Gotham Gazette Gotham Gazette is an online publication covering New York policy and politics as well as news on public safety, transportation, education, finance and more. http://www.gothamgazette.com/component/tags/tag/david-friedfel 2017-10-22T08:06:12+00:00 Webmaster webmaster@gothamgazette.com Even Without Federal Cuts, Signs of Trouble for State Finances 2017-08-01T04:00:00+00:00 2017-08-01T04:00:00+00:00 http://www.gothamgazette.com/?id=7102:even-without-federal-cuts-signs-of-trouble-for-state-finances Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/dinapoli_phillips.jpg" alt="dinapoli phillips" width="600" height="356" /></p> <p>State Comptroller Tom DiNapoli, right (photo: @NYSComptroller)</p> <hr /> <p>State Comptroller Tom DiNapoli is calmly ringing alarm bells about the New York economy and budget outlook. DiNapoli, the state’s chief fiscal officer, recently announced that overall tax collections for the first quarter of Fiscal Year 2018 -- April through July -- fell by $1.2 billion from the same period last year, a decrease of 6.1% in revenue.</p> <p>Not only did tax revenues decrease by $1.2 billion from the prior year, but they were also $1.7 billion below a projection made by the Comptroller’s office in February, an indication that things are significantly worse than expected.</p> <p>The findings were compiled in the comptroller’s monthly <a href="http://www.osc.state.ny.us/finance/finreports/cash/monthly/june-2017.pdf" target="_blank" rel="noopener noreferrer">state cash report</a>, issued in late July. In an accompanying statement, DiNapoli diagnosed a potential cause of the unanticipated shortfall in state revenues.</p> <p>"We're three months into New York's fiscal year and personal income tax collections are falling short of what was expected," DiNapoli said. “Taxpayer anticipation of federal tax changes has contributed to the decline. Offsetting that, business tax collections are well over estimates.”</p> <p>The comptroller, a few days after releasing the cash report, also released a <a href="https://www.osc.state.ny.us/reports/budget/2017/2017-18-enacted-budget-financial-plan-july.pdf" target="_blank" rel="noopener noreferrer">larger fiscal analysis</a> of the state’s enacted budget and other spending plans, including the capital program, which funds infrastructure projects. Already on unstable footing due to lower than expected revenues and questionable uses of budgetary windfalls, the situation is made worse by the looming cuts in federal aid by President Donald Trump and the Republican Congress, who have proposed deep cuts in areas integral to New York ranging from affordable housing to transportation and health care.</p> <p>The comptroller’s fiscal report signals a potential crisis for the state in spite of what the DiNapoli refers to in his accompanying message as the nation’s “ninth year of economic expansion.” The larger analysis shows decreases in federal aid could have a large impact on the state’s ability to provide healthcare, for instance, with Medicaid funding at particular risk. Medicaid funding saw a significant increase in the new state budget, which was passed in early April after an agreement between Governor Andrew Cuomo and the two houses of the state Legislature.</p> <p>The balance in the state’s General Fund, which is the state’s destination for non-earmarked revenue, is $7.7 billion, according to the report. According to DiNapoli, the figure “is substantially higher than the levels in the period during and immediately after the Great Recession, largely reflecting monetary settlements received in the past three years. But the State’s budgetary cushion is shrinking: the Enacted Budget Financial Plan projects that the General Fund balance will be one-third lower at the end of the current fiscal year than its recent peak two years previously.”</p> <p>DiNapoli criticizes the apparent lack of credence paid to the very real threat of cuts in federal aid from the Republican-controlled Congress and White House in Washington D.C. The $153 billion state budget for Fiscal Year 2018 includes in its sources of revenue about $56 billion in federal aid, about a third of the $161 billion in revenue for FY18 <a href="https://cbcny.org/research/budget-navigator" target="_blank" rel="noopener noreferrer">according to the Citizens Budget Commission</a> (CBC).</p> <p>It is unclear just how much the federal budget could cut aid to New York, but the comptroller’s report suggests that the state’s Financial Plan doesn’t sufficiently account for the impact of the increasingly likely scenario of significant cuts in federal grants to New York. Cuomo and the Legislature did pass a new provision that allows the state greater flexibility to adjust the budget mid-year in the face of significant federal cuts, DiNapoli notes, but it is not completely clear how that process will play out and whether the state is truly prepared for such measures.</p> <p>The comptroller also critiqued the use of funds acquired via financial settlements, which have amounted to about a $9 billion windfall over the past several years, as of January. The comptroller’s message states that the settlement money, which is “nonrecurring,” should be put towards financing capital projects rather than to balance budgets. According to the comptroller, through March 31, “the State had spent over $3.1 billion of its extraordinary windfall in settlement resources. Nearly half that amount had been used for various forms of budget relief, and another $461 million is planned for such use this year.”</p> <p>In a statement to Gotham Gazette, David Friedfel, the director of state studies at Citizens Budget Commission, noted shared concerns between the comptroller and the nonpartisan, nonprofit budget watchdog.</p> <p>“We echo many of the Comptroller’s concerns,” he said, “specifically the increasing use of settlement funds to close budgetary gaps. Likewise, it is concerning that personal income tax receipts continue to fall below projections, especially in light of potential cuts in Federal aid.”</p> <p>Both CBC and the comptroller’s report also cast doubt on Cuomo’s claim that annual spending growth has stayed below 2 percent annually during his tenure. In May, CBC released <a href="https://cbcny.org/research/when-2-percent-isnt-2-percent" target="_blank" rel="noopener noreferrer">a report</a> explaining how Cuomo manipulated the numbers to tell his preferred story. The comptroller’s report says similarly, listing such budgetary tricks as “the use of prepayments; certain program restructurings which result in costs being reflected as reduced receipts rather than disbursements; shifting spending to capital projects funds; deferring expenditures to future years; and the use of off-budget resources to pay for certain program costs,” which, when accounted for, results in a 4 percent spending increase this year rather than Cuomo’s touted 2 percent.</p> <p>“We are glad to see OSC voicing the same concern that state operating spending is really growing in excess of 2 percent,” Friedfel said. “The actual growth rate is still below historical norms, but by utilizing accounting adjustments and financial plan reclassifications, the State is undermining transparency to fit an artificial spending growth cap.”</p> <p>Another nonprofit budget watchdog, Empire Center, had a similar reaction to the report.</p> <p>"As usual, the Comptroller’s report was fairly thorough in identifying some of the most important budgetary trends obscured by the governor’s spin as well as the financial risks ahead,” said E.J. McMahon, research director at Empire Center, in a statement to Gotham Gazette. “However, one serious risk surprisingly overlooked by the report is the Trump administration’s proposal to eliminate the federal income tax deduction for state and local taxes, also known as the SALT deduction."</p> <p>SALT refers to state and local taxes. The average SALT deduction claimed by New Yorker taxpayers is $21,038, the highest in the country and nearly double the national average, according to <a href="https://www.empirecenter.org/publications/sizing-up-tax-reform/" target="_blank" rel="noopener noreferrer">McMahon, in a July blog post</a>.</p> <p>"Given the state’s inordinate dependence on taxes paid by wealthy residents,” McMahon told Gotham Gazette, “the repeal of the SALT deduction could seriously undermine our tax base by increasing the net tax “price” of New York compared to states with low or no income tax, such as Florida.”</p> <p>Other gloomy projections the report makes include $5.7 billion more in capital spending for the five-year plan than projected in the 2016-17 budget capital plan; a total lack of deposits to rainy day reserves in the previous fiscal year and the year that has begun; and an increase of $11.2 billion in out-year budget gaps from last year, to $17.4 billion. DiNapoli forecasts outstanding debt to increase by 4.1% to $63.9 billion this year and to $73.7 billion by the end of the current Capital Plan period in 2022.</p> <p>

