New York's Budgeted Medicaid Expenses To Rise to $15.1 Billion, While Cuomo And Medicaid Redesign Team Claim Cuts.

  Did the illusion of budget cutting by the NY State Medicaid Redesign Team work?   (The budget numbers reported below are just what NY pays out of its own pocket, other budget numbers report what New York State pays out in total and include New York's share and the federal funds passed through New York State for Medicaid expenses. See below*)


     "Governor Andrew M. Cuomo today accepted a report from the Medicaid Redesign Team which meets the Governor’s Medicaid spending target contained in his 2011-2012 budget by introducing a global cap on State Medicaid expenditures of $15.109 billion."


        $13.851 billion dollars was New York State Medicaid expenditures for the present year's budget (ends June 2011) as reported in New York Division of Budget Mid-year(December) report in Table 1,
but this was reduced by Federal Stimulus money received for this year's budget, which was
Approximately $5.9 billion of New York’s ARRA funding is projected to be used for General Fund budget balance in SFY 2010-11, with an additional $4.6 billion being passed through to local governments.


     Were you deceived by the illusion of Medicaid budget cuts?

1. This year, the NY State Medicaid expenditure was $13.8 billion and the cap on next year's expenditure will be $15.1 Billion?

2. Where is the missing federal stimulus $5.9 billion going to be conjured up from?

3. Is illusionary money able to balance a budget? 

4. What are the Counties going to do about their missing Federal $4.6 billion dollars and their increased $15.1 billion share that Cuomo's budget sends them?

*Notes on Medicaid Funding method in New York:
1. Medicaid is a joint federal-state program that provides health care to the poor. The feds split the Medicaid bill with the states, paying 50 percent of the program’s cost in richer states like New York and a larger fraction in poorer ones. Spending is open-ended: the more money states spend on Medicaid, the more money Washington sends them as its match. Crucially, though federal regulators set minimum requirements for who’s eligible and what services they receive, states can offer a range of additional services (prescription drugs, say), for which the feds nevertheless have to chip in. These federal dollars are a huge incentive for states to expand their health-care initiatives
2. For Medicaid, the Federal government pays 50%, New York State pays 25% and the counties, with no input pay, 25%
3. Some New York Medicaid facts:
    With 6.4 percent of the nation's population and 8.7 percent of all Medicaid enrollment, New York accounted for 14 percent of all Medicaid spending.
    New York's Medicaid program, including the local government share, was larger than the total budgets of 42 states.
    New York spent 25 percent more than California, whose Medicaid program covered twice as many people.
    New York's federal, state and local Medicaid spending exceeded the Medicaid budgets of Florida, Texas and North Carolina combined.

New York Medicaid Redesign Team Leader Absent When Report Is Released

You can fool some of the people all of the time and all of the people some of the time, but you can not fool all the people all of the time

     Albany magic solves Jeffrey Sachs problem from this blog's yesterday post and New York Times article, "Sachs should register as a Lobbyist."

   Cuomo, the illusionist, hopes the quick sleight of hand has you believe the "Medicaid Redesign Team handed off a package of 79 recommendations designed to save $2.3 billion from the health care program in the 2011-2012 fiscal year." without the input of their leader, Jeffrey Sachs.  
"Conspicuous in his absence from the Thursday meeting was Jeffrey Sachs, a Cuomo friend and Redesign Team member whose private consulting work for several New York hospitals has drawn concern from ethics watchdogs. A spokesman said Sachs had a scheduling conflict."

     Supposedly, they would save $2.3 billion out of almost $53 billion, but of course, this Albany budgeting and this savings is not on this year's budgeted amount, but on a projected larger amount for next year. "The meeting began with good news from state Budget Director Robert Megna, who reported that due to slower-than-expected growth in the state's Medicaid caseload, some $375 million of the cost savings from the group's original target of $2.85 billion wouldn't need to be accounted for in their recommendations."

     Now was the illusionist successful? Do you believe Cuomo's Lobbyist friend, head of Medicaid Redesign Team, had no input into recommendations issued the day he didn't show up, or that the savings were on this year's expenditures and not only on projected increases? 

The results are in:   Cuomo and his Medicaid Redesign Team fail

People of New York   lose

Lobbyists and Medicaid-trough-feeders win

Here's the blog's January 17, 2011 letter to Cuomo:
Dear Governor Cuomo:
      Send your Medicaid Redesign Team (committee) packing and preparing for their new diet.  It's reported, "Every year it's the 800-pound gorilla of the state budget, soaking up money that could be used for tax cuts to make our economy competitive, or for expanding health-care coverage, or for improving education—or for all that, and more. Medicaid is also the major component in county property taxes—and New York's excess property tax burden, now about 62 percent above the national average per capita."
        I've copied a comparison of various State's Medicaid Expenditures per person served for 2008.  The present numbers are much higher, but the comparison remains.  Note that very progressive States with large urban centers have much lower per person expenses.  Read the data and then the solution which follows.

