Gotham Gazette http://www.gothamgazette.com/component/tags/tag/509 Thu, 18 Apr 2019 22:52:57 +0000 en-gb webmaster@gothamgazette.com (Webmaster) Battles Over the MTA’s Long-Term Planning are About to Really Heat Up http://www.gothamgazette.com/130-opinion/8409-battles-over-the-mta-s-long-term-planning-are-about-to-really-heat-up http://www.gothamgazette.com/130-opinion/8409-battles-over-the-mta-s-long-term-planning-are-about-to-really-heat-up govandrewcuomo canarsie engineer

(photo: governor's office)


For those of us who want the MTA to finish a favorite project before our grandchildren are retired, now is the absolute best time to let Governor Cuomo know how you feel. The MTA is finalizing a document that will shape the New York region’s public transportation system for decades. Construction firms, unions, suppliers, and real estate interests are all lobbying the MTA to protect and further their own interests.

Every five years, the MTA issues a report of its capital needs for the next 20 years. This document identifies projects designed to improve travel for subway, bus, and railroad riders as well as for the drivers who cross the MTA’s seven bridges and two tunnels. The upcoming report will identify the transportation system’s critical needs and more than $100 billion worth of projects that the MTA deems essential. This is an extraordinary amount of money considering that the federal government ’s contribution to the MTA’s capital program has been less than $1.5 billion per year (and its contribution to all 6,800 public transportation systems across the country totals only about $13 billion per year).

The MTA’s 20-year needs assessment will set the stage in the fall for yet another document, a five-year capital program. The proposed program will identify which projects in the 20-year needs assessment should begin between 2020 and 2024. Aside from the state’s budget, the MTA’s five-year capital program is one of the most important and controversial items that the Legislature deals with on a regular basis.

In 1999, the MTA released a 20-year needs document that reflected the priorities of Governor George Pataki and Mayor Rudy Giuliani. The MTA saw the need to relieve crowding on the Lexington Avenue line and provide subway service to the Jacob Javits Convention Center. The MTA subsequently built three new subway stations on Second Avenue and extended the No. 7 train to the far West Side. Some of the initiatives identified in 1999 have not panned out though, such as extending subway service to LaGuardia Airport.

The current five-year capital program, which ends this year, has allocated approximately $33 billion to upgrade the transportation network, including purchasing new rail cars, modernizing signals and stations, and building new maintenance facilities. Nearly one-quarter of the program has been devoted to major expansion projects. These initiatives are the ones that are the most debated and anticipated, and include bringing the Long Island Rail Road to Grand Central Terminal, preliminary construction for the second phase of the Second Avenue Subway, and engineering for work that will allow Metro-North to access Penn Station and build four new Bronx stations.

The MTA will propose to spend even more over the next 20 years than it has in the previous two decades. New York City’s population and train ridership have grown more than planners expected 20 years ago. Moreover, New Yorkers want the MTA to provide modern and safe services, and the bar that defines such a system is continuously raised. The new subway stations on Second Avenue have become today's minimum standard: spacious and quiet stations with numerous escalators, elevators, and electronic signs, along with platforms that are cooled on hot summer days.

One thing is very different about this year’s preparation for the 20-year needs assessment and capital program. Five years ago, Governor Cuomo paid little attention to the MTA. Now, the governor is intimately involved with the MTA’s planning and operations. The MTA’s 20-years assessment will be, in effect, the governor’s 20-year vision for the future of transportation in New York City, Long Island, and the Hudson Valley.

Undoubtedly, the MTA’s 20-year needs assessment will state that the authority will connect Metro-North to Penn Station and Long Island Rail Road to Grand Central Terminal. The second and third phases of the Second Avenue subway are also likely to be considered essential. This would extend the subway north from 96th Street to 125th Street and south from 63rd Street to Houston Street. Future phases of the Second Avenue subway, including extending it to Wall Street, may not be in the 20-year needs assessment, indicating that construction will not begin until after 2040.

The document will probably also indicate that the MTA needs at least $6 billion per year to maintain and upgrade its equipment and facilities. There will be a huge gap between the amount of money available and the MTA’s needs. Hopefully, the state does not burden future generations with excessive debt. In recent years, the MTA has been unable to appreciably improve service because it is spending more than $2.5 billion annually on principal and interest to pay back the money it borrowed to finance its previous capital programs.

The 20-year needs document will reveal the governor’s thinking about how he wants to allocate funds between suburban and city projects, as well between new expansion projects and basic infrastructure projects. When it comes to the most expensive projects, he will have to choose between those that would help spur new growth (like the extension of the 7 train has done in Hudson Yards) or ones that alleviate existing subway congestion (like continuing the Second Avenue Subway). The 20-year assessment and 5-year capital program will also indicate how the governor plans on accommodating the preferences of key players in the funding debate including Mayor de Blasio and the leaders of the State Senate and State Assembly.

One caveat about the assessment report and how it will be indicative of the MTA’s level of transparency and accountability. Officials might not want to release the document for many reasons. For example, despite the passage of a congestion pricing program, it is likely to show the need to raise future taxes, tolls, and fares. Likewise, the report will reveal how the MTA is slipping behind certain goals that it had set to upgrade its sprawling network. Just because the MTA has issued these reports every five years does not mean it will release one this year. That would be a shame because the public and elected officials should be aware of the progress that the MTA has been making, and to better understand its ongoing and enormous needs.

For the rest of the year, elected officials will argue vociferously, in public and behind the scenes, about funding levels and specific projects. Although the media and public opinion will shape the final outcome, savvy interest groups know that the best time to push for their favorite projects is now.

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Philip Plotch is a political science professor at Saint Peter’s University and the author of Politics Across the Hudson: The Tappan Zee Megaproject. His book about the Second Avenue subway (The Last Subway) will be published by Cornell University Press in the first quarter of 2020. On Twitter @profplotch.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Battles Over the MTA’s Long-Term Planning are About to Really Heat Up Wed, 17 Apr 2019 04:00:00 +0000
Max & Murphy Podcast: Senator Jessica Ramos on the Adopted State Budget & Upcoming Albany Agenda http://www.gothamgazette.com/state/8459-max-murphy-podcast-state-senator-jessica-ramos-albany http://www.gothamgazette.com/state/8459-max-murphy-podcast-state-senator-jessica-ramos-albany jessica ramos 600a

(photo: @RamosforStateSenate)


April 17, 2019 - Max & Murphy Podcast: State Senator Jessica Ramos on the Albany Agenda

jessica ramos 150State Senator Jessica Ramos of Queens joined the show to discuss her first budget season in the state Legislature -- accomplishments, disappointments, lessons learned -- and what lies ahead on issues including marijuana legalization, rent regulations, and her farmworkers' rights bill.

Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org

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by Ben Max, Gotham Gazette
     

Read more by this writer.

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Max & Murphy Podcast: Senator Jessica Ramos on the Adopted State Budget & Upcoming Albany Agenda Wed, 17 Apr 2019 04:00:00 +0000
The Devilish Details of Albany’s MTA Budget Package http://www.gothamgazette.com/130-opinion/8448-the-devilish-details-of-albany-s-mta-budget-package http://www.gothamgazette.com/130-opinion/8448-the-devilish-details-of-albany-s-mta-budget-package govcuomo photos

(photo: governor's office)


My organization, Reinvent Albany, applauds Governor Cuomo and the legislature for passing congestion pricing in the state budget. Yet we are concerned about it being undermined by boundless exemptions for politically powerful interest groups, and a proliferation of other new structures and requirements for the Metropolitan Transportation Authority (MTA) that passed along with the tolling program.

Paradoxically, the MTA legislative “reform” package also included a deal for the Legislature to approve new CEO/Chair Pat Foye without the extensive confirmation hearings and scrutiny expected for the head of the MTA—a behemoth that is the biggest unit of state government, with a $17 billion operating budget and 75,000 staff.

We believe the net effect of the changes made to the MTA further confuse decision-making and aggravate the lack of public accountability.

We will be living with the details of the “MTA Reform and Traffic Mobility Act” for years, so it is worth taking a detailed look. Below is a summary of the various provisions and our brief analysis. (Those interested in reading the 30+ pages of law that makes up the package can read Part ZZZ -- yes, ZZZ -- of the state budget's Revenue Bill).

1. Congestion Pricing
Congestion pricing is officially known in law as the “Central Business District Tolling Program.” The program will be designed and implemented by the Triborough Bridge and Tunnel Authority (known as MTA Bridges and Tunnels or informally as B&T), with a Memorandum of Understanding (MOU) laying out the details of how B&T will coordinate with the New York City Department of Transportation to get the program up and running. The law also gives B&T enforcement officers the power to issue notices of violations for transit infractions around B&T facilities, including the new tolling infrastructure.

The Central Business District is defined as 60th Street and south in Manhattan, but for FDR Drive, the West Side Highway, and the underpass to the Hugh L. Carey Tunnel (formerly the Brooklyn Battery Tunnel).

