ABOUT ASSEMBLYMEMBER SCOTT STRINGER

Assemblymember Scott Stringer is a native New Yorker who was first elected to the New York State Assembly in 1992 after more than a decade of political involvement and neighborhood advocacy. Stringer represents the 67th Assembly District on Manhattan's West Side.

Stringer released a report in November 2002 titled "Total Collapse: How NYC Department of Buildings' Failed Policies Contribute to Crumbling Buildings". In April 2002, Stringer wrote a report addressing the textbook shortage in New York City's public schools. In May 2002, Stringer also issued a report on tax assessor practices and assessment administration in New York City.

Stringer is the newly appointed Chair of the New York State Assembly Cities Committee and serves on the Education, Higher Education, Housing, Judiciary and Health Committees. Stringer is also a former Chair of the Real Property Taxation Committee, the Assembly Oversight, Analysis and Investigation Committee and the Task Force on People with Disabilities. Stringer is also a member of the Assembly Task Force on Women's Issues.

ACKNOWLEDGEMENTS & CREDITS

Assemblymember Scott Stringer wrote this report with the help of his staff:
Alaina Colon, Public Policy & Communications Director
Debbie Roth-Rogoff, Chief of Staff
Felicia Feinerman, Legislative Director
Jason Haber, District Coordinator

For additional copies of this report, please contact Assemblymember Stringer's office by phone: (212) 873-6368 or email: strings@assembly.state.ny.us.

INTRODUCTION

The current fiscal crisis for New York State will without a doubt have dire consequences for New York City's working- and middle-class families if Governor Pataki's plan is implemented. Since Pataki's budget presentation on January 29th, New Yorkers have been flooded with information on the potential increases in fees such as MTA fares and SUNY and CUNY tuition, as well as sweeping cuts to healthcare, education, and various other social services. However, most people do not understand how such overwhelming costs will specifically affect their livelihoods.

The sheer number and volume of Pataki's suggested cuts and fees have no real meaning without breaking down the billions and looking at how the numbers truly affect New Yorkers. This analysis details the real effects on New York City families of Pataki's unbalanced and unfair approach to closing the State's budget deficit. This breakdown reveals just how many thousands of dollars that Pataki expects students and middle- and working class families to pay to balance the State's tremendous deficit. Faced with this analysis, Pataki should no longer be able to hide behind his abstract billion dollar cuts and misleading rhetoric.

Overall, New York State's current budget deficit is $11.5 billion. While preserving $177 million in tax cuts for New York State, the Governor proposes crippling service reductions and buries a whopping $5 billion worth of fee increases and surcharges that will disproportionately hit the working- and middle-class throughout the State in general and New York City in particular. There is absolutely no denying that New York City residents will have to bear the brunt of this budget.

The following provides a brief snapshot of the most prominent cuts in services and increases in fees for New York State and breaks down the overall effects of those cuts on New York City.

Education - Throughout the State, Pataki proposes a $1.24 billion reduction in elementary and secondary school operating aid. To accomplish this service cut, Pataki puts a disproportionate burden on New York City. He wants to cut operating aid to NYC by 8%, or $407 million, while he proposes only a 4% service reduction in cities throughout the rest of the State. In addition to his lack of support for K-12 education, Pataki disregards the central role of higher education for New York City college students. Major features of his proposal include:

• Decreasing SUNY support by $183.5 million (15%) and CUNY support by $81.7 million (12%)
• Increasing SUNY and CUNY tuition by as much as 35%, or $1,200 for undergraduates
• Forcing the Tuition Assistance Program to withhold 1/3rd of its financial assistance for all eligible students until graduation

Healthcare - Pataki plans to cut Medicaid and other healthcare spending by $2 billion statewide. He proposes a swap in the Medicaid burden, in which the State will pay the cost of pharmaceuticals if localities will pay 12% more for hospital stays and clinic visits. New York City will lose millions of dollars from this proposal, because a higher proportion of New York City's Medicaid costs are due to hospital stays than for the rest of the State. In contrast, suburban localities are estimated to save $200 million from his proposal.

