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March 22,2012

The Honorable Andrew M. Cuomo

Govemor State of New York Executive Chamber, State Capitol Albany, New York 12224
Dear Governor Cuomo: Taxpayers across New York are grateful for your determination to provide localities with long overdue and desperately needed fiscal relief. As the State prepares to enact its FY 2013 Budget, I ask for your continued leadership in order to provide meaningful and equitable relief to local governments, including the City of New York, and sound public policy for the entire state. I am particularly concerned about a number of proposals by the Legislature related to Medicaid, school aid, unfunded mandates, juvenile justice reform and pollution remediation, as outlined below.

Uniform and Equitable Takeover of Local Medicaid Growth

Your Executive Budget moved to address the local fiscal burden of Medicaid costs by proposing a complete State takeover of Medicaid growth. New York City would see significant savings from your proposal: $65 million in the first full year, growing to $421 million in CFY 2017. Your proposal treats all localities equitably, and the Assembly should be applauded for supporting an equitable takeover of local Medicaid costs. By contrast, the Senate's plan for the State takeover of local Medicaid growth treats New York City unfairly. The Senate proposal requires the City to pay for 2%o of Medicaid growth through 2014 and 1o/o staftingin2015, while all other local governments would be responsible for just 1% of growth through 2013 and 0% beginningin2014. The Senate proposal - an effective transfer of funds from New York City to the rest of the State - would cost the City $500 million in lost savings over five years.
The inequity of the Senate's proposal is particularly egregious given that the City seles twothirds of the Medicaid population in the State. Any State takeover of local Medicaid growth should provide equitable and uniform treatment for all counties, including New York Ciff, across the State - just as your plan provides.

Fair Distribution of School Aid Restorations and Flexibilitv from Obsolete Restrictions
I ask that you continue to work with the Legislature to ensure that any restorations of school aid, including money redirected from competitive grant programs, are distributed through the main funding formulas in current law. While the implementation of the Campaign for Fiscal Equity

settlement has been delayed because of the State's fiscal crisis, as new funds become available, they should be directed to those districts most in need. The Gap Elimination Adjustment (GEA) vehicle employed in your past two Executive Budgets uses careful calculations of wealth and taxes to direct funding toward those districts with the greatest needs. The Assembly's one-house budget proposes this kind of equitable redistribution of $178 million through Foundation Aid, including an additional $74 million in school aid to the Cify. The Senate's one-house budget, however, represents a departure from the State's commitment to fair education funding by altering the GEA. The State's commitment to our children should not be distorted by the politics of geography.

In addition, the Senate's one-house budget provides school districts other than the City of New York with flexibility to use Contracts for Excellence (C4E) dollars as unrestricted school aid. C4E requirements, while laudable in their intent, were designed to work in conceft with five consecutive years of significant increases in school aid that were never realized. Freedom from these obsolete requirements would provide districts with much-needed flexibility to target resources where they are needed most. To be clear, this would not result in a single dollar moving out of our schools - quite the contrary; it would enable the more effective expenditure of the education dollars we have. This flexibility should be approved for all districts in the State, including New York City.

Unfunded School Transportation Mandates

I strongly urge you to reject the imposition - solely on New York City transportation mandates included in the Senate's budget proposal.

of two new school

First, the City would be required to provide school transportation for all children in grades 3-8 who live more than one mile away from their schools, and for all children grades K-2 and their grade 3-5 siblings who live more than half a mile away from their schools.
Second, the City would be required to provide transportation, or equivalent parental reimbursement, for K-6 public and non-public school students who are in school after 5:00 p.m. and who live more than a mile away from their school. New York City Department of Education (DOE) elementary and middle schools dismiss their students well before 5:00 p.m., and regular busing service for general education students in the afternoon is provided between 2:00 p.m. and 4:30 p.m. The City would have to go to great expense to cover schools - almost all private Yeshivas - who dismiss students long after the public school system ends its day.

Together, these mandates, which are entirely unfunded, will cost the City tens of millions of dollars annually. At a time when the State should be finding ways to provide flexibility and relief to districts, these new mandates would amount to a costly micromanagement of the City's school transportation policy at the expense ofother critical services.
Close to Home Javenile


The City worked closely with your administration to develop the Close to Home jrenile justice reform initiative that is included in the Executive Budget. The plan would allow the City to better serve young offenders by placing them in juvenile justice facilities closer to their families and by providing additional selices through alternative programs that have been proven to reduce recidivism and increase public safety. Various amendments have been proposed by the Legislature to delay or constrict implementation of the plan, or to only green-light reform for

youth in non-secure facilities. The City is confident in its ability to take over limited secure facilities and is eager to better serve the youth placed in those facilities, and I urge you reject weakening amendments to the language you have proposed for Close to Home.

Low-Sulfur Diesel X'uel and Cleaner Air

In 2010, the State enacted a bill limiting sulfur content of No. 2heatingoil to no more than 15 parts per million, effective this July, which will result in a95%o reduction in sulfur content. In 2071, my administration wrote regulations to phase out No. 6 and No. 4 oil - the two worstpolluting oils.
The heating oil industry has had ample time to implement the new standards, yet the Senate is proposing to delay implementation by three years, which will only result in further pollution to our air, compromising the health of New Yorkers. The Senate's proposed delay should be rejected, so that the phase-out ofhigh content sulfur oils continues expeditiously.

I appreciate your attention to these critical issues. New Yorkers need your leadership to deliver a sound State budget that helps put New York State and its localities back on solid fiscal ground.




The Honorable Dean G. Skelos The Honorable Sheldon Silver Members of the Legislature