WELCOME to The Capitol Pressroom

Here is the link to the Tompkins’ County Land Evaluation and Assessment site that Carol Chock spoke about on today’s program:

http://www.tompkins-co.org/tccog/Gas_Drilling/Focus_Groups/LandValues_Assessment.html

AP’s Albany Bureau Chief Michael Gormley strikes again.

ALBANY, N.Y. — Gov. Andrew Cuomo’s administration has ordered an expanded environmental review of proposed “hydrofracking” for natural gas in New York after a well in Pennsylvania spilled chemical-laced water for two days.

An internal memo obtained by The Associated Press directs the state Department of Environmental Conservation to review and learn any lessons from the April accident in Pennsylvania’s Bradford County.

A creek was polluted and homes were evacuated.

The review will include an on-site inspection by New York officials.

The findings will be part of New York’s environmental evaluation of using the forced-water hydraulic fracturing to capture natural gas in the Marcellus Shale deposit through much of New York’s Southern Tier.

The final report is due July 1.

The president of the powerful state teachers union describes the Assembly’s tax cap as “a gimmick”, “a bad idea” and “a surprise”. 

During an appearance on The Capitol Pressroom earlier today, Richard Iannuzzi said most of the particulars of this bill, especially “some of the more offensive parts”, were not expected. 

We are dismayed at the nature of this bill – NOT that there would be a bill, and certainly the timing and the process raises serious questions.

While Iannuzzi would not use the word “betrayed”in reference to Speaker Sheldon Silver, he admitted to a level of frustration. For years NYSUT’s support among Assembly Democrats, forged by the bonds of ideology and campaign contributions, was so strong, it bordered on the dysfunctional.    No more. 

Today Iannuzzi said the union didn’t know of any details in the Assembly’s bill until after they broke from conference on Monday night.

For us, it’s time to re-evaluate our relationships with just about everything going on in Albany. 

Here are some other quotes from Iannuzzi –

On NYSUT changing its political strategy in Albany:

Our goal will be not to work with parties, but to work with individuals.

On a Cornell Conference in June that would have brought superintendents, school board presidents, local and state union leaders together to design evaluation systems for teachers: 

What I can tell you is NYSUT has pulled out of that conference. It’s difficult to talk about labor-management collaboration when the input of labor is ignored.

On the inclusion in the tax cap bill of language on rent regulations: 

I’m fascinated by rent control language being actually written into the tax cap bill.

NYSUT isn’t the only organization having difficulty with the tax cap. 

The Fiscal Policy Institute’s Frank Mauro, a former Secretary of the Assembly Ways and Means Committee had several questions.  For example Mauro wondered aloud about this logic, or lack thereof:  if  you propose an tax increase of more than 2% you need a 60% vote.  If you don’t get 60% of the vote,  the cap lapses back to 0% rather than 2%. 

Mauro also questions the effectiveness of the pension carve out saying it would have only applied to 3 budgets over the last 37 years.

                                  It’s not logical.

                                                                  – Frank Mauro

While acknowledging the bill isn’t perfect, and will cause some temporary pain, former Empire State Development Corporation head Dennis Mullen described the cap as a message to business leaders across the country who have come to view New York as an empire of taxing and regulation….

It sends a message that the state of NY is taking very positive steps to get taxes under control.  That’s a very powerful message both internally and externally. 

                                                                                      — Dennis Mullen

QUESTION — Does natural gas leasing hurt property values?

ANSWER – There is some damning evidence that it does. 

Walter Hang of Toxics Targeting joined us on the Capitol Pressroom last Friday 5/20 to discuss this issue. He spoke with several banking institutions about their rules surrounding lending money for both residential and commercial land investment, and the results are on his website.   

Here are the highlights:

– “Gas/oil leases are generally NOT (emphasis in the original) accepted by lenders such as Wells, First Place Bank, Provident Funding, GMAC, FNCB, Fidelity, FHA, First Liberty or Bank of America. It would be difficult, if not impossible, to the meet the ‘acceptable if commonly granted’ rule.”