Medicaid Cost Per Person Served, 1998
(Red States less than half New York's cost)
New York ~  $8,961

California $2,386,
Washington $2,563
Oregon $3,652
Virginia $3,740
Florida $3,607
Texas $4,419
Illinois $4,435
Delaware $4,440
Michigan $4,494
Ohio $5,346
Massachusetts $6,870
Wisconsin $5,457
Pennsylvania $5,808
New Jersey $6,856
Rhode Island $6,603

Is there less compassion for the poor in California, Illinois, Michigan, Oregon, Wisconsin, Pennsylvania, or Washington?  No need to reinvent the wheel or waste time drafting new laws and regulations, just copy them from California or Illinois or Michigan or Oregon or Virginia or even, Texas.   Watch the Medicaid costs be cut in half, local property taxes fall and state budget be easier to balance.
 

An Albany Lobbyist's Ethics Problem Are Solved As He Is Transformed To Consultant For Andrew Cuomo

When deeds speak, words are nothing.  ~African Proverb

   Here's the deeds from Cuomo's Medicaid Redesign Team: "The consumer advocacy group the Center for Justice and Democracy is calling on Medicaid Redesign Team member and Cuomo confidante Jeffrey Sachs to release “a sworn affidavit that you have not discussed the Medicaid Redesign Team or any issue covered by the Medicaid Redesign Team with any of your clients and to explain exactly what services you are being paid for by these clients and how much.”  and "You have 'quickly emerged as a leader on the governor’s 27-person Medicaid redesign team' while “working as a paid consultant to some of the biggest players in the New York health care industry, including Mount Sinai Medical Center, NYU Langone Medical Center and the state’s largest association of nursing homes, all of which have financial interests at stake in the coming Medicaid changes.”

 Here's Cuomo's words  in his Inaugural Speech:   (Note all the trust, believe, and restore words.)

1. "That’s what this administration is going to be all about — restoring the pride, making the government work, my friends. So people once again trust the government and trust the institution. So that people once again believe in government, in themselves and in this state.  And that’s what this is all going to be about. Rebuild the government, restore confidence, restore trust, get the people of this state believing once again. Believe in government, believe in themselves, believe in each other, believe in our future. Believe in our potential, believe that we can fulfill this dream of New York and we’re going to make this state the Empire State, greater than it’s ever been before."

2. "The special interests who have ruled our government for years must give way to the people’s agenda."

3. "Number 2 is going to be cleaning up Albany and restoring trust because Bob [Duffy] is right, you have nothing without trust."

4."Too often government responds to the whispers of the lobbyists before the cries of the people."
 
5. "The words “government in Albany” have become a national punch line. And the joke is on us. Too often government responds to the whispers of the lobbyists before the cries of the people. Our people feel abandoned by government, betrayed and isolated, and they are right."

  Here's how the Illusionist has resolved the disparity by "the public relations firm of Ken Sunshine and Shawn Sachs[nephew of Jeffery Sachs], Gov. Andrew Cuomo’s good pal Jeffrey Sachs won’t go to bat for his clients in Albany for as long as Cuomo has a government to run. Declaring that Jeffrey Sachs is not a lobbyist, but a consultant, the spokesman, Jesse Derris, said Jeffrey Sachs has changed his way of operating as a consultant for a host of health care institutions. This comes as Cuomo is trying to get lawmakers to adopt a sweeping ethics reform plan."

 Here's what you now see: Shawn Sachs now deals with the clients for fees, while Jeffery Sachs deals with the government.

Here's today's latest that Sachs should register as a Lobbyist in NY Times.

Now you see it. now you don't.  An illusionist at work

note that the man in white is stealing from the man watching.  He is looking skyward to cause others to look up instead of at the deceivers. link

As I grow older I pay less attention to what men say.  I just watch what they do.  ~Andrew Carnegie

Cuomo Needs Borrow An Unbudgeted Additional $807 Per Taxpaying Person And Each Of Their Dependents

 The People's piggy bank is empty, Andrew.

The Grim Debt Economic Reaper will cut down Cuomo's Budget Fantasy.

The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.    And research shows all Cuomo's estimates of growth in the New York Economy are shown as fantasy by "Rogoff and Carmen M. Reinhart, a University of Maryland economics professor, have done research showing that once government debt surpasses 90 percent of GDP, average growth rates slide 4 percent."


