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/mta-capital-plan 2017-12-12T22:03:37+00:00 Webmaster webmaster@gothamgazette.com The MTA’s Long-Term Financial Problem Is Severe and May Soon Be Worse 2017-09-27T04:00:00+00:00 2017-09-27T04:00:00+00:00 http://www.gothamgazette.com/?id=7220:the-mta-s-long-term-financial-problem-is-severe-and-may-soon-be-worse Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/restored-montague-tube.jpg" alt="MTA restored montague tube" /></p> <p>(photo via MTA)</p> <hr /> <p>Summer 2017 saw a political breakthrough for mass transit riders when Governor Cuomo declared a “Transit Emergency“ after the Harlem subway derailment, effectively acknowledging the State’s responsibility for addressing the deteriorating and delay-plagued subway, bus, and commuter rail system.</p> <p>Within a month, the MTA’s new Chair, Joe Llota, proposed an $836 million “Subway Action Plan” to address the emergency, meaning major upgrades to the MTA’s maintenance operations and other investments to attack the constant delays and bring some meaningful relief to riders. He proposed the MTA and the State split the cost of the new program with the City, which drew a near immediate rebuff from Mayor de Blasio.</p> <p>The MTA began implementing the plan, deploying late-night work crews on system segments to clean debris and fix track and signals, without a clear answer to where it will get the money. The Subway Action Plan became part of the MTA’s constant dilemma - where can it pull together resources for both its short-term and its long-term needs, which are far larger than the $836 million action plan. Seemingly aware of this, the emergency declaration and the subway action plan response precipitated another move by Governor Cuomo.</p> <p>In mid-August Cuomo endorsed “congestion pricing,“ claiming it was “an idea whose time has come.” Congestion pricing puts a toll on the free East River Bridges into Manhattan, as well as a toll for vehicles crossing 60th street toward the city’s business district.</p> <p>The money from the tolls would provide the cash to repay money the MTA generally borrows for its capital needs. Those needs include buying new subway cars and buses, replacing track and signals, rebuilding stations, elevators, escalators, and railyards, continuing expansion projects like the Second Avenue Subway and East Side Access, and installing computer-based train control, which could increase the number of subway trains running during the crowded rush hours.</p> <p>Move New York, an advocacy group, has a detailed plan, which includes vehicles paying one round-trip at the same rate as the Battery and Midtown Tunnels ($5.76 with E-Z Pass, $8 without), and lowering tolls on many of the non-Manhattan destination bridges in the rest of the boroughs</p> <p>The governor does not yet have his own specific plan, and imposing these tolls must have approval of the State Legislature, which is not in session and will not return to Albany until January. This means Cuomo will likely submit a congestion pricing plan with the budget in January, in the hope it would be approved by April 1, 2018. Mayor Michael Bloomberg made a congestion pricing proposal in 2007 and 2008, but the Legislature would not approve it, although it consumed a year’s worth of debate. It never even came to a vote.</p> <p>Meanwhile, Mayor de Blasio said he opposes congestion pricing because it is “regressive,“ by which he means that it is a tax on ordinary working people, not the rich.</p> <p>I served in the New York State Assembly for 32 years, and in 2007 I was Chair of the Assembly Cities Committee, which dealt with the internal workings of the state’s 62 city governments. I had regular dealings with the Bloomberg administration and endorsed congestion pricing. Most of the debate, however, was not about funding the MTA, but about whether the tolls would really deter cars from driving into Manhattan, and whether the neighborhoods in Brooklyn and Queens near the bridges would fill up with cars parked by drivers looking to avoid the tolls and then taking the subways into Manhattan for the last leg of their trip. Of course, unfairness to people of modest means was another major concern. My point of view was that the MTA Capital Plan needed a major new source of funding but that perspective was less of a priority then than it is today.</p> <p>Several years later I became Chair of the Assembly Committee on Corporations, Authorities, and Commissions, which has jurisdiction over laws affecting the MTA. I also helped lead the Assembly’s negotiations with the governor and the Senate over the mass transit aspects of the transportation budget. By 2014 the MTA’s 2015-19 Capital Plan had become the subject of extensive discussion, and the MTA had a $15 billion shortfall in funding for the $32 billion plan that was in the works.