(Music)
>> Gary Walker: JUST AHEAD ON
"NEED TO KNOW," NEW YORK
LAWMAKERS JUST RECENTLY PUT
THE FINISHING TOUCHES ON THE
STATE'S 2001 BUDGET, JUST IN
TIME TO START WORKING ON NEXT
YEAR'S FISCAL PLAN.
WHEN THIS BUDGET GETS DONE,
ANYBODY'S GUESS.
WHAT HAS MOST OF THOSE RELYING
ON STATE AID GUESSING IS WHAT
SORT OF FUNDING WILL OUR CITY
COMMUNITY SCHOOL DISTRICTS
EXPECT TO SEE?
WE'LL TALK WITH CIVIC LEADERS
TO FIND OUT HOW OUR AREA MAY
FARE, PLUS THE "DEMOCRAT AND
CHRONICLE'S" BUSINESS EDITOR,
ELLEN ROSEN, WILL JOIN US FOR
"THE BUSINESS SECTION."
BUT COMING UP FIRST, NEW YORK
STATE'S NEXT BUDGET IS NEXT ON
"NEED TO KNOW."
>> ACCOUNTABILITY IS THE KEY
WORD... ACCOUNTABILITY.
(Music)
>> THIS IS "NEED TO KNOW," THE
ROCHESTER AREA'S ONLY IN-DEPTH
NEWS PROGRAM.
"NEED TO KNOW" IS A PRODUCTION
OF WXXI NEWS AND PUBLIC
AFFAIRS, COVERING ISSUES,
POLITICS, EDUCATION AND
CURRENT EVENTS.
>> "NEED TO KNOW" IS MADE
POSSIBLE BY THE DAISY MARQUIS
JONES FOUNDATION, BY DORSCHEL
LEXUS, AND THROUGH THE SUPPORT
OF VIEWERS LIKE YOU.
>> Gary Walker: THANK YOU FOR
JOINING US.
I'M GARY WALKER.
AS PEOPLE MAKE THEIR HOLIDAY
GIFT LIST, MAYORS OF TOWNS AND
CITIES ACROSS NEW YORK STATE
HAVE ALREADY MADE THEIR WISHES
KNOWN.
THE NEW YORK STATE CONFERENCE
OF MAYORS GATHERED IN ALBANY
EARLIER THIS MONTH TO LOBBY
GOVERNOR PATAKI NOT TO FURTHER
CUT FUNDING TO LOCAL
GOVERNMENTS WHEN HE PRESENTS
THE 2002 BUDGET NEXT MONTH.
NEW YORK'S MAYORS REALIZE THE
UPCOMING BUDGET PROCESS WILL
INCLUDE FOCUS ON RELIEF
EFFORTS IN NEW YORK CITY.
BUT THEY ALSO BELIEVE THEY
HAVE BEEN GETTING THE SHORT
END OF THE FUNDING STICK FROM
ALBANY FOR THE PAST DECADE.
THEY SAY THEIR LOCAL
GOVERNMENTS HAVE REACHED THE
BREAKING POINT.
THE NUMBERS HAVE MADE THEIR
CASE.
NEW YORK CITY HAS RECEIVED
$275 MILLION LESS THIS PAST
BUDGET YEAR THAN THEY RECEIVED
IN 1990.
AND IF THE FUNDING LEVELS HAD
REMAINED EVEN FOR THE PAST TEN
YEARS, CITIES, TOWNS AND
VILLAGES ACROSS THE STATE
WOULD HAVE GOTTEN $4.9 BILLION
MORE IN STATE AID.
WHEN THE BUDGET PROCESS BEGINS
NEXT MONTH, GOVERNOR PATAKI
AND ALBANY LEGISLATORS WILL
ATTEMPT TO DEAL WITH THE
FISCAL FALLOUT OF THE
TERRORIST ATTACKS ON THE WORLD
TRADE CENTER.
PATAKI HAS ALREADY STATED THAT
BUDGET CUTS WILL BE NECESSARY
DUE TO A LOSS OF TAX REVENUE
FROM WALL STREET AND A GENERAL
ECONOMIC SLOWDOWN AS WELL.
IF LAST YEAR'S BUDGET PROCESS
IS ANY INDICATION, ALBANY HAS
ITS WORK CUT OUT FOR IT.
"NEED TO KNOW'S" MATT CUMMINGS
RECAPS THE 2001 BUDGET SEASON.
(Applause and cheering)
>> THE BUDGET I SUBMIT TODAY
CALLS FOR BOTH CHANGE AND
CONTINUITY.
IT DRAMATICALLY CHANGES THE
WAY OUR SCHOOLS ARE FUNDED AND
IT CONTINUES THE CONSERVATIVE
BUDGETING PRACTICES THAT HAVE
STRENGTHENED NEW YORK'S
FINANCES AND INCREASED OUR
CREDIT RATING TO ITS HIGHEST
LEVEL IN MORE THAN TWO
DECADES.
>> Matt Cummings: THAT WAS NEW
YORK GOVERNOR GEORGE PATAKI
GIVING HIS BUDGET ADDRESS LAST
YEAR, OFFERING GLOWING WORDS
ON NEW YORK'S ECONOMIC FUTURE
AND OPTIMISM FOR THE COMING
BUDGET PROCESS.
AND WHY NOT?
WALL STREET WAS STILL BOOMING
AND CRANKING OUT LOTS OF CASH
FOR STATE COFFERS.
>> IF WE CONTINUE TO PUT THE
COMMON GOOD OF THE PEOPLE
AHEAD OF THE NARROW INTERESTS
OF A FEW, WE WILL TAKE THE
NEXT STEP INTO A FUTURE THAT'S
RICH WITH UNTOLD PROMISE AND
UNLIMITED POSSIBILITY.
>> Matt Cummings: BUT PATAKI'S
ANNOUNCEMENT OF HIS $83.7
BILLION BUDGET FOR 2001 SET
THE TABLE FOR A POLITICAL GAME
OF CHICKEN BETWEEN THE
GOVERNOR AND THE LEGISLATURE.
ASSEMBLY DEMOCRATS PUSHED
PATAKI FOR $2 BILLION MORE AND
PUT FORTH THEIR OWN PROPOSAL
OF $85.9 BILLION.
