Wednesday, January 19, 2005

Gov. George Pataki unveiled a 2005-06 state budget Tuesday that would cut Medicaid costs and offer tax breaks to upstate businesses, but would also increase college tuition and expand gambling.

The three-term Republican governor, however, offered little specific for the Rochester area, focusing instead on statewide programs that he said would help local governments and property taxpayers.

The $105.5 billion budget calls for a record increase in state aid for education, a response to a court order seeking billions of dollars more for New York City schools. Pataki also seeks more money for the cities that control school district spending and billions of dollars to improve the state's transportation system.

"We have an opportunity this year — an opportunity to use the recent trend of economic growth as a springboard to long-term solvency, fiscal stability and tax relief," Pataki told the Legislature in presenting his budget in Albany.

But the initiatives, similar to other recent budget proposals, come with hidden costs, critics said. Pataki's plan includes $1 billion in revenue mainly through new or increased fees, such as those for motor vehicle registrations.

"It's just amazing the stuff he's putting in there that he didn't talk about," said Assemblyman David Koon, D-Perinton.

Pataki also wants a $500-a-year tuition increase at State University of New York colleges and to allow for tuition increases each year. In 2003, SUNY tuition was raised by $950 to $4,350 a year.

"Everything comes off the back of students," said Josh Hyman, a SUNY Geneseo senior. "It's like a reverse fix to the problems."

Although not mentioned Tuesday, Pataki proposes restoring $18 million for Renaissance Square, the $230 million Rochester project that calls for a bus terminal, performing arts center and Monroe Community College campus on East Main Street.

But Koon said the appearance of the money in the spending plan offers little solace: Pataki vetoed the same money last year.

Others were encouraged that the funding, which would go to the MCC component, was restored. Local officials seek $52 million in state money for the project.

"The governor is building upon the project that is most important to Rochester: the redevelopment of downtown," said Sen. Michael Nozzolio, R-Fayette, Seneca County.

Pataki's proposal now goes to a Legislature that has failed to pass an on-time budget in 20 years. Due April 1, the budget last year was passed in mid-August — the latest ever.

Pataki's spending plan would close a budget gap of $4.2 billion. The proposal would spend $69.1 billion, excluding federal aid, up 5.4 percent or $3.5 billion from the current year.

The view from Rochester

Although Pataki didn't mention Renaissance Square, Rochester Business Alliance President Sandy Parker said she was pleased by Pataki's proposal. One initiative, Operation SPUR (Strategic Partnership for Upstate Resurgence), would offer tax credits and grants to upstate companies.

But Parker and other local leaders said the biggest plus may be Pataki's goal to reform Medicaid, the focus of his speech.

Pataki estimates that Medicaid costs would grow to $47 billion this year if left unchecked. Pataki proposes capping Medicaid costs at the 2004-05 level, with modest increases in future years. He also seeks to implement other cost containment measures, saving the state $588 million in the coming fiscal year.

Counties argue that the health insurance program for the poor has become a growing burden, prompting double-digit property tax increases. Monroe County has seen its Medicaid costs nearly double in a decade.

New York counties, unlike in other states, pay about 20 percent of Medicaid costs; the state and the federal government pick up the rest. In Livingston County, 52 percent of the total tax levy — the amount collected in property taxes — pays for Medicaid.

"Any type of relief is a step in the right direction," said County Administrator Nick Mazza.

Corinda Crossdale, director of the Monroe County Office for the Aging and Adult Services, complimented Pataki's proposal to expand in-home services for the elderly, part of his Medicaid reform package.

"It's giving elders options," Crossdale said of the proposed "Access to Home" program. "Mr. Pataki is definitely showing his commitment in assisting elder New Yorkers to stay independent in their homes, and that would also be less costly for us in regards to Medicaid dollars."

But the plan faces opposition in the Legislature, where powerful hospitals, unions and patient groups have successfully fought health-care cuts in the past.

"If this plan doesn't work, we'll see what we've seen in years past, which is spending will grow twice as fast as the governor proposes," Diana Fortuna of the watchdog group Citizens Budget Commission.

Doris Corrigan, who lives at the independent-living facility Valley Manor , worries that Medicaid cuts could affect her — even though she doesn't receive the benefits. Elder care facilities may have to increase spiraling costs if they get less in Medicaid revenue, she said.

"It ends up coming down to the consumer," the 81-year-old woman said. "Where are people going to get that money?"

Pat Combattelli's 92-year-old mother, Grace, gets Medicaid and has lived at Kirkhaven nursing home for eight years. Pat fears that services could be cut if the home receives less funding through Medicaid. "If they keep taking money away from nursing homes, how do you keep the staff on?" she asked.

Gambling revenue

To pay for the school funding increase, Pataki seeks to add eight parlors for video lottery terminals around the state, five of them in New York City.

The locations would be determined by applications to the state. About $325 million of the $526 million increase in school aid would come from VLT revenue.

Pataki also wants a state gaming commission to oversee all such operations, including VLTs and gaming on tribal reservations. Last year, the Legislature rejected the same proposal.

Sen. Joseph Robach, R-Greece, said he supports the VLT expansion and would lobby to get the slot machine-like devices on the high-speed ferry that Rochester officials hope to put back in service.

Assembly Speaker Sheldon Silver, D-Manhattan, shot down a bill sponsored by Robach and Assemblyman Joseph Morelle, D-Irondequoit, last year to add VLTs on the ferry.

Additionally, Pataki proposed a massive $36.6 billion, five-year capital plan to improve highways, bridges, rail facilities and airports. Yet it comes with a cost: new fees for motor vehicle registration and titles and other charges by the state Department of Motor Vehicles.

Repeating part of his State of the State address two weeks ago, Pataki asked the Legislature this year to end an income-tax surcharge on people making more than $100,000 a year, which lawmakers enacted in 2003. The program is to expire next year.