The New York Public Interest Research Group and the Schuyler Center for Analysis and Advocacy are criticizing a new program that the 2009-10 state budget—which lawmakers are in the process of voting on—would set up. The New York Higher Education Loan program (HELPs), which would cost $50 million to set up and $10 million annually after that, is a “poorly structured program with few safeguards for student borrowers,” the Schuyler Center said in a statement.

“New York should not launch the nation’s most expensive state student loan program in the middle of the worst labor market for college graduates in a half century,” said Karen Schimke, Schuyler’s president and CEO. The group is a non-profit policy and advocacy group. “We are going to bury those students in debt that will follow them for years to come.”

Gov. David Paterson proposed NYHELPs in his budget. In a news release this week, the governor’s administration said the initiative would provide a minimum of $350 million in loans to 45,000 resident students in degree-granting programs.

Fran Clark, NYPIRG program coordinator, said setting up NYHELPs “without writing basic borrower protections into the law is a big mistake. With decisions about interest rates, fees, payment plans, etc. being made in regulation, it will be hard for legislators to ensure that the terms of NYHELPs loans protect students rather than banks or bond issuers.”

There is no safeguard in NYHELPs to ensure that students don’t forego “cheaper, safer” federal Parent PLUS loans in favor of borrowing from NYHELPs, Clark said.

According to the Schuyler Center, NYHELPs would drive New York into competition with Parent PLUS and result in the state’s taking on costs and risks that the federal government would bear under Parent PLUS. Interest rates, which are at historic rates now, are likely to rise sharply over time, the group said.

The State University of New York Student Assembly said in a statement that is was pleased with the NYHELPs program and some other aspects of the negotiated budget, such as restoration of 10 percent in proposed cuts to community colleges and the restoration of a proposed cut in the Tuition Assistance Program for needy students. Read more of this entry »

   Some education advocacy groups have been critical of the way school-aid numbers appear in the $131.8 billion state budget lawmakers are voting on this week, saying they are misleading. The figures include economic-stimulus money to supplement the Individuals with Disabilities Education Act ($398 million for New York) and Title 1A aid for poor school districts ($454 million), federal funds that go directly to school districts. The separate pot of stabilization funds for education that the state received from the federal government do not show up in the district-by-district funding figures. The state used that money to eliminate a proposed $1.1 billion reduction in education spending. 

   Most of the Title I and IDEA aid can’t be used by school districts to offset local property-tax contributions or to preserve previously funded services or positions, according to the state Council of School Superintendents. Since Title I and IDEA funds were not included in the 2008-09 aid listing, putting the additional stimulus funds for those areas in the 2009-10 budget overstates the percentage impact of that new aid, the group said in a statement.

   The Council of School Superintendents said its members appreciate efforts to eliminate some of the major education cuts from the budget proposed by the governor in December. But the budget freezes the state foundation-aid formula for two years, which means school districts have to turn to reserves, spending cuts and local taxpayers to fund their inflationary costs, the group said. Foundation aid is the largest state education grant to schools and is the major aid category that helps schools pay for basic operating costs like salaries, health insurance and utilities, the group said.

   “The freeze on foundation aid will probably hurt the state’s poorest districts most because they depend on state help the most,” said Robert Lowry, deputy director of the Council of School Superintendents. “Some of these poor districts have little they can cut that is not mandated. Also, trying to generate enough local revenue to match what they need from the state would require tax increases greater than their taxpayers can afford.”

   School district leaders are trying hard to hold down spending an tax increases in the budgets they will present this spring, the council said. Based on anecdotal reports, it expects proposed local tax increases will “average well below what we’ve seen in past years when state aid has been cut or frozen.”

   The $131.8 billion 2009-10 state budget lawmakers are voting on rejects a number of cuts that were recommended by Gov. David Paterson. They would have:

  — Delayed implementation of a law that prohibits prisoners with serious mental illness from being placed in solitary confinement in most cases. Many of the changes required by the legislation would have been delayed three years, until July 1, 2014, under the governor’s budget. The negotiated budget that lawmakers are voting on restores $8.6 million in cuts that originally were proposed.

  —Eliminated funding for Teacher Centers, which receive grants for online and classroom-based professional development. The budget provides $40 million for the centers.

  — Changed the Early Intervention Program for young children with special needs. The governor wanted to exempt children with certain speech-only delays from participation and establish parental and provider fees for participation.

    — Cut the Neighborhood Preservation and Rural Preservation programs, which provide support to citizen-led, not-for-profit housing and community-based organizations that create and preserve affordable housing.

  —Reduced funds for libraries by $10.6 million.

  —Reduced funding for the Elderly Pharmaceutical Insurance Coverage program by $49.9 million and $2.8 million for the Medicaid program to restore coverage for drugs denied by Medicare Part D. EPIC reduces the cost of prescription drugs for senior citizens living on fixed incomes.

Senate Democrats have their own 59-page report on the 2009-10 budget. You can view it here.

Senate Majority Leader Malcolm Smith and Gov. David Paterson got together for a second time today early this afternoon to talk about the MTA.