THE TRADITIONAL THREE MEN IN A
ROOM NEGOTIATIONS BETWEEN THE
GOVERNOR, ASSEMBLY SPEAKER
SHELDON SILVER AND SENATE
MAJORITY LEADER JOSEPH BRUNO
BROKE DOWN, AND IN AUGUST THE
LEGISLATURE PASSED A
STRIPPED-DOWN BUDGET OF $79.6
BILLION.
LEGISLATURE DEMOCRATS AND
REPUBLICANS SAID PASSAGE OF
THEIR PLAN WAS A STRATEGIC
MOVE TO BRING THE GOVERNOR
BACK TO THE NEGOTIATING TABLE,
A PROCESS ROCHESTER'S MAYOR
FOUND DIFFICULT TO COMPREHEND.
>> IT REALLY IS ABSOLUTELY
AMAZING THAT THE STATE
CONTINUES TO OPERATE, YOU
KNOW, IN THIS HIGHLY
IRRESPONSIBLE AND RECKLESS
FASHION.
>> Matt Cummings: AND ALL OF
THIS WAS IN A YEAR WHEN
LAWMAKERS FELT THE STATE HAD
MONEY TO SPEND.
BUT THE ECONOMY WAS SLOWING
DOWN AND A RECESSION WAS
EMERGING ON SEPTEMBER 10th,
AND AFTER THE EVENTS OF
SEPTEMBER 11th, THE STATE
FACED THE NEED TO DIVERT
FUNDING TO THE RELIEF AND
REBUILDING EFFORTS OF NEW YORK
CITY WHILE STILL SHORING UP
THE 2001 BUDGET, AND THEY HAD
TO DO IT WITH GREATLY REDUCED
REVENUE FROM WALL STREET.
ALBANY LAWMAKERS DID PASS A
$200 MILLION SUPPLEMENTAL
BUDGET THIS FALL PROVIDING
ADDITIONAL FUNDING FOR
NON-PROFITS AND SCHOOLS.
BUT ACCORDING TO STATE
COMPTROLLER KARL McCALL, ONLY
$100 MILLION OF ADDITIONAL
FUNDING IS AVAILABLE FOR THE
CURRENT FISCAL YEAR, ALL OF
WHICH CREATES APATHY AMONG NEW
YORKERS HEADING INTO THE
COMING YEAR'S BUDGET PROCESS.
>> THE STATE, UNFORTUNATELY,
HAS NOT BEEN TOO RELIABLE.
WE'RE GETTING MONEY
EVENTUALLY, BUT WE WOULD MUCH
RATHER HAVE IT SOONER THAN
LATER, AND IN TOO MANY
INSTANCES IT COMES WAY TOO
LATE.
(Music)
>> Gary Walker: LOCALLY IT'S
NOT ALL DOOM AND GLOOM WHEN IT
COMES TO THE STATE BUDGET.
ROCHESTER IS EXPECTED TO
RECEIVE ALMOST $41 MILLION IN
STATE AID THIS YEAR, UP 46%
FROM A DECADE AGO.
HOWEVER, MANY SMALL TOWNS AND
VILLAGES ARE FACING MORE CUTS
IN STATE FUNDING.
THEY SAY THEY HAVE TO CUT
THEIR BUDGETS TO THE BONES AND
ANY FURTHER CUTS WILL LEAVE
THEM WITH ONLY TWO OPTIONS:
RAISE PROPERTY TAXES OR CUT
SERVICES.
NOW JOINING US TO DISCUSS THE
IMPACT OF THE 2001 BUDGET AND
LOOK AHEAD TO 2002 IS ELLEN
POLIMENI.
SHE'S THE MAYOR OF CANANDAIGUA
AND PRESIDENT OF THE NEW YORK
STATE CONFERENCE OF MAYORS.
ALAN HARRIS IS THE PRESIDENT
AND C.E.O. OF THE ROCHESTER
LEGAL AID SOCIETY AND THE
PRESIDENT OF THE COUNCIL OF
AGENCY EXECUTIVES, A
COLLECTION OF NON-PROFIT
EXECUTIVES.
AND JODY SIEGEL, EXECUTIVE
DIRECTOR OF THE MONROE COUNTY
SCHOOL BOARDS ASSOCIATION.
THANK YOU ALL FOR JOINING US.
LET'S BEGIN WITH KIND OF AN
OVERALL, BROAD,
TAKE-A-STEP-BACK QUESTION AND
LET ME SAY THIS: BEFORE WE
BEGIN, WE KNOW THE STATE WILL
RECEIVE FEWER REVENUES.
THE ECONOMY WASN'T GREAT
SEPTEMBER 10th, MUCH LESS THE
11th.
MORE NEEDS BECAUSE OF 9/11,
PARTICULARLY FOR NEW YORK
CITY.
THERE WILL BE STILL A HIGH
DEMAND FOR DOLLARS FROM ALL
THE SPECIAL INTEREST GROUPS,
INCLUDING ALL OF YOUR OWN,
NOT-FOR-PROFIT, SCHOOLS,
CITIES, TOWNS.
WELL, I HAVE TO ASK THIS: IS
THERE ENOUGH MONEY IN THE
STATE TO GO AROUND OR DO WE
NEED A STATE TAX INCREASE?
>> WELL, NO ONE LIKES TO
ADVOCATE FOR A STATE TAX
INCREASE.
>> Gary Walker: I KNOW THAT
BUT STILL WE HAVE TO TALK
ABOUT IT.
>> I THINK THE QUESTION REALLY
IS THE IMPACT OF THE EVENTS OF
9/11.
WE HAVE BEEN TOLD BY OUR STATE
DELEGATION LEGISLATORS THAT
THERE'S LESS TAX REVENUE, AND
THAT'S A REALITY FOR NEXT
YEAR.
THE STATE'S FISCAL YEAR STARTS
APRIL 1, AND WE KNOW THAT THE
NEXT BUDGET, THERE'S GOING TO
BE LESS MONEY.
WHETHER OR NOT THE LEGISLATURE
WANTS TO RAISE TAXES, THAT'S A
DECISION THAT THEY HAVE TO
MAKE.
AS THE NOT-FOR-PROFIT WORLD
GOES, WHEN THERE IS A
RECESSION, AS THERE ALREADY
IS, AND WHEN THERE'S LESS TAX
REVENUE AVAILABLE, THERE ARE
MORE NEEDS FOR PEOPLE WHO COME
TO THE NOT-FOR-PROFITS.
