>> Coming up on "Need To Know," governor David Paterson is
calling on the state legislature to return to Albany next month
to deal with the state's growing budget deficit.
We sit down with state senator Joe Robach and assemblyman Joe
Morelle to talk about New York's fiscal crisis.
Then we look back on the Rochester Oratorio society's recent
performance in China.
Our guest is music director Eric Townell.
>> Rochester's news magazine since 1997.
This is "Need To Know."
>> Thanks for joining us.
I'm Peter Iglinski.
New York's budget director says the state is officially in a
recession.
That assessment follows the governor's statewide address
Tuesday telling New Yorkers the deficit has grown more than $6.5
billion.
The next day the governor projected the deficit could balloon
to $26 billion in three years.
He's calling on the state legislature to work out some
solutions.
How manageable is the crisis?
What can we expect in terms of a response?
To get some answers, I now welcome state senator Joe Robach and
assemblyman Joe Morelle.
Thanks for being with us today.
How bad are things, Senator Robach?
>> You know, we're learning about this as we go along, but I
think we should let the public know.
And this really just is as accurate, our budget unlike the
federal government has to be balanced.
We can't print money, which I believe is a good thing.
It makes us more fiscally responsible.
So first, I want to let people know this goes on all the time.
We are adjusting budgets.
We are looking at them.
This is what we do, a big portion of what we do is the
resources to run programs for education, health care, economic
development, roads, bridges, it's what we do.
And I applaud the governor for being up front and in many years
we don't let the public know where we're at financially making
it more transparent and open.
Now we have to look at those numbers, find out if they're
accurate, and then I think we have to work in a very bipartisan
way to address this.
We all have some ideas of what we can do to do this.
You know, you always hope that it's on the lower side, not on
the higher side of deficit or as I say all the time, it's
always much easier to make a budget when you have a surplus
rather than a deficit.
So it will be challenging, but it's what we've done.
We've done it in the past.
We'll do it now.
The question now, I believe, is how big is the scope?
>> Did the governor do the right thing?
He certainly got our attention.
Did he do the right thing interrupting programming and going
right to New Yorkers?
>> I think it's not only effective tool that he used going and
using the media to be able to convey the challenges, but it's a
pretty courageous one, in the middle of the year to say look,
we have serious challenges.
I think Joe's right.
We're always adjusting budgets.
Because we can never know what the future will bring.
The concern I have is not so much the state's fiscal problems
which will resolve by either cutting costs or creating
efficiencies and looking at other means to balance the budget,
but the underlying economic challenges that the state faces is
the greatest long-term threat.
We rely significantly on the financial sector in this state.
We're the financial capital of the world.
Obviously what's going on in the markets globally has an
enormous impact on us.
The housing crisis is having an impact on us.
So from my perspective what we really need to keep our eye on is
what the long-term economic challenges are that face the state
and how does that affect our region?
And obviously as a state which you get to the fiscal issues how
we balance our budgets, we've relied on a lot of revenues out of
metropolitan New York, they've enjoyed a boom in the financial
markets the last 10 to 15 years and it's tended to mask some of
the economic challenges that we have.
But I think that's the real challenge that we face.
>> I'm sorry.
>> If I could just interject because I think this is important
in this dialogue.
I really think, you know, what assemblyman Morelle said is
right.
We should be applauding the governor at this point in the
game.
I think a year ago, the likelihood would have been to try to
sweep it under the rug, not let the public know and I'm hoping
as we go through this we'll even have some scenarios laid out
that we can come back to Rochester, have forums, have
dialogue.
This should be a decision that we should include as many people
as we can in as possible without the governor starting the way
he did, that would have virtually been impossible.
So challenging, but I think we're doing it the right way.
And I give the governor kudos for starting the ball off in the
right direction.
>> What's on the table, what's not on the table?
Assemblyman?
>> Well, my guess is everything is on the table to some
extent.
