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From Albany, this is the legislative gazette, a weekly half-hour review of New York State
government and politics.
The host is political scientist and syndicated columnist Dr. Alan Chartock of the State University.
Hello and welcome to the legislative gazette.
This week we'll look at the fight between the New York State Senate and Governor Cuomo
over the hospital re-enbursement bill and the chances for a Senate override.
The latest study on the Hudson River reveals a sleeping giant.
The environmental impact of certain toxic chemicals on the river was unknown until late, and
now there's a flurry of concern.
In a related water issue, we'll look at how the tax department is catching yacht owners
who have paid New York State sales taxes and the final destination of the infamous floating
gar barge, who ended up getting it and what happened to the waste.
Finally, we'll talk about the significance of Governor Cuomo's trip to Russia.
It's all coming up on the legislative gazette.
Senator Tarkill and Marty Chairman of the Health Committee in the Senate.
Senator, good to have you on the show again.
Nice to be with you.
Okay, let me ask you this.
You needed to have what is called a case payment bill this year.
But why?
Why did we need it in New York State?
What were the stakes?
Well, what happened really is that it wasn't that we needed a case payment bill, but the
present law dealing with hospital re-enbursement, sunsets at the end of this year.
If we did not pass a new legislation, then by the sun setting of the current law, we revert
to the 1978 statutes, which really were the statutes that got us in all the trouble with
distressed hospitals and the cost shifting and the problems in terms of hospital financing
that existed when we had all the problems in the early 70s.
Now, make no mistake about this.
This is big stakes here.
We're talking about hospitals either surviving or closing down based on what the state of New
York can do for them.
Absolutely.
I mean, that you're talking about the financial cash flow of each and every hospital based
upon their ability to have reasonable rates.
Okay.
And the state has for a long time been in the regulating business.
Now, what is in the new bill, the legislature passed that the governor doesn't like?
Well, the new bill has basically three major ingredients.
There's more to it, of course, but let me summarize by talking just about three pieces.
First is that it changes the reimbursement based upon cost factors that existed with
a base year of 1985 rather than under the current law, which is based upon 1981 cost factors.
Now, that certainly is going to add more money to the hospital pool if we make that change.
And, of course, the states posed a given additional funding to hospitals if it's not necessary.
And now, just very quickly, the governor and Commissioner Axel Rodg disagree with that.
They say that starting in 1981, everybody was put on notice.
They had to spend less money, some hospitals lived with that and spent less money, some
spent more.
But you say, nuts to that.
Well, no, I don't say nuts to that, but I say that hospitals could not have done anything
in this state in terms of new procedures and new staffing patterns without getting the
health department approval.
And the way that's done is something called certificate of need, right?
We have certificate of need process, which means that if a hospital wants to bring in a
CAT scan or if they want to bring in a new unit or build more beds, they can't get the
approval without first getting the certificate of need that's based upon the health department
and the state's analysis of their needs.
Okay.
Base year number one, number two, something called negotiated rates.
What's that?
Well, the negotiated rates, some states, the state of California example, where they've
had a tremendous surplus of beds and a vacancy of beds, they've gone to what they call a
competitive system and negotiated rates, saying that let people bid with the hospitals for
their business or let the hospitals bid for the business of the payers of service.
So if I'm the state of New York, I come in and I say to the hospitals, okay, I can give
you my business and bid on New York state's business, right?
Right.
California started it in New York once to follow and what it would mean is that New York
is a big buyer of services under the Medicaid program.
New York would then go to all the hospitals and say in this city if you want to Medicaid
business, give us your lowest possible cost.
So that sounds good, because it sounds good because it'll save the state money.
But from a hospital point of view, it's not good.
Hospital will under bid for the services, they will be bidding at cost, they'll have to
then transfer that cost to other users of the hospital services so that the poor customer,
the poor patient, who is not part of the large buying group, which is most of the middle-class
America today, will pay more for the same hospital service that the state is paying for.
Okay, so the third thing then, so you're against negotiated rates, you're for the 1985 versus
the 1981 is the base year which we base our reimbursements on and the third thing is
something called pricing, right?