SO AS THE REVENUES GO DOWN,
THEIR NEEDS INCREASE, AND THAT
DEMAND IS ALWAYS THERE.
>> Gary Walker: WOULD YOU --
WELL, JODY, YOU GO AHEAD.
>> TAXES WILL INCREASE IN ONE
PLACE OR ANOTHER, WHETHER THEY
CHOOSE TO RAISE THEM IN ALBANY
OR NOT.
THE INCREASED COSTS THAT
COMMUNITIES ARE GOING TO FACE
FOR THE SERVICES THEY WANT ARE
GOING TO HAVE TO COME FROM
SOMEWHERE.
THIS PAST YEAR, STATE FUNDING
FOR EDUCATION WAS NOT WHAT
DISTRICTS HAD BEEN HOPING IT
WOULD BE, AND CONSEQUENTLY
YOU SAW GREATER TAX INCREASES
IN THE BUDGETS THAT WERE PUT
FORWARD BY SCHOOL DISTRICTS
PRETTY MUCH ACROSS THE STATE,
HIGHER THAN THEY HAD BEEN FOR
THE LAST FEW YEARS, AND
COMMUNITIES VOTED FOR THOSE
INCREASES BECAUSE THEY THINK
EDUCATION IS IMPORTANT.
THE SAME THING WILL HAPPEN
AGAIN.
SCHOOLS ARE IN A MUCH MORE
PERILOUS STATE AT THE MOMENT
IN TERMS OF DEPLETED RESOURCES
TO LEAN ON BECAUSE OF WHAT
THEY HAD TO DO TO GET THROUGH
THIS YEAR.
THE STATE CAN CHOOSE TO RAISE
TAXES IN ALBANY BY RAISING
INCOME TAXES, WHICH IS
CONSIDERED LESS OPPRESSIVE, OR
THEY CAN LEAVE IT FOR LOCAL
ORGANIZATIONS TO DO IT IN WAYS
THAT ARE MORE DIFFICULT.
>> Gary Walker: JODY, I WANT
TO COME BACK TO THAT A LITTLE
BIT LATER IN THIS TALK.
I'M GOING TO COME BACK TO THAT
POINT, EXACTLY THAT POINT.
ELLEN, HOW ARE YOU?
>> I'M FINE, THANK YOU.
>> Gary Walker: LET ME ASK
YOU: SHOULD THE STATE
CONSIDER RAISING TAXES?
>> FROM THE STANDPOINT OF
MUNICIPALITIES, I THINK
THERE'S THINGS THAT THE STATE
LEGISLATURE AND THE GOVERNOR
CAN DO FOR US THAT WOULD NOT
CAUSE THERE TO BE A TAX
INCREASE.
FOR INSTANCE, I THINK THAT
THERE ARE SOME MANDATE RELIEF
ISSUES THAT COULD BE HANDLED
IN ALBANY THAT WOULD REALLY
HELP MUNICIPALITIES,
ESPECIALLY SMALL CITIES AND
VILLAGES, BUT ALSO CITIES THE
SIZE OF ROCHESTER.
FOR INSTANCE, THE WICKES LAW.
WE ASKED FOR MANDATE RELIEF IN
THE WICKES LAW, AND EVEN THE
GOVERNOR LAST YEAR PUT IT IN
THE PROPOSED BUDGET TO
INCREASE THE LEVEL AT WHICH
YOU HAD TO START TO COMPLY
WITH THE WICKES LAW.
ALSO, LIABILITY ISSUES FOR
COMMUNITIES.
>> Gary Walker: MINIMUM WAGE
ISSUES AND --
>> PREVAILING WAGE.
>> Gary Walker: I THINK
EVERYBODY AT THIS TABLE
UNDERSTANDS THE POLITICAL
BOMBSHELL THOSE ISSUES ARE,
PARTICULARLY WITH --
>> BUT THEY ARE --
>> Gary Walker: --
PARTICULARLY WITHIN THE
ASSEMBLY FOR SOME OF THOSE
ISSUES, BUT THE LIKELIHOOD OF
THAT HAPPENING POLITICALLY IS
SLIM TO WHAT, ZERO?
>> WELL, I THINK WHEN YOU'VE
GOT THE GOVERNOR PROPOSING IT,
THEN I THINK THE LEGISLATURE
NEEDS TO TAKE A STRONG LOOK.
THEY'RE NOT TALKING WHOLESALE
REPEAL OF THE WICKES LAW.
THEY'RE TALKING ABOUT RAISING
SOME OF THE LIMITS WITHIN THE
WICKES LAW.
THAT WOULD HELP, ESPECIALLY
SMALLER COMMUNITIES, VILLAGES.
>> Gary Walker: LET'S BACK UP
FOR A MINUTE.
MAYBE YOU CAN EXPLAIN WHY THE
WICKES LAW IS SO ONEROUS TO A
COMMUNITY LIKE CANANDAIGUA.
>> OKAY.
THE WICKES LAW REQUIRES THAT
WHEN YOU DO A MAJOR CAPITAL
PROJECT THAT YOU HAVE TO
ENGAGE FOUR DIFFERENT
CONTRACTORS TO BE INVOLVED IN
THAT.
WE HAVE DONE SEVERAL PROJECTS
OVER THE PAST SEVERAL YEARS,
AND IN DOING THOSE, WE FOUND
THAT IF WE HAD NOT HAD TO
COMPLY WITH THE WICKES LAW, WE
PROBABLY COULD HAVE SAVED FROM
$1 MILLION TO $1.5 MILLION ON
PUTTING THOSE PROJECTS
TOGETHER.
IN A COMMUNITY THE SIZE OF
CANANDAIGUA, THAT'S A LOT OF
MONEY.
AND THE SAME IS TRUE FOR OTHER
VILLAGES AND SMALL CITIES
ACROSS THE STATE.
>> Gary Walker: I WANT TO ASK
A QUESTION OF JODY.
BUFFALO WILL LAY OFF ABOUT 355
POSITIONS, A GREAT
PREPONDERANCE OF THOSE
TEACHERS.
JUST RECENTLY, I THINK THIS
MORNING, THE ASSEMBLY SAID
THAT THEY WOULD KICK ANOTHER
$5 MILLION IN TO BUFFALO TO
PREVENT ABOUT 175 OF THOSE
TEACHER LAYOFFS.