Tolls will be charged to vehicles entering the Central Business District by the B&T, with the amount of the tolls to be determined and approved by a majority of the MTA Board, as well as any exemptions. This will be informed by a new Traffic Mobility Review Board (TMRB). The CEO/Chair gets an additional vote if there is a tie.

The TMRB is to be appointed by the MTA Board. The TMRB’s plans must ensure that the recommendation would at a minimum raise $15 billion for the 2020-2024 capital plan, including costs of operating the program. The TMRB also is given the authority to “review” MTA capital plans, though what this will entail is unclear. It will have six members total, including a chair, with one member recommended by the Mayor of New York City, one member residing in the Metro North Railroad (MNR) region, and one residing in the Long Island Rail Road (LIRR) region.

Some exemptions to the toll are listed in the law, such as for emergency vehicles and  “qualifying vehicles transporting a person with disabilities.” The TMRB will make additional recommendations for credits, discounts, or exemptions. This will include consideration of credits or discounts for the current fee imposed on for-hire vehicles that was passed as part of last year’s state budget. A separate tax credit was created for residents in the congestion pricing zone earning less than $60,000 annually, provided they aren’t using their vehicle for business purposes.

Revenue from the tolls will go into a “central business district tolling capital lockbox.” Funds are to only be used for the costs of implementing the program and for the MTA’s 2020-2024 capital plan. Funds will be split 80-10-10: 80% of funds are to be for capital costs for New York City Transit (NYCT), with priority to the subways, accessibility, buses, and expanding transit in outer boroughs; and 10% of funds for both LIRR and MNR, with priority given to parking, rolling stock, capacity enhancement, accessibility and expanding transit in areas with limited transit.

Annual reports are due from B&T to state and city government officials as well as the public on receipts and expenditures, to be posted on the MTA website. Another report is due from B&T due on success of program in terms of traffic congestion, air quality, transit ridership, and bus speeds after one year, and then every two years. NYC DOT is to conduct a separate study on parking around the central business district 18 months after congestion tolls go into effect.

The TMRB will make its recommendation to the MTA Board on exemptions no earlier than November 15, 2020, or no later than 30 days before a tolling program is initiated. The program will be in operation no earlier than Dec 31, 2020. There will be a 30-day testing period where no tolls are collected, and then another 60 days where only tolls are collected, but not other charges and fines.

2. MTA Reorganization
The budget requires the MTA to develop a reorganization plan by June 30, 2019. This will be informed by a separate “independent forensic audit.” The plan will require approval of the MTA Board by majority vote; Chair gets 2 votes in event of tie. The reorganization cannot result in dissolution or merger of the authority and its subsidiaries. The legislation also allows the MTA and its subsidiaries and affiliates to share employees within and between entities, provided the employee will be doing a similar function. The law states that employee sharing will not impede or infringe upon collective bargaining agreements currently in place.

3. Design-Build
The budget adds to the mission and purpose of the MTA, stating that design-build is to be used in all projects over $25 million; however, it allows for a waiver from this streamlined bidding-design-construction requirement to be issued by the Director of the New York State Division of the Budget (currently Robert Mujica), who is appointed by the Governor.

4. MTA Board Appointments
The budget makes the terms of appointees to the MTA Board coterminous with their appointers. It also limits the amount of time that MTA Board members can serve in “holdover” status to 60 days (several MTA Board members were ousted as a result of this change, with new nominations made by the Governor during the budget weekend). The law also puts in place a process for an acting CEO/Chair to be in place not more than six months unless the Senate has not acted on a nomination from the Governor to fill the position. Any candidate filling the vacancy requires advice and consent of the Senate, as for regular appointments.

5. Independent Forensic Audit and “Reviews” of Waste, Fraud and Abuse
A provision retained from the Senate’s one-house bill requires the MTA to hire a certified public accounting firm to conduct an “independent forensic audit” that will review the MTA capital program, among other items. The firm cannot have done business with MTA in the last five years, or employ a former MTA employee who moved over in the past three years. The forensic audit is to be completed by January 1, 2020, and will be posted on the MTA website 30 days after submission to the MTA Board.

It also requires the MTA to hire a financial advisory firm with a national practice to review waste, fraud, abuse, and conflicts of interest; duplication of functions; cost efficiencies; the 2015-2019 capital plan; the MTA’s performance metrics; and cash flow and accounting of expenditures. The firm will submit its “reviews” by July 31, 2019 to the MTA Board, which will be posted on the MTA’s website.

6. Major Construction Review Unit
The MTA is now required to create a Construction Review Unit within the authority, which will consist of a panel of “internal and external experts” appointed by the MTA Board. It will review all “large scale projects” (this is not defined). It is given specific authority to review plans involving signal upgrades, including Communications Based Train Control (CBTC), the current industry standard, and ultra-wideband technology before they are implemented. Ultra-wideband is one component of CBTC, the radio technology for potential use as the “communications” part of CBTC. Its review of any project must be completed within 30 days of submission by MTA staff.

7. Capital Program Review Board
Members of the Capital Program Review Board, which is made up of four voting members, one each from the Governor, Senate and Assembly majorities, and New York City Mayor, are now required to provide a written explanation if a member rejects the MTA’s capital plan or any amendments the Board is considering. The written explanation must include specific areas of concerns and steps to address these concerns. The MTA may provide a response to the rejection, and after 10 days the disapproving member can withdraw the disapproval.

8. Debarment of Contractors
The budget authorizes the MTA to develop a debarment process for contractors to prevent bidding on future contracts for a five-year period. Any regulations developed must ensure notice and an opportunity to be heard. Debarment is to only be provided for situations involving: failure to substantially complete work within time frame of contract, or in a subsequent change order by more than 10% of the contract term; or where disputed work exceeds 10% of the contract cost and claimed costs are deemed invalid.

9. Fare Evasion Plan
The MTA is required to establish a plan to combat fare evasion, in consultation with the Governor, Mayor, and District Attorneys within New York City by June 30, 2019. The details of this consultation are not defined, and presumably will be dependent on the interest of the official identified as being participants.

10. East Side Access
The budget requires that the “L Train independent review team” (the Deans of Columbia and Cornell University who provided an alternate plan for the L Train shutdown), will evaluate the East Side Access project, and make recommendations to accelerate its completion. The project is currently at $11.3 billion in total costs, up from a projected $4.3 billion in 2006, where it was projected to be finished in 2009. It now expected that service will start running in December 2022.

11. Capital Plan Legislative Funds
The budget gives the Legislature a pot of funding that is set aside from the 2020-2024 capital plan for transportation improvements for the subways, buses and commuter railroads, subject to a Memorandum of Understanding (MOU). These types of agreements have been used in the past for other pots of funds, and are not required to be made public. They have not been voted on publicly by the members of the Legislature, so the public in the past has not known which members are requesting individual projects.

This MOU is to be entered into by the Senate Finance Committee Chair (currently Senator Liz Krueger), Assembly Ways and Means Chair (currently Helene Weinstein) and Director of the Budget (the Director of the Division of the Budget - currently Robert Mujica). The MOU is to be approved not more than 90 days after approval of the capital plan by the Capital Plan Review Board.  It should be noted that last year’s budget created a separate $50 million outerborough transit fund, to be used annually by the Legislature for individual projects.

12. Procurement
The budget legislation made a number of changes to procurement at the MTA, relating to both how it selects contractors and who reviews any contracts before they are executed. It extends until 2023 requirements regarding the selection of lowest possible bidder, where possible. It also raises the threshold for requiring use of lowest possible bidder to contracts of $1 million or more from $100,000, and raises the threshold for MTA Board approval of contracts not awarded to the lowest possible bidder or conducted under formal competitive process to $1 million or more.

Where the State Comptroller has existing pre-audit authority for NYCT and MTA contracts (the ability to review noncompetitive contracts over $1 million or those involving state funds, and not making them enforceable until approved), the Comptroller must provide a determination within 30 days receiving the contract from the MTA.

13. Performance Metrics
Another component remaining from the Senate’s one-house bill is a requirement for the MTA to use specific performance metrics, largely borrowed from Transport for London, which are defined in law, including:

-Additional platform time
-Additional train time
-Customer journey time and excess journey time
-Elevator and escalator availability
-Major incidents metrics
-Staff hours lost to accidents
-Terminal on time-performance

On-time performance is defined as arriving within two minutes of scheduled time. Note that two minutes for the subway is very different than for Metro North and Long Island Rail Road, which are required to use the same standard though the frequency and length in terms of mileage of service are very different.

The new law also requires the MTA to publish weekly performance reports for NYCT, LIRR, and MNR, as well as release of an annual report with international benchmarking on costs per mile for operating and maintenance, as well as staff and contractor hours for passenger journeys, and staff hours lost to accidents. Lastly, the law requires release of an annual implementation report for the Legislature and Governor by December 31 every year, which will be posted on the MTA website.

