Testimony to the Senate Finance and Assembly Ways and Means Committees re: the Executive Budget

Testimony of

Public Employees Federation

Roger E. Benson

President

to the

Senate Finance and

Assembly Ways and Means Committees

Wednesday

February 12, 2003

Thank you Mr. Chairman, Senators Johnson and Breslin, and other distinguished members of this committee. I am here representing PEF’s 55,000 members. The vast majority of our members are professionals who made the choice to pursue careers in State government because they wanted to use their skills to serve the public. Today, as we face a very serious budget crisis, I want to address the choices you face as representatives of the citizens of our State.

Unfortunately, I have to say that this proposed Executive Budget makes many wrong choices. Instead of asking all New Yorkers to share in the pain caused by our fiscal crisis, this budget walks away from its responsibility to provide services to the mentally ill, developmentally disabled, and troubled youth. It walks away from its responsibility to maintain publicly funded teaching hospitals. The proposal to increase the health insurance premiums paid by retirees is just plain cold-hearted. This is particularly true in light of the fact that the wealthiest New Yorkers and New York’s businesses are not asked to bear their fair share of our State’s budget crisis.

The breadth and depth of the attack on public employees and the New Yorkers we serve is unprecedented. This budget will not be fixed by minor tinkering. It doesn’t need a tune-up; this budget needs a major engine overhaul.

Our first priority is to avoid layoffs. Almost 1800 State workers face layoffs under the Executive Budget. We will not be able to avoid layoffs this year if we close three psychiatric centers, the Institute for Basic Research, and cut back the operations of the Nathan Kline and NY Psychiatric Institutes. “Job-killing” layoffs not only hurt State employees and their families, they hurt our economy, and they result in the loss of services essential to many New Yorkers, particularly the mentally ill.

The proposals in the Executive Budget that impact the mentally ill in New York have one thing in common—they lack the credibility that would come with a true comprehensive plan. The various proposals I will discuss with you shortly will have terrible repercussions for patients, families, employees, and communities. They are not justified by an assessment of local needs, nor are they accompanied by strategies for mitigating the effects of severe loss of services.

This year the Executive Budget proposes the closure of five psychiatric centers, including three within the next six months. Closure of Elmira, Hutchings, and Middletown violates the enlightened principles expressed in Governor Rockefeller’s Budget Message in 1969, which called for “smaller and much needed facilities for the mentally ill…closer to their homes.” These closures will deprive residents of these areas of inpatient psychiatric services close to home. It will create substantial hardship for the families of patients who will have to devote an extra one to four hours of travel time to visit their loved ones.

The budget recommends the closure of Bronx adult and children’s psychiatric centers in coming years. Bronx would be the only borough in NYC to not be served by its own hospital, depriving the overwhelmingly minority patient population of services close to home. Chronic patients would be transferred to Pilgrim Psychiatric Center on Long Island, which is almost inaccessible by public transportation.

The proposal to create a single appointing authority will also negatively impact care of the mentally ill. Control over where employees can be assigned would be transferred from each individual facility director to the Commissioner of OMH. While many other State agencies do control all appointments, reassignments, and transfers centrally, it is our belief that the nature of the therapeutic relationship is unique and demands the protection that comes with local autonomy. In addition, the State does not need this authority to avoid OMH layoffs; you enacted section 78 of the Civil Service Law to give them all the authority they need to avoid layoffs in 1996. The Legislature has rejected this scheme several times, most recently in 2000. You should reject it again this year.

The Executive Budget also proposes to radically reduce the research on mental illness done at the Nathan Kline Institute and the NY Psychiatric Center and to close the Institute for Basic Research.

Both Nathan Kline and the NY Psychiatric Institutes are celebrated research facilities. Disruption of Nathan Kline Institute operations would seriously impact psychiatric research at a national level. The New York Psychiatric Institute is at the forefront of basic and clinical psychiatric research, education, and treatment, both nationally and internationally. NYPI has been a designated a clinical mental health research center by the National Institute of Mental Health since 1978.

The Institute for Basic Research (IBR) on Staten Island is an internationally recognized center of excellence that is dedicated to diagnosing, treating and preventing developmental disabilities. Scientists at IBR conduct cutting edge research in areas such as cytogenetics, developmental biochemistry, human genetics, immunology, infant development, molecular biology, neurochemistry, pathological neurobiology, pharmacology, psychobiology, psychology, and virology. At IBR New Yorkers can receive testing and evaluations for the causes of developmental disabilities, genetic counseling, prevention and early intervention of developmental disabilities, and management of difficult problems, such as seizures, challenging behavior, and autism in young children, all services that are not available in the local medical community. IBR is essential to OMRDD’s core mission of service to clients, not ancillary to it.

The Executive Budget also includes a proposal to privatize the three SUNY teaching hospitals, although it is done in a backhanded way. The privatization itself is not directly described. The Executive Budget simply includes a proposal to give the SUNY Board of Trustees the authority to do it without legislative approval. Members of the Assembly and Senators, you know as well as I do that once they have that authority, it is not a question of “if” but rather of question of “when.”

In 2001, SUNY contracted with PriceWaterhouseCoopers to conduct a study of the SUNY hospitals’ financial health. The report found that the hospitals’ financial problem was caused by the State increasing the assessment on SUNY hospitals. The report confirmed that SUNY Hospitals operate more efficiently than 75% of their academic peers and have both good market positions and programmatic potential. There is no evidence that privatizing these hospitals will benefit the citizens of our State in any way.

The Executive Budget also proposes privatizing the Youth Facilities program in the Office of Children and Family Services. The first step is to eliminate 250 State-operated beds in youth facilities that serve some of our most troubled young people. This is a step, not toward a better system, but toward an abandonment of State responsibility for these services and our troubled youth.

The final step in the process is that by SFY 2005-06, the privatization of the remaining facilities will be explored. This is a frightening prospect. The record of privately operated correctional and youth facilities across the country is a dismal mix of incompetence and corruption.

