The State of the State, With Slaps

ALBANY—In his State of the State Address, David Paterson dispensed with all pleasantries and attacked the past actions of the

ALBANY—In his State of the State Address, David Paterson dispensed with all pleasantries and attacked the past actions of the legislators and other prominent New Yorkers sitting before him.

“My colleagues, the times are measured. I would ask for your understanding that we dispense with the flourishes and formalities,” he said, and launched immediately into an anti-legislative, anti-special-interest theme that he has used recently in plugging a deficit and trying to bolster his political strength.

“This is a winter of reckoning, and I come before you today not just to talk of the State of the State, but also for the state of our self-governance—a fragile instrument of our popular will which has become the will to be popular,” Paterson said. “Look at history: Cultures of addiction to spending, power, and approval have ruined empires and now they threaten the Empire State. But I come here to day not to replay old grievances or in any way to reclaim lost ground, but we come here to rebuild.”

There was silence.

“The last two budget battles have left this hole on all of us in this chamber, and there are more deficits up ahead that will require an even greater sacrifice,” Paterson said. “We will have to accept that the old way of doing budgets is unsustainable, and so do the special interests, who intimidate, who badger, who push even when the cupboard is bare.”

Later, Paterson spoke about his proposals to tighten ethics enforcement in Albany. He admitted there would be “significant push back.”

“The monied interests—many of them here today as guests—have got to understand that there days of influence in this Capitol are numbered,” Paterson said. “No one person or group is above any others and any more or less deserving of any hardship or pain.”

Paterson’s proposals and rhetoric about fiscal responsibility drew applause—from Republican—as did his promise to invest as much energy in enacting a state spending cap as he did in restructuring drug laws for low-level offenders.

Finally, after speaking for 11 minutes, Paterson mentioned his first person by name: George Pataki, the former governor, who Paterson lauded for working to protect the environment.

“There is still time to rebuild the Empire State,” Paterson concluded. “I say to the elected members of the legislature: Work with me. Follow me.”

The speech lasted for 29 minutes. The governor also touched on his idea to rebuild the upstate economy—he wants it to be “the back office for corporate America”—and a desire to increase state contracts for women and minority-owned businesses.

Below is the complete release from Paterson’s press office.

In his second State of the State address, Governor David A. Paterson today outlined his plan to rebuild New York through firm and decisive steps – including fiscal and ethics reform and an economic development plan that puts New Yorkers back to work. The Governor laid out an agenda to end the culture of over-spending and abuse of power that has for too long dominated State government, including a proposal for sweeping and comprehensive ethics reform – the centerpiece of which is a new independent Ethics Commission.

Governor Paterson also announced a replacement for Empire Zones – the Excelsior Jobs Program – which includes three aggressive tax incentives for targeted growth industries, the Sustainable Neighborhoods Project to revitalize prime housing stock that sits vacant in urban cities across New York State and the Manufacturing Legacy Program to leverage the strengths of the State’s manufacturing industries to guarantee the economic security of the people who are carrying its legacy into the twenty-first century. In addition, the Governor proposed a bold initiative to revive the New York Insurance Exchange that would bring buyers and sellers of complex commercial insurance closer together, providing increased transparency and security for everyone in the process.

“Today is not a day to look back. It is a day to turn crisis into opportunity, to reclaim our government and recommit ourselves to doing better for the people of New York. Today, I stand before all New Yorkers with a bold and decisive plan to rebuild our State’s economy into a national model of ingenuity and strength, to rebuild our people’s confidence in the stability of our State, to rebuild our manufacturing base to meet the energy standards of this enlightened age and to rebuild the trust that the citizens of this great State once had in their government,” Governor Paterson said. “Every decision I make will come down to one question – are we doing what is right for the people of New York? It is time to rise to the high expectations of our citizens and to bring the lasting change that they have long sought and deserved.”

Fiscal Reform

“To rebuild New York, we need to enact fundamental fiscal reform that makes government more accountable to taxpayers. We must enact real and lasting cuts to our State’s bureaucracy, merge agencies to improve efficiency and save money, begin the public tracking of agency performance, and develop a long-term strategy for fiscal planning,” Governor Paterson said. “The days of running New York like a payday loan operation must come to an end.”

