2008 Legislative Session Update

August 1, 2008

Author(s):  Kristin Brown Lilley, Corbin Street, Intern

What a year.  In the midst of all the chaos that surrounded state leadership and serious concerns about the financial outlook for the state, the 2008 legislative session drew to at least a temporary close with a mix of positive and negative outcomes that will affect struggling New Yorkers and their families.  With the slowdown on Wall Street and a sluggish real estate market along with other matters impacting state revenues, lawmakers were forced to make many difficult decisions as they negotiated the budget in late March.  This resulted in a situation where increased resources were focused on specific programs and issues such as home mortgage foreclosures, while other areas, including many essential human services saw funding reductions in the budget.  Many programs were also subject to across the board cuts, part of Governor Paterson's efforts to respond to the fiscal crisis when he became Governor in mid March in the midst of budget negotiations

As this article is being written, the Legislature considers a series of additional "mid year" cuts proposed by the Governor as he seeks to address the state's ongoing fiscal crisis.  These cuts, if enacted, will have a devastating impact on the provision of state funded human services.  From an additional across the board six percent cut to local assistance, to a fifty percent reduction in "legislative adds" and member items, non profit providers, including civil legal services programs may face difficult fiscal situations of their own this fall.  Empire Justice has and will continue to urge the Governor and the Legislature to focus on revenue raising options rather than cuts in programs and services as the most equitable, balanced and fiscally sound way to hold New York back from further fiscal peril.

In terms of our legislative priorities, nine of Empire Justice Center's thirteen priorities were addressed during the 2008 legislative session.  Below you will find a brief summary of each issue and the outcome, as well as a few additional budget items of interest. 

Access to Legal and other Human Services

CIVIL LEGAL SERVICES

Empire Justice Legislative Agenda Goal:

• Maintain last year's investment in state funding for civil legal services by providing a total of $15.85 million in the state budget 

Budget Outcome:

This year's budget process was quite a rollercoaster ride for civil legal services (CLS) providers in New York State.  In late January when news hit of Governor Spitzer's plan for CLS programs to rely entirely on anticipated high yields from Interest on Lawyer Account (IOLA) funding and his subsequent elimination of $15.8 million in state funding, CLS agencies immediately mobilized, reaching out to both the Governor's Office and the Legislature raising deep concerns about the loss of state funding and the instability of IOLA. The campaign proved to be a long one, requiring steady engagement from the CLS community at multiple levels within the government, and is in fact still under way.

In this campaign, countless letters and resolutions were delivered to the Governor's office calling for restoration of the state funding for civil legal services. Two of these letters came from within the Legislature thanks to the tireless leadership of Assembly Judiciary Chair, Helene Weinstein and Senator Ruth Hassell-Thompson, ranking Minority member of the Senate Judiciary Committee.  Both circulated letters through their Conferences and ultimately gathered a total of 92 signatures from members. Several letters were also written to the governor's office from Presidents of the New York State Bar Association, the Women's Bar Association of the State of New York, and the Capital District Women's Bar Association and their members. Resolutions in support of restoring state funding were also passed by the Minority Bar Association of Western New York, the Women's Bar Association of New York, and the Bar Associations of Erie, Albany, Ontario, and Monroe Counties. Over 16 CLS program directors and their staff from across the state came to Albany to speak personally with their representatives about the importance of restoring state funding.

Fortunately, the Legislature – thanks primarily to the steadfast support of the Assembly majority- was able to restore virtually all of funding they had contributed to CLS state funding the previous year.  However, in the end, the 2008-09 enacted budget still created a time warp for civil legal services providers, bringing funding levels back to where they were in 2006 by wiping out last year's gains and providing approximately half ($8 million less) of the state funding provided in 2007.  This cut could not have happened at a more dire time as the economy and housing markets are worsening, and the state's civil legal services programs are subsequently faced with more and more clients in need at the very moment state funding is cut significantly.

The $8 million in new funding from 2007 had been awarded across the state through new contracts with the Office of Court Administration. Without restoration of funding, all of these new grants and contracts will end up being one-time money, and this coming fall, programs will need to shut down any new efforts that they have just gotten up and running. While the majority of the budget has been enacted, the good news is that there is still an opportunity to restore the funding and it can be done at a discount.  Because these new contracts are running on an October-September grant cycle the $8 million gap in funding can be fixed with a $4 million appropriation. The funding would allow programs to continue to provide services under current contracts thought the end of the state fiscal year.  