The Executive Budget continues its privatization zeal with its proposal to eliminate 523 FTEs in the Department of Transportation’s Design and Construction program, which faces a $53 million cut in the Engineering Services Fund. This is not privatizing assets; this is privatizing State work and jobs. This program uses both consultant and State engineers to inspect, design and construct our bridges and roads. Two separate Comptrollers and a consultant study contracted by DOT have found that State engineers are more cost-effective in completing these jobs. The Commissioner of DOT admitted to you last week that State engineers were more cost-effective. Yet during our worst fiscal crisis, the Executive Budget takes all of DOT’s cuts out of their most cost-effective program and does not cut any funding for consultant engineers. The Commissioner of DOT says this is necessary to avoid “bottlenecks” in the capital program. The only reason there may be bottlenecks is the State’s failure to hire engineers and its insistence on hiring more expensive consultants. The Legislature must reverse this policy if it wants to ensure that DOT’s capital program puts more money into roads and bridges than into consultant engineers’ pockets.

The Executive Budget also goes after State retirees by proposing to increase the health insurance premium rates paid by current retirees and to implement steep increases in costs for future retirees. The prospect of a 20-year State employee having to pay 32.5 percent of his or her health insurance premium instead of the current 10 percent is frightening. Retirees can’t afford these kinds of premiums. Long-term employees and retirees who committed their careers to the State rely on these benefits. The State must not break its commitment to them.

The Governor claims that he must propose an Executive Budget with this level of cuts because we are in a crisis. It is true that we have to deal with unprecedented deficits. I don’t think anyone in this room is going to dispute the size of the problem. What we do dispute is whether the proposed methods for dealing with this crisis are appropriate and fair.

There is a better way. First, you need take action on the items that I have outlined above. Second, more revenue must be raised. It must be raised in the fairest way possible. This means that those who can most afford it need to pay their fair share.

Over 200 organizations that represent New York’s working families have proposed a small, temporary surcharge that would be applied to the incomes of the State’s wealthiest individuals, and call for closing certain corporate tax loopholes. This proposal is endorsed by the New York State AFL-CIO and is described in a PEF Commentary in this week’s Legislative Gazette.

The surcharge, which is only seven-tenths of a percent, would allow the State to recapture a small part of the windfall in federal tax cuts that the wealthiest New Yorkers are already receiving. Plugging corporate loopholes would eliminate gimmicks like “income shifting” that enable large multinational corporations to avoid paying their fair share of New York taxes. Together these proposals would raise as much as $4.5 billion.

The Governor portrays this budget as a choice between jobs and taxes. We disagree. Many economists (most notably Joseph Stiglitz, the 2001 Nobel Prize winner) believe that severe spending cuts during economic downturns are actually greater obstacles to economic recovery than modest tax increases. The surcharge proposal we have made will preserve public services and jobs, while imposing only a small temporary tax burden on those most able to afford it. This is the correct choice.

Low and middle-income families already pay a higher percentage of their income in taxes than New York’s wealthiest families do because they bear the brunt of sales and property taxes. Most new Yorkers pay 12% of their income in State and local taxes, while the wealthiest New Yorkers only pay 6.5%. Sadly, this budget makes this gap even wider.

The Governor has said this budget is about jobs and taxes. The real choice is what taxes are going to be raised and who is going to pay those taxes. It is time for everyone to pitch in to help New York out of this budget crisis. It is often said that the State Constitution requires a balanced budget, and it should. But balance should mean more than debits and credits. It should also mean a fair budget where we all share the benefits and we all share the burdens.

The remainder of my testimony will provide significantly more details about the problems State agencies and their workforces will face with the proposed Executive Budget,

Above all, the proposed budget for mental health services in New York State exhibits a striking absence of both short and long range planning. PEF has come before this Committee for years, protesting the Office of Mental Health’s policy of a bottom-line approach to the care of the mentally ill, in which quality of care takes a distant back seat to the goal of cutting spending. This year Commissioner Stone came before you and admitted to as much, stating that “Rather than looking to a plan, we let the market drive the structure of the mental health system.”

When the Legislature in its wisdom enacted Section 5.07 of the Mental Hygiene Law in 1977, it did not require documentation of how the market was driving the structure of the mental health system. Instead, it recognized that services should be based on assessment of needs, input by all stakeholders affected by the system, and the creation of a continuum of services meeting the needs of all users of the system. This budget dramatizes the failure of OMH to comply with that law.

The most overt effects of the lack of planning relate to the proposed psychiatric center closures. For lack of a real plan, patients will suffer from facility closures without replacement of services in their home communities. There will be no local facilities to help them reintegrate into their communities when they are discharged from these distant hospitals. Families will have to travel long distances to visit their loved ones. Some employees of State facilities will have to dislocate their families in order to save their jobs, or worse, some may face unemployment. Underpaid workers of not-for-profit community-based programs will see wage increases unfairly linked to closures.

Staff Reductions. The budget calls for a net reduction of 950 positions in SFY 2003-04 that are linked to the closure of three adult psychiatric centers, the merger of two research centers, and a census rundown of 90 beds. OMH is the hardest hit agency of any in the State, for both total number of position reductions and number of position abolitions. OMH accounts for 611 abolitions, almost 400 positions higher than the second most affected agency. The reductions in staff will continue to negatively impact the ability of staff to provide adequate quality of care.

OMH has gone from a largely geriatric population of patients who spent a considerable part of their lives in psychiatric hospitals to an increasingly younger population characterized by histories of violence, criminal involvement, multiple substance abuse problems, and health problems. In the decade from 1986 to 1996, MICA (mentally ill chemical abuser) admissions in OMH increased 91%, while the MICA census rose by 360%. In the same time period, forensic admissions (clients admitted as the result of a criminal act) increased by over 220%. While OMH has not released updated statistics since 1997, PEF members attest that the trend towards more difficult patients has increased substantially. In OMH psychiatric centers today, nearly one in four patients has a history of criminal convictions. Although safety rates have remained relatively stable in the last few years, the most currently available data shows an accident rate of over 25 accidents per hundred employees in SFY 2000-2001, still an unacceptably high rate.

Staffing in OMH has declined as client populations have declined, without consideration for the more intensive staffing required by these changing demographics. These patients require higher levels of professional care in order to become self-sufficient, functioning members of the community upon their eventual discharge. All too often these patients are discharged without having reached an acceptable level of stability, and the obstacles to readmission to a State facility are almost insurmountable. Despite some increases in funding for community-based services, the availability of such services does not relieve the State from its responsibility to provide the inpatient services necessary to treat those patients who remain a danger to themselves or others while in the community.

