Testimony of Christine C.

Quinn, Speaker, New York City Council

on the Governor’s Executive Budget for State Fiscal Year 2011-2012
Good morning Chairman Farrell, Chairman DeFrancisco, and members of the Ways and Means
and Finance Committees. Thank you for inviting the City Council to speak today on the
Governor’s Executive Budget for Fiscal Year 2011 – 2012. I am joined today by Council
Members Domenic M. Recchia, Jr., Chair of the Council Finance Committee, Helen Diane
Foster, Chair of the State and Federal Legislation Committee, and Robert Jackson, Chair of the
Education Committee.

We of course recognize the very difficult circumstances that New York State, like so many states
across the country, faces as a result of the recent recession. And I commend Governor Cuomo
for presenting such a serious effort at addressing the State’s fiscal gap. The budget makes some
very difficult cuts in State operations, involving many painful consequences, not the least of
which will be thousands of layoffs. So I don’t think any local government in New York can
complain that the State has not taken a hard look at its own spending before making cuts to local
aid.

We are still in the process of reviewing the Executive Budget, and will undoubtedly have
additional thoughts in the weeks ahead, but I will discuss today some of the issues we as the
Council see in the budget at this point.

Education Aid represents, of course the largest single impact the Governor’s budget would have
on the City budget. The Gap Elimination Adjustment (GEA) would reduce NYC’s school aid by
$891.4 million. On top of that would be shifts in the cost of State-mandated services that result
in a further cut of $99 million.

Already, based on the Mayor’s November Financial Plan, we face the prospect of losing 5,000 or
more of our teachers next year, through attrition and probably layoffs as well. A cut of this
magnitude in State aid would likely mean thousands more teachers would have to be laid off, or
other equally drastic cuts made elsewhere in the budget. After beginning to make real progress
toward the promise of a sound basic education for all our students under the CFE agreement,
slashing our teacher workforce by 10 to 15 percent would be to go back on our promise to
parents and school children across the State. By the same token, the Governor’s proposed cap on
Building Aid would also compromise our ability to fulfill the promise of CFE by relieving
overcrowding and upgrading our schools.
 Testimony of Christine C. Quinn, Speaker, New York City Council
February 7, 2011

I am also concerned that the way the GEA was applied in the Governor’s budget does not fairly
or adequately measure “need” factors. For example, measures of income are only applied to
elementary students, but not to middle- and high-school students. The numbers of ELL and
special education students in a system are also not taken into account. We should not implement
what could in effect become a new formula for basic education aid that does not adequately
account for these factors. The CFE settlement recognized the historic inequity of State education
funding, and we urge you to respect the spirit of CFE as you consider the Governor’s budget
proposals.

We will be coming back to you soon with specific suggestions on how the State could offset
some of the cuts to education aid with relief from existing statutory requirements that lead to
higher local costs, for example in the area of contract rates set by the State for Special Education
Pre-K and contract schools. And I promise you that Chair Jackson will continue to place the
DOE’s budget under the microscope as well. I’m sure Chancellor Black is looking forward to
her first budget hearing with him next month!

While we are discussing education, I don’t want us to forget the 1.6 million adults in New York
City who haven’t obtained a high school diploma. For the past two years the City Council has
worked to enhance programming and funding for GED services and adult education. A GED is a
crucial first step to gaining entry to the workforce or to post-secondary education. We urge you
to restore the $700,000 for GED testing to assist New Yorkers in preparing for and passing the
GED exam. I have also raised my concerns about GED policies the Regents will shortly be
voting on with Commissioner Tisch, and I would be happy to go into those in more detail later if
you would like. In today's economy a commitment must be made to support and strengthen the
state's workforce and protecting GED services is one way to help acheive that goal.

With respect to revenue sharing, both Mayor Bloomberg and Comptroller Liu have noted that
New York City is the only municipality that would receive not just a cut in AIM, but – for the 2nd
year in a row – complete elimination. I recognize the reality that the City is much less reliant on
AIM for general budget support than are other localities. But I also think it is important to bear
in mind that New York City businesses and residents send far more in taxes and revenues to
Albany than we receive back in State aid and spending – by one estimate, as much as $13 billion
more. The fiscal relationship between the City and the State must reflect fairly the role that New
York City plays in the State’s economy and the contribution its taxpayers make. AIM, viewed
through that prism, has a much larger significance than its share of City spending. And after all -
- $300 million is $300 million – that’s not chump change in anybody’s budget.

