Wednesday, October 5, 2011

Addabbo: 'The State Broke It's Promise'


Senator Responds to Cuomo's Veto of Bill to Maintain Health and Supplemental Benefits of New York City OTB Retirees

New York State Senator Joseph Addabbo, Jr. (D-Queens), a member of the Senate's Racing, Gaming & Wagering Committee, released the following statement reacting to Governor Cuomo's recent veto of bill S.4489 that passed the legislature in June, requiring the state to maintain the health insurance and supplemental benefits received by retirees of the New York City Off-Track Betting Corporation (NYC OTB).

Under the proposed measure, the state would reimburse the city or its designee for the actual cost of benefits. Former employees received supplemental benefits such as prescription drugs, optical and dental insurance through welfare fund benefit plans funded through employer contributions. When benefits ceased to exist with the closure of NYC OTB in December 2010, retirees were left to determine which prior benefits they could attain without employer contributions.

The Senator stated at the time, "it was illogical how benefits ceased to exist with plans in place to continue funding of benefits for retirees," and Addabbo further noted that "the state broke its promise," one of many reasons for why he voted in favor of S.4489 and sought its passage. It came through both houses of the legislature in June, and had waited for the governor's signature until September 23, when Cuomo vetoed it. According to the Senator and the unions, Senate bill S.4489 and Assembly bill A.5785 address and satisfy the constitutionality and cost issues of health and supplemental benefits funding.


According to Addabbo, “I had written an August 10 letter to the Governor stating that I would be prepared to make additional appropriate budget cuts in spending or seek to further eliminate wasteful allocations in order to absorb the cost of S4489/A5785. I stand with the union members of DC 37 Local 2021 and Teamsters Local 858, who speak for the NYC OTB retirees now in crisis, who cannot continue monthly (COBRA) premiums, which exceed their monthly pension income. Many of the 900 retirees, unwell and aging but who do not satisfy Medicare age requirements, are in the hospital and under unmanageable stress over how to pay their medical bills. Ineligible to enroll in Medicare, retirees have considered enrolling in Medicaid, only to be told that the average OTB retiree monthly income is slightly higher than the 2011 Medicaid monthly income guideline of $1,410.83 for a family of two. Once again, those retirees were ineligible for Medicaid. So today, these NYC OTB retirees are lying in hospital beds uninsured, through no fault of their own."


Concludes Addabbo, "I'll fight along with the unions as we next propose a budget amendment, as soon as possible, to dispel the governor's concern that a lack of funding by the legislature to pay for the OTB health benefit was the reason he vetoed the bill. Expect to see the return of this OTB health bill in some form when the Senate convenes early next year. Until we get it right the next time, all OTB retirees under age 65 are between a rock and a hard place. No one should have to endure financial hardships and choose which benefits to leave behind."


“It is truly unfortunate that the governor vetoed saving the health care and supplemental benefits for 900 NYC OTB retirees. He could have worked with the legislature to find spending cuts in other areas of the budget that would have cost the state nothing, by following the specific plan submitted by the Senate last year when a sincere proposal was offered to save those jobs.

"Last December, the inaction of the former governor and the legislature cost some 1,000 OTB workers their jobs, with the financial cost to the state upwards of $500 million in pension benefits, a negative impact on the thoroughbred and horse racing industry in New York, and the possible detrimental effect that it may have on Aqueduct’s racing future.”


Image courtesy of http://www.pureclipart.com.

6 comments:

ROBERT SICA, Retiree said...

A crime against humanity, strangled the life-blood out of OTB retirees, when Governor Cuomo vetoed vital OTB health legislation on Friday, September 23, 2011. The health legislation would have restored OTB retirees health benefits.

The reason the governor had given for his veto was that there was not an appropriate funding mechanism to maintain the health benefit. The governor is aware that the State of New York is the mechanism responsible to fund the health benefit. New York State was the sole proprietor of the New York City OTBC. Therefore, the State is obligated to maintain the health benefit, from State revenues. To welsh on a commitment to preserve that health-benefit is dishonorable and unconscionable.

The New York State Constitution guarantees OTB pension-benefits. New York State guaranteed OTB health-benefits; (it is that simple.)

Moving the total-cost of OTB retirees health benefits to retirees is unthinkable. On average, OTB retiree monthly pension income is $1500. (COBRA) monthly insurance is $1800. Retiree monthly pension income comes up short ($300.) Governor Cuomo and Mayor Bloomberg do the math; (it is not too hard to do).

Today, retirees have two choices. Should they pay rent or health insurance? They cannot pay both--rent and health insurance. New York State is governed by quite a melange of characters. They can only be rivaled by Runyonesque-characters (like the Lemon Drop Kid and Harry the Horse).

Robert Sica said...

