Senate hopefuls tout fiscal plans

44th SENATE DISTRICT — In a good year, it would have been tough for the state to afford paying every county’s share of the Medicaid bill. But with this year’s massive deficit growing ever worse, the concept championed by Senate candidate Fred Goodman has become an almost impossible sell.

Goodman, a Democrat who is trying to unseat longtime Republican Sen. Hugh T. Farley in the 44th Senate District, has begun emphasizing where he would find cuts to pay for his expensive ideas. But primarily, he’s arguing that in such difficult economic times, the state needs to take more of the burden off local taxpayers.

“If we can get the cost off the back of the counties, we can save 50 percent of their budgets,” Goodman said. “Every other state in the union does it. Why can’t we?”

His opponent, Farley, has criticized the idea as naive, saying it shows Goodman does not understand the depth of the state’s fiscal crisis.

But in truth, the two candidates simply have very different ways of handling the crisis.

Farley, 75, of Niskayuna, is crafting ways to crack down on massive Medicaid fraud, estimated at $4 billion a year, and cut state spending to eliminate the rising deficit.

Goodman, 50, also of Niskayuna, would spend his way out of the crisis. He said that now, more than ever, upstate New York needs state help.

In the past, Farley has been known for bringing home the bacon — flooding his district with generous grants from his pot of state money as a top-ranking member of the Senate majority. But now he tells locals he can’t bring them any money at all. Instead, he says it will take all his energy just to keep municipal and school aid at their current levels as all the legislators search for cuts to the 2008 budget.

“We have got to address how to get the state’s finances in order,” Farley said.

He wants to fund efforts to hunt down fraud in state Medicaid, an effort that he supported through legislation that passed last year. He wants to send more funding to the effort this year as well as reassigning workers from the inspector general’s office to focus on Medicaid fraud.

“Medicaid is 40 percent of the budget — more money is spent on it here than in California and Texas combined, and it’s estimated that 10 percent or more is fraud. That’s $4 billion,” Farley said. “[Eliminating that] would solve all our fiscal problems. We need to rev up the forces.”

He offered a laundry list of possible cuts: He would consider selling or leasing ski centers and other state property, putting a freeze on state hiring, and consolidating state agencies. The banking and insurance agencies could be merged, he suggested.

“We have got to be very, very clever,” Farley said. “The one thing we can’t do is raise taxes.”

CUTTING COUNTY COSTS

Goodman is looking at taxes too — from a local angle.

His Medicaid proposal would dramatically reduce county taxes. At the same time, he would flood the upstate economy with state grants to jump-start development.

“Most of the development has occurred on Manhattan Island,” Goodman said. “The fiscal crisis has only demonstrated the true need for economic development. New York can’t rely on one industry for its economic growth. Wall Street has been the economic growth of the state for decades.”

Goodman has received some criticism for the cost of his plans, but the floundering economy has helped him as well. The counties he would represent are facing large tax increases that would turn into huge tax cuts if they did not have to pay for Medicaid any longer.

“I had a voter say to me, all politicians say they’re going to cut taxes, but you’re the only one who’s shown me how you’ll do it,” Goodman said.

To pay for the Medicaid proposal and the economic development grants, Goodman has suggested a host of small cuts, each of which shaves a few million from the state budget.

He would use teleconferencing to reduce the number of in-person visits between children and jailed parents if the child lives a significant distance from the jail.

“You could save millions of dollars,” Goodman said. “A DSS supervisor and a caseworker are bringing a child from Malone for a one-hour prison visit — that’s costing the county two full workers for two days, plus overtime.”

He would also reduce inmate transportation costs by teleconferencing brief court appearances.

“The equipment is in the courtrooms. We’re not making good use of it,” Goodman said.

As an attorney for Schenectady County, Goodman sees what he considers wasted transportation and supervision costs every day. He is particularly familiar with the Department of Social Services because his law practice focuses on juvenile delinquency, and as a Niskayuna resident he’s seen the power of grants to draw development to downtown Schenectady.

He wants a “Marshall Plan” for upstate New York, in which the state would match local governments dollar-for-dollar on economic development projects.

BRINGING IT HOME

Farley argues that he’s been able to fund local development without such a costly plan.

He takes credit for bringing to downtown Schenectady the Lottery headquarters, Department of Transportation office, Commission on Quality Care and the Zone 5 police academy.

He also takes some credit for the siting of the Target distribution center and the Beech Nut baby food manufacturing center in the town of Florida.

While Goodman has mainly cited the fiscal crisis as another reason to support his ideas, Farley’s campaign has changed markedly since the crisis began. He used to jokingly introduce himself at campaign forums as “the guy who helped all you speeders” by increasing the highway speed limit to 65 mph. Now he talks about his career as chairman of the banking committee and the obscure legislation he got passed a year ago to stop predatory subprime lenders.

“Because of the subprime legislation I passed into law a year ago, New York does not have the problem others do,” Farley said. “That curbed predatory lending. We’ve moved to stem some terrible problems in this area. New York is not in a terrible crisis because of the legislation we passed.”

This year, he wrote legislation that created criminal penalties for lenders who take advantage of homeowners, set into law a number of budgeting basics for new homeowners — including mandatory escrow accounts for taxes — and required an additional 90-day negotiation period before foreclosure.

“Obama and McCain have said that’s what they should do at the federal level, so I guess they’re copying our legislation,” Farley said.

Goodman isn’t impressed. Even though the first legislation was introduced before the housing crisis began, he said Farley still acted far too late.

“He’s been there for 30 years. What took so long?” Goodman said.

As for Farley’s characterization of the state as not being in a “terrible” foreclosure crisis, Goodman said the senator was missing the forest for the trees.

“The core of the problem we’re facing now is the bank failure rates.

Three of the five national banks have failed, all of which were headquartered in New York,” he said. “Yes, we have to protect the homeowners, but that is the tail end.”

BANKING CRISIS

Outside the courtroom, Goodman’s private practice has focused on mortgages — an experience he said makes him particularly fit to guide the Senate through the banking crisis.

He also argues that if the Democrats wrest control of the Senate this year — which both parties agree is a possibility — then upstate would be better off with him than Farley.

“It will be beneficial for these four counties to have a leader who will be a member of the new majority to ensure we’re not lost,” Goodman said.

But Farley said experience will matter as the crisis continues.

“Banking is very arcane. It’s a very complicated area, one that few legislators are drawn to,” Farley said.