>> Coming up on "Need to Know" -- governor eliot spitzer is making house calls.
>> THANK you for accepting our invitation to invite ourselves.
[LAUGHTER]
I'm not quite sure how these things work.
>> WE examine the budget he is trying to sell with help from WXXI capitol bureau correspondent Karen Dewitt.
We check in with city and suburban school officials to find out how the spending plan would impact the classroom.
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>> Rochester's newsmagazine's since 1997.
This is "Need to Know."
>> Thanks for joining us.
I'm television news director Julie Phillips.
Governor Eliot Spitzer released his state budget proposal this week in albany.
It is a $124.3 billion spending plan that closes an estimated four billion dollar deficit.
Despite the deficit and an uncertain economy, this plan represents a 5% increase in overall spending.
Now that the plan is out there, the governor has to sell it just as he did last year's.
He is traveling across New York to talk about the budget.
He was in irondequoit on Wednesday, where he visited a local family in front of local media.
He was asked about a cap on property taxes.
>> I do not want to say anything is the only solution.
Folks may come up with their own ideas.
Increasing educational aid, which we have done significantly for the last two years, despite all we have done, we keep seeing property taxes increase in a way that tells me that now may be the time to go to this instrument.
I have called it a blunt instrument and it is.
It may be necessary now.
This is what we need to do.
>> TOM Suozzi accompanied spitzer in irondequoit.
You might remember he ran an unsuccessful democratic primary challenge against spitzer in 2006.
He is resurfacing as the chairman of the new property tax commission, charged with finding ways to reduce property taxes statewide.
>> Everybody agrees there's a problem.
To have a solution, you have to get the Democrats and Republicans.
You have to get the upstate and downstate.
You have to get the property taxpayers and the board.
You have to get the businesses.
You also have to get the school superintendents, the school boards, the teacher unions.
All these people have to be included in the conversation to come up with an answer.
Everybody knows there's a problem, but nobody knows the answer.
The purpose in coming to see you today is for the governor and I to say that we understand what you're going through.
We accept this is a problem.
We know that something has to be done.
We plan to propose something by day of this year.
>> That is tom suozzi, chairman of the governor's property tax commission in irondequoit.
We heard from the governor.
Now it is time to pull this state budget apart with our capitol bureau correspondent, karen dewitt is standing by in albany.
>> Thanks for joining us today.
>> SURE thing.
>> THE big question is, how can the state afford all that governor eliot spitzer promised last week?
Plus the $1 billion for a state -- a lot of that money is all money from last year.
Remember last April when it cut the budget, they were supposed to do a $1 billion capital plan and they never were able to work out the details.
He has money for that.
He cuts a little bit from everything.
Education, Medicaid dollars, he is closing some prisons, cutting hiring restrictions.
The thing that's different from last year is that he has not defined 1 enemy.
Last year he went after the hospitals.
He has not defined an enemy to set up this fight.
He is taking a little bit from everybody.
A lot of people are unhappy but they're not really unhappy.
They will probably not have rallies and have thousands of people on the steps of the capital shouting at him.
I think it will be easier for him by taking a little bit from everywhere.
>> BY not picking on one sector.
That said, those are the cuts.
What about the fees?
>> There are 46 new fees or increases in fees.
Anything from auto insurance going from $5 to $20.
Real estate closing cost will go up.
He wants to charge $20 more for the enhanced licenses.
Another thing is the star rebates.
They're not going to grow like they were supposed to.
People were going to get more from these star rebate property tax cut checks.
Instead, they will be the same amount.
is not raising any single tax, but he is causing a lot of loopholes.
>> I think his nickel and diming to the tune of $738 million in new fees.
>> The Senate Republicans have added up $1.7 billion, if you total everything, including this HMO charge, where they will be taxed like an insurance company.
The Senate Republicans say they will just pass it on to the policyholders.
They consider that a tax, as well.
>> Let's talk about some of the other things in this budget proposal.
What are some of the other highlights?
>> As a lot of these things were announced in the state of the State message.
Expanding Children's Health Insurance that will be universal coverage.
Selling the lottery.
That would fund an endowment and hire about two thousand more professors.
Also, Medicaid.
It is hard to explain.
He is going to try to change the way Medicaid is paid out and it will go less to people staying in hospitals and will go more to outpatient care.
A lot of the stuff in the budget is not new.
He prepared for it in the state of the State speech.
The budget was to put in the bad news, how he will pay for it, how he will cut, how he will tax.
>> THE state legislature has to approve this.
They will be holding hearings.
He did not have a lot of success selling last year's budget to the legislator, are doing much of anything.
How is that shaping up this year?
>> He could ride them.
Their talks to submit a bill to raise the pay of lawmakers.
Hopefully, they will agree to exchange things on his agenda.
His biggest problem is the Senate majority leader.
They have had a few for the last six months.
Nothing has gotten done in albany.
That's not one to change.
He is very critical of the budgets that have the wrong priority.
expect a fight from him.
