This program is a production of WAMC News.
From Albany, this is the Legislative Gazette,
a weekly half-hour review of New York State government and politics.
Your host is political scientist and syndicated columnist Dr. Alan Shartuck, of the State University.
In this edition of the Legislative Gazette, we'll bring you up to date on the state of New York's finances with state controller Ned Regan.
Last week on this program, we spoke with insurance superintendent James Carcran about some of the problems in the insurance industry,
including rapidly rising premiums for liability insurance.
More was heard about that this week as Bill Grolty reports.
It's a dangerous situation. It's a very dangerous situation.
That's Bob Carroll, president of the professional insurance agents of New York,
with a thirst assessment of the state of liability insurance.
Here in New York, the public first heard the words insurance and crisis used together in connection with the doctors.
Earlier this year, staged a work slowdown to force legislative action to limit skyrocketing malpractice insurance premiums.
Now though, it seems almost everyone is affected by higher premiums.
In our interview last week with insurance superintendent Corcoran, he spoke about municipalities having to pay much more.
Same goes for school districts and businesses, especially bars and taverns because of their need for a liquor liability insurance.
With a legal liability, there's only one market available in New York state today.
That's underwritten by the Frontier Insurance Company.
They are writing a liquor legal with a maximum limit of $100,000.
The cost is continually going up and we are even though the cost is going up.
We are grateful that there is a market available to us.
I hope it continues but I can't give you a guarantee that it's going to.
Right now though, some borrowers have already made a conscious decision not to pay the high premiums.
Many of the borrowers' restaurants are going bare.
You need to be going without a liquor legal liability insurance because the smaller restaurants, the smaller borrowers, can out of 40, the increased cost of the premiums.
Perhaps with the emphasis on preventing drunk driving, it's easy to see why juries are inclined to award large sums to victims of a drunk driver.
But why are daycare centers facing sharply higher liability premiums?
Because of the child abuse awards that are being...
They're going against daycare centers.
The companies are just not writing the coverage because of the high cost.
We've got a catastrophe situation.
Bob Carroll's solution to the liability problem?
Well, you heard it often during the malpractice crisis this summer.
The legislature, he says, has to do something to limit damage awards.
I think that there has to be some state-like dislavery of actions, modifications and changing of the toy reform law.
We're living in a very litigious society and people who are more claim-conscious today than they have been in the past.
High court awards, which is affecting...
Public consumer, affecting the youth, affecting me every time the high-period award comes out.
You and I are paying for it through increased premiums for no coverage available.
What kind of specific... do you have specific legislative proposals ready to go on the table?
Bill, if I had specific proposals to go, I probably wouldn't be in this phone conversation with you.
It's a situation that didn't just happen yesterday.
It's been brewing for some time.
And I think now we've got to educate the public as to why the cost or the surviving, why the insurance is not available.
It's a great educational process that we have to go through.
I think I hope that this could be the start of it.
The education eventually leading to public awareness of which straw often leads to legislative action.
Bob Carroll, president of the Professional Insurance Agency of New York State. I'm Bill Grohlty.
Governor Mario Cuomo may say that he does not like them or pay attention to them, but there can be no doubt that he's the subject of public opinion polls.
And not just here in New York, but in other parts of the country as well.
Here's Dr. Lee Marringoff, director of the Marist College Institute for Public Opinion in Pekipsi.
This past week I was in Washington, D.C. and had occasion to speak with several national political reporters.
The conversation inevitably shifted to Mario Cuomo and his national political aspirations.
Governor Cuomo is clearly a major topic of discussion among political watchers in the nation's capital.
Recalling his splendid speech at the Democratic Convention by a summer, inciting his popularity as governor in New York State,
reporters have a sense that they have not seen the last of Mario Cuomo on the national political scene.
Talk of this sort makes for an interesting lunchtime conversation, but is probably advisable to keep the analysis still at a highly speculative level.
Political events and careers can undergo dramatic change and television can certainly communicate those events with great speed.