The CLS community has urged Governor Paterson to use $4 million in discretionary funding to continue these programs. Countless letters have been written to Governor Patterson urging him to step in and ensure that these critical services can continue. 

Should the proposed 50 percent reduction in member items and legislative adds be enacted, the state funding for CLS would fall to just 75% of the 2007 level.  We are hopeful that the Legislature will reject these proposals and that the Governor will still consider providing discretionary funding to help legal services providers make up for the significant reduction of state funding in the 2008-09 budget.

DISABILITY ADVOCACY PROGRAM (DAP)

Empire Justice Legislative Agenda Goal:

• Save the state money by bringing more federal dollars to New York - invest $10.74 million in the Disability Advocacy Program to help more low income disabled individuals obtain federally funded SSI/SSD benefits.

Budget Outcome:

With the impending economic downturn, Governor Spitzer's initial budget proposal kept DAP funding at its previous level of $6.74 million ($5.74 million base funding and $1 million in Temporary Assistance to Needy Families (TANF) funds). Under the enacted budget, however, to make up for the overall shortfall in revenues, there was a 2% reduction in a number of programs and services, including DAP. While there was an effort to exempt DAP from the reductions because of its revenue producing capacity, a reduction in the base funding was ultimately included in the overall budget package. Fortunately, the $1 million DAP/TANF funding will not be affected, and will be distributed in full. The 2% cut will be reflected in the DAP base awards retroactively beginning on January 1, 2008 due to the calendar year feature of DAP contracts. Should it go forward, the Governor's proposed 6% reduction to local assistance would impact the DAP base funds that have not yet been distributed.  Unfortunately, due to the delay in contracts, none of the funding has been distributed – as a result, we would anticipate an 8% cut across the board for DAP services.

CHILD CARE CO-PAYMENTS

Empire Justice Legislative Agenda Goal:

• Ensure low income families can afford quality child care—cap child care subsidy co-payments at 10% of household income and make eligibility requirements uniform across the state.

Legislative Outcome:

While legislation was introduced in the Assembly that would cap child care co payment subsidies at 10% by Assemblymember Susan John (A.6087) it did not pass the Assembly and there was no Senate bill introduced.  We hope to continue to work with the legislature and with the Office of Child and Family Services to make this issue a higher priority next legislative session.

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDING

Empire Justice Legislative Agenda Goal:

• Increase federal resources to support work supports and services for individuals eligible for public assistance – commit to phasing out use of the federal TANF block grant to fund the state's Earned Income Tax Credit (EITC).

Budget Outcome:

Unfortunately this year's Executive Budget included a $115.4 million increase in the portion of the State EITC funded by TANF dollars, clearly a move in the wrong direction. The State EITC was already comprised of up to 25% of New York's  TANF block grant dollars, and while it is an incredibly valuable work support and an important tool that helps to alleviate poverty, funding the ever-increasing State EITC from a limited resource pool such as TANF is simply not a sustainable policy approach.  In order to protect and hopefully expand the numerous benefits and programs funded with TANF dollars, Empire Justice Center joined with members of the NY Children's Access Network's Economic Security Committee in urging the State to immediately begin transferring the EITC out of TANF by capping the EITC TANF allocation at last year's level of $603.1 million. To our disappointment, the governor's budget proposal was enacted, increasing the amount of TANF dollars for EITC by $115.4 million.

ACCESS TO FAMILY COURT FOR DOMESTIC VIOLENCE VICTIMS

Empire Justice Legislative Agenda Goal:

• Ensure that all victims of domestic violence have fair access to Family Court and certain criminal protection by expanding the Family Court Act and Criminal Procedure Law definitions of "family and household member" to include individuals in dating and intimate relationships, as well as caregivers.

Legislative Outcome:

Over the past 20 years, domestic violence advocates across the state have tirelessly urged the State Legislature to expand access to Family Court civil orders of protection to include all victims of domestic violence. On Tuesday, June 24, 2008 the epic battle ended with the passage of the Fair Access to Family Court Act, bringing New York in line with the other 49 states (including Washington D.C.) that currently provide this level of access.  This bill will bolster safeguards in the 1994 Family Protection and Domestic Violence Intervention Act to include the 50% of domestic violence victims in New York State that are currently not able to      access civil orders of protection.  This includes unrelated persons who are or have been in an intimate or dating relationship, divorced individuals regardless of their living arrangements, and unrelated individuals who have resided or currently reside in the same household.

