KESSEL’S NYPA REIGN:  IT’S ALL ABOUT DINING

Our NYPA correspondents report that C.E.O. Richie Kessel rarely shows up for work at his White Plains office.  On the average, his office appearances are often limited to two half days a week.  The rest of the work week he spends flitting around Long Island and New York City going to luncheons, giving speeches and receiving vanity honors.

Dining plays a very important and expensive role in the lives of Kessel and the hacks on his senior staff.  For instance, NYPA employees have been ordered to pick up food from Manhattan’s Carnegie Deli and from one of Kessel’s favorite Long Island Chinese restaurants to feed Kessel and senior staff at his White Plain’s Executive Management Committee meetings.  In these difficult economic times, it is an outrage that ratepayers’ hard-earned dollars are being wasted on NYPA employees traveling all over the metropolitan region to procure chow for Kessel and his hacks.

There’s more:  Recently received FOIL information from NYPA reveals that Kessel and his staff spend plenty of ratepayers’ money to wine and dine at luncheons and dinners that have nothing to do with NYPA’s mission.  Here’s a very small sampling:

Questions for NYPA Trustees:

1)     Why is NYPA’s CEO permitted to be absent from his White Plain’s work office most of every work week?  Why is he treated differently from every other NYPA employees who must report to their workstations every day?  Why isn’t he disciplined or fired?  Isn’t this theft of service?  What do Kessel’s time sheets say about how he spends his time at the public trough?

2)     Why is Kessel permitted to force NYPA employees to serve as gofers spending their work day picking up food for him?  Doesn’t that sound like what got Alan Hevesi in a heap of trouble?

3)     Why are Kessel and his staff members permitted to squander money on luncheon and dinner events that have nothing to do with NYPA’s mission?

The following appears in the June 17-23, 2011 issue of the Long Island Business News:

It was terrific news for taxpayers when Gov. Andrew Cuomo announced this week that his ethics reform legislation had passed both houses of the state Legislature.

Under the Public Integrity Reform Act, legislators will no longer be policing themselves. A newly structured Joint Commission on Public Ethics will now have oversight jurisdiction over all state elected officials and employees in the executive and legislative branches and registered lobbyists.

The bipartisan commission will have 14 members, six appointed by the governor and eight by the leaders of the Legislature. Because the commission cannot be dominated by one political party, half the appointees must come from a permanent political party that is not that of the governor.

Lobbyists, state-elected officials, state commissioners or leaders of a political party during the previous three years will be ineligible to serve. Also, public ethics commissioners will be prohibited from contributing to candidates for state office during their five-year term of office.

Other provisions of the new law:

• Transparency concerning those who have business within the state: A database will contain the name and affiliation of every person who appears before any state government body.
• Expanded financial disclosure: Elected officials’ financial disclosure forms will require greater details and will be posted on the state’s website. Those filing will now have to report their firm’s clients or customers who do business or are seeking contracts or legislation from the state or are involved in proceedings before the state.
• Registered lobbyists: The new regulations will require lobbyists to report business relations of more than $1,000 with state public officials. Lobbying will also be redefined to include advocacy efforts to “introduce” legislation or resolutions.
• Forfeiture of pensions: Officials who are convicted of crimes related to their public duties may have their pensions forfeited or reduced.

Finally, the Joint Commission will have the authority to investigate potential violation by legislators and their employees. If violations of law have been found to have occurred, the commissioner will report findings to the Legislative Ethics Commission, which will have jurisdiction to impose penalties. The Joint Commission will have the jurisdiction to impose penalties on executive employees and lobbyists.

Why did Cuomo succeed in obtaining genuine ethics reform while his three predecessors failed? Unlike Pataki, Cuomo possesses the drive to pursue legislation with teeth; unlike Spitzer he effectively wields the power of his office; and unlike Paterson, Cuomo is not hapless.

To persuade the Legislature to act, Cuomo waved the most powerful weapon in his arsenal: a Moreland Commission. (Readers will recall that this writer in the pages of LIBN called for the appointment of a Moreland Commission to investigate the Legislature well over a year ago.)