    The debt as reported on this blog in  No Whining, No Federal Bailout; You Made Your Bed Of Debt, Lie In It, New York
 
NY+USA Debt per person:
1. Total USA public debt outstanding Dec. 20 $13,868,461,000,000
2. nation's population on April 1 was 308,745,538 
3. USA debt per person $44,805   The federal Government can't bailout New York; it's sinking itself. 
4. New York debt per person: State-funded debt was $3,105 per person and in 2009, NY was the second most indebted State behind California.
5. This New York debt doesn't include the Pension liabilities from the present phony estimated safe return on pension investments of  7.5%, when the New York fund earned 1.1% over five years and New York State’s $132.6 billion pension fund is the nation’s third-largest.
   If we correct the pension liabilities optimistically with a 3.1% return, we get another $9,664 additional debt per person.   Making $12,769 debt per person as a better debt estimate in New York.   But now look at the 4.52 million people on Medicaid in NY (who don't pay taxes) out of a NY population of 19,541,453  which raises the New York debt per taxpaying person and each of their dependents to $16,600.


And Cuomo's budget has a real deficit of $22.1 Billion and not Cuomo's assumed $10 billion dollars with impossibly optimistic expected tax receipts and ignored other multi-billion dollar expenditures.

       Doing the arithmetic for Andrew Cuomo, we discover Cuomo needs to borrow just for the coming year an additional $12.1 billion to his already budgeted borrowing or $807 dollars  per taxpaying person and each of their dependents.

Who'll lend us this money which we can't pay back, Andrew? 

Will Andrew Cuomo Clean Out The Albany Swamp And Remove Chief Judge Lippman?

"Tear down this wall" ~ Ronald Reagan

"Tear this evil from NY" ~ CuomoTARP

   The Committee on Public Integrity is asking the FBI and Andrew Cuomo to ACT Now on the Creimes of Chief Judge Lippman.   This was reported on this blog in a post months ago. 
     The necessary steps were presented in a prior post on this blog  Misuse Of Public Funds By New York Chief Judge Demands Andrew Cuomo Act

     Andrew Cuomo is aware and has received criminal complaints against Judge Lippman.and has a duty to direct Attorney General Schneiderman to prosecute.  Andrew Cuomo can immediately ask the New York legislature to remove Judge Lippman from office.


     Here, Andrew, is the applicable law to remove Judge Lippman:

Criminal prosecution using Penal Laws of New York:  >§ 155.05 Larceny; defined. 1. A person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof

§ 155.42 Grand larceny in the first degree. A person is guilty of grand larceny in the first degree when he steals property and when the value of the property exceeds one million dollars. Grand larceny in the first degree is a class B felony.

Using the NY Constitution~Article VI § 23. Removal of certain judges and justices, by legislature;

§ 23. a. Judges of the court of appeals and justices of the supreme court may be removed by concurrent resolution of both houses of the legislature, if two-thirds of all the members elected to each house concur therein.

     Here, Andrew, is your duty under New York Executive Law to prosecute Judge Lippman:
Law § 63. General duties of Attorney General. 2. Whenever required by the governor, attend ...any term of the supreme court or appear before the grand jury thereof for the purpose of managing and conducting in such court or before such jury criminal actions or proceedings ...in which case the attorney-general or his deputy so attending shall exercise all the powers and perform all the duties in respect of such actions or proceedings, which the district attorney would otherwise be authorized or required to exercise or perform; 

   Andrew Cuomo and/or Attorney General Scheiderman can remove Judge Lippman from office with

§ 63-a. Action by attorney-general for forfeiture of public office.
The attorney-general may maintain an action, upon his own information or upon the complaint of a private person, against a public officer, civil or military,who has done or suffered an act which by law works a forfeiture of his office.

But how will Cuomo act? 

 1. As an indecisive Hamlet:

"To be, or not to be, that is the question:

Whether 'tis nobler in the mind to suffer

The Slings and Arrows of outrageous fortune;

Or to take Armes against a Sea of troubles."

2.  Or a coward:
“You are a coward when you even seem to have backed down from a thing you openly set out to do” ~ Mark Twain

3. Or the man with a duty:
"Battle is the most magnificent competition in which a human being can indulge. It brings out all that is best; it removes all that is base. All men are afraid in battle. The coward is the one who lets his fear overcome his sense of duty. Duty is the essence of manhood"  ~George S. Patton

4. Or as Ian Welsh asks, "Andrew Cuomo: stupid or evil?"

"Do or not do There is no try" ~ Yoda

Fox News Confirms CuomoTARP's Report That New York State Must Repay Feds $3.3 Billion Dollars With Tax Hike Likely

Andrew Cuomo's budget is a joke; he forgot the $3.3 billion he owed: He must repay the Federal Piper.

      Fox just reported, "States That Ignored Warnings on Unemployment Insurance Face Reckoning"  "States must find the money to pay interest on the loans. Generally, that involves a special tax on businesses until the loan is repaid. Some states could tap general revenues, making it harder to pay for schools, roads and other state services.
In the long term, state will have to their replenish unemployment insurance programs. That typically leads to higher payroll taxes, leaving companies with less money to invest."

