Politicians from Albany have been complaining for years that the state’s capital city is fiscally strapped because 60 percent of the property within its boundaries, much of it state owned, is tax exempt. To address this perennial complaint, members of Albany’s legislative delegation have reintroduced a bill that would require the state (i.e., everyone else in New York) to make a payment in lieu of local property taxes on one of its largest parcels in the city, the Harriman Office Campus.

“As the seat of New York State government, Albany faces a unique challenge in that the majority of the property is removed from the city’s tax rolls because they are [sic] government owned facilities,” said Assemblywoman Pat Fahy.

However, the data don’t support the notion that Albany is more “challenged” than other upstate cities. (more…)

(AP Photo)

It seems like everyone who counts in Albany could get a pay bump before the year’s out.

Pay raises are basically an annual tradition for government employees.  As The Chief reports (subscription required), about 75 percent of the members of the Civil Service Employees Association (CSEA) and 67 percent of Public Employees Federation (PEF) members are getting increases from step increments and longevity bonuses, despite the state’s supposed wage freeze. (The unions say their members are still losing money due to payless furlough days and increases in health insurance premiums.) Teachers often get two raises each year, one negotiated in their contract as a “raise,” and one as a “step” increase.

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The Cuomo administration reportedly is talking with labor leaders about tapping public and private pension funds to help pay for state infrastructure projects, including a multi-billion-dollar replacement for the Tappan Zee Bridge. While details are scant, the idea came in for some pointed criticism today on the editorial page of the Wall Street Journal, which said the plan “would give [public sector unions] political leverage and reinforce the impression that the [pension fund] money is theirs to bargain with.”

The cat's out of the bag

Indeed, why would Cuomo consider financing even a portion of state infrastructure needs with money from pension funds, which generally need to make 8 percent or more on their investments, when he could achieve the same result by issuing tax-exempt bonds at rates not much above 4 percent? Yes, the state’s statutory bond cap is beginning to pinch, but statutes can be easily overridden or sidestepped.

Local 32BJ of SEIU, the politically wired union representing building service workers in New York City, has taken the titular lead in rounding up union support for Cuomo’s plan. In fact, the union already seems to be ramping up a promotional campaign behind this idea, as evidence by a billboard that will greet returning lawmakers on I-787 in Albany, as shown at right.

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Nicole Gelinas has a must-read op-ed in the New York Post today on the sinking fortunes of New York City’s financial sector.  Her message:

Thanks to Washington’s support for big banks, New York City has been a cocoon of prosperity compared to the rest of the nation over the last three years.

But banks can’t stay on the dole forever — and the city’s done nothing in the 37 months since Lehman Bros. collapsed to prepare for a leaner Wall Street.

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Now that the state Public Employees Federation (PEF) has rejected a proposed contract, Governor Andrew Cuomo is moving forward with 3,500 layoffs.  Or, then again, maybe not.

This article in the Albany Times Union suggests there is an 80 percent likelihood the governor and union will reach a new deal without layoffs.  The newspaper also reports that “Cuomo is demanding that any modifications [to the rejected PEF contract] have no costs.”

“No costs”?  How about those savings of “$75 million this fiscal year, $92 million next fiscal year, and almost $400 million over the contract term” that the governor was supposedly counting on?

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Tappan Zee West?

Indiana Gov. Mitch Daniels last Friday “ordered the immediate closure of the Sherman Minton Bridge … pending further notice” after “the discovery of a concerning crack in the critical load-carrying element of the bridge on Thursday.”

The bridge runs over an interstate (I-64) that crosses the Ohio River between Indiana and Kentucky. It normally carries 80,000 commuters every day, so this is kind of a big deal. (more…)

Yesterday, the New York Times accused the Republican-controlled state Senate of “dropping the ball” for failing to pass legislation setting up a state health insurance exchange in the waning days of the last legislative session. If the legislature doesn’t pass a bill soon, the Times worries, the state might lose out on millions of federal dollars in exchange support.

This isn’t likely to happen, since the state would be passing up a “free lunch” offered by federal taxpayers - and the feds have been bending over backwards, forwards, and sideways to encourage states to set up exchanges.

But assuming that a bill passes sooner rather than later, what can New Yorkers expect out of it?

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Video footage from Wednesday’s “Replacing The Tappan Zee Bridge” event is up. Speakers and panelists discussed why New York needs a new bridge — the three-plus-mile span crosses the Hudson between Rockland and Westchester — and how to build it.

One of the most telling comments came from Christopher Waite, former chief engineer of the Thruway Authority, which owns the bridge.

About 1 hour and 31 minutes (and 35 seconds or so) in, Waite notes that “we can’t still be debating this with the bridge closed. It’s essential that something happen.”

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The end-of-session sausage-making machine is moving into high gear in Albany, where the state Senate’s Republican majority has cooked up a fat cylindrical tube of spicy meat and meat substitutes, including a property tax cap, New York City rent regulations, permanent local sales taxes and local government mandate relief provisions.

The property tax cap language in the 143-page Senate bill (S.5758) appears identical to the cap introduced May 24 by Assembly Speaker Sheldon Silver — except, in this case, the cap would be permanent, rather than linked to the effective date of New York City’s “temporary” rent laws.  The rent laws, in turn, would also be permanently extended.  By keeping all income, rent limits and other provisions related to “luxury decontrol” at current levels, rather than expanding them as proposed by Silver, the Senate approach would effectively phase out the impact of rent regs over the long term.

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Oblivious to exploding pension costs and the looming iceberg of retiree health care obligations, Albany lawmakers have introduced 55 bills that would “enhance the pension benefits of New York’s public employees, grant costly protections to retiree health insurance benefits, and make fiscally imprudent changes to the funding of the State’s pension system,” according to the Citizens Budget Commission, which issued its Benefit Sweetener Scorecard today.

In addition to the teacher pension borrowing scheme highlighted here last week, the bills include a pair of proposals that would roll back pension benefits to the rich, pre-1973 Tier 1 level, and another that would extend the option of early retirement without unreduced benefits to all employees who are at least 55 and have at least 25 years of service. Lawmakers have also introduced a half dozen measures that would make it harder for government employers to save money on retiree health benefits, by requiring any changes to first be negotiated with unions representing active workers.

Most of the bills are evergreens sponsored by Assembly Democrats, led by Peter Abbate, the staunch union ally who chairs the Civil Service Committee. But GOP members aren’t absent from the parade. Seven Assembly Republicans have sponsored what amounts to a temporary freeze of retiree health benefits. Three other Assembly Republicans are listed as “multi-sponsors” of a permanent freeze on retiree health benefits, which also has been introduced by a Senate Republican, Andrew Lanza.

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