Facility Closures. The facility closures proposed for July 1, 2003 present problems for staff, patients, and communities. Under these proposals, patients now at Middletown Psychiatric Center will transfer to Rockland Psychiatric Center in Orangeburg, patients at Hutchings Psychiatric Center in Syracuse will transfer to Mohawk Valley Psychiatric Center in Utica, and patients at Elmira Psychiatric Center will transfer to Rochester Psychiatric Center. These closures will deprive many State residents of inpatient psychiatric services reasonably close to home. It will create substantial hardship for the families of patients who will have to devote an extra one to four hours of travel time for visitation.

These closures will also negatively affect staff. For the three facilities combined, 361 staff would remain to continue providing outpatient services, 619 staff would transfer to the facilities receiving the relocated patients, and 343 positions would be eliminated. There are a total of 502 PEF members at these facilities; we do not yet know how many of them are in positions slated for elimination.

These 343 position eliminations may result in layoffs. Even if layoffs are avoided, many staff will end up being placed in the unenviable position of choosing between an assignment to a distant location, with its attendant disruption of their family’s lives, and a voluntary termination of employment. Avoidance of layoffs is not synonymous with absence of harm to employees.

These job reductions in upstate communities are being proposed in the same breath as professed concern for the upstate economy. These areas cannot afford to lose additional jobs. Some areas may be particularly hard hit. Elmira, for example, is being simultaneously affected by layoffs at Corning Industries.

It is particularly ironic that OMH proposes closing Middletown Psychiatric Center, which for many years has been the jewel in the crown of the State psychiatric hospital system. Middletown has long been known for its advancements in psychiatric services, especially as the forerunner of the Treatment Mall concept that has been duplicated in 60 programs in 30 states. This program has received recognition in the December 2000 issue of Clinical Psychiatry News, as well as in Psychiatric Services (7/96), Quality of Care Newsletter (Spring 99), and Treatment Mall Best Practices Directory (9/99). Representatives of over 40 countries have visited Middletown to learn from their example.

Middletown is also known for its Success Program for treatment resistant patients and its Cognitive Mediation Program. As deinstitutionalization made space available at the facility, Middletown created the “community campus” concept of co-locating other community providers in the unused portions of the hospital. The closure of Middletown will not only remove the cornerstone of this program, it will deprive the community of coordinated service provision. If OMH were truly concerned about the quality of care delivered to its patients, it would not close its premiere facility, particularly when Orange County has one of the fastest growing populations in the State.

Hutchings is a relatively new facility (c. 34 years old), considered state-of-the-art at the time of its construction. Rather than the typical monolithic, intimidating structure of the older psychiatric hospitals, Hutchings is styled like a garden apartment complex; it is very accessible and patient-friendly. Because it houses eleven patients per pod, it requires a higher staff to patient ratio than the larger 20 patient wards typical of older facilities. OMH has apparently determined that the cost benefits of closing Hutchings outweigh the therapeutic benefits of a well-designed psychiatric center.

Closure of Hutchings and Middletown violates the enlightened principles expressed in the Governor Rockerfeller’s Budget Message in 1969, which called for “smaller and much needed facilities for the mentally ill…closer to their homes.” The 1969 budget recommended that the normal cost evaluation procedures would be deferred “to the professional judgment of the mental health administrator,” the exact opposite of today’s situation in which fiscal concerns far outweigh therapeutic concerns.

Elmira Psychiatric Center serves a 10-county area encompassing 15% of the geography of New York State. The almost 100 inpatients include 18 children and adolescents, whose families will have a difficult time visiting on a regular basis if they have to make the four-hour round trip between Tioga County and Rochester.

Closure of the children’s unit in Elmira PC will leave the entire Southern Tier without inpatient services for children and adolescents. Rochester does not currently serve patients under 12 years of age, who comprise 21% of Elmira’s juvenile admissions.

This budget also calls for the October 1, 2005 closure of the Bronx Psychiatric Center and the Bronx Children’s Psychiatric Center. Acute adult patients will be transferred to Creedmoor Psychiatric Center in Queens and chronic patients will be transferred to Pilgrim Psychiatric Center on Long Island, while children will be transferred to other downstate children’s facilities (i.e., Brooklyn Children’s Psychiatric Center and Sagamore Psychiatric Center). These transfers pose tremendous inconveniences for families of patients. Reliance on public transportation may necessitate several hours of travel time each way to visit family members, a particular hardship for families of children who rely heavily on these visits. The description of Pilgrim PC on the OMH website does not even provide directions via public transportation because it is relatively inaccessible via public transportation. Upstate designers of this proposal may not realize that downstate distance is calculated in time, not miles.

Bronx PC and Bronx Children’s PC are designed to treat the heavily minority population from which their inpatient population derives. A recent snapshot of the facilities showed an 85% minority population at the adult facility and a 96% minority population in the children’s facility. The Bronx was the last borough in NYC to have its own psychiatric facility. If this proposal is implemented the Bronx will be the only borough in NYC to not have a major mental hygiene facility. Prior to the opening of Bronx PC, the residents of the Bronx were underserved, a condition to which they will return if this proposal is implemented.

Bronx PC is the only location in the State with bilingual wards. Programs are geared to the psychiatric and cultural needs of the Hispanic patient and their families. Staff are fluent in the language and customs of the Hispanic and Latin American Countries. These variables are fully integrated in the provision of treatment and other services and closely embrace family and friends in programs and cultural events.

Bronx PC has two residency programs in collaboration with the Albert Einstein College of Medicine. It is unlikely that these programs would survive the transition of the inpatient population to Queens and Long Island, depriving patients of an additional source of care and students of a unique training ground.

We ask the Legislature to deny the planned closure of Elmira, Middletown, Hutchings, Bronx, and Bronx Children’s Psychiatric Centers, and restore $9.997 million in operating funds.

Consolidation of OMH Research Centers. The shortsightedness of this budget is evidenced by the proposal to merge Nathan S. Kline Institute for Psychiatric Research into the New York Psychiatric Institute (NYPI). This proposal entails the elimination of 113 positions, which is also the number of positions at Nathan Kline, and appears to be the first step towards the ultimate closure of that facility. The loss of a substantial portion of the research staff would make continuing operations difficult, if not impossible. Research staff does highly specialized work on specific studies and cannot be easily reassigned to alternate studies. Nearly $24 million in research grants at Nathan Kline alone will be jeopardized by this proposal.

