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PITTA BISHOP DEL GIORNO & GIBLIN LLC NEWSLETTER THISWEEKINNEW YORK MARCH 11, 2011 has proposed the same solution to this issue and the As- SENATE AND ASSEMBLY sembly should act on it as well.” READY BUDGET PROPOSALS In the Assembly, Rory Lancman introduced an alternative Rank and File Legislators Lead Budget Charge medical malpractice reform proposal to rival the Governor’s Medicaid Reform Team (MRT) initiative. Assemblyman Rank and file legislators from both houses spent the week Lancman’s measure seeks to “reduce medical malpractice floating budget possibilities. The legislative leaders spent costs by reducing incidents of medical malpractice.” It the week mulling the possibilities. The respective fiscal does not limit damages or establish a medical indemnity staffs have a long weekend of number crunching and bill fund for neurologically impaired infants, the two most con- drafting ahead of them in preparation for Tuesday’s legisla- tentious provisions of the MRT proposal. tive budget deadline. The Assembly has also rallied behind continuing New Both the Senate and Assembly have set March 15th as York’s “millionaire” tax to help mitigate cuts to education. A the deadline for passage of their respective budgets. The 70-member coalition of Assembly members – led by As- contents of these budgets will establish the negotiation pa- sembly Education Chair Catherine Nolan – called upon the rameters for the legislative conference committees also Speaker to consider the extension as a viable alternative. scheduled to begin next week. In response, the Speaker Silver indicated that he will heed the call and include the extension in the Assembly budget. The Senate passed legislation sponsored by Senator Michael Ranzenhofer to repeal a tax on local economic de- “The Speaker wholeheartedly agrees that we should not velopment agencies that hinders job growth and economic be giving a tax break to the wealthiest New Yorkers while investment. According to the Senator, the tax, first enacted we are cutting teachers from our classrooms, closing sen- in 2009, provides a direct obstacle to the ability of Indus- ior centers and reducing aid to CUNY and SUNY,” Speaker trial Development Agencies and Authorities (IDAs) to invest Silver’s spokeswoman Sisa Moyo said, according to pub- in new projects, support local businesses, and create jobs. lished reports. The measure mirrors a proposal included in Governor Cuomo’s Executive Budget to remove this tax and restore Rumblings for the extension are starting to be heard in the IDA funding. Senate. Senator Joseph Bonacic broke ranks with his Re- publican counterparts and came out in support of a “true” “Senate Republicans opposed every tax hike and with this millionaire’s tax – increasing the tax rate for individuals bill we will repeal an ill-advised tax placed on the local making $1 million or more annually. The current tax rate agencies that are trying to encourage economic growth,” applies to individuals making more than $200,000 a year Senate Majority Leader Dean Skelos said. “The Governor and couples earning $300,000 and above. Vincent F. Pitta is the founding and managing Senate Deputy Majority Leader Thomas Libous, said Sen- partner of Pitta & Giblin LLP. ator Bonacic’s position was not representative of the Sen- email@example.com ate Republican conference. Tel: 212-652-3836 Fax: 212-652-3891 “The position of the conference has not changed,” Senator Pitta Bishop Del Giorno & Giblin LLC | 120 Broadway | New York, NY 10271 | 111 Washington Avenue, Suite 401 Albany, New York 12210 www.pittabishop.com | New York: P: 212.652.3890 | F:212.652.3891 | Albany: P: 518-449-3320 | F: 518-449-5812. Libous explained, according to published reports. “We glycemia and diabetes. need to work with Andrew Cuomo to get a budget done that cuts spending like he proposed and that has no taxes New York’s investigation demonstrated that AstraZeneca in it. That’s what we are pushing for.” concealed and minimized the risks of these side effects. AstraZeneca also marketed Seroquel for off-label and po- As proposals are unveiled and negotiated, lest not forget tentially dangerous uses including pediatric use, for use at Charles Dudley Warner’s (1850) contention “politics makes high dosage levels, for the treatment of symptoms rather strange bedfellows” (which has been linked to Shake- than diagnosed conditions, and to treat dementia and speare’s (The Tempest) “Misery acquaints a man with Alzheimer’s disease in the elderly. strange bedfellows”). Following the Attorneys General’s investigation, As- traZeneca agreed to change its marketing of Seroquel and Attorney General Lands $3.1 Million Settlement to cease promoting off-label uses of the drug, which are not approved by the U.S. Food and Drug Administration With Drug Company for Deceptive Advertising (FDA). AstraZeneca Marketed Drug for Unauthorized Uses & Failed to Disclose Serious Potential Side Effects The settlement, filed in state court, also contains injunctive terms prohibiting the use of financial incentives to manipu- Attorney General Eric T. Schneiderman yesterday an- late doctors, deterring off-label marketing and requiring nounced a $3.1 million settlement with the major pharma- that AstraZeneca disclose scientific evidence of dangerous ceutical company AstraZeneca, following allegations