</p> <p>Move New York had made its new congestion pricing proposals by then, which I supported. Concerned that congestion pricing might never be approved by the Legislature, I also introduced about six bills intended to help meet the MTA shortfall. Some of the bills addressed road and bridge funding as well. But the governor’s office argued that providing specific additional funds to the MTA would not work because it could not spend more money (which the MTA leadership did not agree with but would not disagree publicly with Cuomo).</p> <p>Governor Cuomo vetoed the initial MTA Capital Plan proposal in October 2014, which ended up forcing the MTA to cut the plan from $32 billion to $29.5 billion. In the 2016 budget, the Legislature approved the governor’s plan to commit the State to $7 billion in new funding for the Capital Plan, while New York City would supplement the funding with $2.5 billion of its own.</p> <p>With those commitments in place, the MTA proceeded with its approved plan. The problem then, as now, is that the $7 billion from the State was just an IOU. There was no identified source of funding for the $7 billion, only a commitment in law that the State would provide the funds after the MTA ran out of its own resources.</p> <p>In late 2019 the MTA will have to submit a proposal to the Capital Program Review Board for the 2020-2024 plan, which is expected to be similar to the past several plans, needing $30 billion for full funding. In the current plan, the MTA had identified about one quarter of the funding from the federal government and about one third of the funding from its own resources, meaning either cash upfront or enough cash to cover the interest on borrowed funds, before the state government settled on the 2016 plan that passed.</p> <p>For 2020-24 it is not known how much more cash the MTA can squeeze from its current resources. The MTA Financial Plan adopted by the Board in July showed rising deficits because revenue from real estate taxes is in decline, meaning its ability to generate more cash resources internally will be very limited. A reasonable person could foresee a shortfall for the 2020-24 plan similar to the one that affected early planning for the current capital plan, namely $15 billion. When you combine that with the unidentified resources for the State share of the current plan, some $7 billion, the total ‘shortfall’ going into 2020 would be $22 billion. Does this suggest the MTA needs a new source of revenue?</p> <p>More than $20 billion in need going into the 2020-24 capital plan is catastrophic. Not all the cash is needed right away, of course, but the governor and the Legislature, I think, should probably do something meaningful pretty soon.</p> <p>***<br /> Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter&nbsp;<a href="https://twitter.com/JimBrennanNY">@JimBrennanNY</a>.</p> <p>

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<p><img src="http://www.gothamgazette.com/images/graphics/2017/restored-montague-tube.jpg" alt="MTA restored montague tube" /></p> <p>(photo via MTA)</p> <hr /> <p>Summer 2017 saw a political breakthrough for mass transit riders when Governor Cuomo declared a “Transit Emergency“ after the Harlem subway derailment, effectively acknowledging the State’s responsibility for addressing the deteriorating and delay-plagued subway, bus, and commuter rail system.</p> <p>Within a month, the MTA’s new Chair, Joe Llota, proposed an $836 million “Subway Action Plan” to address the emergency, meaning major upgrades to the MTA’s maintenance operations and other investments to attack the constant delays and bring some meaningful relief to riders. He proposed the MTA and the State split the cost of the new program with the City, which drew a near immediate rebuff from Mayor de Blasio.</p> <p>The MTA began implementing the plan, deploying late-night work crews on system segments to clean debris and fix track and signals, without a clear answer to where it will get the money. The Subway Action Plan became part of the MTA’s constant dilemma - where can it pull together resources for both its short-term and its long-term needs, which are far larger than the $836 million action plan. Seemingly aware of this, the emergency declaration and the subway action plan response precipitated another move by Governor Cuomo.</p> <p>In mid-August Cuomo endorsed “congestion pricing,“ claiming it was “an idea whose time has come.” Congestion pricing puts a toll on the free East River Bridges into Manhattan, as well as a toll for vehicles crossing 60th street toward the city’s business district.