Saturday, November 14, 2009

Flow of money from Albany likely to ebb

nys unemployment insurance

As New York state faces what could be its toughest budget since the early 1990s, local groups and government bodies are bracing for the ripple effect these cuts could have on them.

Not only do Gov. David Paterson and the state Legislature have a difficult budget ahead, but it’s likely Albany will have an even harder time ironing out kinks in the budget for years to come.

Simply put — the Empire State is nearly out of cash, which is going to cause pain across New York, including in the Mohawk Valley.

“This is a very significant and challenging time,” said Susan Lerner, executive director of Common Cause New York. “All indications are that our state’s economy has not yet recovered. We’re very, very dependent on the financial industry that has been hit hard.”

Among the ways life could be affected in our region:

* State and local government. There are more than 8,000 state jobs in Oneida and Herkimer counties including the prisons, the state Office Building and psychiatric center. How many of them are safe?

* Area hospitals and health centers. Some local hospitals are already anticipating cuts and have taken measures to keep their budgets trimmed.

* Local nonprofits. Funding has already been cut from many nonprofits, even as the need for services in the Utica area grows amid the difficult economy.

* School districts. State legislators are considering mid-year cuts to education. Further cuts could mean re-examining some programs, such as advanced placement courses, said Oneida-Herkimer-Madison BOCES Superintendent Howard Mettelman.

“Our region is extremely state aid dependent,” he said. “When state aid is frozen or cut … either programs get cut, or quite frankly, there is a shift to our local taxpayer.”

Despite the dismal outlook, some Mohawk Valley legislators say they are committed to finding alternatives to cutting money for hospitals and schools.

“I am very concerned about proposed unplanned mid-year cuts to public safety, health care and education,” Assemblywoman RoAnn Destito, D-Rome, said. “Spending cuts and structural reforms will be necessary to avoid further harm to New York’s overall fiscal condition.

However, I do not want to accept any shifts in state obligations onto the local property taxpayers of our community.”

Layoffs, program cuts?

Paterson’s midyear plan to reduce the current fiscal year’s $3.2 billion deficit includes politically sensitive cuts to schools and health care protected by Albany’s strongest lobbies.

Without cuts, though, Paterson says, the 2010-11 budget due April 1 will face a $10 billion deficit. The budget adopted in April was about $131 billion.

“Unless immediate action is taken,” Paterson told lawmakers Monday in a rare joint session of the Legislature, “we will have challenges to our state’s finances and to our cash flow in four and a half weeks.”

Oneida County has been hit hard already, with the state decreasing its share of money handed down to the county, Executive Anthony Picente said.

“The biggest thing that’s affecting us now, and has been very difficult to plan for, is the delay in reimbursements from the state because of their cash flow problem, which provides us cash flow problems,” Picente said.

So what happens if the state keeps delaying or cutting aid to the county? The county might have to make trims affecting public works, law enforcement and public health, he said.

“We’ve been holding the line the best we can, where do we go from here?” Picente asked. “There might have to be layoffs and programs that go to the wayside.”

The county recently stopped giving $10,000 annually to the Community Food Bank of Greater Utica.

“That’s one of the casualties, as a result of lack of revenue,” Picente said.

Food bank board President Mark Wolber said the nonprofit is doing what it can without such funding. Instead, money is coming from the United Way, federal emergency funds and private donations.

“We do with what we have,” Wolber said.” If we don’t have the money, we have less food.”

The problem is, the need has increased by about 25 percent this year over last year, Wolber said. He cited the weak economy and the cost of food as factors driving people to the food bank’s doors.

Less cash, less revenue

Faxton-St. Luke’s Healthcare has already taken dramatic measures to offset financial cuts to its 2010 budget, said Michael Haile, the hospital’s senior vice president and chief financial officer.

Those cuts included at least $3 million in Medicaid from the state, and could be more if New York passes legislation increasing the state tax on health care revenue, he said.

“It just makes life harder for us,” he said. “Because there’s less cash, there’s less revenue. Cash flow for us is really what it’s all about.”

Emergency room visits have increased by about 2 percent at the hospital this year, Haile said.
In January–October of this year, there were 33,287 emergency room visits, compared with 32,542 during the same time frame in 2008.

Now, in light of 2010 cuts and anticipated revenue cuts for 2011, the hospital has limited hiring based on need, postponed capital projects and is holding off on purchasing new equipment, he said.

Hospital officials have spoken to state representatives about the problems they are facing and said their entreaties have been well-received.

“I think that health care and schools are the first place they look and I think they ought to look other places also,” Haile said.

State Sen. Joseph Griffo, R-Rome, agreed.

One alternative could be reforming and consolidating New York’s authorities, he said. The Thruway Authority could be consolidated into the state Department of Transportation to save money, for example, he said.

“We have to look at a complete mission of authority commission consolidation and elimination,” Griffo said.

‘Serious budget problems’

So where does the state go from here?

Back on the road to financial stability, said state Sen. James Seward, R-Milford.
“We cannot resort to new taxes and fees,” he said. “We’ve got to stop spending money we don’t have, and look for some alternatives without hurting our schools and hospitals.”

It could be worse

Is the budget picture worse in New York state than elsewhere?

Interestingly enough, New York state wasn’t named in a recently released study as one of the top 10 states heading toward economic disaster.

The report by the Pew Center on the States found states including Arizona, Florida, Nevada, New Jersey and Rhode Island are at risk. The report cites double-digit budget gaps, rising unemployment, and high foreclosure rates as key reasons.

Although New York didn’t make the cut, it was close, said Susan Urahn, managing director of the Washington, D.C.-based center. The Pew report was based on data available as of July 31 and scored states based on revenue changes.

“We were surprised New York wasn’t on there either,” Urahn said. “New York certainly has some serious budget problems.”

But some of the factors that led to the ratings — unemployment and the housing crisis — weren’t as bad in New York, she said.