Thursday, February 21, 2008

Governor Spitzer's Budget Leaves PULP's Survival to the Legislature

PULP Background
Since 1981, the Public Utility Law Project (PULP) has received state funding to support its mission of advocacy on behalf of low and fixed income utility and energy consumers. PULP vigilantly enforces rights of utility consumers under the laws, and has sparked and contributed to major initiatives affecting affordability, universal service, and customer protection.

PULP's work contributes to New York's reputation as a leader in utility consumer protection, with pioneering work regarding the Home Energy Fair Practices Act, the Energy Consumer Protection Act of 2002, the telephone lifeline program, low income rates, and numerous other utility low income assistance programs approved by the PSC in utility rate cases. PULP's highly qualified staff
  • provides assistance to individual consumers and local advocates through PULP's telephone hotline, often in crisis situations when other avenues for help and local advocates have failed;
  • conducts training programs throughout the state on topics such as prevention of utility service termination;
  • participates in rate cases and generic utility policy cases at the Public Service Commission, providing comments informed by PULP's expertise and mission;
  • participates on numerous state advisory panels regarding low income customer concerns on energy and telecommunications matters;
  • participates actively in bar association and other professional activities, and
  • provides information regarding energy and utility matters through the PULP website including customer self-help information at the PULP website Help Center.
History of PULP's State Funding
PULP has received state budget funding since 1981. Prior to 1995, PULP was included in the executive budgets of Governor Cuomo. Typically, PULP received at least two state appropriations, one funded with general revenue funds and one funded with utility "special revenue" funds raised by utility assessments under Public Service Law 18-a. PULP's grants were "deemed" to be expenses of the Public Service Commission, which are in turn funded through utility rates and not the general state tax revenues.

In contrast, when Governor Pataki took office in 1995, all funding for PULP was completely omitted from his proposed budget in that year, and in every subsequent budget he proposed through his twelve years in office. During the Pataki years, PULP survived, with great hardship and difficulty, only due to legislative additions to the Governor's budget achieved by the state Assembly. In some years, PULP appropriations added by the Legislature were vetoed. Assembly leaders, including Speaker Sheldon Silver, Committee Chairs Destito, Brodsky, Pheffer, Weinstein, Cahill, and many other Assembly members repeatedly acted to overcome veto threats and successfully preserved PULP through the member item process.

Late budgets frequently led to late pay, partial pay, and during some intervals, no pay for staff who remained determined that PULP and its work should continue. During those years, staff retrenchment became necessary due to reduced funding levels. In 2001, after 9/11, funding for PULP and other agencies that had been funded through legislative initiatives was cut by about 25%. Since then, PULP's funding has been basically frozen at a level that, taking inflation into account, now amounts to considerably less than half of PULP's total resources in 1994.

Governor Spitzer's budget proposals in his first year continued to follow the pattern set by Governor Pataki: he proposed no funding at all for PULP. But for the Assembly's continued support and the addition by the legislature of funding for PULP in the 2007 - 2008 budget, PULP simply would not exist today.

PULP Funding Again Omitted in Governor Spitzer's 2008 - 2009 Budget
PULP is seeking additional funding for 2008 - 2009 in order to rebuild its staff and to increase its services during this crucial period of rising energy prices. Four Assembly Committee Chairs supported the inclusion of PULP in the Governor’s Budget for 2008 – 2009, urging the use of utility special revenue to increase the funding to bolster PULP's services, State Budget Director Laura Anglin replied, stating
“The Governor asked me to respond to your joint letter regarding funding for the Public Utility Law Project (PULP). While we recognize the importance of PULP and its advocacy services on behalf of New York’s utility consumers, there is no specific funding for PULP included in the Executive Budget. However, there are $70 million in Civil Legal Services funds from the Interest on Lawyer Account that PULP may apply for. . . .”
Reliance on IOLA Funding is Not the Solution
The Governor's solution as suggested by State Budget Director Anglin is for PULP to replace all of its state budget funding with a grant from the IOLA Fund. Contrary to the suggestion of the Budget Director, however, there is no "$70 million in Civil Legal Services funds from the Interest on Lawyer Account that PULP may apply for. . . ." IOLA simply has nowhere near that amount of money to distribute. See the IOLA revenue reports. Moreover, the bulk of IOLA revenues are categorically targeted by its enabling legislation to fund local legal aid groups.

Even under the most rosy scenarios for future IOLA funding, however, PULP will exhaust all its funds long before any new IOLA funds could be granted and received for 2009. The next regularly scheduled round of applications for IOLA funds is in September 2008, for 2009. PULP’s existing funding expires March 31, 2008 and PULP would completely run out of funds long before the next round of IOLA funding.

Historically, IOLA provided some supplemental funding to PULP, in addition to its core state budget funding. IOLA grants were never more than 15% of total annual PULP funding, mainly to enhance the training and local advocate support portion of PULP's work, in the "Administration of Justice (AOJ)" category. Under the Pataki administration, the IOLA Fund gradually eliminated even the small AOJ grants for PULP by 1998. Since then, the IOLA Fund repeatedly denied all PULP funding requests, including the most recent request, made for calendar year 2008 funding, which was denied by IOLA in December 2007. Thus, upon scrutiny, the suggestion of the State Budget Director assumes a major change of available grant revenue, policy, board, and staff at the of which there is scant evidence. See Spitzer Urged to Stay Away from Defense Fund. Reliance upon IOLA simply is not a viable short or long term funding solution for PULP.

It is again necessary for the Legislature to make additional appropriations in the 2008 - 2009 state budget to ensure not only the survival of PULP but also to provide the increased funding needed to assure fuller representation of the interests of low income energy and telecommunications consumers at the PSC and in other forums.

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