HOWEVER, THERE'S STILL AT
LEAST 100 TEACHERS THAT WILL
FACE LAYOFFS IN BUFFALO.
I'M WONDERING, ARE THREATS OF
TEACHER LAYOFFS THE ONLY THING
THAT'S GOING TO BE EFFECTIVE
IN LEVERING FUNDS OUT OF
ALBANY?
>> THAT'S AN INTERESTING
QUESTION.
IT'S NOT A DIRECTION DISTRICTS
LIKE TO GO IN, BUT EVERY
RATIONAL DISCUSSION WE HAVE
TRIED TO HAVE WITH ALBANY TO
GET A MORE RESPONSIBLE FORM OF
FISCAL PLANNING HASN'T
SUCCEEDED.
AND THERE IS THE ARGUMENT THAT
ONLY IF EVERYONE IN THE STATE
RISES UP AND DEMANDS CHANGE,
WILL THERE BE A CHANGE.
THAT WON'T HAPPEN UNTIL PEOPLE
ARE VERY DIRECTLY AFFECTED.
WHEN IT COMES TO PUBLIC
EDUCATION, LAYING OFF
TEACHERS, INCREASING CLASS
SIZES IS CERTAINLY THE WAY TO
GET PEOPLE IN THE BROADER
COMMUNITY TO FEEL INJURED.
WE DON'T WANT TO INJURE THE
COMMUNITY.
THAT BECOMES A REAL DIFFICULT
SITUATION FOR SCHOOLS.
>> Gary Walker: IT REALLY GETS
ATTENTION WHEN YOU ANNOUNCE
TEACHER LAYOFFS.
I WANT TO TURN TO ALAN QUICKLY
BECAUSE IN A WAY, NON-PROFITS
-- WELL, NOT IN A WAY.
YOU HAVE THE LEAST AMOUNT OF
CLOUT, THE FEWEST RESOURCES,
ARE PRETTY MUCH SCATTERED IN
LITTLE POCKETS ALL OVER THE
PLACE; YOU CAN'T REALLY GET
TOGETHER AS A GROUP, NOT
PRACTICAL; YOU DON'T HAVE
TAXING AUTHORITY LIKE THE
SCHOOL DISTRICTS AND THE TOWNS
AND VILLAGES.
IF IT COMES TO IT, THEY HAVE A
RIGHT TO RAISE TAXES; THEY
HAVE A RIGHT TO RAISE
REVENUES; THEY HAVE THAT
AUTHORITY.
SUBJECT TO VOTE, WE
UNDERSTAND, BUT THEY STILL
HAVE THAT AUTHORITY.
NOT-FOR-PROFITS, YOU'RE PRETTY
MUCH THE GROUP WITH THE LEAST
AMOUNT OF POWER.
COMING OUT OF YOUR
CONVERSATIONS WITH ALBANY,
WHAT CAN WE EXPECT FOR THE
NOT-FOR-PROFITS GROUP?
>> WELL, IT'S NOT VERY
HOPEFUL.
AS YOU KNOW, THE LEGISLATURE
PASSED THEIR BARE BONES
BUDGET, AND IT DIDN'T INCLUDE
ANY OF THE SUPPLEMENTAL BUDGET
ITEMS, WHICH ARE USUALLY
CALLED PORK IN OTHER PLACES.
BUT IN NEW YORK STATE THEY'RE
NOT REALLY PORK; THEY'RE
REALLY SUBSTANTIVE ISSUES THAT
THEY NEVER AGREE UPON
BEFOREHAND AND ALWAYS ADD THEM
ON AFTERWARDS.
LET ME GIVE YOU AN EXAMPLE
FROM THE COUNCIL OF COMMUNITY
-- COUNCIL OF AGENCY
EXECUTIVES: AIDS ROCHESTER IS
GOING TO BE LOSING $100,000 IN
FUNDING.
I WOULD CONSIDER THAT PORK.
THAT'S AN AGENCY THAT HELPS
FOLKS WITH AIDS.
THE FAMILY SERVICE OF
ROCHESTER IS LOSING $125,000,
PART IN A HOUSING PROGRAM AND
PART IN A MENTAL HEALTH
PROJECT.
THE LEGAL AID SOCIETY AND
SEVERAL OTHER LEGAL SERVICE
PROVIDERS, WE FACE A $350,000
LOSS IN REVENUE.
>> Gary Walker: SO WILL THERE
BE FEWER LAWYERS WORKING
THERE?
>> YES.
IN ALL OF THESE PROJECTS --
AND THIS IS JUST A SAMPLING --
THERE WILL BE LAYOFFS; THERE
WILL BE FEWER SERVICES
AVAILABLE, AND THESE ARE NOT
PORK PROJECTS; THESE ARE REAL
SERVICES THAT HELP PEOPLE ON A
DAY-TO-DAY BASIS.
AT THE LEGAL AID SOCIETY, WE
HELP FOLKS WITH FAMILY LAW
PROBLEMS, WITH HOUSING
PROBLEMS, EDUCATION ISSUES,
MOSTLY FOCUS ON DOMESTIC
VIOLENCE ISSUES, AND
SPECIFICALLY IN OUR AGENCY, WE
HAVE ONE POSITION THAT'S BEEN
UNFUNDED SINCE APRIL 1st.
IT'S AN ATTORNEY THAT GOES
INTO COURT AND REPRESENTS
VICTIMS OF DOMESTIC VIOLENCE,
WOMEN WHO ARE BEING ABUSED.
SO THAT'S ABOUT 100 WOMEN WHO
DID NOT GET REPRESENTED THIS
YEAR BECAUSE WE HAVEN'T BEEN
ABLE TO FILL THAT POSITION.
THE ANSWER REALLY IS THAT WE
HAVE VERY LITTLE CLOUT IN
ALBANY.
WE DO THE BEST WE CAN AND WE
TAKE WHAT THEY GIVE US, AND
IT'S EXTREMELY DIFFICULT.
IT'S EXTREMELY DIFFICULT TO
PLAN.
NOT ONLY HAVE WE NOT GOT MONEY
THIS YEAR BUT NEXT YEAR IS
COMING RAPIDLY UPON US AND NOW
WE HAVE TO PLAN FOR NEXT YEAR.