Both Institutes are celebrated research facilities. OMH itself describes NYPI as “a world-renowned research center which is in the forefront of basic and clinical psychiatric research, education, and treatment, both nationally and internationally”, and Nathan Kline as “prestigious…” with “research programs….prioritized to address problems that are of immediate concern to public sector mental health.” Because of advances made through psychiatric research, most people with serious mental illnesses are spending less time as inpatients in State facilities and more time living in the community. Alzheimer’s disease is being diagnosed and treated in its earliest stages, shortening the period of grave disability. Emerging research can help us fill the substantial knowledge gaps that still remain.

Nathan Kline has been at the cutting edge of biomedical research for more than 50 years, improving the lives of individuals affected with schizophrenia, Alzheimer’s disease, and other complex neurobiological disorders of the brain.

The clinical wards of Nathan Kline house some of the State’s most difficult to treat and hard-to-place patients. Unique staff have been assembled to treat these individuals and to identify ways to minimize violence and aggression among all hospital inpatients elsewhere in other State psychiatric centers and forensic facilities.

Nathan Kline provides centralized services for other facilities across the State, including administrative and scientific management of clinical laboratories and the provision of pharmacological information to improve prescribing practices.

Disruption of Nathan Kline’s operations would seriously impact psychiatric research at a national level. Nathan Kline serves as a coordinating center for many studies that are conducted at multiple sites nationwide. This would seriously undermine the credibility of New York State’s participation in federally funded multi-centered studies.

Only four years ago, the State invested close to $40 million to renovate the Nathan Kline facility and to outfit its laboratories with state-of-the-art equipment. With that investment, the Institute’s grant portfolio has more than tripled to more than $15 million per year. Nathan Kline’s efforts to bring in additional grant funding depends on its current base of State positions and funding.

The New York Psychiatric Institute is at the forefront of basic and clinical psychiatric research, education, and treatment, both nationally and internationally. NYPI has been a designated clinical mental health research center by the National Institute of Mental Health since 1978. NYPI is also a named diagnostic center for collaborative psychiatric linkage studies in schizophrenia and a major site in the National Human Genome study. Its division of child psychiatry remains nationally prominent in its innovative studies of emotional and mental disorders in young people.

NYPI provides clinical as well as research programs, including treatment for schizophrenia, major depression, eating disorders, anxiety disorders, bipolar disorder, substance abuse, and memory disorders. NYPI’s Child and Adolescent Psychiatric Evaluation Service (CAPES) provides expert consultation to primary care physicians and families with children from 3 to 17 years old who may suffer from behavioral, emotional, and developmental problems. Less than a year old, as of December 2002, CAPES had partnered with 26 pediatricians in all five boroughs and New Jersey, and had evaluated over 150 patients. In addition to psychiatric consultation, children referred to CAPES are guaranteed a free and thorough evaluation comprised of a psychological interview, structured diagnostic assessment, child cognitive screening, and a multifaceted symptom assessment, as well as expert consensus on diagnosis and treatment recommendations

We ask the Legislature to deny the consolidation of Nathan S. Kline and New York State Psychiatric Institutes, and restore $8.2 million in operating funds for this purpose.

Appointing Authority. Both staff and patients will be negatively affected by the proposal to create a single appointing authority. This would transfer control over where employees can be assigned from each individual facility director to the Commissioner of OMH. While some State agencies do control all appointments, reassignments, and transfers centrally, it is our belief that the nature of the therapeutic relationship is unique and demands the protection that comes with local autonomy.

Facility directors are less likely to disrupt long-term staff/patient relationships in order to satisfy a bureaucratic demand for personnel changes. Facility directors are also more responsive to local needs by virtue of being in the community they serve.

It is contradictory to promote the philosophy of community control through the Community Mental Health Reinvestment Act while at the same time proposing the removal of local accountability through this proposal.

This proposal is also unnecessary. Section 78 of the Civil Service Law allows the State to move employees across layoff units in order to move employees where they are needed and to avoid layoffs. It also contains provisions that protect employees’ seniority and give them some choice in the job assignments they are offered. The Governor’s proposal to create regional appointing authorities in OMH is simply a way to get around the employee protections contained in Section 78 of the Civil Service Law. It will allow OMH to hold over employees’ heads the power to reassign them hundreds of miles from their homes without regard to their seniority, which OMH cannot do under current law.

This proposal also points out an inconsistency with the Executive’s positions on what should be negotiated with State employee unions. Last year the Legislature overwhelmingly passed legislation (S2365/A10239) that would require that reassignments be based on seniority in most circumstances. The Governor vetoed that bill on the recommendation of GOER and the Department of Civil Service, who claimed that changes in the reassignment policy must be negotiated rather than legislated. Now the Executive proposes its changes in reassignment policy through legislation rather than negotiation. They cannot have it both ways.

There is nothing more disruptive to an employee than losing their current job and/or changing where they will work. Currently, when such personnel decisions are made there are rules and procedures in place to insure they are made in a fair and objective manner that protects all employees’ seniority and civil service rights. This proposal would allow OMH to target individual employees for reassignment without regard to their seniority, change their layoff unit and change their relative seniority. The Legislature has wisely rejected a similar proposal several times, most recently in 2000. You should do so once again.

Shared Staff and Reinvestment Staff. Similar issues of continuity of treatment and employee dislocation are raised by the treatment of shared staff and reinvestment staff in this proposed budget. Funding for these services is being converted to Aid to Localities and employees will have to transfer to vacant positions at State psychiatric centers and outpatient programs by March 31, 2004.

This proposal requires professional employees to transfer to the psychiatric center that issues their paycheck, but where many, if not most, of these employees have never worked. In many instances their worksite and home are well over an hour away from the psychiatric center. These distances will be even longer if their psychiatric centers close as proposed by the Executive Budget.

These employees provide a wide array of services in the counties where they work. They are found in clinics, emergency psychiatric services, day treatment programs, case management, and residential settings. Shared staff titles include psychologists, psychiatrists, social workers, and nurses, all a valuable part of the county mental health services community. These employees provide services that prevent their clients from needing the compulsory outpatient treatment imposed by Kendra’s Law. Their clients will needlessly suffer from the disruption of their treatment.