Political pollsters, however, seem very reluctant to keep election campaigns confined to any reasonable proximity to election day.
And so the 1988 hype about the presidential election is on, and not surprisingly Mario Cuomo's name is now thrown in with the crowd.
A Washington-posed ABC news poll released within the past month sets the morning line on several Democratic possible candidates, including Ted Kennedy, Gary Hart, Jesse Jackson, Leia Eccoca, and of course Mario Cuomo.
Regarding Cuomo, here's what that national poll had to say.
Cuomo has the lowest name recognition of these Democrats listed. Cuomo has equal appeal to union and non-union households, equal appeal to whites and blacks, men and women, the poor, and well to do.
And in-house this goes on to break down his ratings even further by region income and educational level.
It seems more reasonable to allow events to unfold a little bit more before this type of information has any long-term political significance.
Cuomo may have an interesting future, but this poll sheds absolutely no light on where that will occur.
Two-thirds of the public nationally do not break Cuomo, and that's understandable.
The name he's been tossed in with have been on the national scene for far longer.
I'm sure there will be national polls within interest in insight into 1988 politics.
I suspect there will be just a little closer to that election.
In the meantime for the legislative, because that this is Lee Maringoff at the Marist College Institute for public opinion in Bekeppley.
There was a significant political ruling from the state's highest court this week. He has billed royalty again with that story.
Alan, the Court of Appeals ruled this week that in nomination petitions, strict compliance doesn't mean absolute compliance with election laws.
Take for example the case of Lewis Fiddler, a Democratic candidate for New York City Council.
The cover sheet of his nomination papers claimed there were 4,669 signatures.
The actual number was 4,660, a difference of nine.
A trial court ruled Fiddler's petition invalid, citing the Court of Appeals ruling last year, which required strict compliance.
In its decision the high court said, quote, the discrepancies in the designation petitions were inconsequential, and no potential for fraud has been alleged or is apparent.
Thus a difference of nine signatures out of more than 4,600 is no reason to throw a candidate off the ballot.
The latest ruling by the high court is further clarification of the petition system.
Last year the Court of Appeals, acting in a case of former state senator Anna Jefferson, said candidates must adhere strictly to the law that the numbers on the cover sheet must match those inside.
A federal court upheld that ruling. Now though the highest court has eased off in its position, making it tougher to bump candidates off the ballot, making it somewhat easier for candidates to get on, and opening up a grey area that is doubtless going to form the basis of another court challenge.
I'm Bill Gralty.
Summer is almost over and we're approaching the midpoint of the state's fiscal year.
We thought it would be a good time to check in with the state's top elected Republican official, the man who oversees the Perstring's state controller Ned Regan.
Controller, what's the state of New York's finances? Are we healthy?
Oh yes, there's no question then that's because the economy is healthy.
The healthy economy, people spend money, cash registers ring, sales taxes flow, overtime comes in, they have to pay more taxes.
Property values go up, that means property tax receipts go up.
So all down the line, a healthy fiscal state of New York is what we have today, but also is clearly dependent upon the healthy economy.
Far be it from me to make a problem between you and your governor, but he keeps implying on our weekly radio extravagancer that the state of New York's economy is due to the administration, his administration stewardship as governor.
Some reporters have been unkind enough to say to him, but it's a national phenomena governor.
And I wondered whether you have any thoughts on it. It's an international phenomenon.
They key if there is a one factor that has strengthened our economy, and you really shouldn't try to isolate one because there's dozens and they're all interrelated, including governor-chormal stewardship.
But if there's one, it is the growth of international trade, international finance, multinational corporations, third world countries, all of this coming up in the last 10 to 15 years, and much of this activity focusing on the now the premier city of the world New York City.
So it's international finance, and all it goes with it is the main cause for our healthy economy. Once you have that, then you get the spin-offs of that.
You get the lawyers, they need and banks, and you get a whole variety of operations to computers, and then you get people that want to be in that environment where that international finance takes place.