14. Twenty-Year Capital Needs Assessment
The last component remaining from the Senate’s one-house bill requires for the next capital plan (2025-2029) that the MTA submit to the Legislature a 20-year capital needs assessment before October 1, 2023, and every five years after for future plans. Its last 20-year capital needs assessment was released in 2013 prior to the finalization of the current 2015-2019 capital plan.

The 20-year needs assessment will include broad long-term capital investments to be made, and establish a non-binding basis for planning of strategic investments involving capital elements of five-year capital plans. The assessment does not require the MTA Board or CPRB approval, and is for information purposes only, though it is required to be certified by the MTA CEO/Chair and entered into the formal records of the minutes of the CPRB.

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Rachael Fauss is Senior Policy Analyst at Reinvent Albany. On Twitter @RachaelFauss & @ReinventAlbany.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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The Devilish Details of Albany’s MTA Budget Package Sun, 14 Apr 2019 04:00:00 +0000
Federal Tax Reform is Shaking Up New York’s Finances But Flow of Bank Settlement Money is Bailing Out the State Budget http://www.gothamgazette.com/130-opinion/8444-federal-tax-reform-shaking-up-new-york-bank-settlement-bailing-out-state-budget http://www.gothamgazette.com/130-opinion/8444-federal-tax-reform-shaking-up-new-york-bank-settlement-bailing-out-state-budget cuomo salt weather

(photo: governor's office)


The federal tax law overhaul enacted at the end of 2017 capped state and local income and property tax deductions on federal income tax returns at $10,000, damaging millions of New Yorkers’(and tens of millions of other Americans’) ability to itemize deductions on their federal tax returns. The change also resulted in sudden shifts in New Yorkers’ behavior toward their own New York tax payments. Over the past two budget cycles the changes have destabilized New York State’s tax revenue collection patterns and caused considerable uncertainty in the state’s budget and funding for the services New Yorkers rely upon.

A recent report by Moody’s Investors Service indicates the fears of Governor Cuomo and other New York leaders that the federal tax deductions cap will cause New Yorkers to flee the State may be exaggerated. But that report only reviewed New York outmigration patterns through 2017 -- this analysis focuses on immediate changes in New Yorkers’ behavior as New York taxpayers and how those changes have affected the past two budgets and the one just adopted. How many New Yorkers will leave the state remains unknown.

In December 2017, following Congress and Trump’s tax reform, the state government experienced a sudden spike in tax payments as New Yorkers chose to make tax payments in 2017 rather than 2018 so they could still deduct in excess of $10,000 in New York taxes from their federal returns, and avoid, at least briefly, the coming limits on deductions to the extent that they could.

According to a 2018 State Comptroller report, the State Division of the Budget estimated that $1.9 billion came into the New York treasury that represented an acceleration of 2018 tax payments into 2017 to take final advantage of full state and local tax (SALT) deductibility. As a result, New York’s tax revenue rose more than 6% in 2017-18 over 2016-17. But, of course, it was anticipated that these 2017 payments would affect 2018 payments and that tax collections would correspondingly fall in 2018. At the time of budget adoption in 2018, the state predicted tax revenue would fall 2% in 2018.

In December 2018 and January 2019, however, tax collections fell precipitously, resulting in a $3 billion drop below estimates made at the time of the April 2018 budget enactment, for a total drop of $ 4.4 billion, or 6.4% below the 2017-2018 budget, not 2%.

Many wealthier taxpayers, with large incomes from capital gains, pay significant portions of their New York State taxes in quarterly estimated payments, including a regular January quarterly payment, rather than in withholding taxes, which are usually related to wages and salaries. Before the federal tax overhaul, New York taxpayers had an incentive to make their January estimated payment in December to assure they could take their tax deductions for that year on their next federal return. But with itemization nearly wiped out, the incentive to make the estimated tax quarterly payment early disappeared. The loss of this incentive is believed to be the main factor in the dramatic revenue declines this past December and January.

The State Division of the Budget believes that some of the money might be recouped in estimated payments in the first quarter of this year following January, but since the state adopted its budget for the April 1 start of the fiscal year, there was no way to know yet how much of the money might be recouped. So the governor and the Legislature chose caution and limited spending increases this year.

New York is not going broke, and the economy and tax revenue are still anticipated to grow, but the shock from the billions in lower revenue informed a cautious approach. The 2018 stock market decline also affected New York’s tax revenue from capital gains. For the first time in many years the governor and the Legislature added to the rainy-day reserve funds rather than add a lot of new spending.

Shoring up the state’s financial situation has been an extraordinarily fortunate additional development over the past few years. Litigation against the financial industry for wrongdoing that occurred during the Great Recession has resulted in many banks and financial companies agreeing to settle lawsuits for fraud and other problems with New York State for almost $12 billion(!) since 2015. New York spent much of the first of these settlement dollars on economic development to help the stagnant economy in Upstate New York , but in 2017 and 2018 $2 billion more has come in from new financial settlements, and the state has simply used the money to bail out the state budget and fund the MTA.

In the 2018 fiscal year the state put $461 million from over $800 million in new settlement funds that year into the state budget, and set aside $155 million to cover future labor contract increases. In the adopted fiscal year 2019 budget (for the fiscal year beginning April 1, 2018), the state put another $383 million from financial settlement into the budget, and took $194 million of additional settlement funds to help pay for the one-time 2018 cost of the MTA Subway Action Plan (2019 and beyond was covered from a tax).

But as 2018 progressed, an extra $1.2 billion more in financial settlement funds came into the state treasury that had not been booked by the state in the April budget adoption! In the budget just adopted a week ago, Governor Cuomo and the Legislature took $336 million of the new money to cover the early 2019 winter shortfalls related to apparent taxpayer behavior changes, and have set aside more than $600 million from the financial settlement funds in reserves to reduce future risks in the case of economic downturn, federal cutbacks, or other problems.

The combination of rainy-day funds and financial settlement reserves now totals $5 billion for the 2019-2020 fiscal year, which began April 1 and has a total state budget of $175.5 billion.

In an important revenue action, the state again renewed the higher rate for taxpayers with incomes over $2.2 million at 8.82%, yielding $770 million this year and an extra $4 billion next year, for five full years.

School aid was increased 3.7% (New York City got 3.4% more). The Legislature restored $550 million for the Medicaid program that the governor tried to cut after the shortfalls appeared.

The minimum wage increase that took place on December 31 to $15 per hour for New York City necessitated $700 million in additional Medicaid spending to cover the cost of raising the pay of workers in hospitals, nursing homes, and home care agencies who made less than $15 an hour in the city, as well as somewhat lower raises outside the city.

The state anticipates tax revenue will recover from the decline this past December and January, although overall it will be lower than had been hoped last year.

The challenges to fund the MTA will continue, since the tax and fee increases to assure $25 billion for its 2020-24 Capital Plan don’t approach the $40 billion estimated to be needed for that plan or the $7 billion for the current 2-15-2019 plan that remains unfunded. But don’t expect more tax increases for the MTA in an election year in 2020.

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Jim Brennan was a member of the New York State Assembly for 32 years, where he chaired four committees. On Twitter @JimBrennanNY.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Federal Tax Reform is Shaking Up New York’s Finances But Flow of Bank Settlement Money is Bailing Out the State Budget Thu, 11 Apr 2019 04:00:00 +0000
Report Undercuts Cuomo and DiNapoli Claims of Outmigration Because of Federal Tax Law http://www.gothamgazette.com/state/8440-report-undercuts-cuomo-and-dinapoli-claims-of-outmigration-because-of-federal-tax-law http://www.gothamgazette.com/state/8440-report-undercuts-cuomo-and-dinapoli-claims-of-outmigration-because-of-federal-tax-law governor and cuomo salt rev

Gov. Cuomo, middle, and Comptroller DiNapoli, right (photo: Governor's office)


In the last few months, Governor Andrew Cuomo and State Comptroller Tom DiNapoli have raised red flags about the impact of the 2017 federal tax overhaul ushered through by President Trump and Republicans in Congress. Chiefly, they said that a new $10,000 cap on the State and Local Tax (SALT) deduction has led to a massive drop in revenue and is likely being accompanied by increased outmigration of high-earning New Yorkers to states with lower taxes.

But Cuomo and DiNapoli never provided concrete proof of the alleged trend and a new report undercuts their claim, to an extent, showing that New Yorkers have not been leaving the state because of the SALT cap but rather as part of continuing demographic trends and shifts in job markets.

Moody’s Investors Service, a leading ratings agency, released a report on Monday that said there are “no discernible signs” that the change in the SALT deduction is leading to people moving out of high-tax states, and notes that the impact of the new cap “will be felt widely for the first time this tax season and possibly spur some out-migration, but jobs and demographic trends will continue to influence relocation patterns more than tax burdens.”