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by Ben Brachfeld, Gotham Gazette

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/dinapoli_phillips.jpg" alt="dinapoli phillips" width="600" height="356" /></p> <p>State Comptroller Tom DiNapoli, right (photo: @NYSComptroller)</p> <hr /> <p>State Comptroller Tom DiNapoli is calmly ringing alarm bells about the New York economy and budget outlook. DiNapoli, the state’s chief fiscal officer, recently announced that overall tax collections for the first quarter of Fiscal Year 2018 -- April through July -- fell by $1.2 billion from the same period last year, a decrease of 6.1% in revenue.</p> <p>Not only did tax revenues decrease by $1.2 billion from the prior year, but they were also $1.7 billion below a projection made by the Comptroller’s office in February, an indication that things are significantly worse than expected.</p> <p>The findings were compiled in the comptroller’s monthly <a href="http://www.osc.state.ny.us/finance/finreports/cash/monthly/june-2017.pdf" target="_blank" rel="noopener noreferrer">state cash report</a>, issued in late July. In an accompanying statement, DiNapoli diagnosed a potential cause of the unanticipated shortfall in state revenues.</p> <p>"We're three months into New York's fiscal year and personal income tax collections are falling short of what was expected," DiNapoli said. “Taxpayer anticipation of federal tax changes has contributed to the decline. Offsetting that, business tax collections are well over estimates.”</p> <p>The comptroller, a few days after releasing the cash report, also released a <a href="https://www.osc.state.ny.us/reports/budget/2017/2017-18-enacted-budget-financial-plan-july.pdf" target="_blank" rel="noopener noreferrer">larger fiscal analysis</a> of the state’s enacted budget and other spending plans, including the capital program, which funds infrastructure projects. Already on unstable footing due to lower than expected revenues and questionable uses of budgetary windfalls, the situation is made worse by the looming cuts in federal aid by President Donald Trump and the Republican Congress, who have proposed deep cuts in areas integral to New York ranging from affordable housing to transportation and health care.</p> <p>The comptroller’s fiscal report signals a potential crisis for the state in spite of what the DiNapoli refers to in his accompanying message as the nation’s “ninth year of economic expansion.” The larger analysis shows decreases in federal aid could have a large impact on the state’s ability to provide healthcare, for instance, with Medicaid funding at particular risk. Medicaid funding saw a significant increase in the new state budget, which was passed in early April after an agreement between Governor Andrew Cuomo and the two houses of the state Legislature.</p> <p>The balance in the state’s General Fund, which is the state’s destination for non-earmarked revenue, is $7.7 billion, according to the report. According to DiNapoli, the figure “is substantially higher than the levels in the period during and immediately after the Great Recession, largely reflecting monetary settlements received in the past three years. But the State’s budgetary cushion is shrinking: the Enacted Budget Financial Plan projects that the General Fund balance will be one-third lower at the end of the current fiscal year than its recent peak two years previously.”</p> <p>DiNapoli criticizes the apparent lack of credence paid to the very real threat of cuts in federal aid from the Republican-controlled Congress and White House in Washington D.C. The $153 billion state budget for Fiscal Year 2018 includes in its sources of revenue about $56 billion in federal aid, about a third of the $161 billion in revenue for FY18 <a href="https://cbcny.org/research/budget-navigator" target="_blank" rel="noopener noreferrer">according to the Citizens Budget Commission</a> (CBC).</p> <p>It is unclear just how much the federal budget could cut aid to New York, but the comptroller’s report suggests that the state’s Financial Plan doesn’t sufficiently account for the impact of the increasingly likely scenario of significant cuts in federal grants to New York. Cuomo and the Legislature did pass a new provision that allows the state greater flexibility to adjust the budget mid-year in the face of significant federal cuts, DiNapoli notes, but it is not completely clear how that process will play out and whether the state is truly prepared for such measures.</p> <p>The comptroller also critiqued the use of funds acquired via financial settlements, which have amounted to about a $9 billion windfall over the past several years, as of January. The comptroller’s message states that the settlement money, which is “nonrecurring,” should be put towards financing capital projects rather than to balance budgets. According to the comptroller, through March 31, “the State had spent over $3.1 billion of its extraordinary windfall in settlement resources. Nearly half that amount had been used for various forms of budget relief, and another $461 million is planned for such use this year.”</p> <p>In a statement to Gotham Gazette, David Friedfel, the director of state studies at Citizens Budget Commission, noted shared concerns between the comptroller and the nonpartisan, nonprofit budget watchdog.</p> <p>“We echo many of the Comptroller’s concerns,” he said, “specifically the increasing use of settlement funds to close budgetary gaps. Likewise, it is concerning that personal income tax receipts continue to fall below projections, especially in light of potential cuts in Federal aid.”</p> <p>Both CBC and the comptroller’s report also cast doubt on Cuomo’s claim that annual spending growth has stayed below 2 percent annually during his tenure. In May, CBC released <a href="https://cbcny.org/research/when-2-percent-isnt-2-percent" target="_blank" rel="noopener noreferrer">a report</a> explaining how Cuomo manipulated the numbers to tell his preferred story. The comptroller’s report says similarly, listing such budgetary tricks as “the use of prepayments; certain program restructurings which result in costs being reflected as reduced receipts rather than disbursements; shifting spending to capital projects funds; deferring expenditures to future years; and the use of off-budget resources to pay for certain program costs,” which, when accounted for, results in a 4 percent spending increase this year rather than Cuomo’s touted 2 percent.</p> <p>“We are glad to see OSC voicing the same concern that state operating spending is really growing in excess of 2 percent,” Friedfel said. “The actual growth rate is still below historical norms, but by utilizing accounting adjustments and financial plan reclassifications, the State is undermining transparency to fit an artificial spending growth cap.”</p> <p>Another nonprofit budget watchdog, Empire Center, had a similar reaction to the report.</p> <p>"As usual, the Comptroller’s report was fairly thorough in identifying some of the most important budgetary trends obscured by the governor’s spin as well as the financial risks ahead,” said E.J. McMahon, research director at Empire Center, in a statement to Gotham Gazette. “However, one serious risk surprisingly overlooked by the report is the Trump administration’s proposal to eliminate the federal income tax deduction for state and local taxes, also known as the SALT deduction."</p> <p>SALT refers to state and local taxes. The average SALT deduction claimed by New Yorker taxpayers is $21,038, the highest in the country and nearly double the national average, according to <a href="https://www.empirecenter.org/publications/sizing-up-tax-reform/" target="_blank" rel="noopener noreferrer">McMahon, in a July blog post</a>.</p> <p>"Given the state’s inordinate dependence on taxes paid by wealthy residents,” McMahon told Gotham Gazette, “the repeal of the SALT deduction could seriously undermine our tax base by increasing the net tax “price” of New York compared to states with low or no income tax, such as Florida.”</p> <p>Other gloomy projections the report makes include $5.7 billion more in capital spending for the five-year plan than projected in the 2016-17 budget capital plan; a total lack of deposits to rainy day reserves in the previous fiscal year and the year that has begun; and an increase of $11.2 billion in out-year budget gaps from last year, to $17.4 billion. DiNapoli forecasts outstanding debt to increase by 4.1% to $63.9 billion this year and to $73.7 billion by the end of the current Capital Plan period in 2022.</p> <p>

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by Ben Brachfeld, Gotham Gazette

Read more by this writer.

