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Cuomo, Albany address some issues but not all

STEPHON JOHNSON Amsterdam News Staff | 8/31/2011, 5:41 p.m.

"The property tax cap will significantly impact community colleges and is expected to lead to the elimination of needed programs and even more overcrowded classrooms at the schools facing enrollment surges."

Along with the property tax cap, state legislators passed an extension of rent regulation laws that will raise the deregulation rent threshold from $2,000 to $2,500, raise the income threshold to pay market rate for the first time in 14 years from $175,000 to $200,000 and limit landlords to collect only one vacancy bonus annually, reducing the potential manipulation of leases in order to push units out of the system.

"The New York State Legislature and governor have passed legislation to extend rent regulation protections to 2.5 million tenants," read a statement from the Metropolitan Council on Housing, a nonprofit organization. "For the first time in 18 years, the laws were extended without weakening amendments and we made incremental progress on our list of reforms, thanks to the sustained activism of the organized tenant movement in New York City and the downstate suburbs in recent years."

"New Yorkers can now look at Albany and see progress on historic initiatives, action on issues that have been left unresolved for decades and a legislative session that delivered results," stated Cuomo last week. "New Yorkers can have a renewed sense of pride and confidence in their state government."

But not so fast. Trouble may still be looming between Cuomo and the Legislature.

A legislative measure that would allow school districts around the state to borrow close to $1 billion over the next 15 years to cover rising employee pension costs passed both houses of the Legislature under the radar. The bill would allow districts to sell 15-year bonds and use the revenue to close the state pension fund. But Cuomo's aides said that the governor would veto any bill that would allow school districts to borrow that much money.

NYSUT spokesperson Carl Korn believes that Cuomo is either listening to the wrong people or doesn't really have the common New Yorker at heart when making his decisions.

"The critics of the bill are misrepresenting what the bill would do," said Korn to the AmNews. "This year, the employer contribution for pensions is 8.6 percent. Because of Wall Street's greed and the stock market crash [of 2008], next year the contribution is expected to rise to 11.1 percent.

So this is putting school districts under increasing pressure to pay pension costs at a time that the state has cut funding for education by more than $3 billion over the last three years."

Korn thinks the public has been also been misinformed about the bill. He believes they don't realize that it's not mandatory for school districts to borrow money from the state and that the bill only gives them some fiscal flexibility if they need it.

"Districts are not obligated to do this," stated Korn. "This would just give them the option of offering bonds to pay the increase in pension costs. They will still pay the 8.6 percent, but they would bond out the rest to save teachers and other programs. Any good businessman knows that the best time to borrow money is when interest rates are low. It's ironic because cities, counties and other local governments were given almost the same option during last year's legislation session and [Former New York Gov. David] Paterson signed it."

Korn also addressed the "myth" of taxpayers footing most of the bill for employee pensions.

"Employees like teachers, bus drivers and such put in 3 percent of their salaries toward pensions," Korn said. "Employee contributions make up about 25 percent of what's in the pension fund. Taxpayers pay about a quarter and the other fifty percent is made in investments. Where were all the critics of pensions when teachers were putting in 3 percent and districts were putting in zero? This has everything to do with politics."

The solution to all of this, according to Korn, is one that countless union protesters have screamed about the past three years: have the rich pay their fair share.

"Someone who works at a convenience store is paying the same tax rate as Donald Trump," Korn said. "The only people who haven't been paying their fair share are the affluent. Who is leading the attacks [on public pensions]? It's not working New Yorkers, it's big business and Wall Street interests. Every New Yorker deserves a dignified retirement."