This blog reported  Andrew Cuomo's Business Friendly Puff Pieces Fizzle As Reality Closes In

     As of January 21, 2011, New York State, one of 30 States, borrowed $3,343,758,375.70 (to be repaid) from the federal government for paying Unemployment Insurance.  Six States, Maryland, New Hampshire, South Dakota, Tennessee and Texas, have repaid their loans in full.    And since Cuomo didn't budget for this in his budget, he must be planning to pass it through to NY businesses at an average $478 TAX per worker.

Oh wait, Andrew Cuomo promised not to raise taxes.  What are we to believe?

Fitch Downgrade Adds $2.99 Billion in Deficit To Andrew Cuomo's Budget Farce

      The downgrading begins as Fitch begins CYA.  Fitch has announced, "In valuing pension liabilities in its credit analysis of states and local governments, the rating agency will now assume a return on assets of 7 percent, lower than the average return of 8 percent used by most pension plans. That translates to an increase in the average plan liability of 11 percent."
       This throws Cuomo's budget into the trash.  After Madoff, only a fool would accept even a 7% "safe" rate of return on investments as sensible.  NY State uses a 7.5% 'safe return on its pension investments.    But, NY's real rate of return was less than 4% for ten years.  Even worse, NY's return for past 5 years was 01.1%.   Link.

       New York's pension fund as of March 31 was nearly $56 billion below the level it would have attained if it had achieved its 8 percent target rate of return for the past five years.

     When Thomas DiNapoli lowered [from 8% to 7.5%] the expected rate of return for the state's $125 billion pension fund, ...[the State] contributed 88% of the $3.4 billion invested in employee pensions last year, according to the fiscally conservative Citizens Budget Commission.  So assuming another drop from 7.5% to 7.0% would require the State to contribute the same 88% of $3.4 billion, or Cuomo's budget just added another $2.99 billion in deficit.

The Hand Writing was on the Wall

Will Cuomo Drop The Corruption Ball And Fail To Make Official Misconduct A Felony?

 Fight crime with Ethics Committees?  Government crooks belong in jail, not told they're naughty. ~ CuomoTARP

   The on going ethics law creation farce is a diversion for New York, so NY politicians avoid increasing the criminal penalty for official misconduct to a felony.

    "Citizens Union Executive Director Dick Dadey was quite cutting as his organization released its second look in as many years at legislative turnover.  ...'While crime has declined in many parts of New York State, there is a crime wave in Albany that needs to be stopped,' Dadey said.  Thirteen legislators in the past six years have left office due to criminal charges or ethical misconduct; just nine have departed in the last two years."

Ethics commissions are jokes.   Jail works better and has a deterrent effect.
Albany ethics are an Albany Swamp joke.   Link 1   Link 2
              

 Watch out in the Albany Swamp
Does  Rep. Charles Rangel belong in jail or is he a "victim" of ethics charges?


A simple change in New York Penal Law was already proposed on this blog, and that prior post's letter is condensed and slightly modified below:


To Governor Andrew Cuomo, NY Assembly members, NY Senators, NY Times, Times Union and others:

         We,the People, demand tough law to stop NY government corruption. NY penal law for Official Misconduct copied here has a misdemeanor penalty, which is oft bargained down. Corruption prosecuted in NY under federal law is usually for felonies. We, the People, want a Better Law.

Old version of Penal Law (with changes in red): § 195.00 Official misconduct. A public servant is guilty of official misconduct when, with intent to obtain a benefit or deprive another person of a benefit: 1. He commits an act relating to his office but constituting an unauthorized exercise of his official functions, knowing that such act is unauthorized; or
2. He knowingly refrains from performing a duty which is imposed upon him by law or is clearly inherent in the nature of his office. Official misconduct is a class A misdemeanor.
3. Judges, judicial employees, employees of all NY State entities under judicial supervision and the Commission on Judicial Conduct are included as public servants under this law. Official misconduct is a class C felony.


Are you with us Andrew Cuomo, Assembly Member, Senator, the NYT , the Times Union?   Put up the law or shut up the corruption rhetoric.
 

Cuomo's Smoke And Mirrors Will Allow A Claim That Unemployment Tax Rate Remains Unchanged But The Tax Collected Doubles

In the picture, note that the man in white is stealing from the man watching.  He is looking skyward to cause others to look up instead of at the deceivers. link

  What will the illusionist, Andrew Cuomo, do with the Unemployment debt of $3.3 Billion dollars borrowed from the federal government, which he must repay this year, which was forgotten in his budget?   As of January 21, 2011, New York State, one of 30 States, borrowed $3,343,758,375.70 from the federal government for paying Unemployment Insurance.  Six States, Maryland, New Hampshire, South Dakota, Tennessee and Texas, have repaid their loans in full.  Since Cuomo didn't budget for this in his budget, he must be planning to pass it through to NY businesses at an average $478 per worker due from employers.

