Golden Fleece at Golden Hill: Which Ulster County Legislators Have Conflicts of Interest?

Via E-mail and Snail Mail

Mr. Mike Hein

Ulster County Executive

 PO Box 1800

Kingston, NY 12402-1800

Dear Executive Hein:

There are rumors circulating in Ulster County that there are several county legislators whose relatives reside at the Golden Hill Nursing Home on which the legislature is to vote concerning a capital investment of about $1,500 per Ulster County household, that is, $100 million.  Legislators with conflicts of interest may not vote in the best interest of the Ulster County populace.  All legislators with conflicts of interest ought to be required to disclose their conflicts to the Ulster County Ethics Board.   This would include disclosure of whether they have family members, including great grandparents, grandparents, in-laws, aunts, uncles and/or domestic partners who are employees or residents of Golden Hill.

Sincerely,


Mitchell Langbert, Ph.D.

Cc: Ulster County Board of Ethics

c/o County Executive's Office

PO Box 1800

Kingston, NY 12401

The Ulster County Republicans in a Can't-Do America

I just submitted this piece to The Lincoln Eagle. 

The Ulster County Republicans in a Can't-Do America

Mitchell Langbert, Ph.D.*

On May 13, Robin Yess resigned from her position of chair of the Ulster County Republican Committee.  In an e-mail that she sent to the county's executive committee, which is comprised of the chairs of the town Republican committees, she wrote that the good 'ol boys' network, the GOB, is the problem with the GOP.  In particular, Yess cited five unnamed GOP county legislators who intend to vote in favor of the $80 to $100 million Golden Hill Health Care facility that will provide senior care to only one percent of Ulster County's seniors, many of whom are related to political officials and the county's wealthiest segment. The facility will cost each Ulster County taxpaying household more than $1,000, not counting interest on the loan, which could cost you another $1,000.  Yess wrote that she believes in limited government and lower taxes.  In her view support for the facility among GOP legislators is inconsistent with the GOP's principles.

               
Yess's resignation was accompanied by the usual political infighting.  But the principle ought to be of interest to anyone concerned with America's future.   Both Democrats and Republicans in Ulster County are committed to spending $100 million (not counting interest on the loan, which could amount to another $100 million) after twenty years of Ulster County's growth being one third of the national average.  New York is experiencing an exodus of young and hardworking taxpayers because of liberal taxation, and neither party senses a problem. 

              
The Golden Hill facility is an example of the age-old American phenomenon of special interest politics.  Both parties have pet causes. The Democrats have George Soros, the Trial Lawyers Association, the National Lawyers' Guild, and NYSUT, while the Republicans have Halliburton.  So it is at the county level.  Both parties have friends in the construction industry, in labor unions, and in the grant seeking business.

Both the Ulster County Law Enforcement Center--the county jail--and the Golden Hill facility benefit special interests.  Making matters worse is the absence of a serious press or media (other than The Lincoln Eagle) that employ journalists who are capable of analysis without ideology or being embedded in the special interests concerning which they are supposed to be reporting. 

Back in the day of the Second Bank of the United States, the precursor of today's Federal Reserve Bank, Whig politicians were on the Bank's payroll until Andrew Jackson, the equivalent of today's Ron Paul, abolished the bank and set the stage for the greatest economic expansion in world history.  After the Civil War, Standard Oil captured a number of state legislators, much as Bruce Ratner and The New York Times recently utilized New York State's Empire State Development Corporation to evict law-abiding property owners for Ratner's and The Times's benefit.

In the 19th century the nation's shared belief in limited government restrained lobbying.  Because Americans believed in limited government, corrupt city governments in places like New York and Minneapolis, and the corrupt federal government, could do limited damage. In those days the corruption in New York was due to the Democrats, but the corruption in the federal customs houses was due to Republicans.