Strengthening Public Benefits and Public Health Programs

STREAMLINING

Empire Justice Legislative Agenda Goal:

• Streamline and simplify all programs (Medicaid, Food Stamps, Public Assistance and Child Care) with a goal of improving the lives of public benefits recipients; cut administrative costs for government agencies; ensure continuity of coverage and seamless transition between programs; reduce churning and eliminate unnecessary documentation requirements; and maximize federal contributions to New York by ensuring that applicants eligible for programs with federal funding enroll and stay enrolled.

Budget and Legislative Outcomes:

Across the state agencies a number of important initiatives were undertaken this year that met the criteria of our Streamlining Agenda, which was published in a previous issue of the Legal Services Journal.  In particular, administration and access to health and Food Stamp programs were improved. See "additional budget items of interest" below for a few of the relevant health initiatives that were enacted and stay tuned for a future article with more information on streamlining efforts.

WELFARE GRANT INCREASE

Empire Justice Legislative Agenda Goal:

• Provide welfare recipients with the means to meet the basic needs of their household while on assistance – provide a long overdue increase in the welfare grant.

Budget Outcome:

While there was no increase in the welfare grant this year, there was an important budget initiative that will provide a significant increase to the monthly income of approximately 27,000 public assistance households with children. Currently, when a family is on public assistance, they must assign their right to child support to the state and local social services district. This money is retained by the social services district to reimburse itself for public assistance paid to the family. If the family receives Temporary Assistance for Needy Families (TANF) funded assistance, 50% of the child support collected is returned to the federal government. However, before this is done, the first $50 of support that is paid in the month when it is due is "passed-through" to the family and does not count as income in the calculation of the family's public assistance grant.

The Federal Deficit Reduction Act of 2005 (DRA) provided a significant incentive to states to increase the pass through. Under the DRA, when child support funds are "passed through" to the family and disregarded up to $100 for one child and $200 for two or more children, the share of child support collections that would have been returned to the federal government is waived, allowing the social services district to keep the extra funding. Taking advantage of this opportunity, the enacted state budget amends the Social Services Law so that effective October 1, 2008, when an absent parent pays their child support in the month when it is due, the household on public assistance will be able to keep up to $100 of that support every month and it will not be counted as income against their public assistance grant. Even more significantly, effective January 1, 2010 the enacted state budget allows households with more than one child to keep up to $200 per month.

Additionally, the Social Services Law has been amended to permit families applying for public assistance from October 1, 2009 on to retain their right to previously accrued child support arrears. Currently, when a family is on public assistance they have to assign their right to child support arrears to their local department of social services to reimburse the agency for public assistance paid to the family, even if those arrears accrued while the family was not on public assistance. Effective October 1, 2009, only those arrears that accrue while the family is on public assistance can be retained by the social services district. This change was required by the DRA, and New York had the option to adopt it effective October 1, 2008, but chose not to do so.

LANGUAGE ACCESS

Empire Justice Legislative Agenda Goal:

• Ensure state and local agencies meet their obligations to ensure individuals with Limited English Proficiency (LEP) have meaningful access to language services they need to effectively communicate when accessing health care, government services and benefits

Legislative Outcome:

Empire Justice strongly supports (A.6288/S.7059) introduced by Assembly Health Chair Richard Gottfried and Senator John Sabini, which would make it possible to obtain Medicaid reimbursement for interpretation services provided by hospital inpatient, outpatient and emergency department settings and in diagnostic treatment centers.  Unfortunately the legislation did not pass in either house.  On the Administrative Advocacy front, we continue to work with state agencies including the Office of Child and Family Services, the Office of Temporary and Disability Assistance and the Department of Health to encourage and assist them in developing policies that adequately meet the needs of LEP New Yorkers who access the services administered by their agencies.  You can also see Barbara Weiner's article in this issue of the Legal Services Journal for a description of recent changes to the Food Stamp Program that will have a positive impact on LEP access to the program. 