To achieve these goals, Governor Paterson today deployed EmpireStat, a new program to track the progress of State agencies – a critical tool for the Governor and the public to assess whether the State, its agencies and authorities are making real progress in the areas that matter to New Yorkers. The Governor will use this tool to conduct agency performance reviews, to hold agencies responsible for their performance, to report directly to New York State taxpayers on that performance and to provide direction for improvement where necessary. In addition, the Governor’s Office of Taxpayer Accountability (OTA) will continue to build on its successes of 2009 with additional actions in 2010 that will result in even more savings and efficient operations including consolidation of certain State agencies and functions.

Governor Paterson has asked Lieutenant Governor Ravitch to take the lead on developing a Four Year Financial Plan. A multi-year fiscal recovery plan is the most sensible way to bring the State’s financial plan into structural balance. The long-overdue goal of structural balance is the only way to budget responsibly and avoid unexpected cuts in essential services – such as schools, hospitals, and mass transit – in times of economic distress. The foundation of such a plan will be the requirement that government spending year-to-year is kept in line with reasonable revenue assumptions and that adequate reserves are created in good times so that the State can better weather rough times.

Governor Paterson has proposed major reform legislation that would cap the growth of State government spending. A spending cap would help control State expenditures, improve New York’s long-term fiscal integrity, and make government more accountable to taxpayers. This fiscal reform bill is tied to a circuit-breaker property tax relief program that would provide direct relief to taxpayers once the State’s fiscal house is in order.

“I know this idea has met resistance from the usual suspects in the past,” the Governor said. “But, just as I have fought for other critical reforms throughout my career, I will fight for this spending cap no matter how long it takes, even if it requires a constitutional amendment.”

Once the spending cap puts New York’s fiscal house in order, the circuit-breaker program will kick in and provide direct relief to New York’s overburdened property taxpayers. Unlike the current STAR exemption program, this circuit-breaker will encourage fiscal responsibility at the local level by providing incentives for localities to limit property tax increases. This program will deliver a double benefit to New York taxpayers – spending restraint at both the State and local level.

Ethics Reform

Governor Paterson today proposed sweeping reform to fundamentally change the culture of Albany. Governor Paterson’s Reform Albany Act is driven not by the illegal actions of any one person, but instead by what is still legal and rampant throughout the entire system of government. The corrosive effects of outside influence and inside decay have bred cynicism and scorn from the people of New York. This Act will restore the trust and faith that people expect and deserve. Special interests expect others to shoulder the burdens that they are unwilling to bear, and expect this treatment with no regard for the welfare of others. The Reform Albany Act puts the interests of the people of New York ahead of the lobbyists and special interests. The ultimate goal of this reform is to bring fairness and openness to a government that has little of either.

“My Reform Albany agenda would drastically reduce campaign contributions; require disclosure of outside income; strip the pension from any public official convicted of a felony; phase in public financing of campaigns; and impose term limits on all State office holders through Constitutional amendment,” the Governor said.

The Reform Albany package would establish an independent State government ethics commission composed of individuals who have no relationship with the State officers they oversee. This Commission will examine conduct and advise the executive and legislative branches of state government to ensure uniform enforcement so that one ethical standard, one set of practices, and one interpretation of the application of the ethics law would apply to everyone in State government.

Singular oversight equals uniform enforcement. Real reform requires full transparency, and accountability to the ethics laws, not to the appointing authority. That is why the new Government Ethics Commission will be selected by a 10-member Designating Commission modeled on the Commission on Judicial Nomination. The Designating Commission members would be selected by State leaders in a way that no clear majority controls the designating board. The single State Government Ethics Commission would include five members, replacing the thirteen-member Public Integrity Commission. It would oversee all branches of government, rather than only the executive branch, and would have both advisory and enforcement powers. A five member commission would be more efficient and less prone to leaks. The Commissioners as well as all Commission staff would be required to sign non-disclosure agreements to help ensure the prevention of leaks.

“This commission would have the power to enforce campaign finance laws; end pay-to-play; and finally bring oversight to so-called good government groups that hide their donors behind walls of sanctimony,” added Governor Paterson.

The Reform Albany plan also makes fundamental changes to the way Albany operates in secret. These enhancements will help to eliminate the Pay-to-Play atmosphere that surrounds Albany by improving the reporting of outside businesses, including increased oversight and enhanced reporting for both lobbyists and State officers, and improving guidance to identify and prevent conflicts of interest.

In addition, a bold new public campaign finance system would drastically reduce the maximum campaign contributions allowable, ban corporate contributions and provide for a 4:1 public matching system with enhancements to encourage participation.