The limits on corruption changed with Theodore Roosevelt's election in 1904.  TR, a Republican, strongly believed in expansion of government. Many of his ideas were copied during the 1930s and later.  TR was brighter than his more famous cousin Franklin Delano Roosevelt.  By the 1930s both parties had adopted variants of the Progressivism that TR had adapted from Herbert Croly's Promise of American Life.  The GOP, inspired by President William Howard Taft, whom TR detested after Taft's first term, favored less regulation and opposed welfare; the Democrats, inspired by FDR, favored more regulation and a greater degree of help to the poor.  Both parties favored subsidies to the wealthy. On balance, the Democrats favored greater subsidies to both the very poor and the very rich than did Republicans, but it is difficult to generalize. Both parties changed from their Jacksonian origins to the Progressivism of Roosevelt, Taft and Woodrow Wilson.

Americans who still believe in the ideas that built America--limited government, hard work, innovation and individualism--have no representative in Ulster County, in New York State, or nationally.  The Republicans and Democrats are both Progressive.  That is, Yess is only half right about Republican principles.  The liberty Republicans, led by Ron Paul and former New Mexico governor Gary Johnson, are one remnant of the Jacksonian Democrats.  The rest of the GOP is comprised of Progressives and, perhaps more commonly, self-interested hacks.  There is a smaller remnant of Jacksonian Democrats within a Democratic Party which is dominated by left-wing Progressives and, just like the Republicans, self-interested hacks.

Until recently, Americans could afford to be complacent. Politicians are politicians, many have reasoned, and you can't fight city hall. But politics has become intrusive; government is ending the American way of life.  Unless the silent majority begins to take an interest, America as you once knew it will end.

The Constitution does not have a word to say about political parties, but most Americans feel that they need to vote for either Democrats or Republicans.  After all, a third party might be radical and do strange and unexpected, extremist things. For example a third party might:

-Start three wars at a time
-Quintuple the nation's money supply and hand the printed money to commercial banks and stock brokers
-Legalize unconstitutional searches and seizures
-Borrow nearly a trillion dollars and give it out to politically connected friends

-Replace the education system with an ideologically driven, politically correct indoctrination system that does not teach writing

-Propose a cap and trade law (and UN Agenda 21 under George H. Bush) that would force you to move out of your home
-Declare morality to be dead and then claim that on moral grounds they have the right to tell Americans what to eat.

Wait, that's what the Democrats and the Republicans have been doing, most of all Barack H. Obama but also George H. and George W. Bush.  So Yess is wrong. We cannot expect the Republicans to think or act like Americans. The GOP is a big government Progressive Party just like the Democrats.  Do Americans want more government and economic death, or to rise to Yess's call for integrity within both parties or a third party? So far, the results are bleak.  Unlike their ancestors, today's America has declined so much that it is now a can’t-do nation.  

*Mitchell Langbert teaches at Brooklyn College. He blogs at http://www.mitchell-langbert.blogspot.com

Disharmonic GOP Orchestrates Golden Hill Street Blues

The following appears in the current issue of Kingston, NY's Lincoln Eagle, circulation 18,000. 

Disharmonic GOP Orchestrates Golden Hill Street Blues

Mitchell Langbert, Ph.D.*

The Ulster County Legislature is about to debate the fate of the Golden Hill Health Care Center, Ulster County's publicly owned senior facility.  While the Republicans are the majority party in the county legislature, disharmony within the GOP makes a big government, Democratic Party-style decision more likely than it ought to be.  As a result, future Ulster County taxpayers are likely to be singing the Golden Hill Street Blues at an out of pocket cost of $200 per household per year, and more after 2015.  The capital cost of a new Golden Hill facility will be taxed to each Ulster County household at roughly $1,000.  A private facility would cost you much less than the $1,000 and would provide comparable service.