Right.
The pricing system right now we reimburse hospitals based upon their cost.
What they do is they compute their cost based upon their level of service and that's how
they determine their reimbursement rate.
What the commissioner has said and what the health care financing council has said, we
can convert to a pricing system whereby you price for the services provided.
Give us an example, gold bladder.
Let's say that we have a gall bladder and if you're in one of any one of four different
hospitals, the price for the gall bladder operation in each hospital today is based upon the
cost of those hospitals and the cost of a teaching hospital, it will be much higher than
the cost of a community hospital.
But what we're saying under a pricing program is that we should group hospitals into
classifications and try to get a unified price for the service regardless of what facility
you attempt.
Okay, now the governor seems and the health commissioners come up with a much more expensive
price for this thing.
They said 400 million your experts tell you 100 million or less depending on who you're
believing.
Now the question I would have of you is are you prepared to come back here and override
the governor's veto on your bill?
Well, let me say that if nothing happens, I think we would have to come back and attempt
to override because we cannot afford the hospital industry and the people of the state of New
York not afford to have the registration sunset so that we revert to the 1978 law.
Okay, now talking the governor says however that he understands the legislature's concern,
things there should be a law, says he wants to come back and negotiate it with you.
Are you going to give him a chance to do that?
Well, he's the governor of course and if he wants to sit down and negotiate, we'll
be glad to discuss and negotiate with him.
The bill that passed is a bill that we passed after negotiations with the governors but
they would not in any way agree to what we felt was necessary.
We were not arbitrary, ours was a consensus bill of the industry and the people involved.
If we now go back to the table, which we, if the governor invites us to negotiate, we'll
be glad to do that.
In a word, optimistic or pessimistic.
Unknown.
Senator Taki Lombardi.
A new study about the Hudson River found that PCB contamination in the river is becoming
stable but other toxic chemicals are replacing them.
The problem now is rainwater runoff from palm pesticides and city streets.
This runoff is carrying chemicals such as lead and mercury into the Hudson River, bringing
the pollution problem to serious proportions.
The legislative gazettes, Brenda McMahon has this report.
PCBs and other industrial pollutants are not the only toxic chemicals contaminating the
Hudson River.
This according to a report released this week by the New York City based environmental
group in form.
The report was performed by a private environmental group over the past three and a half years.
It found that contaminated rainwater runoff from cities and farms are the primary incoming
contaminants in the Hudson River.
This 1982 almost 700 times as much pollution in the Hudson has been caused by this runoff
then caused by industrial and sewage treatment plans.
Inform pointed out four areas which have the most contamination along the Hudson from
Troy to New York City and three of those locations are in the capital district.
These areas include the Mohawk River between Scoherry Creek and the Hudson, the Hudson
between Waterford and Fort Edward and the Hudson between Albany and New Hamburg just south
of Pekipsi.
The fourth most contaminated area was found between Yonkers and New York City.
Nancy Lillianthal co-author of the report says large collections of lead mercury and
cadmium is caused primarily by the urban area runoff, whereas the PCB contamination which
is still severe was caused by the general electric plants along the river.
Although Lillianthal says informed chose not to make recommendations to the state, they
did offer one suggestion which would help monitor water contamination.
We found it was very difficult to establish trends as to whether pollution by hazardous
chemicals in the Hudson is getting better or worse over time.
And one of the things that they could do is establish certain sampling locations that
they use consistently year after year so that we have a record for any particular location
as to whether the concentrations of the various chemicals are increasing or decreasing over
time.
But another problem with monitoring water says Lillianthal is that New York water standards
are much lower than federal standards and it's difficult to interpret the test results.
Although it informs the amount of rainwater runoff contaminating the Hudson is surprising,
our W. Groneman spokesman for NCON says they have been aware of this problem and they're
working steadily towards addressing both the PCB industrial pollutants and the rainwater
runoff.
NCON has always been concerned about the amount of pollutants that are permitted to go into
the Hudson River and our speedy permit which regulates those kinds of water discharges.