So you have strong cultural programs, and then it all starts to feed in itself, and as a result, the jobs, the number of private sector jobs is not only going up in most of New York State.
It's going up right in the city of New York, and New York City is the one city in the nation that is increasing in both population and jobs ahead of Dallas, ahead of them all, percentage and numbers.
So, and it all goes back to international finance. Now there are a lot of other factors involved, including a governor who pays attention to detail, and who watches himself, and who sets a very good tone in a very good environment.
I could suggest that he's also supported by a fiscally prudent controller who has urged upon him, and our governor has adopted a number of fiscal reforms, all of which I'm sure have added to the environment in New York State as being a good safe place in which to invest, in which to do business.
So, governor Cuomo's correct he's certainly part of the solution to New York's economy, but there are plenty of other factors, and I could even throw in somebody he would not agree with, and that I have some problems with, and that is of course the Reagan, the boom we've had in the last two and a half years is a result of the result of policies in Washington.
I want to hit on two things real fast. One of them is the question of deductibility. The governor, as well as most of the Republican leadership of the state, with a possible exception of Congressman Kemp, seemed to be on one side on this issue, that it would be a disaster for New York State if federal and state taxes could not be deducted from the federal, excuse me, the local and state taxes from the federal income tax.
Could you comment on that?
Well, that's true. There is no question because we, it's mainly because we tax so much, so it's a little bit of our fault. In fact, it's a lot of our fault that we spend in tax so much, but the facts are, that's where we are today, and we can't un-ring that bell, at least certainly not in the next couple of days or a couple of months or a couple of years, though it should be adjusted better for the taxpayers.
But the facts are, that our high taxes mean that when we, if we lose the right to deduct those taxes, we will suffer more than the rest of the country.
So that means that the tax cuts that come along with the Reagan tax reform package will have a much less of a beneficial effect in New York State than it will in any other state, which would increase the distortions and the differences economically between New York State and the rest of the country.
So that's why it's a disaster, and that's why Governor Cuomo is quite proper in taking a very strong position, and he's to be commended for his leadership in this role.
As a Republican, are you somewhat unhappy about having to oppose your own president on this issue?
Well, sure I'm unhappy, but the president is completely wrong. This bill is anti-New York, not just in the deductibility, but in other factors.
I believe from my information that the Reagan tax plan, Treasury 2, is its nickname, is dead, and I'm not ready to start praying over it yet, but we're sure throwing the dirt on it.
The House Ways and Means Committee, which is the traditional source of tax legislation in this country, will meet next weekend.
They will write, start to draft, the tax reform bill, that tax reform bill will modify considerably the deductibility issue and be of some benefit to New Yorkers.
Corporate takeover. You told the governor that you didn't think this was such a hot idea, and that of course was the idea that we would protect our New York state corporations by making it hard, or more difficult for people to come in and keep boon pickings and some of the others and take over New York State corporations.
The governor vetoed the bill, he got a lot of flack on that. Do you have any comments on that?
No, I think that was the governor made the proper move. This was not a protection of corporation bill. It was a protection of corporate executives bill. That's what it really was.
I thought the bill was flawed. The governor correctly pointed out that it was contrary to the federal constitution and the governor said it would go from the state house to the courthouse instantly to be challenged, had he signed it.
We opposed it on technical grounds, though, because we own stock, our pension system through which purchase of stocks own stocks and all of these corporations that buy and sell, and every time one of these things start to happen, the value of the stock to our stockholders goes up.
When that happens, the pension system gains money that otherwise, and here comes the key, would have to be provided by the taxpayers.
In fact, on 10 takeovers, which this bill would have banned, we gained $128 million. Now, every penny of that goes direct to the pensions, and every penny of that, $128 million is $128 million less.
The taxpayers have to contribute to the pension system. So, on that ground, we said, wait a minute, you ought to look at a couple of these other aspects.