On the side of efficiency and economic progress is Ulster County GOP chair Robin Yess.  On the side of spending and high taxes is Republican Dean J. Fabiano, Ulster County Legislator from Saugerties.  Walter Frey, also a GOP legislator from Saugerties, marshals factual evidence to show that a private sector firm would be better and more cost effective at managing the Golden Hill facility than Ulster County is. Although he remains uncommitted as to his ultimate vote, Frey notes that he does not support higher taxes to Ulster County's residents.   In contrast, Fabiano and former GOP chair Mario Catalano argue that Medicaid costs may weigh in favor of the existing facility. But Frey produces tomes of evidence that show that costs will be higher with a public facility. If Frey is right, you will pay.

The Golden Hill facility is one of seven senior facilities that adequately address the need for nursing home services in Ulster County.   Six of the seven are privately run facilities that turn a profit and do not receive direct county support.  Since 2002 Golden Hill, the only public sector facility has run an increasing taxpayer-funded deficit.   According to a special task force report presented to the Ulster County Legislature on November 30, 2010, Golden Hill's 2011 budget deficit of between $5.2 and $8.3 million will escalate to between $9.0 and $14.7 million by 2015. With about 70,000 households in Ulster County, that's between $140 and $210 per household.  The report estimates capital costs of about $80 million, or $1,100 per household were the county to rehabilitate the existing structure, and of slightly over $1,000 to your household were the county to build a new facility from scratch. 

Like the Republicans, Democratic Party bigwigs are torn.  In a February 2, 2011 letter to Civil Service Employees Association Southern Region 3 President William Riccaldo, President Pilly Gonzalez of CSEA Local 746 in Ellenville argues that the Kingston CSEA local has been "irresponsible" in demanding that Golden Hill be the only county-run facility.  Gonzalez would like to see the Golden Hill facility split into two facilities, one associated with Ellenville Regional Hospital and one in Kingston.  As well, County Executive Mike Hein is a fiscal conservative.   Mostly, though, the Democrats, sensing a chance for excessive staffing levels, sing harmoniously for the Golden Hill facility, which Legislator Walter Frey calls "a golf course" for government bloat.  Democratic Legislator Jeanette Provenzano goes so far as to argue that Ulster County GOP chair Robin Yess ought to be denied freedom of speech to stop her from criticizing the Golden Hill new facility proposal.  Democratic Kingston legislators David B. Donaldson and Peter M. Loughran did not answer my requests for interviews concerning Golden Hill, nor did Fred Wadnola, a Republican from the

Town of Ulster who is rumored to be a Golden Hill supporter.

One of the most courageous political figures to appear since publication of John F. Kennedy's Profiles in Courage, GOP sachem Robin Yess describes the Golden Hill facility as a symptom of Ulster County's swollen government. "Salary and benefit costs at Golden Hill are 34% higher than in the private sector," Yess told me in a telephone interview.  "What would be the plan to reduce the inefficiency?" she asked.  She added that the special committee has received eight bids, but six have been rejected. The remaining two are offers to buy the nursing home, which is only one of eight options that the legislature has considered.   Yess asks why the request for proposals by which the legislature has solicited bids has been secret.

Mario Catalano, former Ulster County GOP sachem, says that the legislature doesn't have enough information to make an intelligent decision. "One of the differences is that we get paid $192 from Medicaid, so it costs the county $47 per person.  Medicaid pays the average private operator $322. We pay a quarter."

Catalano points out that there are numerous confusing accounting issues surrounding Golden Hill. He says that Golden Hill transferred $2 million to the county's general fund; the county then transferred $4 million to Golden Hill.  Catalano adds that privatizing the facility might increase the percentage of Medicaid recipients."  Republican Legislator Walter Frey says that Catalano is wrong. "We’re required to pay the State $2 million up front for us to receive the $4 million they give for Golden Hill," he said.

I questioned Catalano as to whether his numbers include the $50 to $85 million in capital investment that the various reconstruction and new construction options require.  He e-mailed no, but that is an additional matter to investigate.  But the math doesn't seem hard.   Any differences in Medicaid reimbursement are small compared to the difference between spending $84 million on reconstructing the facility and receiving say $10 or $20 million from the sale of the facility and of the license to a private operator.