“I wanted to show the govenor a few things, and he wanted me to see a few things,’’ Smith said, when asked about the session right after he came out of Paterson’s office, declining to be more specific. He said he and Paterson were still working on trying to find a source of revenue to subsitute for the tolls that the governor and Assembly Speaker Sheldon Silver favor.

Republicans emerged from their closed-door conference about a half-hour ago and arenow prepared to act on the state budget.

“We just wanted to go over some of the amendments we’re going to propose and look at the school-aid runs,’’ said Sen.  George Winner, R-Elmira, when asked what the GOP members were talking about.

The session is now set to start at 3 p.m.  – five and a half hours later than originally scheduled – and will continue “until we’re finished,’’ said Senate Majority Leader Malcolm Smith, D-Queens. That makes it likely that two bills that were introduced too late to be acted on today will be approved shortly after midnight. That will make the budget late, at least by a few hours, since the new fiscal year starts just after midnight.

Tolls on bridges into Manhattan are off the table as Gov. Paterson and legislative leaders try to come up with a financial bailout package for the MTA, the governor said today.

“The Senate has really eliminated what my choice would be, which would be to have tolls,’’ he said after emerging from a closed-door meeting with legislative leaders.

Paterson initially backed a plan that would impose a new employment tax on all businesses in the MTA region (including Westchester, Rockland, Dutchess and Orange counties, besides the city and Long Island), higher train, bus and subway fares and a toll on the bridges.  Assembly Speaker Sheldon Silver backed a similar plan.

But Senate Majority Leader Malcolm Smith, D-Queens, couldn’t muster the votes for it because of opposition of some of his members to the tolls. So now, the governor said, the trick is to find some other source for the billions the tolls would have generated.

Absent a bailout plan, the MTA plans to raise fares sharply and cut service starting this summer.

Silver said the leaders are working “desperately’’ to come up with a deal.  But nothing yet.

   Adoption of a state budget got snarled today in the state Senate before the process even started.

   Republicans so far haven’t shown up for a legislative session that was supposed to start at 9:30 a.m. A Republican spokesman said the minority members were waiting for information about aid to local school districts and other data before considering whether to vote for the bills.

   But the Democrats think the Republicans are weighing whether to just try to delay the process and capitalize on the anger at higher taxes and spending increases that the public has been displaying since the $131.8 billion budget deal was announced on Sunday.

   Republicans, who hold 30 of the 62 Senate seats and are in the minority this year for the first time since 1965, also might want to deny Democrats the bragging rights of getting a state budget passed before the midnight tonight deadline.

   Passage of the budget is expected to go much smoother in the Assembly, where Democrats have a 109-41-seat majority over Republicans.

   Senate Democrats issued a point-by-point description of the proposed budget this morning, saying it’s the first time a breakdown by budget area has been uploaded on the Web by the Senate.

—Jay Gallagher

   The Campaign for Fiscal Equity and the Alliance for Quality Education have asked Arne Duncan, the United States secretary of education, to intervene in New York’s budget process because the state doesn’t plan to use federal stimulus money to increase foundation aid to school districts. The federal statute requires that the funds be distributed through the state’s primary education formulas, the groups said, and the proposed budget “appears to be in violation.”

   “We are asking you to intervene immediately to ensure that the budget scheduled for a vote tomorrow not be allowed to supersede or circumvent federal intent and requirements to fund ‘equity and adequacy’ in the distribution of (stimulus) funds to school districts,” said the letter, signed by Billy Easton, head of the Alliance for Quality Education, and Geri Palast, executive director of the Campaign for Fiscal Equity. 

   The $131.8 billion budget, which will be voted on by lawmakers this week, would delay a schedule for increasing school aid by $7 billion. The four-year plan, which was adopted in 2007, would be implemented over seven years instead of four. Lawmakers and the governor added the money to resolve a longstanding lawsuit over education equity in New York City. New York reworked the formula for school foundation aid, the largest state education grant, to target needy school districts around the state. In the last two years, 37.5 percent of the total foundation aid increase was distributed to districts.

   The Campaign for Fiscal Equity and Alliance for Quality Education want a larger portion of the state’s stimulus funds on foundation aid in 2009-10, and they are asking that the deferral of the phase-in not be allowed. They want at least one year of the foundation formula phase-in to be funded over the next two years.

   If approved by the Legislature, the $131.8 billion state budget will restore $30 million for the Comprehensive Attendance Policy mandate on religious and independent schools. Gov. David Paterson originally proposed eliminating the program, which requires teachers to take attendance whenever students move about during the school day. In an amendment to his budget recommendation, the governor reversed his decision to call for the mandate’s elimination but did not include any money to go with it.

   Getting rid of the Comprehensive Attendance Policy would have saved the state $44 million in 2009-10. The $30 million would be 68 percent of the $44 million.

   The Catholic Advocacy Network in the state has advocated for restoring the program and funding for it.

   The Legislature will be voting on the budget this week. The 2009-10 fiscal year begins Wednesday.