the ones drawing the lines.

Smith and his Democratic colleagues have an unprecedented opportunity to reform Albany along the lines they have been talking about for decades. Given the responsibility they now hold, it could be a very exciting to see the change finally arrive.

--Dick Dadey, executive director, Citizens Union. Citizens Union is the sister organization of Gotham Gazette's publisher, Citizens Union Foundation.

Taxes and Spending

There will be change, but the effects of having the Democrats control the Senate is a bit more difficult to predict than it might have been 10 or 15 years ago. Sen. Malcolm Smith [the likely new majority leader] has been talking about the need to reduce spending, although it is still likely that the average member of the Senate Democratic conference might be more willing to raise taxes than the typical member of the Senate Republican conference.

This all relates to the ability of New York City to control its own fiscal policy. I would guess that future mayors would attempt to get the Senate Democratic majority to give the city more flexibility than the Senate Republican majority has been willing to approve. The upstate Republicans have wanted more flexibility on Medicaid so maybe there could be a grand compromise where local leaders gain more control over their own fiscal policy.

At the state level, it is unlikely we will see someone as dominant as Nelson Rockefeller, who, when he had majorities in both houses, was able to dictate the agenda. But now the legislature is much more independent than it used to be, and the two houses are more independent of each other. What that comes down to is it’s much more likely that there will be a single leader or even a ruling triumvirate where three leaders work in tandem on everything.

--Robert B. Ward, deputy director, Nelson A. Rockefeller Institute of Government Rockefeller Institute

Crisis on the Tracks

How will the election results affect the future of transit in the New York metropolitan region?

The newly elected officials in the state and federal governments -– along with their colleagues in city government -– will be facing the worst fiscal crisis for the Metropolitan Transportation Authority in the more than 25 years that I've monitored the agency's finances.

And that's bad news for the more than 9 million riders who use the subways, buses and commuter rail lines. The MTA's preliminary budget for 2009 already includes a fare increase for next July, right on the heels of a fare hike this past March.

And, as the media recently reported, the MTA’s deficit in July – pegged at $900 million – has ballooned by several hundred million dollars. Depending on how bad the numbers are and how much the MTA can save in management efficiencies, that could result in a double whammy: an even higher fare hike coupled with major service cuts.

In plain English, more for less.

Why is the MTA having such problems? There are two major causes.

The first is the economy. In addition to fares, the MTA is funded by a variety of economically sensitive taxes. These include taxes on sectors of the New York region that directly benefit from the most extensive transit network in the nation, such as businesses, property owners, consumers and drivers. Every indication is that these taxes will raise less money than originally projected for this year and next.

Second, the MTA has been forced to borrow huge sums – up to $28 billion – to finance its critical rebuilding program, using the money to buy or rehabilitate new subway and commuter cars, buses, scores of stations, and infrastructure like tracks, signals, tunnel lighting and tunnel fans.

The MTA has become the fifth largest borrower in the United States, behind only the states of California, New York and Massachusetts and the City of New York.

The bill for all this borrowing is coming due. "Debt service" on the bonds will cost $2 billion by 2010 - fully one fifth of the MTA's $10 billion budget. Debt service is also the single largest growing expense for the agency.

What's to be done?

On the federal level, there's a big push for an economic stimulus package that would include many billions of dollars for badly needed transportation infrastructure. Investing in the subways, buses and commuter rail should literally help get America – and our economy – moving again.

On the state level, a commission appointed by Gov. David Paterson and headed by former MTA Chairman Richard Ravitch is due to report on Dec. 5 on ways to fund both the MTA's operating and rebuilding needs. Those watching the commission believe it will suggest some combination of new revenue sources, fares, tolls and management savings.

Once its recommendations are out, it will be up to Paterson, the state legislature and Mayor Michael Bloomberg to take action.

That's a tall order. But the alternative of disinvesting in transit would be much worse.

A big fare hike and major service cuts would be widely seen as a hit on the very people reeling from our troubled economy. It would also risk a return to the many decades in which the transit system was both a drag on the region's economy and a misery to use.

--Gene Russianoff, staff attorney, Straphangers Campaign

An Opportunity to Help Low-Income New Yorkers

Last Tuesday night, the nation and the world witnessed the election of Sen. Barack Obama as the nation's 44th president. For the first time in the 232-year history of our republic, a black American will occupy the highest office in our land. It is a remarkable achievement for a nation that once condoned the enslavement of Africans and codified discrimination against black Americans.

We should be mindful that despite the historic nature of his election, President-elect Obama faces significant challenges in the days and months ahead. He will be confronted by an economic crisis that rivals that of the Great Depression.

Still, there are some federal proposals that can help those out of work, especially young people. A bill introduced by Rep. Charles Rangel would amend the current Work Opportunity Tax Credit to include low-skill youth who have been out of work and school for the past six months. Rep. Jerrold Nadler has introduced a bill that would create a career-ladder grant program within the Federal Transit Administration to help existing workers retain jobs in the public transportation industry.