The initial findings, based on 2017 data, fly in the face of the governor’s more definitive claims that the federal tax reforms -- which largely benefited corporations and wealthy individuals -- were leading to outmigration from high-tax Democratic states like New York, Connecticut, and New Jersey, where high-income earners make up a large part of the revenue base.

“We hope Moody’s is right, but with the first filing deadline post-SALT still upcoming, we are in the first inning of a long game,” said Freeman Klopott, a spokesperson for the state Division of the Budget, which is under Cuomo. “By the federal government’s own calculation, the cap on SALT is a more than $600 billion tax hike that will be borne overwhelmingly by New York and similarly situated states, making it an attack on the work we have done to strengthen New York State’ economy with a 2 percent limit on annual State spending growth, a cap on local property taxes, and a tax cut for every New Yorker.”

Brian Butry, a spokesperson for DiNapoli, said in an email, “As New Yorkers finalize their taxes, some are learning for the first time the impact of the SALT cap. The jury remains out on what the long-term effect will be.”

At a February 4 news conference, Cuomo and DiNapoli made a dire announcement that personal income taxes had come in $2.3 billion lower in December and January than the prior year, warning that even a small amount of outmigration of high-income residents would have a significant impact on state revenue. The SALT cap, they said, cost the state $14.3 billion in total.  

“SALT encourages high-income New Yorkers to move to other states,” Cuomo said, using his typical and misleading shorthand of “SALT” to mean the new cap on SALT deductions (the governor also regularly says that SALT was ended, when it has been capped). “And what you have to remember is even if a small number of high-income taxpayers leave, it has a dramatic effect on this tax space.”

He continued, “Taxpayers are adjusting in response to SALT....We have been hearing all along from the major accounting firms, to major individuals, that this is going to be the tipping point and that people now will be making a decision to make a geographic location change. And the SALT provision, remember, did not go into effect yesterday. It had over one year to adjust, so you didn't have to move on 24 hours' notice. You had one year to start to plan a move. And it goes into effect this April, so if you had to move or decided to move, now is the time that you would do it.”

DiNapoli was less forceful in making that argument that day. “We certainly have all heard anecdotally, as the Governor pointed out, people who say they're going to change their legal address, and I think these numbers show that in fact that is probably a big part of the picture,” he said, while acknowledging that several other factors, including volatility in the financial markets were to blame for the recent revenue decrease.

In a March 13 interview on WBAI radio with Gotham Gazette’s Ben Max and City Limits’ Jarrett Murphy, DiNapoli continued that line of reasoning while maintaining that he would need to examine months of data from the Department of Taxation and Finance before coming to a firm conclusion. “I do think that is a piece and probably a very significant piece, of what’s happening,” he said of the alleged SALT cap impact on taxpayer behavior and state revenue. “We’re gonna need more months of data....My instinct tells me the governor was on the right track, that the biggest piece of the shortfall was the response to the adjustment in federal tax reform.”

[LISTEN: Max & Murphy Podcast: Comptroller Tom DiNapoli (March 2019)]

The Moody’s report, however, points out using Census Bureau data that migration rates between 2012 and 2017 in the five states where “the SALT deduction represents the largest share of total federal adjusted gross income” -- California, Connecticut, Maryland, New Jersey and New York -- “are below pre-recession levels and generally follow the US as a whole.” The report notes that it is too early to gauge if the federal tax law has affected migration, contrary to what Cuomo and, to a lesser degree, DiNapoli have said. The report also said that people are generally moving from one high-tax state to another.

“In 2017, 25%-30% of people who moved out of New York, Connecticut and New Jersey moved to another one of the five high-tax states,” the report reads. “The most popular destination for people moving out of New Jersey and Connecticut was New York.”

The report does confirm long-running concerns from Cuomo and others about migration of New Yorkers to Florida, a state with far lower taxes. Moody’s noted that 14% of people who moved out of New York in 2017 went to the Sunshine State. But, those who moved were not primarily driven by lower taxes but rather by job opportunities, climate, and housing costs, the report said. The trend of New Yorkers moving to Florida is nothing new, however. Overall, New Yorkers have consistently been leaving the state since at least 1961, according to the Empire Center, a think tank, and the state saw a net loss of more than 1 million people between 2010 and July 2017.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

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Report Undercuts Cuomo and DiNapoli Claims of Outmigration Because of Federal Tax Law Tue, 09 Apr 2019 04:00:00 +0000
What Cuomo Did and Did Not Get Done in His 'First 100 Days' Agenda http://www.gothamgazette.com/state/8433-what-cuomo-did-and-did-not-get-done-in-his-first-100-days-agenda http://www.gothamgazette.com/state/8433-what-cuomo-did-and-did-not-get-done-in-his-first-100-days-agenda Cuomo 2019 agenda

Gov. Cuomo outlines his agenda (photo: governor's office)


Governor Andrew Cuomo made a triumphant appearance at a Manhattan luncheon hosted by the Association for a Better New York on Thursday, celebrating a raft of accomplishments achieved in partnership with the Democrat-controlled state Legislature over the last three months and in the recently approved state budget.

“Understanding the forces that we were dealing with, we laid out a very robust agenda last December,” he said, referring to a large budget gap that he blamed on federal policies hostile to New York, “a 100-day agenda that took the bull by the horns and addressed the issues and we said we would get it done in 100 days. We got it done and I again want to applaud the Legislature for making some of the toughest, most meaningful reforms that this state has ever made.”

But did they ‘get it done’? Was Cuomo’s entire “first 100 days” agenda for the first year of his third term -- and the first legislative session of his gubernatorial tenure with Democrats in control of both houses of the Legislature -- accomplished? Not quite. Just a few days earlier, with a budget deal reached and bills being voted through by the Assembly and Senate, Cuomo held a press conference in Albany and used slightly more nuanced language about the degree to which he had moved that ambitious agenda, though even then he exaggerated.

In December, five weeks after Cuomo was comfortably reelected for a third term, he released a list of priorities that he said that he would focus on in the first 100 days of 2019. It was an agenda dealing with taxes, affordability, reproductive rights, gender equality, gun control, immigrant rights, environmental protections, good government policies, criminal justice reform, and more. Many aspects were long-held progressive priorities blocked by Republicans who had controlled the state Senate for Cuomo’s first two terms. Some items mentioned specific legislation while others included only broader goals.

The new Democratic dominance in Albany appeared to make virtually any progressive goal possible, depending in large part on the governor’s willingness to continue his move leftward, but also how much agreement on the particulars was achievable among a wide array of legislators from throughout the state, even if they espoused similar values.

Though there has been infighting and hand-wringing, and perhaps more moderate compromise than some Democratic activists and officials expected, it has been a successful and uncharacteristically productive legislative session, both before and during the budget, for Democrats so far this year in Albany, and as Cuomo’s 100th day hits on Wednesday, he’ll have checked most of the boxes in his 20-point agenda, though he is mischaracterizing the extent to which they’ve been successful given several bigger issues remain unresolved.

Cuomo began his victory lap on the 100 days agenda before the ink on the 2020 state budget was even dry. “[W]e we got every element accomplished, virtually,” he said at a March 31 news conference, announcing the budget agreement reached with the state Legislature, members of which were debating and voting through budget bills all the way through the morning of April 1.

“We have not legalized cannabis, adult use cannabis. The political desire is there, I believe we will get it done,” he said, acknowledging perhaps the biggest policy goal he had set that was not achieved in the first 100 days of his term -- though there are several others.

It was undoubtedly a productive three months. Several major voting and campaign finance reforms were approved early on, followed by protections for the LGBTQ community, women’s reproductive rights legislation, new gun control laws, and broad criminal justice reforms.

A closer look at what parts of his agenda Cuomo did and did not get done in his first 100 days of term three, including through the budget:

“Ensure a Progressive Tax System”
Cuomo pledged to protect New Yorkers from the effects of the recent federal tax code overhaul, which gave large tax cuts to the wealthy and to corporations but spelled serious complications for New York and other high-tax states (and is the subject of litigation brought by New York and others).

Following through on the promise of a “progressive tax system,” the state budget agreement included a five-year extension of the state’s millionaire’s tax though not an expansion of it as the state Assembly majority had sought. Cuomo was also successful in making the state’s 2% cap on annual property tax increases (outside New York City) permanent even though it was not due to expire until next year.

Though it wasn’t part of Cuomo’s agenda, the governor and the Legislature also wound up passing a “mansion tax” that adds a surcharge on sales of homes valued over $2 million in New York City, the revenue for which will go toward the MTA.

“Cut Middle Class Taxes while Fighting to repeal SALT”
The governor has been particularly critical of the Trump tax cuts for reducing the State and Local Tax (SALT) deduction to $10,000, which disproportionately hurt high-tax, Democrat-heavy states like New York, Connecticut, and California. He’s promised to tour the country to rally against the policy and has attempted to create workarounds in state law to help New Yorkers reduce their tax burden, though those have failed. Litigation is ongoing, however.