The Governor’s local assistance increases will not directly replace all of these employees, particularly in clinics in remote areas. Even with additional funding, counties will undoubtedly have a difficult time hiring replacement staff with this degree of qualification, training, experience, and dedication.

Where counties are able to offer PEF members similar positions, it is clear the counties will not have the resources to compensate these shared staff at a rate comparable to that which they currently receive as employees of the Office of Mental Health. Shared staff will be placed in the distressing position of either accepting a significant reduction in pay and a disruption in seniority and benefits, or abandoning the clients and communities they have served for many years.

To our knowledge, there is nothing in the proposal that requires localities to use the transition funding from the State for mental health purposes. Given the extreme fiscal hardship that many counties are experiencing, it is likely that much of this funding will not actually replace the services currently provided by shared staff. The counties may benefit by a quick influx of cash, but ultimately the mentally ill will suffer most.

We once again ask the Legislature to restore all OMH shared staff positions and reinvestment positions to ensure continuity of care for their clients. The Assembly identifies savings of $16.3 million reflecting the transition of funding to localities. The budget shows an $11.3 million increase in Aid to Localities for this purpose.

The Loss of Salary Enhancements. According to both the Senate and Assembly budget analyses, the OMH budget provides for the elimination of salary enhancements for psychiatrists and nurses. Details of this proposal are not yet available to the public, but may affect certain enhancements already paid to OMH nurses and psychiatrists such as geographic differentials, shift differentials, increased minimum salaries for impracticability to recruit, and/or increased minimum salaries for advanced qualifications. These salary differentials were implemented by the State because it is having a difficult time recruiting and retaining nurses and psychiatrists in OMH facilities, particularly in the New York City Metropolitan and Mid Hudson regions. These recruitment and retention problems still exist as evidenced by the Division of Classification and Compensation’s request to increase these differentials across the State. This request has been stalled in the Division of Budget for over a year. We believe that DOB wants to create pressure to close psychiatric centers by removing salary differentials so they cannot recruit and retain enough staff to meet their accreditation standards and warrant their continued operation. We ask you to stop this scheme by requiring that the Executive provide documentation to the Legislature that there is no longer a recruitment and retention problem for nurses and psychiatrists at the OMH facilities where they want to remove salary enhancements before they are allowed to terminate those enhancements.

The proposed increase in staffing for OMRDD is welcome, but it reflects expansion of services and will not ease the existing widespread problems of short staffing and unsafe working conditions.

The client population in OMRDD has changed significantly over the last decade. Many judges now view OMRDD as the preferred sentencing and/or diversion option for minimally disabled offenders, and it is increasingly being used as a condition of parole from the prison system.

Among these court-committed individuals are highly aggressive adults who cannot live successfully in a community setting. They tend to exhibit unpredictable, explosive behavior, with violence directed towards staff. They show a high frequency of attempting to run away. Such clients are typically streetwise and know how to get and use weapons. They are accustomed to adapting to life on the street. Aggression and violence are an everyday part of their lives. They bring this violence and aggression with them into the institutional environment.

The newly admitted special populations also include pedophiles with documented histories of sexual abuse. They need constant surveillance as they attempt to sexually prey on those around them. They have higher cognitive functioning and will manipulate situations in an effort to groom sexual victims, and are therefore a particular threat to the vulnerable developmentally disabled population. They also pose a high risk of leaving the facility whenever the opportunity arises.

These populations require a more intensive level of staffing and different skills than the traditional developmentally disabled population. This raises questions of security and safety, not only for staff who have not received specific training to care for this type of population, but also for the vulnerable among the OMRDD clients.

OMRDD’s staffing allocation also fails to address the consequences of the State’s frequent role in assisting private sector programs that are unable to continue to provide services due to mismanagement, fiscal insolvency, or fraud. Occasionally the State has taken the extreme measure of taking over an entire program, but more commonly the State acts to assist in the takeover of one private sector operation by another. This typically involves a multi-month effort on the part of staff to step in and clean up the program, providing services in the interim. This is a tremendous drain on State-operated programs, diverting staff from programs that are already suffering from the strains of understaffing.

Institute for Basic Research. The shortsighted proposal to close the Institute for Basic Research on July 1, 2003, will not only cut short critical research in developmental disabilities and neurological disorders, but will deprive more than 2,000 families of vitally important clinical services. The 207 employees of IBR provide services that are irreplaceable within New York’s health care system.

On an annual basis, the soon to be eliminated clinical services include: more than 3,000 evaluations for children and adults with mental retardation and other developmental disabilities; evaluations of nearly 300 families with autistic children; about 1,000 comprehensive evaluations, including genetic, neurology, psychiatry, psychology and electrophysiology, for indigent children with special needs; treatment of more than 2,000 patients with epileptic seizures from New York City and the tri-state area; and genetic services for more than 600 families. IBR’s Fragile X Center is the only center of its kind in the Northeast providing families with annual comprehensive evaluations for fragile X syndrome, the major inherited cause of mental retardation. In the past 12 years, more than 10,000 neurobehavioral and neurofunctional assessments of over 4,000 premature and at-risk newborns and infants have been conducted at IBR to facilitate early diagnosis and intervention.

Research staff at IBR have earned international recognition for discoveries that help prevent mental retardation. They are responsible for the discovery of the genetic Phenylketonuria (PKU), a cause of severe mental retardation, and the subsequent development of a special diet that prevents or alleviates mental retardation in individuals affected by PKU. In New York alone, 20 to 27 new PKU cases are prevented each year, saving millions of dollars annually in lifetime care over the last two decades. This finding led to the development of newborn screening programs now universally used to detect PKU and other genetically determined diseases. IBR scientists first developed tests for fragile X syndrome, the most common inherited cause of mental retardation. IBR scientists have developed the first non-invasive test for Batten Disease, a group of rare genetic neurodegenerative disorders, and a test to detect chronic alcohol use in pregnant women.

Ongoing research efforts include a multi-center trial of vitamin E in Down syndrome to prevent dementia, and treatment of late-infantile neuronal ceroid lipofuscinosis, a fatal neurodegenerative disorder. Collaborative efforts with the College of Staten Island include research covering infant development; social development; applied behavior analysis; studies of perception; molecular genetics; cell, molecular, and developmental biology; transplantation studies; experimental neuropathology; neuroimmunology; and neurochemistry. Staff at IBR’s Center for Trace Element Studies and Environmental Neurotoxicology are also conducting research on various aspects of the possible role of environmental agents in causing birth defects and neurodegenerative disease. The future benefits of all of this research would undoubtedly be lost, as the private sector will not support programs such as these because they are unlikely to yield a profit.