</p> <p>The money from the tolls would provide the cash to repay money the MTA generally borrows for its capital needs. Those needs include buying new subway cars and buses, replacing track and signals, rebuilding stations, elevators, escalators, and railyards, continuing expansion projects like the Second Avenue Subway and East Side Access, and installing computer-based train control, which could increase the number of subway trains running during the crowded rush hours.</p> <p>Move New York, an advocacy group, has a detailed plan, which includes vehicles paying one round-trip at the same rate as the Battery and Midtown Tunnels ($5.76 with E-Z Pass, $8 without), and lowering tolls on many of the non-Manhattan destination bridges in the rest of the boroughs</p> <p>The governor does not yet have his own specific plan, and imposing these tolls must have approval of the State Legislature, which is not in session and will not return to Albany until January. This means Cuomo will likely submit a congestion pricing plan with the budget in January, in the hope it would be approved by April 1, 2018. Mayor Michael Bloomberg made a congestion pricing proposal in 2007 and 2008, but the Legislature would not approve it, although it consumed a year’s worth of debate. It never even came to a vote.</p> <p>Meanwhile, Mayor de Blasio said he opposes congestion pricing because it is “regressive,“ by which he means that it is a tax on ordinary working people, not the rich.</p> <p>I served in the New York State Assembly for 32 years, and in 2007 I was Chair of the Assembly Cities Committee, which dealt with the internal workings of the state’s 62 city governments. I had regular dealings with the Bloomberg administration and endorsed congestion pricing. Most of the debate, however, was not about funding the MTA, but about whether the tolls would really deter cars from driving into Manhattan, and whether the neighborhoods in Brooklyn and Queens near the bridges would fill up with cars parked by drivers looking to avoid the tolls and then taking the subways into Manhattan for the last leg of their trip. Of course, unfairness to people of modest means was another major concern. My point of view was that the MTA Capital Plan needed a major new source of funding but that perspective was less of a priority then than it is today.</p> <p>Several years later I became Chair of the Assembly Committee on Corporations, Authorities, and Commissions, which has jurisdiction over laws affecting the MTA. I also helped lead the Assembly’s negotiations with the governor and the Senate over the mass transit aspects of the transportation budget. By 2014 the MTA’s 2015-19 Capital Plan had become the subject of extensive discussion, and the MTA had a $15 billion shortfall in funding for the $32 billion plan that was in the works.</p> <p>Move New York had made its new congestion pricing proposals by then, which I supported. Concerned that congestion pricing might never be approved by the Legislature, I also introduced about six bills intended to help meet the MTA shortfall. Some of the bills addressed road and bridge funding as well. But the governor’s office argued that providing specific additional funds to the MTA would not work because it could not spend more money (which the MTA leadership did not agree with but would not disagree publicly with Cuomo).</p> <p>Governor Cuomo vetoed the initial MTA Capital Plan proposal in October 2014, which ended up forcing the MTA to cut the plan from $32 billion to $29.5 billion. In the 2016 budget, the Legislature approved the governor’s plan to commit the State to $7 billion in new funding for the Capital Plan, while New York City would supplement the funding with $2.5 billion of its own.</p> <p>With those commitments in place, the MTA proceeded with its approved plan. The problem then, as now, is that the $7 billion from the State was just an IOU. There was no identified source of funding for the $7 billion, only a commitment in law that the State would provide the funds after the MTA ran out of its own resources.</p> <p>In late 2019 the MTA will have to submit a proposal to the Capital Program Review Board for the 2020-2024 plan, which is expected to be similar to the past several plans, needing $30 billion for full funding. In the current plan, the MTA had identified about one quarter of the funding from the federal government and about one third of the funding from its own resources, meaning either cash upfront or enough cash to cover the interest on borrowed funds, before the state government settled on the 2016 plan that passed.