After the new state budget was approved, Cuomo took credit for not only pushing the property tax cap but also for continuing the phase-in of a middle-class tax cut that was previously approved (though Cuomo has presented it as a new cut).

“We lowered the middle-class tax rates again up to $300,000 which is an expansive view of the middle class,” he said. “We said that we had to combat SALT. I am doing everything I can to combat SALT. I've met with the President, I'm working on organizing governors across the country. We came up with a number of alternatives to SALT through the tax code which the federal government rejected. I've been speaking with Speaker Pelosi and I will continue this fight, which I believe is the most important fight for the state of New York until we get it done.”

Prospects for the repeal of the SALT cap are grim, at least while Republicans control the presidency and Senate.

“Protect Quality, Affordable Health Care”
The state Legislature and governor took several actions over the last few months to, they say, strengthen the state’s health care system, as Trump and some Republicans in Congress have continued to threaten to repeal and replace the Affordable Care Act.

“New York State has significant legal power because we regulate the insurance industry. And we have codified many of the protections of Obamacare, so regardless of what President Trump does, we know that we have a healthcare program in New York that will protect New Yorkers,” Cuomo said on March 31. As he noted, the budget agreement put ACA protections, including the state insurance marketplace and coverage of pre-existing conditions, into state law.

The agreement also included $550 million in increased Medicaid funding, which Cuomo had earlier proposed cutting back as the state faced a $2.3 billion revenue shortfall.

“Codify Reproductive Rights”
Among the bills that the Democratic Legislature quickly advanced in the first month of the legislative session were protections of women’s reproductive rights, which Republicans had blocked for years. For Democrats, passing those laws was particularly pressing after the balance of the Supreme Court tilted in favor of conservatives with the confirmation of Brett Kavanaugh last year.

On January 23, the 46th anniversary of the Supreme Court’s Roe v. Wade decision, which grants the federal right to abortion, the state Legislature passed the Reproductive Health Act, which codified Roe abortion protections into state law, and the Comprehensive Contraception Care Act, which requires health care insurers to cover the cost of contraception.

The Legislature also approved the “boss bill,” which prohibits employers from discriminating against employees based on reproductive health decisions. Cuomo quickly signed all three into law.

“Combat Gun Violence”
Strengthening the state’s gun laws has been a signature issue for Cuomo, who worked with Democrats and Republicans to enact an assault rifle ban and other regulations shortly after the Sandy Hook mass shooting of 2012. In January, the state Legislature passed and the governor signed several more gun control measures including banning bump stocks, extending the background check waiting period for buying a gun from three days to ten days, and the Red Flag Law, which allows a judge to order the seizure of firearms from individuals (and their households) deemed a threat to public safety and prohibits those individuals from purchasing a weapon.

“Launch a $150 Billion Infrastructure Plan”
Cuomo expanded the state’s massive infrastructure program with several new investments in the 2020 fiscal year budget. The $150 billion capital investment program is expected to create 675,000 jobs over the next five years, Cuomo has said, by renovating and building new airports, bus and train stations, highways, tunnels, bridges, housing, and other facilities across the state.

At the ABNY speech, Cuomo called it the “the largest building program in the United States of America.” He showed a powerpoint slide with a long list of projects that will either be completed or started during his third term, and added, “We get this done, we will have transformed New York. Think about all those projects and think about how comprehensive they are. New airports, new rail, new bridges, new power systems. It will be a new New York.”

“Fund and Restructure the MTA While Easing Traffic in New York City's Business District”
After years of being rejected by both Democrats and Republicans, congestion pricing was embraced this year by the state Legislature and Cuomo as a way to create a sustainable revenue source for the MTA and to cut down on Manhattan gridlock. The details of the plan have yet to be worked out, however, and it will only go into effect after December 2020, but the program is expected to raise as much as a $1 billion annually, which the MTA will be able to leverage to raise another $10 billion by issuing bonds, for an expected total of $15 over five years.

Additionally, Cuomo and the Legislature decided to dedicate taxes from the new “mansion tax” as well as portions of expected proceeds to New York City and State from an expansion of the internet sales tax. There will still be some portion of the coming MTA capital plan for 2020-2024 that must be covered, and the MTA’s annual operating budget is in a tenuous position.

Although Cuomo had also promised to reform the MTA’s management structure (mostly to give him greater control even though he already effectively controls its every move) there were few immediate changes to the agency included in the budget. There are prospective ones, though: MTA has been mandated to issue a reorganization plan by June, will be required to undergo an “independent forensic audit and efficiency review,” will have to implement a 20-year capital needs assessment starting in 2023 and publicly report metrics on performance, among other reforms.

“Ensure Education Equity”
The final budget agreement included about $27.9 billion in education funding, marking a $1 billion increase in aid to school districts, far lower than what the state Board of Regents and some legislators had advocated for. It was slightly more than Cuomo had proposed himself, but given the state’s fiscal picture Cuomo appeared set against a larger increase, arguing that the state is already providing excessive education aid to localities and that the real need is more funding to the poorest schools.

Cuomo put forward a new “Education Equity” formula through which he said 70% of new aid would go to poorer schools, not just districts. “This says in the budget poor schools must be prioritized from a funding point of view by the district. And they must publish the numbers of how much they have funded the schools within their district,” Cuomo said of the deal that was reached, which fell short of what he had outlined initially but appears may help further the goals he laid out.

“Pass the Dream Act”
The DREAM Act is meant to provide tuition assistance to “Dreamers,” undocumented immigrants who came to the United States as children, and it was passed by the state Assembly and Senate in January. The bill has yet to be sent to the governor for his signature, even though he has said he will sign it, because of concerns about the broad language included in it, according to the Albany Times Union, but the state budget provides $27 million in funding to implement it.

“Ensure Clean, Safe Drinking Water for All”
The state budget added $500 million in additional funding for clean water infrastructure, bringing the state’s total investment to $3 billion.

“Improve Our Democracy”
The state Legislature passed several voting and elections reforms this year that are meant to improve voter turnout, including approving ten days of early voting (which was funded at $10 million in the budget), consolidating the state and federal primary elections in June, allowing pre-registration of 16- and 17-year-olds, universal transfer of voting registration, and beginning the process of amending the state constitution to allow no-excuse absentee ballots by mail and same day voter registration.

Cuomo had also pushed for automatic voter registration and making Election Day a state holiday but was unsuccessful. The budget agreement did however provide three hours (up from two) of paid leave on election day to allow people to vote, expanded voting hours in upstate New York, and also included $14 million in funding for electronic pollbooks, which were approved by the Legislature and are said to be essential to carrying out early voting.

“Protect Public Sector Unions”
Following the Supreme Court’s decision in Janus v. ACFME, which overruled compulsory union fees for non-union workers on First Amendment grounds, Cuomo promised to protect New York’s labor unions from its adverse effects. The state budget extended Janus protections approved by the state -- including protecting personal contact information of public employees from being disclosed -- to all local governments.

“Pass the Child Victims Act”
After more than 15 years of repeated failure, the Legislature finally passed with near unanimous support and Cuomo signed the Child Victims Act, which extends the statute of limitations on child sexual abuse and gives victims the ability to seek justice as adults, while also including a one-year “look back window” that briefly suspends the statute of limitations.

“Protect LGBTQ Rights”
The Gender Expression Non-Discrimination Act (GENDA) was another bill stonewalled by Republicans for years that Democrats approved this year. The bill prohibits discrimination based on gender identity and was a top priority for LGBTQ activists. The state Legislature also banned the controversial and discredited practice of “conversion therapy” for minors.

“Ensure Fairness in the Criminal Justice System”
In budget negotiations, Cuomo repeatedly said he would not sign a budget that did not include several key criminal justice reforms including ending cash bail, and enacting speedy trial and open discovery reform. The final agreement did not completely do away with cash bail but did significantly curtail it, while implementing the other reforms as well.

There are parts of the 100 days agenda that haven’t been accomplished yet and are expected to be on the docket over the next three months as the legislative session continues.

More on what Cuomo did not get done:

“Legalize Adult Use of Recreational Marijuana”
Cuomo’s embrace of recreational marijuana legalization, which could raise an estimated $300 million in revenue annually, was unsuccessful as the state Legislature could not come to an agreement with him over how to implement it and how much of the revenue raised should go to mass transit (as Cuomo intended) or to communities hurt by marijuana enforcement.

”It is complicated to come up with a program that does it and protects public safety, and does economic empowerment for communities that have paid the price,” Cuomo said. “And the best way to do it was not in the race of the budget. And that is nothing new, we've been talking about it for weeks. But that's the one item on the list that we did not get to yet.”