Closure of IBR also threatens the education of students in the Center for Developmental Neuroscience. Doctoral and Master’s Degree students are participating in interdisciplinary research leading to improved diagnostic techniques and new treatment methods in autism, Alzheimer’s, Parkinson’s, mental retardation, and other disorders.

The economic impact of the closure has been overlooked. IBR is the sixth largest employer in Staten Island. This area was disproportionately hurt by the World Trade Center bombings and has an unemployment rate of 6.4%. The $7 to $9 million generated annually in grants from the National Institutes of Health support an additional 130 Research Foundation jobs that will be jeopardized. In addition to lost jobs and revenues, the cost of dismantling IBR will be enormous because of stringent OSHA regulations dictating proper disposal of scientific equipment, chemicals, and specimens.

We ask the Legislature to reject the proposal to close the Institute for Basic Research, and restore $11.8 million in operating funds for this purpose.

Youth Opportunity Program. The Executive Budget once again calls for the elimination of the Youth Opportunity Program. PEF’s concern for maintaining this program goes beyond the restoration of the 13 Youth Program Supervisor positions that would be eliminated. Since it was established by the Legislature in 1967, the Youth Opportunity Program has helped economically disadvantaged and at-risk high school students stay in school and experience “real life” work at OMRDD and OMH facilities. Over 90% of participating students are minorities. Students are provided work experience, support services, and basic life skills training while serving OMRDD and OMH consumers in a structured work environment.

Since its inception, over 19,000 students have participated in the Youth Opportunity Program. Ninety-five percent of these students successfully graduated from high school. In the last five years, over 60% have gone on to college; a sizeable percentage of these students majored in health and human services fields.

Eighty-five percent of the SFY 2001-02 participants who were seniors last year graduated from high school. Over 87% of these graduates went to college after leaving the program. More than half of these students planned to major in health or human services fields.

There are currently 220 students participating in the YOP. These students come from high schools throughout the State, including Binghamton, Elmira, Newburgh, Poughkeepsie, Rome, Staten Island, Syracuse, NYC, and Long Island. Each year students spend thousands of hours working with consumers. They work in OMRDD community residences, Intermediate Care Facilities, nursing units, and Developmental Services Offices as well as in OMH State Operated Community Residences, Residential Care Centers for Adults, and Psychiatric Centers. They also get hands-on research experience at the Institute for Behavioral Research and the New York Psychiatric Institute.

Many YOP students continue to work in the mental health/mental retardation field. Many recent YOP graduates have taken the Developmental Aide exams, and many currently work for public and private agencies while they attend college.

Preserving YOP funding will continue to provide at-risk students with a reason to stay in school as well as the skills needed to proceed to college and worthwhile employment. It will allow these students to enhance the lives of the mentally retarded, developmentally disabled, and mentally ill consumers whose treatment they assist. Furthermore, in this time of difficulty in recruitment and retention of health care staff, it will continue to generate skilled workers for the future. The Legislature has rejected this proposal several times, most recently in 2002. It should reject it once again and restore $1.3 million to OMRDD’s budget.

SUNY Hospitals. The Executive Budget once again includes a proposal to privatize the SUNY hospitals. Only this time it is done in a backhanded way. The privatization itself is not formally proposed. The Executive Budget simply includes a proposal to give the SUNY Board of Trustees the authority to do it without legislative approval. Members of the Assembly and Senators, you know as well as I do that once they have that authority, it is not a question of “if” but rather of question of “when.”

This concept has been dormant since the SFY 2000-01 Executive Budget. At that time it was noted that “the fiscal challenges facing the SUNY hospitals are further exacerbated by the operational inflexibility caused by the State agency status.” The 2000-01 budget further noted that “A nationally recognized health care consulting firm has been engaged to assess the current finances of SUNY’s teaching hospitals and recommended short-term and long-term actions needed to maintain their fiscal viability in today’s changing health care environment.”

The PriceWaterhouseCoopers study of the SUNY hospitals’ financial health identified the cause of the hospitals’ financial problem. It found that the problem was caused by the State increasing the assessment on SUNY hospitals by over $66 million annually, from $50.1 million in SFY 1995-96 to $116.2 million in SFY 1996-97, with additional increases every fiscal year thereafter. The report confirms that SUNY Hospitals operate more efficiently than 75% of their academic peers and have both good market position and programmatic potential. They are, however, operating in a rapidly changing market place brought on in part by changes made by the State and federal governments that led to reduced payments to the hospitals and a greater number of patients receiving managed care. In fact, the Executive Budget’s Medicaid proposals may exacerbate the financial strain on the SUNY Hospitals whether or not they are privatized

The SUNY teaching hospitals are an important part of SUNY’s educational mission because education and research in the health sciences are an integral part of SUNY’s mission. Such vital elements must not be left to the private sector. Privatization would also have a dramatic impact on employees because they would lose their status as State employees. This would mean the loss of pension rights and contractual and Civil Service Law protections.

If there are significant problems at the SUNY hospitals, let us all hear what they are and let’s fix them by legislation while preserving their educational mission.

There are no savings associated with this proposal in the Executive Budget. The Legislature should not allow the Executive to diminish its authority and circumvent open debate on the governance of the SUNY hospitals. You should reject the Executive Budget proposal to authorize the SUNY Board of Trustees to transfer the SUNY hospitals to the private sector.

The Executive Budget proposes privatizing the Youth Facilities program in the Office of Children and Family Services. The first step is to start sending these children into community-based not-for-profit providers.

These privately run programs will, according to the Executive Budget, provide services ranging from family-based counseling to specialized after-school programs. The Executive Budget claims that these programs will reduce recidivism rates and, coupled with a reported declining population, result in 250 fewer beds in the secure facilities.