       "The current moratorium on interest on these loans' may cease in December 2010, when a provision of the federal economic stimulus law expires. If this happens, loans not repaid within a year would be subject to interest rates projected at between 4 percent and 5 percent. Furthermore, if states do not repay the loans by November 2011, employers will lose part of a federal tax credit they usually receive."
       Federal Unemployment Tax Act also pays half the cost of extended unemployment benefits. For example the FUTA tax rate was at 6.2% through 2009, and was levied only on the first $7,000 earned by each of a company's employees.      Under federal law, such tax increases are automatic once the money owed reaches a certain level.

        While the illusionist, Andrew Cuomo, was creating distractions, three other States have already have had to raise taxes to begin paying back the money they owe. More than 20 other states likely would have to raise taxes to cover their unemployment insurance debts.
        Obama has proposed a moratorium in 2011 and 2012 on state tax increases and on state interest payments on the debt.     In 2014, however, the administration proposes to increase the taxable income level for unemployment insurance from $7,000 to $15,000. 

      Will the illusionist, Andrew Cuomo, fool business by claiming the Unemployment Tax Rate has not increased, when the income upon which it is levied has doubled, thus doubling the tax collected.

Misuse Of Public Funds By New York Chief Judge Demands Andrew Cuomo Act

"Tear down this wall" ~ Ronald Reagan

"Tear this evil from NY" ~ CuomoTARP

  Although, the question should be when did Andrew Cuomo know about this, we will wait for his decisive action to remove all doubts. Is Cuomo serious about cleaning out the criminals out of the Albany Swamp and fiscal responsibility or will he try for a cover-up?

Factual Note: Andrew Cuomo has been aware of the criminal acts of and malfeasance and cover-up of court corruption by Chief Judge Lippman and it is all documented on ExposeCorruptcourts.blogspot.com  

       A New York Post - EDITORIAL - February 8, 2011: "Who knew that New York Chief Judge Jonathan Lippman's secret ambition was to run a luxury hotel? As The Post's Brendan Scott reported yesterday, the judges on New York's highest court will soon be moving into their own top-drawer residence suites atop an Albany building undergoing a $23 million, taxpayer-financed renovation."

"When-Gov. David Paterson [was] poised to lay off hundreds of state employees, the oblivious Lippman put in for some $1 million in decorating upgrades. Like $368,800 in cherry-wood furniture. And $49,915 in Carrera marble tile. Plus personal refrigerators and microwaves for each justice. Not to mention a $400,000 "museum." The building itself will feature stained-glass skylights and a mural of the Zodiac. No wonder Gov. Cuomo took a public swipe at Lippman for refusing to abide by the 10 percent spending cut he asked for from all agencies during this 'time of unprecedented financial hardship.' The Office of Court Administration submitted a $2.7 billion budget request -- more than $50 million above last year's."

   Judge Lippman conspired and concealed from public knowledge and used State funds for a project which benefited himself and others.  Judge Lippman knew that this project would not have been approved by act of the Legislature signed by the Governor. The value was in excess of one thousand dollars to Judge Lippman and others.  This is crime under New York Penal Law §195.20 Defrauding the government.  Defrauding the government is a class E felony.    Andrew Cuomo is aware and has received criminal complaints against Judge Lippman.and has a duty to direct Attorney General Schneiderman to prosecute.  Andrew Cuomo can immediately ask the New York legislature to remove Judge Lippman from office.


     Here, Andrew, is the applicable law to remove Judge Lippman:
NY Constitution~Article VI § 23. Removal of certain judges and justices, by legislature;

§ 23. a. Judges of the court of appeals and justices of the supreme court may be removed by concurrent resolution of both houses of the legislature, if two-thirds of all the members elected to each house concur therein.

     Here, Andrew, is your duty under New York Executive Law to prosecute Judge Lippman:
Law § 63. General duties of Attorney General. 2. Whenever required by the governor, attend ...any term of the supreme court or appear before the grand jury thereof for the purpose of managing and conducting in such court or before such jury criminal actions or proceedings ...in which case the attorney-general or his deputy so attending shall exercise all the powers and perform all the duties in respect of such actions or proceedings, which the district attorney would otherwise be authorized or required to exercise or perform; 

   Andrew Cuomo and/or Attorney General Scheiderman can remove Judge Lippman from office with

§ 63-a. Action by attorney-general for forfeiture of public office.
The attorney-general may maintain an action, upon his own information or upon the complaint of a private person, against a public officer, civil or military,who has done or suffered an act which by law works a forfeiture of his office.

But how will Cuomo act? 