that it side effects, the Attorney General explained. In addition, improperly marketed and promoted the antipsychotic drug the settlement requires AstraZeneca to provide accurate, Seroquel. The agreement is part of a 37-state settlement objective and scientifically balanced responses to requests totaling $68.5 million. for off-label usage information. AstraZeneca must also have policies in place to ensure that financial incentives are According to the Attorney General, these practices violate not given to marketing and sales personnel for off-label consumer protection laws established to protect patients marketing and that sales personnel do not promote to and ensure that health care providers are fully briefed on health care providers who are unlikely to prescribe Sero- the medications available, including all known potential quel for an FDA- approved use. benefits and side effects. “The illegal promotion of drugs for off-label uses and hiding In the News – New York City scientific studies that reveal the dangers of pharmaceutical drugs must stop,” said Attorney General Schneiderman. NYC Comptroller Looks Into NYC Municipal Employee Compensation In the complaint, Attorney General Schneiderman alleged In an effort to facilitate the discussion of public employee that AstraZeneca engaged in deceptive and misleading pensions in New York City, Comptroller John Liu has un- practices when it marketed Seroquel for unauthorized, or dertaken a research initiative, Retirement Security NYC, to “off-label,” uses and failed to adequately disclose the drug’s provide objective, numbers-based employment and retire- serious potential side effects to health care providers, in- ment-related information. The initiative released its first re- cluding hyperglycemia and diabetes mellitus. port this week, entitled “Municipal Employee Compensation in New York City.” Seroquel is approved for the treatment of schizophrenia, certain instances of bipolar disorder, and depressive “This kind of objective research will serve both public em- episodes associated with bipolar disorder, according to the ployees and the taxpayers,” Comptroller Liu added. “Policy Attorney General When it was first introduced to the mar- decisions of this magnitude must be made thoughtfully ket in the 1990s, experts thought that it would be less and based on the facts.” likely to produce Parkinson’s type symptoms and motion disorders such as tardive dyskinesia, and therefore could Authored by the Comptroller’s Chief Economist Frank Bra- be used in long-term treatment of schizophrenia. However, coni, Ph.D., findings of the report include: while Seroquel may reduce the risk of these symptoms, it also produced dangerous side effects, including hyper- I Without adjusting for age, education, or any other de- Pitta Bishop Del Giorno & Giblin LLC | 120 Broadway | New York, NY 10271 | 111 Washington Avenue, Suite 401 Albany, New York 12210 www.pittabishop.com | New York: P: 212.652.3890 | F:212.652.3891 | Albany: P: 518-449-3320 | F: 518-449-5812. mographic factors, the average full-time government “I have absolutely no idea where he gets those numbers,” worker in NYC earns 17 percent less than the average Mayor Bloomberg said, according to published reports. private, for-profit employee. “Last I checked his job was to audit the city contracts and the books.” I The wage distribution is “compressed” in NYC govern- ment, i.e. there is less disparity between lower and “Retirement Security NYC” is partnering with two leading higher income earners. institutions—the National Institute on Retirement Security (NIRS) and The New School’s Schwartz Center for Eco- I The wages of City workers on average are lower than nomic Policy Analysis (SCEPA)—to analyze the current their private sector counterparts even though City work- state of public pensions and offer sensible reforms, ac- ers are more highly educated. cording to the Comptroller. I Employer costs of retirement benefits for NYC civilian Budget Director to City Agencies: You Know the Drill workers, including teachers, are not fundamentally dif- New York City Budget Director yesterday called for another ferent than the retirement benefit costs of other large round of agency reductions, giving agency heads until employers. March 24th to submit $600 million in budget cuts. The tar- get savings are 2% for the uniformed forces and Depart- I A larger portion of total employee compensation in the ment of Education and 4% for all other agencies. public sector comes in the form of fringe benefits, par- ticularly health and pension. “A key component of our plan for balance for FY 2012 is $600 million of measures to be taken by the State,” Mr. I Most City employees are offered “defined benefit” (i.e. Page wrote in a memo to agency heads. “If the state does traditional pension) plans which guarantee the level of not deliver, we must maintain budget balance.” annual retirement benefits. Agencies are asked to prioritize the cuts in order of prefer- I The basic structure of NYC police and fire pensions is ence. Mr. Page noted, however, that the proposed reduc- similar to that of other jurisdictions as well as to that of tions do not necessarily represent the final outcome of the the U.S. military. resource allocation of the agency. I There is little evidence to demonstrate that NYC police The Budget Director’s call did not come