ALL WE KNOW IS THERE WILL BE
LESS MONEY.
>> Gary Walker: LET ME PLAY
DEVIL'S ADVOCATE HERE.
GOVERNOR PATAKI RECENTLY
STATED THAT MUNICIPALITIES
HAVE SAVED $6 BILLION TOTAL
BECAUSE OF MANDATE RELIEF AND
STATE ACTION IN CUTTING
MEDICAID COSTS.
IS HE BLOWING SMOKE?
IS HE MISLEADING US OR HAVE
THERE BEEN SAVINGS ON THE PART
OF MUNICIPALITIES FROM STATE
ACTIONS IN THE PAST TEN YEARS?
>> I THINK HE MIGHT BE TALKING
ABOUT THE LARGER CITIES.
WHEN YOU LOOK AT THE SMALLER
CITIES AND VILLAGES, THAT'S
NOT THE CASE.
THEY HAVE MADE SOME ATTEMPTS
IN SOME AREAS AS FAR AS THE
MANDATE RELIEF, BUT FOR THAT
MANDATE RELIEF THAT WE MAY BE
GETTING, THEY ARE ALSO SENDING
US MORE PROGRAMS WITHOUT ANY
DOLLARS ATTACHED.
>> Gary Walker: HAS
CANANDAIGUA RECEIVED ANY
BENEFITS OF WHAT THE GOVERNOR
--
>> NO, THAT'S NOT TRUE.
ACTUALLY, IN THE LAST TEN
YEARS, CANANDAIGUA HAS
RECEIVED 27% LESS IN REVENUE
SHARING FROM ALBANY THAN IT
WAS RECEIVING IN '89/90.
>> Gary Walker: OKAY.
LET'S HOLD ON TO THAT.
IN 1991 THEY STOPPED REVENUE
SHARING FOR CITIES; HOWEVER,
THEY BEGAN A SUPPLEMENTAL AID
FOR CITIES WITH NEEDS AND THAT
POT OF MONEY IS ALMOST THE
SAME SIZE AS THE
REVENUE-SHARING POOL.
>> THAT'S CORRECT.
NOW, THAT GOES TO ALMOST ALL
CITIES.
IT DOESN'T GO TO ALL CITIES.
THERE ARE CITIES IN THE STATE
THAT DON'T RECEIVE SOME OF
THAT SUPPLEMENTAL AID...
>> Gary Walker: BECAUSE THEY
DEEM YOU BETTER, WITH MORE
RESOURCES THAN THE CITIES THAT
ARE GETTING IT, RIGHT?
>> RIGHT.
>> Gary Walker: SO YOU'RE
SAYING THAT YOU'RE -- WITH THE
ADDED MANDATE AND THE NO
BENEFITS FROM THE MANDATE
RELIEF THAT'S ALREADY BEEN
GIVEN OUT, YOU'RE IN A SPOT
WHERE YOU MAY HAVE TO RAISE
PROPERTY TAXES?
>> ACTUALLY, WE PASSED OUR
BUDGET LAST THURSDAY NIGHT.
WE DID NOT RAISE TAXES, BUT
THAT IS UNUSUAL WITH SMALL
CITIES ACROSS THE STATE.
THERE ARE SEVERAL SMALL CITIES
THAT ARE REALLY SUFFERING
SEVERE FINANCIAL DIFFICULTY,
TO THE POINT WHERE THEY'RE
ACTUALLY HAVING TO GO TO
ALBANY AND ASK FOR EXTRA HELP.
>> Gary Walker: I DON'T WANT
TO PICK ON YOU, BUT I'M
PLAYING DEVIL'S ADVOCATE HERE.
ISN'T THAT A PRETTY GOOD
STRATEGY ON THE PART OF THE
STATE?
IF THEY CAN REDUCE THE FUNDING
TO CITIES LIKE CANANDAIGUA AND
YOU STILL DIDN'T HAVE TO RAISE
YOUR TAXES, THEN I GUESS TO
THEM THEY'RE SAYING, "WELL,
YOU KNOW, THIS IS AN OKAY
THING.
THEY DIDN'T HAVE TO RAISE
THEIR TAXES.
THE AID WILL GO TO THE CITIES
WHO REALLY NEED IT," NOT TO
SAY THAT CANANDAIGUA DOESN'T
HAVE ANY NEEDS, BUT IN THE
GREATER REALM OF THINGS, IN A
TOUGH YEAR, THIS IS HOW IT IS
SUPPOSED TO WORK.
>> RIGHT.
BUT WHEN THAT GOES ON FOR TEN
YEARS, GARY, THERE ARE THINGS
YOU ARE PUTTING OFF.
YOU CAN'T CONTINUALLY PUT OFF
MAJOR CAPITAL PROJECTS AND NOT
HAVE TO PAY MORE FOR THEM
LATER.
SO, YOU KNOW, IT MAY LOOK THAT
WAY RIGHT NOW, BUT LET'S SAY
FIVE YEARS FROM NOW, I THINK
YOU'RE GOING TO FIND THOSE
COMMUNITIES THAT ARE DOING
OKAY TODAY WILL BE IN
FINANCIAL DIFFICULTY BECAUSE
THEY'LL HAVE CAPITAL PROJECTS
THAT HAVE BACKED UP.
>> Gary Walker: JODY, YOUR
TURN.
>> OKAY.
>> Gary Walker: LET'S TALK
ABOUT PUBLIC PERCEPTION.
THE CITY OF ROCHESTER SCHOOL
DISTRICT REPORTED LAST WEEK
IT'S $29 MILLION IN DEBT,
FACING THE PROSPECT OF MASSIVE
TEACHER LAYOFFS, BUT JUST THIS
MORNING IN "THE DEMOCRAT AND
CHRONICLE," THEY REPORTED THE
SCHOOL DISTRICT RAN OUT OF
MONEY THE FIRST WEEK OF THE
BUDGET YEAR.
THERE'S A $21 MILLION
OVERSTRETCH OF THE BUDGET;
THEY OVERSPENT BY $21 MILLION.
AND THE DISTRICT C.F.O. JUST
RESIGNED.
THE PERCEPTION IS THERE'S NO
AMOUNT OF MONEY FOR SOME
SCHOOL DISTRICTS THAT WILL BE
SATISFACTORY AND THAT MONEY IS
NOT PARTICULARLY BEING WELL
SPENT OR WELL MANAGED.