Part of the challenge that we would have as legislators is that
we're not administrators.
We're not in the executive branch.
I'm not sure what's been spent so far.
Obviously the budget we passed on April 1 indicates what we
believe the priorities are.
I think the things that we will be less likely to do are
school-aide cuts and cuts to programs for frail, elderly,
disabled, the most vulnerable population in the state.
Those are the things that would happen last.
Some things we may be able to adjust the budget by delaying
payments or spreading out a program over time, so slowing it
down.
That may be one way of addressing it.
We may look at, as the governor indicated, a downsized work
force, that may be something we look at.
I think everything is on the table, but I think Joe and I and
our colleagues would be very reluctant to do anything that
damages our investment in the future, which is education or do
anything that damages programs that are really essential for
disabled and frail, elderly people.
>> Which did happen in the early 1990's, mid year school cuts.
>> Everybody knows it's very different to manage.
It's not the direction we want to go in.
I would almost say it this way, we don't really know exactly,
we have some idea, how big it is.
Sometimes, too, I say this, from challenge can come a little
opportunity.
Now I and the senators have been going around, I think
abolishing some of this overhead and administrative things
especially in some of these authorities.
Not the people that do the work.
But folding the thruway authority into the department of
transportation, great way to save money.
Liquor authority, let's make that part of economic
development.
Instead of spending all this money, how about we give you a
license unless you're a convicted felon.
If you have two violations, you lose your license.
I think there's a lot of things we've tried to do well but the
bureaucracies have gotten big.
We may be able to save a big chunk of money in that way and
avoid some of the things that are more vital services or things
that New Yorkers have come to like and need.
>> The thing that I would add is that the challenge for us
again is if we can't create a stable fiscal picture for the
state, people will not invest private capital.
People won't create jobs in New York state.
So the barrier which is most acute in upstate New York will
be the state has to get its fiscal house in order or else
people won't invest.
We've had challenges in people wanting to invest and create
jobs.
We have to deal with this.
>> Can we expect structural changes versus gimmicks?
>> I don't think we can get through this long-term with
gimmicks.
I think what I would say is we have to look at the structure of
government, we have to look at a lot of the programs that are
well-intended and effective but not the greatest priorities and
we're going to have to start to realize that we have limits to
our expectations and what we can do as government.
And we'll have to peel back some of those expectations.
When we're able to get to the point where the economy is
growing, where there's revenue growth in terms of income taxes
and sales taxes are as a result of growth in terms of the
economy and not just simply increase in prices, then that's
when we'll start to really get some traction on a return to
prosperity.
>> This is an election year.
Your chamber especially is under a lot of scrutiny, very small
margin.
Do lawmakers this year have the political will to make the
tough decisions?
>> I think always doing your job, engaging the public, letting
them know what you're doing, letting them know you're trying to
listen to them, implement and work with them I think isn't only
what we're supposed to do.
I've always lived by that's the best politics.
Do a good job, be sincere, have the best campaign platform.
It's worked for us.
It's worked for me.
I don't think it will be any different.
So being responsive to the public, being responsive to your job
and taking it seriously can be helpful.
I think the public understands, too, a little bit where we're
at, what's going on.
We hear it from them whether it's them dealing with escalating
gas prices, food prices, adjustable rate mortgages.
We know what you hear more and more is we want government to be
a little bit more responsive to some of the things that we do.
I think every attempt will be made to meet that goal in a way
not more so Democrat or Republican, I believe a little bit more
parochially with policies and programs that affect Rochester
and upstate New York.
Sure, I'm going to try and protect those.
That doesn't mean we don't have the will.
I think that's what I'm supposed to do.
And we'll do that.
We'll get through this.
Post September 11 we had a struggle, we got through it.
We'll do this.
>> You know the reports, dysfunctional state government,
this year two of the big three leaders in New York have
changed, a majority leader in your chamber, a new governor.
What can we expect?
It seems like the dynamics have changed so much people aren't
sure what we can expect in Albany.