“Keep Housing Affordable for New Yorkers”
Cuomo has touted a $20 billion affordable housing plan though it’s hard to gauge its results. But the more pressing issue for Democrats this year is the effort to reform rent regulation laws that expire in July. Cuomo has supported ending vacancy decontrol, eliminating preferential rent rules, and also modifying rent increases from Major Capital Improvements (MCI). Faced with a somewhat diminished but nonetheless powerful real estate lobby, rent regulations will likely be a controversial subject for the Legislature and governor. Cuomo included reforming rent regulations in his 100 days agenda, but neither he nor the Legislature ever appeared set on dealing with them before the budget -- the regulations expire in June, and always appeared as if they would be one of, if not the most controversial issues in the post-budget session.

“Enshrine Gender Equality into Law”
Cuomo promised to push for the passage of the Equal Rights Amendment, which would prohibit discrimination based on sex. Placing it in the state constitution would require the current Legislature to pass a resolution, which would then have to be passed by the next Legislature seated in 2021 and subsequently approved by voters. Though the amendment has passed in the Assembly previously, and State Senator Julia Salazar has introduced a resolution in the Senate, it has not moved through the Legislature.

“Increase Trust in the Democratic System”
The governor pledged to end the so-called LLC loophole in state campaign finance law, which allows limited liability companies to make donations without disclosing their donors. Though the state Legislature did significantly curb LLC donations, limiting them to a maximum of $5,000, and added new disclosure requirements, the loophole remains open to an extent. Cuomo has dubiously claimed otherwise.

Cuomo also pushed to ban corporate contributions, which did not pass. He also advocated for ending outside income for lawmakers, which was not done directly by the Legislature but was effectively accomplished by a state commission that recommended pay increases for legislators while restricting outside income (those outcomes are the subject of litigation).

On creating a system of public financing of elections, the Legislature and governor passed a broad agreement to move ahead but punted, charging a commission to come up with a program by December with no specific mandates for how a public financing system would be structured. Advocates have called for a system modelled on the one currently in place in New York City.

“Launch the Green New Deal”
Cuomo has also claimed to have launched a Green New Deal for New York but even his version that was included in his executive budget proposal, which falls far short of what advocates and some state legislators have pushed for, was not accomplished in the budget.

Cuomo’s bill would have set the state’s energy sector on a path to becoming carbon neutral by 2040, while environmental activists are pursuing the Climate and Community Protection Act, which mandates that the entire state economy be carbon neutral by 2050. Cuomo did celebrate certain environmental and clean energy investments as well as a “ban” (with carve-outs) on single-use plastic bags, a major victory for supporters of the measure to help reduce New York’s plastic bag use and waste.

[READ: 10 Issues to Watch in Albany's Post-Budget Legislative Session]

***
by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note: this article has been corrected to note that Cuomo's 100th day of his new term is Wednesday April 10, not Monday as originally stated.

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What Cuomo Did and Did Not Get Done in His 'First 100 Days' Agenda Sun, 07 Apr 2019 04:00:00 +0000
A Closer Look at Albany Democrats’ Compromise on Bail Reform http://www.gothamgazette.com/state/8420-a-closer-look-at-albany-democrats-compromise-on-bail-reform http://www.gothamgazette.com/state/8420-a-closer-look-at-albany-democrats-compromise-on-bail-reform bail sign via zellnor

(photo: @zellnor4ny)


At a Sunday press conference, following his overnight announcement of a $175.5 billion budget deal, Governor Andrew Cuomo heralded a criminal justice reform agreement with the Legislature, and thanked one member of the Assembly in particular. “I want to applaud Assemblymember Latrice Walker who really was very helpful and very constructive, and understood the tensions,” he said of the Brooklyn representative.

Cuomo was referring to the especially contentious issue of bail reform. For weeks he and legislators had debated how far to go in amending a system intended to secure defendants return to court, but which in reality has catalyzed the disproportionate pretrial incarceration of poor black and Hispanic New Yorkers.

Queens Senator and Majority Leader Michael Gianaris managed to collect 25 co-sponsors for his advocate-backed bill to eliminate cash bail entirely, with the option of pretrial detention only for certain violent felonies. Governor Cuomo and Assembly Speaker Carl Heastie also previously pledged to eliminate cash bail this session.

But prosecutors and a faction of Democrats insisted that judges would still need discretion to remand defendants deemed dangerous. What they viewed as crucial for public safety was, to Gianaris and his allies, tantamount to replacing cash bail with a system just as susceptible to racial bias.  

The ultimate compromise -- accompanying reforms intended to speed up trials and boost early defendant access to evidence -- resembles a Walker bill that passed the Assembly last session. It eliminates cash bail for most misdemeanors and nonviolent felonies, ensuring pretrial freedom for what amounted to about 90 percent of 2018 arrests statewide. Conditions on that freedom could include mandatory check-ins or electronic monitoring.

“The consensus among people who care about reform,” Gianaris told Gotham Gazette, “was, let’s take a solution that covers the vast majority of people, rather than risk making it worse for the remainder.”

‘Challenging’ Process
Recent pressure from Cuomo, Long Island Senate Democrats, and the District Attorneys Association of New York (DAASNY) ultimately shifted negotiations towards the Assembly framework, according to legislators and advocates who observed these developments. All three parties -- with Democratic Senator Todd Kaminsky negotiating on behalf of the so-called “Long Island Six” -- called for some amount of judicial discretion to remand people deemed dangerous to a specific person or persons (language that appeared in Cuomo’s original budget proposal).

Fearful that this discretion would encourage more pretrial incarceration -- not less -- Gianaris says that he and Senate co-sponsors began discussing alternatives with Assembly Democrats, led by Walker. Her 2017 legislation had appeased Assembly Democrats who saw bail as an important tool to separate defendants from survivors of domestic violence. At least with bail, she’s argued, defendants still have an avenue -- if they can afford it -- to pretrial release.

“It was challenging,” Walker said in a phone interview, of the negotiations. “Because it has a wonderful ring to be able to say, ‘We eliminated cash bail in NYC.’ And that’s the ultimate goal, but at what price would we have claimed that accomplishment?”

Kaminsky’s office did not respond to multiple requests for comment, but the senator and former federal prosecutor told the New York Law Journal in the midst of negotiations last month that he was “trying to make sure we’re reforming the system while keeping the public safe.”

Cuomo Counsel Alphonso David did not elaborate on the governor’s role in negotiations, telling Gotham Gazette that, ultimately, the dangerousness question “did not have to be addressed at this time.”

“The perfect would've been the whole elimination of bail, but I don't believe in making the perfect the enemy of the good,” Cuomo told WNYC’s Brian Lehrer on Monday, calling the final agreement, “the most historic criminal justice reform in modern history in the state."

Mayor Bill de Blasio, who has endorsed dangerousness considerations in the past, told anchor Errol Louis on Monday’s “Inside City Hall” that he is “obviously thrilled” about the bail agreement, which he predicts will “supercharge” efforts to decrease New York City’s jail population. Numbers have been dropping precipitously for decades -- essential to a city plan to close the Rikers Island jail complex.

Advocates with the FREEnewyork campaign, a coalition of more than 150 grassroots groups that backed the Gianaris bill (carried by Danny O’Donnell in the Assembly), say they are very pleased that this compromise will greatly decrease pre-trial detention. As of September, more than a third of the 8,200 people in New York City jails were held pre-trial on misdemeanors or nonviolent felonies.

The state budget outcome “dodged a lot of bullets,” said JustLeadershipUSA organizer Katie Schaffer, because “there is not any sort of generalized consideration of dangerousness or risk to public safety that could exacerbate racial disparities.”

But there is lingering frustration. With Democratic control in both houses of the Legislature, advocates had been hopeful criminal justice reform would be handled outside of the harried budget process where horse-trading often happens. “It seems obvious that passing significant policy at 3 a.m. on a Sunday morning is not good process,” said VOCAL-NY organizer Nick Encalada-Malinowski.

Lingering Concerns
For defendants charged with sexual assault misdemeanors and most violent felonies, judges will still have the option to set bail, putting poor defendants at a disadvantage. Certain felonies in this category will also be eligible for remand, including witness intimidation and terrorism-related charges.

Last year’s Walker bill would have required an evidentiary hearing for anyone eligible for pretrial detention. Judges would have had to review evidence within days of arrest and “explain themselves a bit” before sending defendants to jail pre-trial, Schaffer explained. Advocates saw this as a useful check, considering many convictions stemming from violent felony arrests -- 31% statewide in 2017 -- are misdemeanors. But these hearings were negotiated out of the budget agreement.

“Given the history of criminal justice reform, it is not a surprise that they chose this middle path that greatly benefits some and excludes others,” said Nicole Triplett, policy counsel at the New York Civil Liberties Union. This split, she said, fails to “fully realize the constitutional promise that every person be treated as innocent until proven guilty.”

The budget bill also requires desk appearance tickets for most misdemeanors and Class E felonies -- including promoting gambling and criminal contempt -- a measure Gianaris says he is proud of (though advocates say they’ll be watching how police officers use their discretion to arrest in some cases).