We are not opposed to the provision of these programs. We are opposed to using these programs as a rationale to claim a reduction in beds. PEF has been advocating for years to have the teacher/student ratios at the secure facilities decreased. In 1990 the ratio was 1:8. Since then it has gone to 1:14 and efforts have been made to push it to 1:16. At the same time the student/teacher ratio was rising and so were the number of youths entering OCFS custody with serious problems. Between 1990 and 1998 the following occurred:

Tremendous increases in the number of youth in OCFS custody with serious problems make it more difficult to teach, counsel and rehabilitate them. Increasing funding and reducing the student/teacher ratio will definitely reduce recidivism rates. It is also well known that youth crime rates generally increase during a recession due to the increase in the number of economically deprived children in our population. We are in a recession and the number of economically deprived children in this State and in the country is projected to significantly increase over the next ten years. This is not the time to permanently reduce OCFS’s secure bed capacity; we may need those beds sooner than the Executive expects.

It is very difficult to improve the lives of adolescents with serious health, mental health, and learning problems, particularly when they have been involved in serious crimes. These youth need to get help while they are in OCFS custody. If not, they will most likely continue or amplify their serious criminal activity upon their release from OCFS. Privatization will increase juvenile delinquency rather than prevent it. Family counseling and after-school programs are not the answer. We need more teachers and counselors at OCFS facilities if we are to truly prevent delinquency and rehabilitate troubled youth.

The Executive Budget claims that the reduction of 250 secure beds will save the State $11.6 million. However, the services provided by these secure facilities cannot be replaced by community-based programs. Community-based programs should be used to complement services provided in the secure facilities, not supplant them.

The Executive Budget also proposes to explore the privatization of the remaining facilities by SFY 2005-06. This is a frightening prospect. The record of privately operated correctional and youth facilities across the country is a dismal mix of incompetence and corruption.

PEF urges the Legislature to reject the Governor’s proposal to privatize OCFS’s youth facilities program and permanently reduce its bed capacity.

The Executive Budget continues to ignores one key area in which everyone agrees that savings can be found: transportation. By any objective measure, the greatest value in transportation maintenance is found in the State workforce. Multiple bi-partisan studies spanning significant periods of time confirm the fact that State-employed engineers cost significantly less than private sector consultants. Studies by State Comptrollers Regan and McCall both concluded that tens if not hundreds of millions of dollars can be made available for actual highway and bridge projects simply by hiring more Department of Transportation engineers while reducing the Department’s reliance on costly consulting engineers.

Regrettably, the current budget once again ignores these studies and seeks to achieve budgetary savings by reducing the number of State-employed engineers, rather than reducing the State’s reliance on costly engineering consultants. In fact, according to the Assembly’s analysis, the Executive Budget anticipates achieving the entire $53 million in savings by reducing the DOT workforce by another 523 positions, for a two-year total reduction of over 1,000 positions. Since almost 800 of these positions are in the Design and Construction program, it appears that most of them are engineering positions.

The loss of in-house engineering services has a negative impact on the budget as well as road and bridge construction projects. Recently, the Commissioner of Transportation acknowledged that it costs less to perform routine engineering services in-house, yet he must use more costly consultant engineers because he does not have enough in-house resources. Clearly, this reliance on expensive consultant engineers is a direct result of ongoing reduction of DOT engineering staff. As more road construction projects require the services of expensive consulting engineers, there is less money available to spend on actual transportation projects.

In order to meet the challenges of the current fiscal realities faced by New York State, we need common-sense solutions. The Executive Budget speaks of “working smarter” and more “cost-effectively.” The Executive Budget seeks to identify “logical and cost-effective opportunities for the private sector to assume certain government functions.” In this case, the logical, cost-effective, common sense solution is to have DOT perform more in-house engineering services, not fewer.

Significant savings can be achieved at DOT. However, it requires more DOT engineers, not fewer. To this end, we urge the Legislature to adopt this common-sense approach and ensure that there is adequate funding to restore 800 engineering positions at DOT. This can be done by either restoring the $53 million cut to capital projects or providing language that requires that a greater portion of the capital project appropriations are used to support in-house engineering positions rather than costly consultant engineers.

The Executive Budget proposal will have a significant impact on environmental issues important to the citizens of New York State and the future quality of our environment. Unfortunately, the budget impact will mostly be negative as continued understaffing of important functions will greatly inhibit the Department’s ability to monitor the quality of our air and water, its ability to ensure compliance with environmental mandates, and its ability to ensure the timely remediation of hazardous waste sites.

The Executive Budget anticipates a decrease of 234 FTEs from the current staffing levels. This represents a two-year reduction of 419 positions. A position reduction of this magnitude which results in the continued understaffing of quality programs significantly diminishes the Department’s ability to protect our State’s environmental resources.

For example, inspection and monitoring are essential to the protection of water quality. Both of these components have been and will continue to be compromised as staff and funding continue to be reduced. These reductions, in combination with the addition of new mandates such as Stormwater and Concentrated Animal Feed Operations (CAFO), stretch staff to the point that no project is given the time and attention it needs to be successful. It is important that staffing levels are maintained because mandates such as Stormwater and CAFO are designed to track and address various pollutants that damage our drinking and recreational waters. Understaffing of these programs is ill advised, since the need for comprehensive compliance and ambient monitoring programs becomes more important as the threat to the State’s water quality increases with the aging of the State’s treatment plants and the increased frequency of plant failures.

Moreover, assessment reporting is critical to the protection of the State’s waters and the health and safety of its citizens. For example, Division of Water field staff collects data used to support assessments and issues of compliance. At current staffing levels, monitoring for the 2003 sampling year will be seriously compromised, sites will be eliminated, and frequency of assessment will be reduced. With gaps in sampling years, it will be impossible to conduct trend analysis, and the mandate of characterizing water quality in the major river basins of the State will not be met. Compliance monitoring and inspections of point sources will also be reduced or eliminated in most if not all regions of the State.

While the examples here are specific to the Division of Water, the continued understaffing of all program areas will have a similar programmatic and environmental impact. Therefore, in order to maintain adequate staffing levels and ensure the future purity of our air, water, and land, the Legislature must restore $8.6 million in general fund personal service appropriations.

Additionally, the Legislature must refinance the Superfund with at least $138 million in support of the recommendations of the Superfund Working Group. This funding is important to the identification and remediation of hazardous waste sites. We are concerned that the historical dispute over reauthorizing the Superfund will hamper the important staff work that needs to be done to ensure these sites are properly remediated. A quick resolution of this dispute with adequate funding and standards is necessary to ensure that the Superfund staff can continue to protect the public from the dangers posed by these hazardous waste sites.