The big question is if the Senate Republicans will hold up the budget passed the April 1 deadline.
Is it in their interest?
Will it hurt them more because they are all up for reelection this year?
that's the big question to see what kind of strategy they take and how much they will oppose the governor.
Will they think it is in their best interest to work together with him?
>> Will the fact that they're up for reelection this year -- all of them -- have a big impact in more ways than just the deadline?
>> THEY do not want to say no to anybody when they are up for reelection.
The budget is already up 5% in spitzer's proposal.
We have to expect it will be spending more than that.
The governor said he was not going to draw any lines in the sand.
When you start off with a 5% increase, the governor will probably end up with more money than that.
>> ANOTHER question under there is -- is there an upstate and downstate divides starting to develop since the governor deliver his address.
Could that play a factor in budget negotiations?
>> I cannot think New York City cares about it.
The New York papers are not covering this upstate thing.
Long Island people are angry.
Long Island legislators and business leaders.
They say that Long Island has problems also.
They have high property taxes.
Some of the Long Island people are jealous.
there are pockets of poverty in Long Island.
I do not know so bring tension or not.
I do not think it will.
>> The governor has made it clear that he is backing a property tax cap of some sort.
Who pays for that?
I know suburban school districts outside the Big five are getting nervous.
>> The governor has decided that a cap is necessary, given the star rebates are not working.
The star thing was started by the governor to bring down property taxes.
It never did.
The big question is how the override will be structured.
Most of the states that have them have a cap, but they allow school districts that they want to spend more money to ask the voters if the voters say yes.
And they can.
That would play in the favor of suburban schools.
It may actually be poor schools that will lose out on this because voters will not have enough money to override the cap.
Critics say that is the real issue, even more disparity in the schools.
We just settled a decade long court case over poor schools not getting enough funding.
That will be a big question.
Also, all the demands on schools, and teacher contracts for pensions and benefits.
They will have to somehow bring those down if they want to stay within this cap.
He has a real challenge ahead of him in trying to pull this off.
>> AND a real challenge ahead for you and the other albany correspondence.
Sounds like your work cut out for you.
karen dewitt, thank you.
"Need to Know" now focuses on what this budget would mean for local school districts.
First we're going to the headquarters of the rochester city school district where superintendent John Claude brizard said he is pleased the governor is opposing to send $36 million in additional schooling to the district.
Brizard cautions that there will be cutbacks as he restructures the district's budget.
>> Looking at past budgets for the district, I have seen anywhere from $5 million to $20 million.
Every year we see a shortfall between what we spend and what we actually get.
We always manage, by the way, to make everything work.
It comes time for us to look at the reserves, and making sure we have the right kind of fiscal policies and that we're not spending more than we are bringing in.
It is fundamental that we drive dollars to classrooms, and make sure schools have what they need.
>> That is the word from city schools.
We are joined in studio by the head of the monroe school board association, jody siegle.
What was your reaction when you heard the governor's budget address the other day?
>> There are good things about it and things that raise flags for us.
We are very aware that it is just the first step in the budget process because the Legislature will weigh in.
There will be discussions about a move forward.
We were disappointed that he was not able to keep the promises he made last year about the level of funding that he would provide to schools.
We are particularly disappointed that the budget proposal came with the new mandates and new cuts that will hurt districts.
We hoped that was the new formula and its commitment to giving schools an understanding of how money would flow, school districts would be able to plan better from year to year.
This predictability has been undermined by several factors in the budget.
>> Years of unpredictability in the budget process.
Last year he tried to straighten that out a little bit.
He is giving some of the increase he promised, but not all of it.
How does that affect you, on top of what monroe county has done with the so-called fair plan?
>> Dollar for dollar, if you look at the increase for state aid that the governor has proposed, it has pretty much canceled out by what districts would lose in sales tax revenues.
It is important to recognize that the effect is different from district to district.
There are districts that only received a small amount of money, say half a million dollars as an increase in state aid from the governor's proposal and losing two million in sales tax revenue.
They are actually starting with less.
>> People need to look closely at their own district to see how it worked out.
Some may not grow a lot.
Others could lose a lot of money.
>> That is correct.
>> How are you dealing with this?
he has a property tax commission.
I know that has the school board associations concerned.
>> That had us very concerned.
It started out being a discussion in the Speech.
They were going to talk about what they could do to contain costs.
One week later, it had evolved to a discussion that concluded with the statement, we will be looking at school property tax caps.
It deeply concerns us that the members of the commission have been appointed.
Despite what we have assets of the governor before hand, none of the members have any experience with school finances.
Some of them are people that have been involved in setting the mandates on schools that forced their cost to go up.
Of all the people in the state involved in public education, no one has ever been involved in planning a budget and bring it forward for a vote is on that commission.
>> People said that most schools are still getting an increase.
A lot of money is coming their way.
School budgets have gone up historic plea two or three times the rate of inflation.
>> IF you are right.
That is a serious problem.
For the last 15 years, members have been very actively and vocally talking with representatives in Albany and Washington about lots of things that can be done to help us contain costs.