Beyond ethics, pay to play and campaign finance enforcement, the Reform Albany plan also contains rules to establish Term Limits for Members of the Legislature as well as statewide elected officials by limiting State Assembly and State Senate to six, two-year terms and limiting statewide office holders to two, four-year terms.

“I don’t expect these proposals to be embraced by everyone,” the Governor said. “But the performance of our State government has not lived up to the ideals of the people of New York. Bold steps have become necessary to restore the faith of New Yorkers in their government. The ultimate goal of this reform is to bring fairness and openness to a government that has little of either. The moneyed interests should know that their days of influence are numbered. They expect others to shoulder the burdens that they are unwilling to bear or expect special treatment with no regard for the welfare of others.”

Excelsior Jobs Program

Today, the Governor announced a replacement for Empire Zones – the Excelsior Jobs Program – a New Economy jobs program focused on the high tech and clean energy growth jobs of tomorrow. The Excelsior Jobs Program is the centerpiece of the most innovative job-creation agenda in the history of New York. The Program includes three aggressive incentives for targeted growth industries including:

    • An expansion of the Research and Development Tax Credit to support innovation and enhance New York State’s role in the New Economy. The definition of the credit will be broadened to allow the use of credit to encourage additional categories of investment than currently exist.
    • The creation of an Enhanced Investment Tax Credit to support capital investment.
    • A New Jobs Incentive to target firms in the high technology, biotechnology, clean energy technology, finance and manufacturing industries. Firms that create and maintain a set number of new jobs in New York for five years will receive tax credits for a portion of the payroll costs associated with those new jobs.

“Unfortunately, the Empire Zone program has outlived its usefulness, which is why we are replacing it with a program that is focused, strategic, accountable, cost-effective and transparent,” the Governor said. “To develop the Excelsior Jobs Program, we spent the last year reaching out to hundreds of businesses and communities across our State to find out how we can best build a program that delivers what it promises. The result: three aggressive tax incentives for targeted growth industries. We’ve learned from this recession that New York is nothing if not a fighter and we are going to fight for these new jobs.”

Economic Development and Job Creation

The third vital reform in rebuilding New York is to restore our economy to greatness, with a focus on New Economy jobs, a rebuilt manufacturing base, a modern energy infrastructure and a commitment to helping New Yorkers lift themselves up. The fiscal and ethics reforms in the Governor’s plan will help form the foundation of New York’s economic comeback.

The Governor today announced a $25 million New Technology Seed Fund to create the next Silicon Valley right here in New York State. This fund will help institutions of higher learning grow their research and strengthen their partnerships with the business community to advance their work to commercialization and put New York on par with other states in terms of directly supporting entrepreneurial activity and creating jobs for the State.

Over the last hundred years, New York’s economy was built by two primary industries – manufacturing and financial services. We must leverage the strengths of these twin titans to guarantee the economic security of the people who are carrying their legacy into the twenty-first century which is why Governor Paterson has proposed the creation of a new Manufacturing Legacy Program to re-purpose underutilized industrial facilities.

Partnering with regional non-profit business organizations to help build on New York’s exceptional manufacturing legacy, we will establish the inventory of available locations, assess the opportunities, identify regional core competencies, partner with key stakeholders, invest and aggressively market these locations nationally and internationally and create industrial assistance centers to educate businesses on alternative manufacturing approaches and marketing efforts.

New York State is home to an estimated 60,000 back office jobs. The Paterson Administration will focus on expanding the State’s back office opportunities by making Upstate New York the preferred back office for corporate America. There is no denying that we have the workforce, space and livable communities to support these office operations throughout Upstate New York.

“We must finally address the economic crisis that has been bleeding Upstate New York for decades. We have hundreds of thousands of highly skilled trades, construction and manufacturing workers in our State. In rebuilding New York and our manufacturing base, they are important too. That is why we will look to our historic manufacturing industries and make them new again as well as make Upstate New York the preferred back office for corporate America,” the Governor said.

To support New York State’s small businesses we must provide them with much needed capital. That is why Governor Paterson proposes the creation of a Small Business Revolving Loan Fund that will provide capital to worthy entrepreneurs. The fund will target minorities, women and other disadvantaged New Yorkers who have difficulty accessing regular credit markets.