</p>
Several Significant Questions About The Governor's Budget 2016-03-02T22:16:00+00:00 2016-03-02T22:16:00+00:00 http://www.gothamgazette.com/?id=6203:several-significant-questions-about-the-governors-budget kfan <p><img src="http://www.gothamgazette.com/images/graphics/2016/23994415209_01555788be_z.jpg" alt="Cuomo built to lead sots" width="600" height="400" /></p> <p>Gov. Cuomo at his State of the State (via The Governor's Office)</p> <hr /> <p>Gov. Andrew Cuomo's 2016-2017 budget proposal has legislators and budget experts scratching their heads as to how major capital projects will be paid for, how the state plans to make good on a promise to fund the MTA, and how certain measures might affect funding for New York City. Many are wondering if the governor will keep his pledge that his plan to shift millions in costs for CUNY and Medicaid "won't cost New York City a penny."</p> <p>These questions linger almost two months after the plan was first released, rankling Mayor Bill de Blasio, City Council members, and city-based state legislators, and alarming budget watchdogs.</p> <p>Only one month remains until the April 1 start of the new fiscal year and budget negotiations have been muted. State of Politics <a href="http://www.nystateofpolitics.com/2016/03/cuomo-meets-with-legislative-leaders/" target="_blank">reports</a> that there was an initial budget conversation on Wednesday morning among Cuomo and legislative leaders. The way Cuomo has positioned things, there are questions about whether the State Assembly and Speaker Carl Heastie, de Blasio's most important ally, will be willing and able to take on the political cost of going to battle for the city - on CUNY, Medicaid, and other issues like affordable housing bonds and homelessness-prevention vouchers. The Legislature recently finished holding budget hearings and the Assembly and Senate one-house budgets are expected imminently.</p> <p>Potential state cuts loomed large over the initial New York City Council preliminary budget hearing on Tuesday, at which de Blasio's budget director reiterated several times that possible state cuts could be crippling to the city, but that the city plans to hold the governor to his word and that Assembly Democrats will be essential in the process.</p> <p>Cuomo's move to have New York City assume additional MTA, CUNY, and Medicaid cuts are among his most controversial, along with the governor's plan to take more control of affordable housing being built in the city. While many await more detail from the governor as the clock ticks, there is also mystery around major infrastructure projects for the metropolitan region that the governor is overseeing as well as a proposal from the governor to create a new entity to take more control of such projects.</p> <p>As the governor pushes other policies that city Democrats back, like a minimum wage increase and paid family leave, he appears to be exacting whatever costs from the city he can in order to both undermine de Blasio and help the state pay its obligations.</p> <p>Cuomo has a variety of government ethics reform proposals in his budget, but he has not been promoting them publicly, leaving many to wonder their fate. Meanwhile, in recent days new light has been shone on billions of dollars in the governor's budget with no determined purpose, to be used by Cuomo and legislative leaders as they see fit at a later date.</p> <p><strong>The City's Burden</strong><br />A recent evaluation of New York City finances by State Comptroller Thomas DiNapoli warned that Governor Cuomo's budget provides major economic threat to the city. "The largest and most immediate budget risk is the proposed state Executive Budget, which includes three proposals that would increase the city's costs by $985 million in FY 2017 and by about $1.2 billion in each subsequent year (a total of $4.8 billion during the financial plan period)," reads the comptroller's report.</p> <p>It continues: "The two proposals with the greatest budgetary impact ($785 million in FY 2017 alone) would require New York City to pay a larger share of the local cost of Medicaid and of the costs of the senior colleges of the City University of New York. After the release of the Executive Budget, the Governor stated that efficiencies would be identified to mitigate the budgetary impact of these proposals, but such savings have not yet been identified."</p> <p>The Citizens Budget Commission, a nonprofit, nonpartisan watchdog based in New York City, quickly cried foul over the proposals in Cuomo's budget that would move costs for CUNY and Medicaid to the city (both are joint city-state programs that the state has traditionally supported to a far greater degree than the city).</p> <p>CBC estimates the shift would cost the city $800 million. De Blasio pledged he would do "whatever it takes" to stop the plan, saying it could impact major plans to expand pre-kindergarten and other initiatives. As focus on the budget measure intensified Cuomo characterized the plan as a mutual agreement between the city and state to find efficiencies in the programs. De Blasio had only met briefly with Cuomo before the State of the State address and said he had learned about the shift that could cost the city nearly a billion dollars when most New Yorkers did.</p> <p>Cuomo, in <a href="http://www.ny1.com/nyc/all-boroughs/politics/2016/01/14/ny1-online--cuomo-discusses-state-budget-and-how-it-affects-city.html" target="_blank">a NY1 interview</a>, claimed "At the end of the day, what you will see is it won't cost New York City a penny, but we will make joint streamlining policy efficiency changes."</p> <p>Some observers expected Cuomo to adjust the plan in his 30-day budget amendments, but nothing about it changed - apparently leaving it up to the city's allies in the Legislature to negotiate it.</p> <p>Assembly Speaker Carl Heastie, the city's most powerful advocate in Albany, has expressed major concern over the plans, but it appears that he would have to own the cost of a change as part of budget negotiations, possibly preempting other major initiatives his conference wants.</p> <p>E.J. McMahon, president of the Empire Center, a budget-focused think tank, said he believes that undoing Cuomo's plan would cost Heastie "$500 million" during negotiations which would limit what else Assembly Democrats could bargain for given that Cuomo appears committed to a 2 percent overall cap on spending growth.</p> <p>The governor's budget makes for 1.7 percent spending growth so there isn't much room for new initiatives and losing the savings created by the cost shift would further tighten the equation. "1.7 to 2 [percent] is $300 million," said McMahon, "So $500 million is a pretty significant number in budget negotiations."</p> <p>Dave Friedfel of the CBC agrees. "To add $500 million back on to the budget would blow through the governor's spending cap. It will have a major impact on negotiations," Friedfel said.</p> <p>The Fiscal Policy Institute, also a think tank, argued in its budget testimony that the state should scrap the 2 percent spending cap. "There is no reason to hold annual spending growth below two percent if it means that we are under-investing in education and poverty reduction," reads the FPI testimony. "This unforced austerity has already caused the state to underinvest in several critical areas, and the continuation of the cap guarantees further harmful cuts to local governments, education and human service programs."</p> <p>Meanwhile, Heastie has pressed for a millionaire's tax that would allow the state to spend more on education. The Cuomo administration has derided the plan and Heastie <a href="http://www.gothamgazette.com/index.php/government/6158-heastie-takes-to-twitter-to-respond-to-cuomo-on-tax-plan" target="_blank">has fired back</a>. Mayor de Blasio has continued to express support for raising taxes on the highest earners, but he has not made a focused push on the issue since his efforts failed in 2014.