In addition to changes in the Medicaid payment structure, Pataki proposes a slew of additional taxes, increased fees and reduced benefits in healthcare overall. According to the Mayor's office, the City is set to lose $250 million per year due to City hospitals' lost revenue and increased costs associated with Pataki's taxes and fees. These taxes and fees include:

• Additional hospital taxes
• Reduced Medicare reimbursements
• Increased fees on EPIC
• More out-of-pocket costs for the Early Intervention Program, a previously free service for infants and children with disabilities

As if these cuts to health services were not enough, Pataki also intends to raid $3.8 billion from the State Tobacco settlement funds, a financial resource earmarked specifically for a range of health promotion programs in New York State. This move is unconscionable as it will sacrifice the health of innumerable New Yorkers. His diversion of settlement funds will be especially hurtful to healthcare programs for low-income New Yorkers and anti-smoking programs throughout the City.

Transportation - The MTA, a State Authority with board members appointed by Pataki, proposes different types of transit fare hikes, which are essentially regressive tax hikes totaling $1.4 billion. Since New York City working families are by far the majority of those using mass transit, New York City will yet again unfairly bear the burden of this fare increase.

Other Hidden Fees and Taxes - Riddled throughout Pataki's budget presentation is his promise to withhold from any form of "job-killing" taxes. However, in cowardly fashion, he uses this rhetoric to mislead the public on the true meaning of his budget-speak mantra. Pataki plans to impose and increase numerous hidden taxes and fees, resulting in higher costs to New Yorkers, such as:

• Sales tax on clothes and shoes
• DMV fees
• User fees for State parks and facilities
• Parking fines
• Tax on life insurance premiums
• Fees for filing court cases
• Retrieval fees for birth and death certificates as well as other vital documents.

It is nearly impossible to make sense of Pataki's sweeping cuts in services and broad increases in fees. This analysis brings to light just how much the average New Yorker will struggle under the gun of Pataki's budget. Below are five simulated portrayals of households in New York City. Each snapshot includes descriptions of the services and programs many New York City residents rely on and details the quantifiable, unquantifiable and potential losses under Pataki's budget. New Yorkers will now know exactly how the Governor's budget will impact their daily lives. This analysis gives real meaning to the billion dollar cuts written about in the papers and shows how the wallets of New Yorkers will be impacted if Pataki moves forward with his budget plan.

FIVE NYC FAMILIES: THE REAL IMPACTS OF PATAKI'S BUDGET

1. Ms. Anderson: Senior Citizen, Manhattan, $9,888/yr.¹

Ms. Anderson is a 68 year-old woman who has lived in Manhattan for over 50 years. She began living in an apartment in Greenwich Village in 1965 and continues to live there under rent-control to this day. Despite the fact that she has no surviving family, Ms. Anderson has several friends that live in her neighborhood. She is known amongst all of her peers as a loyal and vibrant friend with enormous pride in her independence.

Ms. Anderson relies heavily on Medicaid benefits to help her through the recovery process for a minor stroke she suffered recently. Since her release from the hospital, she receives regular home-care visits from a registered nurse for approximately 10 hours per week. Ms. Anderson's doctor also instructed her to take several prescription drugs to stabilize and strengthen her condition.

The Andersons always struggled to make ends meet, and Mr. Anderson's recent death is making Ms. Anderson even more worried about finances. At least Ms. Anderson will soon be able to access his pension, as soon as she provides his death certificate. Because of her strict budget to afford life's essentials, Ms. Anderson always takes advantage of the sales tax exemption on clothing and shoe purchases under $110. In fact, she has regular shopping dates with her best friend. Ms. Anderson is also an avid rider of the subway, using the subway 6 times per week. As she does not trust the new MetroCard, she only uses tokens to pay her way.