Having monitored quite closely over a number of years we have built up a statistical table
that indicates that the Hudson River was in fact improving dramatically in the cleanliness
of the water source.
PCBs remain a problem.
We are trying to address that issue with our hearings in the upper Hudson area regarding
the proposed dredging of PCBs.
But as to chemical pollutants we believe we have a good handle on that.
We believe that more can be done of course.
In fact, DEC has all often and always encouraged industries to reduce their waste stream.
It helps the environment and all sorts of often cost effective in the operation of an industry
that right now might be the discharging some of its waste materials into the river.
Our W. Groneman in a related issue, a bill signed into law by Governor Cuomo last week
makes the Hudson River eligible for federal cleanup funds.
The bill designated the Hudson as an estuary under a Federal Clean Water Act.
This act selects 11 estuaries nationwide to share the $12 million proposed for the program.
Previously New York Harbor was the only New York State body of water eligible for such
federal funds.
For the Legislative Gazette this is Brenda McMahon.
The New York State Tax Department is endeavored upon their own sort of vice team.
Tax inspectors are trying to catch yacht owners who are evaded paying sales tax on their luxury
boats.
The yacht owners do this by setting up a corporation in Delaware for a $300 fee.
The boat owners then maintain that this corporation owns the yacht so they don't pay New York State
sales tax.
Carl Felsen spokesman for the State Taxation Department says the state has collected $10
million in yacht sales taxes in the past four years.
But this week launched a major operation to collect much more.
Inspectors swept rumourineers on Long Island in June and this week began tracking down yachts
on the Hudson River Lake George and Sakandaga Lake as well as the St. Lawrence Seaway, the
Finger Lakes and other New York waterways.
Felsen told the Legislative Gazette's Bruce Robertson that one of the novel aspects of
this week's tax operation is that inspectors are taking to the water to find the tax evaders.
We've always gone on foot into the marinas and yacht clubs because they're publicly accessible.
This year we also got the cooperation first of the NASA and Suffolk County Police
Marine Divisions and now in the latest week with the State Police, the Federal Park Marine
Police, the Coast Guard and various counties share us to provide us with launches so that
we could go from the water side.
This way we could go to private moorings and private docks and we're finding that some
of the most expensive yachts obviously are not in the yacht clubs of marinas but they
are at private moorings.
So now we can do a much more comprehensive sweep.
The third thing we're doing different, what we've done in the past is we've gone in and
tried to prove that the corporation that's set up in Delaware is just a shell and we got
marina records and tried to prove that it's the New York resident that's paying the bills
in this sort of thing.
We've been very successful in doing this but it's an awful lot of work so what we're
doing now is trying a different tactic and saying well if you want to pretend you're
a corporation fine, we'll treat you as a corporation.
That means number one we assess corporate taxes.
It means number two is that the period that you have the use of the boat, you have to
report that as income the same as if you had a company car and we're going to charge
you a state income tax on that and then we're going to buck the information up to the
IRS and they'll charge a federal income tax on that.
In addition the corporation is responsible for paying sales tax on the fair rental value
at the boat for the period they give it to an employee or a corporate officer for their
use.
So for giving everybody a choice you can dissolve your phony corporation and pay the sales
tax or we're going to hit you with this battery of corporate income in sales taxes and
those taxes won't be just charged once.
They'll be charged every year so we're expecting a lot of people to get out of the corporate
yacht owning business.
I would sort of imagine are they going to be liable for any kind of penalties if they
opt right now to dissolve the corporation and pay the back taxes?
Are they also going to be penalized for having in a sense done something illegal?
Well it's not, technically it's not illegal.
If they set up their corporation correctly and they do have the corporation registered
and current there's nothing illegal.
The thing is there is a corporate liability there and if we assess the corporate liabilities
we will be charging interest in penalty.
So what we're saying is let's put this scheme to rest.
If you come forward on your own dissolve the corporation and just pay the sales tax.
We'll go as easy as possible and let's just cut out all of this nonsense and not have
us being able to detect us every year.
The sweep that is beginning in the down state region of Long Island and New York Harbor
you indicated it's moving up state.
Is this going to be a step by step procedure or is it going to be a simultaneous blitz?