</p> <p>For 2020-24 it is not known how much more cash the MTA can squeeze from its current resources. The MTA Financial Plan adopted by the Board in July showed rising deficits because revenue from real estate taxes is in decline, meaning its ability to generate more cash resources internally will be very limited. A reasonable person could foresee a shortfall for the 2020-24 plan similar to the one that affected early planning for the current capital plan, namely $15 billion. When you combine that with the unidentified resources for the State share of the current plan, some $7 billion, the total ‘shortfall’ going into 2020 would be $22 billion. Does this suggest the MTA needs a new source of revenue?</p> <p>More than $20 billion in need going into the 2020-24 capital plan is catastrophic. Not all the cash is needed right away, of course, but the governor and the Legislature, I think, should probably do something meaningful pretty soon.</p> <p>***<br /> Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter&nbsp;<a href="https://twitter.com/JimBrennanNY">@JimBrennanNY</a>.</p> <p>

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What's The [DATA] Point? $32.5 Billion 2017-07-06T04:00:00+00:00 2017-07-06T04:00:00+00:00 http://www.gothamgazette.com/?id=7048:what-s-the-data-point-with-janno-lieber-mta Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The Data Point? Episode 4 -- $32.5 billion, with Janno Lieber, the MTA's new Chief Development Officer. [You can download What's The Data Point? wherever you get your podcasts, including on iTunes]</strong></p> <p>For the fourth episode of What's The [Data] Point? we were joined by Janno Lieber, the MTA's new Chief Development Officer who is one month into his work at the MTA, where he is overseeing major capital projects. Lieber discussed his mission, his initial work and the work that lies ahead, the general issues facing the city's subway system, and recent announcements made by Governor Andrew Cuomo that relate to the MTA. He said no one should be panicking about the subways and explained that the MTA can both manage major expansion projects and bring the current system up to a state of good repair at the same time.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax">@TweetBenMax</a>), Maria Doulis (<a href="https://twitter.com/MariaDoulis">@MariaDoulis</a>) of CBC, and special guest Janno Lieber (<a href="https://twitter.com/MTA">@MTA</a>)</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/331975354&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;visual=true" width="100%" height="300" frameborder="no" scrolling="no"></iframe></p> <p>

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by Ben Max, Gotham Gazette
     

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<p><img src="http://www.gothamgazette.com/images/graphics/2017/whats-the-data-point.jpg" alt="whats the data point" width="600" height="600" /></p> <hr /> <p><strong>What's The Data Point? Episode 4 -- $32.5 billion, with Janno Lieber, the MTA's new Chief Development Officer. [You can download What's The Data Point? wherever you get your podcasts, including on iTunes]</strong></p> <p>For the fourth episode of What's The [Data] Point? we were joined by Janno Lieber, the MTA's new Chief Development Officer who is one month into his work at the MTA, where he is overseeing major capital projects. Lieber discussed his mission, his initial work and the work that lies ahead, the general issues facing the city's subway system, and recent announcements made by Governor Andrew Cuomo that relate to the MTA. He said no one should be panicking about the subways and explained that the MTA can both manage major expansion projects and bring the current system up to a state of good repair at the same time.</p> <p>Listen to the conversation and let us know what you think: Ben Max of GG (<a href="https://twitter.com/TweetBenMax">@TweetBenMax</a>), Maria Doulis (<a href="https://twitter.com/MariaDoulis">@MariaDoulis</a>) of CBC, and special guest Janno Lieber (<a href="https://twitter.com/MTA">@MTA</a>)</p> <p><iframe src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/331975354&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;visual=true" width="100%" height="300" frameborder="no" scrolling="no"></iframe></p> <p>

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by Ben Max, Gotham Gazette
     