Saugerties Legislator Dean J. Fabiano goes further than Catalano. He says that he believes in less government, but, "When you consider disabled people I am more lenient. These are people who have paid their dues in life...I think it's the obligation of government to take care of people who can no longer take care of themselves. This is an issue where you have to put people before money." Fabiano did not know that 99% of Ulster County's senior citizens do not receive any benefit from Golden Hill. He claimed that a large percentage of Ulster County's senior citizens live in Golden Hill. In fact, there are over 25,000 Ulster County citizens over age 65, about one percent of whom, 280, reside in Golden Hill.  While all Ulster County taxpayers pay equally, recipients of the Golden Hill facility have included relatives of wealthy physicians, attorneys and leading political figures in the region.  In other words, elderly homeowners who have been having trouble making ends meet are being asked to subsidize Golden Hill residents who are wealthy in some cases.

Fabiano seconds Catalano's argument that the county pays 25% of Medicaid.  "If you're going to pay anyway, why not own it and have the say?" Fabiano asks.   He concludes, "We can always find money for everything else, for a jail where you don't know if you're walking into a jail or walking into the Hillside Manor. Where do you get the money for anything?"

Tea Party activist Glenda R. McGee of Olivebridge offers the Tea Party response to Fabiano's argument: "It's clear that voters can take no comfort within the Republican Party if they're looking for respect for their property rights and fiscal well-being.  The nursing home is a rich opportunity to repeat the catastrophe of building the Ulster County Jail."

I asked Fabiano what he thought the cost to the taxpayers would be of keeping Golden Hill. He did not know.  I also asked him what he thought the phrase "limited government" means and whether a state where 70% of the economy is under government control would be consistent with his vision of limited government. After hesitating he answered "Yes, it would." I offered to send Fabiano a copy of Friedrich Hayek's Road to Serfdom, which is about the trend toward socialism that the Republicans started under Theodore Roosevelt, and Fabiano agreed to read it.  

Walter Frey, also a Saugerties Republican, paints a more coherent and critical picture than either Fabiano or Catalano. Frey, a powerhouse of information, points out that of Golden Hill's $32 million annual budget, $19 million comes from payroll and benefits.  He also points out that the usual staffing level at senior facilities is one staff member per bed, but at Golden Hill there are approximately 350 staff members for 280 beds, a 25% staff excess.  Whereas at private facilities the staff's employee benefit rate is 18% of payroll, at Golden Hill the benefit rate is more than 40% of payroll.  Whereas in the average senior facility, benefit costs for the staff amount to $26 per resident day, at Golden Hill they are $90 per resident day.  Golden Hill spends $1.7 million per year in administrative costs that are not directly related to patient care. Frey adds that two nearby counties, Dutchess and Westchester, have sold their facilities.  Orange County is currently looking at selling its facility.

Frey adds that without taking Golden Hill into account Ulster County does a great deal for seniors. It administers $117 million on senior programs, which includes the county's Medicaid share that is capped at $33 million.  The $117 million includes federal, state and local contributions for programs such as meals on wheels, Office for the Aging, and transportation.

Contrary to Catalano, Frey states that residents of public and private hospitals have the same Medicare reimbursement rate for the first 100 days.   After that, if they have assets greater than the Medicaid eligible amount, they must spend down their own assets to cover cost of care. Then they become Medicaid eligible, and the County would be responsible for a portion of their care at that point.

 The median patient at Golden Hill has stayed a little over two years, but the trend is toward shorter stays.  The methods of pricing and reimbursement are the same for public and private facilities if they offer the same services, according to Frey.

Frey has thought about this issue carefully. He has concluded that senior living centers are more cost effective than nursing homes; they are better run by private firms because seniors live in a community center and can take care of each other. The county has used up its financial surplus and can ill afford the significant subsidy that Golden Hill will require, he concludes.

*Mitchell Langbert is associate professor of business at Brooklyn College. He blogs at http://www.mitchell-langbert.blogspot.com.