In his 1998-99 New York State Executive Budget, Governor Pataki proposes to increase the reimbursement rate for state-ready inmates held in local jails from $34 to $100 per day. Localities including New York City have long complained that the state shortchanges them for the actual costs of detaining state prisoners. If approved by the legislature, the change could mean an additional $12 million per year for the city.

Nevertheless, the city is opposing the legislation because it includes language that would prevent local lawsuits against the state to recoup the costs of housing state prisoners. Although the city has never brought suit against the state, the Governor's bill would remove the threat of such action which, it is believed, would impair the city's future negotiating position.

The proposal remedies the situation for only one of several classes of state prisoners detained in city jails: "state readies"-those prisoners who have just been sentenced and are waiting to be transferred to state facilities. Parole violators and class D and E felons are also subject to state reimbursement, the former at the $34 per day rate of state-ready inmates and the latter at $17 per day. If the state provides additional funds to bring the daily rate for these populations to $100 per day as well, the total benefit to the city would rise from $12 million to over $109 million annually.