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Hochul scraps Cuomo order that limited not-for-profit execs’ pay

Gov. Kathy Hochul has scrapped an government order issued by predecessor Andrew Cuomo that sought to forestall state-funded service suppliers from paying “extreme” salaries to executives.

Cuomo’s 2012 edict capped government salaries for hundreds of not-for-profit suppliers at $199,000. Salaries may solely get bumped with a waiver or approval from the state funds director.

The rule additionally ordered recipients of state help to pay not more than 15 % of funding on administrative overhead.

On the time, Cuomo complained about an unnamed service supplier that acquired 99 % of its income from authorities contracts and whose chief government acquired $3.2 million in compensation.

A broadcast report highlighted the lavish existence and salaries two brothers loved whereas operating the Medicaid-funded, city-based Younger Grownup Institute that served sufferers with disabilities.

The Put up has additionally reported on government-funded nursing dwelling executives getting $1 million compensation packages.

“How can we justify this spending to the taxpayers of this state?” Cuomo mentioned on the time.

However the state Well being Division, in a public discover posted final week, mentioned it’s not imposing the wage cap — as a result of it not exists.

“Govt Order 38, issued on January 18, 2012 pertaining to limits on state-funded administrative prices and government compensation was discontinued. As such … Limits on Administrative Bills and Govt Compensation is not needed,” the Well being Division mentioned within the New York Register, the bulletin of state authorities.

State businesses that regulate suppliers working with folks with disabilities and psychological diseases, senior residents, substance abuse providers, legal justice providers, and kids and households additionally issued notices that they’re not implementing the wage cap as a result of Hochul repealed it.

Cuomo’s edict roiled the waters and instantly triggered lawsuits from the well being care and residential care industries.

Andrew Cuomo
Cuomo’s cap restricted not-for-profit executives’ salaries to $199,000.
AP

In 2018, the Courtroom of Appeals’ issued a ruling that gutted a lot of the affect of Cuomo’s order, concluding that parts of it had been overly broad.

Upholding a portion of the order, the courtroom decided {that a} hospital or different well being care supplier that relied solely on state funds for its revenues can be restricted both to paying its coated executives not more than $199,000 per 12 months, or to hunt a waiver from the well being division to pay greater than $199,000.

However the ruling additionally mentioned Cuomo improperly imposed an general cap on government compensation, whatever the funding supply:

The choice mentioned that social service suppliers may ignore the wage edict in the event that they acquired income from sources aside from Medicaid or different state funds — akin to from Medicare, personal insurance coverage or philanthropy.

The ruling dramatically restricted the variety of service suppliers and different entities impacted by the order.

Social service advocates applauded Hochul for torpedoing a wage cap they complained was impractical.

“The order was complicated and never simple to implement,” mentioned Michelle Jackson, government director of the New York State Human Companies Council.

“I’m not stunned Hochul removed it. The order had no enamel. I recognize the governor simply attempting to maintain issues alive which might be working.”

Hochul’s workplace had no speedy remark.

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