But our opposition was technical. The governor's was on the broader policy implications, but nonetheless, I thought he was correct.
Let's talk lottery. The lot of New York state lottery. Everybody wants to know from me.
They say, hey, does this money really go into education, or does it not? That's what it's supposed to do constitutionally.
The answer to your question is yes. Both questions. Right? And let's unravel that. Technically, the money goes there. The checks are actually written from a lottery account, right to the school districts.
There is no question that the money comes in. The profits come in. It's written to a special account, and that account writes checks to school districts.
So, yes to that question. The broader question is your second one. Does that mean that if the lottery receipt should rise, the school districts will get more, or if the lottery receipts would fall, would the school districts get less?
The answer to that is no. In other words, the amount of money that goes to education is set as it properly should be, not on women caprice, or people's habits.
It is set based on the determinations by the governor and by the legislature, is to what support ought to be given to public schools.
Fortunately, for the school systems in New York state, that report, that support by the governor and the legislature has been very generous.
And so, they give, most times, much more, in increases every year than the lottery receipts from each, as compared to each year.
So, that the lottery receipts while technically being written to school districts, do not determine the amount of money that goes to school districts, it goes to education.
Now, suppose a long comes a $45 million windfall, in other words, a humongous lottery, and everybody, including me, did you take a ticket on this controller?
I made $79.25 on my bet. I mowned in from vacation. It's the first time I've ever done it, and I bet a dollar, or whatever.
And you got $79.25 back. I was waiting for me in New York when I got there. So, even you had to go, okay, I had a ticket for the first time.
Fred Orrenstein and his wife who told me they never had a ticket before.
So, they bought these tickets, and now we have $45 million dollars or something. Suppose a windfall like that comes in, and the state makes an extra $20 million.
Shouldn't that be split up among the school boards?
It will be technically, but it won't be, there will be a check written. It'll say lottery.
It'll be signed by the lottery commissioner. It will be written to the school districts.
But it will displace general revenue funds, right? That would have ordinarily gone in. Yes.
In other words, the amount of money going to education is dependent as it should be on the policy decisions of the governor and the legislature.
That's how it should be. That's democracy. And then if you don't like what they're doing, you vote them in or you vote them out.
It is not dependent on whether I invested my first dollar in the lottery. And it shouldn't be dependent.
What is wrong in this process is that the lottery was originally sold that way. That's what's wrong.
Now, I should add one. There is one little exception to everything I've just said.
It's conceivable that if we eliminated the whole lottery system tomorrow, and that we didn't have that three or four hundred million dollars extra a year from the lottery,
that the governor and legislature might say, well gee, we've got to spend less. Everybody's got to suffer because we've lost three hundred million.
So the Department of Transportation is going to get a little less and audit and control will get a little less. And education will get a little less.
Or the reverse. It's conceivable that if the lottery commissions went take profits to the state, went to 800 million that governor and legislature might say, well look, spread that around.
And it's conceivable that that point that education would get in this case a little more. But basically the lottery receipts do not control what the schools get, even though the checks are written from the lottery division.
Last question of the day. The governor has been asked by a number of times to raise your salary, to raise attorney general Robert Abrams salary.
He has not chosen to make that recommendation to the legislature. He says he can live on what he gets. So can you. I mean, how do you feel about that?
I mean, that's just, it's just foolish. Of course I can live on what I get. There's no question about that. And he can live on what he gets with the mansion and the allowances and cars and servants and everything else.
That's not the argument. The argument is what is the salary scale for people in public service? I don't mean private service. Public service will clearly the controller salary, though it's high and dollars is low by comparison.
I don't know what executives and mayors make more. That's not the important factor, though. It's true. What's important is that I'm a damper. I'm a ceiling on all of the state employees.
And so that you've got senior executives in the state who are not now receiving the salary increases that were awarded them because there's an unwritten rule that they can't exceed my salary.
My salary is fixed for the next now six years. This if if governor maintains his attitude, there will be turmoil. He will not be able to hire anybody in if you should win for reelection in another three or four years for a senior staff.