– “Surface or sub surface rights within 200 feet of a residential structure would not be acceptable for conventional financing in the Secondary market.”

– “NYS title insurance gas endorsements specifically void title insurance coverage if the premises are used for any commercial venture.”

– “Lenders are responsible to warrant several items to the investor in the Secondary market that can not be done leaving lenders with significant liability.”

– “Surface or sub surface rights within 300 feet of a residential structure OR within 300 feet of property boundary lines would not be acceptable for FHA [Federal Housing Administration] (Department of HUD [Housing and Urban Development]) financing.”

=

On Monday I confirmed that Assemblymember Barbara Lifton was so concerned about how gas leasing might affect land values in Tompkins County, that she met with three members of the Governor’s staff to bring them up to date:  Jim Malatras, Tony Giardina and Tom Congdon.  I still haven’t had any confirmation from the Governor’s office.  I am also still waiting to hear what they intend to do about this issue.

According to Lifton, gas drillers – at one time –  did let people bow out of their leases if they were looking to move and borrow money.  But those days are over.  Now that the industry is required to have leases on 60% of all land within a ”spacing unit” it has been hesitant to allow land owners out of those leases. 

Lifton will join me on The Capitol Pressroom tomorrow, Tuesday 5/24 from 11:06am – 11:18am to discuss this issue, as well as her conversation with members of the Cuomo administration. 

SHOULD THE DEC’S SGEIS BE REOPENED TO INCLUDE LAND VALUES IN THE IMPACT STATEMENT?

Below is the letter that Walter Hang sent to the administration regarding this issue:

Letter to Governor Cuomo Regarding Natural Gas Leasing Impacts on Mortgage Lending

John Kane of “Let’s Talk Native” has stated that he suspects that the State ultimately wants to shut down Native American tobacco retail businesses by outlawing Native brands, and to actively stop the legal distribution of those brands. 

When I asked Budget Director Robert Megna if that was the case, his response was the following:

“You know, I don’t think so.  I mean, I haven’t heard that. We know that the Native Americans produce or have begun producing their own brands of cigarettes, but I think what we have said, the State of New York has said for many years, is that we want to collect the money paid on cigarettes that were not produced by the Native Americans that are being sold by the Native Americans to New Yorkers tax free.  It’s as simple and straight forward as that. I think the Governor’s office and the Tax Department have developed a rational plan for doing that which does not involve the State infringing on the territories of Native Americans but rather working through wholesalers and saying that if you are going to sell manufactured cigarettes, that all cigarettes have to have a stamp on them to ensure that those that are being sold to New Yorkers, the tax has been paid and that an allocated amount will go to Native Americans for their…for their purposes that will be tax free. This has been our policy for a long time.”

Here is a response from Kane –

“…the state believes it has a right to pre-collect both its excise and sales taxes on cigarettes from everyone except those enrolled on the land from which they are sold. So if you are a Mohawk living on the Cattaraugus territory of the Seneca Nation, the state considers you and your purchases taxable. Any law maker, judge, agency or enforcement officer who does not see this for the racist, oppressive, meddling piece of shit that it is, must truly be ignorant. To suggest that a Seneca from Tonawanda cannot conduct trade with a Seneca from Cattaraugus on Seneca land without the state getting its cut is an act of aggression.  I am always pissed off at the state when they try to interfere with our lives but this is the height of arrogance. Tighten your seatbelts everyone it is going to be one hell of a summer!”

May 17th is right around the corner – that’s the day New Yorkers around the State are scheduled to vote on school budgets.

Dr. Rick Timbs of the Statewide School Finance Consortium told The Capitol Report that the average budget increase this year will be around 3.4%. That said, some districts are asking for a lot less; the budget for the Syracuse City Schools registers a decrease, down 6% from last year. The bad news is that between this year and last year, Syracuse mailed out hundreds of pink slips and tapped heavily into its reserve funds. When those funds are gone, they’re gone — districts who have zeroed-out their fund balances will be out of luck next year. And that doesn’t factor in a possible 2% property tax cap.

Timbs projects that half the districts in the state will have structural deficits in 3 years time.