>> WELL, I CERTAINLY DON'T
KNOW THE DETAILS OF THEIR
ACCOUNTING, BUT I AM AWARE
THAT I WOULD BE HARD PUT TO
COME UP WITH ANY CITY SCHOOL
DISTRICT THAT WASN'T FACING
MAJOR FINANCIAL PROBLEMS, IN
NEW YORK STATE OR ANYWHERE.
IT'S -- IT'S NOT A PRECISE
THING.
THERE ARE INCREDIBLE DEMANDS
BEING MADE ON SCHOOL
DISTRICTS.
EVERY YEAR FOR THE LAST FEW
YEARS, THE NUMBER OF MANDATES
THAT SCHOOL DISTRICTS FACE HAS
INCREASED.
IF STATE LAW HAD BEEN FOLLOWED
THIS YEAR, THE STATE LAWS
BEING IMPOSED ON SCHOOLS,
EDUCATION WOULD HAVE NEEDED
$1.45 BILLION IN NEW MONEY
OVER LAST YEAR'S BUDGET.
BUT WHEN THE BUDGET CAME DOWN
EARLIER IN THE YEAR, THAT
VERSION THAT WAS THE EARLIER
ONE, $375 MILLION WAS PUT IN
TO COVER $1.45 BILLION OF
COSTS.
THIS CREATES AN ENVIRONMENT
WHERE IT'S VERY DIFFICULT FOR
SCHOOL DISTRICTS TO FUNCTION,
URBAN DISTRICTS, RURAL
DISTRICTS, SUBURBAN
DISTRICTS...
>> Gary Walker: WE HAVE A
COUPLE OF MINUTES LEFT AND I
WANTED TO TALK ABOUT SOMETHING
THAT YOU BROUGHT UP EARLIER.
RIGHT NOW WE HAVE THE STAR
PROGRAM WHICH IS A HUGE
RECURRING DEBT FOR THE STATE.
WHAT'S IT GOING TO BE THIS
YEAR, IN THE BILLIONS,
CORRECT?
A COUPLE BILLION DOLLARS.
THAT IS STATE TAX DOLLARS
RAISED FROM THE STATE TAX
POOL, AND MOSTLY FROM INCOME
TAX, OFFSETTING PROPERTY TAXES
FOR SCHOOL DISTRICTS, FOR MOST
PEOPLE IN THIS STATE.
SOME PEOPLE LOOK AT THAT AS A
KIND OF FOOTHOLD INTO THE IDEA
THAT PROPERTY TAX, WHICH IS
WHAT WE'RE TALKING ABOUT, THE
MOST ONEROUS TAXES FOR MAYORS
TO HAVE TO RAISE; SCHOOL
DISTRICTS DON'T LIKE TO DO IT.
SO PERHAPS WE'RE THINKING THAT
THERE NEEDS TO BE A DIFFERENT
WAY TO RAISE MONEY STATEWIDE.
DO YOU THINK -- IS THAT
SOMETHING THAT WE'RE GOING TO
SEE OR HAVE SOME DISCUSSION
GENERATED FROM ORGANIZATIONS
SUCH AS NON-PROFITS AND SCHOOL
DISTRICTS AND CITIES AND TOWNS
TO SAY SHOULD THESE DOLLARS BE
BETTER RAISED IN AN INCOME TAX
OR SALES TAX FORMAT THAN IN
PROPERTY TAX AND FIND SOME WAY
TO CHANGE THE FORMULA?
>> IT ISN'T JUST HOW THE
DOLLARS ARE RAISED; IT'S HOW
THEY'RE ALLOCATED.
THERE ARE OVER 30 DIFFERENT
CATEGORIES OF STATE AID TO
EDUCATION.
IF YOU HAVE A CATEGORY THAT
YOU DON'T EXHAUST THE
ALLOCATION, YOU DON'T GET THAT
MONEY.
AND SO IT MAY LOOK IN MANY
WAYS THAT THE STATE IS
PROVIDING MONEY FOR EDUCATION
THAT DISTRICTS CAN'T USE,
DON'T HAVE ACCESS TO.
WHAT WE REALLY NEED FROM
ALBANY IS A CLEAR VISION OF
HOW TO MAKE DECISIONS IN THE
STATE AND HOW TO SPEND MONEY
WELL.
IN 1930, THE STATE REALIZED
THAT THEIR STATE EDUCATION
FUNDING FORMULA HAD BECOME
TOTALLY UNWORKABLE, WHICH IS
HOW MOST PEOPLE WOULD DESCRIBE
IT CURRENTLY.
>> Gary Walker: RIGHT.
>> SO THEY THREW IT OUT AND
TRIED AGAIN.
OBVIOUSLY AFTER 70-SOME YEARS,
THEY HAVE MADE IT UNWORKABLE
AGAIN, BUT I THINK WHAT THE
STATE REALLY NEEDS IS A
SERIOUS DISCUSSION ABOUT WHAT
IS FAIR AND WHAT'S APPROPRIATE
AND WHAT IS THE JOB OF THE
STATE GOVERNMENT TO HELP THE
PEOPLE IN THE STATE GET THE
SERVICES THEY NEED?
>> Gary Walker: OKAY.
WE HAVE ABOUT A MINUTE LEFT.
I'M GOING TO GO TO EACH ONE OF
YOU QUICKLY.
BEST AND WORST CASE FOR 2002?
>> HMMM... WELL, AS I SAID,
FOR 2002, WE HAVE ESTABLISHED
OUR BUDGET.
WE'RE GOING TO BE ABLE TO
OPERATE.
>> Gary Walker: BUT SPEAKING
FOR OTHER SMALL CITIES.
>> FOR OTHER SMALL CITIES,
AGAIN, I HAVE TO AGREE IT'S
THE WAY THE DOLLARS ARE
ALLOCATED.
SINCE 1995/96, THE STATE HAS
INCREASED SPENDING 14.3%.
-- BILLION DOLLARS, EXCUSE
ME.
14.3 BILLION DOLLARS.
OUT OF THAT, 1.7 BILLION HAS
COME TO LOCALITIES.
>> Gary Walker: ALAN, QUICKLY.
>> WELL, THE PROCESS IS
BROKEN.