PATAKI'S PRICE TAG: $363

Fee for death certificate will cost Ms. Anderson an extra $15 ($30 up from $15). The subway will now cost her an extra $78 per year.2 She will need to spend an additional $48 per year on clothes and shoes.3 Her prescription drugs will now cost an extra $54 per year, due to increased co-pays for prescriptions filled through Medicaid. Ms. Anderson loses $14 per month, or $168 for the year, because Pataki diverts the Federal Cost of Living Adjustment (COLA) earmarked for SSI recipients to balance the State budget. Unquantifiable Losses: Ms. Anderson loses 2 hours per week of home-care visits due to Pataki's cuts in Medicaid.4

2. The Robertsons: Middle-Class Family of Four, Queens, $42,000/year.⁵

Mr. and Mrs. Robertson live in a house with their two kids in Forest Hills, Queens. Mrs. Robertson is a 48 year-old teacher's aid at a nearby elementary school, but she has been worried lately about being laid off due to budget cuts. Mr. Robertson is a doorman for an apartment building on the Upper East Side and just celebrated his 50th birthday last week. The youngest child, Kim, is a senior at the local public high school. Paul, her brother, is a freshman at SUNY Stonybrook.

Mr. and Mrs. Robertson work long hours to make ends meet, especially to save money for Paul's and Kim's college educations. Due to their restricted budget, Mr. and Mrs. Robertson only own one car, which they share with their kids. Ms. Robertson uses the car to commute to and from work each day. All four family members also use the car for most family weekend and evening activities around and outside the City, and their kids each use the subway on the weekends to see friends. Due to the wear and tear from the family's frequent use of the car, all four tires need to be replaced this year. An additional expense this year for the Robertsons includes the renewal fee for their licenses.

Mr. Robertson takes the subway to commute to work. Out of fear of losing a monthly MetroCard, he buys a weekly unlimited instead to take advantage of longer-term MetroCard discounts. The family also saves money through the sales tax exemption on new clothes and shoes, particularly for Kim, who always wants new clothes. The Robertsons shop about once a month and end up spending $100 on average each trip.

Kim is a very talented artist, recognized with 10 different awards for her excellence in painting and sculpture over the past few years. Even so, she has always had a hard time excelling in some of her required school subjects, especially Math and Science. Luckily, she has access to an excellent tutor through the State-funded Extended After-School Program.

Ever since Paul began college last year, Kim has been working really hard to improve her grades so she can join him at Stonybrook. She also works part-time at a local McDonald's for spending money. Although she refuses to try hard drugs like some of her friends do, Kim has been experimenting with smoking cigarettes with fellow co-workers after school. However, her parents are hopeful that new anti-smoking programs funded by tobacco settlement funds will encourage Kim to stop.

Paul lives at home and commutes to and from college via the LIRR. His parents contribute money towards his tuition, and he receives just enough money in TAP to cover the rest. He is hoping to continue working hard so that he does not have to burden his parents further with his college tuition costs.

PATAKI'S PRICE TAG: $2,031

Paul's SUNY tuition will increase by $1,534, thanks to Pataki's crippling combination of a 33% TAP reduction and a $1,200 tuition increase. To replace all four tires this year, the Robertsons will have to pay $9.00 more than before because of Pataki's increased fees. Mr. Robertson's weekly MetroCard will be $3 more per week, or $156 per year, thanks to MTA's increased fare proposal.6 Between Paul and Kim, the kids use mass transit seven times per weekend on average. This amounts to an additional $182 due to MTA fare increases.7 Monthly shopping trips totaling $1,200 for the year incur an additional $99 in sales tax that the Robertsons would have saved previous to Pataki's elimination of the tax exemption.8 Carlos' additional LIRR expense from fare increases is $43.9 Four new driver licenses cost the family an extra $8.00 due to Pataki's proposed fee hikes. Unquantifiable Losses: Mrs. Robertson may lose her job as a teacher's aid after Pataki's cuts to education. Kim may lose her Math and Science tutor due to Pataki's $30.2 million cut to Extended After-School Programs. Kim is more likely to take up smoking after Pataki's diversion of tobacco settlement funds to balance the State budget instead of funding anti-smoking programs (which is their intended use). Kim may not be able to afford college after Pataki's education cuts, which might force her to stay at a low-paying job. This would incur a yearly earnings loss of at least $6,387.10