CHILDHOOD LEAD POISONING

Empire Justice Legislative Agenda Goal:

• Stop children from being poisoned by lead in their homes by enacting the primary prevention solutions contained in "The Childhood Lead Poisoning Primary Prevention and Safe Housing Act" A.7533(Peoples)/S.4121(Perkins) and "The Childhood Lead Poisoning Prevention and Safe Housing Act"A.6399C(Gantt)/S.6350(Robach).

Legislative Outcome:

After years of advocacy at the state and local level, the Gantt/Robach legislation finally passed both houses, but not before advocates who worked on this bill had a bit of a roller coaster ride.  In the last days of the scheduled session, the Senate bill was amended - primarily to make technical changes and to move up the enactment date, and then passed.   The Assembly bill had passed earlier in the year.  Despite the fact that the two bills were virtually the same, the last minute amendments meant that the bills did not "match" and therefore could not be sent to the Governor for his signature.  Thankfully, when the Senate returned to Albany in early August, they also passed a version of the bill that was identical to the Assembly's.  Empire Justice and other advocates who worked hard to get this legislation passed are reaching out to the Governor and his staff to encourage him to sign this important bill. 

The Peoples/Perkins bill did not pass in either house. 

ACCESS TO HOSPITAL FINANCIAL ASSISTANCE PROGRAMS

Empire Justice Legislative Agenda Goal:

• Minimize medical debt for low-income consumers by encouraging hospitals to create and publicize financial assistance programs – restrict hospital reimbursements from the state's Indigent Care Pool to services for patients actually enrolled in those financial assistance programs.

Budget Outcome:

Last year's budget tasked a bipartisan Technical Advisory Committee on Indigent Care (of which Empire Justice was a member) with reviewing the existing distribution of charity care funding for hospitals and making recommendations for reform.  The Advisory Committee documented shortcomings of the extremely complicated existing system and proposed a new, simplified methodology for distributing funding.  This new methodology links reimbursements to actual services provided to patients enrolled in hospital financial assistance programs.  The legislature approved the new methodology for use with 10% of the $847 million that is distributed annually for hospital indigent care.  Data will be collected to evaluate the new reimbursement methodology and lay the groundwork for further reform of the system, hopefully putting us on the path toward transparency and accountability and giving hospitals real incentives to maximize use of their financial assistance programs.

Assisting New Yorkers Facing Financial Crisis

CONSUMER PROTECTION 

Empire Justice Legislative Agenda Goals:

• Keep victims of the subprime market in their homes and on the tax rolls – invest in foreclosure prevention measures including $10 million in funding for housing counseling and civil legal services, the creation of a $100 million statewide home rescue fund, and begin collection and making available to the public statewide foreclosure data.

• Help protect New York consumers from obtaining mortgage loans that put their financial stability at risk—pass the New York State Responsible Lending Act of 2007 and support federal legislative efforts to regulate mortgage lending. A.8972A(Towns).

Budget and Legislative Outcomes:

At the beginning of this year's Legislative Session Speaker Silver introduced a bill which, to our excitement, proposed a total of $180 million in foreclosure prevention funding, including $30 million for non-profit housing counseling and legal services and a $150 million rescue fund. While the $150 million home rescue fund was not adopted, we are pleased to announce that the '08-'09 enacted budget did allocate $25 million to the New York State Housing Trust Fund Corporation to create the foreclosure prevention services program. The money will be distributed to nonprofit, housing counseling agencies, and legal services providers to provide foreclosure prevention assistance to homeowners who entered into unconventional or subprime mortgage loans. The Corporation will distribute the funds in consultation with the Department of Housing and Community Renewal (DHCR), the Banking Department, and the Office of Court Administration.  The RFP was made available in July.  After the completion of the budget, the Paterson Administration sent the Legislature a program bill that included a comprehensive response to the foreclosure crisis. Introduced by Senator Farley and Assemblymember Towns, Chairs of the Banking Committees in both houses, the legislation combined immediate solutions to help homeowners in trouble and longer term approaches to help avert ongoing mortgage problems.  As the legislative session drew to a close, Governor Paterson, Speaker Silver and Majority Leader Bruno announced a three way agreement on the proposed legislation.  The resulting legislation retained many of the original components of the program bill, but did not include a private right of action.  For more details about the final agreement, see Kirsten Keefe's article in this issue of the LSJ.

