January 3, 2007
Governor Spitzer's State of the State emphasizes economic revival and government reforms
The Governor's agenda addresses eight of 10 top priorities identified by Council members in a December survey
Declaring that "New Yorkers have resoundingly rejected the status quo," Governor Eliot Spitzer Wednesday outlined a broad range of policy proposals aimed at reforming state government and reinvigorating the economy.
In his State of the State speech at the state Capitol in Albany, Governor Spitzer repeated themes he sounded throughout his campaign and again last Monday in his inaugural address.
And, in outlining a broad range of priorities, the Governor addressed eight of the top 10 priorities identified by Business Council members as their top concerns in a survey that was released last month. Those priorities are: health insurance costs; workers' compensation reform; energy costs; economic-development programs and incentives; workforce development and training; innovation, science, and technology; local government consolidation; and public authority reform. The two top Council priorities not mentioned in the State of the State are business tax relief and liability insurance and lawsuits.
Specific proposals of interest to business include workers' comp reform, property-tax relief for middle-class homeowners, steps to ease energy costs by increasing supply, and new accountability requirements for schools and municipalities linked to increases in their state aid. He also called for restraint in the growth of state spending, and he said he would propose no tax increases this year.
"I report to you that the condition of many New Yorkers is superb, but whole communities have been left behind," Governor Spitzer told state legislators in his speech. "As the world has transformed and moved forward, it is only Albany that has stood still."
A centerpiece of his administration's policy efforts will be steps to improve the state's business climate, Governor Spitzer said.
"As the economy becomes global, and reveals our competitive disadvantages, we must reduce the burdensome cost structures that have driven businesses out of our state," he said, as the Legislature burst into applause. "We must adapt to the Innovation Economy. . . the knowledge-based economy of new businesses and new ideas that has become the driving force of job creation in the world today."
The Governor proposed:
- Reforms to a workers comp system "that does not work for anyone: not the employers who pay some of the highest premiums in the country, and not the workers who receive some of the lowest benefits."
- A new effort to reduce property taxes paid by middle-class homeowners by $6 billion over three years.
- Reforms to the notorious Wicks Law to increase the threshold at which its cost-inflating requirements kick in. The Wicks Law requires municipalities and school districts to use multiple contractors on public construction projects with estimated costs of $50,000 or more.
- Education reforms, including a "new, transparent
school funding formula" and reforms designed to increase
the focus on school accountability. "The debate will
no longer be about money, but about performance; the goal
will no longer be adequacy but excellence; and the timetable
will no longer be tomorrow but today," he said.
School districts will get new money only if they show where it's spent and whether it gets results—"with consequences for failure and rewards for success," he added. Aid would be increased in schools where it is most needed it, with school districts required to invest the funds "in programs that have been proven to work."
He also proposed increasing the number of charter schools that would be authorized by the state.
- An increase in state aid to distressed cities and towns, with new accountability requirements for better financial management and stronger efforts to achieve efficiencies.
- Creation of a new Upstate Empire State Development (ESD) office and appointment of a new Upstate chairman.
- New government support for businesses owned by women and minorities.
The Governor's speech urged state lawmakers to make a new commitment to spending restraint.
"Despite a momentary cash infusion, we are operating in a deficit environment, with out-year deficits conservatively estimated in the tens of billions of dollars," Governor Spitzer said.
"The fact is that recurring expenses this year and in the fiscal years ahead are much greater than recurring revenues. That simple reality leaves us with a simple choice: either we raise taxes and place an even greater burden on New Yorkers, or we end the culture of spending that is out of control."
His budget will propose no tax increases and will instead proposal a slower rate of growth in spending, "which has increased at three times the rate of inflation over the last four years. Just last year alone, General Fund spending increased by an astonishing 13 percent. We must end this culture of spending money we do not have."
Health care proposals
The Governor also said that health-care reform is essential both "to make health care affordable again and to free up the resources for other urgent priorities."
The Governor proposed:
- Closing and consolidating hospitals.
- Shifting health-care spending away from institutions toward "community and home-based alternatives."
- Using government leverage to force lower prices on prescription drugs.
- Stepping up efforts to fight Medicaid fraud, and creating a "Martin Act for health care." The Martin Act gives New York State's attorney general broad investigative and prosecutorial powers in the financial arena.
- Increasing state spending to give 500,000 uninsured
children taxpayer-funded health insurance and to enroll
another 900,000 adults in Medicaid.
He argued that this would cut state spending in the long run "because seeing a primary care doctor costs far less than providing charity care for the same patient in an emergency room – and it leads to far better care."
Governor Spitzer also proposed:
- Renewing Article X of the state's public service law, a long-expired law that was designed to expedite the siting of new power-generating plants.
- Aggressive new conservation efforts and a continued commitment to the state's goal of securing 25 percent of its energy from renewable sources.
The Governor proposed:
- Strong new campaign finance reform measures to lower contribution limits, close loopholes to those limits, and reduce contributions from lobbyists and companies that do business with the state. He said the ultimate goal of this reform effort should be full public financing of elections.
- Lobbying reforms, including a ban on gifts to elected officials and new limits on lobbying of state legislators by those who leave the legislative staff
- Creation of an independent, non-partisan redistricting commission. He said he would veto any partisan gerrymandering.
- Public-authority reforms "to strengthen transparency and accountability," to consolidate and eliminate authorities where possible, and to require that they be staffed by professionals with expertise, not people whose only connections are political. Governor Spitzer said authorities "have become patronage dumping grounds, adding yet another costly bureaucracy, entrenched in the status quo and insulated from accountability."
- Creation of a Commission on Local Government Efficiency
to develop ideas for local government consolidation.
"We must summon the political will to face the reality that 4,200 taxing jurisdictions are simply too many, too expensive and too burdensome," Governor Spitzer said.
- Budget reforms to ensure timeliness, transparency and fiscal responsibility. Specifically, he proposed accelerating consensus revenue forecasting, shortening the Governor's 30-day amendment period, and requiring legislative conference committees to meet as early as possible.
- Eliminating lump-sum member items, and requiring that all member-item spending be itemized in the budget.
- Requiring that the enacted budget is balanced, and requiring the Legislature to report on the financial effect of any changes to the executive budget.
"You can't change the world by whispering," Governor Spitzer said. "New Yorkers didn't whisper for change on Election Day; they shouted for it. And today is when we all come together in this chamber and respond."