Gianaris’ bill did not address the question of electronic monitoring, while the adopted budget states that only certain defendants are eligible -- those charged with a felony, domestic violence or sexual assault misdemeanor, or with a recent violent felony conviction. Anyone ordered to wear an ankle monitor cannot bear the cost of that device.

These guidelines, which extend to charges that are not eligible for pretrial detention, are concerning for JoAnne Page, president of the Fortune Society, a nonprofit that offers reentry services. “The fear is electronic monitoring will be utilized excessively and indiscriminately on people – mostly people of color who come from the same low-income neighborhoods in New York City that are disproportionately impacted by the criminal justice system – who never would have been held on bail in the first place,” she warned.

The budget reforms drew sharp criticism from DAASNY President David Soares. “The New York State Legislature, along with Governor Cuomo, has passed the most reckless bail reform statute in the country,” Soares told Gotham Gazette, arguing that prosecutors have lost a key mechanism for removing dangerous defendants from the general public. “Our greatest concern first and foremost is for victims of crime.”

Cuomo, who ultimately insisted that criminal justice reform be addressed in the budget, told reporters this weekend that he plans to return to the bail question -- and outcomes for people charged with violent felonies, specifically. “That's something we're going to continue to work on,” he said Sunday.

Assembly Speaker Carl Heastie also told the New York Law Journal Monday that “we are going to get to the finish line to make it a completely cashless bail system.” Gianaris says that he is still committed to this outcome, as well.

“I think advocates will have to keep these issues very present,” Schaffer predicted. “Because it is very easy for legislators to feel done with an issue, to move on to other issues.”

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by Emma Whitford, Gotham Gazette
@emma_a_whitford

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A Closer Look at Albany Democrats’ Compromise on Bail Reform Thu, 04 Apr 2019 04:00:00 +0000
Max & Murphy Podcast: State Budget Takeaways http://www.gothamgazette.com/state/8423-max-murphy-podcast-10-state-budget-takeaways http://www.gothamgazette.com/state/8423-max-murphy-podcast-10-state-budget-takeaways mxm logo

Ben Max, left, of Gotham Gazette, and Jarrett Murphy, right, of City Limits


April 3, 2019 - Max & Murphy Podcast: 10 State Budget Takeaways

38813932055 a4cf29902e zThere's a new state budget, with $175.5 billion in spending and a lot of policy included. We break down some of the key takeaways.

Listen to the conversation and let us know what you think -- we're on Twitter @TweetBenMax and @JarrettMurphy. You can listen to the show through the embedded audio below or download the episode wherever you get your podcasts, under "Max & Murphy," and listen to Max & Murphy live on Wednesdays at 5 p.m. on WBAI radio, 99.5FM or wbai.org

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by Ben Max, Gotham Gazette
     

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Max & Murphy Podcast: State Budget Takeaways Wed, 03 Apr 2019 04:00:00 +0000
Doing Good Things Badly: Congestion Pricing and MTA Reforms http://www.gothamgazette.com/130-opinion/8417-doing-good-things-badly-congestion-pricing-and-mta-reforms http://www.gothamgazette.com/130-opinion/8417-doing-good-things-badly-congestion-pricing-and-mta-reforms cuomo carol kellerman

(photo: governor's office)


Everyone complains that our regional mass transit system is in disrepair, but no one wants to pay to make the needed fixes and modernizations. Have we finally found a way?

Ten years after legislation was first proposed by Mayor Bloomberg, the state Legislature passed a plan for what has been named “central business district tolling,” otherwise known as congestion pricing, in Manhattan as part of the fiscal year 2019-20 budget. The basic concept is that driving into the central core of Manhattan – defined as south of 61 Street – will incur a fee to achieve the multiple worthy aims of providing revenue for mass transit investments, cutting down on intense traffic congestion, and curbing air pollution.

Full details are still to come, with responsibility for administering the fee collection system vested in the Triborough Bridge and Tunnel Authority (TBTA), a subsidiary of the MTA, and the new charges will not go into effect until 2021.

Congestion pricing systems have been in effect in London, Stockholm, and Singapore for some time, but this will be the first such system in a major city in the United States. Given its novelty, the intensity of resistance from suburban legislators and officials (and indeed, even from some in Queens and from my dear, admired friend Dick Ravitch, a former MTA chair) and the distaste for user fees in general, it is a major accomplishment that this proposal was adopted.

Kudos are due to Move New York, the Riders Alliance, various other groups and officials, including Governor Cuomo, and the many voices in the business community who showed the foresight to press for this groundbreaking outcome. Nonetheless, it must be acknowledged that the legislation is imperfect and the so-called governance reforms to the MTA that were included may be a cure that is worse than the disease.

Will the new tolling generate enough revenue to fund all the transit system’s capital needs? The law requires that tolls set by the TBTA be sufficient to generate enough revenue to finance $15 billion to fund all or a portion of the 2020-2024 MTA capital plan, which is expected to be more than twice that amount in order to overhaul subway signaling and get the system to a modern state of good repair. This projected total seems to assure that exemptions (i.e. for disabled drivers) and credits (i.e. for people who live in Manhattan below 61 Street and have annual incomes below $60,000) will not be so extensive as to force excessively high tolls on other drivers. Good.

Let’s hope that a rising tide of complaints doesn’t sidetrack this initiative by the time it is supposed to be implemented a whole two long years from now. The revenue is to go into a “lockbox” to be used 80% for MTA subway and bus needs, 10% for the Long Island Rail Road, and 10% for Metro-North. This seems to be an appropriate distribution and is far better than some of the more project-specific kinds of allocations that had been discussed in previous iterations of proposed congestion pricing schemes. But $15 billion is not enough to fund everything needed, not by a longshot. So two other new revenue sources have also been adopted into law and earmarked for MTA capital use.

First, specific amounts of the projected revenue to be generated from a new internet sales tax are to be deposited in the MTA lockbox. It is appropriate to impose a broad-based tax on internet sales, but it would be better to make it part of the state’s general operating revenue stream. If the estimated revenue turns out to be unduly optimistic there will be pressure to reduce the amounts going to the MTA.

Second, the tax on transfers of residential property has been increased. Again, it is not optimal tax policy to earmark general taxes to a particular use, and this one can be expected to be somewhat volatile. Nevertheless it is far superior to the pied-a-terre tax that had been advocated by some.

It must be remembered, however, that no matter what the new law says, the revenue from these new taxes and indeed, from the new tolls, cannot be guaranteed to be dedicated to the MTA in perpetuity. A lockbox enacted by the Legislature can also be modified or eliminated by a subsequent law. Presumably, covenants in the bonds underwritten by these revenues will help assure that cannot occur if and when money gets tight in another area of government services.

These new revenue streams dedicated to the MTA also do not change the fact that regular, planned fare increases will be necessary, largely to support the authority’s annual operating budget. That budget continues to grow too rapidly, in part due to exorbitant labor costs, which must be addressed in the near future but elected leaders do not appear inclined to tackle. Moreover, the revenue from these new sources must additions to, not substitutes for city and state aid to the MTA. Those resources will continue to be needed.

There is also a welcome new requirement that the MTA conduct an assessment of all its capital assets and needs over the next 20 years, although it doesn’t kick in until 2023.

Also, in the grand bargain that is the state budget, the governor has succeeded in imposing more obligations, costs, and controls on the MTA. It seems that after trying unsuccessfully to convince the public that he is not in control of the transit authority, he has decided to completely own it and subject it to endless oversight and review by (no doubt costly) consultants and advisory bodies. He is, in effect, going to create studies and reviews of his own actions.

The new law decrees there shall be a “complete personnel and reorganization plan” for the MTA submitted to its board no later than this coming June 30 and, in addition, there shall be an independent forensic audit conducted by a certified public accounting firm, a fiscal review by a different financial advisory firm “with a national practice,” a new construction review unit composed of a panel of internal and external experts, and a traffic mobility review board that will not only advise the TBTA on setting the new congestion tolls but, inexplicably, review the MTA capital plan!

Finally, the governor has touted that he is responsible for changes to the law on appointments to the MTA board so that no member serves for more than a very short period after the official who appoints the member is out of office. The goal is apparently to assure that everyone is beholden for their seat to the official (governor, mayor, county executive) that appointed them and that the next elected official has the prerogative to assert ‘ownership’ over the seat.

It is inevitable that appointees to prestigious boards like the MTA feel allegiance to their appointing official and since the sources of the MTA’s power and revenue derive from the political process this is appropriate – to an extent. But the way this or any governor should assert their authority over the MTA (or any public authority, e.g. the Port Authority) is to appoint a full-time Chair and CEO and allow and expect that leader to run the agency. All gubernatorial concerns and requests should be directed to and through that CEO, not through extra-agency review panels or by going around the CEO to the staff.