IF THE PROCESS COULD BE FIXED
AND YOU COULD GET A BUDGET IN
APRIL, EVEN IF THERE WERE
FEWER DOLLARS, EVERYBODY WOULD
HAVE AN EASIER TIME RESOLVING
THEIR ISSUES.
HAVING A BUDGET START IN APRIL
BUT NOT HAVING DOLLARS IN
DECEMBER, UNWORKABLE.
>> Gary Walker: DO YOU SEE
LAYOFFS COMING?
>> ABSOLUTELY.
>> Gary Walker: JODY, QUICKLY.
ARE LAYOFFS COMING IN SCHOOL
DISTRICTS OR NO?
>> IN THE COMING BUDGET YEAR,
IT'S VERY LIKELY.
SCHOOLS ARE IN A MUCH MORE
PERILOUS SITUATION.
YOU HAVE TO REALIZE SCHOOLS
AREN'T EQUAL IN THE MONEY THEY
GET FROM THE STATE.
>> Gary Walker: AND THAT'S GOT
TO BE THE END OF STATEMENT.
UNDERSTOOD.
THANK YOU, JODY.
THANK YOU, ALL OF YOU.
UNFORTUNATELY THAT'S ALL THE
TIME WE HAVE FOR THIS
DISCUSSION.
FOR MORE INFORMATION ON THIS
YEAR'S BUDGET PROCESS, LOG ON
TO OUR WEB SITE AT
wxxi.org/ntk.
AND NOW IT'S TIME FOR THIS
WEEK'S EDITION OF "THE
BUSINESS SECTION" WITH "THE
DEMOCRAT AND CHRONICLE."
(Music)
>> Gary Walker: JOINING US NOW
IN STUDIO IS ELLEN ROSEN, THE
BUSINESS EDITOR FOR "THE
DEMOCRAT
AND CHRONICLE."
ELLEN, THANKS FOR JOINING US.
>> Ellen Rosen: THANKS, GARY.
>> Gary Walker: YOU HAD A
PRETTY BUSY WEEK THIS WEEK
WITH THE PRESIDENT OF XEROX.
I UNDERSTAND YOU HAD A
SIT-DOWN WITH ANNE MULCAHY.
>> Ellen Rosen: YES, WE HAD A
45-MINUTE INTERVIEW WITH ANNE,
WHO IS THE PRESIDENT AND C.E.O
AND SOON TO BECOME CHAIRMAN OF
XEROX CORPORATION.
>> Gary Walker: SHE IS TAKING
CHARGE OF A COMPANY, TOTAL
COMMAND OF A COMPANY THAT'S
COMING OUT OF PROBABLY THE
NADIR OF ITS PROUD HISTORY.
DID SHE GIVE YOU AN IDEA OF
WHAT JOB ONE IS FOR HER?
>> Ellen Rosen: SHE REALLY
JOINED THE COMPANY AT THAT LOW
POINT OF WHAT YOU'RE TALKING
ABOUT AND SO A LOT OF WHERE
THE COMPANY HAS COME HAS BEEN
ATTRIBUTABLE TO HER
LEADERSHIP.
HER JOB REALLY IS TO RESTORE
CONFIDENCE IN THE COMPANY,
BOTH WITHIN THE WORK FORCE AND
WITHIN WALL STREET.
SHE TALKED ABOUT WHAT SHE
NEEDS TO DO THAT, AND SHE WAS
VERY CLEAR ABOUT THE FACT THAT
RESULTS ARE ALL THAT MATTERS
AT THE END OF THE DAY.
>> Gary Walker: I HAVE TO TELL
YOU, AFTER TALKING TO INVESTOR
AFTER INVESTOR, THEY BOUGHT
XEROX AT 20, AT 17, AT 15, AT
11, AT 8... SAYING "IT CAN'T
GO ANY LOWER," AND IT GOES
LOWER, LOWER, DEPRESSING TO
WATCH.
DID SHE TALK ABOUT WHAT SHE
CAN DO TO GET INVESTORS
REINTERESTED IN XEROX STOCK?
>> Ellen Rosen: RIGHT.
WELL, SHE OBVIOUSLY WASN'T
WILLING TO MAKE ANY STOCK
PROJECTIONS ON THE STOCK
PRICE, BUT SHE DID TALK VERY
CANDIDLY ABOUT WHAT SHE NEEDS
TO DO.
I MEAN, XEROX, I THINK THE
52-WEEK HIGH WAS AROUND $11
BACK IN THE SPRING, FOLLOWED
SHORTLY BY THE 52-WEEK LOW
WHICH WAS UNDER $5.
IT'S TRADING AROUND $8 NOW, $8
AND CHANGE.
SHE SAID, AGAIN, THAT WHAT SHE
REALLY NEEDS TO DO IS RESTORE
CONFIDENCE.
SHE NEEDS TO RETURN THE
COMPANY TO PROFITABILITY; THEY
NEED TO RESOLVE THEIR ISSUES
OF REVOLVING CREDIT, AND THEN
THEY NEED SUCCESS.
AND THEY NEED MULTIPLE
QUARTERS OF SUCCESS.
THEY NEED TO STRING TOGETHER A
SERIES OF SUCCESSFUL QUARTERS,
AND THEN SHE FEELS THAT PEOPLE
WILL SEE IT'S A GOOD THING TO
BUY.
SHE'S ALSO VERY HEARTENED BY
THE FACT THAT THERE'S A NEW
BREED OF INSTITUTIONAL
INVESTOR IN XEROX.
THERE HAD BEEN A GROUP OF
INSTITUTIONAL INVESTORS THAT
HAD BEEN BUYING IT FOR THE
SHORT-TERM, LOOKING FOR
SHORT-TERM RESULTS.
THEY HAVE REALLY LEFT THE
COMPANY AND BEEN REPLACED BY
PEOPLE WHO TEND TO BUY FOR THE
LONG TERM, SO THAT REALLY
GIVES HER CONFIDENCE THAT THEY
FEEL XEROX WILL BE HERE AND
WILL BE A GOOD BUY DOWN THE
ROAD.
>> Gary Walker: DID SHE TALK
ABOUT HOW TO GET XEROX
CREDIBILITY BACK ON WALL
STREET, WHICH HAS GOT TO BE
THE TOUGHEST AUDIENCE ON THE
FACE OF THE EARTH?