Before the legislature took off for a two week break – the Senate Democrats held a press conference to reiterate that the public has highly supported the need for a public hearing for issues like ethics. On Wednesday, May 4th – the public can go to twitter to submit questions and concerns on the need for Ethics Reform. Questions can be submitted via twitter – @NYSenDems. The hearing will begin around noon on Wednesday but questions can be submitted any time before then.

The Governor says 3700 prison beds need to be eliminated. 

You may remember that about a month ago on the Capitol Pressroom, Senate Majority Leader Dean Skelos said this about the closures:

“The Governor has said he will do it fairly, and we trust the governor on that.”  

Not surprisingly, as the weeks tick by without any word from the 2nd floor, a few upstate lawmakers are wondering about the timing of the closures and the criteria the Governor will use to choose which prisons to close down.  

One of those lawmakers is State Senator Joseph Griffo of Rome.  

“It would help if they outlined the criteria to evaluate which facilities are targeted.”

Oneida is one of the counties that makes up the Senator’s central New York district. It’s home to 4 prisons, thousands of inmates and according to Griffo’s estimate, if only one of the two prisons in Rome is shutdown, the city will also be home to over 600 out-of-work prison employees.

In an email today, I asked the Governor’s Deputy Communications Director Josh Vlasto if criteria for picking which prisons to close had been made public.  He said yes, it could be found in the original executive order. 

But Executive Order,  No# 7, the original,  has been revoked.  The new executive order, No#13 — includes no criteria.  

Additionally, Vlasto says that whatever criteria can be found in the original executive order ”isn’t binding”  

All of this means one thing:  Senator Griffo is no closer to understanding how the Governor will choose which prisons will get the ax and which live to house prisoners for another day.

 “Outside of his indication that it would be geographically and politically balanced, we have not heard about specifics.”

 Griffo’s single request, that the market value of the land a prison sits on is included, was NOT on the original list of criteria in that defunct executive order. 

As for the timing of the closures?  The Governor’s office says we should be seeing a list of prisons slated for possible closure within the next few weeks.  Any final list will have to be made in conjunction with the Legislature.

After hearing about the Governor’s negotiated deal with Council 82, I remembered something I’d read a while ago about a state worker “retirement tsunami”.  

Turns out, I read it in Andrew Cuomo’s “The New NY Agenda: A Plan for Action”.  

Here’s what the Governor wrote, starting on page 105:

The impact of the aging Baby Boom
generation on State government is profound. Over
37,000 employees have retired in the past six years.
Tens of thousands are likely to retire soon, given that
42 percent of the State workforce is eligible to retire
in the next five years. And, as noted, there is no
meaningful “back bench” to replace these retiring
workers. Many of the employees who would
traditionally be in the position to replace the retiring
workers are the same age or older than those who are
retiring.

Therefore, the “retirement tsunami” hitting
State government will result in a devastating loss of
experience and talent. No less damaging is the
relative dearth of young people in the public sector.
Young people can play an important role in
transforming government. Because they are not
Over 37,000 employees have retired in the past
six years. Tens of thousands are likely to retire
soon, given that 42 percent of the State
workforce is eligible to retire in the next five
years.

While asking for union concessions, the Governor needs to keep in mind that the state may be losing 1000’s of public employees over the next 10 years.  Perhaps more than it can afford to lose.  Somehow the Governor needs to cajole CSEA and PEF into either freezing pay increases or other givebacks, while at the same time raising the respect quotient for state workers.   If young people begin seeing state workers as a drain on the economy, or “the enemy”, we will find ourselves with a whole new set of problems to solve.

Senator Liz Krueger’s bill requiring that gas drilling companies disclose all the ingredients in their fracking fluid just died in the Senate EnCon Committee. The vote was 7 to 6, largely along party lines — Krueger needed 8 votes to move the bill forward. 

According to Krueger, if Long Island Republicans who voted “no” had instead voted “aye without recommendation” or Senator Suzi Oppenheimer had been able to present, rather than excused for medical reasons, the votes might have been there.

There are other bills being considered today, including an AVELLA bill, S4220 — that will pretty much ban hydrofacking altogether.