Pat Foye has been appointed and confirmed in that role and it is to be hoped that Governor Cuomo will now step back and let him get the MTA to marshal its new resources and do its job professionally and effectively. That is the only governance reform that is needed.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Doing Good Things Badly: Congestion Pricing and MTA Reforms Tue, 02 Apr 2019 04:00:00 +0000
10 Issues to Watch in Albany’s Post-Budget Legislative Session http://www.gothamgazette.com/state/8419-10-issues-to-watch-in-albany-s-post-budget-legislative-session http://www.gothamgazette.com/state/8419-10-issues-to-watch-in-albany-s-post-budget-legislative-session Cuomo legislators bills

(photo: governor's office)


Although the state budget approved earlier this week included several progressive priorities for Governor Andrew Cuomo and the state Legislature, there are still three months left in the legislative session this year and a list of remaining items on which the governor and legislators have promised action.

Taking advantage of their party’s newfound control over both houses of the Legislature, Democrats moved a long list of bills already this year, both prior to and in the budget. Though there has been a level of expected divergence on some bills within the legislative chambers, and a more unexpected degree of infighting between the legislative leaders on one hand and the governor on the other, long-sought Democratic priorities have nonetheless advanced, from voting reforms to women’s reproductive rights to gun control and much more.

In a Sunday news conference outlining the details of the budget agreement that included congestion pricing, criminal justice reform and other new policies, Cuomo also laid out some unfinished business for the days ahead including legalizing the adult use of marijuana.

“We have not legalized cannabis, adult use cannabis. The political desire is there, I believe we will get it done,” Cuomo said. The governor had intended to use much of the estimated $300 million in annual revenue that would be raised from taxing marijuana sales to fund the MTA. But the proposal was pulled in different directions and it became apparent a few weeks before the April 1 budget deadline that a deal on all the intricacies of legalization was unlikely.

On the one hand, more conservative legislators and law enforcement officials raised concerns (some unfounded) about public safety, with several county leaders indicating they planned to opt out of allowing sales, and, on the other, lawmakers of color and criminal justice reformers wanted to see both opportunity and revenue go towards communities most impacted by marijuana enforcement. “It is complicated to come up with a program that does it and protects public safety, and does economic empowerment for communities that have paid the price,” Cuomo said. “And the best way to do it was not in the race of the budget.”

He also spoke of a desire to update the so-called public works bill to ensure workers receive a prevailing wage on construction projects receiving state benefits, and reform the state’s rent regulations, which expire in July. Along with marijuana legalization, rent regulations are expected to be the most controversial issues taken up in the remaining session.

In a Tuesday interview on WNYC’s The Brian Lehrer Show, Cuomo in particular addressed reforming the Major Capital Improvements (MCI) law that allows landlords to substantially increase regulated rents after undertaking significant renovations. It is one of a small handful of rent regulations that legislators plan to strengthen -- others include preferential rents, the so-called vacancy bonus, and vacancy decontrol.

“That’s going to be I think a great reform for tenants and I believe we’ll get more than people have ever gotten before,” Cuomo said of MCI changes, “because it wasn’t just the real estate lobby, but there was a reluctance to deal with the details of how these laws actually work and we now have three months to focus just on these laws because we got so much done in the budget.”

On MCIs, Cuomo indicated what has become a popular Democratic position that even some in real estate see as potentially tenable: that landlords should be able to pass along some of the costs of improvements to tenants, but not necessarily in perpetuity. Some legislators want to abolish the MCI program altogether, though others, as well as real estate representatives, warn that could lead landlords to drastically limit investments in their buildings.

Cuomo also included several other priorities in his executive budget proposal that weren’t included in the adopted budget and could potentially be addressed in the next few months. He floated a proposal to allow municipalities to legalize the use of electronic scooters and bicycles, which criminal justice reform and immigration advocates in New York City are particularly eager to see approved. The city has been cracking down on e-bikes -- which are regularly used by restaurant delivery workers who are often immigrants -- and the City Council has been awaiting authorization from the state to legalize them.

State lawmakers and activists are also pushing a bill that would allow drivers licenses for undocumented immigrants, which would affect more than 700,000 immigrants living in New York. The governor has publicly said he supports it, but Gothamist reported last month that he was working behind the scenes to prevent its passage. The bill's Assembly sponsor, Bronx Assemblymember Marcos Crespo, had urged its inclusion in the budget, tweeting on March 27, "Senate and Assembly Dems should come together and support our immigrant families in This budget cycle." Assembly Speaker Carl Heastie responded to Crespo, saying the chamber would advance the bill after the budget. 

The governor has also proposed ending the state’s ban on paid surrogacy and just last week urged lawmakers to act. “It is unconscionable that people need to leave the state to have a child due to New York State's antiquated surrogacy laws,” he said in a statement. But surrogacy was not legalized in the budget.

Though there has been little discussion of legislation favorable to charter schools -- which have stronger allies in the Republican Party but also enjoy support from Cuomo and some Democrats -- there is a possibility that the state could look at expanding the cap on the number of charters in New York City, a threshold that was met for the first time this year.

In the Assembly, Speaker Heastie said Tuesday that his chamber would be “laser focused” on rent regulation, though he did not say whether it would take priority over marijuana legalization. “I don’t wanna say what’s bigger than the other but I think there’s 20-something years worth of history with rent regulations that I think has to be spoken about, talked about and fixed,” he told reporters outside his office, according to audio provided by a spokesperson. “So I’d say it’s going to be a huge, major focus of ours.”

He also said “there’s support within the conference to do universal rent control. In the Assembly we don’t just wanna seem like we care about the tenants in New York City...We want to protect tenants all across the state.”

Two significant proposals that gained little traction, outside of advocacy circles, prior to the budget were the New York Health Act and the Climate and Community Protection Act.

The NYHA, led by Assemblymember Richard Gottfried and Senator Gustavo Rivera, would establish a single-payer health care system in the state. Cuomo has supported the principle, but insists that it should be federally funded rather than putting the state’s finances in jeopardy. It remains to be seen if the bill will gain any momentum in the three remaining months of session. Supporters rallied for it on Tuesday in Albany, trying to establish it as a key priority for the next several weeks. It’s unclear if either Democratic majority in the Legislature has the stomach for pursuing the policy and forcing a broader conversation on what would make for a major overhaul of health care and insurance in the state, as well as the state tax code.

The CCPA is a roadmap to moving the state economy towards entirely renewable energy and creating jobs in the process, akin to a version of the Green New Deal being championed by national progressive Democrats. But Cuomo proposed his own version of “New York's Green New Deal,” which was a somewhat less aggressive alternative proposal that only dealt with the energy sector. Neither moved towards passage before the budget and will likely be a matter of discussion as the post-budget session moves ahead.

One aspect of the budget agreement that left government reform advocates particularly disappointed was the omission of any new anti-corruption measures targeted specifically at the state’s scandal-ridden economic development programs. The budget included funding for a “database of deals” that will purportedly outline projects receiving state assistance, but did not include statutory language about the structure of the database, which will apparently be at the discretion of the Cuomo administration and its Empire State Development.

The governor also agreed to administratively restore the state comptroller’s authority to pre-audit contracts handed out by SUNY and CUNY affiliates, rather than give it legislative power.

Heastie said Tuesday that those two measures could end up in statute, something legislators have been threatening for years. “I think that we did agree that on ethics we wanted to engage in three-way conversation so I think those discussions will happen in the second half as well,” he said, echoing comments he’s made in the past.

[Read: In State Budget, More on Voting, Little on Ethics, and Half-Baked Campaign Finance Reform]

In February, the Assembly and Senate held the first joint hearing in decades on workplace sexual harassment, hearing from several women who had experienced harassment when employed by former state lawmakers. The women testified to the inadequate protections against harassment in state law and insisted that the Legislature must work to improve them, as well as the broader culture in Albany.

Both Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins have said they support holding additional hearings that could potentially take place in the next few months and set the stage for further legislative action. The former legislative aides, some of whom have formed the Sexual Harassment Working Group, have a set of proposals to strengthen the state’s anti-harassment laws, and there are several legislators who appear ready to work with the advocates to advance those priorities, which would apply to both the public and privates sectors, as did anti-harassment laws passed last year.

Ineffective state response to sexual harassment in part points to the oft-maligned Joint Commission on Public Ethics (JCOPE), which victims have said is incapable of appropriately handling sexual harassment complaints against those in government. JCOPE has also been criticized as lacking independence from the very officials it is supposed to investigate, leading to calls -- and legislation -- to replace the commission with a new body. It’s unclear if there will be any momentum in the coming months to explore that option or a host of other reform bills, some proposed by Cuomo, like extending the Freedom of Information Law to the Legislature.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note - This article has been updated.

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10 Issues to Watch in Albany’s Post-Budget Legislative Session Tue, 02 Apr 2019 04:00:00 +0000