January 20, 2009

Union calls on lawmakers to resist cuts to education, health care, and revive economy with new revenues

Source: New York Teacher
Caption: Melinda Person of NYSUT's Legislative Department updates local leaders on the union's budget advocacy efforts. Photo by Andrew Watson.

NYSUT is waging a concerted campaign in response to the state's fiscal crisis and the Executive Budget proposal, holding regional meetings of union leaders, near round-the-clock discussions with lawmakers and scheduling a special, accelerated one-day Committee of 100 lobby day.

With the state facing a more than $15-billion deficit in wake of the Wall Street meltdown, Gov. David Paterson's budget proposal calls for deep cuts to K-12 school aid, hospitals and health services and would slash aid for the State and City University systems, including community colleges.

"We fully understand the gravity of the state's fiscal crisis and respect the governor's efforts to put together a budget in these very difficult economic times," NYSUT President Dick Iannuzzi said.

"However, this spending proposal raises deep concerns about the adverse impact it would have on public schools, higher education and health care. We cannot cut our way out of this economic slump," Iannuzzi said.

Instead, state lawmakers must call on leaders in Washington to pony up New York's fair share of federal stimulus money, NYSUT Executive Vice President Alan Lubin said.

A plan to increase revenue also must include asking the wealthiest New Yorkers to pay their fair share by increasing the state's personal income tax on high-income taxpayers.

Under Paterson's proposal, aid to schools would be cut by $2.5 billion, when factoring the $1.9 billion allocation the state is required to pay schools under terms of the Campaign for Fiscal Equity lawsuit.

The proposed $20.7 billion education package would represent a 12 percent reduction from the amount promised under the state's formula to address inequities highlighted in the CFE court decision.

Unacceptable cuts

Other proposals in the governor's budget include:

  • Freezing Foundation Aid - funds for the neediest students - at the current level and extending the full phase-in of the aid from four to eight years;
  • Reducing formula-based aids for 2009-10 by $1.1 billion under a one-time Deficit Reduction Assessment, leaving individual districts with cuts ranging from 3 percent to 13 percent;
  • Freezing funding to the state's Universal Pre-Kindergarten program at the current level and delaying the full phase-in of the program to 2014-15;
  • Eliminating funds for teacher centers and the state Mentor-Teacher Intern Program (see related story);
  • Reducing by 50 percent a special state grant for the troubled Roosevelt School District;
  • Instituting a $188 million cost shift to school districts for pre-school special ed, making districts responsible for a 15 percent share of those costs by reducing the state and county shares;
  • Eliminating the STAR rebate program that provides school property tax relief;
  • Creating a new tier (Tier 5) of pension benefits for newly hired state and local government workers, including educators, that would increase the retirement age from 55 to 62, require employees to contribute to the pension fund beyond their 10th year of service and raise the vesting period from 5 to 10 years. Adding a new tier would not generate any immediate savings for the state during the economic crisis, union leaders said; and
  • Cutting additional aid to the State and City University systems, which have already been forced to absorb $277 million in cuts this year.

The budget proposal, if passed by the Legislature, would cut community college aid in the current year by 10 percent and continue those cuts for 2009-10. The proposal would raise undergraduate tuition by 14 percent at SUNY and 15 percent at CUNY. Funding, meanwhile, to SUNY hospitals would be slashed by $24 million.

Lubin said the proposed cuts, coupled with the planned reduction in community college aid, would erode access to affordable higher education at a time when New York's working families are most in need

"The proposed higher-ed cuts are not only misguided, but would create dangerous holes in a safety net that New Yorkers rely on more than ever in tough economic times," Lubin said.

One welcome development is the governor's proposed use of SUNY reserves to protect student access and faculty lines.

However, union leaders remain concerned about proposals to re-open state contracts to seek wage freezes and a lag in state paychecks, two proposals that would affect state workers including members of United University Professions, the NYSUT affiliate at SUNY.

Revenue boosters

Union leaders stress that the state cannot cut its way out of an economic crisis, saying the governor and lawmakers must focus on ways to enhance revenue - particularly through a more progressive income tax that would impose a temporary surcharge on the wealthiest New Yorkers.

A study by the Fiscal Policy Institute estimates such a proposal, backed strongly by NYSUT, could generate between $2 billion and $7 billion in revenue.

A recent poll by Quinnipiac University found New York voters overwhelmingly support the surcharge plan, with 80 percent supporting a personal tax increase on those earning more than $1 million annually, while 73 percent support a tax increase on those earning more than $500,000 per year.

NYSUT is working with New York's congressional delegation to push for additional state aid in a federal economic stimulus package expected early this year. U.S.

Sen. Charles Schumer recently proposed a plan to include education aid in the stimulus package being negotiated in Washington. If Congress agrees, this could infuse more than $6 billion into New York's treasury.

Union takes action

While NYSUT leaders are in ongoing discussions with lawmakers, local leaders are meeting with the union's legislative staff to stay abreast of budget developments and to give feedback to NYSUT about what's happening in different communities.

"We agree with the governor that the road ahead will be difficult, but how New York recovers from this crisis depends on the route it chooses," Iannuzzi said.

"Maintaining New York's investment in public education and health care is the best way to get the state's economy moving forward again."

- Matt Smith and Clarisse Butler Banks

NYSUT's recommendations for cost savings, revenues

As part of an effort to help the state close its budget deficit, NYSUT is promoting recommendations to save money, raise revenue and preserve services. They include:

  • Imposing a temporary income-tax surcharge on wealthiest New Yorkers ($2 billion to $7 billion)
  • Urging our congressional representatives to secure funding under a federal stimulus package
  • Tapping the state's Tax Stabilization Fund, known more commonly as the "Rainy Day Fund" ($1.2 billion)
  • Closing loopholes in the state's bottle bill ($200 million)
  • Reducing outsourcing of state work ($100 million), and bulk purchasing of prescription drugs ($100 million)Why wealthiest New Yorkers should pay fair share

New York state has cut its top personal income tax rate by more than 50 percent over the last 30 years - from 15.375 percent to 6.85 percent. This means a household earning $50,000 and a household earning $500,000 are being taxed at the same percentage. Tax cuts enacted since 1994 are reducing state revenues by more than $16 billion annually.

"Restructuring the state income tax would actually reduce the tax burden for lower-income and middle-class families while ensuring everyone pays their fair share," said Executive Vice President Alan Lubin.

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