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April 29, 2013

Progress slow on state mandate relief

'Million little things' stressing local budgets

By Richard Whitby
The Daily Star

---- — Gov. Andrew Cuomo offered a ray of hope two weeks ago that he’s ready to discuss the financial strains on the state’s local governments, which are caught between a property-tax cap and a host of expenses over which they have little control.

“Their situation with the police and fire contracts is a specific that is begging that larger problem,” Cuomo said in a radio interview. “I want to use it as an opportunity to talk about the larger problem of distressed communities and governments and how the state can help.”

The governor has yet to elaborate about how he intends to approach the problem, but public salaries and pensions are only a part – albeit a big one – of a gloomy picture, local officials say.

The big cities “are all in very, very difficult straits, for all of the reasons we know about: cost of pension programs, etc.,” Oneonta Mayor Dick Miller said last week. “And their situations are, depending on who you talk to, are in some form of desperate.”

The governor proposed a cap on binding-arbitration awards, but the proposal, which is opposed by labor, ultimately was left out of the budgets approved by the Senate and Assembly.

State Sen. James Seward, R-Milford, said the cap was left out of the final budgets because the law is about to expire.

“At the time we were doing the budget, it was just taken out of the budget discussions and will certainly dealt with in some fashion between now and the end of June, because it will need to be,” he said.

Seward added that the state has taken some steps to address the pension issue.

“We did do the pension reform – the Tier 6 that was enacted will bring down pension costs for local government and school districts,” he said last week. “And in this year’s state budget, we are offering what we call pension smoothing. … It’s a vehicle (by which) local governments can spread out their pension costs.”

Seward also pointed to progress to ease the pressure of ballooning Medicaid costs.

“For county governments, we have started to take over the growth,” he said, adding that the “phased-in takeover of the Medicaid growth will stabilize, at least, the county finances.”

But the problem doesn’t stop with big-ticket programs, Miller said.

“It’s a million little things,” he said.

The problem has come to be defined as “unfunded mandates.”

Essentially, that refers to a constellation of laws and regulations promulgated by the legislature and executive agencies, such as the Education Department, for which municipal and county governments must spend money to comply. These laws and regulations contain no provisions to offset the costs.

“When we enacted the property tax cap a couple of years ago, I said that only works if it comes with meaningful mandate relief,” Seward said. “That’s really the way to address high property taxes.”

Miller offered an example.

“A test that has to be done at the water plant used to be done quarterly,” he said. “All of a sudden, it has to be done monthly. A lot of these things are not enacted by the legislature; they’re enacted by the various departments within government and with no process at all that allows any dialogue with the affected agencies.”

“If you look at every piece of legislation that’s enacted, every additional regulation that’s imposed, it’s a cost to government and to the people,” he added, although he conceded that 75 percent of those laws and regulations are legitimate.

Nevertheless, Seward said he’s support a proposal to allow all regulations to sunset next year unless specifically reauthorized.

“I could buy into that,” he said. “Because I think we need to, shall we say, start fresh here and force a review of what’s in place. That’s exactly what that would do, because what we’re faced with here is layer on layer of requirement and mandates that have built up over a period of time. There may have been a good reason at a particular time, but does that reason still exist?”

The governor appointed a Mandate Relief Council in January 2012, naming his secretary, Lawrence Schwartz, to lead it. Its 2012 report, released in December, essentially is a list of requests for relief – all from school districts – and the council’s recommendations, none of which had the force of law.

The Laurens School District, for example, asked for relief from the Wicks Law, a measure dating to 1912 that was updated in 1946 and 2008. The law applies to construction projects undertaken by public entities. School districts and local governments have been railing against it for decades.

It was intended to foster competition by requiring that projects whose estimated costs exceeded geographically based thresholds hire separate prime contractors for general construction; heating, ventilation and air conditioning; electrical work; and plumbing. 

The current thresholds – $3 million for projects in New York City, $1.5 million for those in Nassau, Suffolk and Westchester counties and $500,000 for those in the rest of the state – were set five years ago.

New York Conference of Mayors, referring to unnamed studies, says the Wicks Law adds 8 to 30 percent to the cost of public construction.

The Mandate Relief Council recommended that school districts be exempted from the Wicks Law – New York City schools already are – but the legislature has yet to act on that advice. Contractors have lobbied to block the exemption.

Seward said he’s cosponsored legislation that would give local governments the choice of opting out of the law, which would be tantamount to a repeal, because few would choose to spend more money on a project.

He said he’d also support legislation that would exempt all school districts from the law.

“The New York City school already are exempt from that, and when it comes to school districts, we’re always looking for parity there in terms of the upstate schools,” he said.