Friday, July 02, 2010

PULP Closure Imminent as Legislature Adjourns Without Appropriating Funds for PULP

Exactly three months into the state fiscal year that began April 1, the official deadline for the state budget, the New York State Assembly and Senate both adjourned on July 1st with most of the budget for the 2010 – 2011 completed. See David King, State Budget Remains in Limbo, Gotham Gazette, July 1, 2010.

The budget bills enacted to that date, however, did not include funding for continuation of PULP. There is a small appropriation - equal to two percent (2%) of last year's state funding - which in turn is more than 90% of PULP's total funding. The bulk of the budget was adopted via short term extenders to which major annual appropriations were attached by the Governor, who threatened to veto the bills and shut state operations down if the legislature did not accept his bills without change. Neither the Governor's original budget proposal nor any of his subsequent versions contained the normal core appropriation for PULP.

As a result of the Governor omitting any funding for PULP in his budget proposals, PULP has now spent far more than the $10,000 that was appropriated to date, exhausted all of its reserves, can not borrow any more in anticipation of revenue from other appropriations or any other source, has incurred unpaid bills greater than its assets, and has unpaid obligations to its staff.

Without continued funding it will be necessary for PULP to lay off all staff, halt all services, cease operations, file for bankruptcy, and seek pro bono counsel to complete pending cases where PULP is attorney of record.

There is ample opportunity not only to fund PULP but also close other budget gaps if disparities in taxation, assessment, and regulation of utility services were ended. See PULP Memo on Ending Utility Tax and Assessment Loopholes to Make Competitive Playing Field Level and Generate Added State Revenue. Assessment disparities and tax loopholes have arisen as alternative providers of utility services have developed over the past decade. Due to the tax disparities, state and local tax revenues are less, and there is now an unlevel playing field in which competitors receive the benefit of favored treatment, and consumers lack protection in the terms and conditions of service.

Sound competition policy would be advanced by taxing all providers of similar utility services equally. If the same tax and assessment rates were applied, with no increase, more revenue would be received. Indeed, revenues could be increased, and the existing tax rates could even be reduced, if utility services from all providers are covered. See, for example, Utility Regulatory Assessments: The Time Has Come to Include VoIP and Wireless and New York City Closes ESCO Electric Service Sales Tax Loophole; Will Other Localities and New York State be Next?

The following articles describe in more detail the dire PULP funding crisis:

Larry Rulison, Cuts could pull plug on voice for poor, Albany Times Union, April 13, 2010
......The Public Utility Law Project of New York, a small Albany nonprofit that fights for the rights of low-income utility consumers, could have to shut its doors if the state Legislature doesn't fund it this year.

April 09, 2010
State Budget Impasse Threatens PULP's Future
.........One of the alarming consequences of the unresolved New York State Budget for 2010 – 2011 is the absence of future State funding for PULP in the budget proposals of the Governor and the State Senate. The latest problems may be more serious than those caused by the chronically late state budgets during the Pataki years, which led to furloughs and serious hardship for PULP and its employees. This year, the financial situation is particularly dire....

April 16, 2010
Budget “Extenders” Won't Solve Non-Profits' Problems Due to Late State Budget
.......Although the state legislature has appropriated funds for PULP each year since our founding in 1981, the future is clouded because the Governor again did not include any appropriation for PULP in either his proposed budget in January or in any bill extenders, and the State Senate has yet to take any action to continue funding for PULP.

April 23, 2010
AARP Urges State Senate to Save PULP
.....Governor Paterson omitted PULP from his budget proposal, again making it essential for the state legislature to add appropriations that would ensure PULP's survival. See State Budget Impasse Threatens PULP's Future, April 9, 2010......

June 11, 2010
PULP's Funding and Future Still in Jeopardy
.....With the legislative session nearing an end, and the expected adoption of a budget for the 2010-11 state fiscal year, which began April 1, 2010, essential funding necessary for PULP's continued operation is still in jeopardy. See AARP Urges State Senate to Save PULP. PULP has exhausted its funds and cannot pay its staff or other bills now, and will cease operations without continued funding in the forthcoming state budget.


After the Senate passed a budget revenue measure on August 3, 2010, the legislature adjourned. Appropriation bills, enacted as part of budget extender bills submitted by the Governor, had no appropriation for PULP for the first time in 30 years. See Larry Rulison, PULP's Funding Plug Pulled, Times Union, Aug. 5, 2010; Danny Hakim, 125 Days Late, a State Budget With New Taxes, N.Y. Times, Aug. 4, 2010; Rick Karlin, It's a State Budget!, Times Union, Aug. 4, 2010.

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