>> One of the interesting things is if you really want change,
there's going to be new faces, there's going to be new
approaches.
And I think again, I agree with Joe that I think the governor
set the tone for this.
This is pretty extraordinary thing to say in the middle of a
fiscal year, to start alerting people early on to call the
legislature back into special session.
Those are things where I think he's trying to be forthright, I
think he's trying to have a frank discussion.
And obviously, I think to our public, to our constituents, to
the broader residents of the state, you know, we obviously look
around and see the economy nationally is in real trouble.
We see the subprime lending crisis, the housing prices, the gasoline
prices, so I think the public understands, look, there are
difficult times.
I think the governor has made a real adjustment.
And frankly, this is good.
This adds transparency.
I think those of us particularly upstate who seem to be under
more of a microscope than some of our downstate colleagues are
used to this, but that's good.
We want to be able to make decisions where while people may
disagree with us about the decisions, they'll know the choice
that we had in front of us.
They'll know the decisions we made.
They'll know why we prioritized things in the way that we did.
And I think that's more honest and I think people will respect
it even if they don't agree with absolutely every choice that
we make.
>> You know, Peter, you always want to get better and people
are entitled to their opinion.
Many of them I agree with sometimes, but, you know, change is
good.
But you want to make sure it's change in the right direction.
I always say change to what?
So over the course of time, you know, my relatively short time
in the Senate, six years, working together, we've made a lot of
changes on the amount of resources we've got from the state, to
Rochester working together or the city of Rochester would be
in fiscal dire crisis without the extra money in direct aid.
We've changed how we do the budget.
So many things that have changed.
Those are some that I think are good.
Some people may think some of the changes we made might not be
good.
We've done record amounts for K-12 education.
Most people seem to like it and understand that it can help
offset property tax and quality programs.
At the same time, some would like more accountability.
That's all change.
Beauty is in the eye of the beholder.
This is no different.
We're going to address this.
If you want to call it a change, people are going to have a
time to chime in and see what the result of it is. that's really
what government does on a daily basis.
>> That's an understatement.
>> That's right.
The governor is asking for $600 million in cuts.
And the new majority leader in your chamber is balking at that
saying that we can handle it through efficiencies.
That's a lot of efficiency.
>> Right.
Well, we have to be real.
We have to share this with the public.
I think behave to be nonpartisan.
But people are entitled to their opinion.
A lot of people don't realize this and even being involved in
government, I have to say our budget is $122 billion.
With a B.
Not an M.
Don't forget that.
Bigger than most countries.
So there's a lot of things in there.
As my colleague Joe said, there's a lot of programming, there's
a lot of different things.
There is a lot of government.
First I think people would like to see if there's a way to do
this without doing anything that's going to be too upsetting to
deliver vital services.
And then there are certain things that I think we're going to
agree on that we think are so important is investments to bring
money back to localities and to invest in our future, I.E.,
education, even some capital projects that create career
opportunities.
Those are things that I think people will have different
opinions on.
What's most important to protect?
But they'll probably all be done in a very public forum.
>> Speaking of capital --
>> People should remember $1.2 billion cut which the governor
is talking about.
He's going to take out of agencies and adds those to make $600
million in additional directions.
That's our budget.
We're already through about half of the fiscal year by the time
we get back to Albany, by the time we go through this.
So this is really a pretty significant amount of money.
I'm not sure that we can do it without simply outright stopping
some programs.
But I think we'll wait to hear more from the governor because
their agencies will be able to tell him and tell us what's
already been spent, what's on the list of things that are going
to be spent, so we don't spend out of the $122 billion the same
amount every single day.
We'll have to get more detail on what money is out the door and
what things we haven't already contracted for.
It's going to be significant.
The bigger issue though, Peter, is $6 billion next year which
is what the governor is talking about is about a 5% reduction
in overall what we call all-fund spending, that includes
federal money, that includes the money that we raise as a state
through various taxes.