 1. As an indecisive Hamlet:

"To be, or not to be, that is the question:

Whether 'tis nobler in the mind to suffer

The Slings and Arrows of outrageous fortune;

Or to take Armes against a Sea of troubles."

2.  Or a coward:
“You are a coward when you even seem to have backed down from a thing you openly set out to do” ~ Mark Twain

3. Or the man with a duty:
"Battle is the most magnificent competition in which a human being can indulge. It brings out all that is best; it removes all that is base. All men are afraid in battle. The coward is the one who lets his fear overcome his sense of duty. Duty is the essence of manhood"  ~George S. Patton

4. Or as Ian Welsh asks, "Andrew Cuomo: stupid or evil?"

"Tear this evil from NY" ~CuomoTARP 

"Do or not do There is no try" ~ Yoda

Fiscal Conservative Andrew Cuomo's Shell Game Is Borrowing From The Pension Fund To Contribute To Pension Fund

 "I am not a crook!" ~ Richard Nixon

Shell game scam alert: Will there be something left for the bond holders, or the pensioners, or any taxpayers capable of paying for it?  Or nothing left anywhere?

     What's Andrew Cuomo or Comptroller DiNapoli doing about borrowing from the pension fund to pay contributions to the pension fund in 2011?  Nothing, it's not so described in his budget or in his announced agenda. 


      Amortized means payments are extended over future years.

  From Empire Center for New York Policy, "Starting in fiscal 2011-12, the contribution rates used to calculate the state’s pension bill will be allowed to increase by only one percentage point a year, starting at this year’s capped level. Billed contributions above that amount in any given year can be spread, or amortized, over 10 years, payable to the pension fund at a rate pegged to interest on taxable bonds, generally in the neighborhood of 5 percent. As part of the deal, the minimum contribution level is permanently fixed at 4 percent. Local governments have been given the option of joining this “rate mitigation program,” and many are already choosing to do so."

This is the applicable law: NY State Law RSS - Retirement and Social Security
Title 2 - ESTABLISHMENT, MANAGEMENT, SUPERVISION AND FINANCING
19-A - Employer contributions for the two thousand ten - two thousand eleven fiscal year and subsequent fiscal years. (allowing amortization or paying in this year's contribution over many years)

     Pension Plan or Ponzi Scheme?  "Now there is a new claimant to the title of Ponzi Perfection — The State of New York.…Another oddity of the plan is that the pension fund, which assumes its assets will earn [7.5%] percent a year, would accept interest payments from the state that would probably be 4.5 percent to 5.5 percent."   "'Mr. DiNapoli, the comptroller, said: “We would view it more as an extended-payment plan.” 

       This NY State Shell Game also allows Municipalities to Borrow from Pension Fund to make Required Pension Fund Contributions

      Is this Fiscal Insanity by the Fiscally Conservative Andrew Cuomo, or a scam?   This is another reason why New York will default or go bankrupt.   If this was a private company, they'd all be headed to jail, or, for the insane, to the asylum.

Andrew Cuomo's Business Friendly Puff Pieces Fizzle As Reality Closes In

 Oh what a tangled web we we weave, when first we practice to deceive ~ Shakespeare

    Andrew Cuomo's business friendly with no tax increases puffing is about to burst.   His lackeys got puff pieces in the Wall Street Journal describing Cuomo as a “national spokesman for fiscal sanity” and in the National Review entitled “Cuomo the Conservative”  Abraham Lincoln has some timeless advice for Andrew, "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."

   As of January 21, 2011, New York State, one of 30 States, borrowed $3,343,758,375.70 from the federal government for paying Unemployment Insurance.  Six States, Maryland, New Hampshire, South Dakota, Tennessee and Texas, have repaid their loans in full.    And since Cuomo didn't budget for this in his budget, he must be planning to pass it through to NY businesses. From NY Dept. of Labor, "the number of private sector jobs increased 1% by 70,800," or the number of private sector jobs in New York is 7,008,000. Dividing $3,343,758,375.70 by 7,008,000 means an average $478 per worker is due from employers. Is this NY as business friendly?

       Did Cuomo fool his conservative/tea party supporters by having only a property tax cap passed by his request in the NY Senate?    Not really, when "UNYTEA’s Board of Directors has voted unanimously to endorse Governor Cuomo’s proposal for a 2% cap on property taxes, but only if it is accompanied by mandate relief."

        Ian Welsh describes Cuomo and his cronies as "the people who hollowed out the US economy and caused the financial crash don’t pay the price of their evil, but in fact stay in charge of society despite causing a Depression and being  bankrupt."   Welsh asks, "Andrew Cuomo: stupid or evil?"   It doesn't matter, because he won't continue to fool people for much longer.   It's Cuomo's M.O.