Still it's all out right now since Monday.
We kept it a little bit under wraps the first few days so that people wouldn't be moving
both around but for example we have our Albany Buffalo Binghamton Rochester Syracuse
and Utica offices all involved in a matter of fact Monday alone we reviewed over 12,000
boats and stay wide and we found nearly 900 of them to be registered out of state and
we're going to follow up on that.
So we for example out of the Albany office they did check 13 marinas on Monday they're
checking more today and this is going to go on most of the rest of the week.
After this week Felson says that inspectors will continue to follow up on tips from citizens
calling a tax evasion hotline.
Officials say boat owners sometimes call into report yacht owners in their marinas who
are thought to be evading sales tax.
The infamous Isle of Garbage barge has finally come to rest this week at a Brooklyn incinerator
after a five month odyssey that took thousands of miles in search of a dump site.
Morrie small has this report.
The Garbage as it came to be known docked Monday in Brooklyn where the more than 3,000
tons of New York trash was to be unloaded and burned.
The ash is then to be trucked to Isle of Long Island and dumped.
The docking in Brooklyn was the first time the orange mobrow 4,000 barge landed since
it left New York City last March as part of a venture by an Alabama businessman hoping
to barge trash for profit.
But North Carolina officials refused to allow unloading of the trash bales at the planned
destination there.
The barge then tried and failed to unload in Louisiana, Florida, Mexico, Belize and
the Bahamas.
And after the Garbage returned to New York Harbor, it became the subject of legal wrangling
because nobody in New York wanted the trash either.
Finally, two weeks ago, a Brooklyn judge approved the plan to burn the refuse in Brooklyn
and dump it in Isle.
That proposal had been challenged in court by Brooklyn officials and environmental groups.
The barge provided material for jokes by Johnny Carson and cartoons in the New Yorker.
But it also served to dramatize the worsening problem of waste disposal that communities
nationwide are grappling with.
The barge may also have sparked an investigation into the role of organized crime in waste disposal.
New York officials are said to be investigating reports that a number of mob-linked businessmen
were running the Garbage, Assemblyman Maurice Hinchy of Ulster County who heads a waste disposal
committee in the Assembly, says he passed on information on the alleged mob connection
to the New York organized crime task force.
Hinchy says it's high time for a clamp down on mob control of garbage carting, especially
because inadequate waste disposal can have disastrous environmental results.
For the legislative gazette, this is more e-small.
Fred Dicker of the New York Post, the governor, is about to take a long, predicted trip to the
Soviet Union.
What does he want to accomplish there?
What's this all about?
I don't think there's any doubt that notwithstanding the governor's protestations to the country,
this is about presidential and national politics.
The governor more and more over the last year, as we both know, has been interested in national
issues.
He's of course being touted just as recently as today by Mike Roiko as the number one candidate
for the Democrats to feel that they want to win the presidency.
What he's doing here is trying to address the principle criticism against him on that
issue, which is he has no foreign policy experience at all.
This guy I don't think has ever traveled out of the United States except once in his
whole life.
Now he's going to Russia, he's going to be meeting with some important officials.
He just gave the speech last weekend saying, let's do what we can to end the Cold War.
He's having fun and he's focusing on national issues.
Fred, over and over, we keep talking about how drafts are not possible in this environment.
You've got to go into campaigns to rest of it.
Now you're close to all the Cuomo people you're on the phones always as we say, working
the phones all the time.
You're a good friend, Tony Burgos, and you just went down to Nick Aragway, he's one of the
governors, closest advisors.
What are they telling you?
Is there any sense of an emerging strategy here?
No, no sense of a strategy, but what they're saying is that a draft is possible.
That a draft is only impossible because it hasn't happened before.
If it does happen, then people will say, of course, it's possible.
I mean, note that legally, the delegates who go to the convention are not apparently
bound to vote for whoever they're committed to, but even putting that aside.
Many now believe, Alan, and we've talked about this together, that at the convention,
there will be no clear winner.
And after the first ballot, clearly all bets are off, and delegates can go wherever they
want, no matter what the individual state law say.