On the state level, Democrats captured the majority in both houses of the legislature. This could provide opportunities to move the agenda for low-income New Yorkers. The results of our latest survey of low-income New Yorkers, "The Unheard Third," reveal that these New Yorkers are most worried about housing costs, losing their homes and jobs, and the rising gas and home heating prices. They are struggling just to meet basic needs.

For all the euphoria we are experiencing today, the reality is that we face challenges of epic proportions. But by working with our representatives in both Albany and Washington, we have the chance to bring real change through policies that help low-income New Yorkers and make New York a better place to live for all of us.

David R. Jones, president and chief eexecutive officer, Commuity Service Society.

Room for Tenants

Tenants PACworked very hard to elect a Democratic State Senate, and that has been our task for the last four election cycles. This year we raised money for several Democratic candidates, contributing a total of $55,000, and did lots of volunteer work for Darrel Aubertine [who won an open seat in a special election last February], Joe Addabbo and Brian Foley [who defeated incumbent Republican senators on Nov. 4]

Now, we expect to have a much different reception in the State Senate. As long as the Republican were in charge, tenants could not get a hearing in the State Senate because the Republicans were owned lock, stock and barrel by the New York City real-estate industry, which gave them $2 million every election. For the last 20 years, you couldn't get the simplest pro-tenant bill out of committee.

Instead of the majority conference being controlled by upstate and suburban Republicans, it now will be controlled by Democrats from New York City and the suburbs, who represent lots of tenants. They support our reform agenda not only because we helped them win the majority, but because they understand the importance of rent regulation in maintaining a supply of affordable workplace housing in the downstate region.


Even upstate Democrats, who do not have rent control, have been very supportive of our tenant agenda. One told me, referring to the bill the Assembly passed in May to repeal vacancy decontrol, "This issue does not affect my district but it is life and death to my colleagues in the City, and that is why I support it."

We are not naĂŻve. We're expecting opposition. We are up against a powerful adversary, and their power comes from their money. But with Liz Krueger chairing the housing committee and the new majority in the Senate, we expect a very different situation.

--Michael McKee, treasurer, Tenants PAC

Regulation and Responsibility

The shift in the Senate from Democratic to Republican control is obviously a concern, since the Senate has served as a bulwark against the Assembly's attempts to over-regulate the rental housing industry. At the same time, now that the Democrats will be in charge of the Senate, they will have to have a sense of responsibility. At a time of economic crisis, we find it hard to think the Senate would put more of a regulatory burden on the housing industry. We also think it is unlikely that the Senate will want to turn its power to regulate rental housing over the city.

--Jack Freund, executive vice president, Rent Stabilization Association of New York

It's Not a Revolution

The change from Republican to Democratic control in the Senate, giving Democrats control over both houses of the legislature and the governorship, is presumed to be significant. While it seems it should cause significant change -- the first unified Democratic control in a very long time -- it is unlikely to result in major changes in policy.

The more recently elected Democrats in the Senate come from areas previously held by Republicans and with greater Republican enrollment. They are unlikely to be willing to vote for liberal programs and risk being defeated in 2010. They will constrain the direction of the party. There is also concern that the reason some were elected was because of the negative view of Republicans, and the new Democrats must be careful that the political winds will shift in 2010.

Further, the state already has the highest state and local taxes in the country and is not gaining population. Any policy change that would raise taxes will create more problems, and Democrats worry about jobs as much as anyone.

Finally, the looming projected deficits will constrain Democrats. There may be movement on some "cultural wars" issues but moving fiscal policy in a liberal direction is unlikely.

--Jeff Stonecash, professor of political science, Maxwell School of Syracuse University

Thinking Small in Albany

During my candidacy for the New York State Senate in the 38th district, I observed that the politics of cronyism still is the predominant political perspective that limits a politics of change embraced by the voters. Barack Obama's effort nationwide, to jumpstart a more participatory democratic agenda, does not resonate with the power-seeking players in local and state politics.

Dr. Joseph's Stiglitz "millionaire's tax," a progressive income tax, a single-payer universal health care system, energy independence in 10 years through alternative energy programs, job growth through sustainable development, education for improving the quality of life, transparency in government contracts and transferring member items to budget-line items, if combined, would yield significant budgetary balance in the coming years. Instead, "crisis management" sets Gov. David Paterson's agenda. It's a campaign strategy, instead of creative thinking to retool government in New York State.

The opportunity to appeal to empowering a "do-it-ourselves democracy" that the Obama victory has ushered in is lost on the New York politicians who are addicted to manipulation and stagnant thinking. Until we have a constitutional convention that modernizes NY State, including a non-partisan, common sense approach to realigning election districts, the nonsense of the three men in a room continues in Albany, be they of a red or blue hue.

--Gregory Julian, who lost his bid for the State Senate, is a professor of political science at Pace University.




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