3. The Kramers: Single Parent, Bronx, $28,000/year¹¹

Mr. Kramer is a 32 year-old caseworker in the Bronx and a single parent of a 5-year old daughter, Nicole. His wife passed away two years ago, and Mr. Kramer must budget very carefully to afford his apartment and take care of his daughter's needs. An added stress is Nicole's illness. She was identified by doctors at a very early age as having a developmental disability. At least this qualifies her for the State-funded Early Intervention Program. This program currently offers services, including therapy, at no cost to the patient.

Mr. Kramer uses the subway for all of his transportation needs within the City. He also owns a car, which he then uses to visit Nicole's grandparents in Upstate New York on the weekends. Due to the common difficulty in finding parking throughout the City, Mr. Kramer is prone to getting tickets for illegal parking.

Due to Mr. Kramer's financial situation, he cannot afford to put up the money to buy a weekly or monthly MetroCard. Instead, he buys tokens on an as-needed basis. In addition, he heavily depends on the sales tax exemption for clothes and shoes. He must shop for Nicole often, as she is in a stage of development where children grow very quickly. Although he attempts to find hand-me-downs from friends and relatives, he does not have anywhere near the support necessary to keep her well-clothed. Currently, he spends $800 per year on clothes and shoes for both of them on average.

PATAKI'S PRICE TAG: $3,371

Due to Pataki's increase in parking ticket fees, Mr. Kramer will pay an extra $45 for his 5 tickets this year. Mr. Kramer will have to pay an additional $3,000 out-of-pocket for Kim's Early Intervention Program.12 Mr. Kramer must pay an extra $260 per year due to transit fare hikes.13 Mr. Kramer will spend an additional $66 in shopping expenses due to the increased sales tax.14 Unquantifiable Losses: If Pataki's cuts in education force Bloomberg to postpone reductions in class size, Nicole may perform less well on standardized tests and reduce her chances of obtaining a well-paying job. Assuming she graduates from college, her loss of income for just one year upon graduation is at least $382.15

4. Ms. Delmonico: Single Lawyer, Brooklyn, $50,000/year

Ms. Delmonico is a 25 year-old lawyer, who just moved from Atlanta to start her first job at a public interest law firm in Manhattan. While Ms. Delmonico is secure with her new position at the law firm, she is still very concerned about her finances. A sizeable portion of her salary must go to pay back college and law school loans, and New York City has a higher cost of living than Atlanta. Due to her sizeable debt and substantial relocation expenses, Ms. Delmonico is very tight with her budget. She currently takes advantage of the discounts that accompany the 30-day unlimited MetroCard, as her job requires a lot of commuting throughout the City.

Since she just became a lawyer in New York, she must pay the fee to register as a new lawyer within New York State. An additional expense to Ms. Delmonico's budget includes monthly mortgage payments associated with her recently acquired ownership of her Uncle's condo in Brooklyn Heights. Luckily, School Tax Abatement Relief (STAR) presently cuts down on the number of taxes she must pay per year. Ms. Delmonico also has an ongoing personal claim in the New York State Supreme Court.

Since she just got her first job in a professional environment, Ms. Delmonico must buy business suits and professional clothing and shoes. When she goes on her monthly shopping trips in New York City, Ms. Delmonico is careful not to spend over $110 in order to keep the sales tax exemption on her purchases.