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With Subways in Crisis, It’s Showtime for Mayoral Candidates 2017-06-14T04:00:00+00:00 2017-06-14T04:00:00+00:00 http://www.gothamgazette.com/?id=6999:with-subways-in-crisis-it-s-showtime-for-mayoral-candidates Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/31433620342_a1f80f59bf_z.jpg" alt="Cuomo subway train" width="600" height="450" /></p> <p>(photo: The Governor's Office)</p> <hr /> <p>Standing near a City Hall subway stop, Staten Island Assembly member and GOP mayoral candidate Nicole Malliotakis railed against Mayor Bill de Blasio’s handling of the city’s transit system and its state-controlled operator, the Metropolitan Transit Authority.</p> <p>At a podium set up just outside a 4 and 5 train entrance -- the same station that the mayor and his family emerged from for his inauguration on January 1, 2014 -- Malliotakis said last Friday that de Blasio has been ineffective and pledged that if she is elected mayor, she’ll provide additional city investment into the ailing system.</p> <p>“The mayor cannot keep pointing fingers, he needs to take responsibility for the subway system that runs through his city,” she said, as puzzled straphangers emerged from the stairs behind her.</p> <p>The issue of what to do about the city’s beleaguered public transportation system has quickly become a central question before the September primaries and November mayoral election. With cascading delays and the looming closure of the L train just as the subway’s ridership has ballooned to over 5.6 million commuters on an average weekday, the transit system’s troubles are threatening to devolve into a full-blown crisis, and Malliotakis isn’t the only mayoral candidate pouncing on the issue.</p> <p>On Monday morning, former City Council member and Democratic candidate Sal Albanese echoed Malliotakis as he stood outside the midtown offices of Governor Andrew Cuomo. He was there to hand-deliver a letter to Cuomo’s staff – the governor was in Albany – in which he pledged to immediately increase the city’s MTA capital funding to $1 billion annually if elected mayor, and to work with the governor. “We can’t take the position that this service is basically a ping-pong ball between the mayor and the governor,” he said, alluding the icy relationship between de Blasio and Cuomo.</p> <p>Paul Massey, a millionaire real-estate executive and political novice who is seeking the Republican nomination, seems to want to regain his footing after having stumbled somewhat over the transit issue at a mid-May press conference in front of City Hall, where he was critical of the mayor and alluded to “a lot of problems in our mass transit system,” but didn’t give any specific ideas for fixes when asked for details.</p> <p>A spokesperson for Massey said that the campaign will roll out a “comprehensive plan next week” and outlined some of the plan’s main points: additional funding for the MTA is necessary, but any increase in the city’s contribution would be “conditional on the city taking back control of our transit system, including additional NYC representation on the MTA board.” This would likely entail a change to the MTA’s charter, which would have to be approved by the state legislature.</p> <p>In addition, Massey’s campaign said it will unveil plans for “immediate system-wide upgrade of subway signals and switches,” “a ground-up overhaul of city traffic management policies,” and “transformative infrastructure investment in all five boroughs.” Massey mentioned some of the looming platform when <a href="http://www.gothamgazette.com/city/6992-massey-makes-a-stop-on-the-upper-east-side" target="_blank" rel="noopener noreferrer">he campaigned Monday evening</a> outside a subway stop on the Upper East Side.</p> <p>The idea of conditional increased funding was also put forward by activist and Democratic hopeful Robert Gangi, who said in a phone call that he would “communicate that [the city] is prepared to increase its investment but at the same time get some understandings and some commitments about where the money should go,” including the purchase of “a significant amount of new buses and subway cars.” He did not have a specific number for funding increases, but said he would study the issue.</p> <p>Gangi’s main transportation plank is less about infrastructure and more about socioeconomics: he backs the “fair fares” plan to provide free access to public transportation, including subways and buses, to low income New Yorkers. He claims he would pay for it in part by cancelling other transportation proposals, such as the Brooklyn-Queens Connector (BQX) streetcar announced last year by the mayor.</p> <p>Public transportation is fundamental to the largest city in the country and its elected leaders. But the issue is taking on new urgency just as the city’s political calendar heats up.</p> <p>“This is a bread-and-butter issue, this is not some esoteric issue. This is what drives the city’s economy,” said Albanese, expressing a sentiment echoed in some way by every candidate Gotham Gazette spoke to (along with Albanese, Gangi, Massey, and Malliotakis, there are a handful of other mayoral candidates).