On Tuesday--October 11--Charles Hayward, New York Racing Association Chief Executive, submitted to the Senate, Gaming, and Wagering Committee, a written statement requesting licenses to open off-track-betting parlors in New York City. The New York Racing Association's (NYRA) bold initiative has certified its intention to reestablish off-track-betting, in New York City; but there is one hitch, NYRA needs government approval to achieve its intrepid goal. With all the political wrangling that has been surfacing in New York State, since the New York City OTBC was voted out-of-business, it will be no easy task for the NYRA, to accomplish its goal. Off-track-betting always was a politically-charged-topic of discussion in New York State; and it is no different today. To obtain the required license to commandeer off-track-betting in New York City, both the city and state have to approve Mr. Hayward's ambitious undertaking. So who are the contenders in the race for the former New York City OTBC's old-turf?

According to Hayward, an in depth study had been performed to determine which factors caused the demise, of the New York City OTBC. The report concluded that The remaining OTBs are suffering from lack of profitability--identical to the malady that had overcome the health and well being of the former NYC OTBC. The district OTBs, said Hayward, suffer a endemic disorder known as acute operational and legacy costs, a condition of deadly proportions, which is affecting the sustainability and profitability of the remaining OTBs, in New York State, today.

Hayward's ambition is to open OTB parlors in bars and restaurants. He believes that NYRA can recapture all the former NYC OTBC's handle. To illustrate his point, Hayward stated that NYRA has captured 30% of the NYC OTBC's advanced deposit wagering (ADW) business. The NYRA's goal is not only to harness all the defunct NYC OTBC's ADW handle, but also its parlor handle, as well.

NYRA is fully aware that the regional OTBs are also interested in opening off-track-betting parlors in New York City. Lobbying city and state officials to see it their way, the regional OTBs know that there is a potentially lucrative off-track-betting market, lurking in the streets and by-ways of New York City. NYRA is also aware that off-track-betting in New York City is a win, win, situation. The regional OTBs are not the solution to harvest off-track-betting in New York City, said Hayward. He highlighted that the regional OTBs are saddled with operational and financial problems, which will eventually implode the OTBs to oblivion. Knowing that the OTBs have political-clout, Hayward reemphasized his position that the regional OTBs should not, establish an off-track-betting foothold in New York City.

Hayward failed to prevail over New York City traffic jams on Thursday. This caused him to miss the Senate Racing, Gaming, and Wagering Committee hearing on Thursday, October 6th. Hayward was stuck in heavy traffic, following a NYRA board meeting that morning in New York City. Irked committee members, at the end of that meeting, requested Hayward to submit written testimony to the Senate Racing, Gaming, and Wagering Committee by Tuesday, which he did. Hayward's testimony, in summary, informed committee members that it would be in the best interest of horse racing, in New York state, to continue NYRA's success. After all, New York City is NYRA's turf; and acccording to Hayward, NYRA, should be the king of its castle.


The regional OTBs disagree with Hayward. The regional OTBs reminded committee members that the NYRA had problems, of its own, not too long ago. NYRA's past-performance, necessitated that New York State advance NYRA a $25-million loan to (bail-out) its failed business activities (in March,2010).

(For now, it is back to the drawing board for the Senate Racing, Gaming, and Wagering Committee.)

Robert Sica said...

Off-track-betting talks are underway in New York City. It seems that the defunct NYC OTBC's $800-million annual handle is sorely missed by the city and state. Despite the former OTB's attractive handle, the NYC OTBC was a dead horse, running a $600,000 a month deficit. How and why did the OTB, with annual gross receipts of $800-million, run a $600,000 a month expenditure, over income?

The NYC OTBC was created in 1970, as an outlet, to take illegal horse betting from organized crime. OTB was a money maker, from the get-go. Off-track-betting profits of ($4.5 billion) filled the city and state coffers. As technology improved, the NYC OTBC failed to integrate advanced technology into its field-operations. New York City Off track betting parlors were unsightly and deteriorating (hardly an atmosphere to attract new clientele). When public disinterest in horse-racing was gaining-stride, the NYC OTBC failed to act. The lack of any significant horse-racing campaign to win-back the heart and mind of the betting public, permitted that trend to continue, unabated. As a result, the NYC OTBC experienced dwindling patronage.

A recent state audit revealed that the horse-industry, in New York State, is too big to fail. Approximately, 500 horse breeding farms exist in New York State, and some 40,000 New York residents rely on the horse-industry for employment. Opening OTB outlets in bars, lottery-shops, and kiosks, renegotiating the OTB statutory funding formula and responsible government policy are essential components, which must establish a homogeneous-blend, if off-track-betting success is to be achieved in New York City. (These objectives have to be promulgated in Off-track-betting legislation.)

