State Bag of Tricks

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By all accounts, the state budget approved by Governor Pataki and the legislature last week is a mixed bag of goods for New York City.

The city did do well in some areas, getting funding for downtown redevelopment and pre-kindergarten classes. But community health clinics and housing development for the city’s homeless were lacking.

City Limits offers a roundup of winners and losers in the Empire State’s election-year financial plan.

First, there’s the cash that’s being pulled from the coffers that the federal welfare legislation intended to go toward cash benefits and programs that benefit low-income New Yorkers.

When it enacted welfare reform in 1996, Congress allowed the states to spend their Temporary Assistance to Needy Families block grant any way they saw fit, as long as it helped people on public assistance find jobs. Since New York’s welfare caseload has dropped from 2 million in 1997 to 640,131 as of February, and the budget for actual welfare benefits has dropped correspondingly, the state has had a welfare surplus each year. This year, there’s $2.58 billion.

Over the past five years, the state has done two things with this money: put almost $1 billion into what was called a “rainy day” fund, and spent another several billion dollars to expand everything from child care to the earned income tax credit.

From the look of the budget the governor and legislature announced last week, they must be forecasting only sunny days ahead for the state’s welfare program. The state fiscal plan for the next year doles out the entire $920 million rainy day fund, as well as this year’s $1.6 billion TANF surplus. Among the lucky recipients: The Tuition Assistance Program, which provides college scholarships to students whose families earn less than $80,000 a year, gets more than half of its budget, or $380 million, from TANF cash. Last year, TAP got $636 million–all from the state’s general revenues.

Another $250 million goes toward other programs also typically funded by the state’s general fund, like grants to local foster care programs and for pre-kindergarten classes. And to play a little catch-up, the new budget shifts $282 million from the rainy day fund to pay for last year’s earned income and child and dependent care tax credits, money the state’s just now doling out through tax refunds.

While glad that some of this cash is going toward programs that will help some of the state’s poorest, some welfare advocates wonder how, with no rainy day TANF fund, the state will pay for the intensive services required to prepare New Yorkers on welfare for work, or to fund a rise in the welfare rolls should the economy continue to falter. “A very large chunk of this TANF surplus is being used for inappropriate things,” said Ron Deutsch, executive director of Statewide Emergency Network for Social and Economic Security, pointing to TAP. “Now there’s less money down the road for supportive services that people need to stay off welfare and get good jobs.”


In the case of health care, New York did fairly well, thanks in part to Democrat-turned-Republican Senator Pedro Espada of the Bronx. The legislature was able to restore $7.9 million for programs for people with the virus, $1.3 million for increases in adult day health care, and, most surprising of all, $4.75 million for a long-sought initiative aimed at providing prevention education and case management in communities of color. Of that, Espada pushed in $1.25 million, much of which is expected to go to his district. The Senate also put in an additional $1.75 million for HIV/AIDS treatment and substance abuse treatment.

As for how Espada did it, said Michael Kink, AIDS policy guru for Housing Works, “I think that he used his, uh, his–let’s just say he communicated very effectively with Bruno. He used his role as an advocate.”

Election-year largesse did not extend to small, community-based and specialized health clinics, however. For rape crisis clinics, only 60 percent of the governor’s proposed cuts were restored; and when it came to family planning and school-based health clinics, most of which serve underserved, underinsured communities of color, 89 percent of what the governor had cut was reinstated.

One long-hoped-for program was left out entirely: a capital fund to help community health clinics fix dilapidated conditions, modernize and ease into the new managed care payment regime.

“These are clinics that don’t have access to the kinds of capital funds that hospitals have,” said Richard Conti from State Assembly Health Committee Chair Richard Gottfried’s office. “They serve poor, primarily uninsured populations, and so their revenue base is not strong.”


Advocates for the homeless saw good news on the budget overall. Some of the programs the governor threatened to slash in his “bare bones” budget were restored to last year’s levels: $525,000 for grants to improve safety, health and sanitary conditions in shelters; $800,000 for homeless outreach programs; and $200,000 to help homeless people with disabilities get SSI.

An additional $750,000 was put in for eviction prevention services, to be run by the Coalition for the Homeless. And a new program was created, to the tune of $2 million, to provide supportive housing for families and aging foster children.

Things do not look so good for the Homeless Housing and Assistance Program, the state’s biggest initiative to build apartments for people living in shelters or on the street. Funding for that went down from $40 million last year to $30 million.

Still, lobbyists for homeless programs were optimistic last week: “Under the circumstance and in the wake of September 11, I am really pleased we’re making it through as well as we are,” said Shelly Nortz of the Coalition for the Homeless.

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