New York State Department of Labor statistics show that during the past year, unemployment among African-Americans was more than twice as high as unemployment among whites, and unemployment among Hispanics was fifty-percent higher than whites. In the past, minority and women-owned enterprises were not a significant part of the State’s economic development priorities. By synchronizing the MWBE program with the State’s overall economic development agenda, Governor Paterson is ensuring that companies are growing in the areas that will create jobs, wealth, and tax revenue. Under the Governor’s leadership, revenues to MWBE’s in New York State have increased by $100 million. The State is continuing to open the door to success for any New Yorker who has the talent, drive and passion for their business to succeed by creating a permanent council to encourage the use of MWBE firms in public contracting.

“New York’s economy means creating new opportunities for all New Yorkers,” the Governor said. “I am proposing a wide ranging set of initiatives both large and small that includes a revolving loan for small businesses with emphasis on minority and women-owned enterprises and a Families First Initiative to help connect newly vulnerable citizens with available services they may not be aware of..”

New York Insurance Exchange

Governor Paterson is committed to maintaining New York’s status as the financial capital of the world which is why he proposed a bold initiative to establish the infrastructure for a revived New York Insurance Exchange. The NYIE would bring buyers and sellers of complex commercial insurance closer together, providing increased transparency and security for everyone in the process. The NYIE would operate in a manner similar to Lloyd’s of London and would enhance New York’s status as the world’s financial center stimulating the economy by increasing the flow of capital and insurance premiums to New York.

“By bringing together buyers and sellers of complex commercial insurance, the exchange will reaffirm our status as the hub of international trade and finance and it will also curtail the unregulated transactions that devastated the global economy,” Governor Paterson said. “New York was the epicenter of so much that went terribly wrong in 2008. It is our responsibility as New Yorkers to lead in the rebuilding and reform of these vital global markets.”

Clean Energy Economy

In December, the Governor accepted the New York State Energy Plan which provides a comprehensive 10-year blueprint for further actions necessary to transition to a clean energy economy. In 2010, the Paterson Administration will take a series of steps to make New York more energy efficient, independent and innovative including submitting several key pieces of legislation. The Administration also understands the need to identify future needs for, and invest in, energy infrastructure. That is why the Governor will, among other things, release a Climate Action Plan that will identify strategies to achieve an 80 percent reduction in greenhouse gas emissions by 2050.

Governor Paterson will also submit legislation to reform the Power for Jobs program so that businesses will have the certainty they need to make long-term investments in our State.

Taken together, these actions will have the desired impact if we work to improve coordination between the State, other governments and communities. In 2010, the Governor will promote land use and zoning tools that support Smart Growth, develop procedures to assess and consider disproportionate environmental burdens from energy facilities in potential environmental justice areas and increase the number of Climate Smart Communities.

Sustainable Neighborhoods Project

Resulting from decades of economic decline, the vacant housing crisis across Upstate New York inhibits future economic development, discourages homeownership and in-migration and perpetuates the perception that the region’s urban areas are in a downward spiral. The Paterson’s landmark legislative efforts for keeping neighborhoods together in the face of the foreclosure and sub-prime crises have been emulated across the country. Now, Governor Paterson proposes the Sustainable Neighborhoods Project as a national model for affordable housing and urban revitalization.

“There is no other region of the country with the affordable housing stock, the close-by schools, the natural beauty and the untouched small towns that families would cherish. We need to return to promoting all that we have to offer,” Governor Paterson said. “Part of that effort must include revitalizing prime housing stock that currently sits vacant and turning it into long-term affordable housing, starting in Buffalo, which has more than 23,000 vacant units.”

This historic initiative will fight urban decay and revitalize prime housing stock – using existing housing capital resources to create long-term affordable housing across the State. Local officials will designate blighted homes for rehabilitation and sale to first time homeowners; houses will be marketed as long-term affordable housing and homeowners would be selected through a lottery process. With more than 23,000 vacant housing units, Buffalo will serve as the starting point for the project which will expand to cities across New York State.

Time and time again, New Yorkers have demonstrated the ability to rebuild and renew – that is the promise of the Empire State. New Yorkers have recovered from economic crises and rebuilt after disasters both natural and manmade. Every time our capacity for hope has been questioned, every time our faith has been tested, every time we have approached a wall that seemed too high to scale, we have proven that our fight knows no bounds. New York will rebound again.

In closing, Governor Paterson addressed his fellow colleagues and the citizens of New York stating: “We will come full circle from the fiscal chaos in our own State budget to helping rebuild our State and nation after the chaos of a national meltdown. The plan I have outlined today will make us stronger, grow our economy, and get New Yorkers back to work.”

The State of the State, With Slaps