</p> <p>Asked about whether there have been joint efforts between the Cuomo and de Blasio administrations to find efficiencies as the governor discussed, Morris Peters, spokesperson for the division of budget, said in a statement: "We have been having conversations with our partners in government and we will continue to do so."</p> <p><a href="http://www.gothamgazette.com/index.php/government/6202-at-first-council-budget-hearing-concerns-over-city-savings-and-state-cuts" target="_blank">During City Council budget testimony on Tuesday</a>, de Blasio's budget director Dean Fuleihan said that talks had yet to occur between the city and state but that he expects them to take place soon.</p> <p>"I've also said I'm going to take him at his word, but I'll hold him to it," de Blasio told a gathering of the state Legislature's Black, Puerto Rican, Hispanic, and Asian Caucus last month, referring to Gov. Cuomo and the CUNY and Medicaid cuts. "When the budget is passed on April 1 I fully expect there won't be any negative impact on New York City," de Blasio continued. "He said it won't cost us a single cent. That's what we expect, and I think a lot of people are going to make sure that happens."</p> <p><strong>Construction &amp; Housing Takeovers</strong><br />Another, little-discussed measure contained in Gov. Cuomo's budget would see the creation of "The New York State Design and Construction Corp." that would be given oversight of public construction projects worth over $50 million. The DCC would be a subsidiary of the state's Dormitory Authority and would be headed by three commissioners, all appointed by the governor.</p> <p>"The DCC's primary purpose will be to provide additional project management expertise and oversight on significant public works projects undertaken by state agencies, departments, public authorities and public benefit corporations throughout the state," reads the governor's State of the State <a href="https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/2016StateoftheStateBook.pdf" target="_blank">policy book</a>.</p> <p>The proposal has raised concerns for legislators and budget watchdogs who believe Cuomo is trying to have more influence over independent authorities like the MTA. The MTA board is made up of members appointed by the city and other localities serviced by the agency. The Governor also appoints members and names the chair. Representatives of Citizens Budget Commission (CBC) are concerned the body would create more bureaucracy and confusion. For example, the DCC could void contracts signed by the MTA. CBC has written legislators urging them to oppose the plan.</p> <p>John Kaehny, of watchdog group Reinvent Albany, said he was taken aback by the plan. "The Dormitory Authority is the premier slush fund for pork barrel spending. To house a project management agency within it is alarming. We agree with budget watchdog groups who view this as a power grab and another attempt to reduce transparency and accountability."</p> <p>"What is his motivation for proposing this unprecedented design and construction corporation?" asked McMahon, of The Empire Center. "It will allow [Cuomo] to reach in and take control of any project he wants. The governor is the kind of guy who will say 'Stop that, give it to me, I can do it better!' The governor likes to draw power to the center, to the top, to him."</p> <p>Cuomo is also looking to increase the state's say over New York City development of affordable housing. Per the governor's plans, The Public Authorities Control Board would be allowed to veto individual housing projects proposed by the city that utilize tax-exempt bonds, given to the state by the federal government, which the state then allocates to municipalities.</p> <p>Cuomo administration officials say the plan would add a new level of transparency to a system that allocates billions of dollars to construction each year. City officials and affordable housing developers say that there is no need for another level of bureaucracy.</p> <p>The Control Board is made up of the governor and both legislative leaders. Mayor de Blasio has panned the proposal, as have a number of contractors and housing advocates who worry the plan will create overlap and uncertainty around badly-needed projects that increase affordable housing stock. The Real Estate Board of New York has also raised concerns that more state say would create uncertainty and possibly confuse lending institutions.</p> <p>"We think adding these additional layers will only slow down the process at a point where thousands and thousands of people are waiting for housing that will allow them and their families to be able to make ends meet," de Blasio told legislators during budget testimony earlier this year.</p> <p>Adding to the drama around the city's affordable housing plans, De Blasio administration officials, housing advocates and developers are also growing nervous that Cuomo may continue to divert some of the flow of federal housing bonds that the city relies on to create affordable housing. After doing so with millions of dollars in bonds that the city thought it could count on in 2015, Cuomo <a href="http://www.nytimes.com/2016/02/29/nyregion/cuomo-de-blasio-feud-threatens-new-york-citys-plans-for-affordable-housing.html" target="_blank">is considering</a> using the bonds for the state's newly expanded role in creating affordable housing. During his State of the State, Cuomo outlined general plans to invest billions in affordable housing, but he has yet to flesh those plans out. His policy book promised details "in the coming weeks."</p> <p><strong>MTA Financing<br /></strong>Last year, Cuomo and his MTA Chair Thomas Prendergast began a campaign to push the city to contribute more to the MTA capital plan. Eventually a deal was struck where the city agreed to contribute $2.5 billion and the governor pledging an additional $7.3 billion, bringing the state's total pledged contribution to $8.3 billion, all part of the $26 billion overall five-year plan. For months Cuomo was asked how the state would pay its share and he retorted that the question would be answered in his budget.</p> <p>His budget plan simply raised more questions. Cuomo's plan appropriates $1 billion for the MTA capital plan and pledges to provide more of the promised $8.3 billion when the MTA spends through other capital funding. The city has in turn put off its commitment to extra funding since the city-state agreement was contingent upon parallel fund allocation.</p> <p>Budget experts believe the Cuomo administration will allow the MTA to issue bonds to raise the $7.3 billion once it spends the funds it has on hand. "[The governor] already committed to $8.3 million for the MTA and we all wondered where that would come from," said McMahon. "The answer is that the MTA commitment he signed was not worth the paper it was written on. Once the MTA is done spending money it raises itself, the state will direct them to issue their own bonds."</p> <p>Jamison Dague of CBC said that while the MTA has a backlog of projects that need to be addressed, he would like to see the state spell out specific funding for the agency. "What they've done here is tell the MTA, 'You have resources to draw down before we come in with the pledge.' The MTA has a lot of capital funding sources they are still trying to spend."</p> <p>However, Dague said knowing where the state funding is coming from is prudent for both the MTA and state's long-term planning. "You always want to identify revenue for big capital work before you get going with big contracts," Dague said.