The Moreland Commission vests the governor with unilateral authority to create an investigative commission with power to issue subpoenas and take testimony under oath, to document waste, mismanagement, corruption, fraud or wrongdoing. It is funded with money already appropriated in the executive chamber budget.

The very threat of empanelling a Moreland Commission was, in my judgment, too much for members of the Legislature whose chambers have been deemed the most dysfunctional in the nation by the Brennan Center at New York University.

In recent years, the state Legislature has become a rogue’s gallery. Too many have been caught stealing, abusing power as well as engaging in other unsavory behaviors. The Public Integrity Reform Act will begin the process of rehabilitating Albany and restoring the fundamental tenet that state government exists to serve taxpayers and not special interest groups.

The following appears in the June 3-9, 2011 issue of the Long Island Business News:

As this year’s session of the state Legislature draws to a close, Albany has been inundated by busloads of special interest groups protesting program cuts, possible layoffs, etc. The constant hue and cry: Since government subsidies are sacrosanct, raise taxes on the rich – those making over $200,000 a year – to maintain and increase funding levels.

What these protesters fail to grasp is that every year tens of thousands of New York’s highest earners are bolting because they are tired of their wallets picked to finance bloated state and local budgets. New York has had the largest net domestic migration of any state – 1.7 million walked out since 1998.

A study by the Manhattan Institute that measured the impact of large income-tax increases on the wealthy in Connecticut, New Jersey and New York concluded that in the aftermath of tax hikes there were significant reductions in the number of well-off people who paid taxes in those states. The report also found that 75 percent of the loss of New York’s tax revenue in 2008-2009 was the “result of reduced income tax payments by rich people.”

New York cannot afford to be hostile to its top earners because its treasury is dependent on their tax revenue. The top 1 percent of earners pays 41 percent of the total state taxes.

In the Big Apple, where the combined state and city income tax is 12.62 percent – the highest burden in the nation – the top 1 percent pays 51 percent of total income taxes. Of the city’s 4 million households, 40,000 are responsible for more than half the tax revenue.

If only 5,000 of those families – many of whom own second homes in low-tax states – change their legal residences, the city’s tax base would be wrecked.

Tom Golisano is a classic example of a frustrated taxpayer. The co-owner of the Buffalo Sabres and founder of Paychex who created thousands of jobs in the Empire State announced in 2009 he was pulling up stakes and moving down south. “I love New York.  But how much should it cost to call New York home?” he asked. “Decades of out-of-control budgets, spending hikes and relentless borrowing have made New York simply too expensive.… Politicians like to talk about incentives … to relocate…. I have identified the most compelling incentive of all: a major tax break immediately available to all New Yorkers. To be eligible you need do only one thing: move out of New York state.” Golisano claimed he is saving at least $5 million a year by changing his residence to Florida.

Reacting to such announcements, Mayor Michael Bloomberg has declared, “Unless we make this an attractive state to do business in and to live in people are going to continue to move out. We have to reverse the trend.”

If the state’s entitlement crowd and their lackeys in the Legislature don’t abandon their “soak-the-rich” ideology, the geese that lay the golden eggs will continue to flee, New York’s economic prospects will continue to decline and the red ink in Albany will continue to flow.

That is why Gov. Andrew Cuomo and Majority Leader Dean Skelos’ pledge to allow the so-called millionaire’s tax to expire is so important.

RICHIE KESSEL:  POSTER BOY FOR ETHICS REFORM

One day when historians of New York State look back on the 20th century, they may debate who was the most and least effective Governors, most corrupt legislator and best Senate Majority Leader and shrewdest Assembly Speaker.  But it is likely there will be little debate as to the most investigated State official in the last 30 years:  Richie Kessel. To give Kessel’s legacy its due, let’s recognize that Kessel has been investigated during the Pataki, Spitzer, Paterson and Cuomo Administrations.