Empire Justice Legislative Agenda Goal:

• Ensure that low income individuals are not placed at financial risk by inappropriately freezing bank accounts containing funds that are exempt from seizure (this includes Social Security, disability benefits, pensions, child support and other essential income) S.6203(Volker)/A.8527(Weinstein).

Legislative Outcome: 

Thanks to the leadership of Assembly Judiciary Chair Helene Weinstein and Senate Codes Committee Chair Dale Volker, this long awaited legislation, which passed the Assembly unanimously in early March finally passed the Senate the week before session ended.  The Senate vote was also unanimous.  While the legislation had been introduced in both houses and passed in the Assembly in the previous year, this year the bill underwent additional scrutiny and was amended to balance the rights and needs of consumers with the concerns of the banking industry. 

Once signed by Governor Paterson, the new law will take effect on January 1, 2009 and will have a dramatic impact on low income New Yorkers who have exempt income direct deposited into their bank accounts by exempting the first $2500 in the from being attached.  One of the positive outcomes of the amendments made this year was that the exemption threshold will be indexed for inflation.  For more information on the "Exempt Income Protection Act, see Kirsten Keefe's article in this issue of the LSJ.     

Other Issues of Interest

CHILD HEALTH PLUS (CHPlus) EXPANSION

In last year's budget, eligibility for the CHPlus program was expanded from 250% to 400% of the state poverty level, contingent on the state receiving federal financial participation in the expanded program. The federal government denied approval for the expansion. In an incredible move by the New York State Governor and Legislature, this year's enacted budget provided for the fully funded expansion of CHPlus (as proposed last year) with state only dollars.

MEDICALLY NEEDY PROGRAM EXPANSION

This year's budget also expanded income eligibility for the Medically Needy Program, as required in the Blair v. Daines class action lawsuit.  Since federal approval for the expansion has not been forthcoming, the budget language removed last year's federal financial participation requirement and now allows households with one or two members to have income up to the New York State standard of monthly need:  $725 monthly for households of one and $1067 monthly for households of two.  Income standards for households with two or more were also revised to increase by 15% for each additional household member.

MEDICAID SIMPLIFICATION AND CHANGES

A number of New York State Department of Health proposals to simplify Medicaid enrollment were approved, including: 

• The Medicaid resource test will be raised to conform with the resource test used for Family Health Plus;

• The resource test for the Medicare Savings Program, under which Medicaid pays for Medicare premiums and cost-sharing, will be eliminated;

• Medicaid eligibility tests for childless couples and single adults will no longer include drug and alcohol screenings;

• Standards of need used in computing Medicaid eligibility levels for single adults, childless couples and low-income families will now be standardized across counties at 130% of the Suffolk County standard of need (the highest in the state).

Also, starting on October 1, 2008, the Department of Health will be able to require dual eligibles (people who are eligible for both Medicare and Medicaid) who are participating in Medicare Advantage (private HMO plans) to also participate in a companion Medicaid Advantage plan offered by the same HMO.

REIMBURSEMENT REFORM

The enacted budget contains a major reform for outpatient reimbursement. Previously, medical providers were given a flat rate reimbursement per visit, regardless of the services rendered. Now, reimbursement will be based only on the intensity of services provided. In the meantime, inpatient rate reform will undergo further study by an advisory panel that will make recommendations for next year's budget.

OUTPATIENT INCENTIVES

$57 million in inpatient care funding will be shifted to hospital clinics, emergency rooms and ambulatory care. An additional $45 million will be provided for community clinics, physician services and providers that have evening and weekend hours. Doctors Across New York, a program proposed by the State Department of Health to provide loan repayment for physicians willing to practice in underserved areas, also received initial funding. 

ELDERLY PHARMACEUTICAL INSURANCE COVERAGE (EPIC) REFORM

Beginning on October 1, 2008 the Elderly Pharmaceutical Insurance Coverage (EPIC) program will have a mandatory generic component, meaning that prior authorization may be required before EPIC will pay for specific brand name drugs. Also, automatic EPIC wrap-around coverage for individuals who have Medicare Part D and EPIC will be removed to ensure that EPIC is not paying for costs that the Part D plans should be covering. As of April 2009, there will be a new EPIC drug discount card for non-elderly individuals, which will be available to anyone between the ages of 50-64, and anyone with a disability who does not receive Medicaid and whose income is below EPIC limits.