Unless he breaks the rule and all of these people start to making ten or twenty thousand dollars more than the control in the attorney general. I mean, it just doesn't make sense. His position doesn't make just doesn't make good business sense.
Last question. Last last question, Ned. Are you going to run for governor? No. Not this time.
Controller Ned Regan. Ned Regan is another in a long line of controllers who seem to understand the way it all works. Like former controller Arthur Leffick and governor Nelson Rockefeller, Regan has made his peace with Mario Cuomo.
Believe me, they'll never be the best of friends, but they do have a symbiotic relationship. They need each other. It is somewhat ironic that the Democrat Cuomo needs the Republican Regan to certify and legitimize his actions far more than he would need a Democratic controller.
This way the governor is able to say, look at that. Even the Republicans are saying I'm doing a good job. But of course, if Regan is going to assure his continuity as controller, and that's what this is all about, then to some degree, he is going to have to lower his sights on the governor's chair, at least for the 1986 election.
Regan, of course, would be a formidable candidate for governor if Mario Cuomo was out of the picture. Of course, he has always been a liberal Republican. In fact, he was once rumored to be thinking of moving to the other party.
His problem, of course, would be to win a primary in a state in which Republicans don't vote for liberal Republicans, witness Paul Curran and Jacob Javits to name just two.
Naturally, there are many Republicans, particularly those in the legislature who are not enamored of Regan's often cozy relationship with the Democratic governor.
But there too, Regan has shown remarkable ability to stay current with rank-and-file Republicans, and in an age of television, his remarkable ability to project his personality and philosophy will serve him well.
So why are Cuomo and Regan so close? It has a lot to do with function. It's clear, of course, that Ned Regan knows how incredibly popular Mario Cuomo is. Regan's not stupid, that's for sure. But it's also a question of their jobs. Both men have to know that the reputation of New York state is at stake.
If the state's fiscal house appears to be out of order, both their reputations will suffer. If the state fails to collect enough revenue to pay its bills, both the controller and the governor will look inept.
And if President Regan's tax reform program is adopted, and state and local taxes can no longer be deducted from the federal income tax, the result in hue and cry for less state spending in New York state will be deafening.
The governor and the controller both know that they'll have to put up with a lot of demands for more services and less spending at the same time, and neither of them want that.
And as far as the lottery goes, they're both on the same side of that one too. They both think it's appropriate that lottery money be allocated in the beginning of the year to local communities, and that extra money raised through a banan's lottery not go to the communities, but go indirectly back into their general revenue.
Both men of course are independently elected and statewide officials, and they have to behave responsibly in the end. That's always the sensible thing to do.
I spend 10 days in Japan with Ned Regan, and I think I begin to appreciate what makes him tick. He has integrity. He has no problem speaking out, and he doesn't seem to be overly worried about political consequences.
In his own way, his presentation before microphones and television cameras is nothing short of fantastic. He looks gubernatorial. He has a reputation for working his staff close to the breaking point, and he is a loner, unlikely to have to protect staff who embarrass him.
If they do that, they are likely to go with little remorse on the controller's part. And always remember that he is the highest ranking Republican official in the state right now would appear that Ned Regan will not be governor.
At least for another six years. But don't bet the ranch that you won't see him in that mansion someday.
That's our show for this week. Join us again next week for a still another look at state government and politics.
Go to all the edits and produces this program. Please address comments and questions to us at WAMC Fox 13,000 Albany, New York, 1-2-2, 1-2. I'm Alan Chartock.
The legislative gazette is a production of WAMC News. Alan Chartock is executive producer. This program is made possible with funds provided by the state University of New York College at New Pulse.
The state government is also a member of the state government of New York.
The state government is also a member of the state government of New York.
The state government is also a member of the state government of New York.
The state government is also a member of the state government of New York.
The state government is also a member of the state government of New York.
The state government is also a member of the state government of New York.