Whether at LIPA or NYPA, the one constant has been investigations of Kessel.  Even now as his inglorious career lurches to its long overdue denouement, Kessel is being investigated simultaneously for potentially unethical behavior at two separate State authorities.  Street Corner Conservative believes this achievement is unprecedented in the history of the Empire State.  Indeed, it is possible that when Kessel takes his leave of State service he will remain under investigation by the Cuomo Administration Inspector General for his actions at two separate authorities in two decades.

Lest future generations not recognize Kessel’s lifetime achievements in ethical investigations, Street Corner points out that Kessel was previously investigated by a Democratic Comptroller for his actions at LIPA and received well-deserved criticism for bypassing its own bidding requirements when it paid a Republican consulting firm $45 thousand to conduct “political polls.”  Later, he was investigated by the Inspector General in the Paterson Administration.

Since Kessel partisans may claim their benefactor was a victim of partisan politics, it is critical to note that each of the four investigations was undertaken by a Democratic official.

While the State Legislature considers the Governor’s much needed ethics reform bill in the closing days of this legislative session, I call upon the NYPA board to investigate promptly the following Kessel issues:

1)  whether at Kessel’s direction health insurance was improperly provided to a NYPA trustee;

2)  whether Kessel improperly sole sourced any of the scores of such contracts;

3)  whether donations to Long Island organizations of hundreds of thousands of dollars were improper because they were unrelated to NYPA’s mission; and

4)  whether Kessel violated any State laws, including the various public authority reform acts, regulations and NYPA policies.

 The following appears in the May 20-26, 2011 issue of the Long Island Business News:

The verdict is in from the Washington, D.C. think tank, the Tax Foundation: out of 1,823 counties with populations over 20,000, Nassau ranks No. 1 in median home property taxes, edging out New York’s wealthiest county, Westchester, where median home prices are over 13 percent higher – $562,000 versus $494,000. Sadly, the 10 counties with the highest property taxes are either in New York or neighboring New Jersey and 12 of New York’s 62 counties are in the top 100. This helps explain why people in both states are voting with their feet and seeking job opportunities in the low tax/ high employment southern and southwestern parts of the nation.

These depressing findings make it all the more imperative that Gov. Andrew Cuomo’s property tax-cap legislation be signed into law.

Cuomo’s bill calls for capping increases in annual local property tax levies to no more than 2 percent or the rate of inflation, whichever is less. To push the levy above the cap, two-thirds of local municipal governing bodies would have to vote yea. In school districts, which comprise over 60 percent of the property tax burden outside of New York City, the support of 60 percent of ballot-box voters would be required.

Cuomo’s bill is particularly tough on school districts. The annual school budget vote will be eliminated. Taxpayers would vote, instead, on the proposed tax levy. A 51 percent majority would be required for any tax increase below the cap but 60 percent if it is higher. If the school district voters reject the proposed higher tax twice, there would be no increase; taxes would be frozen at the previous year’s levy.

The cap would force schools to watch every dollar, to implement efficiencies and to streamline bureaucracies. It would also force Albany to come to terms with burdensome and expensive unfunded state mandates. The Taylor Law would have to be reformed to restore leverage in contract negotiations to management. School districts would need the authority to address the mounting costs of health care benefits for retirees. Also, the state would have to address the spiraling costs of pension contributions and seriously consider implementing portable defined contribution retirement plans for future employees. Finally, capping growth at the lower of 2 percent or inflation will quickly slow school spending if we experience inflation in the years ahead.

The Empire Center for New York State Policy, in a newly published analysis, points out that “Cuomo’s proposed cap is modeled after the most successful tax limitation approach tried in other states –Proposition 2 ½ in Massachusetts. Proposition 2 ½, which allows for voter overrides, has restrained the growth of the tax burden without compromising essential public services. Despite the tax limitation, Massachusetts’ schools rank among the best in the nation.”

The good news is the Republican-controlled Senate passed the governor’s property tax cap in January. However, the Democratic Assembly majority, captives of municipal and teacher unions, are characteristically dragging their feet.

To tighten the screws on Democratic assemblymen, the governor and his cabinet members, who are traveling the state promoting the cap, must incite beleaguered taxpayers to command their representatives to give them, not the vested interests, the power to check the growth of taxes.