     Will new business delight that Cuomo's budget is smoke and mirrors and has ignored over $10 Billion in deficit in addition to the $10 billion that Cuomo claims and that the pension books are cooked.   Or that, Cuomo proposes to "eliminate a $10 billion dollar deficit without raising taxes or borrowing" and then he is borrowing $5.6 Billion dollars.

    Bob Brinker, this weekend, after hearing of all the great retirements for government employees, now recommends that people move out of the high tax States with cooked Pension books.     Who's going to be left to pay for Cuomo's plans?  Medicaid recipients, government workers?   So the advice for residents of  budget challenged States is dump their bonds and move out. 

      Did Andrew believe he'd escape the message of the  Handwriting on the Wall?

 

The party's over; the government fed pigs must removed from the trough; and the piper must be paid

Default Closing In On Andrew Cuomo As Bond Rates Rise And Bonds Are Dumped

Prodigal, adjective: recklessly wasteful. from Latin, prodigus ~ sqander

      Mario's prodigal son will soon be banging his silver spoon and demanding his credit card debt be paid and that he needs to borrow to get more spending cash.   Meanwhile, default, bankruptcy, budget gimmick failures, real World accounting, and the ridiculous 7.5% "safe return" on pension investments are all closing in on "The Son of Mario."

    Andrew Cuomo's budget is a farce.  NY General Obligation Bond latest sales (at 9AM, 2/4/11) were at 5.00% to Investors and instead of the lower 3.357% which gave Cuomo's budget $5.6 Billion in borrowing costs.  Cuomo's budget seriously underestimated borrowing costs by over $2 billion dollars.


In the news:

1. "Congressman Patrick McHenry, R-NC, has launched a broad investigation into the struggling market for debt issued by states."
2. "House Speaker Newt Gingrich and former Florida Gov. Jeb Bush ... promoting a plan to enable near-insolvent states such as California and Illinois to go bankrupt as well."
3. Cuomo's deceit that he'll collect taxes from Indian Reservations on cigarettes, ignores the obvious that if Indian cigarettes include the tax, the reservations would lose all most all sales and thus a $130 million dollar lie.
4. Cuomo is still puffing up as he readies to run for President in 2016.
5. Cuomo wastes money on attracting business while ignoring repaying the Unemployment Insurance: State Trust Fund Loans of a growing $3.1 billion.   Cuomo must pass this on in higher unemployment contributions by New York Employers and watch the Cuomo Business Friendly New York fizzle.
5a.  The Delusional Cuomo, like Stalin, Mao and Fidel, thinks he and his committees can evaluate, "based on your ideas and what you bring to the table."  Poor Andrew doesn't know Mao, Stalin, and Fidel's economic plans all failed even with their committees.
6. "[Investors] in November and December pulled a record $21 billion from funds that invest in municipal bonds — twice as much as they did at the depths of the 2008 credit crisis."

7. "Investors pulled money from U.S. municipal-bond mutual funds for the 12th consecutive week ... Muni-bond funds had net redemptions of $2.7 billion in the week ended Jan. 26, the Investment Company Institute said today ...   The withdrawals,.... total $33.5 billion over the 12-week stretch."

 
   What will happen is Cuomo will run out of cash.   He can try I.O.U's, like California, ($3 Cuomo's backed by the full faith and credit of NY and Cuomo).  And/or, just not pay some bills.  And/or moan and whine to the President and Congress.   And/or pray for a Bankruptcy Chapter 10 for States.

P.S. Proposed Chapter 10 Bankruptcy along with above post will be sent to Newt Ginrich, Jeb Bush, Ron Paul and Rand Paul and faxed to the Representatives below on McHenry's House Committee on Oversight and Government Reform
Patrick McHenry 202-225-0316; Frank C. Guinta 202-225-5822
Ann Marie Buerkle 202-225-4042;Justin A. Amash 202-225-5144
Patrick Meehan 202-226-0280; Joe Walsh 202-225-7830
Trey Gowdy 202-226-1177; Dennis Ross 202-226-0585
Mike Quigley 202-225-5603; Carolyn B. Maloney 202-225-4709
Peter Welch 202-225-6790; John Yarmuth 202-225-5776
Jackie Speier 202-226-4183; Jim Cooper 202-226-1035

Cuomo's Crusade Falters As Moody's, Bankruptcy And Default Circle

The demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots. ~ H. L. Mencken

A modern Tenth Crusade has been declared by 'The Son of Mario" Cuomo.  Here's a five-minute video version hoping to enlist people to support him in his battle against the “special interests and lobbyists”


"Cuomo again blamed state spending on 'permanent law'”  Permanent law is a fake malady made up to sell "Cuomo's Snake Oil Cure For Spending"  As New York's top court, the Court of Appeals, noted a half-century ago, it is fundamental to our democratic system that "one Legislature cannot be limited or bound by the actions of a previous one."