</p> <p>Similarly, none of those four candidates thought that the equipment powering the 665 mainline miles of subway tracks is adequate, with the system’s archaic ‘block’ signaling system receiving outsize scorn. “Much of the equipment for the subway was installed pre-World War II,” said Malliotakis, who compared the city’s subway unfavorably to that of other cities around the world, including Paris, Copenhagen, San Francisco, Vancouver, and London.</p> <p>London’s transportation system’s signal improvements were also invoked by Albanese, who argued that they showed a modern metropolis could make necessary upgrades provided a political will. He pledged to take the subway regularly as mayor, saying “I understand that sometimes you have to take the SUV, even a helicopter once in a blue moon, but I will use transit.” In a jab at the current mayor, he added that Mayor Michael “Bloomberg, talk about billionaires, actually got on the train himself on a regular basis.”</p> <p>Mayor de Blasio is not a frequent subway rider, and, with the system in crisis, he’s dismissed recent calls to take the train more often as a way of both leading by example in using public transportation and a way to understand what his constituents are dealing with. (De Blasio quietly took a subway ride uptown on Wednesday afternoon, his first subway trip since mid-April.)</p> <p>The subway situation may be a vulnerability for de Blasio in this campaign, especially given that many New Yorkers reflexively blame the Mayor, not knowing that the MTA is much more the Governor’s responsibility. De Blasio’s famously frosty relationship with Cuomo has manifested in finger-pointing and a lack of dialogue on the city’s transit, and de Blasio has taken flak for a workout routine that involves taking two SUVs from his official home on the Upper East Side to a gym in Park Slope, Brooklyn, his longtime neighborhood. The issue would have likely blown over if the mayor didn’t then jab at critics, arguing that using public transit instead would amount to “cheap symbolism” in the fight against climate change.</p> <p>As the nightmare commutes and bad headlines mount, de Blasio has laid the blame with Cuomo and the MTA, routinely prefacing responses to subway crises with reminders that the MTA is “state-run.” Nonetheless, he has faced increasing attacks from rivals, as well as questions from members of the public and reporters about what he’s doing to address commuter issues and whether he’s being a forceful enough advocate for his constituents.</p> <p>Currently, New York City has committed to providing $2.5 billion, or 9 percent, of the MTA’s 2015-2019 capital program, which funds improvements to the transportation system. That number was the endpoint of a contentious public fight between the mayor and the governor, who sided with the MTA and the Transport Workers Union Local 100 in accusing the city of neglecting its responsibilities after an original commitment of $657 million. The state has committed $8.3 billion, or 28 percent.</p> <p>Critics and budget hawks have complained that no funding sources have yet been identified for these commitments, which kick in after the MTA, which has pledged $11.8 billion – collected from fares, loans, and other sources – has used up all other funding.</p> <p>The governor directly appoints six out of 14 voting MTA board members and names the Chair, effectively controlling the agency; the mayor recommends four board members. Despite that, Malliotakis argued that de Blasio couldn’t pass the buck on transportation, since “aside from keeping us safe, it is the number one issue,” and accused his appointed members of not challenging “the status quo.”</p> <p>At an unrelated press conference on June 5, the mayor was asked if the city’s congestion could be fixed without the addition of subway lines. “We need to first think about the things we can do right now,” he said, including ferry service, select bus service – “very, very productive” – and light rail, touting his BQX project. He did say that if reelected, he would start looking into the possibility of adding lines, saying “I’m going to be spending real time in the second term trying to figure out our physical reality for the future.”</p> <p>In an email, a spokesperson for the mayor’s reelection campaign touted the $2.5 billion MTA capital plan contribution “to support new buses, subway cars, signal and station improvements, while introducing a citywide ferry system, and expanding bike lanes and CitiBike. That’s a transit record we are happy to compare with anyone."</p> <p>

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by Felipe De La Hoz, Gotham Gazette
     