>> Ellen Rosen:
PROFITABILITY, THAT'S ALL IT
IS.
YOU HAVE TO SHOW THAT YOU CAN
MAKE A PROFIT AND YOU HAVE TO
SHOW THAT YOU HAVE POTENTIAL
FOR GROWTH.
>> Gary Walker: WELL, YOU SAY
GROWTH, BUT DID SHE TALK ABOUT
WHERE THE GROWTH WOULD COME
FROM?
>> Ellen Rosen: ACTUALLY,
THEY ARE VERY EXCITED ABOUT
SOME NEW PRODUCTS.
XEROX IS NOT PROJECTING MUCH
GROWTH FOR 2002, ALTHOUGH THEY
ARE PROJECTING THAT THEY'LL BE
PROFITABLE, AND THEY'RE STILL,
AS WE REPORTED THE OTHER DAY,
STILL CAUTIOUSLY OPTIMISTIC OF
A PROFIT IN THE FOURTH QUARTER
OF THIS YEAR.
BUT WHAT THEY ARE REALLY
EXCITED ABOUT IS SOME NEW
PRODUCTS THAT THEY'VE GOT
COMING OUT, SOME NEW PRINTERS
AT THE COMMERCIAL PRINTING
LEVEL, THEIR NEW IGEN III
MACHINE, WHICH SHOULD BE OUT
IN THE SECOND HALF OF NEXT
YEAR, WHICH IS A MASSIVE
PRINTING MACHINE; BOOKS ON
DEMAND, AND THEN THEY WERE
VERY EXCITED ABOUT A NEW TONER
TECHNOLOGY WHICH THEY TEASED
WOULD REVOLUTIONIZE THE
TECHNOLOGY.
>> Gary Walker: HOW ABOUT -- I
GUESS I WOULD HAVE TO SAY
PEOPLE -- ON MOST PEOPLE'S
MINDS WATCHING THIS WOULD BE
WHAT ABOUT EMPLOYMENT?
DID SHE TALK ABOUT EMPLOYMENT,
PARTICULARLY LOCALLY?
>> Ellen Rosen: AGAIN, THEY
WEREN'T WILLING TO GIVE ANY
LOCAL NUMBERS, BUT THEY DO
FEEL THAT SOME OF THESE NEW
PRODUCTS THAT ARE COMING OUT,
PARTICULARLY IGEN III AND SOME
OF THE TONER TECHNOLOGIES,
SOME OF THE OTHER THINGS, ARE
ACTUALLY GOING TO BE MADE IN
WEBSTER.
URSULA BURNS, WHO IS PRESIDENT
OF GLOBAL SOLUTIONS, SAYS SHE
FEELS THAT WILL HELP STABILIZE
THE EMPLOYMENT IN WEBSTER.
SO WE SHOULDN'T BE LOOKING FOR
THINGS TO DIP TOO LOW.
HOWEVER, THEY ARE GOING TO BE
RENEGOTIATING THE CONTRACT
WITH THEIR UNION WHICH AT LAST
COUNT HAD SOMETHING LIKE 800
WORKERS, THOUGH THEY HAVE LAID
OFF SOME SINCE THEN, AND
YESTERDAY THEY ANNOUNCED THEY
ARE GOING TO LAY OFF 240
WORKERS LATER THIS MONTH.
>> Gary Walker: DID SHE TALK
AT ALL ABOUT HERSELF IN THAT
SHE'S PRESIDENT, C.E.O., NOW
CHAIRMAN OF THE BOARD?
DID SHE TALK ABOUT WHAT IT'S
LIKE BEING THE FIRST WOMAN TO
HAVE THAT KIND OF POWER?
>> Ellen Rosen: SHE REALLY
DOES NOT LIKE TO TALK ABOUT
HERSELF.
WE DID A PROFILE OF HER THAT
RAN A COUPLE OF MONTHS AGO AND
AT FIRST WE THOUGHT THAT IT
WAS JUST A TENDENCY TO BE A
PRIVATE PERSON, BUT WE FOUND
LATER THAT IT REALLY HAS TO DO
WITH HER COMMITMENT TO THE
COMPANY.
SHE FEELS VERY STRONGLY THAT
THE FOCUS NEEDS TO STAY ON
XEROX AND WHERE XEROX IS GOING
AND NOT ABOUT ANNE MULCAHY.
OBVIOUSLY SHE HAS SEEN THE
LESSONS FROM HER COLLEAGUE
CARLY FIORINA OVER AT HEWLETT
PACKARD, WHICH IS IN THE
PROCESS OF DISCUSSING A MERGER
THAT FIORINA HAS BEEN PUSHING
FOR WITH COMPAQ COMPANY, AND
THE STORIES, IF YOU LOOK AT
THE "NEW YORK TIMES" AND "THE
WASHINGTON POST" REALLY MUCH
MORE RECENTLY HAVE BEEN "WHAT
WILL THIS DO TO CARLY
FIORINA?" NOT "WHAT WILL THIS
DO TO THE COMPANY?"
>> Gary Walker: WHEN CAN WE
SEE THE BULK OF THIS ARTICLE?
>> Ellen Rosen: THIS IS ALL
RUN IN THE BUSINESS SECTION.
WE HAVE A Q&A WITH MULCAHY,
AND WE'LL HAVE MORE OF IT UP
ON THE WEB.
WHAT WE CAN'T GET IN THE PAPER
WILL BE ON OUR WEB SITE AND
THAT WILL BE THIS SUNDAY.
>> Gary Walker: SUNDAY PAPER.
THANK YOU.
>> Ellen Rosen: THANK YOU,
GARY.
>> Gary Walker: ELLEN ROSEN,
THIS WEEK'S REPORT.
FOR MORE INFORMATION ON THIS
WEEK'S EDITION OF "NEED TO
KNOW" OR TO DISCUSS ANY OF
THESE TOPICS, LOG ON TO OUR
WEB SITE: wxxi.org/ntk.
THAT'S ALL FOR THIS WEEK'S
PROGRAM.
TUNE IN NEXT WEEK AS "NEED TO
KNOW" INVESTIGATES CREDIT CARD
DEBT AND HOW MORE AND MORE
PEOPLE ARE FALLING INTO THE
CREDIT TRAP.
SEE YOU NEXT WEEK.
(Music)