Cuomo hopes "to enlist people to support him in his battle against the “special interests and lobbyists” and promised his proposed-budget would “shake up the Albany establishment.”  Crusader Cuomo has already isolated those special interests and lobbyists to his committees, such as the Medicaid Redesign Team;  even Al Sharpton had input in Cuomo committees.

Cuomo blusters, “The real power of the governor comes when the people of the state stand with him. I need you to make your voice heard now.  We can right the wrongs of the past.”

Rise up; join "The Son of Mario" in his Crusade Against Special Interests and Lobbyists and buy into "Cuomo's Snake Oil Cure For Spending."
 
     Meanwhile, Moody’s joins the pension skeptics, with "Moody’s new approach is expected to be adopted by other credit-rating agencies ... to find borrowing for projects more costly and their bond offerings less attractive to investors.  ... It also reflects skepticism going forward about the expected rate of return on investment used by most pensions funds, such as the 7.75 percent figure used by the California Public Employees’ Retirement System."  Andrew is  delusional, if believes the 7.50% rate he uses is an improvement.

Reality, the Chinese, Bankruptcy, default, $3 Cuomos, and the Hand Writing on the Wall are closing in on "The Son of Mario," and his Crusade.

"The worst enemies of the republic are the demagogue and the corruptionist." ~ T. Roosevelt

New York Bonds Are Down Rated Based On Cuomo's Executive Budget

Rating the Cuomo Executive Budget for Bond Purchasers

  The Cuomo 2011-2012 Executive Budget is like fancy curtains placed in the window hiding a burnt out interior in the house.   First,  there is the new folly presented by Cuomo:
1. Cuomo expects government bureaucrats and committees could design programs to save money. (SAGE Spending and Government Efficiency, Medicaid Redesign Team, 10 regional Economic Development Councils, Right-sized Youth Detention into community-based programs, Mandate Relief Resign Team) Link to Committees.  Grade D

2. Cuomo in his first sentence proposes to "eliminate a $10 billion dollar deficit without raising taxes or borrowing" and then he is borrowing $5.6 Billion dollars.    Grade F

3. Cuomo says, "New York is number one in education spending and number 34 in results and number one in healthcare spending and number 21 in results."  Cuomo expects the same State workers running these programs will change their stripes, now that Cuomo is Governor?    Grade -Delusional/Incomplete

4. Cuomo has a creative "funds shift [that] would result in the use of state bond proceeds for payment of a portion of debt service on MTA revenue bonds."   Grade F

Then there is the Cuomo folly reported yesterday on this blog:

 5. Cuomo's budget will fail to deal with the elephant in the room and will not follow eight other State's models for laws and regulations which could produce at least  $29 billion in savings per year.  And Cuomo and his Medicaid Redesign Team  is filled with trough feeders.  Grade-Delusional/Incomplete

6. Cuomo's budget  used the "Madoff-like" pension assumptions of 7.5% safe return on pension investments. and continue to allow borrowing to fund contributions.     Grade F
 
7. Cuomo will fail to budget in the required repaying of the federal government for Medicaid frauds tolerated by New York.  This is minimally estimated at $6.4 billion needed to added to deficit or be funded.    Grade F

8. Cuomo reducing Medicaid waste and fraud is a joke, since Cuomo recovered only 0.6% of medicaid fraud while he was Attorney General.    Grade -Delusional/Incomplete

9. Cuomo forgot what happens when New York's bond rate rises?  and NY's borrowing costs will move up from $5.6 Billion to $18.8 Billion.       Grade D

10. Cuomo forgot about repaying the Unemployment Insurance: State Trust Fund Loans of  $3.1 billion.   Cuomo must pass this on in higher unemployment contributions by New York Employers and watch the Cuomo Business Friendly New York fizzle.     Grade F

11. Cuomo claims a $10 billion dollar deficit, when if he could add correctly he'd get $22.1 billion deficit,  without even counting the pension shortfall from the phony 7.5% safe return and the "Build America" funding losses.     Grade F


New York State Bonds will be rated overall Grade D- and the multiple delusional/incompletes show an impossibility of improvement.

     The good News is Moody's acts slowly on bonds.  Their downgrade of Egyptian Bonds reported on Monday, many days after any sane person would have.

      In further regard of Bond Rating Firms:  The Financial Crisis Inquiry Commission established  by Congress and signed by the President Obama in May 2009 reported on page 25: "We conclude the failures of credit rating agencies were essential cogs in the wheel of financial destruction. The three credit rating agencies were key enablers of the financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval. Investors relied on them, often blindly. In some cases, they were obligated to use them, or regulatory capital standards were hinged on them. This crisis could not have happened without the rating agencies." [link to full report 600+ pages]
You still have time to sell your New York Bonds before they are devalued.  Or, you can hold on to your bonds and then later join the class action suit against rating agencies to recover losses.