A strong marketing campaign can have an enormously positive impact, on horse-racing in New York State, as well. A practical solution to raise investment in horse-racing is dependent upon a well executed media-campaign. With some tweaks and nifty horse-sense, off-track-betting in New York City can be a highly profitable business enterprise.

Robert Sica said...

According to Greek Tragedy, Hubris is described as a fatal character flaw. America's hubris resides in its lack of commitment to its middle-class and elderly citizens.

Since the New York City OTBC closed many working and elderly families have had to suffer insurmountable hardships. Retirees' under age 65 live in fear of illness because they have no health insurance. Former OTB employees are either collecting unemployment benefits or living with family members, until they can get their lives back on-track. The tragedy of this situation is that it could have been avoided.

The senators who voted the New York City OTBC out-of-business did so irresponsibly. Many lives were adversely affected by their lack of empathy and social-justice. America's elite, along with the mainstream media, has repeatedly ignored the complaints of the American middle-class. The fact is that middle-class Americans are hard-working and tax-paying citizens. They live in their communities, and they are civic minded. They are educators, police officers, small business owners and retired people. They make-up the beautiful mosaic of New York City, which can be liken to a landscape painting of rainbow colors. New Yorkers share a common bond, to educate their children and care for their dependents. New York City's people, of diversity, contribute to all that make New York City a special place to live and raise a family.

Sustaining the delicate balance between human kindness and economic opportunity is no easy task. The people of New York City acknowledge your unswerving dedication to defend the rights of all the people, not only the rich and powerful.

OTB Health Benefits said...

The past 20 years, litigation following court challenges favored the decision in the Yard-Man, which determined that parties intended for the retiree health benefits, to vest.

The court noted that Yard-Man,recognized that the parties, to a collective-bargaining agreement (CBA) can agree to vest benefits that survive the termination of the (CBA) agreement.

The Yard-Man court found that retiree benefits are status-benefits, which carry with them, an inference that the parties likely intended those health benefits to continue, as long as the "beneficiary remains a retiree."

Furthermore, the court noted that Yard-Man provided an inference of intent to vest, rather than, a presumption of vesting.

The court explained that the pension plan is a lifetime benefit. The health benefits linked to the pension plan are vested-benefits; therefore, the health benefits are lifetime-benefits.

( The link between the pension plan and health benefits resulted in finding that, the parties, intended for the health benefits to be lifetime benefits.)

The "Yard-Man" is analogous to the New York City OTBC, retirees, ongoing health benefits dispute with Mayor Bloomberg and Governor Cuomo.

OTB retirees are members of the New York City Retirement System. Therefore, OTB retirees, pension and health benefits are vested lifetime-benefits.

Mayor Bloomberg and Governor Cuomo, are attempting to conceal the fact, OTB retirees health benefits are lifetime benefits--by ignoring the facts.

The New York City Employees Retirement System, is the link and key witness, for the defendant.

George Riley said...

The best laid plans of mice and men often go awry. Based on the famous poem by Robert Burns, it, summarizes this thought: No matter how carefully a project plan, something may still go wrong with it.

May 27,2011, the day of infamy for New York City OTB retirees. On that day, the Appellate Court, terminated the health insurance benefits of NYC OTB retirees and their dependents. The court's rationale was foggy, in regard to the health insurance benefits cancellation. That day, the court's decision stemmed from the judge's opinion, not fact. The judge cannot claim for certain...that the intent to vest welfare health insurance benefits were not the intention of the parties, in a previous collective bargaining agreement (CBA). The court did not request any past (CBA) to determine, whether or not, the intention of the parties, who signed the (CBA), intended for the health insurance benefits to vest.

In Yard-Man, the court concluded that when the parties signed the collective bargaining agreement, the (CBA), clearly intended that the health insurance benefits vest. The court also concluded that the employer promised employees health insurance benefits, and that the employer's promise vested the health insurance benefits. Consequently, the court ruled that the health benefits vested and are, therefore, lifetime benefits as long as the retirees remain retired.

While additional empirical research is necessary to confirm arguments, continued health insurance benefits were a norm of the unionized workplace that both employers and employees accepted. Courts' following the Yard-Man approach all justify a finding that retiree health benefits vested, by looking to the nature of the unionized workplace and the collective bargaining context. Supporters of this approach argue that the (expectations of lifetime benefits) should be protected because they are reasonable, given the workplace and the relationship in which they arose. Mayor Bloomberg's past statement that OTB retirees are not civil service employees is irrelevent, in regard to whether or not, the health insurance vested, according to the Second Circuit Appellate Court's ruling.

The key issue was that the employer promised health insurance benefits to employees. The question whether or not the employees are technically civil service employees is not the main issue.