As you know, many important social services programs in the City and elsewhere in the State
receive critical support from State aid. The Executive Budget cuts would tear some big holes in
the social safety net – and shift more of the responsibility for that safety net to local
governments. Again – we recognize that cuts are unavoidable. We ask only that you consider the

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 Testimony of Christine C. Quinn, Speaker, New York City Council
February 7, 2011

fairness of their application. For now, I want to mention two areas in particular – homeless
services, and seniors.

The Executive Budget proposes completely eliminating two streams of funding that are
particularly important to our effort to address homelessness in New York City. One is funding
for Adult Shelter, and the other for the WorkAdvantage program. Although we have had our
issues with the WorkAdvantage program, it nonetheless is a vital source of support for our
homelessness prevention efforts. As you know, family homelessness continues to rise, and here
is a case where an ounce of prevention is truly worth a pound of cure – especially since housing
families in shelter is no cure to anything.

The Executive Budget would also eliminate the ability to use part of our Title XX, Social
Services Block Grant funding at our discretion for purposes other than child welfare services.
The clear goal of this restriction is to allow the State to substitute federal funds for State
spending for child welfare. But New York City relies on that discretionary authority more than
most local governments in the State. The outcome would be particularly devastating for the
budget of the Department for the Aging, which would lose up to $25 million in funding for the
operation of senior centers – forcing the closure of as many as 95 centers across the City – nearly
a third of all senior centers. Last year we worked with the Administration to close 29
underutilized or poorly-managed or maintained centers. There is no way to absorb a cut of this
magnitude, however, without closing many well-run, well-maintained, well-attended centers that
meet critical social and nutritional needs of seniors in communities all across the City. I must
urge you to take this into account as you consider this proposal, which would have a
disproportionate and devastating impact on the City.

I would like to comment on the reforms to the juvenile justice system reflected in the
Governor’s budget. Under the Governor’s proposal, the State would limit its cost sharing for
juvenile detention to only the most high-risk youth – although we would still be required to pay
half the cost of all placements in OCFS facilities and 100% of placements in private contract
facilities. This certainly creates an incentive for us to emphasize alternatives to detention, and I
am particularly pleased to see some of the savings from detention aid being re-invested into
support for community-based alternatives to detention. The Council has long been a mainstay of
support and funding for such programs in the City, and as a result the City has a number of well-
established and highly effective programs. I hope that you will give your full support to funding
for alternatives to detention, and ensure that funding can be used for the existing high-quality
programs the Council has supported for years, as well as for innovative new programs that will
be required to divert even more youth from detention. Of course, ultimately the placement
decision rests in the hands of Family Court judges. We believe that standardized guidelines
could encourage the use of alternatives programs more uniformly. The City has led the way in
the development of a risk assessment tool which could provide an excellent starting point.

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 Testimony of Christine C. Quinn, Speaker, New York City Council
February 7, 2011

In addition to the cuts that will directly affect the City’s budget next year, there is of course also
the significant reduction in planned Medicaid spending the Governor has targeted. With the
highest costs in the nation, New York State has no choice but to find a way get control of our
Medicaid spending. The Mayor eloquently testified earlier on HHC’s importance for healthcare
in New York City, and as a former chair of the Council’s Health Committee, I fully agree with
his assessment. We urge you to consider HHC’s crucial role in the provision of health care in
underserved communities as you examine the recommendations from the Medicaid Redesign
Team.

As I said at the outset, we will continue to analyze the Executive Budget in the weeks to come
and to share our assessment of its impact with you. There are a number of other areas that the
Council has historically strongly supported that face deep cuts, and out of deference to your time
today I refer you to the attachment to my testimony. We all know that we face a daunting task –
but one that we must face for the good of our future. I thank you again for the opportunity to
begin this dialogue with you today, and I pledge that we will work with you in the most
constructive spirit possible in the coming months.