as a surprise. In officers or firefighters are “spiking” their overtime prior to fact, Mayor Michael Bloomberg alluded to the possibility in their retirements. releasing his preliminary budget last month. With the State moving into the final stages of its budget negotiations, the I Pension benefits have a material effect on relative com- call gives substance to the Mayor’s contention that Albany pensation rates of current City uniformed personnel, needs to ratchet up its funding to offset potential cuts. particularly police officers and firefighters. The annual The State Senate and Assembly are currently drafting their value of their pension benefits raises their effective com- respective budget plans for passage early next week. pensation by roughly 25 percent. “These findings about municipal salaries are an important IN BRIEF foundation for any discussion about public employee pen- sions,” said Comptroller Liu. “The issue of retirement Attorney General Announces $154 million needs to be looked at in the context of the overall com- GM Clean up Settlement pensation package earned by public employees. Attorney General Eric T. Schneiderman this week an- According to published reports, Mayor Michael Bloomberg nounced that a United States Bankruptcy Judge in New raised questions regarding the study including its compari- York approved a settlement agreement with the fo rmer son of workers’ total compensation in relation to pensions General Motors (GM) Corporation (now known as Motors and health benefits. Liquidation Company) that will dedicate $154 million to the environmental cleanup and redevelopment of contami- Pitta Bishop Del Giorno & Giblin LLC | 120 Broadway | New York, NY 10271 | 111 Washington Avenue, Suite 401 Albany, New York 12210 www.pittabishop.com | New York: P: 212.652.3890 | F:212.652.3891 | Albany: P: 518-449-3320 | F: 518-449-5812. nated sites in New York. The agreement was approved as • 11:00 a.m. part of the company’s plan of liquidation and involved set- Business Integrity Commission tlements with the federal government and several States, • 11:30 a.m. including New York and the St. Regis Mohawk Tribe. Public The settlement with the former General Motors Corp. and Committee on Oversight and Investigations, 250 Broadway - the federal government will dedicate $154 million directly Committee Rm, 14th Fl., 10 a.m. Oversight – New York City for the cleanup and redevelopment of former GM sites in Council Fiscal Year 2012 Preliminary Budget Massena (St. Lawrence County) and Salina – just outside Syracuse (Onondaga County). • 10:00 a.m. Department of Investigation Employers Prepare for Wage Theft Prevention Act • 11:15 a.m. The Wage Theft Protection Act (Chapter 564 of the Laws Public of 2010) goes into effect April 9, 2011. Signed into law by Governor David Paterson on December 13, 2010 (TWINY, Committee on Aging & the Subcommittee on Senior Centers, 250 12/17/10), the Wage Theft Protection Act enacts new em- Broadway - Committee Rm, 16th Fl., 1:30 p.m. ployer notification and recordkeeping requirements, signifi- Oversight – New York City Council Fiscal Year 2012 Preliminary cantly expands the Department of Labor’s enforcement Budget powers, and increases employers’ potential liability for vio- lations of the Labor Law. • 1:30 p.m. Department For The Aging • 2:30 p.m. Four Gubernatorial Nominees Confirmed Public The State Senate this week unanimously confirmed Gover- nor Andrew Cuomo’s nominees: Rose Harvey, Commis- Tuesday, March 15th sioner of Parks, Recreation and Historic Preservation; Subcommittee on Zoning and Franchises, 250 Broadway - Com- Joseph Martens, Commissioner of Environmental Conser- mittee Rm, 16th Fl., 9:30 a.m. vation; Thomas H. Mattox, Commissioner of Tax and Fi- Committee on Public Safety, 250 Broadway - Committee Rm, nance; and Joan McDonald, Commissioner of 14th Fl., 10 a.m. Oversight – New York City Council Fiscal Year Transportation. 2012 Preliminary Budget Subcommittee on Landmarks, Public Siting and Maritime Uses, COMING UP 250 Broadway - Committee Rm, 16th Fl., 11 a.m. Subcommittee on Planning, Dispositions & Concessions, 250 New York State Broadway - Committee Rm., 1 p.m. Monday, March 14th The Needs of New York State Veterans Wednesday, March 16th Standing Committee on Veterans, Homeland Security and Military Committee on Land Use, 250 Broadway - Committee Rm, 16th Affairs Fl., 10 a.m. State Capitol Building, Room 124, Albany, 11 a.m. Committee on Governmental Operations, 250 Broadway - Hear- ing Rm, 14th Fl., 10:30 a.m. Oversight – New York City Council New York City Fiscal Year 2012 Preliminary Budget Monday, March 14th Committee on Land & Committee on Technology, 250 Broadway - Committee on Consumer Affairs, 250 Broadway - Committee Rm, Committee Rm, 16th Fl., 11 a.m. Oversight – New York City 16th Fl., 10 a.m. Council Fiscal Year 2012 Preliminary Budget Oversight – New York City Council Fiscal Year 2012 Preliminary Budget • 11:00 a.m. Landmarks Preservation Commission • 10:00 a.m. • 12:00 p.m. Department of Consumer Affairs Department of City Planning • 1:00 p.m. Pitta Bishop Del Giorno & Giblin LLC | 120 Broadway | New York, NY 10271 | 111 Washington Avenue, Suite 401 Albany, New York 12210 www.pittabishop.com | New York: P: 212.652.3890 | F:212.652.3891 | Albany: P: 518-449-3320 | F: 518-449-5812. 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