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<p><img src="http://www.gothamgazette.com/images/graphics/31433620342_a1f80f59bf_z.jpg" alt="Cuomo subway train" width="600" height="450" /></p> <p>(photo: The Governor's Office)</p> <hr /> <p>Standing near a City Hall subway stop, Staten Island Assembly member and GOP mayoral candidate Nicole Malliotakis railed against Mayor Bill de Blasio’s handling of the city’s transit system and its state-controlled operator, the Metropolitan Transit Authority.</p> <p>At a podium set up just outside a 4 and 5 train entrance -- the same station that the mayor and his family emerged from for his inauguration on January 1, 2014 -- Malliotakis said last Friday that de Blasio has been ineffective and pledged that if she is elected mayor, she’ll provide additional city investment into the ailing system.</p> <p>“The mayor cannot keep pointing fingers, he needs to take responsibility for the subway system that runs through his city,” she said, as puzzled straphangers emerged from the stairs behind her.</p> <p>The issue of what to do about the city’s beleaguered public transportation system has quickly become a central question before the September primaries and November mayoral election. With cascading delays and the looming closure of the L train just as the subway’s ridership has ballooned to over 5.6 million commuters on an average weekday, the transit system’s troubles are threatening to devolve into a full-blown crisis, and Malliotakis isn’t the only mayoral candidate pouncing on the issue.</p> <p>On Monday morning, former City Council member and Democratic candidate Sal Albanese echoed Malliotakis as he stood outside the midtown offices of Governor Andrew Cuomo. He was there to hand-deliver a letter to Cuomo’s staff – the governor was in Albany – in which he pledged to immediately increase the city’s MTA capital funding to $1 billion annually if elected mayor, and to work with the governor. “We can’t take the position that this service is basically a ping-pong ball between the mayor and the governor,” he said, alluding the icy relationship between de Blasio and Cuomo.</p> <p>Paul Massey, a millionaire real-estate executive and political novice who is seeking the Republican nomination, seems to want to regain his footing after having stumbled somewhat over the transit issue at a mid-May press conference in front of City Hall, where he was critical of the mayor and alluded to “a lot of problems in our mass transit system,” but didn’t give any specific ideas for fixes when asked for details.</p> <p>A spokesperson for Massey said that the campaign will roll out a “comprehensive plan next week” and outlined some of the plan’s main points: additional funding for the MTA is necessary, but any increase in the city’s contribution would be “conditional on the city taking back control of our transit system, including additional NYC representation on the MTA board.” This would likely entail a change to the MTA’s charter, which would have to be approved by the state legislature.</p> <p>In addition, Massey’s campaign said it will unveil plans for “immediate system-wide upgrade of subway signals and switches,” “a ground-up overhaul of city traffic management policies,” and “transformative infrastructure investment in all five boroughs.” Massey mentioned some of the looming platform when <a href="http://www.gothamgazette.com/city/6992-massey-makes-a-stop-on-the-upper-east-side" target="_blank" rel="noopener noreferrer">he campaigned Monday evening</a> outside a subway stop on the Upper East Side.</p> <p>The idea of conditional increased funding was also put forward by activist and Democratic hopeful Robert Gangi, who said in a phone call that he would “communicate that [the city] is prepared to increase its investment but at the same time get some understandings and some commitments about where the money should go,” including the purchase of “a significant amount of new buses and subway cars.” He did not have a specific number for funding increases, but said he would study the issue.</p> <p>Gangi’s main transportation plank is less about infrastructure and more about socioeconomics: he backs the “fair fares” plan to provide free access to public transportation, including subways and buses, to low income New Yorkers. He claims he would pay for it in part by cancelling other transportation proposals, such as the Brooklyn-Queens Connector (BQX) streetcar announced last year by the mayor.</p> <p>Public transportation is fundamental to the largest city in the country and its elected leaders. But the issue is taking on new urgency just as the city’s political calendar heats up.</p> <p>“This is a bread-and-butter issue, this is not some esoteric issue. This is what drives the city’s economy,” said Albanese, expressing a sentiment echoed in some way by every candidate Gotham Gazette spoke to (along with Albanese, Gangi, Massey, and Malliotakis, there are a handful of other mayoral candidates).