</p> <p>Legislators expressed outrage over the plan during a budget hearing last week. "I have no idea how we can actually do a capital program and actually approve a capital program with language that 'it'll be there when you need it.' Corporate America would laugh at this. Any country would be surprised with this type of approach in funding," said Senator Marty Golden, a Republican from Brooklyn, <a href="http://www.capitalnewyork.com/article/albany/2016/02/8591986/state-legislators-bewildered-cuomos-mta-plan" target="_blank">according to</a> Politico New York.</p> <p>The Cuomo administration has vigorously defended its position. "The Governor put unambiguous and iron-clad language in the budget to make good on his commitment to provide $8.3 billion towards the MTA's capital plan," Morris Peters of the Division of The Budget told Gotham Gazette in a statement. Peters pointed to <a href="http://publications.budget.ny.gov/eBudget1617/fy1617artVIIbills/TEDArticleVII.pdf" target="_blank">budget legislation</a> that he said would cement the state's commitment to funding the MTA "in law."</p> <p><strong>Infrastructure Spending</strong><br />This year's State of the State address was centered around the idea that Cuomo is rebuilding New York. "Built to Lead" was the theme and the governor announced a myriad of projects including revamping Penn Station, retooling the Javits Center, reconstructing LaGuardia Airport, and a major contribution to the rail tunnel underneath the Hudson River. The combined cost of the projects is estimated at over $100 billion.</p> <p>Budget watchdogs say Cuomo's plans are bold but not backed up with detailed funding mechanisms. The governor's budget points to federal funding, cash from public authorities, and investment from public/private partnerships to fund a number of the projects. It leaves the state assuming $29 billion of project costs. Watchdogs say the budget only appropriates two-thirds of that cash. "I think the situation was created by the governor's desire to portray himself as having a grand plan. So we all wondered: 'With what money?'" said McMahon.</p> <p>Cuomo has also already allocated billions of dollars worth of the state's bank settlement funds to other projects such as upstate revitalization. The state is also relatively close to bumping up against a borrowing cap that was signed into law under Gov. George Pataki, so it is unlikely the state could fund all of the projects if it wanted to.</p> <p>"I think the governor's ambition is admirable," said Dague of CBC. "But one of the concerns is he has promised to take on so many projects while leaving the funding details to be filled in. Another concern the legislature has is that the projects aren't being put through rigorous analysis. There isn't a discussion of how the state makes use of its limited capital projects funds--why this and not that. And there also is the question in some cases of: 'Why are these projects in the governor's budget and not the MTA's?'"</p> <p>Peters, of Cuomo's administration, said that the budget clearly lays out how Cuomo's grand plans will be paid for. The list of major infrastructure projects are funded by a combination of resources, including from the state and federal governments, public authorities, and private investment, as clearly laid out in our budget materials."</p> <p><strong>Cash Stash</strong><br />Another major concern for budget watchdogs is the $2.4 billion in funds stashed in 80 different pots in this year's executive budget not labeled for any specific use, as identified by good government group Citizens Union in <a href="http://www.citizensunion.org/www/cu/site/hosting/Reports/FINAL%20CU%20Spending%20in%20the%20Shadows%20Report%20FY17%20Executive%20Budget%20-%202%2029%2016.pdf" target="_blank">a new report</a>.</p> <p>It is actually common for the governor and both houses of the Legislature to create slush funds in the budget each year. The practice came under increased scrutiny last year after the arrest of (now former) Assembly Speaker Sheldon Silver, who used cash from one of those pots of money in a scheme to earn referral fees through his law firm. Silver has been convicted on federal corruption trials and faces sentencing soon.</p> <p>This year, according to the Citizens Union "spending in the shadows" report, the governor has $2.2 billion worth of this discretionary money, the Senate $815 million, and $686 million for the Assembly. Last year, Cuomo inserted language into the budget that would have required legislators to reveal their connections to any organization that received funding from these pots of cash, but he has not reinserted the language this year. Cuomo has outlined a series of ethics reforms that he says he intends to negotiate with legislative leaders</p> <p>"With former Speaker Silver convicted in part because of his access to and illegal use of a healthcare-related lump sum pot, we need no greater reason to reform this form of budgeting," said Dick Dadey, executive director of Citizens Union, in a statement. "We need a whole new set of rules and level of transparency to ensure that taxpayer dollars are not used to personally enrich elected officials or used in unseemly pay to play schemes."</p> <p><strong>Policy Questions</strong><br />Cuomo has again packed his budget with his major legislative priorities, a practice that has earned the governor criticism - some say that the budget should only include operational and capital spending, not new policy. This year, Cuomo is including an increase of the minimum wage toward $15 per hour, paid family leave, and raising the age of adult criminal responsibility from 16 to 18, among other policies.</p> <p>The governor has the support of Assembly and Senate Democrats on the outlines of all of these issues while Senate and Assembly Republicans have voiced varying levels of dissent. The Governor recently told reporters the minimum wage issue might be removed from the budget debate.</p> <p>Assembly Democrats, who control that chamber, are pushing for The DREAM Act, which Cuomo has included in his budget but has not rallied for publicly this year. Senate Republicans, who control that chamber, have been vigorously opposed to the plan, which would allow undocumented residents access to education aid.</p> <p>Also on the Assembly to-do list is the millionaire's tax they argue will allow an increase in education spending, among other things. The Cuomo administration and the Senate have both rejected the idea.</p> <p>Cuomo has remained nearly silent on the package of ethics reforms he pitched in January. Although he's taken to touring the state in an RV to tout his wage plan at a series of rallies, he has discussed ethics reform when prompted by reporters. His plans would strictly limit legislators outside income and close the LLC loophole that allows corporate donors to avoid campaign finance limits.</p> <p>The governor was asked about the lack of discussion around ethics reform during one of his RV stops last week. He replied that discussions were happening "in phases."</p> <p>"There's not a lot of continuity between $15 minimum wage and ethics," <a href="http://blog.timesunion.com/capitol/archives/246460/cuomo-were-going-to-see-if-ethics-reforms-stay-in-budget/" target="_blank">he said</a>. "It's kind of a hard transition: 'I want to talk to you about a $15 minimum wage, oh, and now I wanna talk to you about limiting income for legislators.' It's not the most fluid transition. Maybe you could do it. It's tough for me."</p> <p>

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by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: this article has been changed to reflect the report of the initial budget meeting between Cuomo and legislative leaders.</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2016/23994415209_01555788be_z.jpg" alt="Cuomo built to lead sots" width="600" height="400" /></p> <p>Gov. Cuomo at his State of the State (via The Governor's Office)</p> <hr /> <p>Gov. Andrew Cuomo's 2016-2017 budget proposal has legislators and budget experts scratching their heads as to how major capital projects will be paid for, how the state plans to make good on a promise to fund the MTA, and how certain measures might affect funding for New York City. Many are wondering if the governor will keep his pledge that his plan to shift millions in costs for CUNY and Medicaid "won't cost New York City a penny."</p> <p>These questions linger almost two months after the plan was first released, rankling Mayor Bill de Blasio, City Council members, and city-based state legislators, and alarming budget watchdogs.</p> <p>Only one month remains until the April 1 start of the new fiscal year and budget negotiations have been muted. State of Politics <a href="http://www.nystateofpolitics.com/2016/03/cuomo-meets-with-legislative-leaders/" target="_blank">reports</a> that there was an initial budget conversation on Wednesday morning among Cuomo and legislative leaders. The way Cuomo has positioned things, there are questions about whether the State Assembly and Speaker Carl Heastie, de Blasio's most important ally, will be willing and able to take on the political cost of going to battle for the city - on CUNY, Medicaid, and other issues like affordable housing bonds and homelessness-prevention vouchers. The Legislature recently finished holding budget hearings and the Assembly and Senate one-house budgets are expected imminently.</p> <p>Potential state cuts loomed large over the initial New York City Council preliminary budget hearing on Tuesday, at which de Blasio's budget director reiterated several times that possible state cuts could be crippling to the city, but that the city plans to hold the governor to his word and that Assembly Democrats will be essential in the process.</p> <p>Cuomo's move to have New York City assume additional MTA, CUNY, and Medicaid cuts are among his most controversial, along with the governor's plan to take more control of affordable housing being built in the city. While many await more detail from the governor as the clock ticks, there is also mystery around major infrastructure projects for the metropolitan region that the governor is overseeing as well as a proposal from the governor to create a new entity to take more control of such projects.</p> <p>As the governor pushes other policies that city Democrats back, like a minimum wage increase and paid family leave, he appears to be exacting whatever costs from the city he can in order to both undermine de Blasio and help the state pay its obligations.</p> <p>Cuomo has a variety of government ethics reform proposals in his budget, but he has not been promoting them publicly, leaving many to wonder their fate. Meanwhile, in recent days new light has been shone on billions of dollars in the governor's budget with no determined purpose, to be used by Cuomo and legislative leaders as they see fit at a later date.</p> <p><strong>The City's Burden</strong><br />A recent evaluation of New York City finances by State Comptroller Thomas DiNapoli warned that Governor Cuomo's budget provides major economic threat to the city. "The largest and most immediate budget risk is the proposed state Executive Budget, which includes three proposals that would increase the city's costs by $985 million in FY 2017 and by about $1.2 billion in each subsequent year (a total of $4.8 billion during the financial plan period)," reads the comptroller's report.</p> <p>It continues: "The two proposals with the greatest budgetary impact ($785 million in FY 2017 alone) would require New York City to pay a larger share of the local cost of Medicaid and of the costs of the senior colleges of the City University of New York. After the release of the Executive Budget, the Governor stated that efficiencies would be identified to mitigate the budgetary impact of these proposals, but such savings have not yet been identified."</p> <p>The Citizens Budget Commission, a nonprofit, nonpartisan watchdog based in New York City, quickly cried foul over the proposals in Cuomo's budget that would move costs for CUNY and Medicaid to the city (both are joint city-state programs that the state has traditionally supported to a far greater degree than the city).</p> <p>CBC estimates the shift would cost the city $800 million. De Blasio pledged he would do "whatever it takes" to stop the plan, saying it could impact major plans to expand pre-kindergarten and other initiatives. As focus on the budget measure intensified Cuomo characterized the plan as a mutual agreement between the city and state to find efficiencies in the programs. De Blasio had only met briefly with Cuomo before the State of the State address and said he had learned about the shift that could cost the city nearly a billion dollars when most New Yorkers did.</p> <p>Cuomo, in <a href="http://www.ny1.com/nyc/all-boroughs/politics/2016/01/14/ny1-online--cuomo-discusses-state-budget-and-how-it-affects-city.html" target="_blank">a NY1 interview</a>, claimed "At the end of the day, what you will see is it won't cost New York City a penny, but we will make joint streamlining policy efficiency changes."</p> <p>Some observers expected Cuomo to adjust the plan in his 30-day budget amendments, but nothing about it changed - apparently leaving it up to the city's allies in the Legislature to negotiate it.</p> <p>Assembly Speaker Carl Heastie, the city's most powerful advocate in Albany, has expressed major concern over the plans, but it appears that he would have to own the cost of a change as part of budget negotiations, possibly preempting other major initiatives his conference wants.</p> <p>E.J. McMahon, president of the Empire Center, a budget-focused think tank, said he believes that undoing Cuomo's plan would cost Heastie "$500 million" during negotiations which would limit what else Assembly Democrats could bargain for given that Cuomo appears committed to a 2 percent overall cap on spending growth.</p> <p>The governor's budget makes for 1.7 percent spending growth so there isn't much room for new initiatives and losing the savings created by the cost shift would further tighten the equation. "1.7 to 2 [percent] is $300 million," said McMahon, "So $500 million is a pretty significant number in budget negotiations."</p> <p>Dave Friedfel of the CBC agrees. "To add $500 million back on to the budget would blow through the governor's spending cap. It will have a major impact on negotiations," Friedfel said.</p> <p>The Fiscal Policy Institute, also a think tank, argued in its budget testimony that the state should scrap the 2 percent spending cap. "There is no reason to hold annual spending growth below two percent if it means that we are under-investing in education and poverty reduction," reads the FPI testimony. "This unforced austerity has already caused the state to underinvest in several critical areas, and the continuation of the cap guarantees further harmful cuts to local governments, education and human service programs."</p> <p>Meanwhile, Heastie has pressed for a millionaire's tax that would allow the state to spend more on education. The Cuomo administration has derided the plan and Heastie <a href="http://www.gothamgazette.com/index.php/government/6158-heastie-takes-to-twitter-to-respond-to-cuomo-on-tax-plan" target="_blank">has fired back</a>. Mayor de Blasio has continued to express support for raising taxes on the highest earners, but he has not made a focused push on the issue since his efforts failed in 2014.</p> <p>Asked about whether there have been joint efforts between the Cuomo and de Blasio administrations to find efficiencies as the governor discussed, Morris Peters, spokesperson for the division of budget, said in a statement: "We have been having conversations with our partners in government and we will continue to do so."</p> <p><a href="http://www.gothamgazette.com/index.php/government/6202-at-first-council-budget-hearing-concerns-over-city-savings-and-state-cuts" target="_blank">During City Council budget testimony on Tuesday</a>, de Blasio's budget director Dean Fuleihan said that talks had yet to occur between the city and state but that he expects them to take place soon.</p> <p>"I've also said I'm going to take him at his word, but I'll hold him to it," de Blasio told a gathering of the state Legislature's Black, Puerto Rican, Hispanic, and Asian Caucus last month, referring to Gov. Cuomo and the CUNY and Medicaid cuts. "When the budget is passed on April 1 I fully expect there won't be any negative impact on New York City," de Blasio continued. "He said it won't cost us a single cent. That's what we expect, and I think a lot of people are going to make sure that happens."</p> <p><strong>Construction &amp; Housing Takeovers</strong><br />Another, little-discussed measure contained in Gov. Cuomo's budget would see the creation of "The New York State Design and Construction Corp." that would be given oversight of public construction projects worth over $50 million. The DCC would be a subsidiary of the state's Dormitory Authority and would be headed by three commissioners, all appointed by the governor.</p> <p>"The DCC's primary purpose will be to provide additional project management expertise and oversight on significant public works projects undertaken by state agencies, departments, public authorities and public benefit corporations throughout the state," reads the governor's State of the State <a href="https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/2016StateoftheStateBook.pdf" target="_blank">policy book</a>.</p> <p>The proposal has raised concerns for legislators and budget watchdogs who believe Cuomo is trying to have more influence over independent authorities like the MTA. The MTA board is made up of members appointed by the city and other localities serviced by the agency. The Governor also appoints members and names the chair. Representatives of Citizens Budget Commission (CBC) are concerned the body would create more bureaucracy and confusion. For example, the DCC could void contracts signed by the MTA. CBC has written legislators urging them to oppose the plan.</p> <p>John Kaehny, of watchdog group Reinvent Albany, said he was taken aback by the plan. "The Dormitory Authority is the premier slush fund for pork barrel spending. To house a project management agency within it is alarming. We agree with budget watchdog groups who view this as a power grab and another attempt to reduce transparency and accountability."</p> <p>"What is his motivation for proposing this unprecedented design and construction corporation?" asked McMahon, of The Empire Center. "It will allow [Cuomo] to reach in and take control of any project he wants. The governor is the kind of guy who will say 'Stop that, give it to me, I can do it better!' The governor likes to draw power to the center, to the top, to him."</p> <p>Cuomo is also looking to increase the state's say over New York City development of affordable housing. Per the governor's plans, The Public Authorities Control Board would be allowed to veto individual housing projects proposed by the city that utilize tax-exempt bonds, given to the state by the federal government, which the state then allocates to municipalities.</p> <p>Cuomo administration officials say the plan would add a new level of transparency to a system that allocates billions of dollars to construction each year. City officials and affordable housing developers say that there is no need for another level of bureaucracy.</p> <p>The Control Board is made up of the governor and both legislative leaders. Mayor de Blasio has panned the proposal, as have a number of contractors and housing advocates who worry the plan will create overlap and uncertainty around badly-needed projects that increase affordable housing stock. The Real Estate Board of New York has also raised concerns that more state say would create uncertainty and possibly confuse lending institutions.</p> <p>"We think adding these additional layers will only slow down the process at a point where thousands and thousands of people are waiting for housing that will allow them and their families to be able to make ends meet," de Blasio told legislators during budget testimony earlier this year.</p> <p>Adding to the drama around the city's affordable housing plans, De Blasio administration officials, housing advocates and developers are also growing nervous that Cuomo may continue to divert some of the flow of federal housing bonds that the city relies on to create affordable housing. After doing so with millions of dollars in bonds that the city thought it could count on in 2015, Cuomo <a href="http://www.nytimes.com/2016/02/29/nyregion/cuomo-de-blasio-feud-threatens-new-york-citys-plans-for-affordable-housing.html" target="_blank">is considering</a> using the bonds for the state's newly expanded role in creating affordable housing. During his State of the State, Cuomo outlined general plans to invest billions in affordable housing, but he has yet to flesh those plans out. His policy book promised details "in the coming weeks."</p> <p><strong>MTA Financing<br /></strong>Last year, Cuomo and his MTA Chair Thomas Prendergast began a campaign to push the city to contribute more to the MTA capital plan. Eventually a deal was struck where the city agreed to contribute $2.5 billion and the governor pledging an additional $7.3 billion, bringing the state's total pledged contribution to $8.3 billion, all part of the $26 billion overall five-year plan. For months Cuomo was asked how the state would pay its share and he retorted that the question would be answered in his budget.</p> <p>His budget plan simply raised more questions. Cuomo's plan appropriates $1 billion for the MTA capital plan and pledges to provide more of the promised $8.3 billion when the MTA spends through other capital funding. The city has in turn put off its commitment to extra funding since the city-state agreement was contingent upon parallel fund allocation.</p> <p>Budget experts believe the Cuomo administration will allow the MTA to issue bonds to raise the $7.3 billion once it spends the funds it has on hand. "[The governor] already committed to $8.3 million for the MTA and we all wondered where that would come from," said McMahon. "The answer is that the MTA commitment he signed was not worth the paper it was written on. Once the MTA is done spending money it raises itself, the state will direct them to issue their own bonds."</p> <p>Jamison Dague of CBC said that while the MTA has a backlog of projects that need to be addressed, he would like to see the state spell out specific funding for the agency. "What they've done here is tell the MTA, 'You have resources to draw down before we come in with the pledge.' The MTA has a lot of capital funding sources they are still trying to spend."</p> <p>However, Dague said knowing where the state funding is coming from is prudent for both the MTA and state's long-term planning. "You always want to identify revenue for big capital work before you get going with big contracts," Dague said.</p> <p>Legislators expressed outrage over the plan during a budget hearing last week. "I have no idea how we can actually do a capital program and actually approve a capital program with language that 'it'll be there when you need it.' Corporate America would laugh at this. Any country would be surprised with this type of approach in funding," said Senator Marty Golden, a Republican from Brooklyn, <a href="http://www.capitalnewyork.com/article/albany/2016/02/8591986/state-legislators-bewildered-cuomos-mta-plan" target="_blank">according to</a> Politico New York.</p> <p>The Cuomo administration has vigorously defended its position. "The Governor put unambiguous and iron-clad language in the budget to make good on his commitment to provide $8.3 billion towards the MTA's capital plan," Morris Peters of the Division of The Budget told Gotham Gazette in a statement. Peters pointed to <a href="http://publications.budget.ny.gov/eBudget1617/fy1617artVIIbills/TEDArticleVII.pdf" target="_blank">budget legislation</a> that he said would cement the state's commitment to funding the MTA "in law."</p> <p><strong>Infrastructure Spending</strong><br />This year's State of the State address was centered around the idea that Cuomo is rebuilding New York. "Built to Lead" was the theme and the governor announced a myriad of projects including revamping Penn Station, retooling the Javits Center, reconstructing LaGuardia Airport, and a major contribution to the rail tunnel underneath the Hudson River. The combined cost of the projects is estimated at over $100 billion.</p> <p>Budget watchdogs say Cuomo's plans are bold but not backed up with detailed funding mechanisms. The governor's budget points to federal funding, cash from public authorities, and investment from public/private partnerships to fund a number of the projects. It leaves the state assuming $29 billion of project costs. Watchdogs say the budget only appropriates two-thirds of that cash. "I think the situation was created by the governor's desire to portray himself as having a grand plan. So we all wondered: 'With what money?'" said McMahon.</p> <p>Cuomo has also already allocated billions of dollars worth of the state's bank settlement funds to other projects such as upstate revitalization. The state is also relatively close to bumping up against a borrowing cap that was signed into law under Gov. George Pataki, so it is unlikely the state could fund all of the projects if it wanted to.</p> <p>"I think the governor's ambition is admirable," said Dague of CBC. "But one of the concerns is he has promised to take on so many projects while leaving the funding details to be filled in. Another concern the legislature has is that the projects aren't being put through rigorous analysis. There isn't a discussion of how the state makes use of its limited capital projects funds--why this and not that. And there also is the question in some cases of: 'Why are these projects in the governor's budget and not the MTA's?'"</p> <p>Peters, of Cuomo's administration, said that the budget clearly lays out how Cuomo's grand plans will be paid for. The list of major infrastructure projects are funded by a combination of resources, including from the state and federal governments, public authorities, and private investment, as clearly laid out in our budget materials."</p> <p><strong>Cash Stash</strong><br />Another major concern for budget watchdogs is the $2.4 billion in funds stashed in 80 different pots in this year's executive budget not labeled for any specific use, as identified by good government group Citizens Union in <a href="http://www.citizensunion.org/www/cu/site/hosting/Reports/FINAL%20CU%20Spending%20in%20the%20Shadows%20Report%20FY17%20Executive%20Budget%20-%202%2029%2016.pdf" target="_blank">a new report</a>.</p> <p>It is actually common for the governor and both houses of the Legislature to create slush funds in the budget each year. The practice came under increased scrutiny last year after the arrest of (now former) Assembly Speaker Sheldon Silver, who used cash from one of those pots of money in a scheme to earn referral fees through his law firm. Silver has been convicted on federal corruption trials and faces sentencing soon.</p> <p>This year, according to the Citizens Union "spending in the shadows" report, the governor has $2.2 billion worth of this discretionary money, the Senate $815 million, and $686 million for the Assembly. Last year, Cuomo inserted language into the budget that would have required legislators to reveal their connections to any organization that received funding from these pots of cash, but he has not reinserted the language this year. Cuomo has outlined a series of ethics reforms that he says he intends to negotiate with legislative leaders</p> <p>"With former Speaker Silver convicted in part because of his access to and illegal use of a healthcare-related lump sum pot, we need no greater reason to reform this form of budgeting," said Dick Dadey, executive director of Citizens Union, in a statement. "We need a whole new set of rules and level of transparency to ensure that taxpayer dollars are not used to personally enrich elected officials or used in unseemly pay to play schemes."</p> <p><strong>Policy Questions</strong><br />Cuomo has again packed his budget with his major legislative priorities, a practice that has earned the governor criticism - some say that the budget should only include operational and capital spending, not new policy. This year, Cuomo is including an increase of the minimum wage toward $15 per hour, paid family leave, and raising the age of adult criminal responsibility from 16 to 18, among other policies.</p> <p>The governor has the support of Assembly and Senate Democrats on the outlines of all of these issues while Senate and Assembly Republicans have voiced varying levels of dissent. The Governor recently told reporters the minimum wage issue might be removed from the budget debate.</p> <p>Assembly Democrats, who control that chamber, are pushing for The DREAM Act, which Cuomo has included in his budget but has not rallied for publicly this year. Senate Republicans, who control that chamber, have been vigorously opposed to the plan, which would allow undocumented residents access to education aid.</p> <p>Also on the Assembly to-do list is the millionaire's tax they argue will allow an increase in education spending, among other things. The Cuomo administration and the Senate have both rejected the idea.</p> <p>Cuomo has remained nearly silent on the package of ethics reforms he pitched in January. Although he's taken to touring the state in an RV to tout his wage plan at a series of rallies, he has discussed ethics reform when prompted by reporters. His plans would strictly limit legislators outside income and close the LLC loophole that allows corporate donors to avoid campaign finance limits.</p> <p>The governor was asked about the lack of discussion around ethics reform during one of his RV stops last week. He replied that discussions were happening "in phases."</p> <p>"There's not a lot of continuity between $15 minimum wage and ethics," <a href="http://blog.timesunion.com/capitol/archives/246460/cuomo-were-going-to-see-if-ethics-reforms-stay-in-budget/" target="_blank">he said</a>. "It's kind of a hard transition: 'I want to talk to you about a $15 minimum wage, oh, and now I wanna talk to you about limiting income for legislators.' It's not the most fluid transition. Maybe you could do it. It's tough for me."</p> <p>

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by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: this article has been changed to reflect the report of the initial budget meeting between Cuomo and legislative leaders.</p>