And that's significant.
If you had a $60,000 household income, that means about $3,000
in expense cuts for you, which is not insignificant.
>> 30 seconds, maybe asking a lot, the upstate revitalization
fund.
A lot of rejoicing when that was approved.
How secure is that?
>> I think it's secure.
The governor understands that's investment.
It may be slower in coming in terms of how fast money comes out
the door and there may be ways to be able to help fiscally
slowing it down, but I don't think there's any question that
that money as a whole is going --
>> Do you agree with that?
>> I would concur, absolutely.
>> I don't believe there's any --
>> Senator Robach, assemblyman Morelle, thank you for being
with us today.
You can go on-line to listen to this interview.
Type in WXXI.org/ntk and click on the link for audio pod
casts.
>> The Rochester Oratorio society is back in town after a
two-week trip to China.
The R.O.S. took part in that country's preOlympic festival.
I'm happy to welcome Eric Townell, the music director of the
Rochester Oratorio society.
Welcome.
>> Thank you, Peter.
>> How did this opportunity come about in the first place?
>> I started researching it about two years ago, once the
Olympic venues were announced for 2008.
Had to be the most exciting single stage.
It was just right for us.
>> Very basic question, why did you want this opportunity?
>> Well, because sometimes it means very visible exposure to
build awareness at home, so that people understand what it is
you're trying to do.
It helps somebody outside of your communities and local people
feel free to buy in.
That's always an asset.
>> Is it a bonding thing?
>> Extra motivation to go for that extra polish and
professionalism.
I think we got it on this trip.
>> Let's talk about the audiences in China.
How do they compare to audiences in this country?
>> Well, they don't come with a background in Latin and Greek.
And, of course, an Oratorio society, our middle name is -- that
is something that goes as understood with American classical
audiences.
You have to work harder to make the music speak for the text,
where the understanding might not be there.
>> Did they react as you wanted them to react?
How were you received?
>> Very much so.
Very warmly.
You know, for audiences that are typically more noisy than
American classical audiences, people texting and talking and
interacting which is refreshing and fun, we were able to quiet them and still them in the way only
wonderful singing can do.
And Oratorio really reached home.
>> In terms of the programs in both Beijing and Shanghai, who
were you competing before and after with?
Were you one of the few western choirs?
What was the whole program like?
>> We were the single choir from north America.
And of the 44 choirs in the festival, only two from the west.
The other was from Norway.
The rest of them were from the region, Hong Kong and all over
China and southeast Asia in general.
So they were singing mostly folk type music from their cultures
in their language and in their costumes.
We were the lone exponent of western classical music and
sacred music, American music in particular.
And we really tried to bring the best that Rochester and New
York and the U.S. has to offer.
>> Did you get a chance to talk to many of the citizens through
an interpreter to find out what they thought of the R.O.S.?
>> Yeah.
Mostly they stayed away from the content we were offering and
just talked about the polish and the maturity of the sound and
the wonderful elegance, the production.
That's something I really need the rest of the R.O.S. to hear.
I've had a chance to hear that firsthand and I'm going to have
the chance to tell them in September.
>> I feel stressed when I travel across time zones.
There's the time difference and the stress of the traveling
process.
But as an artist, you have to go there and your voice has to be
in shape and you have to sing.
How did the stress of travel affect the performers?
>> Well, it was quite evident on our first performance, when we
were at the end of a very long program in the keynote spot and
people had to stand in a long hallway for about 50 minutes
before we got to perform.
The performing situation was not optimal and I can see
people flagging and we really had to pull the energy up to get
that performance done.
To their credit, they did very well.
But the next day after that, we had a long break, sight seeing
day and a late performance the next day so we were able to
regroup.
>> A lot of talk about smog and environmental issues.
Did that pose a problem at all?
>> Really not a problem.
Air conditioners, the environments were air conditioned.
And I expect that's contributing to the smog on some level, but
we were comfortable most of the time.