The Executive Budget, once again, proposes to transfer the State Library, Archives, and Museum from the State Department of Education (SED) to the Council on the Arts. The Budget again proposes that they become the newly created public benefit corporation New York State Institute for Cultural Education (NYICE). NYICE will have “as its sole focus the promotion of New York’s cultural resources.”

While PEF certainly supports the arts in New York, we remain concerned about the “sole focus” of the State Library, Archives, and Museum being cultural promotion. These are educational institutions. They should remain educational institutions.

In the past, the Governor has claimed that these important institutions did not receive adequate funding from the Regents. Others have claimed that it is the Division of Budget, which the Governor does control, that has under-funded these vital institutions, not the Regents.

The State Library is the largest of its kind in the nation, providing reference information and other library services to State agencies, businesses, and the public. It also charters all libraries in the State and distributes State and Federal aid to local libraries. It serves as a “back-up” to all of the libraries in the State and provides them with guidance on what books to carry. The State Library is able to do this based on its complete knowledge of the requirements of school districts throughout the State.

The State Museum is a major research center and home to the Geological Survey, Biological Survey, Anthropological Survey, and Historical Survey.

We believe that all three are very successful, very valuable educational institutions. These institutions provide valuable services to many New Yorkers, not related to cultural promotion but related to learning. As such, they should remain in the State Education Department.

The Executive Budget includes a savings of $2 million in this program. It is unclear if this savings is a result of the transfer or is just a cut in funding. Therefore, it is possible that this savings would be realized if the Museum, Library and Archives remain in the State Education Department. There is also mention in the Executive Budget about using an existing surcharge for the recording, indexing, and certifying of documents by county clerks as the funding source for NYICE. It is not clear what programs are currently supported by this funding stream.

The Legislature wisely rejected a less radical proposal last year and should do so again.

Special Education Funding. The Executive Budget proposes a change in funding for the costs of educating children with serious disabilities who are placed in residential special education programs. This proposal would shift costs to school districts and could discourage school districts from making the most educationally appropriate placement decisions. This could have a negative impact on special education students and on specialized programs such as the State School for the Blind in Batavia and the School for the Deaf in Rome.

The Executive Budget proposes increasing the share employees and retirees pay for health insurance. In order to make this change for PEF members, the State will have to negotiate it as a part of our contract negotiations Retirees are afforded no such opportunity to bargain.

A retiree who retired after January 1, 1983 will have their share of the health insurance premium for the Empire Plan increased from 10 percent to 15 percent for family coverage and from 25 percent to 30 percent for family coverage. The same will be true for anyone who retires prior to January 1, 2004.

After January 1, 2004, the bottom drops out from under retirees. The State will provide a 50 percent benefit for the first ten years of services and 1.75 percent for every year thereafter up to a cap of 85 percent for individual and 70 percent for family coverage. This means that a State employee who retires with 20 years of services will have to pay 32.5 percent of their health insurance premium.

This is an incredible burden on a group of people who can least afford it. Retirees can’t afford these kinds of premiums. Long-term employees and retirees who committed their careers to the State rely on these benefits. The State must not break its commitment to them.

The Executive Budget claims a savings of $27.3 million in fiscal year 2003-04 and $114 million per year thereafter. The Legislature should reject this proposal that would make retirees bear the burden of the State’s deficit.

The Executive Budget proposes legislation that authorizes the Division of Parole to grant a merit termination of sentence to certain non-violent parolees and conditional or presumptive releasees who have served at least one year on parole supervision, provided that they have not been convicted of any new offense or engaged in any behavior that is deemed a significant violation of the conditions under which they were released. Non-violent felony offenders convicted of an A felony defined in Article 220 of the Penal Law will be eligible for merit termination of sentence after 2 years on parole supervision and non-violent offenders convicted of a B, C, D, or E felony will be eligible after 1 year. The Board of Parole is authorized to grant an absolute discharge from parole or conditional release when the parolee or conditional releasee has been on unrevoked community supervision for a period of at least 3 consecutive years, release is in the best interest of society, and the releasee has no pending restitution matters. The Division of Budget estimates that this bill will result in the merit termination of sentence of 3,100 releasees and achieve an annual cost savings of $1.6 million.

The Executive justices this proposal by claiming that studies have shown that the number of arrests and parole violations decrease dramatically for non-violent parolees who successfully serve one year of parole. That is true. Unfortunately, the Executive does not tell you the complete findings of these studies. These same studies found that the criminal activity of parolees spikes upward after their parole supervision is terminated. That is why they remain on parole. A fiscal crisis is no excuse for endangering community safety. We ask the Legislature to reject this unwise proposal to terminate parole supervision for non-violent parolees.

The Governor claims that he must propose an Executive Budget with this level of cuts because we are in a crisis. He claims that we have to deal with unprecedented deficits. It is clear that the Executive Budget closes the SFY 2002-03 and SFY 2003-04 deficits mostly through spending cuts and one-shot revenues like the tobacco securitization proposal. While the Executive Budget does raise $1.4 billion in revenues, it does so by raising regressive taxes like the sales tax and fees that put a greater burden on working families who already pay more than their fair share of State and local taxes. According to the Institute on Taxation and Economic Policy, in 2002 all New York’s non-elderly taxpayers paid about 12% of their income in State and local taxes except the wealthiest New Yorkers, who make $634,000 or more a year and pay only 6.5% of their income in State and local taxes. The Executive Budget will exacerbate this gap rather than close it. According to the New York State School Board’s Association and NYSUT, property taxes will increase by an average of at least 13% to 15% in most school districts throughout the State.

The fact that New York’s large and profitable corporations are not asked to pay their fair share of the State’s fiscal burden is illustrated by the Executive Budget’s Financial Plan projections that business taxes will only go up $160 million in SFY 2003-04, and that is largely due to a restructuring of the insurance tax. Since 1977, New York’s corporations’ contribution to State revenues has decreased from 10% to less than 4%.

Instead, the proposed budget has chosen to rely on two of the most regressive taxes we have in New York. It reinstates most of the sales tax on clothing and will increase property taxes by making drastic cuts in local government and school aid. As stated above, low and middle-income families already pay a higher percentage of their income in taxes than New York’s wealthiest families do because they bear the brunt of sales and property taxes. Sadly, this budget makes this gap even wider.

In summary, we ask the Legislature to make the following changes and restorations to the Executive Budget: