Mental Health Association in New York State

April 13, 2006

VETOES, LOTS OF VETOES: Yesterday, as had been widely predicted, Governor Pataki finished issuing vetoes on several areas of the budget agreement passed by the Assembly and Senate, which included between $2 and $5 billion more than the Governor had provided for in his budget proposal.

Following is a list of the Governor’s vetoes that effect the mental health community:

Language changing the way in which the 2.5% Cost of Living Adjustment (COLA) would be implemented, specifically articulating that only direct care staff was eligible for the COLA. There still will be a 2.5% COLA implemented as the Governor provided for in his budget proposal.
$3,335,000 that the Legislature provided to restore programs impacted by the $7.7M cut to Local Assistance funding in the 2004-05 budget. If this veto is final, programs that received cuts two years ago will not be restored.
$130,600,000 that the Legislature provided to extend the Governor’s proposed Medicaid wrap-around to ensure that dual eligibles enrolled in a Medicare Part D plan would not be out-rightly denied medications if difficulty in accessing a drug was experienced with the Part D plan. If this veto is final, the Medicaid wrap around will continue until July 1, 2006, not January 14, 2007 as the Legislature’s agreement called for.
$2,000,000 that the Legislature provided to help with plan selection and assistance in navigating Medicare Part D.
$36,800,000 that the Legislature provided to ensure that physicians have the final say in determining which medication a Medicaid recipient shall receive, which was part of the agreement that brought about the Preferred Drug Program in Medicaid last year. If this veto is final, physicians will not have the final say.
$18,700,000 that the Legislature provided to ensure that cost would not be a factor in determining which drugs were placed on the list of ‘preferred’ medications in the Preferred Drug Program’s Clinical Drug Review Program. If this veto is final, drugs that are more costly (possibly including mental health drugs) could be restricted for Medicaid recipients.
$810,000 for 55 scattered site supported housing apartments to be made available to Adult Home residents living with psychiatric disabilities.
$500,000 the Legislature provided for a state increase in the SSI rate for Adult Home residents, which would then be linked to the Consumer Price Index. If this veto stands, there will be no additional SSI increases for Adult Home residents.
$5,200,000 that the Legislature provided to continue to operate Camp Pharsalia DOCS facility, instead of transferring it to the Office of Mental Health for purposes of establishing a facility to civilly commit sexual offenders.
$4,400,000 that the Legislature provided to reimburse providers of transportation services to Medicaid eligible individuals.
$500,000 that the Legislature provided to prevent individuals enrolled in Family Health Plus from being denied services due to an inability to pay the co-pay.
$21,400,000 that the Legislature provided to continue to make Family Health Plus available to people working for employers with more than 100 employees. If this veto stands, individuals working for employers with more than 100 employees will not be able to participate in Family Health Plus.
$10,200,000 that the Legislature provided to allow individuals enrolled in Medicaid or Family Health Plus to keep their eligibility up to 6 months, rather than being kicked off immediately and being forced to go through the application process all over again, which can be quite lengthy.
$850,000 for additional supported housing units, mostly in Upstate NY.
$1,000,000 for family support services.
$500,000 for 2 pilot projects to address the transitional housing needs of children.
$200,000 for telepsychiatry to better handle mental health needs in rural areas.
$500,000 for positions at Nathan Kline Institute for Psychiatric Research.
$500,000 for positions at NYS Psychiatric Institute.

The Governor used two separate justifications in issuing the vetoes listed above. The first is the justification he has used in previous years, in which he claims such appropriations will “adversely impact the State’s capacity to maintain a properly balanced budget, provide for adequate fiscal reserves and ensure manageable out-year budget gaps.”

The second justification the Governor articulates for vetoing portions of the budget is based on a State Court of Appeals decision a few years ago which found that the Legislature has only limited authority to alter the Governor’s appropriation bills, leaving them with the authority to alter the language that stipulates how such appropriations are to be spent (Article VII bills). Therefore, other vetoes are accompanied by a justification that states that some items, “represent an unconstitutional alteration of an appropriation contained in the Executive Budget submission and is therefore disapproved.” In these cases, the Governor claims that his vetoes issued on a basis of unconstitutionality are not subject to a veto override by the Legislature.

The veto of funding for the $3.335 million in Local Assistance restorations and other mental health initiatives, were vetoed for the first reason mentioned above. If these vetoes were to be overridden by the Legislature, these funding restorations would take effect immediately. However, for the programs and initiatives related to Medicaid and Family Health Plus, including the vetoes of the Medicaid wrap around and the Preferred Drug Program changes, were vetoed for the unconstitutional reason.

While we expect that the Legislature will attempt overrides of the funding vetoed not for unconstitutional reasons, it remains very unclear what, if anything, will happen with regard to the vetoes issued based on the unconstitutional reasoning. Perhaps we may see the Legislature attempt to override the Governor on these issues vetoes as well, which would likely drag this budget battle into court for many years.

Presently, Silver v. Pataki is winding its way through the court system, which challenges the Governor’s ability to include implementation language in appropriation bills (thus making it untouchable by the Legislature). If the outcome of this case favors the Legislature, the vetoes that the Governor issues on grounds of unconstitutionality would then be constitutional.

In summary, most of the vetoes related to mental health (e.g. $3.335 million in Local Assistance restorations) can be overridden by a 2/3rds vote of both the Assembly and Senate. Other vetoes in the health arena including the ‘physician prevails’ language in the PDP and the Medicaid wrap around for dual eligibles enrolled in Medicare Part D will likely be challenged in court if overridden by the Legislature.

Essentially, while not due to the delinquency of the budget, NYS’s budget is once again in uncharted waters. What is unfortunate is that the budget process will likely occupy the attention of the Legislature, preventing them from focusing on other matters, such as Timothy’s Law.

Stay tuned as we will likely work to ramp up grassroots support next week to urge the Legislature to override the Governor’s vetoes when they return to Albany on April 24th after the Passover/Easter break.

IN THE NEWS:

Governor Vetoes Albany Spending and Tax Breaks. By Danny Hakim
The New York Times, April 13, 2006

ALBANY, April 12 — Gov. George E. Pataki has vetoed nearly $3 billion worth of tax cuts and spending initiatives from the Legislature's budget, saying on Wednesday that they would lead to irresponsible future deficits.

In the current fiscal year, his vetoes of tax cuts worth more than $1 billion struck down rebate checks for property owners, a new child tax credit and the elimination of a tax provision felt by married couples. His spending cuts included $650 million from Medicaid alone and $500 million from the State University of New York.

Mr. Pataki's 202 separate vetoes were a striking exercise of power by a lame-duck Republican governor considering a future in national politics, and they suggested that he was trying to establish an image of fiscal conservatism in his final year in office. [News analysis, Page B7.]

Yet his wholesale rejection of the Legislature's tax cuts has enraged fellow Republicans in the Senate.

"I cannot believe he's vetoed something like $4 billion in tax cuts," said Joseph L. Bruno, the Senate majority leader, referring to the value of the Legislature's tax cut packages over two years. "I can't for the life of me understand what he's doing."

Mr. Pataki issued the vetoes after lawmakers rejected his more limited tax cut plan, and he was emboldened by a recent court ruling establishing the administration's vast powers over the state budget, which is now at $112.8 billion. In fact, Mr. Pataki's actions set the stage for a potentially bruising legal fight with the Legislature that could leave the final shape of the budget in doubt for months.

The governor maintains that courts have established that the Legislature does not have the power to override most of his vetoes. Legislative leaders sharply disagree, and a prominent health workers' union and a hospital association have threatened to sue over the Medicaid cuts.

Mr. Pataki did not rule out negotiating further with the Legislature and possibly amending the budget in the coming months, though communications between the sides are increasingly fractious. Lawmakers will certainly try to override many of the vetoes, although the administration appears poised to battle some overrides in court.

The governor appeared ready for any outcome.

"I've been sued so many times," he said at a news conference on Wednesday when asked about the possibility. "I expect that there will be more."

"These are vetoes that I would have preferred not to have to make," he said, adding that the Legislature's budget created "fiscal difficulties, very real ones for this state."

Assembly Speaker Sheldon Silver, Mr. Pataki's chief Democratic antagonist in the Legislature, said he did not concede the governor's contention that lawmakers could not override him. He has repeatedly referred to Mr. Pataki as "the governor of technicalities" for finding legal problems with the Legislature's budget as justification for his vetoes.

Under the recent court ruling, the Legislature cannot alter the language of the governor's budget proposals, only specific appropriations. As a result, lawmakers are limited in making substantive changes to the governor's budget.

Mr. Silver appeared to come out better than Mr. Bruno in the budget battle. The governor did not veto the $11.2 billion bonding plan to finance construction of New York City schools, which has been the top priority of Mr. Silver, who represents Lower Manhattan. Senate Republicans, on the other hand, saw the governor veto their main priority, the property tax rebate checks that would have been mailed shortly before the November election. Those rebates were considered a way to please the Senate Republicans' upstate base and hold on to their majority.

Mr. Pataki's vetoes began shortly before midnight Monday and continued into Wednesday afternoon.

In reinstating $650 million in cuts to Medicaid that were in his original executive budget, he eliminated the practice by which married couples who normally would not qualify for Medicaid can qualify for benefits for the ailing spouse by transferring their assets to the healthy spouse. He also made it harder for Medicaid recipients to receive prescriptions that are not on the state's preferred drug list. His cuts to Medicaid would be in effect for a year, through next April.

He cut nearly $120 million to tuition assistance programs, halting financial aid payments to college students who default on loans or do not meet more stringent course credit requirements. His $500 million aid cut to SUNY was mostly designated for building improvements.

More than $2 million was cut from Legal Aid programs around the state, as was $19 million earmarked for the Metropolitan Transportation Authority.

Mr. Pataki also vetoed an often-maligned $200 million fund that he and the Legislature have traditionally used for secretive "pork barrel" spending, but he did not veto a similar appropriation used for capital projects.

There were many cuts to such diverse projects as the Staten Island Ferry, a PBS documentary on the Erie Canal and a rabies research center at Cornell University.

Mr. Pataki also blocked a legislative attempt to grab control of more than $150 million collected by utilities each year and used to support energy conservation and clean energy programs in the state. The New York State Energy Research and Development Authority currently selects the projects to be financed by the program, and environmentalists supported keeping the money in the authority's hands and out of the budget process.

It was the governor's veto of the broad package of tax cuts that struck at the heart of the Legislature's budget proposal. Mr. Pataki did not object to all the tax cuts but said he was required to veto the entire package if he wanted to strike any one item.

"The governor's playing political hardball," said Blair Horner, the legislative director of the New York Public Interest Research Group. "This is major league hardball, it's not Triple A, and he has apparently chosen to make this the year he's going to dig in."

The vetoes capped a period of worsening relations between the governor and leaders of the Legislature.

On Wednesday, Mr. Pataki swung back at comments Mr. Silver made Tuesday suggesting the governor would deliberately reveal his vetoes after the beginning of Passover, Wednesday evening. That would have meant that Mr. Silver, an Orthodox Jew, could not respond.

"To me that's extremely disappointing, because I think it's just wrong to challenge somebody doing their job when it's an incredibly difficult job and making some sort of a religious allegation that this is somehow anti-Semitic," Mr. Pataki said. "It is wrong and it is beneath the speaker. He knows that I have gone out of my way to be cognizant of his observation, as I am of all religious peoples' observations."

As it happened, the governor announced his vetoes early in the afternoon Wednesday.

Mr. Silver said he never called the governor anti-Semitic. "That's typical of what this governor is doing," he said. "He doesn't want to talk about substance, he doesn't want to talk about dropping people from health care, he'd rather talk about technicalities and his interpretation of things that were said."

For his part, Mr. Bruno offered a blunt assessment of the state of affairs in an interview on WROW, an Albany radio station.

"The governor is well intentioned, the Assembly is well intentioned, we're well intentioned," he said. "And the road to hell is paved with good intentions."

Anthony DePalma contributed reporting for this article.