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New York’s Hospitals and Doctors Have the Nation’s Highest Medical Malpractice Costs—That Makes No Sense Despite fewer adverse events and scoring high on numerous quality measures, New York’s world-class hospitals and doctors spend billions annually on medical malpractice costs—by far the nation’s highest. It’s stark proof of a deeply flawed system. Let’s not make things even worse. We urge the NYS Legislature to reject any bills that would increase medical malpractice costs and weaken the ability of doctors and hospitals to deliver high-quality care.
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EDITOR’S NOTE / Contents
Jon Lentz Senior Editor
Gov. Andrew Cuomo loves to talk about the Tappan Zee Bridge. Despite the growing need to replace it, he likes to say, his predecessors couldn’t get it done. It would cost too much, skeptics said. Politicians, environmentalists and local residents would kill it. But today the first new span is well underway, with a second one scheduled for 2018. “The Tappan Zee Bridge is not just a bridge, but a symbol of possibility to me,” the governor said late in March. “We were doubting our own capacity for a long time, and the Tappan Zee Bridge says, ‘Yes, you can.’” After announcing an ambitious infrastructure program earlier this year, Cuomo is hoping to find similar success. It won’t be easy. As Bob Hennelly writes in this issue, major projects in New York are often plagued by delays, cost overruns and even fraud. More levels of government have to sign off on plans, even as fewer dollars are contributed. In many cases, there’s no clear funding plan in place – and on Cuomo’s new Tappan Zee Bridge, that’s something he just isn’t talking about.
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SPOTLIGHT: TRANSPORTATION INFRASTRUCTURE City & State explores which of Cuomo’s ambitious infrastructure projects are likely to move forward – and the various challenges they face.
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NURSING HOME NEGLECT Frank Runyeon continues his series on abuse in New York nursing homes, shedding light on the revolving door between nursing homes and homeless shelters.
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TAX CAP TROUBLE Buffalo reporter Justin Sondel on how rising assessments in Western New York are causing headaches for local budget offices.
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NEW YORK SLANT Nicole Gelinas and Jeff Smith weigh in on the mounting accusations against Mayor Bill de Blasio.
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BACK & FORTH We speak with Josh Lafazan, one of the youngest people in elected office in New York and a cheerleader for millennials in politics.
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City & State is the premier multimedia news organization dedicated to covering New York’s local and state politics and policy. Our in-depth, non-partisan coverage serves New York’s leaders every day as a trusted guide to the issues impacting New York. We offer round-the-clock coverage through our weekly publications, daily e-briefs, events, oncamera interviews, weekly podcast and more.
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City & State’s inaugural 50 Over 50 list celebrated some of New York City’s most distinguished leaders in government, advocacy, business and media. The winners were honored with a special ceremony last month at Federal Hall National Memorial in downtown Manhattan. The list included 10 lifetime achievement award winners: Lilliam Barrios-Paoli, Tonio Burgos, Ray Kelly, Ernie L ogan , B ob Morgenthau , E leanor R andolph , Dick Ravitch, Howard Rubenstein, Steven Spinola and Merryl Tisch. All 50 have committed decades of their lives to making New York City a better place.
Evan Goldberg, president of the New York State Trial Lawyers Association Marcia Kramer, chief political correspondent at CBS 2 News
Howard Rubenstein, chairman of Rubenstein Associates Louis Coletti, president and CEO of the Building Trades Employers Association, and Frank Marino, president and CEO of Marino
Tonio Burgos, CEO of Tonio Burgos & Associates Inc.
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U.S. Rep. Carolyn Maloney, Gene Russianoff, senior attorney of the New York Public Interest Research Group, and Jay Hershenson, CUNY senior vice chancellor
City & State President and CEO Tom Allon and state Republican Committee Chairman Ed Cox
Ernie Logan, president of the Council of School Supervisors and Administrators
Former New York City Public Advocate and 50 Over 50 Chairwoman Betsy Gotbaum congratulates former Deputy Mayor of Health Lilliam Barrios-Paoli
Bertha Lewis, founder of The Black Institute
John Catsimatidis, chairman and CEO of Red Apple Group, and former NYPD Commissioner Ray Kelly
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FROM
NURSING HOMES TO
HOMELESS
SHELTERS Story and photos by FRANK G. RUNYEON ROBERT NEGRON, 60, has been shuttled between more nursing homes than he can remember – at least six and perhaps as many as 20 – before landing in his current bed at Beth Abraham Health Services in the Bronx. The instability has been wearing on Negron, a Crohn’s disease patient who uses a wheelchair and needs regular attention for an unhealed wound on his foot and chronic skin ulcers – but it’s still better than being in a homeless shelter, he would say. “In the shelters it’s dirty, it’s nasty. You could not get enough medical attention and lose a limb,” Negron said, explaining how the unsanitary conditions at the men’s shelters on Ward’s Island, over
the 10 years he occasionally stayed there, put him at risk. Although he visited a clinic for care and did the best he could to change his own bandages, “There were times when my foot was really bad,” he said. A New York City Human Resources Administration spokesman said that since Negron’s stay, “substantial improvements” have been made at that shelter. Yet nursing homes, Negron said, have forced him into city homeless shelters three times. While there, the only thing that concerned him more than the lack of medical care were the people around him. “They victimize you,” Negron said. “The criminals and the undesirables, they prey on the
homeless disabled.” Once, he said, another man assaulted him in the shelter when he refused to hold drugs for him. Negron’s case is an extreme one, advocates for the disabled say, but he is not alone. His experience is illustrative of a long-standing practice of nursing homes placing residents into New York City’s Department of Homeless Services shelter system. These vulnerable New Yorkers often have chronic medical conditions that have improved little, advocates say, but are moved to shelters that are poorly equipped for ailing individuals and are rife with violence Long-term care advocates are alarmed by a sudden spike in the
number of older adults who report being forced out after having received nursing home care for many months or years. Although the city keeps no official statistics on transfers from nursing homes to shelters, advocates say there is evidence that the figures are rising. In March, Gov. Andrew Cuomo called the city’s homeless shelter system “deplorable” and “dangerous,” citing recent news reports that show high numbers of assaults. The city has taken steps to try to address these issues, most recently opting to retrain shelter security staff in order to manage the violence. “We are in the throes of a homelessness crisis in New York
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S Robert Negron, 60, says he’s been forced from nursing homes into shelters several times.
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City … and we are watching people being poured into the shelters from nursing facilities,” said Susan Dooha, executive director of Center for Independence of the Disabled, New York. These often frail individuals, she said, “cannot be cared for in the shelters,” where there is no skilled nursing care and part-time clinics offer what is often the only medical aid available. Nursing homes are required by state law to ensure all transfers are made to a safe place. For that reason, Dooha said she “cannot fathom” how nursing homes could send their residents to the city’s homeless shelters. Beyond that, Dooha said, federal protections were also being trampled. When reached for comment, an HRA spokesman said “no one” should have been transferred from a nursing home to a shelter “if the needed medical treatment is not available at that shelter.” “Their civil rights are being violated, in my opinion,” Dooha said, citing protections under the Americans with Disabilities Act that ensure safety and accessibility for the disabled. “I recently brought this up with people in the governor’s office because I’m so concerned,” Dooha said, adding that she had also alerted the New York State Department of Health and the New York State Office for the Aging. “People are not furniture,” Dooha said. Nevertheless, nursing home administrators responsible for what they call “involuntary transfers” of their residents into homeless shelters tell watchdogs that there’s little they can do. If someone no longer requires a “nursing home level of care,” the logic goes, that person needs to leave. And for those with nowhere else to go, that means they go to a shelter. “What I’ve heard directly from the people who were responsible for the discharge is, ‘Yes, it’s unfortunate. We wish we had another option. Our hands are tied. They gotta go,’” explained Richard Danford, director of the New York City Long Term Care Ombudsman Program, a federally mandated and largely volunteer group advocating
for nursing home residents. In the past, Danford said, “You could count the number of shelter discharge complaints the ombudsman program got in a year on one hand.” In the last four months, however, complaints are coming in at eight times the normal rate. Since last November, the program fielded calls from 16 nursing home residents in New York City complaining that they were being transferred to homeless shelters. And while that number may appear low, Danford said, those complaints represent only a small fraction of what’s happening in the city’s nursing homes. It is likely that there are many others being sent into homeless shelters who did not call to complain, Danford said. “These are the people who have it together enough to be able to read their notice, realize they can call us, and realize they can appeal the discharge,” Danford said. And those calls did not originate from a single nursing home or even a few nursing homes. The calls came from 16 residents in 15 different homes, in four out of the five boroughs in New York City. In other words, Danford said, there are indications that the transfers are not only increasing in number, they’re becoming more widespread. “We’re really worried that that’s the tip of an iceberg,” Danford said. “It’s clearly becoming a practice. … There’s no question about it. Our biggest fear is that the number is substantially higher” than the call logs show. After City & State requested statistics on the number of nursing home residents discharged into city homeless shelters, a spokesman for the Human Resources Administration responded that “DHS has not been systematically tracking entries from nursing homes but will be doing so in the future.” The spokesman added, “As part of the 90 day review, we will be enhancing DHS procedures to make sure that clients are not discharged from nursing homes to DHS shelters when that is not appropriate.” Daniel Ross, a lawyer with MFY
Legal Services, which provides pro-bono civil representation for vulnerable New Yorkers, has counseled several nursing home residents thr eatened with a transfer into a homeless shelter. “Most shelters are inaccessible (to the disabled) and they’re unsafe,” Ross said, citing news reports describing shelter conditions. “And those two things are particularly concerning for nursing home residents who are particularly vulnerable to those conditions.” “I don’t think a homeless shelter can be an ‘appropriate discharge plan’ for long-term nursing home residents,” Ross said, referencing the plans that nursing homes must develop before removing someone from their care. Nursing home residents can be discharged against their will for a few reasons, according to state regulations, including a determination that “the transfer or discharge is appropriate because the resident’s health has improved sufficiently.” Advocates say that this is the most common reason nursing home residents are given when they are told they are being transferred to a shelter. Nursing homes are required to provide residents written notice 30 days before transferring them. The notice should include a care plan that shows the facility has arranged for relocation to a specific destination that is safe. Guidelines even suggest an advance visit to the destination. But actual notices reviewed by the ombudsmen cast doubt on how – or if – nursing homes are meeting these requirements. One notice, dated March 4, appeared not to give the resident 30 days notice. It noted an “Effective/ Anticipated Date of Discharge” of just one week later, on March 11. It also didn’t specify where exactly the resident was going. The transfer destination, scrawled in looping handwriting, read simply: “Department of Homeless Services.” Looking at the form, Danford wryly noted, “That’s it. Just any shelter (they) can drive him to.” In summary, he said, the notice “is
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not in compliance with the legal requirements.” But on the face of it, the reason for the transfer was valid: “As per interdisciplinary team, resident has completed health goals and no longer requires skilled nursing care.” Since nursing home medical staff can make that determination themselves, advocates believe that many residents feel helpless in the face of a transfer, so they do not challenge it. Residents have the right to appeal to the state Department of Health, but advocates worry that few are even aware of that, because they have found that nursing homes do not always give residents that information, as required. Ross, at MFY Legal Services, has represented residents who wanted to challenge their transfer. In one case, a client had lived in the nursing home for years, receiving care for an array of
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problems. The man, an amputee, had an ill-fitting prosthesis that left him reliant on his wheelchair to move around. Nevertheless, his nursing home wanted to send him to a shelter. He appealed the decision to the Health Department, which regulates nursing homes and acts as arbitrator in transfer disputes. An administrative law judge from Albany came down to New York City to preside over a hearing in a conference room at the nursing home. Gathered around the table, each side presented their case. The nursing home’s physical therapist argued the man did not need to be a resident any longer. Ross argued the man needed further care. The judge ruled in the nursing home’s favor and approved the man’s transfer into a homeless shelter. Ross said he has not heard from his client since then and did not know where he was.
“THE Y DON’T GIVE ANYONE WITH A WHEELCHAIR HOUSING . ALL YOU’RE DOING IS WAITING TO BE SHIPPED OFF TO ANOTHER NURSING HOME . . . . BET WEEN THE SHELTER AND THE NURSING HOME , THERE IS A RE VOLVING DOOR . IT’S A VICIOUS GAME .” -ROBERT NEGRON “If a nursing home wants to do this,” Ross said, “it’s not that challenging.” Ross explained that a core problem is that the Health Department has decided that homeless shelters can be an “appropriate” place for long-term nursing home residents. “I think we just disagree with the Department of Health about what ‘appropriate’ is,” Ross said.
The Department of Health’s in-house administrative law judges have approved discharges to shelters “in certain instances,” a spokesman acknowledged, “particularly where an individual was homeless prior to being admitted to a nursing home for short-term skilled nursing care and have no other housing options.” The department did not respond to requests for statistics on how often
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these hearings occur. The department spokesman also stressed the responsibility of nursing homes to “establish that the discharge is safe and appropriate for the person’s clinical needs.” Michael Balboni, executive director of the Greater New York Health Care Facilities Association, which represents for-profit nursing homes in the New York City area, agreed with the Health Department on that point, stressing the need for nursing homes to follow state regulations. But Balboni said there are pressures from state-implemented federal programs, aimed at reducing health care costs, that incentivize nursing homes to push out patients who don’t require skilled nursing care – particularly the Delivery System Reform Incentive Payment Program and managed care. Richard Herrick, president and CEO of the New York State Health Facilities Association,
which represents a variety of longterm care facilities, echoed that sentiment, agreeing that nursing homes were under pressure to discharge patients. The state Health Department, he said, is “always very strict about warning us about the inappropriate placement of patients in nursing homes – ‘inappropriate’ means that they don’t meet skilled (nursing) needs.” A representative for LeadingAge New York, an organization that represents the state’s nonprofit nursing homes, further explained that discharging a nursing home resident to a shelter may allow that person to access public assistance benefits they would be unable to receive while living in nursing home care. That reasoning sounds familiar to Negron. He recalled a social worker telling him before he was transferred into shelter, “All we can do is send you
to a shelter, but you won’t be there long. They’ll help you get out.” “But that’s a crock, man,” Negron said. “They don’t give anyone with a wheelchair housing. All you’re doing is waiting to be shipped off to another nursing home.” “Between the shelter and the nursing home, there is a revolving door,” Negron said of his experience. “It’s a vicious game.” Whatever the rationale, advocates say long-term nursing home residents like Negron should not be placed in the city’s shelter system. The ombudsman’s office has a catalog of stories about such longterm patients that it believes should never have been removed from nursing care. In one such instance last summer, a man who had been transferred out of a nursing home into a homeless shelter immediately walked himself to the nearest hospital emergency room and was
admitted for inpatient medical care. As the number of complaints go up, Danford’s office expects to have more stories to tell. “There’s definitely been an increase, there’s no doubt about it,” Danford said. “Something’s going on and someone needs to figure out what it is.” Balboni agrees. “The Department of Health, the state Senate, the state Assembly should hold joint hearings on this. They should find out what’s going on,” Balboni said. “But more importantly: How do you stop it?” For now, Negron holds out hope that the current care he’s receiving at Beth Abraham will allow him to recuperate enough to find his own place someday. And perhaps, he said, sharing his story will help others, too. “Maybe if there’s enough exposure,” he said. “Maybe someone will say we need to do more for those people.”
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CAP TRADE-OFFS
State’s property tax cap can make rapid growth a headache for municipalities Story by JUSTIN SONDEL Photos by NANCY PARISI
ON ONE OF the coldest nights of the year, with wind chills well below zero, the HarborCenter in downtown Buffalo buzzed with activity even as the clock neared midnight. That weekend night, the massive, two-story sports bar in the complex, 716, was about half full of Buffalonians and visitors swilling ales and munching on pub grub as they took in games from around the country and sports highlights. At the HarborCenter’s Marriott hotel, which opened last summer, about 85 percent of the 205 rooms were full. And on the twin ice rinks – the centerpiece of the sports and entertainment complex – men’s league hockey games went on well into the night. While municipalities in Western New York are enjoying a recent
wave of development and the associated increases in property values, rising assessments tied to the improvements have also caused headaches for local budget offices as they work within the confines of Gov. Andrew Cuomo’s oft-touted tax levy limit law, commonly referred to as the 2 percent property tax cap, officials say. The cap limits the annual growth of property taxes levied by local governments and school districts to 2 percent or the rate of inflation, whichever is less. “The problem with the law is that the law doesn’t allow a carveout for areas that are having assessment growth,” said Tim Callan, Erie County’s deputy director of budget. Three years ago, the HarborCenter was nothing more
than a few architectural renderings. When Buffalo Sabres and Buffalo Bills owners Kim and Terry Pegula bought the land from the city to build their recreational megaplex, it was a surface parking lot that serviced the First Niagara Center, the home of the Sabres, and the nearby watering holes that filled up on game nights but were largely empty on other weekday evenings. Predictably, given the nearly $200 million investment it took to erect the Pegulas’ hockey Taj Mahal, the city’s assessment office took another look at the value of the plot. The land went from a valuation of $1.5 million in 2014 to $75.2 million last year. The previous owners were paying about $42,000 in property taxes
annually. The Pegulas paid about $2.5 million last year. Even after their lucrative payment-in-lieuof-taxes agreement kicks in this year, reducing their property taxes by a full 90 percent, they will still be paying about $360,000 a year, as the assessment is set to rise again to $105 million. This sort of increase in land values has been happening throughout Western New York as both large- and small-scale development, fueled by state investments and other market forces, encourages private development and boosts home values throughout the region. While this sort of economic growth is exactly the type of progress many politicians and residents have celebrated in recent years, the tax cap can make for a
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tough puzzle for municipalities trying to balance community needs with the law. In Erie County Executive Mark Poloncarz’s budget division, for example, administration officials have been maneuvering to squeeze in under the cap, which in recent years has been exceedingly low. The latest inflation measure was 0.7 percent, limiting the county’s tax revenue growth to well below 2 percent. Callan said that they barely were able to make last year’s spending plan work. This year they are expecting to be held to a 0.3 percent increase in the levy, perhaps lower. “As we’re having all this commercial development you’re seeing equalized full-market tax value base go up,” Callan said. As long as construction continues at a fast clip, as analysts are predicting, the county will have to find a way to stay under the cap while property value assessments continue to rise. One option will be to lower tax rates, as they did in last year’s budget, reducing them by 4 cents per $1,000 of assessed value to make the math work. Peter Baynes, the executive director of New York Conference of Mayors, said his group raised concerns over the potential of rising property values tied to economic development when the law was being put together, but lawmakers did not include an adequate carve-out. “Our concern was that if assessments rose because of either new construction or physical improvements to property or the land that, all else being equal, including the tax rate, it’s going to force the levy up automatically and will put pressure on the tax cap even though it shouldn’t,” Baynes said.
THE POLITICS
There is one simple way for municipalities to take advantage of the growth in the tax rolls driven by economic development. As many proponents of the cap will point out, local lawmakers can always vote to exceed the limit.
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However, in a state with some of the highest property taxes in the nation, voting for a measure that raises property taxes in any way – even if it will not actually cause homeowners to see an increase in their bills – is often a big political risk. Still, the number of municipalities exercising that option is on the rise, with more than a quarter of state municipalities voting to override the cap in 2015, up from 19 percent the year before. Figures from state Comptroller Tom DiNapoli’s fiscal stress monitoring system have shown that the number of financially struggling or at-risk localities has remained relatively steady. There were 40 such municipalities in 2012, the first year DiNapoli’s office issued the report. That number fell to 35 in 2013 but rose to 44 in 2014. DiNapoli said low inflation has forced municipalities to make difficult choices, but most have been able to come in under the line. However, if market conditions remain steady and low inflation continues, the state may see more municipalities and districts exceeding the cap, he said. “I don’t know that we’re seeing that at this point,” DiNapoli said. “The cap is what it is, but there is, in fact, a mechanism to exceed it.” While officials and advocates have made it known that they want to see carve-outs added or additional funding, the law has worked the way it was intended to, he said. “Local officials have expressed their concerns, appropriately so,” DiNapoli said. “But at the end of the day they are, by and large, displaying the kind of fiscal responsibility to keep their school district or local government within an appropriate range, from our perspective, when we’re measuring fiscal health and budget strength.”
NOT ENOUGH
While a carve-out does exist, known as the quantity change factor, Erie County officials say it
does not go far enough. With major construction or renovations that require a permit, the quantity change factor offers tax cap exemptions to any increase in the total assessed value of property. However, it does not account for increase in values to the building overall or the value of surrounding properties. The New York State Association of Counties last year sent a letter to Jerry Boone, the state commissioner of the Department of Taxation and Finance, urging him to apply the exemptions more widely under the provision in order to allow the counties to use the growth in the tax base to pay for the infrastructure and services such developments require. “Counties believe this language provides a critical opportunity to improve the administration of the local property tax/revenue cap, while correcting an unintended consequence of the existing law that we believe is counterproductive to the state’s economic development and job creation goals,” Stephen Acquario, NYSAC’s executive director, wrote in the letter. Robert Keating, the director of budgeting and management for Erie County, said that his department has found that the criteria for a building to fall under the quantity growth factor carveout are so restrictive that the only projects that seem to fall under the category are new builds on vacant lots, and even then only some are counted as such. In 2015, where the county saw a total assessment growth of 5 percent, one contributing factor toward the total tax cap calculation – the quantity change factor, or the portion exempt from the cap – was only 0.67 percent. “That lags far, far behind the assessment growth,” Keating said.
EXPANDED SERVICES
In the years since the property tax cap was instituted, in a pattern that mirrors Cuomo’s Buffalo Billion investments in the region, Erie County has gone from a small contraction in assessed value to steady growth. The combination of land values
and tax exemptions that make up that assessed value is likely to rise even more next year, as there are a number of big projects still under construction or in the pipeline. Meanwhile, county residents, who see the growth and feel the excitement in Buffalo, want to see the improved services that should accompany a growing tax base, Callan said. “It’s really a problem, because the public is still demanding more money for libraries, more money for parks, more money for roads, new bridges, new highways, having more snow plowing services and all the other things that county government does,” Callan said. Erie County is far from the only municipality feeling the pinch. Town supervisors and mayors from around the state – not to mention school superintendents who saw their calendar year levy growth rate set at a paltry 0.12 percent this year – have been making their concerns known to the governor’s office and the state Legislature since the bill was being formulated. And advocacy groups that represent them, like the New York Conference of Mayors and the New York State Association of Counties, have been in Albany to lobby for adjustments to the law and additional funding to make up for the low rate of inflation for several years now. Mark Lavigne, NYSAC’s deputy director, said that the counties are “100 percent in favor of economic development,” but that the growth without the benefit of additional tax revenue puts municipalities in a tough spot. Additional economic development requires more infrastructure upgrades, maintenance and services. With many big development projects being largely tax exempt and with counties forced to lower tax rates to come in under the cap, municipalities are not getting the cash they need to pay for those things. “These properties that are tax exempt, they still need the services we provide, whether those are law enforcement, sheriffs or police
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or emergency service or fire service or infrastructure service, connecting these properties to water and sewer,” Lavigne said.
NOT THIS YEAR
With the law thoroughly reviewed and extended last year, locking it in place for four years, as well as the popularity of the tax cap with constituents, most advocates concede that major changes to the law itself are not likely to come through this session. Cuomo’s office expressed no interest in seeking changes to the law. “We make no apologies for enacting a tax cap that broke the cycle of skyrocketing property tax increases, saved property taxpayers $4.5 billion alone in 2015 and helped ensure that New York is no longer the high tax capital of the world,” Rich Azzopardi told City & State. “Also, as enacted, districts are able to exceed the cap with the consent of
their residents.” Azzopardi did not directly comment on the fiscal challenges faced by municipalities with rapidly rising property values due to new development. Geoffrey Gloak, a spokesperson for the state Department of Taxation and Finance, added that increased value to a taxing jurisdiction’s property due to real estate trends is not linked to that community’s need to spend more money on services. “The property tax cap is adjusted upward annually to reflect increases in the tax base, including new construction and additions,” Gloak wrote in an email. “However, the cap is not adjusted to reflect increases in property values due to a strengthening real estate market.” State Sen. Cathy Young, a Western New York Republican and chairwoman of the Senate Finance Committee, said she is sympathetic to the difficulties
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localities face in trying to stay under the cap and that she and other members of her conference are willing to listen to ideas on funding sources and other potential solutions. “When the property tax cap was passed there were measures to provide significant savings to school districts and localities,” Young said. “At the same time we’ve been working to increase funding.” However, Young said the tax cap has been a great success, saving taxpayers $7.6 billion since it was instituted in 2012. She said she doesn’t see a great appetite from her constituents or her colleagues in the Legislature for significant changes to the law. In fact, her conference has been pushing to make the cap permanent, something they failed to accomplish last year, but which they will continue to push for. Senate Republicans included a permanent tax cap law in their one-house budget bill this year, but that did not make it into the final version. While Senate Republicans
remain committed to making the law permanent, the appetite for doing so from their Democratic colleagues remains uncertain. Democratic state Sen. Marc Panepinto of Buffalo said he would like to see the state move toward a hard 2 percent cap and that, especially in the absence of that change, municipalities and districts need additional funding from the state to make up the difference. “While I certainly support the tax cap, the current configuration of it is not working for upstate municipalities,” Panepinto said. “It may be working for Westchester and Long Island, where they have significantly higher property values, but it doesn’t work in upstate.” Young said that Senate Republicans are open to other solutions. “We’re always open to more discussions about mandate relief and other ways that we can help our local governments,” she said. “We look forward to having those this year.” Still, advocates say they will continue to try to amend the law,
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if not this session then in future years. In the meantime, they will push for more funding to make up for the gap between the consumer price index and the 2 percent cap that is often associated with the law. This session they asked for increases in aid through programs
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like state AIM funding to make up for the limited growth in the levy. Baynes said that the state budget provided additional financial assistance for municipal infrastructure projects, but that “it provides zero help for tax cap compliance.” “What we’re fighting for is a tax cap equalization aid program for local governments whereby a local government would receive a payment in aid from the state that would represent the difference between the 2 percent tax cap growth and whatever the tax cap growth limit is for that particular municipality,” NYCOM’s Baynes said. Baynes said the members of his organization are all very excited about the direction of the state from an economic development standpoint, but the law sets unrealistic expectations at a time when mayors and town supervisors should be able to use that growth to help their communities. “Our mayors want to stay under the tax cap,” he said. “They want to keep taxes flat. But, they need the state to get some skin in the game and participate in that process rather than just chastising local governments to be more efficient when local governments have been working very hard for decades to be as efficient as possible.”
21st-Century Success Requires 21st-Century Infrastructure BY MARSHA GORDON
To see our future, you need look no further than the new Tappan Zee Bridge spanning the Hudson River—a collaboration among state and local governments, labor, and businesses that will help to create thousands of jobs both during its construction and beyond. In Westchester County, transportation keeps our communities working, not only on the road but on the rails and in the air: we’re home to three different MetroNorth commuter lines and a 700-acre airport hosting six commercial airlines and one of the biggest fleets of corporate jets in the nation. Building and maintaining transportation infrastructure is key to our region’s edge in a global economy. And to support transportation and every other activity our families and businesses pursue, we rely on another crucial form of infrastructure: energy. New York’s appetite for energy is prodigious, consuming quadrillions of Btu’s in heating and hundreds of millions of megawatt-hours in electricity every year. We pay among the highest electricity costs in the nation: residential costs here are 68 percent higher than the national average and 50 percent higher than in neighboring Pennsylvania. Our state is also one of America’s largest importers of electricity, buying from Canada, New England, and the Mid-Atlantic—which proves how big the opportunity is for us to enhance and enlarge our energy infrastructure, both in power generation and in transmission. These opportunities are magnified even further by federal, state, and local initiatives to fight climate change. Westchester County contractors and workers converting older properties and building new ones according to LEED (Leadership in Energy and Environmental Design) certification standards are but one example of how the environmental and economic benefits of this transformation can be realized. There’s so much more we can and must do—and, just as with the new Tappan Zee Bridge, success will require careful planning and coordination by government, business, and labor. New York’s transmission grid is glaringly in need of such effort: the vast majority of our transmission lines are old, many of them built before 1980, and 42 percent of them will need to be replaced in the next 30 years. Obtaining approvals and rights-of-way lengthen the process for completing a new line to upwards of ten years. We need to get going now on this crucial investment. The same is true of sustaining and increasing in-state generating capacity, especially in view of New York’s new Clean Energy Standard mandating that carbon emissions be reduced to 40 percent of 1990 levels and that 50 percent of our electricity generation be from renewables by 2030. Bringing renewables up to baseload scale could employ thousands of New Yorkers, but it will take time—so let’s make sure all of our existing power plants, including our zero-carbon nuclear fleet, remain up and running throughout the transition. Westchester County is proud to take its place among the innovators and drivers taking our economy into the 21st Century, and we’re well-positioned to work with all of our partners in the Empire State’s government and business and labor communities to assure that our state’s transportation and energy infrastructure will help us compete and prosper in the future—built for New Yorkers, by New Yorkers, right here in New York. About the Author: Marsha Gordon is the president of the Business Council of Westchester, one of the largest and most influential business membership organizations in New York State.
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Spotlight
TRANSPORTATION INFRASTRUCTURE The tagline for Gov. Andrew Cuomo’s agenda this year is “Built to Lead,” and in some ways it’s an apt description. In January he unveiled a long list of infrastructure projects. Some, like an overhaul of the dilapidated terminals at LaGuardia International Airport and an agreement to fund the Metropolitan Transportation Authority, were already in the works. Others, like a third line on a busy stretch of the Long Island Rail Road and a new Penn Station, face serious obstacles. But in the state budget, Cuomo secured funding for a number of the projects while trying to balance downstate transit needs with investments in upstate roads and bridges. In this special section on transportation infrastructure, City & State explores which projects are likely to move forward – and the various challenges they will face.
CONTENTS 18 … RISK OF DELAYS AND OVERRUNS LOOMS OVER CUOMO’S MAJOR PROJECTS| By BOB HENNELLY 24 … PLANES, TRAINS AND AUTOMOBILES: A RUNDOWN OF CUOMO’S PROPOSALS By JON LENTZ QUICK TAKES … MATTHEW DRISCOLL, JOSEPH ROBACH, POLLY TROTTENBERG and YDANIS RODRÍGUEZ
CityAndStateNY.com
KEVIN P. COUGHLIN/OFFICE OF THE GOVERNOR
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BUILT TO LAG Risk of delays and overruns looms over Cuomo’s major projects By BOB HENNELLY IT WAS A confident Gov. Andrew Cuomo who, in his State of the State address in January, proclaimed that he would make a “$100 billion investment in transformative projects statewide.” It was a big number, even by Empire State standards. “I propose the New York: Built to Lead program,” Cuomo said. “It is a development initiative that would make Governor Rockefeller jealous.” On the impressive to-do list: $22.1 billion for roads and bridges to be built by the state Department of
Transportation; $26.1 billion for Metropolitan Transportation Authority transit projects; $3 billion for an expanded Penn Station; and $5 billion for the Port Authority of New York and New Jersey’s Gateway rail tunnel under the Hudson River. Yet, industry experts warn, the reality is that historically these kinds of big projects fall prey to multibillion-dollar cost overruns, blown deadlines and even what prosecutors describe as criminal behavior by the very construction companies that are building them.
Consider the Port Authority’s World Trade Center site, which came in years behind schedule at a cost of $14.8 billion, well above the original $11 billion estimate. There is also the MTA’s East Side Access project, designed to link Grand Central Terminal with the Long Island Rail Road, which was supposed to cost $4.3 billion and be completed in 2009. In 2014, the MTA said the project would come in at $10.8 billion and would not be finished until 2023. New York City’s Croton Water Filtration Plant
was supposed to cost $800 million and came in at $3.2 billion. The stakes are high. Even as our critical infrastructure has continued to deteriorate, the federal government has scaled back its role in supporting big-ticket projects. When projects blow their budget and timeline, that boosts costs. That, in turn, means a higher debt service to cover the additional borrowing that’s required. To this day, the inability of agencies like the New York City Department of Environmental
REHEMA TRIMIEW / MTA CAPITAL CONSTRUCTION
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Protection and the MTA to bring in big projects on time and on budget has forced residents to pay higher water rates and subway fares. Brian Aryai, a former U.S. Treasury special agent and former senior executive of a major construction company who became an industry whistleblower, warns that the way New York’s industry is currently wired, the governor’s ambitious plan will fall short of its goals. The reason, said Aryai, who now runs Icon Compliance Services, is because of “long-standing layers of fraudulent padding of construction costs,” which has roots in the era when organized crime dominated the business. “We must first cure the endemic disease that plagues the construction industry and trade unions before incurring more capital expenditures,” Aryai told City & State. For him, the remedy is having truly independent compliance and integrity monitoring at every step of these massive public works projects. Aryai says holding the construction industry accountable is a more formidable challenge than keeping the banking sector honest. “With the Wall Street banks, it seems like every politician is a beneficiary of the campaign cash largesse of Wall Street, and the same thing is true when it comes to these multinational contractors,” he said. “But in the case of the builders, they are even more formidable because of the political clout of the trade unions who depend on the big builders.” Ronald Goldstock, former director of the New York State Organized Crime Task Force, which investigated the infiltration of the construction trades by the Mafia, says law enforcement has been successful in rolling back the mob’s dominance in construction. However, he says that the organized crime legacy still makes the industry vulnerable to corruption, like padding the bills they send to their public and private sector clients. “Over time, customs and practices are internalized within the industry,” Goldstock told City & State. “Industry participants live with what they see as an accommodation – union leaders are able to reward
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their friends, and the companies that pay expect that the union will not cause major financial harm by having their members unduly delay projects. But the system, at its core, is corrupt and needs to be ended.”
ACCUSED AND ON THE JOB For years, the U.S. attorney’s office in the Eastern District of New York has been pursuing what prosecutors allege is an industrywide practice in which contractors fraudulently
Work progresses over the years on the East Side Access project, an undertaking to bring the Long Island Rail Road to Grand Central Terminal. It was originally supposed to cost $4.3 billion and be completed in 2009, but the MTA has since said the project would come in at $10.8 billion and would not be finished until 2023.
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The World Trade Center Transportation Hub, which was completed years behind schedule and billions of dollars over budget. bill both public- and private-sector clients tens of millions of dollars for phantom overtime hours. The practice is known as “eight and two,” referring to the bonus of paying two hours of overtime without the worker having to be on the job to earn it. Industry insiders defend the practice as a way contractors can retain their skilled workforce. Aryai says the practice is just the tip of the iceberg. Prosecutors did not charge any unions or individual members in connection with the alleged scam. So far, three companies have paid $83 million and accepted non-
prosecution or deferred prosecution agreements to settle these federal fraud charges, which go back years and involve signature projects like World Trade Center Towers One, Three, Four and Seven; the World Trade Center PATH Transportation Hub; the Plaza Hotel renovation; the Javits Convention Center Expansion and Renovation Project; the Aqueduct Casino in Queens; and scores of other jobs. In April 2012, prosecutors required Lend Lease, formerly Bovis Lend Lease, to pay out $56 million for construction fraud. In May of last year another contractor, Hunter
Roberts Construction Group, settled for $7 million, and in December Tishman Construction, a subsidiary of Aecom, settled for $20 million. As part of their settlement agreements with the Department of Justice, all three pledged to make significant internal reforms and to put in place rigorous compliance programs in order to avoid prosecution. “Through a systemic practice, Tishman Construction bilked its clients by charging them for unworked time and at rates higher than those bargained for by their clients,” U.S. Attorney Robert Capers said in a statement in
December. “By doing so, Tishman defrauded its clients and abused the trust placed in it to provide construction services on some of New York’s most storied buildings.” Janice Fedarcyk, then the head of the FBI’s New York office, was equally tough on Bovis in 2012. “The overbilling fraud affected city, state and federal public building projects,” she said. “If you are a New York City resident, Bovis indirectly swindled you on three different levels.” Loretta Lynch, then the U.S. attorney for the Eastern District of New York, added: “The defense of ‘everyone does it’ will not be a shield
LEONARD ZHUKOVSKY
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DARREN MCGEE / OFFICE OF THE GOVERNOR
Quick Takes
Gov. Andrew Cuomo holds a press conference in 2014 highlighting progress on the new Tappan Zee Bridge. The first span of the bridge was scheduled to open later this year, but has been pushed back to 2017. against law enforcement.” When the Justice Department started publicly rolling on these cases in 2012, it was reported that prosecutors were also investigating Skanska, Turner Construction and Plaza Construction for similar practices. Turner Construction and Plaza Construction did not return a request for comment. An attorney close to the case, but not authorized to speak about it by his client, confirmed that behind-the-scenes negotiations were ongoing. A representative for Skanska confirmed the company was contacted, along with other New York-area contractors, by the Eastern District of New York as part of its industrywide investigation into certain labor billing practices and minority- and women-owned business enterprises, or MWBEs. “We continue to cooperate with the Eastern District and its investigation,” the Skanska representative confirmed. A subsidiary of Skanska, Bayshore Concrete, is supplying materials for the multibillion-dollar state Thruway Authority’s new Tappan Zee Bridge
and is the primary contractor on the Port Authority’s Bayonne Bridge project. Skanska also entered into a nonprosecution agreement with Preet Bharara, the U.S. attorney for the Southern District of New York, in March of 2011 to settle criminal charges that the firm fraudulently tried to exploit federally established programs to help disadvantaged MWBEs from getting government work. Skanska had to pay $19.6 million. On other projects, higher costs have not led to criminal charges or settlements but have raised questions all the same. Bronx Assemblyman Jeffrey Dinowitz says there just is no accountability when it comes to public works projects like the New York City Department of Environmental Protection’s Croton Filtration Plant, which had a final price four times its original estimate. “When the total cost of a project is multiples of the original estimate, there needs to be a real investigation,” he said. And Dinowitz said he’s not impressed when prosecutors get
ON THE MAYOR’S PLANS TO EXPAND SELECT BUS SERVICE IN THE CITY, INCLUDING ALONG WOODHAVEN BOULEVARD ...
“Mayor Bill de Blasio’s dedication to Select Bus Service is grounded in its three fundamental benefits: Using dedicated lanes and curbside fare collection, SBS increases mobility, speeding commutes by as much as 30 percent; SBS helps achieve economic equality by targeting those communities that have not been historically wellPOLLY TROTTENBERG served by transit; and as we redouble our Vision Zero efforts on some of our busiest and most dangerous corridors, SBS increases safety. … We fully expect COMMISSIONER, our plans for the SBS on Woodhaven Boulevard will NEW YORK CITY achieve all of these benefits. Over 30,000 daily bus DEPARTMENT OF commuters on this critical Queens bus corridor suffer TRANSPORTATION through a long commute – often more than an hour – that is notoriously unreliable, with travel times that vary by as much as 30 minutes. Meanwhile, with 20 deaths and more than 2,800 injuries between 2010 to 2014, Woodhaven is a Vision Zero priority corridor that demands our best efforts to calm traffic. “We are working to transform several busy bus routes all over the city. We expect to implement three more this year – on Utica Avenue in Brooklyn, along 23rd Street in Manhattan and the expanded Q70 from Woodside to LaGuardia Airport – with more routes, including Woodhaven, expected next year. We have committed to Phase One SBS costs on Woodhaven Boulevard that will not exceed $20 million, and we are closely evaluating the budget for future phases to ensure that we maintain SBS’ costeffective reputation. “Since the first SBS route opened in the Bronx in 2008, we have indeed grown more efficient at bringing SBS to communities around the city. However, each new route offers new, different and particular challenges – around community engagement, design, interagency coordination and construction.” Quick Takes
MATTHEW DRISCOLL COMMISSIONER, STATE DEPARTMENT OF TRANSPORTATION
ON CRITICS WHO HAVE CALLED FOR THE STATE DEPARTMENT OF TRANSPORTATION TO IMPROVE ITS CAPITAL PLAN DEVELOPMENT PROCESS ... “The transportation plan, produced as part of the recently enacted state budget, is consistent with the comprehensive transportation process developed cooperatively with locally elected officials and public transportation operators statewide. The end result was the adoption of a record $27 billion five-year capital plan, including $21.1 billion for improvement of highways, bridges, rail, aviation infrastructure, non-MTA transit and DOT facilities throughout the state. While this extensive transportation process incorporates opportunity for public review and comment, I recognize that there is always room for additional input. To that extent, I am personally committed to incorporating new technologies and techniques.”
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multimillion-dollar payouts from construction companies as part of deferred prosecution deals. “A lot of companies will take a hefty fine and look at it as just a cost of doing business,” he said. “Now, perhaps it is time to hold individual executives liable.”
LOWEST BID, HIGH RISK Barry LePatner, an attorney and one of the nation’s leading experts on the construction industry, says that the standard public-sector practice of awarding a contract to the lowest bidder sets the stage for fraud down the line. “The contractors routinely know they have to bid at or below their actual costs to get the job and count on making their profit with change orders later on,” said LePatner, the author of “Broken Buildings, Busted Budgets: How to Fix America’s Trillion-Dollar Construction Industry.” “If you go with the lowest bidder, you get what you deserve.” LePatner, who says cost overruns in the United States total $120 billion each year, suggests both publicand private-sector construction service consumers shift from a lowest-bidder strategy to criteria for picking a contractor that incorporates their overall performance and track record. “We don’t reward competence or success otherwise,” he said. Maria Doulis, vice president with the Citizens Budget Commission, says part of the problem is that officials pushing for a project will low-ball the cost to get public consensus. “And then, in the public sector, there are these deep chasms between the scoping and design phase effort of a project and its actual construction,” she said. Doulis credits the Cuomo administration for shifting to a “design-build” strategy, where those discrete phases are bid as a single contract. “A single firm or consortium of firms bids on the contract, and the contract is awarded based on the lowest bid, or
CityAndStateNY.com
more commonly, the ‘best value,’” Doulis explained. Doulis says the results of designbuild, first put on the books in 2011, have been encouraging, with several state Department of Transportation projects coming below budget and ahead of schedule. For Cuomo, the biggest test to date for design-build is the ongoing replacement of the Tappan Zee Bridge. The nearly $4 billion project is supposed to be completed by 2018. So far, officials say they are on budget and on schedule.
Quick Takes
JOSEPH ROBACH CHAIRMAN, STATE SENATE TRANSPORTATION COMMITTEE
BACK TO BASICS Mark Peters, the commissioner of the New York city Department of Investigations, says it should come as no surprise that the construction industry is vulnerable to criminal activity. “There’s billions of dollars at stake,” Peters told City & State. But Peters, who served as the chief public corruption attorney for the New York state attorney general, remains confident that the way to stop it is by holding individuals responsible for their actions, including construction contractors. Last summer, Peters and Manhattan District Attorney Cyrus Vance charged two managers of a lower Manhattan excavation site with manslaughter because they allegedly failed to take proper safety precautions on the site, which lead to the death of a 22-year-old laborer. In February Vance and Peters teamed up again to bring criminal charges against contractors and property owners who allegedly were responsible for the Lower East Side gas explosion last year that left two people dead. But Peters notes that keeping corruption in check is not just the job of officials. “One person can absolutely make a difference,” Peters said, referring to citizens that call into the DOI with tips about corruption. “Just last year, we arrested 50 building inspectors, related contractors and property owners in a massive bribery scheme,” Peters said, “and it all started with a single tip from a single person who told us about a single bribe attempt.”
Quick Takes
YDANIS RODRÍGUEZ
CHAIRMAN, NEW YORK CITY COUNCIL COMMITTEE ON TRANSPORTATION
ON THE IMPACT OF SIGNIFICANT TRANSPORTATION INFRASTRUCTURE FUNDING IN THE STATE BUDGET ... “Certainly I was very happy that this year’s budget negotiations resulted in a five-year capital plan to put $27.1 billion into both the MTA and the statewide road and bridge program. “The MTA moves more people than anywhere else in the country, and is critically important for transportation and the economic well-being of downstate residents. The same can be said of the road and bridge program in both New York City and certainly for upstate New York. Safe roads and bridges are needed for people commuting to work, bringing their children to school, attending to medical appointments and various other daily needs. In addition to this historic funding, we also made significant investments into railroads and airports, and provided local governments with greater funding for their local transportation improvement projects. “It is imperative that we all work diligently to ensure that we get these resources out the door so we can get work done on important infrastructure projects and put people back to work in the construction industry. While historic funding was achieved, we must continue to look at ways to use this funding to protect vital infrastructure and ensure safe transportation for all residents and visitors of New York. “Both upstate and downstate funding also included additional resources for bus transit services, which impacts thousands of users and commuters every day. As a state legislator and Senate Transportation Committee Chairman my door is always open for suggestions on how we can further improve our service and infrastructure to best meet the needs of New Yorkers.” ON THE IMPORTANCE OF EXPANDING BRT TO LESS ACCESSIBLE PARTS OF QUEENS AND BROOKLYN ... “I have a (Select Bus Service route) in my district. That is very good. I have seen how the SBS that we have connecting Washington Heights and the Bronx has reduced the time for people to move in that area. However, all the items that the BRT brings – where first you make it more easy for people to make the payment to get into the bus, (design) the platforms that also can allow the bus riders to be able to go out or in the buses and … creates those areas in the center for bus services – and I think that this will be a good model that we will be able to see in our city. “Sometimes projects have been delayed. Most projects, when it comes to transportation, require more funding than what was expected. But I believe that especially in that area, that connecting places in Queens and even down to Brooklyn, BRT is very important. “There are some places, especially in Queens and Brooklyn, that people have to walk 20 blocks to take a train. And being that the BRT is the only solution that we have or alternative that we have so far to connect those communities, I am confident that, at the end of the day, the BRT will be a great solution for the major problem that sometimes can contribute to the inequality of our city.”
The Must-Read Morning Roundup of New York Politics and Government This daily email is the most efficient and effective digital resource to get your message in front of top city and state elected officials, agency and industry leaders, and the staff, advocates, media and operatives who drive the issues of the day—all by 7am each weekday! As an advertiser, an advocacy campaign including City & State First Read provides a targeted way to reach New York State’s most influential leaders and political professionals. For more information of advertising opportunities and availabilities, please contact Lissa Blake at Lblake@cityandstateny.com
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TRAINS
TRACKING CUOMO’S AMBITIOUS INFRASTRUCTURE PROPOSALS By JON LENTZ
In the days leading up to his State of the State address in January, Gov. A ndrew Cuomo announce d one major project after another: adding tracks on a busy Long Island Rail Road line. Transforming Penn Station into “a world-class transportation hub.” Funding a “ fundamental ” transformation of the Metropolitan Transportation Authority. Money for bridges, roads and airports. And on and on. The total price tag for the governor’s long list of infrastructure projects? A whopping $100 billion, a top Cuomo aide said in January. (Much of the funding will come from the federal government and the MTA , however, undercutting the governor’s status as the state’s hundred billion dollar man.) So, now that the state budget is over and done with, what ’s the status of this ambitious i n f ra s t ru c t u r e p r o g ra m? I s t h e governor’s transportation agenda still on track?
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AUTOMOBILES
PHILIP KAMRASS / DARREN MCGEE / OFFICE OF THE GOVERNOR
PLANES
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MTA
CAPITAL PLAN
REHEMA TRIMIEW / MTA CAPITAL CONSTRUCTION
THE OFFICIAL LINE: “This budget supports a massive infrastructure construction program – literally $27 billion for the MTA, which is the largest capital plan for the MTA,” Cuomo said during the announcement of a budget deal at the end of March. That includes $1.5 billion for the second phase of the Second Avenue Subway, one of the MTA’s most high-profile projects. ON THE OTHER HAND: A Cuomo administration official said that there was only $1 billion actually allocated for the MTA capital plan. “There is an appropriation for the first year and there is language as well that addresses the long term,” state Budget Director Robert Mujica said. TIMELINE: The five-year capital plan covers 2015-2019. The first phase of the Second Avenue Subway is scheduled for completion in December 2016. Tunnel boring on the second of three phases could start in 2019. COST: The state has committed $8.3 billion to the MTA’s $27 billion five-year capital plan. The entire Second Avenue Subway is expected to exceed $17 billion.
PENN STATION
THE OFFICIAL LINE: “If Vice President Biden was critical of LaGuardia Airport, we’re only lucky he didn’t take a train and end at Penn,” Cuomo said in January. “I can only imagine what he would have said. But we won’t give him the chance. We will build a new Penn Moynihan complex, finally.” The state would work with Amtrak to combine Penn Station and the adjacent James A. Farley Post Office into a redesigned “Empire Station Complex.” ON THE OTHER HAND: Experts say one key question with the project is the fate of Madison Square Garden, which sits atop Penn Station and may have to be relocated. In fact, a decade ago the state selected two developers to turn the post office building into Moynihan Station, but their plans, including one that involved moving Madison Square Garden, never took off. TIMELINE: The Cuomo administration said it would break ground this year and complete “substantial construction” within three years. COST: $3 billion.
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CityAndStateNY.com
LAGUARDIA THE OFFICIAL LINE: “… We will build a new airport to replace the outdated LaGuardia,” Cuomo said in January. “Not rebuilding what was, but building a whole new state-of-the-art airport. It will be the first new airport in the United States in over 20 years and New York will lead the way again.” ON THE OTHER HAND: Experts have noted that the project doesn’t add any new runways, calling in question whether the overhaul will do anything to reduce delays. TIMELINE: The biggest portion of the project, a $4 billion unified main terminal, will be partially completed and open to passengers in 2019, with full completion 18 months later, the Cuomo administration said last year. COST: $5.3 billion.
LONG ISLAND RAIL ROAD
THE OFFICIAL LINE: “We need to add a third track to the Long Island rail system so we can expedite commuters and promote intra-island transit,” Cuomo said in January. The “major expansion and improvement project” would be on a 9.8-mile stretch between Floral Park and Hicksville and allow for trips in both directions during peak hours. ON THE OTHER HAND: It is unclear how the project will be paid for. The idea has also drawn opposition from local residents in the past, although Cuomo said fewer homeowners would be displaced under his plan. TIMELINE: The administration has only announced $7 million for a study and community outreach. COST: $1.5 billion for the entire project.
OFFICE OF THE GOVERNOR
AIRPORT
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GATEWAY TUNNEL
THE OFFICIAL LINE: “Our $20 billion Gateway Partnership, a project long overdue, is now a reality,” Cuomo said in January. “It is a coordinated effort among the federal government, New Jersey and New York. It will build a new rail tunnel – the first in 100 years – and it will speed commuters from the west.” ON THE OTHER HAND: The project replaces the Access to the Region’s Core tunnel, but New Jersey Gov. Chris Christie killed that project in 2010, setting back years the effort to build new rail tunnels under the Hudson River. Going forward, there have also been questions about how New Jersey and New York will split the costs. TIMELINE: Several parts of the project will be completed between 2019 and 2030. New rail tunnels and renovation of existing tunnels will take a decade. COST: An estimated $20 billion. New York and New Jersey have offered to pay half of the costs, with the federal government covering the other half.
TAPPAN ZEE
NEWNYBRIDGE.COM
BRIDGE
THE OFFICIAL LINE: “Our new Tappan Zee Bridge is an exciting symbol of what we can accomplish,” Cuomo said in January. “A bridge that other administrations couldn’t even begin is now moving forward. It’s rising from the Hudson like our aspiration is rising for this state.” ON THE OTHER HAND: It is unclear how the project will be paid for, including how high tolls will have to be raised. TIMELINE: The opening of the first span has been pushed back to spring or summer of 2017. The second span is set to be open in 2018. COST: $3.98 billion.
UPSTATE
ROADS AND BRIDGES THE OFFICIAL LINE: “Upstate’s roads and bridges, broadband and other infrastructure must be upgraded also,” Cuomo said in January. “I propose the largest roads and bridges investment in history – a $22 billion, five-year investment – achieving parity with downstate.” ON THE OTHER HAND: Most of that $22 billion was already in the state Department of Transportation’s capital plan, although the final budget deal did raise the total to $27 billion. TIMELINE: The funding will be in the Department of Transportation’s five-year capital plan. COST: $27 billion.
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NYSlant.com
A fresh perspective on opinions / Edited by NICK POWELL
DE BLASIO UNDER FIRE THANKS TO CUOMO’S POLITICAL MANEUVERING By JEFF SMITH
PEOPLE HAVE SAID many things about Gov. Andrew Cuomo, but no one’s ever accused him of lacking survival instincts. When the Moreland Commission he appointed in 2013 started sniffing around the executive branch, Cuomo hurried to quash those inquiries. But the genius of the deal he cut was that in exchange for shuttering the commission, he was able to create a new independent enforcement unit designed to target political corruption – a unit that would be headed by a loyal longtime subordinate whose focus would be trained not on Albany but down the Hudson toward another political operative-cumchief executive: Cuomo rival Mayor Bill de Blasio. That Cuomo acolyte, Risa Sugarman, recently produced a state Board of Elections report on de Blasio’s operation that has turned up the heat on sundry campaign finance imbroglios from “simmer” to “boil.” The de Blasio cauldron was already overflowing with a pungent mix of horse carriages, nursinghome-for-
AIDS-patients-turned-luxecondos and diamonds for top cops. But the action for which the mayor’s team faces potential legal peril involves events many miles north – de Blasio’s effort to accomplish what Cuomo consistently declined to do: help Democrats recapture the state Senate. And Cuomo made sure that de Blasio would pay for that. By placing his most trusted aide, Joe Percoco, into the planning around de Blasio’s effort, Cuomo not only got to claim to have fulfilled a promise to Working Families Party members, but also got access to an email thread that would later prove instrumental in his neverending quest to remain New York’s political top dog. In Missouri, where I served in the state Senate, there were campaign finance restrictions comparable to New York’s laws – which limit direct contributions to $10,300 per candidate but allow donors to give $103,000 to state or county political party committees, not earmarked for specific candidates. A legislative candidate in Missouri running under contribution limits of $650 might call a wealthy longtime donor and solicit $13,000 for a certain “friendly” local party committee. Sophisticated donors read between the l i n e s : A “friendly” committee could accept $13,000 and contribute 20 times the
legal limit to an individual candidate, but not directly to the candidate’s campaign. That’s why candidates learned not to tell a donor explicitly that the money would be funneled straight back to the candidate (often with the committee skimming off a 3 to 10 percent “lug”), and donors learned to not to ask. All parties were careful not to acknowledge what was actually happening – an evasion of direct donation limits. Unfortunately for de Blasio, this is precisely what two political operatives did regarding a 2014 contribution he solicited. As the New York Times has reported, Matthew Lerch, campaign treasurer for then-state Sen. Cecilia Tkaczyk, emailed the Ulster County Democratic Committee’s
“HAS THE CHECK FOR $60K CLEARED?” he asked, treasurer.
according to Sugarman’s report. “Below is our banking info, we need the 60 transferred over ASAP please.” Incidentally, a check for exactly $60,000 from a New York City-based nurses union with close ties to de Blasio had just arrived; the next day, the Ulster County committee transferred the $60,000 to Tkaczyk’s campaign. According to emails obtained by the New York Daily News, this was one of several huge donations de Blasio solicited in the fall of 2014 in his quest to help regain control of the Senate for his fellow Democrats. Lerch’s email is what
prosecutors call a “smoking gun,” and it led Sugarman to conclude that de Blasio had, in some cases, personally solicited such contributions (which were then directed to upstate county committees by his campaign’s finance director) and that this constituted a premeditated “willful and flagrant” breach of state campaign finance laws. De Blasio’s attorney responded to the report by noting that party leaders can solicit unlimited contributions to party committees and committees may fund individual candidates – and that unless donations to candidates were made “at gunpoint,” they are legal. This defense is disingenuous at best, and at worst willfully blind to political realities. In other words, sure, the Ulster County committee treasurer theoretically could’ve held on to the nurses’ $60,000 or used it for other purposes, but he would’ve never been able to show his face at a Democratic Party function again, and the same goes for any consultant who accepted the money for an unintended purpose. These are the unspoken codes of politics. The mayor’s attorney also noted that Senate Republicans pioneered the use of local party committees to circumvent campaign finance limits for candidates. Criminal defense lawyers call this “selective enforcement,” but prosecutors and judges call it the “everybody does it” defense. Ask Shelly Silver or Dean Skelos how well that worked for them.
NYSlant.com
Like Cuomo and de Blasio, I was once an operativeturned pol with a reputation for campaign micromanagement. I was sloppy: First, I wrongly approved illegal coordination between my campaign and a third party, and then acknowledged it verbally, breaking Earl Long’s dictate. When
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questioned, I claimed ignorance – later belied by my words on a close friend’s wire. Cuomo got sloppy when he clumsily short-circuited the Moreland Commission and was forced into verbal gymnastics to explain the move. Previously, he’d called the commission
“totally independent.” Then, it became his: “I can appoint you, I can unappoint you.” But even in those dark days, the wily governor was maneuvering de Blasio into a scheme Cuomo would later exploit. Now, de Blasio allies should hope that any operative who got sloppy
will now keep his mouth shut – and that nobody was wired. Jeff Smith is assistant professor at The New School. He served in the Missouri Senate from 20062009.
A blog dedicated to providing opinion and analysis of the day’s news
DE BLASIO’S CITY HAUL
MAYOR BILL DE BLASIO’S many scandals may look like good news to people who don’t want to see the mayor reelected next year. They’re not. Though the mayor is doing badly, the city is doing well, and any challenger will face the same problems that the mayor’s opponents faced the first time around. The enduring myth is that de Blasio won the mayor’s race nearly three years ago because the public rose up against capitalism after 12 years of tyrannical billionaire rule. The truth is that de Blasio won office because of Bloomberg’s successes, and on crime and the economy, New York today doesn’t look much different from the New York of three years ago. With record-low crime and a thriving economy, New York was doing so well in 2013 that the mayoral race was an afterthought to the voters, if not the press. In a year of record-low turnout, de Blasio won on two issues that determine elections only when people are pretty happy: hike spending on education so
that all 4-year-olds can go to school, and curtail the NYPD’s use of stop, question and frisk. If people had been terrified of a fiscal crisis, they wouldn’t have voted for someone pushing the first issue. If people had been terrified of a crime crisis, they wouldn’t have voted for someone pushing the second issue. The corruption charges plaguing de Blasio were already apparent back then. Take the horse carriages. Way back in July 2013, two months before the primary election, one commentator wrote, “A candidate who opposes the carriage horses is inadvertently showing that he … is easily spooked by powerful interests.” Even then, it was obvious that de Blasio supported getting rid of the horse carriages
BEC AUSE HIS POWERFUL DONORS WANTED HIM TO.
It might have been too much to expect the voters to parse de Blasio’s vulnerability to corruption and vote for someone else. But even if the voters had done this, they had few choices. Save for Christine Quinn, de Blasio’s opponents – even Republicans Joe Lhota
and John Catsimatidis – actually agreed with the mayor on getting the horse carriages off New York’s streets, despite no facts to back this proposal. And no candidate was entirely clean from a fundraising perspective. De Blasio was just better at it. It’s hard to see what will be different in 2017. Barring a sudden crisis, the city is still in good shape. Through mid-April, the murder rate for the year was down 18.8 percent. Shootings, too, are down 11.5 percent. Assuming the city can keep crime at record lows through the hot summer months – something that it did last year – de Blasio will be holding a press conference in December to tell the city that violent crime has never been so low. As for the economy: New York has a record number of jobs, 172,800 more than when Bloomberg left office. That, too, could change; but so far, it hasn’t. And though the mayor’s recent scandals are more complex than the initial horse carriage scandal, they follow the same pattern: powerful people giving the mayor money and wanting something in return, and he often either did that thing for them, or tried to. The latest investigation
By NICOLE GELINAS
into campaign-finance practices is slightly different, but it’s also far more difficult for a busy person to follow. Headlines sharpen with each scandal, but de Blasio has never been very good at communicating. He’s suffered relentlessly bad headlines since before his election – and so far, they have not mattered. Of course, what could be different by the next election – and what would make the voters pay attention – is an indictment of the mayor. But criminal charges won’t solve New Yorkers’ electoral problems. Real estate and other donors and their lobbyists might tone it down for a while. But they’ll just find the next candidate willing to do their bidding. Without some sort of crisis that affects them directly, voters still won’t be paying attention. And even if they do, they may not have any better choices.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal. For first access to the Our Slant blog, become a City & State Insider at cityandstateny. com/insider.
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EMBRACING YOUTH
A Q&A WITH JOSH LAFAZAN, CHEERLEADER FOR MILLENNIALS IN POLITICS When Josh Lafazan was elected to the Syosset Board of Education in 2012 at age 18, he became the state’s youngest elected official. Although he has since relinquished that title, he is still in office and makes a point of advising other young candidates. In an interview with City & State’s Jon Lentz, Lafazan discussed how he got into politics, his recent book and whether he or state Comptroller Thomas DiNapoli was younger when first elected. The following is an edited transcript.
Syosset school board trustee Josh Lafazan with presidential candidate Ohio Gov. John Kasich C&S: You’re the author of a recent book , “Political Gladiators: How Millennials Can Navigate the 21st Century Political Minefield and WIN!” So, how can a millennial win? JL : A m i l l e n n ia l c a n w i n b y embracing their youth and not running away from it. I say that because too often in life people blame barriers for their lack of success . There are a million barriers in life. What I tell millennials is to run into those barriers. Yes, I’m young. That means, yes, I have creative ideas. Yes, I think outside the box. Yes, I have more time to devote to this job. And yes, I’m going to work smar ter and harder than any other candidate in this election and win. So by embracing our youth, millennials can win in the 21st century political minefield. C&S: You interviewed a number of other young elected officials, or officials who were elected at a young age. Were there any stories that stood out? JL: Cyrus Habib is one of the most impressive individuals I’ve ever met in my entire life. Cyrus
is currently running for lieutenant governor in the state of Washington. He was the first Iranian-American ever elected to public office, he’s legally blind, and he ’s a Yale L aw S cho ol graduate. What’s so incredible about him is he’s starkly honest about how to break into politics. What he did, and what he shares with other young candidates, is a lot of times running for office isn’ t the first step. It ’s really the third step. You should get involved in your community first, because getting involved in your community is like auditioning for that role as a public servant. C&S: What did you do before running for office? JL: My introduction to public service came when I started Safe Ride Syosset in September of my senior year. I love the Jets – my heart is crushed every year, but I’m a huge Jets fan. I bring that up because when then-Jets wide receiver Braylon Edwards got caught drinking and driving, he got lambasted by everybody in sports radio. But what nobody spoke about was Edwards was
eligible for the Player Protect program, which enables any player on the Jets organization to a free ride home, 24/7. I didn’t drink until I was 21, so when I got my license at 17 I became the designated driver for my friend group every weekend. I would often drive 10 to 15 kids home a night because I just wanted to make sure they got home safely, and because drinking and driving is so prevalent on Long Island. When this happ ene d with Edwards, I thought if this guy, with millions of dollars, the support of the entire Jets organization, and the Player Protect program, can make this stupid decision to drink and drive, what about my Syosset high school classmates? So I star ted Safe Ride Syosset , a community outreach program. If students either drank or were driven by someone who drank called the Safe Ride Syosset hotline, on Friday and Saturday nights, volunteers would pick these kids up and take home, free of charge and no questions asked and no judgment passed. In 2 0 1 2 , my s e n i o r y e a r, we
took home 350 kids safely, and not one drinking and driving accident occurred on the nights we were operating. C&S: Thomas DiNapoli, who is now the state comptroller, was also elected to a local school b o a r d a s a t e e n a g e r. D i d you break his record as the youngest person ever elected in New York? JL: It’s funny. Tom DiNapoli is a m e n t o r o f m i n e . We h a v e breakfast on occasion, and he likes to tease me that he was y o u n g e r b y a m o nth , o r h is election was later than mine, so prett y much I say that because he’s a mentor of mine, I conceded to him. I think the fraternity of us is all within a month or two, but we were both elected at 18. C&S: You’re graduating in May from Cornell University. What’s next? JL: I’m enrolling in August in the Har vard Graduate School of E d u c ati o n f o r a mas te r ’s i n education policy and management.
The New York STaTe Trial lawYerS aSSociaTioN
Celebrates law Day
Congratulations to New York State Chief Judge Janet DiFiore On her inaugural Law Day as Chief Judge, with best wishes for the many years to come. Chief Judge DiFiore at NYSTLA Law Day
“The first duty of society is justice.” -- Alexander Hamilton New York State trial lawYerS aSSociatioN · ProtectiNg New YorkerS SiNce 1953
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