</p> <p>Similarly, none of those four candidates thought that the equipment powering the 665 mainline miles of subway tracks is adequate, with the system’s archaic ‘block’ signaling system receiving outsize scorn. “Much of the equipment for the subway was installed pre-World War II,” said Malliotakis, who compared the city’s subway unfavorably to that of other cities around the world, including Paris, Copenhagen, San Francisco, Vancouver, and London.</p> <p>London’s transportation system’s signal improvements were also invoked by Albanese, who argued that they showed a modern metropolis could make necessary upgrades provided a political will. He pledged to take the subway regularly as mayor, saying “I understand that sometimes you have to take the SUV, even a helicopter once in a blue moon, but I will use transit.” In a jab at the current mayor, he added that Mayor Michael “Bloomberg, talk about billionaires, actually got on the train himself on a regular basis.”</p> <p>Mayor de Blasio is not a frequent subway rider, and, with the system in crisis, he’s dismissed recent calls to take the train more often as a way of both leading by example in using public transportation and a way to understand what his constituents are dealing with. (De Blasio quietly took a subway ride uptown on Wednesday afternoon, his first subway trip since mid-April.)</p> <p>The subway situation may be a vulnerability for de Blasio in this campaign, especially given that many New Yorkers reflexively blame the Mayor, not knowing that the MTA is much more the Governor’s responsibility. De Blasio’s famously frosty relationship with Cuomo has manifested in finger-pointing and a lack of dialogue on the city’s transit, and de Blasio has taken flak for a workout routine that involves taking two SUVs from his official home on the Upper East Side to a gym in Park Slope, Brooklyn, his longtime neighborhood. The issue would have likely blown over if the mayor didn’t then jab at critics, arguing that using public transit instead would amount to “cheap symbolism” in the fight against climate change.</p> <p>As the nightmare commutes and bad headlines mount, de Blasio has laid the blame with Cuomo and the MTA, routinely prefacing responses to subway crises with reminders that the MTA is “state-run.” Nonetheless, he has faced increasing attacks from rivals, as well as questions from members of the public and reporters about what he’s doing to address commuter issues and whether he’s being a forceful enough advocate for his constituents.</p> <p>Currently, New York City has committed to providing $2.5 billion, or 9 percent, of the MTA’s 2015-2019 capital program, which funds improvements to the transportation system. That number was the endpoint of a contentious public fight between the mayor and the governor, who sided with the MTA and the Transport Workers Union Local 100 in accusing the city of neglecting its responsibilities after an original commitment of $657 million. The state has committed $8.3 billion, or 28 percent.</p> <p>Critics and budget hawks have complained that no funding sources have yet been identified for these commitments, which kick in after the MTA, which has pledged $11.8 billion – collected from fares, loans, and other sources – has used up all other funding.</p> <p>The governor directly appoints six out of 14 voting MTA board members and names the Chair, effectively controlling the agency; the mayor recommends four board members. Despite that, Malliotakis argued that de Blasio couldn’t pass the buck on transportation, since “aside from keeping us safe, it is the number one issue,” and accused his appointed members of not challenging “the status quo.”</p> <p>At an unrelated press conference on June 5, the mayor was asked if the city’s congestion could be fixed without the addition of subway lines. “We need to first think about the things we can do right now,” he said, including ferry service, select bus service – “very, very productive” – and light rail, touting his BQX project. He did say that if reelected, he would start looking into the possibility of adding lines, saying “I’m going to be spending real time in the second term trying to figure out our physical reality for the future.”</p> <p>In an email, a spokesperson for the mayor’s reelection campaign touted the $2.5 billion MTA capital plan contribution “to support new buses, subway cars, signal and station improvements, while introducing a citywide ferry system, and expanding bike lanes and CitiBike. That’s a transit record we are happy to compare with anyone."</p> <p>

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by Felipe De La Hoz, Gotham Gazette
     

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</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
     

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</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>