Changes in all kinds of laws.
There has been no willingness to address those issues.
I do not know what will be different this year as they start looking at the caps.
I think people need to realize that school boards are the first line of people trying to rein in the cost, not the last.
>> Talk a little bit about the state mandates, which you are calling unfunded mandates.
>> ONE is shifting to the school districts the responsibility for evaluating students who have disabilities at the.
Preschool.
For administrating the program.
In the governor's budget, this is a savings of $46 million.
That responsibility is coming to the school districts in the coming year.
In another area, yes, about 12 weeks of paid family leave.
In the school district, when someone leaves for 12 weeks, and is being paid for that -- so, hiring someone to replace them would be a costly mandate for schools.
It increases the family leave time already available.
He is also proposing to cut the reimbursement aid.
These are dollars that district's spent last year.
They were expecting to receive it as part of their revenue stream in the coming years.
This is taking away money the district had planned on having.
>> We heard brizard say that he has got to go.
He is restructuring the budget.
He is building a stronger budget for the future.
Is that something that a lot more districts will have to do?
>> That is very much what this case do every year.
They have to start looking at the fixed cost.
There is tremendous discussion about re-prioritizing.
There's a great deal of work going on between the district's, sharing, services, doing things together so there is no duplication.
>> BASICALLY, school boards are going to be very busy this spring.
>> YES, they are.
>> THANK YOU VERY MUCH.
Jody siegle is the executive director of the monroe county school boards association.
It is now time for the business section with the Democratic and chronicle.
>> Matt Daneman is a business reporter from the democrat chronicle.
The change in the path at this company.
>> IT depends on who you talk to.
A former bigwig at Johnson and Johnson, a former competitor of this company.
When the private Equity Group in 2007 bought the company, a number of analysts predicted there would be changes at the top because you do not go and buy a company and do not do anything with it.
You'd buy it and do it because you think you'll get more money out of it.
>> They changed their CEO.
>> YES.
The CEO is leaving basically because he did not want to make the 5-7 year commitment to stay with the company through the entire time that they will likely be owned.
He was looking to retire after two years.
>> What can you tell us about the new CEO?
>> He comes from an eye care background.
He comes from Johnson and Johnson.
>> NEXT up is a local stocks.
how have they faired?
>> IT has been a roller coaster if you're an investor.
There was a Fed cut earlier this week.
Stocks have been doing very well in the rochester area.
Eastman Kodak, which had been at historic lows a week ago was trading around $20 this morning.
Gramm Corp. is now doing better.
>> THEy turn around quickly.
>> The investment community is hoping this continues.
>> Constellations brands.
They have been buying stuff.
Now they're selling stuff.
>> THEY sold a couple of well-known brands.
They sold lower end wines.
They also sold a winery in California for $134 million in cash to another WINE business.
They're focusing on premium wines.
It is $5 and up.
It does not sound like a lot, but there's a lot of leeway.
>> Maybe this is not a new strategy -- those are very popular brands.
Why the change in strategy?
>> Good question.
The Value WINE segment sales have been declining.
Premium wines have been going up.
Constellations says a lot of Americans are trading up.
You start with something like this, and then start developing an untaste for higher end things.
>> Let's talk about the awards this week.
>> THE winner is Ruth Lawrence, a pediatrician at Children's hospital.
She is a fascinating person.
She is a pioneer in pediatrics and prenatal care.
She started one of the first prenatal icu's in the rochester area.
The awards recognize women in the business community who are pioneers and true leaders.
Here's a person in health care -- it is tough to argue that she should not have won this.
There are 20 other good nominees also.
>> CONGRATULATIONS to her.
Thank you very much.
Matt Daneman is a business reporter from the democrat and chronicle.
Earlier in the program we heard from rochester city school superintendent John Claude brizard.
You can hear a lot more from the district's new leader next Thursday.
WXXI and wdkx are teaming up for brizard square one.
It is an effort to help you get to know brizard better.
We recently caught up with him as he was meeting with a few students and he talked about changing the school schedule beginning next September.
>> Going to Wilson for the awards ceremonies the other morning.
I went to Wilson by accident at First.
There were almost right next to each other.
It was 6:50 a.m.
It was dark and snowing.
Kids were crossing the street in the dark.
I wanted to know why school started so early in the morning.
All the research I read it tells people that teenagers do not do well as 7:00 in the morning.
>> The school schedule will be just one of the many topics brizard is likely to address during brizard square one.
We'll launch this project on Thursday with a day of programming on WXXIam and WXXItv.
We will have a special live call in addition of "Need to Know" beginning at 9:00 on Thursday nights.
You can find a whole schedule of other events at our web site.
Again, that's a special one-hour long "Need to Know" addition brizard square one.
It begins next Thursday at 9.
And that does it for this week's "Need to Know."
We will be back here at our regular time next week, as well.
We will be focusing on crime and violence in Rochester.
I'm television news director julie Phillips.
Thanks for joining us.
Have a good week.