>> How did you select the program?
>> I chose New York music.
Composer connected with New York state.
And then some of the best of the 20th century, sacred music
which is our repertoire.
And then a piece by a Rochester composer that was commissioned
by the R.O.S. some years ago.
It has a new text, it was a very welcome addition to the
program.
>> In closing, you took third place.
You got a trophy.
Tell us about it.
>> We did.
That was a surprise because there was a ranking system that we
couldn't anticipate before we left.
Third place is a very nice finish for such a large field.
>> Thank you for being here.
Congratulations.
>> Thanks for having me.
>> Time now for a look at "The Business Section with the
Democrat and Chronicle."
>> I now welcome Matt Daneman.
Thanks for being here.
>> Always a pleasure.
>> Let's start with Kodak.
Second quarter report, profits down 14%.
What happened?
>> Wall street is just basically getting a little bit tired of
the slow pace of Kodak post its four years major
restructuring.
You had sales basically flat quarter over quarter from last
year.
There was some growth in areas like digital, impressive growth,
10%, things of that nature.
Really part of the problem from wall street's perspective is
the one thing that really made Kodak profitable was $270
million that it got from the I.R.S.
That's a one-time thing.
That's not structural.
That's not built into the system.
That's a lottery winning.
And if you're basing your profitability for a quarter on a
windfall, that's a big red flag which is why the stock didn't
do so hot this week.
>> What can we expect next quarter?
>> Well, once again, it just continues to be a wait and see.
Digital products are doing pretty well.
There's been quite a bit of growth as the third and fourth
quarters are the big quarters because of holiday shopping and
back to school.
The film is the albatross dragging down the company.
Those sales keep declining.
>> Some good news.
E.S.L. broke ground.
What does it mean for the city?
>> For the city itself, maybe more symbolic than substantive.
We're talking 300 jobs, not a huge influx of jobs.
But this is the first major company moving into downtown in
something like 20 years.
So in sort of a symbolic way, it helps the city feel good.
And you know, this is part one of a part two thing with payTEC
coming in a couple years from that.
Those combined numbers might have a bigger bang for the buck.
>> Are we just moving the pieces around?
Is it a wash?
>> And obviously we'd love to -- it would make better economic
sense if it was organic growth or jobs coming from outside of
the area.
But at least on the payTEC situation and I imagine the same for
E.S.L., the properties they're leaving behind are somewhat
desirable.
Presumably they'll be snapped up by somebody else.
>> Blue cross-blue shield looking to cut costs.
How bad is that situation?
>> They had an internal memo that went out saying look, we're
struggling with a lot of stuff.
The economy is struggling.
We've got an aging population.
Competition is tough.
We're trying to make all sorts of measures so we don't have to
do significant layoffs.
Really the proof will be in the pudding if they can do these
sorts of cost cutting to not have to do significant layoffs.
Excellus is a major provider.
That would not be good.
>> Tom Suozzi chairs the governor's commission on property
taxes.
And he had a little dustup with local businessman Tom
Golisano.
What was that about?
>> Tom Golisano has run for governor twice.
He's campaigned on fiscal responsibility.
His whole point is that one of the key reforms recommended by
Suozzi's commission is a 4% cap on school property taxes.
Golisano is saying that's not enough.
And therein lies the rub.
Is a 4% cap good news or is it putting a band-aid on a gaping
wound?
>> They don't really disagree, just the extent of how far you
go?
>> Yeah, exactly so.
Both had some interesting points to raise.
I guess Tom Suozzi's next step, he's going to try to see what
kind of lawmakers he can line up in Albany.
It will be interesting to see if he can get people behind him
considering what the alternative is.
>> Thank you for being here, Matt.
Matt Daneman, business reporter for the Democrat and Chronicle
who puts local economic issues in perspective.
That's it for this week's edition of "Need To Know."
I'm Peter Iglinski.
Thanks for joining us.
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