So privately, the saying is possible.
Now, I'm really hoping that AMC allows you to go to Russia with a press corps that's
going out, because this is going to be an important trip to see how the Russians treat
the governor, and I think all your listeners out there are going to be interested in this,
because I think they're going to treat them like royalty as a guy who could be the next
president.
There's always been a sense in the Soviet Union that they think they get these handicaps
on people that they think are comers.
For example, for years Richard Nixon has always been treated very well in China and the
Soviet Union on the idea that somehow they still perceive him as a power here.
No question.
And it's yours thinking that the same thing may well be true with Cuomo.
Well, let me just put it this way.
Back in the spring when he was planning to go, he said he was only going at the invitation
of some Sunya or Sunni professors who were teaching a course.
He said that on the Capitol connection.
So I think he revealed it there.
But that's not the case anymore.
In fact, this time Cuomo is going at the invitation of a gentleman by the name of VI, and
it's not when it's VI, Viratnikov, who just happens to be a member of the Politburo
and is the equivalent of a governor of the major state, the Russian Soviet federated
socialist republic.
Yeah, he said that to us.
So, I mean, it's taken on.
Okay, what about the Duke?
You have the caucus coming out front now, leading in New Hampshire, leading in Iowa.
What happens with a guy like that?
After all, he's articulate.
He's bright, they're Fred.
Yeah, but he's not distinguished.
I mean, he is locally.
They know about him in Massachusetts, but he doesn't have an excitement now, and he doesn't
have certainly a genuine charisma of the way this guy Cuomo does.
He doesn't have a cheering section.
I mean, like it or not, or wanting to face it or not, the governor of New York,
has a cheering section from the New York press and New York Times in particular, the National
TV Networks, and the Washington Post, which likes him.
When you have the big-time media on your side, it's a lot different than when you don't.
And Cuomo, as you know, is a favorite, not only of some distinguished national sort of
centrist and liberal, or sort of lefty writers, but even a favorite of conservative writers
like William F. Buckley.
I mean, it's David Broder, it's William Buckley, it's Mary McGrawry, they all are fascinated.
George Will, they're fascinated with Cuomo in a way that Tukakis has been unable to
have them fascinated in him.
He's a continual fountain of material and ideas, of course, which is of columnist dream.
And I'm sure he knows that.
But this guy Cuomo announces that he's going to do some running and it becomes national
news.
I mean, the guy is the hottest property around.
And certainly, the Soviets realize this, and I think we're going to see the treatment that
they give him reflecting it.
Meanwhile, Fred, as they say, back at the ranch, we still talk of a, an override, Tarky
Lombardi, the distinguished head of the Senate Health Committee is talking about push towards
overriding the governor on hospital reimbursement.
Sure.
Do they have the stomach for it?
Who said not Lombardi's distinguished, by the way?
I know you just said it, but does anybody else agree with you?
Well, he's a very bright man.
There's no question about it.
I think there is some question myself, but I'm going to raise that.
No, get into your point now.
These guys don't dare, in my judgment, come back and override such a popular governor
at a time when they look like a pack of thieves.
And most importantly, at a time when the issue of this medical reimbursement issue involves,
according to the governor, $400 million in spending more than the stake in a Ford.
Why would they all want to put their necks out and override the governor and run the risk
of being blamed as a group for nearly bankrupting the state?
I say it won't happen.
They're blustering and man at the governor because he's made, they think, he's made them
look bad on the scandal stuff when in fact they've only made themselves look bad and to
override the governor would make them look even worse.
Fred Dicker of the New York Post.
And that's it for this week's edition of the Legislative Gazette.
Our show is edited and produced by Brenda McMahon in the studios of WAMC.
She had helped from worry small and Bruce Robertson.
I hope you enjoyed our show.
We'll be back again next week.
The Legislative Gazette is a production of WAMC News.
Dr. Ellen Chartock is executive producer.
This program is made possible with funds provided by the State University College at New
Poms.
Statewide satellite distribution of this program was made possible by the Lawrence group, providing
residents throughout New York State with total insurance coverage.
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