PATAKI'S PRICE TAG: $244

Ms. Delmonico bears the increase of $50 in the new lawyer registration fee with the State Office of Court Administration because of Pataki's budget proposals. Ms. Delmonico must pay an additional $35 to bring her court case to New York State Supreme Court. Due to MTA fare hike, Ms. Delmonico's must pay an additional $60 per year for her 30-day MetroCard.16 Reversal of sales tax exemption increases Ms. Delmonico's costs by $99 per year.17 Unquantifiable Losses: Ms. Delmonico will lose an unquantifiable amount of money because of Pataki's freeze on STAR rebates. Freezing STAR rebates at their current levels hurts NYC homeowners disproportionately, since the rebate formula was already weighted in favor of suburban residents.18

5. Ms. Garcia: Full-time CUNY Student, Manhattan, $9,000 per year

Ms. Garcia is a 20 year-old student at City College. Because she comes from a relatively poor family, she relies heavily on TAP to assist her in making college payments. While her parents saved as much as they could to help Ms. Garcia afford her college expenses, they are not able to continue their financial support. In order to make up for the end of her parents' financial assistance, Ms. Garcia works a part-time job as a waitress while going to college full-time.

Since Ms. Garcia is so strapped for cash, she usually buys no more than a $10 MetroCard when traveling by subway. She rides the subway about 12 times a week to and from work. Otherwise, she is in class or in the library. Unfortunately, she rarely has the time or the money to go out with her friends. Although Ms. Garcia is not aware of the current sales tax exemption for clothes and shoes purchases up to $500, her small amount of discretionary funds generally limit her clothing purchases to under $110 at a time.

Ms. Garcia has health coverage under Family Health Plus, a State-funded program that provides health insurance for low-income New Yorkers. She is very thankful for this coverage as she would be uninsured otherwise.

PATAKI'S PRICE TAG: $6597

Unable to secure a sufficient loan to accommodate the additional $1,534 required to pay CUNY tuition due to Pataki's hurtful TAP and tuition policies, Ms. Garcia is forced to drop out. Because Ms. Garcia never obtains a college degree, she will never make as much money as a college graduate. Instead, she is forced to work at lower-wage jobs, causing her to lose $6387 in foregone income this year alone.19 Ms. Garcia will have to pay an additional $156 per year in subway fare due to MTA fare hikes.20 Imposition of sales tax on clothing poses additional costs of $25, as her clothing purchases add up to $100 every 4 months.21 Due to Pataki's cut to Family Health Plus, Ms. Garcia' yearly salary is barely too high to qualify for coverage. When she gets bronchitis at the start of the flu season, she must pay an extra $29 out-of-pocket for antibiotics.22

CONCLUSION

These portrayals illustrate for the first time the real effects of Pataki's budget proposal on New York City working families, college students, and the poor. The sweeping generalizations currently defining the budget debate disguise the simple fact that New Yorkers will be forced to pay thousands of dollars to make up for Pataki's past mistakes and broken promises. This analysis illustrates in clear terms what Pataki is asking New York City residents to sacrifice in order to balance the State's budget.

For the City that drives the economic engine of the State, Pataki's budget is clearly overly burdensome and unfair. By increasing regressive taxes and out-of-pocket costs for average New Yorkers, Pataki's budget proposals decimate the financial safety nets for New Yorkers already threatened by his spending cuts. Pataki goes even further to hurt the lives of New York City families, refusing to consider Mayor Bloomberg's request for $2 billion in aid from the State to help with New York City's budget crisis. Instead, Governor Pataki only offers a meager $439 million in net aid, most of which is in the form of one-shots that will only hurt the future economy.

It is time to stop adopting policies that balance the budget by crippling New York City. Nor can Pataki continue to support a budgetary plan that hurts those least able to afford it - our working- and middle-class families, students, and the poor. Reasonable alternatives to the Governor's proposed budget exist, and there must be careful analysis of each of those options to protect New York City and the lives of New York City families who are struggling to succeed in these difficult times. People like Ms. Anderson, the Robertsons, the Kramers, Ms. Delmonico, and Ms. Garcia should not have to bear the brunt of Pataki's fiscal irresponsibility.